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Registration Rights Agreement by and between the Registrant
and Xxxx X. Xxxxx dated July 11, 1997
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REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement is dated as of July 11, 1997 by and
among FOUNTAIN PHARMACEUTICALS, INC., a Delaware corporation (the "Company") and
XXXX X. XXXXX (the "Holder").
W I T N E S S E T H:
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WHEREAS, the Holder owns certain shares of the Company's Common Stock;
WHEREAS, the parties hereto desire to set forth their agreement concerning
the registration of the Company's Common Stock under the Securities Act of 1933,
as amended.
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
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1. DEFINITIONS.
(a) "Company" shall mean Fountain Pharmaceuticals, Inc.
(b) "Holder" shall mean Xxxx X. Xxxxx.
(c) "Restricted Stock" shall mean 25,000,000 shares of the Common
Stock of the Company acquired by the Holder from the Company in December 1995.
(e) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar or successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
any relevant time.
(f) "SEC" shall mean the United States Securities and Exchange
Commission.
2. MANDATORY REGISTRATION.
(a) The Company has agreed to prepare and file a Registration
Statement with the SEC no later than January 31, 1998 for the purpose of
facilitating the public resale of the Restricted Stock. The Company shall use
its best efforts to have such Registration Statement declared effective.
(b) The Company shall be entitled to include in any Registration
Statement referred to in Subparagraph (a) of this Paragraph 2, shares of Common
Stock to be sold by the Company for its own account (or by other holders of
Common Stock, if all shares which the Company wishes to register for its own
account have been included).
(c) The Company's obligation in Subparagraph 2(a) above extends
only to the use of all reasonable efforts to register such shares pursuant to a
Registration Statement. The Company shall have no obligation whatsoever to
indemnify or hold harmless the Holder or any underwriter or managing underwriter
designated by the Holder, to cooperate with such underwriter, or to obtain a
commitment from an underwriter relative to the sale of such shares, whether in a
public offering or private placement transaction. Furthermore, should the
Company elect to include certain shares for its own account or for the account
of other shareholders in such Registration Statement pursuant to Subparagraph
2(b) above, and should such shares be subject to a commitment from an
underwriter relative to a public or private offering, the Company shall have no
obligation to include the shares of Restricted Stock being registered pursuant
to Subparagraph 2(a) hereof in such underwritten offerings. Furthermore, the
Holder registering his shares hereby agrees, as a condition precedent to such
registration, to provide the Company with a certificate or certificates
evidencing compliance with the Securities Act and all applicable rules and
regulations thereunder.
3. INCIDENTAL REGISTRATION.
(a) If the Company at any time (other than pursuant to Paragraph 2
hereof) proposes to register any of its securities under the Securities Act for
sale, whether for its own account or for the account of other securityholders or
both (except with respect to Registration Statements on Form X-0, Xxxx X-0, or
another form not available for registering the Restricted Stock for sale to the
public), it will each such time give written notice to the Holder of its
intention so to do. Upon the written request of the Holder, given within 20 days
after receipt of any such notice, to register any of its Restricted Stock (which
request shall state the intended method of disposition thereof), the Company
will cause the Restricted Stock as to which registration shall have been so
requested to be included in the securities to be covered by the Registration
Statement to permit the sale or other disposition by such Holder (in accordance
with their written request).
(b) The Company's obligation in Subparagraph 3(a) above shall
extend only to the inclusion of the shares of Restricted Stock in a Registration
Statement, and not as to the determination of the manner of disposition. The
Company shall have no obligation to include the shares requested in Subparagraph
2(a) above in any underwritten offering, to otherwise assure the terms and
conditions of distribution, to indemnify and hold harmless the Holder or any
underwriter or managing underwriter, to locate or cooperate with any such
underwriter or managing underwriter, or to obtain a commitment from an
underwriter relative to the sale of such shares of Restricted Stock.
Furthermore, the Holder registering his shares pursuant to Subparagraph 2(a)
above, hereby agrees, as a condition precedent to such registration, to provide
the Company with a certificate or certificates evidencing compliance with the
Securities Act, and all applicable rules and regulations thereunder.
4. REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of Paragraphs 2 and 3 hereof to effect the registration of
any of the Restricted Stock under the Securities Act, the Company will use
all reasonable efforts to:
(a) prepare and file with the Commission a Registration Statement
with respect to such securities and use its best efforts to cause such
Registration Statement to become and remain effective for the period of the
distribution contemplated thereby or as required under the Securities Act;
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(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
the period specified in Subparagraph 4(a) above and as comply with the
provisions of the Securities Act with respect to the disposition of all
Restricted Stock covered by such Registration Statement in accordance with the
sellers' intended method of disposition set forth in such Registration Statement
for such period;
(c) furnish to each seller and to each underwriter such number of
copies of the Registration Statement and the prospectus included therein
(including each preliminary prospectus), as such persons may reasonably request
in order to facilitate the public sale or other disposition of the Restricted
Stock covered by such Registration Statement;
(d) use its best efforts to register or qualify the Restricted
Stock covered by such Registration Statement under the securities or blue sky
laws of such jurisdictions as the sellers, or, in the case of an underwritten
public offering, the managing underwriter shall reasonably request; provided,
however, that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;
(e) immediately notify each seller under such Registration
Statement and each underwriter, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus contained in such Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required or necessary to be stated therein in
order to make the statements contained therein not misleading in light of the
circumstances then existing;
(f) make available for inspection by each seller, any underwriter
participating in any disposition pursuant to such Registration Statement, and
any attorney, accountant or other agent retained by any such seller or
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such Registration
Statement;
(g) for purposes of Subparagraphs 4(a) and 4(b) above, the period
of distribution of Restricted Stock shall be deemed to extend for nine months
(120 days in the case of registration on Form S-3) or such earlier date as (A)
in an underwritten public offering, each underwriter has completed the
distribution of all securities purchased by it; and (B) in any other
registration, all shares of Restricted Stock covered thereby shall have been
sold; and
(h) if the Common Stock of the Company is listed on any securities
exchange or automated quotation system, the Company shall use its best efforts
to list (with the listing application being made at the time of the filing of
such Registration Statement or as soon thereafter as is reasonably practicable)
the Restricted Stock covered by such Registration Statement on such exchange or
automated quotation system.
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5. EXPENSES.
(a) For the purposes of this Paragraph 5, the term "Registration
Expenses" shall mean: all expenses incurred by the Company in complying with
Paragraphs 2 and 3 of this Agreement, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company (other than the
expenses of any special audit as described below), fees of the National
Association of Securities Dealers, Inc. ("NASD"), fees and expenses of listing
shares of Restricted Stock on any securities exchange or automated quotation
system on which the Company's shares are listed and fees of transfer agents and
registrars. The term "Selling Expenses" shall mean: all underwriting discounts
and selling commissions applicable to the sale of Restricted Stock and all
accountable or non-accountable expenses paid to any underwriter in respect of
the sale of Restricted Stock.
(b) Except as otherwise provided herein or in Subparagraph 5(c)
hereof, the Company will pay all Registration Expenses in connection with the
Registration Statement(s) filed pursuant to Paragraphs 2 and 3 of this
Agreement. All Selling Expenses in connection with any Registration Statement
filed pursuant to Paragraphs 2 or 3 of this Agreement shall be borne by the
Holder in proportion to the number of shares sold by him, or by such persons
other than the Company (except to the extent the Company shall be a seller) as
they may agree.
6. OBLIGATIONS OF HOLDER.
(a) In connection with each registration hereunder, each selling
Holder will furnish to the Company in writing such information with respect to
such seller and the securities held by such seller, and the proposed
distribution by them as shall be reasonably requested by the Company in order to
assure compliance with federal and applicable state securities laws, as a
condition precedent to including such seller's Restricted Stock in the
Registration Statement. The Holder also shall agree to promptly notify the
Company of any changes in such information included in the Registration
Statement or prospectus as a result of which there is an untrue statement of
material fact or an omission to state any material fact required or necessary to
be stated therein in order to make the statements contained therein not
misleading in light of the circumstances then existing.
(b) In connection with each registration pursuant to Paragraph 2
or 3 of this Agreement, the Holder included therein will not effect sales
thereof until notified by the Company of the effectiveness of the Registration
Statement, and thereafter will suspend such sales after receipt of telegraphic
or written notice from the Company to suspend sales to permit the Company to
correct or update a Registration Statement or prospectus. At the end of any
period during which the Company is obligated to keep a Registration Statement
current, the Holder included in said Registration Statement shall discontinue
sales of shares pursuant to such Registration Statement upon receipt of notice
from the Company of its intention to remove from registration the shares covered
by such Registration Statement which remain unsold, and such Holder shall notify
the Company of the number of shares registered which remain unsold immediately
upon receipt of such notice from the Company.
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7. MISCELLANEOUS PROVISIONS.
(a) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
(b) COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
(c) AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given without the written consent of the Company and the Holders.
(d) NOTICES. All communications under this Agreement shall be
sufficiently given if delivered by hand or by overnight courier or mailed by
registered or certified mail, postage prepaid, addressed,
(i) if to the Company, to:
Fountain Pharmaceuticals, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxx, XX 00000
Attention: Chief Executive Officer
with a copy to:
Xxxxxxx X. Xxxxx, Esquire
Xxxxxxxx Ingersoll Professional Corporation
Eleven Penn Center
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
or, in the case of the Holders, at such address as each such Holder shall
have furnished in writing to the Company; or at such other address as any of the
parties shall have furnished in writing to the other parties hereto.
(e) SUCCESSORS AND ASSIGNS; HOLDERS AS BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective successors and assigns, and the agreements of the Company
herein shall inure to the benefit of all Holders and their respective successors
and assigns.
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(f) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(g) ENTIRE AGREEMENT; SURVIVAL; TERMINATION. This Agreement is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
Very truly yours,
FOUNTAIN PHARMACEUTICALS, INC.
By:
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Xxxx X. Xxxxx
Chief Executive Officer
Agreed and accepted this
11th day of July, 1997:
By:
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Xxxx X. Xxxxx
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