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Registration Rights Agreement by and between the Registrant
and Fountain Holdings, LLC dated July 11, 1997
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REGISTRATION RIGHTS AGREEMENT
July 11, 1997
In connection with the purchase by the undersigned Purchaser of 2,000,000
shares (the "Preferred Shares") of Series A Preferred Stock, $.001 par value
(the "Series A Preferred Stock"), of Fountain Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), pursuant to the Stock Purchase and Subscription
Agreement of even date herewith (the "Purchase Agreement") between the Company
and the Purchaser and as an inducement to the Purchaser to consummate the
transactions contemplated by the Purchase Agreement, the Company covenants and
agrees with the Purchaser as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
"CLASS B STOCK" shall mean the Class B Common Stock of the Company,
$.001 par value per share.
"COMMISSION" shall mean the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
"COMMON STOCK" shall mean the Common Stock of the Company, $.001 par
value per share.
"CONVERSION SHARES" shall mean shares of Common Stock and Class B
Stock issued upon conversion of the Preferred Shares.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"PREFERRED SHARES" shall mean the Series A Preferred Shares sold
pursuant to the Purchase Agreement.
"PREFERRED STOCK" shall mean the Series A Preferred Stock.
"REGISTRATION EXPENSES" shall mean the expenses so described in
Section 8.
"RESTRICTED STOCK" shall mean the Conversion Shares, excluding
Conversion Shares which have been (a) registered under the Securities Act
pursuant to an effective registration statement filed thereunder or (b)
publicly sold pursuant to Rule 144 under the Securities Act.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in Section
8.
2. RESTRICTIVE LEGEND. Each certificate representing Preferred Shares
and Conversion Shares shall, except as otherwise provided in this Section 2 or
in Section 3, be stamped or otherwise imprinted with a legend substantially in
the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT
AND ALL SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM REGISTRATION
IS AVAILABLE."
A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company the securities represented thereby may be publicly
sold without registration under the Securities Act and any applicable state
securities laws.
3. CONVERSION. Pursuant to a Certificate of Designation duly adopted by
the board of directors of the Company, the Preferred Shares are convertible into
shares of the Common Stock and Class B Stock from time to time at the discretion
of the holder of Preferred Shares. It is acknowledged that the registration
rights set forth in this Agreement extend to all shares of Common Stock and
Class B Stock acquired upon conversion of the Preferred Shares to the extent
they are at any such time Restricted Stock within the meaning of this Agreement.
Notwithstanding the foregoing and by way of expression, the registration rights
contemplated by this Agreement shall extend to the holders of Preferred Stock
who may at any time exercise such rights prior to conversion of the Preferred
Shares; in such event, conversion of the Preferred Shares may be made contingent
upon the registration in accordance with the terms and conditions of this
Agreement of the shares to be acquired upon such conversion. For purposes of
this Agreement, shares to be acquired upon conversion of Preferred Shares and
for which registration is to be effected in accordance with this Agreement prior
to conversion (with conversion contingent upon registration) shall for purposes
hereof be deemed to be "Conversion Shares" and "Restricted Stock" as the context
requires.
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4. REQUIRED REGISTRATION. (a) At any time following the conversion of
Preferred Shares or subject to conversion if conversion is made contingent upon
registration by the holder of Preferred Shares, the holders of the resultant
Conversion Shares constituting at least 50% of the total number of Conversion
Shares then outstanding may, by written notice to the Company, request the
Company to register under the Securities Act all or any portion of the
Conversion Shares held by such requesting holder or holders for sale in the
manner specified in such notice. For purposes of this Section 4 and Sections 5,
6, 13(a) and 13(d), the term "Restricted Stock" shall be deemed to include the
number of shares of Restricted Stock which would be issuable to a holder of
Preferred Shares upon conversion of all Preferred Shares held by such holder at
such time. Notwithstanding anything to the contrary contained herein, no request
may be made under this Section 4 within 180 days after the effective date of a
registration statement filed by the Company covering a firm commitment
underwritten public offering.
(a) Following receipt of any notice under this Section 4, the Company
shall promptly notify all holders of Restricted Stock from whom notice to
register has not been received and shall use its best efforts to register under
the Securities Act, for public sale in accordance with the method of disposition
specified in such notice from requesting holders, the number of shares of
Restricted Stock specified in such notice (and in all notices received by the
Company from such other holders within 30 days after the giving of such notice
by the Company). If such method of disposition shall be an underwritten public
offering, the holders of a majority of the shares of Restricted Stock to be sold
in such offering may designate the managing underwriter of such offering,
subject to the approval of the Company, which approval shall not be unreasonably
withheld or delayed. If such method of disposition is an underwritten public
offering and in the opinion of the managing underwriter inclusion of all shares
of Restricted Stock for which registration has been requested would adversely
affect the marketing of the shares to be sold, the number of shares of
Restricted Stock to be included may be reduced pro rata among requesting holders
based on the number of shares of Restricted Stock owned by such holders. The
Company shall be obligated to register Restricted Stock pursuant to demand made
in this Section 4 on two occasions only, PROVIDED, HOWEVER, that such obligation
shall be deemed satisfied only when a registration statement covering all shares
of Restricted Stock specified in notices received as aforesaid for sale in
accordance with the method of disposition specified by the requesting holders,
shall have (i) become effective and, if such method of disposition is a firm
commitment underwritten public offering, all such shares shall have been sold
pursuant thereto, or (ii) been withdrawn at the request of holders of Restricted
Stock requesting such registration (other than solely as a result of material
information concerning the business or financial condition of the Company which
is made known to such holders after the date on which such registration was
requested).
(b) Except for registration statements on Form S-8 or any successor form
thereto, the Company will not file with the Commission any other registration
statement with respect to its Common Stock or Class B Stock, whether for its own
account or that of other stockholders, from the date of receipt of a notice from
requesting holders pursuant to this Section 4 until the completion of the period
of distribution of the registration contemplated thereby.
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5. INCIDENTAL REGISTRATION. If the Company at any time (other than
pursuant to Section 4 or Section 6) proposes to register any of its securities
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Form S-8 or another form not available for
registering the Restricted Stock for sale to the public), each such time it will
give written notice to all holders of outstanding Restricted Stock of its
intention so to do. Upon the written request of any such holder, received by the
Company within 20 days after the giving of any such notice by the Company, to
register any of its Restricted Stock, the Company will use its best efforts to
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
proposed to be filed by the Company, all to the extent requisite to permit the
sale or other disposition by the holders of such Restricted Stock so registered.
In the event that any registration pursuant to this Section 5 shall be, in whole
or in part, an underwritten public offering of Common Stock, the number of
shares of Restricted Stock to be included in such an underwriting may be reduced
pro rata among the requesting holders to the extent of the pro rata interests of
such requesting holders in the outstanding stock of the Company (assuming
conversion of the Series A Preferred Stock) if and to the extent that the
managing underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold by the Company therein.
Notwithstanding the foregoing provisions, the Company may withdraw any
registration statement referred to in this Section 5 without thereby incurring
any liability to the holders of Restricted Stock.
6. REGISTRATION ON FORM S-3. If at any time (i) a holder or holders of
Restricted Stock request that the Company file a registration statement on Form
S-3 or any successor thereto for a public offering of all or any portion of the
shares of Restricted Stock held by such requesting holder or holders, the
reasonably anticipated aggregate price to the public of which would exceed
$500,000, and (ii) the Company is a registrant entitled to use Form S-3 or any
successor thereto to register such shares, then the Company shall use its best
efforts to register under the Securities Act on Form S-3 or any successor
thereto, for public sale in accordance with the method of disposition specified
in such notice, the number of shares of Restricted Stock specified in such
notice. Whenever the Company is required by this Section 6 to use its best
efforts to effect the registration of Restricted Stock, each of the procedures
and requirements of Section 4 (including but not limited to the requirement that
the Company notify all holders of Restricted Stock from whom notice has not been
received and provide them with the opportunity to participate in the offering)
shall apply to such registration, PROVIDED, HOWEVER, that there shall be no
limitation on the number of registrations on Form S-3 which may be requested and
obtained under this Section 6.
7. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of Sections 4, 5 or 6 to use its best efforts to effect the
registration of any shares of Restricted Stock under the Securities Act, the
Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering pursuant to Section 4,
shall be on Form S-1 or other form of general applicability satisfactory to the
holders of Restricted Stock or the managing underwriter selected) 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 (determined as hereinafter provided);
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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 paragraph (a) above and 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 of Restricted Stock and to each underwriter
such number of copies of the registration statement and the prospectus included
therein (including each preliminary prospectus) as such persons reasonably may
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 of Restricted Stock or, in the case of an
underwritten public offering, the managing underwriter reasonably shall 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) use its best efforts to list the Restricted Stock covered by such
registration statement with any securities exchange on which the Common Stock of
the Company is then listed;
(f) immediately notify each seller of Restricted Stock and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge 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 a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(g) if the offering is underwritten and at the request of any seller of
Restricted Stock, use its best efforts to furnish on the date that Restricted
Stock are delivered to the underwriters for sale pursuant to such registration:
(i) an opinion dated such date of counsel representing the Company for the
purposes of such registration, addressed to the underwriters, stating that such
registration statement has become effective under the Securities Act and that
(A) to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Securities Act, (B) the
registration statement, the related prospectus and each amendment or supplement
thereof comply as to form in all material respects with the requirements of the
Securities Act (except that such counsel need not express any opinion as to
financial statements or other financial or statistical data contained therein)
and (C) to such other effects as reasonably may be requested by counsel for the
underwriters and (ii) a letter dated such date from the independent public
accountants retained by the Company, addressed to the underwriters and to such
seller, stating that they are independent public accountants within the meaning
of the Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration statement or
the prospectus, or any amendment or supplement thereof, comply as to form in all
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material respects with the applicable accounting requirements of the Securities
Act, and such letter shall additionally cover such other financial matters
(including information as to the period ending no more than five business days
prior to the date of such letter) with respect to such registration as such
underwriters reasonably may request; and
(h) make available for inspection by each seller of Restricted Stock,
any underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by 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.
For purposes of Section 7(a) and 7(b) and of Section 4(c), the period of
distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Restricted Stock covered thereby and 120 days
after the effective date thereof.
In connection with each registration hereunder, the sellers of Restricted
Stock will furnish to the Company in writing such information with respect to
themselves and the proposed distribution by them as reasonably shall be
necessary in order to assure compliance with federal and applicable state
securities laws.
If the Company has delivered preliminary or final prospectuses to the
sellers of Restricted Stock and after having done so the prospectus is amended
to comply with the requirements of the Securities Act, the Company shall
promptly notify such sellers and, if requested, such sellers shall immediately
cease making offers of Restricted Stock and return all prospectuses to the
Company. The Company shall promptly provide the sellers with revised
prospectuses and, following receipt of the revised prospectuses, the sellers
shall be free to resume making offers of the Restricted Stock.
In connection with each registration pursuant to Sections 4, 5 or 6
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
8. EXPENSES. All expenses incurred in complying with Sections 4, 5 and
6, including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and independent public accountants
for the Company, fees and expenses (including counsel fees) incurred in
connection with complying with state securities or "blue sky" laws, fees of the
National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars, costs of insurance and reasonable fees and
disbursements of one counsel for the sellers of Restricted Stock, but excluding
any Selling Expenses, are called "Registration Expenses". All underwriting
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discounts and selling commissions applicable to the sale of Restricted Stock are
called "Selling Expenses". The Company will pay all Registration Expenses in
connection with each registration statement under Sections 4, 5 or 6.
9. INDEMNIFICATION AND CONTRIBUTION. (a) In the event of a registration
of any of the Restricted Stock under the Securities Act pursuant to Sections 4,
5 or 6, the Company will indemnify and hold harmless each seller of such
Restricted Stock thereunder, each underwriter of such Restricted Stock
thereunder and each other person, if any, who controls such seller or
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such seller,
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Restricted Stock were registered under the Securities Act
pursuant to Sections 4, 5 or 6, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such seller, each such underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability (or action in respect thereof) arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by any such seller, any such
underwriter or any such controlling person in writing specifically for use in
such registration statement or prospectus.
(a) In the event of a registration of any of the Restricted Stock under
the Securities Act pursuant to Sections 4, 5 or 6, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer, director, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Restricted Stock
were registered under the Securities Act pursuant to Sections 4, 5 or 6, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
PROVIDED, HOWEVER, that such seller will be liable hereunder in any such case if
and only to the extent that any such loss, claim, damage or liability (or action
in respect thereof) arises out of or is based upon an untrue statement or
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alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
registration statement or prospectus, and PROVIDED, FURTHER, HOWEVER, that the
liability of each seller hereunder shall be limited to the proceeds received by
such seller from the sale of Restricted Stock covered by such registration
statement.
(b) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 9 and shall only relieve it
from any liability which it may have to such indemnified party under this
Section 9 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 9 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so selected,
PROVIDED, HOWEVER, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the indemnifying
party or if the indemnified party is advised by counsel that the interests of
the indemnified party reasonably may be deemed to conflict with the interests of
the indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred. The indemnifying party shall not, however, in
connection with any action or related action in the same jurisdiction be liable
for the fees and expenses of more than one separate law firm at any one time for
all such indemnified parties. No indemnifying party shall be liable for any
settlement of any proceeding effected without its written consent, which consent
shall not be unreasonably withheld, but if settled with such consent, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement.
(c) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Restricted Stock exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 9 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 9 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling holder or any such controlling
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person in circumstances for which indemnification is provided under this Section
9; then, and in each such case, the Company and such holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such holder
is responsible for the portion represented by the percentage that the public
offering price of its Restricted Stock offered by the registration statement
bears to the public offering price of all securities offered by such
registration statement, and the Company is responsible for the remaining
portion; PROVIDED, HOWEVER, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the public offering price of all
such Restricted Stock offered by it pursuant to such registration statement; and
(B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11 (f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.
10. CHANGES IN COMMON STOCK AND CLASS B STOCK. If, and as often as,
there is any change in the Common Stock, Class B Stock or the Series A Preferred
Stock by way of a stock split, stock dividend, combination or reclassification,
or through a merger, consolidation, reorganization or recapitalization, or by
any other means, appropriate adjustment shall be made in the provisions hereof
so that the rights and privileges granted hereby shall continue with respect to
the Common Stock, Class B Stock or the Series A Preferred Stock as so changed.
11. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Stock to the public without registration, at all times
the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act; and
(c) furnish to each holder of Restricted Stock forthwith upon request a
written statement by the Company as to its compliance with the reporting
requirements of such Rule 144 and of the Securities Act and the Exchange Act, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents so filed by the Company as such holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing such holder to sell any Restricted Stock without
registration.
12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate in any material respect any provision of law, any order of any court or
other agency of government, the Certificate of Incorporation or By-laws of the
Company, each as amended, or in any material respect any provision of any
indenture, agreement or other instrument to which it or any or its properties or
assets is bound, conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such indenture, agreement
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or other instrument (except those which would not have a material adverse affect
on the business of the company) or result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the properties
or assets of the Company.
(b) This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, except to the extent that the
enforceability of the indemnification and contribution provisions hereof may be
limited by applicable laws.
13. MISCELLANEOUS.
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto.
(b) All notices, requests, consents and other communications hereunder
shall be in writing and shall be delivered in person, mailed by certified or
registered mail, return receipt requested, or sent by telecopier or telex,
addressed as follows:
if to the Company or any other party hereto, at the address of such
party set forth in the Purchase Agreement;
if to any subsequent holder of Preferred Shares or Restricted Stock
or to a Related Party, to it at such address as may have been furnished to
the Company in writing by such holder or Related Party.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
(d) This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and the holders
of at least a majority of the outstanding shares of Series A Preferred Stock.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) The obligations of the Company to register shares of Restricted
Stock under Sections 4, 5 or 6 shall terminate on the tenth anniversary of the
date of this Agreement.
(g) Notwithstanding the provisions of Section 7, the Company's
obligation to file a registration statement, or cause such registration
statement to become and remain effective, shall be suspended (i) for a period
not to exceed 90 days in any 24-month period if there exists at the time
material non-public information relating to the Company which, in the reasonable
opinion of the Company, should not be disclosed or (ii) if at the time of a
request to register securities pursuant to Section 4 or 6 the Company is engaged
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or has fixed plans to engage within 30 days of the time of the request in a firm
commitment underwritten registered public offering as to which holders of
Restricted Stock may include shares pursuant to Section 5, for a period of up to
180 days from the effective date of the registration statement relating to such
offering.
(h) The Company shall not grant to any third party any registration
rights more favorable than or inconsistent with any of those contained herein,
so long as any of the registration rights under this Agreement remains in
effect.
(i) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
Please indicate your acceptance of the foregoing by signing and returning
the enclosed counterpart of this letter, whereupon this Agreement shall be a
binding agreement between the Company and you.
Very truly yours,
FOUNTAIN PHARMACEUTICALS, INC.
By:_________________________________
Xxxx X. Xxxxx, President
AGREED TO AND ACCEPTED as of the date first above written.
Purchaser:
____________________________________
By:_________________________________
Title:______________________________
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