EXHIBIT 4.19
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of June 17,
1997 by and among DYNAGEN, INC., a Delaware corporation, with headquarters
located at 00 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Company"), and
XXXXXX XXXX SECURITIES INC., acting in its capacity as agent for certain
non-U.S. persons (such non-U.S. persons, the "INITIAL INVESTOR").
WHEREAS:
A. In connection with the Securities Purchase Agreement of even date
herewith by and between the Company and the Initial Investor (the "PURCHASE
AGREEMENT"), the Company has agreed, upon the terms and subject to the
conditions contained therein, to issue and sell to the Initial Investor (i)
Series B Preferred Stock (the "PREFERRED STOCK") that is convertible into shares
(collectively, the "CONVERSION SHARES") of the Company's common stock (the
"COMMON STOCK") , all upon the terms and subject to the limitations and
conditions set forth in the Certificate of Designation, and (ii) 225,000 shares
of Common Stock (the "COMMON SHARES"); and
B. To induce the Initial Investor to execute and deliver the Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 ACT");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investor hereby agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have
the following meanings:
(i) "INVESTORS" means the Initial Investor and any
transferees or assignees who agree to become bound by the provisions of this
Agreement in accordance with Section 9 hereof.
(ii) "REGISTER," "REGISTERED," and "REGISTRATION"
refer to a registration effected by preparing and filing a Registration
Statement or Statements in compliance with the 1933 Act and pursuant to Rule 415
under the 1933 Act or any successor rule providing for offering securities on a
continuous basis ("RULE 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(iii) "POTENTIALLY MATERIAL EVENT" means any of the
following: (a) the possession by the Company of material information not ripe
for disclosure in a registration statement, which shall be evidenced by
determinations in good faith by the Board of Directors of the Company that
disclosure of such information in the registration statement would be
detrimental to the business and affairs of the Company; or (b) any material
engagement or activity by the Company that would, in the good faith
determination of the Board of Directors of the Company, be adversely affected by
disclosure in a registration statement at such time, which determination shall
be accompanied by a good faith determination by the Board of Directors of the
Company that the registration statement would be materially misleading absent
the inclusion of such information.
(iv) "REGISTRABLE SECURITIES" means the Conversion
Shares issued or issuable and the Common Shares, any shares of capital stock
issued or issuable as a dividend on or in exchange for or otherwise with respect
to any of the foregoing and any shares of Common Stock issued in connection with
Section 2(b) hereof.
(v) "REGISTRATION STATEMENT" means a registration
statement of the Company under the 1933 Act providing for registration of the
Registrable Securities.
(b) Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Purchase Agreement.
2. REGISTRATION.
(a) Mandatory Registration. The Company shall, within 45 days
following the Closing Date, file with the SEC a Registration Statement on Form
S-3 (or, if Form S-3 is not then available to the Company, on such form of
Registration Statement as is then available to the Company to effect a
registration of the Registrable Securities, subject to the consent of the
Initial Investor (as determined pursuant to Section l0 hereof), which consent
will not be unreasonably withheld conditioned or delayed) covering the resale of
the Registrable Securities. The Registration Statement, to the extent allowable
under the 1933 Act and the Rules promulgated thereunder (including Rule 416),
shall state that such Registration Statement also covers such indeterminate
number of additional Conversion Shares as may become issuable upon conversion of
the Preferred Stock or to prevent dilution resulting from stock splits, stock
dividends or similar transactions. The Company shall use its best efforts to
cause such registration to become and remain effective (including the taking of
such steps as are necessary to obtain the removal of any stop orders); provided,
however, that the Investors shall furnish the Company with such appropriate
information in connection therewith (whether requested prior to or after the
filing of the Registration Statement with the SEC) as the Company shall
reasonably request in writing. The Registration Statement (and each amendment or
supplement thereto, and each request for acceleration of effectiveness thereof)
shall be provided to (and subject to the approval of) the Initial Investor and
its counsel prior to its filing or other submission. The Company further
undertakes to take all steps necessary to ensure that a Registration Statement
is, or Registration Statements are, effective at all times during the
Registration Period (as defined below) with respect to all Registrable
Securities and the resale thereof.
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(b) Liquidated Damages. The Company shall use its best efforts to
obtain effectiveness of the Registration Statement within 150 days following the
Closing Date. If (i) the Registration Statement(s) covering the Registrable
Securities required to be filed by the Company pursuant to Section 2(a) hereof
is not declared effective by the SEC within one hundred fifty (150) days after
the Closing Date of the sale of the Shares, or if, after the Registration
Statement has been declared effective by the SEC, sales of Registrable
Securities cannot be made pursuant Registration Statement (by reason of stop
order, the Company's failure to update the Registration Statement, the
occurrence of a Potentially Material Event, a Company Event (as defined below)
or otherwise), or (ii) any of the Registrable Securities are not designated,
listed, or included for quotation on the NASDAQ National Market System (the
"NASDAQ-NMS"), NASDAQ SmallCap, the New York Stock Exchange (the "NYSE"), or the
American Stock Exchange (the "AMEX"), then the Company will make payments to the
Investors as liquidated damages in such amounts and at such times as shall be
determined pursuant to this Section 2(b) as partial relief for the damages to
the Investor by reason of any such delay in or reduction of their ability to
sell the Registrable Securities (which remedy shall not be exclusive of any
other remedies available at law or in equity). The Company shall pay to each
holder of Registrable Securities an amount equal to (x) the aggregate purchase
price paid by the Investors for the Shares then held by such investors and of
which sales cannot be made pursuant to the Registration Statement or are not
listed, designated or included for quotation on NASDAQ-NMS, NASDAQ SmallCap,
they NYSE, or AMEX (including, without limitation, Preferred Shares that have
been converted into Conversion Shares then held by such Investors) (the
"Aggregate Share Price") multiplied by (y) two and one-half hundredths (.025)
multiplied by (z) the sum of (i) the number of months (prorated for partial
months) after the end of such 150-day period and prior to the date the
Registration Statement is declared effective by the SEC; provided, however, that
there shall be excluded form such period any delays that are solely attributable
to changes required by the Investors in the Registration Statement with respect
to information relating to the Investors, including, without limitation, changes
to the plan of distribution, or to the failure of the Investors to conduct their
review of the registration statement pursuant to Section 2(a) above in a
reasonably prompt manner; plus (ii) the number of months (prorated for partial
months) that sales cannot be made pursuant to the Registration Statement after
the Registration Statement has been declared effective; plus (iii) the number of
months (prorated for partial months) that the Common Stock is not listed or
included for quotation on the NASDAQ-NMS, NASDAQ SmallCap, NYSE or AMEX after
the Registration Statement has been declared effective. (For example, if the
Registration Statement becomes effective one (1) month after the end of such
150-day period, the Company would pay $25,000 for each $1,000,000 of Aggregate
Share Price and would continue to pay $25,000 for each $1,000,000 of Aggregate
Share Price until the Registration Statement becomes effective.) Such amounts
shall be paid in cash or, at each Investor's option (but subject to the
limitations contained Article 5 of the Certificate of Designations), may be
convertible into Common Stock at the "Series B Conversion Price" (as defined in
the Certificate of Designations). Any shares of Common Stock issued upon
conversion of such amounts shall be Registrable Securities. If the Investor
desires to convert the amounts due hereunder into Registrable Securities, it
shall so notify the Company in writing within two (2) business days of the date
on which such amounts are first payable in cash and such amounts shall be so
convertible (pursuant to the mechanics set forth in the Certificate of
Designations), beginning on the last day upon
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which the cash amount would otherwise be due in accordance with the following
sentence. Payments of cash pursuant hereto shall be made within ten (10) days
after the end of each period that gives rise to such obligation, provided that,
if any such period extends for more than thirty (30) days, interim payments
shall be made for each such thirty (30) day period. Notwithstanding anything to
the contrary set forth above in this Section 2(b), if the payment of cash
liquidated damages by the Company would cause the Company to violate any
covenant under any agreement entered into in connection with the Superior
Transaction (as defined in the Purchase Agreement), then for so long as such
payment would cause such violation, the Company may pay any liquidated damages
required hereunder in shares of Common Stock, valued at the average of the
closing bid price of the Common Stock as recorded by the NASDAQ SmallCap market
for the five trading days preceding the payment date required by the immediately
preceding sentence. Any of such shares of Common Stock paid as liquidated
damages shall be Registrable Securities.
(c) Eligibility for Form S-3. The Company represents and
warrants that, as of the date hereof, it meets the requirements for the use of
Form S-3 for registration of the sale by the Investors of the Registrable
Securities and the Company shall file all reports required to be filed by the
Company with the SEC in a timely manner so as to maintain such eligibility for
the use of Form S-3.
3. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
(a) The Company shall within 45 days following the Closing
Date prepare and file promptly with the SEC a Registration Statement and
thereafter use its best efforts to cause such Registration Statement to become
effective within 150 days following the Closing Date, and keep the Registration
Statement effective pursuant to Rule 415 at all times until such date as is the
earlier of (i) the date on which all of the Registrable Securities have been
sold and no shares of Preferred Stock are outstanding, (ii) the date on which
all of the Registrable Securities (in the opinion of counsel to the Initial
Investor) may be immediately sold without registration and (iii) two years from
the Closing Date (the "REGISTRATION PERIOD"), which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein and all documents incorporated by reference therein) shall not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein not
misleading. The Company shall furnish to the Investors, in accordance with the
notice provisions of Section 11(b) hereof, copies of reasonably complete drafts
of all such documents proposed to be filed (including exhibits, if any), and any
such Investor shall have the opportunity to object, within three (3) business
days, to any information pertaining to such Investor that is contained therein
and the Company will make the corrections reasonably requested by such Investor
with respect to such information prior to filing any such Registration Statement
or amendment.
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(b) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period. Without limiting any of
the Company's obligations under this Agreement, in the event the number of
shares of Common Stock covered for resale by the Investors under a Registration
Statement filed pursuant to this Agreement is insufficient to cover all of the
Registrable Securities (a "Company Event"), the Company shall amend the
Registration Statement, or file a new Registration Statement (on the short form
available therefore, if applicable), or both, so as to cover all of the
Registrable Securities, in each case, as soon as practicable, but in any event
within forty-five (45) days after the necessity therefor arises (based on the
market price of the Common Stock and other relevant factors on which the Company
reasonably elects to rely). The Company shall use its best efforts to cause such
amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof. During any period when a Company Event
has occurred and is continuing, the Company shall pay liquidated damages as
provided for in Section 2(b) hereof.
(c) The Company shall furnish, in accordance with the notice
provisions of Section 11(b) hereof, to each Investor whose Registrable
Securities are included in the Registration Statement and to its legal counsel
(i) promptly after the same is prepared and publicly distributed, filed with the
SEC or received by the Company, one copy of the Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or supplement thereto, and, in the case of the Registration Statement referred
to in Section 2(a), each letter written by or on behalf of the Company to the
SEC or the staff of the SEC, and each material item of correspondence from the
SEC or the staff of the SEC, in each case relating to such Registration
Statement (other than any portion thereof that contains information for which
the Company has sought confidential treatment), and (ii) such number of copies
of a prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as such Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor.
(d) The Company shall use its best efforts to (i) register and
qualify the Registrable Securities covered by the Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in the United
States as the Investors who hold a majority in interest of the Registrable
Securities being offered reasonably request, (ii) prepare and file in those
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto (a) to qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (b) to subject
itself to general taxation in any such jurisdiction, (c) to file a general
consent to service of process in any such jurisdiction, (d) to provide any
undertakings that cause the Company undue expense or burden, or
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(e) to make any change in its charter or bylaws that in each case the Board of
Directors of the Company determines to be contrary to the best interests of the
Company and its stockholders. The Company shall promptly notify each Investor
who holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or qualification
of any of the Registrable Securities for sale under the securities or "blue sky"
laws of any jurisdiction in the United States or its receipt of actual notice of
the initiation or threatening of any proceeding for such purpose.
(e) Notwithstanding the foregoing, if at any time or from time
to time after the date of effectiveness of the Registration Statement, the
Company notifies the Investors in writing of the existence of a Potentially
Material Event, the Investors shall not offer or sell any Registrable Shares, or
engage in any other transaction involving or relating to the Registrable Shares,
from the time of the giving of notice with respect to a Potentially Material
Event until such Investor receives written notice from the Company that such
Potentially Material Event either has been disclosed to the public or no longer
constitutes a Potentially Material Event; provided, however, that the Company
may not so suspend the right to such holders of Registrable Shares for more than
90 days in the aggregate during any 12-month period during the period the
Registration Statement is required to be in effect. Liquidated damages shall
continue to accrue pursuant to Section 2(b) hereof during any such Potentially
Material Event.
(f) The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify each
Investor who holds Registrable Securities being sold (or, in the event of an
underwritten offering, the managing underwriters) of the issuance of such order
and the resolution thereof.
(g) The Company shall make available for inspection by (i) any
Investor, (ii) any underwriter participating in any disposition pursuant to the
Registration Statement, (iii) one firm of attorneys and one firm of accountants
or other agents retained by the Initial Investor, and (iv) one firm of attorneys
retained by all such underwriters (collectively, the "INSPECTORS") all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "RECORDS") as shall be reasonably deemed
necessary by each Inspector to enable each Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information that any Inspector may reasonably request
for purposes of such due diligence; provided, however, that each Inspector shall
hold in confidence and shall not make any disclosure of any Record or other
information that the Company determines in good faith to be confidential, and of
which determination the Inspectors are so notified, unless (a) the disclosure of
such Records is determined to be necessary by the Investors and the Company to
avoid or correct a misstatement or omission in any Registration Statement, (b)
the release of such Records is ordered pursuant to a subpoena or other order
from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement. The
Company shall not be required to disclose any confidential information in such
Records to any Inspector until and unless such Inspector shall have entered into
confidentiality agreements (in form and substance satisfactory to the Company)
with the Company
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with respect thereto, containing terms substantially similar to those contained
in this Section 3(g). Each Investor agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to the Company
and allow the Company, at its expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein shall be deemed to limit the Investor's ability to
sell Registrable Securities in a manner that is otherwise consistent with
applicable laws and regulations.
(g) The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, or other applicable law, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other order from a court or governmental body of
competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this or any
other agreement. The Company agrees that it shall, upon learning that disclosure
of such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to such Investor prior to making such disclosure, and allow the Investor,
at its expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, such information.
(i) The Company shall use its best efforts to secure the
listing, designation and inclusion for quotation of all the Registrable
Securities covered by the Registration Statement on the NASDAQ SmallCap Market,
if the listing of such Registrable Securities is then permitted under the rules
and regulations of such market. To the extent that the Company is unable to
secure such designation and quotation of any Registrable Securities, liquidated
damages shall accrue on such Registrable Securities pursuant to Section 2(b)
hereof.
(j) The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.
(k) The Company shall cooperate with the Investors who hold
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be sold pursuant to the Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Investors may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Investors may request.
(l) The Company shall use its best efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable each holder thereof to consummate disposition of Registrable
Securities.
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4. OBLIGATIONS OF THE INVESTORS.
In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:
(a) It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such Registrable Securities.
(b) Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statement.
(c) Each Investor agrees that, upon receipt of any notice from
the Company of the happening of Potentially Material Event as set forth in
Section 3(e), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities, and shall be entitled to liquidated damages in
accordance with Section 2(b) hereof, until such Investor receives notice in
accordance with Section 3(e) providing for the disposition of Registrable
Securities in accordance with the Registration Statement.
(d) Without limiting an Investor's rights under Section 2(a),
no Investor may participate in any underwritten distribution hereunder unless
such Investor (i) agrees to sell such Investor's Registrable Securities on the
basis provided in any underwriting arrangements in usual and customary form
entered into by the Company, (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements, and (iii)
agrees to pay its pro rata share of all underwriting discounts and commissions
and any expenses in excess of those payable by the Company pursuant to Section 5
below.
(e) Each Investor whose Registrable Securities are included in
a Registration Statement understands that the 1933 Act may require delivery of a
prospectus relating thereto in connection with any sale thereof pursuant to such
Registration Statement and each such Investor shall use its reasonable best
efforts to comply with the applicable prospectus delivery requirements of the
1933 Act in connection with any such sale.
(f) Each Investor agrees to notify the Company promptly, but
in any event within seventy-two (72) hours after the date on which all
Registrable Securities owned by such Investor have been sold by such Investor,
so that the Company may comply with its obligation to
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terminate the Registration Statement in accordance with Item 512 of Regulation
S-K or Regulation S-B, as the case may be.
5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including all registration, listing
and qualifications fees, printers and accounting fees and the fees and
disbursements of counsel for the Company, shall be borne by the Company. All
fees and disbursements of counsel to the holders of Registrable Securities, any
expenses incurred by holders of the Registrable Securities as a result of any
investigation pursuant to Section 3(g), any underwriting discounts and
commissions and all other expenses of such holders not contained in the previous
sentence shall be borne by the holders of Registrable Securities.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
(a) To the extent permitted by law, the Company will
indemnify, hold harmless and defend (i) each Investor who is a seller of
Registrable Securities under the Registration Statement, and (ii) the directors,
officers, partners, employees, agents and each person who controls any such
Investor within the meaning of the 1933 Act or the Securities Exchange Act of
1934, as amended (the "1934 ACT"), if any (each, an "INDEMNIFIED PERSON"),
against any joint or several losses, claims, damages, liabilities or expenses
(collectively, together with actions, proceedings or inquiries by any regulatory
or self-regulatory organization, whether commenced or threatened, in respect
thereof, "CLAIMS") to which any of them may become subject insofar as such
Claims arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or the omission
or alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading (the matters in the foregoing
clauses (i) and (ii) being, collectively, "VIOLATIONS"). Subject to the
restrictions set forth in Section 6(c) with respect to the number of legal
counsel, the Company shall reimburse the Investors and each such underwriter or
controlling person, promptly as such expenses are incurred and are due and
payable, for any reasonable legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim arising
out of or based upon a Violation that occurs in reliance upon and in conformity
with information furnished in writing to the Company by any Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement,
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preliminary prospectus or final prospectus, or any amendment thereof or
supplement thereto; (ii) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld; and (iii) with
respect to any preliminary prospectus, shall not inure to the benefit of any
Indemnified Person if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, if such corrected prospectus was
timely made available by the Company pursuant to Section 3(c) hereof. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of
the Registrable Securities by the Investors pursuant to Section 9.
(b) In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees severally and not jointly
to indemnify, hold harmless and defend, to the same extent and in the same
manner set forth in Section 6(a), the Company, each of its directors, each of
its officers who signs the Registration Statement, each person, if any, who
controls the Company within the meaning of the 1933 Act or the 1934 Act, and any
other stockholder selling securities pursuant to the Registration Statement or
any of its directors or officers or any person who controls such stockholder
within the meaning of the 1933 Act or the 1934 Act (collectively, an
"INDEMNIFIED PARTY"), against any Claim to which any of them may become subject,
under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim arises out
of or is based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon written information
furnished to the Company by such Investor expressly for use in connection with
such Registration Statement, preliminary prospectus or final prospectus, or any
amendment or supplement thereto; and subject to Section 6(c) such Investor will
reimburse any legal or other expenses (promptly as such expenses are incurred
and are due and payable) reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Investor, which consent shall not be unreasonably withheld;
provided, further, however, that the Investor shall be liable under this
Agreement (including this Section 6(b) and Section 7) for only that amount as
does not exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented.
(c) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate
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in, and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. The indemnifying
party shall pay for only one separate legal counsel for the Indemnified Persons
or the Indemnified Parties, as applicable, and such legal counsel shall be
selected by Investors holding a majority-in-interest of the Registrable
Securities included in the Registration Statement to which the Claim relates, if
the Investors are entitled to indemnification hereunder, or by the Company, if
the Company is entitled to indemnification hereunder, as applicable. The failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action shall not relieve such indemnifying party of
any liability to the Indemnified Person or Indemnified Party under this Section
6, except to the extent that the indemnifying party is actually prejudiced in
its ability to defend such action. The indemnification required by this Section
6 shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation, and (iii) contribution (together with any indemnification or
other obligations under this Agreement) by any seller of Registrable Securities
shall be limited in amount to the amount of proceeds received by such seller
from the sale of such Registrable Securities.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investors the benefits of Rule
144 promulgated under the 1933 Act or any other similar rule or regulation of
the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("RULE 144"), the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
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(b) use its best efforts to file with the SEC in a timely
manner all reports and other documents required of the Company under the 1933
Act and the 1934 Act so long as the Company remains subject to such requirements
and the filing of such reports and other documents is required for the sale of
the Registrable Securities pursuant to Rule 144; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights of an Investor hereunder, including the right to have the
Company register Registrable Securities pursuant to this Agreement, shall be
automatically assignable by each Investor to (a) any transferee of at least 30%
of the Preferred Stock and/or Common Shares, or Registrable Securities or (b) up
to but no more than five persons proved that in any case, (i) the Investor
agrees in writing with the transferees or assignees to assign such rights, and a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (ii) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (a) the name and
address of such transferees or assignees, and (b) the securities with respect to
which such registration rights are being transferred or assigned, (iii)
following such transfer or assignment, the further disposition of such
securities by the transferee or assignee is restricted under the 1933 Act and
applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence, the
transferees or assignees agree in writing with the Company to be bound by all of
the provisions contained herein, (v) such transfer shall have been made in
accordance with the applicable requirements of the Purchase Agreement, and (vi)
such transferees shall be an "accredited investor" as that term defined in Rule
501 of Regulation D promulgated under the 1933 Act.
10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company and
Investors who hold at least a majority of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon each Investor and the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with
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respect to the same Registrable Securities, the Company shall act upon the basis
of instructions, notice or election received from the registered owner of such
Registrable Securities.
(b) Notices required or permitted to be given hereunder shall
be in writing and shall be deemed to be sufficiently given when personally
delivered (by hand or by courier) or sent by facsimile or reputable overnight
courier service,
If to the Company, to:
DynaGen, Inc.
00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Initial Investor, to:
Xxxxxx Xxxx Securities Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
or at such other address as each such party furnishes by notice given in
accordance with this Section 11(b), and shall be effective, when personally
delivered, upon receipt and, when so sent by facsimile, the time and date
indicated by accurate electronic confirmation generated by the sending facsimile
machine, and when so sent by reputable overnight courier service, the next
business day after sending.
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof
(d) This Agreement shall be enforced, governed by and
construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed entirely within such State. In the event
that any provision of this Agreement is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof that
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
(e) This Agreement and the Purchase Agreement (including all
schedules and exhibits thereto) constitute the entire agreement among the
parties hereto with respect to the
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subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the Certificate of Designation and the Purchase
Agreement supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
(g) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
(i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(j) All consents and other determinations to be made by the
Investors pursuant to this Agreement shall be made by the Investors holding a
majority of the Registrable Securities (determined as if all shares of Preferred
Stock then outstanding had been converted into Registrable Securities).
[REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK.]
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DYNAGEN, INC.
REGISTRATION RIGHTS AGREEMENT
Counterpart Signature Page
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this Agreement and return the same to
the Company, whereupon, this Agreement shall become a binding Agreement among
us.
Very truly yours,
DYNAGEN, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
---------------------------
Title: Executive Vice President
---------------------------
DYNAGEN, INC.
REGISTRATION RIGHTS AGREEMENT
Counterpart Signature Page
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this Agreement and return the same to
the Company, whereupon, this Agreement shall become a binding Agreement among
us.
Very truly yours,
Xxxxxx Xxxx Securities Inc.
By: /s/ [ILLEGIBLE]
---------------------------
Title: Managing Director
---------------------------
