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Exhibit 4a
EXECUTION COPY
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (this "AGREEMENT"), dated as of February 26,
1998, by and among DYNAGEN, INC., a corporation organized under the laws of the
State of Delaware (the "COMPANY"), with headquarters located at 000 Xxxxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 and Sovereign Partners, a Delaware limited
partnership ("PURCHASER").
WHEREAS:
A. The Company and Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the "SECURITIES
ACT");
B. The Company desires to sell and issue to Purchaser as ordinary
course bridge financing, and Purchaser desires to purchase, upon the terms and
conditions stated in this Agreement, a 7% Convertible Debenture Due February 26,
1999 of the Company (the "DEBENTURE") convertible into shares of common stock,
par value $0.01 per share, of the Company (the "COMMON STOCK") in accordance
with the terms and conditions set forth therein. The form of the Debenture,
including the terms upon which such Debenture are convertible into shares of
Common Stock, is attached hereto as Exhibit A. The shares of Common Stock
issuable upon conversion of the Debenture or otherwise pursuant to the Debenture
are referred to herein as the "CONVERSION SHARES." The Debenture and the
Conversion Shares are collectively referred to herein as the "SECURITIES."
C. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement,
in the form attached hereto as Exhibit B (the "REGISTRATION RIGHTS AGREEMENT"),
pursuant to which the Company has agreed to provide certain registration rights
under the Securities Act and the rules and regulations promulgated thereunder,
and applicable state securities laws;
NOW, THEREFORE, the Company and the Purchaser hereby agree as follows:
1. PURCHASE AND SALE OF DEBENTURE
a. Purchase of Debenture. On the Closing Date (as defined below),
subject to the satisfaction (or waiver) of the conditions set forth in Sections
6 and 7 below, the Company shall issue and sell to Purchaser and Purchaser
agrees to purchase from the Company, (i) a Debenture in such original principal
amount as is set forth on the signature page hereto Purchaser represents and
agrees that neither it nor its affiliates has entered or will enter into any
transactions with respect to any securities of the Company (other than the
transactions contemplated by this Agreement) on the Closing Date or the three
trading days thereafter. The purchase price (the "PURCHASE PRICE") for the
Debenture shall be as set forth on the execution page hereto.
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b. Form of Payment. On the Closing Date, Purchaser shall pay the
aggregate Purchase Price for the Debenture by wire transfer to the Company, in
accordance with the Company's written wiring instructions, against delivery of
the duly executed Debenture being purchased by such Purchaser hereunder and the
Company shall deliver such Debenture against delivery of such aggregate Purchase
Price. Within twenty (20) days after the second trading day following the
Closing Date, the Company shall deliver to Purchaser a duly executed certificate
representing the Common Shares purchased by Purchaser.
c. Closing Date. Subject to the satisfaction (or waiver) of the
conditions thereto set forth in Section 6 and Section 7 below, the date and time
of the issuance and sale of the Debenture pursuant to this Agreement (the
"CLOSING DATE") shall be 12:00 noon eastern time on February 26, 1998, or such
other time as may be mutually agreed upon by the Company and Purchaser. The
closing shall occur at the offices of Xxxxx, Xxxx & Xxxxx LLP, Xxx Xxxx Xxxxxx
Xxxxxx, Xxxxxx, XX 00000.
2. PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser represents and warrants to the Company that:
a. Investment Purpose. Purchaser is purchasing the Debenture for
Purchaser's own account for investment only and not with a present view towards
the public sale or distribution thereof, except pursuant to sales that are
exempt from the registration requirements of the Securities Act and/or sales
registered under the Securities Act. Purchaser understands that Purchaser must
bear the economic risk of this investment indefinitely, unless the Securities
are registered pursuant to the Securities Act and any applicable state
securities or blue sky laws or an exemption from such registration is available,
and that the Company has no present intention of registering any such Securities
other than as contemplated by the Registration Rights Agreement.
b. Accredited Investor Status. Purchaser is an "accredited investor" as
defined in Rule 501(a) promulgated under the Securities Act.
c. Reliance on Exemptions. Purchaser understands that the Debenture and
Conversion Shares are being offered and sold to Purchaser in reliance upon
specific exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying upon the truth and
accuracy of, and Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of Purchaser set forth herein in
order to determine the availability of such exemptions and the eligibility of
Purchaser to acquire the Debenture and Common Shares.
d. Information. Purchaser and its counsel or representative, if any,
have been furnished all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Debenture which have been specifically requested by Purchaser or its counsel or
representative. Purchaser and its counsel, if any, have been afforded the
opportunity to ask questions of the Company and have received what Purchaser
believes to be complete and satisfactory answers to any such inquiries. Neither
such inquiries nor any other due diligence
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investigation conducted by Purchaser or its counsel or any of its
representatives shall modify, amend or affect Purchaser's right to rely on the
Company's representations and warranties contained in Section 3 below. Purchaser
understands that Purchaser's investment in the Securities involves a high degree
of risk.
e. Governmental Review. Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
f. Transfer or Resale. Purchaser understands that (i) except as
provided in the Registration Rights Agreement, the Securities have not been and
are not being registered under the Securities Act or any state securities laws,
and may not be transferred unless (a) subsequently registered thereunder, or (b)
Purchaser shall have delivered to the Company an opinion of counsel (which
opinion shall be in form, substance and scope customary for opinions of counsel
in comparable transactions) to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration, including without limitation Rule 144 promulgated under the
Securities Act (or a successor rule) ("RULE 144"), or (c) transferred without
consideration to an affiliate of Purchaser; (ii) any sale of such Securities
made in reliance on Rule 144 may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any resale of such
Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the Securities Act) may require compliance with some other exemption under the
Securities Act or the rules and regulations of the Securities and Exchange
Commission (the "SEC") thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such Securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder (in each case, other than pursuant to the Registration
Rights Agreement).
g. Legends. Purchaser understands that the Debenture and, until such
time as the Conversion Shares have been registered under the Securities Act as
contemplated by the Registration Rights Agreement or otherwise may be sold by
Purchaser pursuant to Rule 144 without any restriction as to the public resale
thereof, the certificates for the Conversion Shares, may bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates for such Securities):
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended. The securities have been
acquired for investment and may not be sold, transferred or assigned in
the absence of an effective registration statement for the securities
under said Act, or an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable transactions, that
registration is not required under said Act or unless the Company is
provided with reasonable assurances that the securities were sold
pursuant to Rule 144 under said Act.
The legend set forth above shall be removed and the Company shall issue
a certificate without such legend upon conversion of the Debenture to the holder
of any Security upon which it is stamped,
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if (a) the resale of such Security is registered under the Securities Act, or
(b) such holder provides the Company with an opinion of counsel, in form,
substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security may
be made without registration under the Securities Act or (c) such holder
provides the Company with reasonable assurances that such Security has been sold
pursuant to Rule 144 or can be sold pursuant to Rule 144 without any restriction
as to the number of Securities acquired as of a particular date that can then be
immediately sold. Purchaser agrees to sell all Securities, including those
represented by a certificate(s) from which the legend has been removed, pursuant
to an effective registration statement and to deliver a prospectus in connection
with such sale (if and to the extent such delivery is required) or in compliance
with an exemption from the registration requirements of the Securities Act. In
the event the above legend is removed from any Security and thereafter the
effectiveness of a registration statement covering such Security is suspended or
the Company determines that a supplement or amendment thereto is required by
applicable securities laws, then upon reasonable advance notice to Purchaser the
Company may require that the above legend be placed on any such Security that
cannot then be sold pursuant to an effective registration statement or Rule 144
without any restriction as to the number of Securities acquired as of a
particular date that can then be immediately sold, which legend shall be removed
when such Security has been sold pursuant to Rule 144 or may be sold pursuant to
an effective registration statement or Rule 144 without any restriction as to
the number of Securities acquired as of a particular date that can then be
immediately sold.
h. Authorization; Enforcement. This Agreement and the Registration
Rights Agreement have been duly and validly authorized, executed and delivered
on behalf of Purchaser and are valid and binding agreements of Purchaser
enforceable in accordance with their respective terms.
i. Location of Purchaser. Purchaser has advised the Company in writing
with respect to the jurisdictions wherein the investment decision regarding
Purchaser's acquisition of the Debenture has been made.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser that:
a. Organization and Qualification. The Company and each of its
subsidiaries is a corporation duly organized and existing in good standing under
the laws of the jurisdiction in which it is incorporated, and has the requisite
corporate power to own its properties and to carry on its business as now being
conducted. The Company and each of its subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
where the failure so to qualify would have a Material Adverse Effect. "MATERIAL
ADVERSE EFFECT" means any material adverse effect on the operations, properties,
condition (financial or otherwise) or prospects of the Company and its
subsidiaries, taken as a whole on a consolidated basis or on the ability of the
Company to perform its obligations in connection with the transactions
contemplated hereby on a timely basis.
b. Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and perform this Agreement and the
Registration Rights Agreement, to issue
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and sell the Debenture in accordance with the terms hereof, and to issue the
Conversion Shares upon conversion of the Debenture in accordance with their
terms. The Company's board of directors has voted to place before the Company's
stockholders, at a special meeting to be held on or about March 4, 1998 (the
"STOCKHOLDERS' MEETING"), a proposal to effect a recapitalization of the Company
which would result in a one-for-ten reverse stock split of the Company's Common
Stock (the "REVERSE SPLIT"). If the stockholders do not approve the Reverse
Split, the Company will have insufficient shares of authorized and unissued
Common Stock to meet its obligations under this Agreement. Except for the
matters to be voted on at the Stockholders' Meeting and subject to the
stockholders' approval of the Reverse Split and its subsequent effectiveness,
(i) the execution, delivery and performance of this Agreement, the Registration
Rights Agreement and the Debenture by the Company and the consummation by it of
the transactions contemplated hereby and thereby (including without limitation
the issuance of the Debenture and the issuance and reservation for issuance of
the Conversion Shares) have been duly authorized by the Company's Board of
Directors and no further consent or authorization of the Company, its Board or
Directors, or its stockholders is required ; (ii) this Agreement has been duly
executed and delivered by the Company; and (iii) this Agreement constitutes,
and, upon execution and delivery by the Company of the Registration Rights
Agreement and the Debenture, such agreement and such instrument will constitute,
valid and binding obligations of the Company enforceable against the Company in
accordance with their respective terms.
c. Issuance of Securities. The Debenture is duly authorized and, upon
issuance in accordance with the terms of this Agreement, will be validly issued
and free from all taxes, liens, claims and encumbrances and will not be subject
to preemptive rights or other similar rights of stockholders of the Company.
Subject to approval of the Reverse Split at the Stockholders' Meeting and the
subsequent effectiveness thereof, issuance of the Conversion Shares has been
duly authorized by the Company's Board of Directors, will thereafter be reserved
for issuance upon conversion of the Debenture in accordance with the terms
thereof, will be validly issued, fully paid and non-assessable, and free from
all taxes, liens, claims and encumbrances and will not be subject to preemptive
rights or other similar rights of stockholders of the Company.
d. No Conflicts. The execution, delivery and performance of this
Agreement, the Registration Rights Agreement and the Debenture by the Company,
the performance by the Company of its obligations hereunder and thereunder, and
the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and reservation for
issuance, as applicable, of the Debenture and the Conversion Shares) will not
(i) result in a violation of the Certificate of Incorporation or By-laws or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its subsidiaries is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree (including U.S. federal and state securities laws and regulations)
applicable to the Company or any of its subsidiaries or by which any property or
asset of the Company or any of its subsidiaries is bound or affected (except for
such conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations as would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect). Neither the
Company nor any of its subsidiaries is in violation of its Certificate of
Incorporation or other organizational documents and neither the Company nor any
of its subsidiaries is in default (and no
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event has occurred which, with notice or lapse of time or both, would put the
Company or any of its subsidiaries in default) under, nor has there occurred any
event giving others (with notice or lapse of time or both) any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its subsidiaries is a
party, except for defaults relating to or resulting from the Company's
inadequate number of authorized and unissued Common Stock and possible defaults
or rights as would not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect. The businesses of the Company
and its subsidiaries are not being conducted, and shall not be conducted so long
as Purchaser owns any of the Securities, in violation of any law, ordinance or
regulation of any governmental entity, except for possible violations the
sanctions for which either singly or in the aggregate would not have or
reasonably be expected to result in a Material Adverse Effect. Except as
specifically contemplated by this Agreement and except for the filing of a Form
D with the Securities and Exchange Commission, the filing of the registration
statement contemplated by the Registration Rights Agreement under the Securities
Act, any filings required by applicable state securities laws and the filing of
an application with Nasdaq (as defined below) to list or approve for quotation
the Conversion Shares, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self regulatory agency in order for it
to execute, deliver or perform any of its obligations under this Agreement, the
Registration Rights Agreement or the Debenture, in each case in accordance with
the terms hereof or thereof. The Company has been notified that it is not in
compliance with new listing requirements of the Nasdaq SmallCap Market
("NASDAQ") and the Common Stock is subject to delisting by Nasdaq.
e. SEC Documents, Financial Statements. Since December 31, 1994, the
Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT") (all of the foregoing, filed prior to the date hereof and after December
31, 1994, and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits) incorporated by reference
therein together with any registration statements or other documents filed by
the Company pursuant to the Securities Act prior to the date hereof and all news
releases by the Company, being hereinafter referred to herein as the "SEC
DOCUMENTS"). The Company has made available to Purchaser true and complete
copies of the SEC Documents, except for such exhibits, schedules and
incorporated documents. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Exchange Act or the
Securities Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As of their
respective dates, the financial statements of the Company included in the SEC
Documents complied in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto. Such financial statements have been prepared in accordance with U.S.
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may include footnotes or may not be condensed or
summary
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statements) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except as set forth in the financial
statements of the Company included in the SEC Documents, the Company has no
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to the date of the most recent financial
statements included in the SEC Documents and (ii) obligations under contracts
and commitments incurred in the ordinary course of business and not required
under generally accepted accounting principles to be reflected in such financial
statements, which, individually or in the aggregate, are not material to the
financial condition or operating results of the Company.
f. Absence of Litigation. Except as disclosed in the SEC Documents or
otherwise disclosed to Purchaser, there is no action, suit, proceeding, inquiry
or investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its subsidiaries, threatened against or affecting the Company, any of
its subsidiaries, or any of their respective directors or officers in their
capacities as such, wherein an unfavorable decision, ruling or finding would or
could reasonably be expected to result in a Material Adverse Effect.
g. Disclosure. All information relating to or concerning the Company
set forth in this Agreement or provided to Purchaser pursuant to Section 2(d)
hereof and otherwise in connection with the transactions contemplated hereby is
true and correct in all material respects and the Company has not omitted to
state any material fact necessary in order to make the statements made herein or
therein, in light of the circumstances under which they were made, not
misleading. No event or circumstance has occurred or exists with respect to the
Company or its subsidiaries or their respective businesses, properties,
prospects, operations or financial conditions, which, under applicable law, rule
or regulation, requires public disclosure or announcement by the Company but
which has not been so publicly announced or disclosed (assuming for this purpose
that the Company's Exchange Act Reports are being incorporated into an effective
registration statement filed by the Company under the Securities Act).
h. Current Public Information. The Company is currently eligible to
register the resale of its Common Stock on a registration statement on Form S-3
under the Securities Act. The Company has been notified that it is not in
compliance with new listing requirements of the Nasdaq SmallCap Market
("NASDAQ") and the Common Stock is subject to delisting by Nasdaq.
i. No General Solicitation. Neither the Company nor any person acting
for the Company has conducted any "GENERAL SOLICITATION," as such term is
defined in Regulation D, with respect to any of the Securities being offered
hereby.
j. No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration of the
Securities being offered hereby under the Securities Act.
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k. No Brokers. The Company has taken no action which would give rise to
any claim by any person for brokerage commissions, finder's fees or similar
payments by any Purchaser relating to this Agreement or the transactions
contemplated hereby.
l. Acknowledgment of Dilution. The number of Conversion Shares issuable
upon conversion of the Debenture may increase substantially in certain
circumstances, including the circumstance wherein the trading price of the
Common Stock declines. The Company acknowledges that its obligation to issue
Conversion Shares upon conversion of the Debenture in accordance with its terms
is absolute and unconditional, regardless of the dilution that such issuance may
have on the ownership interests of other stockholders.
4. COVENANTS
a. Best Efforts. The parties shall use their best efforts timely to
satisfy each of the conditions described in Section 6 and 7 of this Agreement.
b. Blue Sky Laws. The Company shall take such action as the Company or
Purchaser shall reasonably determine is necessary to qualify the Securities for
sale to Purchaser pursuant to this Agreement under applicable securities or
"blue sky" laws of the states of the United States or obtain exemption
therefrom, and shall provide evidence of any such action so taken to Purchaser.
c. Reporting Status. So long as Purchaser beneficially owns any of the
Securities, the Company shall timely file all reports required to be filed with
the SEC pursuant to the Exchange Act.
d. Use of Proceeds. The Company shall use the proceeds from the sale of
the Debenture and Conversion Shares for internal working capital purposes,
mergers and acquisitions, investments and general corporate purposes.
e. Financial Information. Upon the written request of Purchaser while
holding any Securities, the Company shall send the following reports to
Purchaser: a copy of its Annual Report on Form 10-K, its Quarterly Reports on
Form 10-Q, any proxy statements, any Current Reports on Form 8-K and any press
releases issued by the Company or any of its subsidiaries.
f. Reservation of Shares. Subject to, and after obtaining, the approval
of the stockholders of the recapitalization describe in Section 3(b) hereof at
the March 4, 1998 meeting, Company shall reserve and shall at all times
thereafter have authorized and reserved for the purpose of issuance a sufficient
number of shares of Common Stock to provide for the full conversion of the
Debenture and issuance of the Conversion Shares in connection therewith and as
otherwise required by the Debenture.
g. Corporate Existence. So long as Purchaser beneficially owns the
Debenture, the Company shall maintain its corporate existence, except in the
event of a merger, consolidation or sale of all or substantially all of the
Company's assets, as long as the surviving or successor entity in such
transaction (i) assumes the Company's obligations hereunder and under the
agreements and instruments entered into in connection herewith regardless of
whether or not the Company would
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have had a sufficient number of shares of Common Stock authorized and available
for issuance in order to effect the conversion of the Debenture as of the date
of such transaction and (ii) is a publicly traded corporation whose common stock
is listed for trading on the Nasdaq Stock Market, the New York Stock Exchange or
The American Stock Exchange.
5. TRANSFER AGENT INSTRUCTIONS
The Company shall instruct its transfer agent to issue certificates,
registered in the name of Purchaser or its nominee, for the Conversion Shares in
such amounts as specified from time to time by Purchaser to the Company upon
conversion of the Debenture. Prior to registration of the Conversion Shares
under the Securities Act or resale of such Securities under Rule 144, all such
certificates shall bear the restrictive legend specified in Section 2(g) of this
Agreement. The Company warrants that no instruction other than such instructions
referred to in this Section 5, and stop transfer instructions to give effect to
Section 2(f) hereof in the case of the Conversion Shares prior to registration
of the Conversion Shares under the Securities Act, will be given by the Company
to its transfer agent and that the Securities shall otherwise be freely
transferable on the books and records of the Company as and to the extent
provided in this Agreement, the Registration Rights Agreement and the Debenture.
Nothing in this Section shall affect in any way Purchaser's obligations and
agreement set forth in Section 2(f) hereof not to resell the Securities except
pursuant to an effective registration statement (and to deliver a prospectus in
connection with such a sale) or in compliance with an exemption from the
registration requirements of applicable securities law. If Purchaser provides
the Company with an opinion of counsel, which opinion of counsel shall be in
form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that the Securities to be sold or transferred may be
sold or transferred pursuant to an exemption from registration, the Company
shall permit the transfer, and, in the case of the Conversion Shares, promptly
instruct its transfer agent to issue one or more certificates in such name and
in such denominations as specified by a Purchaser. The Company acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to a
Purchaser by vitiating the intent and purpose of the transaction contemplated
hereby. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 5 will be inadequate and agrees, in
the event of a breach or threatened breach by the Company of the provisions of
this Section 5, that a Purchaser shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing economic loss
and without any bond or other security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL
The obligation of the Company hereunder to issue and sell the Debenture
to Purchaser at the closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions thereto, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion.
(a) Purchaser shall have executed the execution page to this Agreement
and the Registration Rights Agreement, and delivered the same to the Company.
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(b) Purchaser shall have delivered the Purchase Price for the
Debenture.
(c) The representations and warranties of Purchaser shall be true and
correct.
(d) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
7. CONDITIONS TO PURCHASER'S OBLIGATION TO PURCHASE
The obligation of Purchaser hereunder to purchase the Debenture on the
Closing Date is subject to the satisfaction of each of the following conditions,
provided that these conditions are for Purchaser's sole benefit and may be
waived by Purchaser at any time in Purchaser's sole discretion:
(a) The Company shall have executed the signature page to this
Agreement and the Registration Rights Agreement, and delivered the same to
Purchaser.
(b) The Company shall have delivered to Purchaser a duly executed
Debenture in the principal amount being purchased by Purchaser in accordance
with Section 1(b) above.
(c) The representations and warranties of the Company shall be true and
correct as of the Closing Date and the Company shall have performed, satisfied
and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date.
(d) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
8. GOVERNING LAW; MISCELLANEOUS
a. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware. The parties
irrevocably consent to the jurisdiction of the United States District Courts for
the Southern District of New York in any suit or proceeding based on or arising
under this Agreement and irrevocably agree that all claims in respect of such
suit or proceeding may be determined in such court. The parties irrevocably
waive the defense of an inconvenient forum to the maintenance of such suit or
proceeding. The parties further agree that service of process mailed by first
class mail shall be deemed in every respect effective service of process in any
suit or proceeding arising hereunder. Nothing herein shall affect Purchaser's
right to serve process in any other manner permitted by law. The parties agree
that a final non-appealable judgment in any such
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suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner.
b. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party.
c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
e. Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor Purchaser make any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived other than by an instrument in writing signed by
the party to be charged with enforcement and no provision of this Agreement may
be amended other than by an instrument in writing signed by the Company and
Purchaser.
f. Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier, overnight delivery
service or by confirmed telecopy, and shall be effective five days after being
placed in the mail, if mailed, or upon receipt or refusal of receipt, if
delivered personally or by courier, overnight delivery service or confirmed
telecopy, in each case addressed to a party. The addresses for such
communications shall be:
If to the Company:
Dynagen, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxx
with a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
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If to Purchaser, to :
Sovereign Partners
Executive Pavilion
00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Each party shall provide notice to the other parties of any change in
address.
g. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company nor Purchaser shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other. This
provision shall not limit Purchaser's right to transfer the Securities pursuant
to the terms of the Debenture, the Registration Rights Agreement and this
Agreement or to assign Purchaser's rights hereunder to any such transferee, nor
shall this provision limit the right of Purchaser to transfer or assign its
rights under such agreements and instruments to an affiliate (provided that
Purchaser makes no more than two (2) such transfers), provided that the
representations and warranties set forth in Section 2 are true and correct with
respect to such affiliate or managed account.
h. Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
i. Survival. The representations and warranties of the parties and the
agreements and covenants set forth in Sections 2, 3, 4 and 8 shall survive the
closing hereunder and any conversion of the Debenture, notwithstanding any due
diligence investigation conducted by or on behalf of Purchaser.
j. Publicity. The Company and Purchaser shall have the right to approve
before issuance any press releases, SEC, Nasdaq or NASD filings, or any other
public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior
approval of Purchaser, to describe the transactions contemplated hereby in any
Form 10-Q or Form 10-K filed by it.
k. Further Assurances. 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.
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IN WITNESS WHEREOF, the undersigned Purchaser and the Company have
caused this Agreement to be duly executed as of the date first above written.
SOVEREIGN PARTNERS
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title:_________________________
SUBSCRIPTION AMOUNT
Principal Amount of Debenture: $500,000
Purchase Price: $500,000
DYNAGEN, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
Title: Executive Vice President
