Exhibit 4.2
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT ("Agreement") by and among DYNAGEN INC., a
Delaware corporation (the "Company"), [INSERT NAMES OF PURCHASERS] (collectively
"Purchaser"), dated as of May 13, 1999.
RECITALS
WHEREAS, the Company and the Purchaser are executing and delivering this
Agreement in accordance with and in reliance upon the exemption from securities
registration afforded, inter alia, by Rule 506 under Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933, as amended (the "1933 Act"), and/or
Section 4(2) of the 1933 Act; and
WHEREAS, the Purchaser wishes to purchase, upon the terms and subject to
the conditions of this Agreement, 8% Convertible Debentures of the Company (the
"Debentures") which which will be convertible into shares of Common Stock, $.01
par value per share, of the Company (the "Common Stock"), upon the terms and
subject to the conditions of such Convertible Debentures, and subject to
acceptance of this Agreement by the Company;
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 parties agree as follows:
1. Agreement to Purchase; Purchase Price.
1.1 The undersigned hereby agrees to purchase from the Company the
Debentures in the principal amount set forth on the signature page of this
Agreement (the "Initial Debentures"), out of a total offering of up to$3,000,000
of such Debentures, and having the terms and conditions and being in the form
attached hereto as ANNEX I. The purchase price for the Initial Debentures shall
be as set forth on the signature page hereto and shall be payable in United
States Dollars.
(a) As used herein, the term "Debentures" means the Initial
Debentures unless the context otherwise requires.
(b) As used herein, the term "Securities" means the Debentures and
the Common Stock.
(c) As used herein, the term "Purchase Price" means the purchase
price for the Initial Debentures.
(d) As used herein, the term "Closing Date" means the relevant
Initial Closing Date.
(e) As used herein, the term "Transaction Documents" means the
Securities Purchase Agreement, the Registration Rights Agreement, the Debenture,
the Warrant and the Joint Escrow Instructions.
1.2 Form of Payment; Delivery of Debentures.
(a) The Purchaser shall pay the Purchase Price for the relevant
Debentures by delivering immediately available good funds in United States
Dollars to the escrow agent (the "Escrow Agent") identified in the Joint Escrow
Instructions attached hereto as ANNEX II (the "Joint Escrow Instructions") on
the date prior to the relevant Closing Date.
(b) No later than the relevant Closing Date, but in any event
promptly following payment by the Purchaser to the Escrow Agent of the relevant
Purchase Price, the Company shall deliver the relevant Debentures duly executed
on behalf of the Company to the Escrow Agent.
(c) By signing this Agreement, each of the Purchaser and the
Company, subject to acceptance by the Escrow Agent, agrees to all of the terms
and conditions of, and becomes a party to, the Joint Escrow Instructions, all of
the provisions of which are incorporated herein by this reference as if set
forth in full.
1.3 Method of Payment. Payment into escrow of the Purchase Price shall
be made by wire transfer of funds to:
Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA# 000000000
For credit to the account of Xxxxxxx & Xxxxxx, Esqs.
Account No.: [To be provided by Xxxxxxx & Prager]
Not later than 5:00 p.m., New York time, on the date which is one (1) New York
Stock Exchange trading days after the Company shall have accepted this Agreement
and returned a signed counterpart of this Agreement to the Escrow Agent by
facsimile, the Purchaser shall deposit with the Escrow Agent the Purchase Price
for the Initial Debentures in currently available funds. Time is of the essence
with respect to such payment, and failure by the Purchaser to make such payment,
shall allow the Company to cance this Agreement.
1.4 Escrow Property. The Purchase Price and the Debentures delivered to
the Escrow Agent as contemplated by Sections 1.2(a) and (b) hereof are referred
to as the "Escrow Property."
2. Representations and Warranties of Purchaser. To induce the Company's
acceptance of this Agreement, each of Purchasers hereby severally certifies,
represents and warrants to the Company and its agents and attorneys as follows:
2.1 Intent. Purchaser will be acquiring the Debentures and any shares of
Common Stock acquired upon conversion of the Debentures, for its own account,
and Purchaser has no present arrangement (whether or not legally binding) to
sell any of the Securities to or through any person or entity or any intention
to effect a distribution of Securities; provided, however, that by making the
representations herein, Purchaser does not agree to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with U.S. federal and state securities laws
applicable to such disposition and any restrictions imposed on such transfer by
this Agreement or the instruments and documents executed in connection with this
Agreement. Purchaser understands that the Securities must be held indefinitely
unless the Securities are subsequently registered under the Securities Act or an
exemption from registration is available. Purchaser has been advised or is aware
of the provisions of Rule 144 promulgated under the Securities Act.
2.2 Sophisticated Investor And Accredited Investor. Purchaser is a
"sophisticated investor" (as described in Rule 506(b)(2)(ii) of Regulation D)
and an "accredited investor" (as defined in Rule 501(a) of Regulation D), and
Purchaser has such knowledge and experience in business and financial matters
that it is capable of evaluating the merits and risks of an investment in the
Company's securities.
2.3 Ability of Purchaser to Bear Risk of Investment. Purchaser
acknowledges that the Securities are speculative investments and involve a high
degree of risk and the Purchaser is able to bear the economic risk of an
investment in the Securities, and, at the present time, is able to afford a
complete loss of such investment.
2.4 Authority. The Transaction Documents have been duly authorized and
validly executed and delivered by each Purchaser and (assuming due authorization
and valid execution by the Company) are legal, valid and
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binding agreements of Purchaser enforceable against Purchaser in accordance with
their terms, subject to general principles of equity and to bankruptcy,
insolvency or similar laws relating to, or affecting generally the enforcement
of creditors' rights and remedies or by other equitable principles of general
application. The person or persons executing the Transaction Documents and
documents or instruments executed in connection with this Agreement have all
requisite authority to do so on behalf of Purchaser.
2.5 Brokers, Finders. Each Purchaser has taken no action which would
give rise to any claim by any person for brokerage commission, finder's fees or
similar payments by the Company relating to this Agreement or the transactions
contemplated hereby. The Company shall have no obligation with respect to such
fees or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section 2.5 that may be due in connection
with the transactions contemplated hereby. Purchaser shall indemnify and hold
harmless the Company, its respective employees, officers, directors, agents, and
partners, and their respective affiliates, from and against all claims, losses,
damages, costs (including the costs of preparation and attorney's fees) and
expenses suffered in respect of any such claimed or existing fees, as and when
incurred.
2.6 Organization; Authority. Each Purchaser is an entity organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents, and to
carry out its obligations thereunder. The acquisition of the Securities and the
payment of the purchase price therefor by such Purchaser have been duly
authorized by all necessary action on the part of such Purchaser.
2.7 Absence of Conflicts. The execution and delivery of the Transaction
Documents and any other document or instrument executed in connection herewith
or therewith, and the consummation of the transactions contemplated hereby or
thereby and compliance with the requirements thereof, will not violate any law,
rule, regulation, order, writ, judgment, injunction, decree or award binding on
such Purchaser, or the provision of any indenture, instrument or agreement to
which such Purchaser is a party or is subject, or by which such Purchaser or any
of its assets is bound, or conflict with or constitute a material default
thereunder, or require the approval of any third-party pursuant to any material
contract, agreement, instrument, relationship or legal obligation to which such
Purchaser is subject or to which any of its assets, operations or management may
be subject.
2.8 Disclosure; Access to Information. Each Purchaser has received
copies of or has had access to all documents, records, books and other
information pertaining to such Purchaser's investment in the Company and the
Securities that have been requested by such Purchaser. Each Purchaser has been
afforded the opportunity to ask questions of the Company and its management.
Such Purchaser further acknowledges that it understands that the Company is
subject to the periodic reporting requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and such Purchaser has reviewed or
received copies of any such reports that have been requested by it, including
the Company's Annual Report or form 10-KSB for the year ended December 31, 1998.
Such Purchaser further acknowledges that it has been provided with copies of the
Company's Certificate of Incorporation and By-Laws.
2.9 Manner of Sale. At no time was Purchaser presented with or solicited
by or through any leaflet, public promotional meeting, television advertisement
or any other form of general solicitation or advertising with respect to the
Securities.
2.10 Accuracy of Other Materials. To the extent Purchaser has received
from the Company documents or other materials which constitute summaries,
projections, forecasts or estimates, Purchaser acknowledges the following with
respect to such documents or other materials. Such documents or other materials
are intended to illustrate projected financial and other results based upon a
set of assumptions (in some cases based on information obtained by the Company
from outside sources) the Company views as reasonable and obtainable. All such
summaries, projections, forecasts or estimates pertaining to revenue growth,
profitability and other similar financial or market data are forward-looking
statements. Such statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. No
representations or warranties of future performance by or market trends for the
Company are intended, and such are expressly disclaimed.
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2.11 Accuracy of Representations and Information. All representations
made by Purchaser in the Transaction Documents and all documents and instruments
related to this Agreement or the other Transaction Documents, and all
information provided by Purchaser to the Company concerning Purchaser are
correct and complete in all material respects as of the date hereof.
2.12 Conversion Limitation. Notwithstanding the provisions hereof, in no
event (except (i) with respect to a Mandatory Conversion or (ii) if the Company
is in default under any provision of the Debentures or of any of the Transaction
Agreements, as defined above) shall the holder be entitled to convert any
Debentures to the extent that, after such conversion, the sum of (1) the number
of shares of Common Stock beneficially owned by the Purchaser and its affiliates
(other than shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of the Debentures or
unexercised portion of the Warrants), and (2) the number of shares of Common
Stock issuable upon the conversion of the Debentures or exercise of the Warrants
with respect to which the determination of this proviso is being made, would
result in beneficial ownership by the Purchaser and its affiliates of more than
9.99% of the outstanding shares of Common Stock. For purposes of the proviso to
the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), except as otherwise provided in clause (1) of such proviso.
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to Purchaser as follows:
3.1 Company Status. The Company has registered its shares of Common
Stock pursuant to Section 12(g) of the Exchange Act, is in full compliance with
all reporting requirements of the Exchange Act, and the Company has maintained
all requirements for the continued listing of its Common Stock on the Nasdaq OTC
Bulletin Board, and such Common Stock is currently listed on the Nasdaq OTC
Bulletin Board and the Boston Stock Exchange.
3.2 Current Public Information. The Company has furnished or made
available to Purchaser through directing the Purchaser to the Company's filings
on the SEC Web site, true and correct copies of all registration statements,
reports and documents, including proxy statements (other than preliminary proxy
statements), filed with the Securities and Exchange Commission (the "SEC") by or
with respect to the Company since December 31, 1997 and prior to the date of
this Agreement, pursuant to the Securities Act or the Exchange Act, including
the Company's Annual Report on Form 10-KSB for the year ended December 31, 1998
(collectively, the "SEC Documents"). The SEC Documents are the only filings made
by or with respect to the Company since December 31, 1997 pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act or pursuant to the Securities
Act. The Company has filed all reports, schedules, forms, statements and other
documents required to be filed under Sections 13(a), 13(c), 14 an 15(d) of the
Exchange Act since January 1, 1997 and prior to the date of this Agreement. The
Company currently meets the "Registrant Requirement" for eligibility to use Form
S-3 under the Securities Act in order to register the Company's Securities for
resales.
3.3 No General Solicitation. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
the Securities.
3.4 Valid Issuance of Securities. The Company has an authorized
capitalization consisting of 75,000,000 shares of Common Stock, par value $0.01
per share, and 10,000,000 Preferred Shares par value $0.01 per share. As of the
date of this Agreement, the Company has issued and outstanding the shares of
capital stock, options, warrants and convertible securities set forth on
Schedule 3.4. All of the shares of Common Stock of the Company issued to date
have been duly and validly authorized and issued and are fully paid and
non-assessable. Except as set forth above or as disclosed in Schedule 3.4,the
SEC Documents as of the date of this Agreement, (i) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or
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any of its subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of it subsidiaries is or may become
bound to redeem or issue additional shares of capital stock of the Company or
any of its subsidiaries or options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, any shares of capital stock of the Company or any of
its subsidiaries, (ii) there are no outstanding debt securities and (iii) there
are no agreements or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of their securities under
the Securities Act. Except for the disclosed in Schedule 3.4, there are no
securities or instruments containing any anti-dilution, right of first refusal,
preemptive rights or similar provisions that will be triggered by the issuance
of the Securities as described in this Agreement. Upon issuance of the
Securities, such securities will be duly and validly issued, fully paid and
non-assessable.
3.5 Organization and Qualification. The Company is a corporation duly
organized and existing in good standing under the laws of the State of Delaware,
and has the requisite corporate power to own its properties and to carry on its
business as now being conducted. The Company does not have any subsidiaries,
except for those listed on Schedule 3.5 attached to this Agreement (the
"Subsidiaries"). The Subsidiaries are duly incorporated or organized and
existing in good standing under the laws of the jurisdiction of their
incorporation or organization. The Company and each of the Subsidiaries is duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, other than those in which the
failure so to qualify would not have a Material Adverse Effect. "Material
Adverse Effect" means any effect on the business, operations, properties,
prospects, or financial condition of the Company and its Subsidiaries taken as a
whole or which would prohibit or otherwise materially interfere with the ability
of the Company to enter into and perform its obligations under the Transaction
Documents.
3.6 Authorization: Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Transaction Documents, Debentures and the Registration
Rights Agreement (the "Transaction Documents"), and to issue the Securities in
accordance with the terms of the Transaction Documents, (ii) the execution,
issuance and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplate by the Transaction Documents
have been duly authorized by all necessary corporate action, and no further
consent or authorization of the Company or its board of directors or
shareholders is required, (iii) the Transaction Documents have been duly
executed and delivered by the Company, and (iv) the Transaction Documents
(assuming due authorization and valid and legal execution) constitute legal,
valid and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws relating to, or affecting
generally the enforcement of, creditors' rights and remedies or by other
equitable principles of general application.
3.7 No Conflicts. To the best of the Company's knowledge after diligent
inquiry, the execution, delivery and performance of the Transaction Documents by
the Company and the consummation by the Company of the transactions contemplated
hereby, including without limitation the issuance of the Securities, do not and
will not (i) result in a violation of the Company's Certificate of Incorporation
or By-Laws, or (ii) conflict with, or result in a breach of or forfeiture of any
rights (or result in an event which with notice or lapse of time or both would
become a breach of or forfeiture of any rights) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any material
agreement, indenture or instrument to which the Company or any of the
Subsidiaries is a party, or (iii) result in a violation of any federal or state
law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations) applicable to the Company or any of the
Subsidiaries or by which any property or asset of the Company or any of the
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 a Material Adverse Effect). The
business of the Company is not being conducted in violation of any law,
ordinance or regulation of any governmental entity, except for possible
violations which either singly or in the aggregate do not and will not have a
Material Adverse Effect. The Company is not required under federal, state or
local law, rule or regulation to obtain any consent, authorization or order of,
or make any filing or registration with, any court or governmental agency in
order for it to execute, deliver or perform any of its obligations under this
Agreement or issue and sell the Securities in accordance with the terms of this
Agreement (other than any SEC, NASD or state securities filings which may be
required to be
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made by the Company subsequent to any Closing, and any registration statement
which may be filed in furtherance of this Agreement); provided that, for
purposes of the representation made in this sentence, the Company is assuming
and relying upon the accuracy of the relevant representations and agreements of
Purchaser herein. Except disclosed in the SEC Documents, neither the Company nor
any of the Subsidiaries is in violation of any material term of or in material
default under its certificate of incorporation, by-laws, or any material
contract, agreement, mortgage, indebtedness, indenture, instrument, judgment,
decree of order or any statute, rule or regulation applicable to the Company or
is subsidiaries, which has not been duly waived as of the date of this
Agreement, except for any of the foregoing that do not, individually or in the
aggregate, have a Material Adverse Effect.
3.8 SEC Documents. The Company has not provided to Purchaser any
information which according to applicable law, rule or regulation, should have
been disclosed publicly prior to the date hereof by the Company but which has
not been so disclosed. As of their respective dates, the SEC Documents complied,
and all similar documents filed with the SEC prior to the Closing Date will
comply, in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and rules and regulations of the SEC
promulgated thereunder and other federal, state and local laws, rules and
regulations applicable to such SEC Documents, and none of the SEC Documents
contained, nor will any similar document filed with the SEC prior to the Closing
Date contain, any untrue statement of a material fact or omit 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. The financial statements of the Company included in the SEC
Documents, as of the dates thereof, complied, and all similar documents filed
with the SEC prior to the Closing Date will comply, as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC and other applicable rules and regulations with respect
thereto. Such financial statements were prepared in accordance with generally
accepted accounting principles applied on a consistent basis 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 not include footnotes or may be condensed or summary statements
as permitted by Form 10-Q of the SEC) and fairly present in all material
respects the financial position of the Company and its consolidated subsidiaries
as of the dates thereof and the consolidated results of operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments).
3.9 No Undisclosed Liabilities. Except to the extent described in
Schedule 3.19, the Company and the Subsidiaries have no liabilities or
obligations of a financial nature (whether accrued, absolute, contingent or
otherwise), which are material, individually or in the aggregate, and are not
disclosed in the SEC Documents, other than those incurred in the ordinary course
of the Company's or the Subsidiaries' respective businesses consistent with past
practice since December 31, 1997, and which, individually or in the aggregate,
do not or would not have a Material Adverse Effect on the Company.
3.10 Litigation and Other Proceedings. Except as may be set forth in the
SEC Documents or otherwise disclosed in writing to the Purchaser, there are no
lawsuits or proceedings pending or to the best knowledge of the Company
threatened, against the Company, nor has the Company received any written or
oral notice of any such action, suit, proceeding or investigation, which might
have a Material Adverse Effect on the Company or which might materially
adversely affect the transactions contemplated by this Agreement. Except as set
forth in the SEC Documents no judgment, order, writ, injunction or decree or
award has been issued by or, to the best knowledge of the Company, requested of
any court, arbitrator or governmental agency which might result in a Material
Adverse Effect or which might materially adversely affect the transactions
contemplated by this Agreement.
3.11 Other Documents or Materials. With respect to any document or other
materials received by Purchaser from the Company or its representatives other
than the Transaction Documents and the SEC Documents, (i) the Company has no
reason to believe any of such documents and materials or any projections
contained therein, as of the date of such other documents or materials,
contained errors or misstatements or do not adequately describe the status of
the development of the Company's technologies or its business as of such date,
and (ii) such documents, materials and projections were prepared by the Company
and its management in good faith.
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3.12 Nature of Company. The Company is not an open ended investment
company or a unit investment trust, registered or required to be registered, or
a closed end investment company required to be registered, but not registered,
under the Investment Company Act of 1940.
3.13 Brokers, Finders. Except for payment of fees to Xxxxxxxx Capital,
payment of which is the sole responsibility of the Company, the Company has
taken no action which would give rise to any claim by any person for brokerage
commission, finder's fees or similar payments by Purchaser relating to this
Agreement or the transactions contemplated hereby. Purchaser shall have no
obligation with respect to such fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this Section 3.14
that may be due in connection with the transactions contemplated hereby. The
Company shall indemnify and hold harmless each of Purchaser, their respective
employees, officers, directors, agents, and partners, and their respective
affiliates, from and against all claims, losses, damages, costs (including the
costs of preparation and attorney's fees) and expenses suffered in respect of
any such claimed or existing fees, as and when incurred.
3.14 Absence of Certain Changes. Except as disclosed in the SEC
Documents, since December 31, 1998, no Material Adverse Effect has been suffered
by, and no material adverse development has occurred in the business,
properties, operations, financial condition, results of operations or prospects
of, the Company or the Subsidiaries, except as set forth on Schedule 3.15
hereto. Except as disclosed in the SEC Documents, the Company has not taken any
steps, and does not currently expect to take any steps, to seek protection
pursuant to any bankruptcy law nor does the Company or any of the Subsidiaries
have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy proceedings.
3.15 Intellectual Property Rights. The Company and its subsidiaries do
not have any knowledge of any infringement by the Company or its subsidiaries of
trademarks, trade name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service xxxx registrations, trade
secrets or other similar rights of others, or of any such development of similar
or identical trade secrets or technical information by others and, there is no
claim, action or proceeding being made or brought against, or to the best
knowledge of the Company, being threatened against, the Company or its
subsidiaries regarding trademark, trade name, patent, patent rights, invention,
copyright, license, service name, service xxxx, service xxxx registration, trade
secret or other infringement; and the Company and its subsidiaries are unaware
of any facts or circumstances which might give rise to any of the foregoing. The
Company and its subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their intellectual properties.
3.16 Tax Status. The Company and the Subsidiaries have made or filed all
federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject and has paid all taxes and
other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports, declarations, except those being
contested in good faith and has set aside on its books provisions reasonably
adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports, or declarations apply. There are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such
claim.
3.17 Certain Transactions. Except as set forth in the SEC Documents and
except for arm's length transactions pursuant to which the Company makes
payments in the ordinary course of business upon terms no less favorable than
the Company could obtain from third parties and other than the grant of stock
options, none of the current officers, directors, or employees of the Company
(or any spouse or relative of any such person) is presently a party to any
transaction with the Company (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
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3.18 Dilution. The number of shares of Common Stock issuable upon
conversion of the Debentures may increase substantially in certain
circumstances, including, but not necessarily limited to, the circumstance
wherein the trading price of the Common Stock declines during the sixty day
period between the Effectiveness Date and the Second Closing Date. The Company's
executive officers and directors have studied and fully understand the nature of
the transactions contemplated by this Agreement and recognize that they have a
potential dilutive effect. The board of directors of the Company has concluded,
in its good faith business judgment, that such issuance is in the best interests
of the Company. The Company specifically acknowledges that its obligation to
issue additional Shares pursuant to the Debenture is binding upon the Company
and enforceable regardless of the dilution such issuance may have on the
ownership interests of other shareholders of the Company.
3.19 Nasdaq Listing. The Company's Common Stock is presently quoted on
the Nasdaq OTC Bulletin Board and the Boston Stock Exchange under the symbol
"DYGN". Except as set forth in a letter from the Boston Stock Exchange requiring
a response by May 10, 1999, the Company meets all criteria except the $500,000
net worth requirements of the Boston Stock Exchange. Except as set forth in this
Section 3.19, the Company is not in receipt of any written notice from any stock
exchange, market or trading facility on which the shares of Common Stock are or
have been listed (or on which they are or have been quoted) to the effect that
the Company is not in compliance with the listing or maintenance requirements of
such stock exchange, market or trading facility or that the shares of Common
Stock will be delisted from such stock exchange, market or trading facility.
3.20 No Integrated Offering. Neither the Company nor any of its
affiliates nor any person acting on its or their behalf has, directly or
indirectly, at any time since August 1998, made any offer or sales of any
security or solicited any offers to buy any security under circumstances that
would eliminate the availability of the exemption from registration under
Regulation D in connection with the offer and sale of the Securities as
contemplated hereby.
4. Use and Disposition of Proceeds. The Company will use the proceeds from
the sale of the Debentures pursuant thereto (excluding amounts paid by the
Company for legal fees, finder's fees and escrow agent fees in connection with
the sale of the Debentures) for general company purposes and acquisitions, but
shall not, directly or indirectly, use such proceeds for investment in any other
affiliate or to repay debt to affiliates other than debt to former stockholders
of Superior Pharmaceutical.
5. Company Reliance on Purchaser's Representations. Purchaser understands
that the Company is relying on the truth and accuracy of the representations and
warranties made herein by Purchaser in offering the Securities for sale and in
relying upon applicable exemptions available under the Act and applicable state
securities laws.
6. Restricted Shares. Purchaser understands and acknowledges that the
Initial Securities have not been, and will not as of the time issued, be
registered under the Securities Act and that they will be issued in reliance
upon exemptions from the registration requirements of the Securities Act, and
thus cannot be resold unless they are included in an effective registration
statement filed under the Securities Act or unless an exemption from
registration is available for such resale. With regard to the restrictions on
resales of the Securities, Purchaser is aware (a) that the Company will issue
stop transfer orders to its stock transfer agent in the event of attempts to
improperly transfer any such securities; and (b) that a restrictive legend will
be placed on certificates representing the Securities, which legend will read
substantially as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAW.
ACCORDINGLY, THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
ASSIGNED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT UNDER THE ACT WITH RESPECT TO SUCH SECURITIES AND THE
REGISTRATION AND QUALIFICATIONS OF THE SECURITIES UNDER APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY IN FORM AND CONTENT, THAT
8
SUCH REGISTRATION OR QUALIFICATION UNDER THE SECURITIES ACT AND STATE
SECURITIES LAWS IS NOT REQUIRED.
The legend set forth above shall be promptly removed, and the Company shall
issue a certificate without such legend to the holder of any such Securities
upon which such legend is stamped, if, unless otherwise required by state
securities laws, (i) such Securities are registered for resale under the
Securities Act, or (ii) such holder provides the Company with reasonable
assurances that such Securities can be sold pursuant to Rule 144(k) promulgated
under the Securities Act. Notwithstanding the removal of the legend set forth
above in the event the Securities are registered for resale on an effective
registration statement, the Company reserves the right to affix a legend on
certificates representing such Securities that any selling shareholder must
comply with the prospectus delivery requirements of the Securities Act in
connection with any resale. The Company shall bear the cost of the removal of
any legend as anticipated by this Section 6.
7. Other Covenants of the Company.
7.1 Furnishing of Information. As long as Purchaser owns Securities, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act. If at any time prior to the date on which the Purchasers may resell all of
their Securities without volume restrictions pursuant to Rule 144(k) promulgated
under the Securities Act (as determined by counsel to the Company pursuant to a
written opinion letter to such effect), the Company is not required to file
reports pursuant to such sections, it will prepare and furnish to the Purchasers
and make publicly available in accordance with Rule 144(c) promulgated under the
Securities Act annual and quarterly financial statements, together with a
management's discussion and analysis of such financial statements in form and
substance substantially similar to those that woul otherwise be required to be
included in reports required by Section 13(a) or 15(d) of the Exchange Act in
the time period that such filings would have been required to have been made
under the Exchange Act.
7.2 Listing of Securities. The Company shall (a) not later than the
Effective Date, prepare and file with the Nasdaq OTC Bulletin Board (as well as
any other national securities exchange, market or trading facility on which the
Securities are then listed) any additional shares listing application covering
the Securities covered by on the Nasdaq OTC Bulletin Board, (b) take all other
steps, if any, which may be necessary to cause such Securities to be approved
for listing on the Nasdaq OTC Bulletin Board (as well as on any other national
securities exchange, market or trading facility on which the Securities are then
listed) as soon as possible thereafter, and (c) provide to Purchaser evidence of
such listing, and the Company shall use its best efforts to maintain the listing
of its Securities on such exchange or market.
7.3 Certain Agreements.
(a) Except in accordance with the provisions of Section 7.4 hereof
and the Registration Rights Agreement, the Company covenants and agrees that it
will not, without the prior written consent of the Purchaser, enter into any
subsequent or further offer or sale of the Debentures, Common Stock, or
securities convertible into shares of Common Stock with a market value exceeding
$500,000 with any third party which would require the filing of a Registration
Statement prior to sixty (60) days after the Effective Date.
(b) The provisions of Subsection 7.4 shall not apply to (i) the
issuance of Debentures constituting "restricted securities" within the meaning
of Rule 144, provided the holder thereof holds such Securities for at least one
year from the date of issuance; (ii) public offerings of Securities at market;
or (iii) the issuance of securities (other than for cash) in connection with a
merger, consolidation, purchase of assets, or the exchange of capital stock for
assets, stock or other interests; (iv) the sale or issuance of Securities upon
the exercise of currently outstanding options, warrants or rights or upon the
exercise of options hereafter granted to employees or directors of the Company,
(v) the conversion of currently outstanding convertible securities, or (vi) in
connection with the Settlement of the Superior Pharmaceuticals litigation.
9
7.4 First Right. Each time the Company proposes to sell securities
convertible into or exercisable for shares of its common stock in a capital
raising transaction, prior to closing any such transaction, the Company shall
first notify the Investors in writing stating (i) its bona fide intent to sell
such securities, (ii) a detailed description of the price and terms upon which
the Company intends to sell such securities, and (iii) the number or amount of
the securities proposed to be sold. The Investors shall have five business days
to inform the Company in writing that they wish to purchase all, but not a part,
of the securities proposed to be sold by the Company on the terms and for the
price set forth in the Company's notice. If the Investors shall not exercise
such right, the Company may proceed to sell such securities for the price and on
the terms set forth in its notice. If such transaction is not closed within 60
days of the Company's notice to the Investors, the Investos right set forth in
this paragraph 7.4 shall be deemed to be revived and such securities shall not
be sold unless reoffered to the Investors in accordance herewith. The right of
refusal set forth herein shall not be applicable to sales of securities
described in Section 7.3(b) of this Agreement.
7.5 Available Shares. The Company shall have at all times authorized and
reserved for issuance, free from preemptive rights, shares of Common Stock
sufficient to issue the Repricing Shares.
7.6 Reimbursement. If (i) any Purchaser, other than by reason of its
gross negligence or willful misconduct or violation of any applicable law, rule
or regulation, becomes involved in any capacity in any action, proceeding or
investigation brought by any stockholder of the Company, in connection with or
as a result of the consummation of the transactions contemplated by Transaction
Documents, or is impleaded in any such action, proceeding or investigation, or
(ii) any Purchaser, other than by reason of its gross negligence or willful
misconduct or by reason of its trading of the Company's Securities in a manner
that is illegal under the federal securities laws, rules or regulations or by
reason of its violation of any other law, becomes involved in any capacity in
any action, proceeding or investigation brought by the Commission against or
involving the Company or in connection with or as a result of the consummation
of the transactions contemplated by the Transaction Documents, or is impleaded
in any such action, proceeding or investigation by any person, then in any such
case, the Company will reimburse such Purchaser for its reasonable legal and
other expenses (including the cost of any investigation and preparation)
incurred in connection therewith, as such expenses are incurred. In addition,
other than with respect to any matter in which such Purchaser is a named party
or is impleaded, the Company will pay such Purchaser the charges, as reasonably
determined by such Purchaser, for the time of any officers or employees of such
Purchaser devoted to appearing and preparing to appear as witnesses, assisting
in preparation for hearings, trials or pretrial matters, or otherwise with
respect to inquiries, hearing, trials, and other proceedings relating to the
subject matter of this Agreement. The reimbursement obligations of the Company
under this paragraph shall be in addition to any liability which the Company may
otherwise have, shall extend upon the same terms and conditions to any
affiliates of the Purchasers who are actually named in such action, proceeding
or investigation, and partners, directors, agents, employees and controlling
persons (if any), as the case may be, of the Purchasers and any such affiliate,
and shall be binding upon and inure to the benefit of any successors, assigns,
heirs and personal representatives of the Company, the Purchasers and any such
affiliate and any such Person. The Company also agrees that neither any
Purchaser nor any such affiliate, partners, directors, agents, employees or
controlling persons shall have any liability to the Company or any person
asserting claims on behalf of or in right of the Company in connection with or
as a result of the consummation of the Transaction Documents except to the
extent that any losses, claims, damages, liabilities or expenses incurred by the
Company result from the gross negligence or willful misconduct or violation of
law, rule or regulation by such Purchaser.
7.7 Release. Effective upon the mutual execution hereof, the Company,
for itself and on behalf of all affiliated persons and entities,
representatives, and all predecessors in interest, successors and assigns
(collectively, the "Releasing Parties"), hereby releases and forever discharges
each of Purchaser, and Purchaser's direct and indirect partners, officers,
directors, employees, affiliates, representatives, agents, trustees,
beneficiaries, predecessors in interest, successors in interest and nominees, of
and from any and all claims, demands, actions and causes of action, whether
known or unknown, fixed or contingent, arising prior to the Closing Date, that
the Company may have had, may now have or may hereafter acquire with respect to
any matters whatsoever under, relating to or arising from any prior Purchase
Agreement, Registration Agreement, the Existing Preferred Shares or Debentures,
and the agreements entered into in connection therewith (sometimes collectively
referred to as the
10
"Prior Agreements") with the Purchaser or any affiliate of the Purchaser. The
Purchasers expressly agree that, if any of them commences an action against the
Company, the Company does not waive and the Company may raise (i) any and all
defenses and counterclaims it may have with respect to honoring the terms of the
Prior Agreements, or any (ii) offsets it may have with respect to the amounts
owed under the Prior Agreements.
The Company represents, warrants and covenants that it has not, and at
the time this release becomes effective will not have, sold, assigned,
transferred or otherwise conveyed to any other person or entity all or any
portion of its rights, claims, demands, actions or causes of action herein
released.
7.8 Warrants. The Company agrees to issue to Purchaser at the Closing,
transferable divisible warrants (the "Warrants") for ____________ shares of
Common Stock. Such Warrants shall bear an exercise price per share of Common
Stock as follows: 110% of the Market Price, as defined in the Debenture, on the
Closing Date, and shall be exercisable immediately upon issuance, and for a
period of three (3) years thereafter, in the form annexed hereto as Exhibit VI,
together with piggy-bac registration rights, and demand registration rights.
8. Transfer Agent Instructions.
8.1 Irrevocable Instructions. If the Company maintains a transfer agent
with respect to its Debentures and/or Common Stock, the Company will irrevocably
instruct that the transfer agent issue shares of Common Stock from time to time
in such amounts as shall be specified from time to time by the Company to the
transfer agent, bearing the restrictive legend specified in Section 5 of this
Agreement prior to registration under the Securities Act, registered in the name
of the Purchaser or its nominee and in such denominations to be specified by the
Purchaser and issuable by the Company. The Company warrants that no instruction
other than such instructions referred to in this Section 8 and stop transfer
instructions to give effect to Section 5 hereof prior to registration and sale
of the Securities under the Securities Act will be given by the Company to the
transfer agent and that the securities shall otherwise be freely transferable on
the books and records of the Company as and to th extent provided in this
Agreement, the Registration Rights Agreement, and applicable law. Nothing in
this Section 8 shall affect in any way the Purchaser's obligations and agreement
to comply with all applicable securities laws upon resale of the Securities.
8.2 Transmission of Certificates. The Company will transmit the
Certificates representing the unlegended securities to be issued to the
Purchaser pursuant to Section 8.2 via express courier, by electronic transfer or
otherwise, within three (3) business days after receipt by the Company of the
certificate representing the legended Common Stock (the "Delivery Date").
8.3 Delay. The Company understands that a delay in the issuance of the
securities beyond the Delivery Date could result in economic loss to the
Purchaser. As compensation to the Purchaser for such loss, the Company agrees to
pay late payments to the Purchaser for late issuance of unlegended securities in
accordance with the following schedule (where "No. Days Late" is defined as the
number of days beyond five (5) business days from Delivery Date):
Late Payment For Each
No. Days Late $10,000 of Common Stock
1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
7 $700
8 $800
11
9 $900
10 $1,000
>10 $1,000 +$200 for each
Business Day
Late beyond 10
days
The Company shall pay any payments incurred under this Section 9.4 in
immediately available funds upon demand. Nothing herein shall limit the
Purchaser's right to pursue actual damages for the Company's failure to issue
and deliver the unlegended securities to the Purchaser.
8.4 Cover. If, by the relevant Delivery Date, the Company fails for any
reason to deliver the Shares to be issued pursuant to Section 8.2 and after such
Delivery Date, the holder of the securities (a "Holder") purchases, in an open
market transaction or otherwise, the shares of Common Stock (the "Covering
Shares") in order to make delivery in satisfaction of a sale of shares of Common
Stock by the Holder (the "Sold Shares"), which delivery such Holder anticipated
to make using the Shares to be issued upon such conversion (a "Buy-In"), the
Company shall pay to the Holder, in addition to all other amounts contemplated
in other provisions of the Transaction Agreements, and not in lieu thereof, the
Buy-In Adjustment Amount (as defined below). The "Buy-In Adjustment Amount" is
the amount equal to the excess, if any, of (x) the Holder's total purchase price
(including brokerage commissions, if any) for the Covering Shares over (y) the
net proceeds (after brokerage commissions, if any) received by the Holder from
the sale of the Sold Shares. The Company shall pay the Buy-In Adjustment Amount
to the Company in immediately available funds immediately upon demand by the
Holder. By way of illustration and not in limitation of the foregoing, if the
Holder purchases shares of Common Stock having a total purchase price (including
brokerage commissions) of $11,000 to cover a Buy-In with respect to the shares
of Common Stock it sold for net proceeds of $10,000, the Buy-In Adjustment
Amount which Company will be required to pay to the Holder will be $1,000.
8.5 Electronic Transfer. In lieu of delivering physical certificates
representing the securities issuable upon conversion, provided the Company's
transfer agent is participating in the Depository Trust Company ("DTC") Fast
Automated Securities Transfer program, upon request of the Purchaser and its
compliance with the provisions contained in this paragraph, so long as the
certificates therefor do not bear a legend and the Purchaser thereof is not
obligated to return such certificat for the placement of a legend thereon, the
Company shall use its best efforts to cause its transfer agent to electronically
transmit the shares of Common Stock issuable upon conversion to the Purchaser by
crediting the account of Purchaser's Prime Broker with DTC through its Deposit
Withdrawal Agent Commission system.
9. Closing Date.
9.1 The closing of the issuance and sale of the Debentures shall occur
on the date (the "Closing Date") which is the first NYSE trading day after the
fulfillment or waiver of all closing conditions pursuant to Sections 10 and 11
hereof or such other date and time as is mutually agreed upon by the Company and
the Purchaser.
9.2 Each closing of the purchase and issuance of the Debentures shall
occur on the Closing Date, as the case may be, at the offices of the Escrow
Agent and shall take place no later than 12:00 Noon, New York time, on such day
or such other time as is mutually agreed upon by the Company and the Purchaser.
9.3 Notwithstanding anything to the contrary contained herein, the
Escrow Agent will be authorized to release the Escrow Property only upon
satisfaction of the conditions set forth in Sections 10 and 11 hereof.
10. Conditions To The Company's Obligation To Sell
The Purchaser understands that the Company's obligation to sell the
Debentures on the Closing Date to the Purchaser pursuant to this Agreement is
conditioned upon:
12
10.1 The receipt and acceptance by the Purchaser of this Agreement as
evidenced by execution of this Agreement by the Purchaser.
10.2 Delivery by the Purchaser to the Escrow Agent of immediately
available funds as payment in full of an amount equal to the Purchase Price for
the Debentures in accordance with Section 1(c) hereof;
10.3 The accuracy on the Closing Date of the representations and
warranties of the Purchaser contained in this Agreement as if made on the
Closing Date, and the performance by the Purchaser on or before the Closing Date
of all covenants and agreements of the Purchaser required to be performed on or
before the Closing Date;
10.4 There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.
10.5 No statute, rule, regulation, executive order, decree, ruling or
injunction shall be enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which prohibits or adversely
affects any of the transactions contemplated by this Agreement or the
Transaction Documents, and no proceeding or investigation shall have been
commenced or threatened which may have the effect of prohibiting or adversely
effecting any of the transactions contemplated by this Agreement or the
Transaction Documents.
11. Conditions To The Purchaser's Obligation To Purchase.
The Company understands that the Purchaser's obligation to purchase the
Debentures on the Closing Date is conditioned upon:
11.1 Acceptance by the Company of this Agreement for the sale of the
Debentures as indicated by execution of this Agreement;
11.2 Delivery by the Company to the Escrow Agent of the appropriate
Debentures in accordance with this Agreement;
11.3 The accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained in this Agreement as if
made on the Closing Date and the performance by the Company on or before the
Closing Date of all covenants and agreements of the Company required to be
performed on or before the Closing Date; and
11.4 On the Closing Date, the Purchaser having received an opinion of
counsel for the Company, dated the Closing Date, in form, scope and substance
reasonably satisfactory to the Purchaser, to the effect set forth in ANNEX III
attached hereto, the Registration Rights Agreement annexed hereto as ANNEX IV
and the Warrants.
11.5 No statute, rule, regulation, executive order, decree, ruling or
injunction shall be enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which prohibits or adversely
affects any of the transactions contemplated by this Agreement or the
Transaction Documents, and no proceeding or investigation shall have been
commenced or threatened which may have the effect of prohibiting or adversely
effecting any of the transactions contemplated by this Agreement or the
Transaction Documents.
11.6 From and after the date hereof to and including the initial Closing
Date, the trading of the Securities shall not have been suspended by the SEC, or
the NASD and trading in securities generally on the New York Stock Exchange or
NASDAQ OTC Bulletin Board shall not have been suspended or limited, nor shall
minimum prices been established for securities traded on NASDAQ OTC Bulletin
Board, nor shall there be any outbreak or escalation of hostilities involving
the United States or any material adverse change in any financial
13
market that in either case in the reasonable judgment of the Purchaser makes it
impracticable or inadvisable to purchase the Debentures, as the case may be.
12. General Provisions.
12.1 Assignment. Neither this Agreement nor any rights of Purchaser
hereunder may be assigned by any party to any other person without the prior
written consent of the Company.
12.2 Attorneys' Fees. In the event any dispute arises under this
Agreement or the documents or instruments executed and delivered in connection
with this Agreement, and the parties hereto resort to litigation to resolve such
dispute, the prevailing party in any such litigation, in addition to all other
remedies at law or in equity, shall be entitled to an award of costs and fees
from the other party, which costs and fees shall include, without limitation,
reasonable attorneys' fees and legal costs.
12.3 Choice of Law; Venue. This Agreement will be construed and enforced
in accordance with and governed by the laws of the State of Delaware without
reference to principles of conflicts of law. The parties agree that, in the
event of any dispute arising out this Agreement or the transactions contemplated
thereby, venue for such dispute shall be in the state or federal courts located
in Delaware, and that each party hereto waives any objection to such venue based
on forum non conveniens.
12.4 Costs and Expenses. Except as provided in the Escrow Agreement, the
parties shall be responsible for and shall pay their own costs and expenses,
including without limitation attorneys' fees and accountants' fees and expenses,
in connection with the conduct of the due diligence inquiry, negotiation,
execution and delivery of this Agreement and the instruments, documents and
agreements executed in connection with this Agreement.
12.5 Counterparts/Facsimile Signatures. This Agreement may be executed
in one or more counterparts, each of which when so signed shall be deemed to be
an original, and such counterparts together shall constitute one and the same
instrument. In lieu of the original, a facsimile transmission or copy of the
original shall be as effective and enforceable as the original.
12.6 Entire Agreement: Amendment. This Agreement, together with the
exhibits to this Agreement and the other instruments and documents delivered in
connection with this Agreement constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof,
and no party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth in
this Agreement or therein. Except as expressly provided in this Agreement,
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
12.7 Headings. The headings of the sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
12.8 Notices. All notices or other communications provided for under
this Agreement shall be in writing, and mailed, telecopied or delivered by hand
delivery or by overnight courier service, as follows:
If to the Company:
DynaGen Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
ATT: President
Tel: (000) 000-0000
14
Fax: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxxx, Esq.
Xxxxx Xxxx & Xxxxx LLP
0 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
If to Purchaser:
With a copy to:
Xxxxxxx & Prager, Esqs.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATT: Xxxxxx X. Xxxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
All notices and communications shall be effective as follows: When mailed, upon
three (3) business days after deposit in the mail (postage prepaid); when
telecopied, upon confirmed transmission of the telecopied notice; when hand
delivered, upon delivery; and when sent by overnight courier, the next business
day after deposit of the notice with the overnight courier.
12.9 Publicity. The Company and Purchaser shall consult with each other
in issuing any press releases or otherwise making public statements with respect
to the transactions contemplated hereby and no party shall issue any such press
release or otherwise make any such public statement without the prior written
consent of the other parties, which consent shall not be unreasonably withheld
or delayed, except that no prior consent shall be required if such disclosure is
required by law, in which such case the disclosing party shall provide the other
parties with prior notice of such public statement. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of Purchaser without
the prior written consent of such Purchaser, except to the extent required by
law. Purchaser acknowledges that this Agreement and all or part of the
Transaction Documents may be deemed to be "material contracts" as that term is
defined by Item 601(b)(10) of Regulation S-K, and that the Company may therefore
be required to file such documents as exhibits to reports or registration
statements filed under the Securities Act or the Exchange Act. Purchaser further
agrees that the status of such documents and materials as material contracts
shall be determined solely by the Company, in consultation with its counsel.
12.10 Severability. Should any one or more of the provisions of this
Agreement be determined to be illegal or unenforceable, all other provisions of
this Agreement shall be given effect separately from the provision or provisions
determined to be illegal or unenforceable and shall not be affected thereby.
12.11 Survival Of Representations And Warranties. The Company's and the
Purchaser's representations and warranties herein shall survive the execution
and delivery of this Agreement and the delivery of the Debentures and the
Purchase Price.
15
[SIGNATURE PAGE FOLLOWS IMMEDIATELY]
16
IN WITNESS WHEREOF, the parties named below have caused this Agreement
to be executed, as of the date first above written.
PURCHASER:
------------------------------------------
By: ______________________________________
Its: _______________________________
By: ______________________________________
Its: _______________________________
THE COMPANY:
DYNAGEN INC.
By: ______________________________________
Its: _______________________________
17
SCHEDULE 2
PURCHASERS AND AMOUNT OF DEBENTURE PURCHASED
PURCHASER AMOUNT
--------- ------
Sovereign Partners L.P. $ 700,000
Canadian Advantage Limited Partnership $ 200,000
Dominion Investment Fund LLC $ 100,000
Dominion Capital Fund Limited $ 800,000
Endeavour Capital Fund S.A. $ 1,000,000
Gross Foundation, Inc. $ 200,000
18
ANNEXES
-------
ANNEX I Form of Debenture
II Joint Escrow Instructions
III Form of Opinion
IV Registration Rights Agreement
V Form of Warrant
VI Company Disclosure Material
19
SCHEDULE 4.4
CAPITALIZATION
1. First Refusal, Preemptive Rights or Similar Provisions
None.
20
SCHEDULE 4.5
SUBSIDIARIES
1. GDI
2. Superior Pharmaceutical
3. Able Laboratories, Inc.
4. Apex
21
SCHEDULE 4.10
UNDISCLOSED FINANCIAL LIABILITIES
22
ANNEX VI
--------
DYNAGEN, INC. 8% CONVERTIBLE DEBENTURE
DUE APRIL 30, 2002
COMPANY DISCLOSURE MATERIALS
----------------------------
NONE
23
