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EXHIBIT 4c
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
February 26, 1998 by and among DynaGen, Inc., a Delaware corporation, with
headquarters located at 000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the
"Company"), and Sovereign Partners, a Delaware limited partnership (the
"Investor").
WHEREAS:
A. In connection with the 7% Convertible Debenture Due February 26,
1999 of even date herewith by the Company and the Investor (the "Debenture"),
the Company has agreed, upon the terms and subject to the conditions contained
therein, to issue to the Investor shares $0.01 par value per share of the
Company's common stock, $0.01 par value per share (the "Common Stock") issuable
upon conversion of the Debenture upon the terms and subject to the conditions
set forth therein; and
B. To induce the Investor to execute and deliver the Debenture, the
Company has agreed to provide certain registration rights under the Securities
Act of 1933, as amended, and the rules and regulations thereunder, or any
similar successor statute (collectively, the "1933 Act");
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor
hereby agree as follows:
1. DEFINITIONS
(a) As used in this Agreement, the following terms shall have the
following meanings:
(i) "Investor" means the Investor and any transferees or
assignees who agree to become bound by the provisions of this Agreement in
accordance with Section 9 hereof.
(ii) "Register, "Registered" and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission
(the "SEC").
(iii) "Potential Material Event" means any of the following: (a)
the possession by the Company of material information not ripe for disclosure in
a registration statement, which shall be evidenced by determinations in good
faith by the Board of Directors of the Company that disclosure of such
information in a Registration Statement would be detrimental to the business and
affairs of the Company; or (b) any material engagement or activity by the
Company which would, in the good faith determination of the Board of Directors
of the Company, be adversely affected by disclosure in a Registration Statement
at such time, which determination shall be accompanied by a
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good faith determination by the Board of Directors of the Company that the
registration statement would be materially misleading absent the inclusion of
such information.
(iv) "Registrable Securities" means the Common Stock
issued to the Investor upon conversion in whole or in part of the Debenture.
Registrable Securities shall not include any shares of Common Stock which are
available for sale and can be sold (whether or not so sold) pursuant to Rule
144A or Rule 144 of the Act, or any similar rule promulgated by the SEC
permitting the resale of restricted securities without the necessity of a
registration statement under the Act.
(v) "Registration Statement"means a registration
statement of the Company under the 1933 Act.
2. REGISTRATION
(a) Mandatory Registration. The Company shall, as soon as
practicable after the date hereof but in no event more than 30 days following
the date hereof, file with the SEC a Registration Statement on Form S-3 (or, if
Form S-3 is not then available, on such form of Registration Statement as is
then available to effect a registration of the Registrable Securities, subject
to the consent of the Investor, which consent will not be unreasonably withheld,
conditioned or delayed) covering the resale of the Registrable Securities. The
Registration Statement, to the extent then allowable under the 1933 Act and the
Rules promulgated thereunder , shall state that in accordance with Rule 416 and
Rule 457 under the 1933 Act, it also covers such indeterminate number of
additional shares of Common Stock as may become issuable upon conversion of the
Debenture to prevent dilution resulting from fluctuations in the market price of
the Common Stock into which the Debenture is convertible or from stock splits,
stock dividends or similar transactions. The Company shall use its best efforts
to cause such registration to become and remain effective (including the taking
of such steps as are necessary to obtain the removal of any stop orders);
provided, that the Investor shall furnish the Company, within five (5) business
days of the Company's written request, with such appropriate information in
connection therewith (whether requested prior to or after the filing of the
Registration Statement with the SEC) as the Company shall reasonably request in
writing. The Registration Statement (and each amendment or supplement thereto,
and each request for acceleration of effectiveness thereof) shall be provided to
(and subject to the approval of) the Investor and its counsel prior to its
filing or other submission. The number of shares of Common Stock initially
included in such Registration Statement shall be no less than one hundred
percent (100%) of the shares of Common Stock issuable upon the conversion of the
Debenture as of the date such Registration Statement is initially filed. The
Company further undertakes to use its best efforts to ensure that a Registration
Statement is, or Registration Statements are, effective at all times during the
Registration Period (as defined below) with respect to all Registrable
Securities and the resale thereof.
(b) Eligibility for Form S-3. The Company represents and
warrants that, as of the date hereof, it meets the requirements for the use of
Form S-3 for registration of the sale by the Investor of the Registrable
Securities, and the Company shall file all reports required to be filed by the
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Company with the SEC in a timely manner, and take any and all such other actions
within its control as may be reasonably necessary or appropriate, so as to
maintain such eligibility for the use of Form S-3.
3. OBLIGATIONS OF THE COMPANY
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
(a) The Company shall, as soon as practicable after the Closing
Date but in no event more than 30 days following the Closing Date, prepare and
file promptly with the SEC a Registration Statement and thereafter use its Best
Efforts (as hereinafter defined) to cause such Registration Statement relating
to the Registrable Securities to promptly become effective, but in no event to
become effective more than 90 days following the Closing Date, and to keep the
Registration Statement effective pursuant to Rule 415 at all times until such
date as is the earlier of (i) the date on which all of the Registrable
Securities have been sold and no shares of Preferred Stock and no portion of the
Debenture remains outstanding or (ii) the date on which all of the Registrable
Securities (in the opinion of counsel to the Investor) may be immediately
publicly sold without registration and (iii) two years from the Closing Date
(the "Registration Period"), which Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein and all
documents incorporated by reference therein) shall not contain any untrue
statement of a material fact, or omit to state a material fact required to be
stated therein, or necessary to make the statements therein not misleading. The
Company shall furnish to the Investor copies of reasonably complete drafts of
all such documents proposed to be filed (including exhibits, if any), and the
Investor shall have the opportunity to object, within three (3) business days,
to any information pertaining solely to the Investor that is contained therein
and the Company will make the corrections reasonably requested by the Investor
with respect to such information prior to filing any such Registration Statement
or amendment. Any period of review and revision resulting from such review shall
be added to the time in which the Registration Statement is to be filed and no
penalty shall be assessed with respect to such period. If the Company fails to
cause such Registration Statement to become effective within 90 days following
the Closing Date, other than (i) due to the material failure, whether by act or
omission, by the Investor to fulfill its obligations hereunder or (ii) during
the time after a Potential Material Event shall have occurred and before it has
been disclosed or no longer constitutes a Potential Material Event, then the
Conversion Date Market Price in the Debenture, as therein defined, shall be
reduced 2% for each month that the Company's failure continues, prorated for
periods of less than one month, up to a maximum reduction of 10%. As used in
Section 2(a), 3(a), (b), (d), (f), (i) and (m) hereof, "Best Efforts" shall
include the taking of any and all actions necessary or appropriate with respect
thereto, including timely response to all comments and correspondence received
(including from the SEC), the filing or providing of any further drafts and
other documents as may be required, and the like.
(b) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used
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in connection with the Registration Statement as may be necessary to keep the
Registration Statement effective at all times during the Registration Period.
Without limiting any of the Company's obligations under this Agreement, in the
event the number of shares available under a Registration Statement filed
pursuant to this Agreement is insufficient to cover all of the Registrable
Securities issued or issuable upon conversion of the Debenture, the Company
shall amend the Registration Statement, or file a new Registration Statement (on
the short form available therefore, if applicable), or both, so as to cover all
of the Registrable Securities, in each case, as soon as practicable, but in any
event within twenty (20) days after the necessity therefor arises (based on the
market price of the Common Stock and other relevant factors on which the Company
reasonably elects to rely). The Company shall use its Best Efforts to cause such
amendment and/or new Registration Statement to become effective as soon as
possible following the filing thereof.
(c) The Company shall furnish to the Investor (i) promptly
after the same is prepared and publicly distributed, filed with the SEC or
received by the Company, one copy of the Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or supplement thereto, and, in the case of the Registration Statement referred
to in Section 2(a), each letter written by or on behalf of the Company to the
SEC or the staff of the SEC, and each material item of correspondence from the
SEC or the staff of the SEC, in each case relating to such Registration
Statement (other than any portion thereof that contains information for which
the Company has sought confidential treatment), and (ii) such number of copies
of a prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as the Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by the Investor.
(d) The Company shall use its Best Efforts to (i) register and
qualify the Registrable Securities covered by the Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in the United
States as the Investor shall reasonably request, (ii) prepare and file in those
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary, appropriate or available to maintain
such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to (a) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(d), (b)
subject itself to general taxation in any such jurisdiction, (c) file a general
consent to service of process in any such jurisdiction, (d) provide any
undertakings that cause the Company undue expense or burden, or (e) make any
change in its charter or bylaws, which in each case the Board of Directors of
the Company determines to be contrary to the best interests of the Company and
its stockholders. The Company shall promptly notify the Investor of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.
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(e) Notwithstanding the foregoing, if at any time or from time
to time after the date of effectiveness of the Registration Statement, the
Company notifies the Investor in writing of the existence of a Potential
Material Event, the Investor shall not offer or sell any Registrable Shares, or
engage in any other transaction involving or relating to the Registrable Shares,
from the time of the giving of notice with respect to a Potential Material Event
until the earlier of (i) twenty (20) days from the receipt of notice of such
Potential Material Event, or (ii) the Investor receives written notice from the
Company that such Potential Material Event either has been disclosed to the
public or no longer constitutes a Potential Material Event; provided, however,
that the Company shall use its best efforts to minimize any such suspension and
under all circumstances the Company may not so suspend the right to holders of
Registrable Shares for more than two periods of twenty (20) days each in the
aggregate during any 12-month period during the period the Registration
Statement is required to be in effect; and provided, further, that there shall
be an interval of no less than 45 days between such two twenty (20) day periods.
(f) The Company shall use its Best Efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify the
Investor of the issuance of such order and the resolution thereof.
(g) For a period of five (5) business days prior to filing with
the SEC, the Company shall permit counsel designated by the Investor to review
the Registration Statement and all amendments and supplements thereto. Any
period of review and revision resulting from any such review that extends beyond
five (5) business days shall be added to the time in which registration is
required to be filed and effective, as appropriate, and no penalty shall be
assessed with respect to such period.
(h) The Company shall make available for inspection by (i) the
Investor, (ii) any underwriter participating in any disposition pursuant to the
Registration Statement, (iii) one firm of attorneys and one firm of accountants
or other agents retained by the Investor, and (iv) one firm of attorneys
retained by such underwriter (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "Records") as shall be reasonably deemed
necessary by each Inspector to enable each Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request
for purposes of such due diligence; provided, however, that the Investor shall
cause each Inspector to and each Inspector shall hold in confidence and shall
not make any disclosure of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the disclosure of such Records is
determined to be necessary by the Company to avoid or correct a misstatement or
omission in any Registration Statement, (b) the release of such Records is
ordered pursuant to a subpoena or other order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement. The Company shall not be required to disclose any
confidential information in such Records to any Inspector until and
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unless such Inspector shall have entered into confidentiality agreements (in
form and substance satisfactory to the Company) with the Company with respect
thereto, containing terms substantially similar to those contained in this
Section 3(h). The Investor agrees that it shall, upon learning that disclosure
of such Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein shall be deemed to limit the Investor's ability to
sell Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.
(i) The Company shall hold in confidence and not make any
disclosure of information concerning the Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, or other applicable law, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other order from a court or governmental body of
competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this or any
other agreement. The Company agrees that it shall, upon learning that disclosure
of such information concerning the Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to such Investor prior to making such disclosure, and allow the Investor,
at its expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, such information.
(j) The Company shall use its Best Efforts to secure the
designation and quotation of all the Registrable Securities covered by the
Registration Statement on the Nasdaq SmallCap Market, if the listing of such
Registrable Securities is then permitted under the rules and regulations of such
market.
(k) The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later than
sixty (60) days from the date hereof.
(l) The Company shall promptly facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legends)
representing Registrable Securities to be sold pursuant to the Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the managing underwriter or underwriters, if any, or the
Investor may reasonably request and registered in such names as the managing
underwriter or underwriters, if any, or the Investor may request.
(m) The Company shall use its Best Efforts to cause all
Registrable Securities covered by such Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable each holder thereof to consummate disposition of Registrable
Securities.
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4. OBLIGATIONS OF THE INVESTOR
In connection with the registration of the Registrable Securities, the
Investor shall have the following obligations:
(a) It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of the particular Investor that such Investor shall
furnish to the Company, within five (5) business days of the Company's written
request, such information regarding itself, the Registrable Securities held by
it and the intended method of disposition of the Registrable Securities held by
it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute within five (5) business days of
receipt by the Investor such documents in connection with such registration as
the Company may reasonably request.
(b) The Investor, by the Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder.
(c) The Investor agrees that, upon receipt of any notice from
the Company of the happening of a Potential Material Event as set forth in
Section 3(e), the Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities in accordance with Section 3(e).
(d) Without limiting the Investor's rights under Section 2(a),
the Investor may not participate in any underwritten distribution hereunder
unless such Investor (i) agrees to sell the Registrable Securities on the basis
provided in any underwriting arrangements in usual and customary form entered
into by the Company, (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements, and (iii) agrees to
pay its pro rata share of all underwriting discounts and commissions and any
expenses in excess of those payable by the Company pursuant to Section 5 below.
(e) The Investor understands that the 1933 Act may require
delivery of a prospectus relating thereto in connection with any sale thereof
pursuant to such Registration Statement and the Investor shall use its
reasonable best efforts to comply with the applicable prospectus delivery
requirements of the 1933 Act in connection with any such sale.
(f) The Investor agrees to notify the Company promptly, but in
any event within seventy-two (72) hours after the date on which all Registrable
Securities owned by such Investor have been sold by such Investor, so that the
Company may comply with its obligation to terminate the Registration Statement
in accordance with Item 512 of Regulation S-K or Regulation S-B, as the case may
be.
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5. EXPENSES OF REGISTRATION
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including all registration, listing
and qualifications fees, printers and accounting fees and the fees and
disbursements of counsel for the Company, shall be borne by the Company. All
fees and disbursements of counsel to the holders of Registrable Securities, any
expenses incurred as a result of any investigation pursuant to Section 3(h), any
underwriting discounts and commissions and all other expenses of such holders
not contained in the previous sentence shall be borne by the holders of
Registrable Securities.
6. INDEMNIFICATION
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify,
hold harmless and defend (i) the Investor and (ii) the directors, officers,
partners, employees, agents and each person who controls the Investor within the
meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act"), if any, (each, an "Indemnified Person"), against any joint or
several losses, claims, damages, liabilities or expenses (collectively, together
with actions, proceedings or inquiries by any regulatory or self-regulatory
organization, whether commenced or threatened, in respect thereof, "Claims") to
which any of them may become subject under the 1933 Act, the 1934 Act or
otherwise, insofar as any such Claim arises out of or is based upon: (i) any
untrue statement or alleged untrue statement of a material fact in a
Registration Statement or the omission or alleged omission to state therein a
material fact required to be stated or necessary to make the statements therein
not misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading (the matters in the foregoing clauses (i) and (ii) being,
collectively, "Violations"). Subject to the restrictions set forth in Section
6(c) with respect to the number of legal counsel, the Company shall reimburse
the Investor and each controlling person, promptly as such expenses are incurred
and are due and payable, for any reasonable legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall not apply to
a Claim arising out of or based upon a Violation which occurs in reliance upon
and in conformity with information furnished in writing to the Company by any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement, preliminary prospectus or final prospectus, or any
amendment thereof or supplement thereto; (ii) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent
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shall not be unreasonably withheld; and (iii) with respect to any preliminary
prospectus, shall not inure to the benefit of any Indemnified Person if the
untrue statement or omission of material fact contained in the preliminary
prospectus was corrected on a timely basis in the prospectus, as then amended or
supplemented, if such corrected prospectus was timely made available by the
Company pursuant to Section 3(c) hereof. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable Securities
by the Investor pursuant to Section 9. Notwithstanding anything to the contrary
contained herein, any Investor that does not fulfill its obligations under
Sections 2(a), 3(a) or 4(a) hereof within the period of time specified in such
Sections shall not be an Indemnified Person and shall not be entitled to
indemnification pursuant to this Section 6.
(b) In connection with any Registration Statement in which the
Investor is participating, the Investor agrees to indemnify, hold harmless and
defend, to the same extent and in the same manner set forth in Section 6(a), the
Company, each of its directors, each of its officers who signs the Registration
Statement, each person, if any, who controls the Company within the meaning of
the 1933 Act or the 1934 Act, and any other stockholder selling securities
pursuant to the Registration Statement or any of its directors or officers or
any person who controls such stockholder within the meaning of the 1933 Act or
the 1934 Act (collectively, an "Indemnified Party"), against any Claim to which
any of them may become subject, under the 1933 Act, the 1934 Act or otherwise,
insofar as such Claim arises out of or is based upon any Violation, in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by the
Investor expressly for use in connection with such Registration Statement,
preliminary prospectus or final prospectus, or any amendment or supplement
thereto; and subject to Section 6(c) the Investor will reimburse any legal or
other expenses (promptly as such expenses are incurred and are due and payable)
reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnity agreement contained in this
Section 6(b) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such Investor, which
consent shall not be unreasonably withheld; provided, further, however, that the
Investor shall be liable under this Agreement (including this Section 6(b) and
Section 7) for only that amount as does not exceed the net proceeds to the
Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Investor
pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.
(c) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the
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commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. The indemnifying party shall pay for only one separate legal counsel
for the Indemnified Persons or the Indemnified Parties, as applicable, and such
legal counsel shall be selected by the Investor holding a majority-in-interest
of the Registrable Securities included in the Registration Statement to which
the Claim relates, if the Investor is entitled to indemnification hereunder, or
the Company, if the Company is entitled to indemnification hereunder, as
applicable. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section 6, except to the extent that the
indemnifying party is actually prejudiced in its ability to defend such action.
The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable.
7. CONTRIBUTION
To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation, and (iii) contribution (together with any indemnification or
other obligations under this Agreement) by any seller of Registrable Securities
shall be limited in amount to the amount of proceeds received by such seller
from the sale of such Registrable Securities.
8. REPORTS UNDER THE 1934 ACT
With a view to making available to the Investor the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Investor to sell securities of the Company
to the public without registration ("Rule 144"), the Company agrees to:
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(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the filing of such reports and other documents is required for the sale of the
Registrable Securities pursuant to Rule 144; and
(c) furnish to the Investor so long as the Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Investor to sell such securities pursuant to Rule 144 without
registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS
The rights of the Investor hereunder, including the right to have the
Company register Registrable Securities pursuant to this Agreement, shall be
automatically assignable by the Investor to any transferee of at least 30% of
the Debenture or Registrable Securities held by the Investor if (i) the Investor
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (ii) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee, and (b) the securities with respect to
which such registration rights are being transferred or assigned, (iii)
following such transfer or assignment, the further disposition of such
securities by the transferee or assignee is restricted under the 1933 Act and
applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein, (v) such transfer shall have been made in
accordance with the applicable requirements of the Debenture, and (vi) such
transferee shall be an "accredited investor" as that term defined in Rule 501 of
Regulation D promulgated under the 1933 Act.
10. AMENDMENT
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only by means of a written executed by the
parties hereto.
11. MISCELLANEOUS
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
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Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder shall
be in writing and shall be deemed to be sufficiently given when personally
delivered (by hand, by courier, by telephone line facsimile transmission or
other means) or sent by facsimile or overnight courier,
If to the Company, to:
DynaGen, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Investor, to:
Sovereign Partners
Executive Pavilion
00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
or at such other address as each such party furnishes by notice given in
accordance with this Section 11(b), and shall be effective upon receipt when
personally delivered, on the date of transmission when sent by facsimile and one
day following the date of deposit thereof with delivery charges prepaid when
sent by a national overnight courier.
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be enforced, governed by and construed
in accordance with the laws of the State of Delaware applicable to agreements
made and to be performed entirely within
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such State. In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provision hereof. Each of
the parties consents to the jurisdiction of the United States District Court for
the Southern District of New York in connection with any dispute arising under
this Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions.
(e) This Agreement and the Debenture (including any schedules
and exhibits thereto) constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Agreement and the Debenture supersede
all prior agreements and understandings among the parties hereto with respect to
the subject matter hereof and thereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
(g) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.
(i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
[REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the date first set forth above.
DYNAGEN, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Xxxxxxxxx X. Xxxxxxx
Executive Vice President
SOVEREIGN PARTNERS
By: /s/ Xxxxxxx Xxxxx
Name:
Title:
Address:
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