EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of June 18, 1997 by and among DYNAGEN, INC., a Delaware
corporation ("DYNAGEN" or the "COMPANY"), and the former shareholders of
Superior Pharmaceutical Company, a corporation organized under the laws of Ohio
("SUPERIOR"), and each of Xxxxxx Xxxxx, Xxxx X. Xxxxxxxxxxx and Xxxxxx Xxxxxxx
(collectively the "SHAREHOLDERS" and individually a "SHAREHOLDER").
RECITALS
A. The Company, Superior and the Shareholders are parties to a certain
Merger Agreement dated as of March 7, 1997, as amended (the "MERGER AGREEMENT"),
pursuant to which DynaGen will acquire Superior for cash consideration of
US$6,500,000, a promissory note in the principal amount of $5,000,000, and the
issuance of 1,666,667 shares of DynaGen's Common Stock, $.01 par value per share
(the "DYNAGEN COMMON STOCK"), as set forth in the Merger Agreement.
B. The execution and delivery of this Agreement by the parties hereto
is a condition precedent to the obligations of the parties to consummate the
transactions under the Merger Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the parties hereto agree as follows:
1. DEFINITIONS.
For the purposes of this Agreement, the following terms have the
meanings indicated below:
1933 ACT. The Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time
1934 ACT. The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, as in effect from time to
time.
BUSINESS DAY. Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York are
authorized or obligated by law or executive order to close.
COMMISSION. The United States Securities and Exchange
Commission.
EFFECTIVE TIME. The "Effective Time" as defined in the Merger
Agreement.
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HOLDER. Any person owning Registrable Securities who is a
party to this Agreement, and any transferee thereof in accordance with Sections
3 and 10 of this Agreement.
PROSPECTUS. The prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement (including,
without limitation, any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement), and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
REGISTER, REGISTRATION AND REGISTERED. A registration effected
by preparing and filing a registration statement or similar document with the
Commission in compliance with the 1933 Act, and the declaration or ordering of
effectiveness of such registration statement or document.
REGISTRABLE SECURITIES. The shares of DynaGen Common Stock
issued to and received by the Shareholders pursuant to the Merger Agreement,
including, without limitation, the Adjustment Shares, as defined in the Merger
Agreement, and any securities that may be issued by the Company or any successor
to the Company from time to time with respect to, in exchange for, or in
replacement of such shares of DynaGen Common Stock, including, without
limitation, securities issued as a stock dividend on or pursuant to a stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation, or other similar reorganization of DynaGen Common Stock;
provided, however, that those shares as to which the following apply shall cease
to be Registrable Securities: (a) a Registration Statement with respect to the
sale of such Registrable Securities shall have become effective under the 1933
Act and such Registrable Securities shall have been disposed of under such
Registration Statement; (b) such Registrable Securities shall have become
transferable (whether or not so transferred) in accordance with the resale
provisions of Rule 144 or any successor rule or provision, under the 1933 Act;
(c) such Registrable Securities shall have been transferred in a transaction in
which the Shareholder's rights and obligations under this Agreement were not
properly assigned in accordance with this Agreement; or (d) such Registrable
Securities shall have ceased to be outstanding.
REGISTRATION EXPENSES. All expenses incident to the Company's
performance of or compliance with Section 2 hereof, including, without
limitation: (i) all registration and filing fees (including filing fees with
respect to the Commission and to the National Association of Securities Dealers,
Inc. and listing fees of the Nasdaq SmallCap Market System), all fees and
expenses of complying with state securities or "blue sky" laws (including fees
and disbursements of underwriters' counsel in connection with any "blue sky"
memorandum or survey, but excluding any fees and expenses for foreign
qualification in such jurisdictions); (ii) all printing expenses, (including
expenses of printing certificates for Registrable Securities in a form eligible
for deposit with the DTC and of printing prospectuses included in any
Registration Statement and all registrars' and transfer agents' fees); (iii) all
fees and disbursements of the Company's counsel and independent public
accountants; (iv) liability insurance under the 1933 Act, if the Company so
desires such insurance; (v) fees and expenses of all attorneys, advisers,
appraisers and other persons retained by the Company or any subsidiary of the
Company; (vi) internal expenses of the Company and the subsidiaries of the
Company (including, without limitation, all salaries and expenses of officers
and employees of the Company and the subsidiaries of the Company
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performing legal or accounting duties); (vii) the expense of any annual audit;
(viii) the fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange; and (ix) the expenses
relating to printing, wordprocessing and distributing all Registration
Statements, underwriting agreements, securities sales agreements and any other
documents necessary in order to comply with this Agreement; provided, however,
that Registration Expenses shall not include the fees and expenses of counsel to
the holders of Registrable Securities, or underwriters' discounts or commissions
associated with the sale of the Registrable Securities.
REGISTRATION STATEMENT. A registration statement prepared and
filed with the Commission in compliance with the 1933 Act that covers any of the
Registrable Securities pursuant to the provisions of this Agreement, including
the Prospectus, amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits, and all material incorporated
by reference or deemed to be incorporated by reference in such Registration
Statement.
RULE 144. Rule 144 promulgated under the 1933 Act and the
rules, regulations and interpretations thereof issued by the Commission as may
be in effect from time to time.
SELLER. Any person, including any Holder, participating in an
offering of any Registrable Securities of the Company pursuant to this
Agreement.
SELLING EXPENSES. All applicable transfer taxes and any fees
and disbursements of any counsel, accountants or other advisors for any Seller
of the Registrable Securities being registered.
SHELF REGISTRATION. A registration effected pursuant to a
shelf Registration Statement of the Company, on an appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by the
Commission, all amendments and supplements to such Registration Statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein. A Registration Statement relating to a Shelf Registration
shall be referred to herein as the "SHELF REGISTRATION STATEMENT." The Shelf
Registration Statement shall be effected on Form S-3 or any successor form
prescribed by the Commission.
2. SHELF REGISTRATION.
2.1 DEMAND REGISTRATION RIGHT. Subject to the limitations set forth
elsewhere in this Section 2, commencing on or after eleven (11) months from the
Effective Time, and subject to the resale restrictions and limitations set forth
in Section 3 hereof, upon the request of all of the Shareholders DynaGen will
use its best efforts to promptly effect qualification and registration of the
Registrable Securities under the Securities Act on a Form S-3 registration
statement (or any other registration statement form for which it is then
eligible, other than Form S-1) as a Shelf Registration as soon as practicable,
but in any event no later than twelve months from the Effective Time. DynaGen
shall not be required to effect more than one registration on Form S-3 pursuant
to the provisions of this Section 2. DynaGen and the Shareholders shall use
reasonable efforts to coordinate sales of the Registrable Securities pursuant to
a Form S-3 registration
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statement with DynaGen's market makers in a manner to ensure stability in the
trading price of DynaGen Common Stock.
2.2 LIMITATION ON SHELF REGISTRATION OBLIGATION. Notwithstanding the
provisions of Section 2.1, and subject to the limitations described below in
this Section 2, if, prior to the filing or effective date of the Shelf
Registration Statement referred to in Section 2.1 above, the Company shall
furnish to the Holders a certificate issued by the Board of Directors upon the
advice of counsel and signed by the President of the Company stating that, in
their good faith judgment:
(a) the filing of the Shelf Registration Statement or the
offering of securities pursuant thereto would materially and adversely affect
(i) a pending or scheduled public offering of DynaGen's securities, (ii) a
pending or proposed acquisition, merger, consolidation, reorganization,
strategic alliance, corporate partnership, restructuring or similar transaction
involving DynaGen, which in each case is material to the business of DynaGen,
(iii) bona fide negotiations, discussions or proposals with respect to any of
the foregoing types of material transactions, or (iv) the financial condition,
prospects, stock price or strategy of DynaGen in connection with the proposed
disclosure of any pending transaction or pending or threatened litigation,
claim, assessment or government investigation which may be required thereby; and
(b) in the event the Shelf Registration Statement were then
effective and sales of Registrable Securities were being made or offered
thereunder, and disclosure of all material information with respect to the
transactions mentioned in the preceding paragraph had not been made, such
circumstances would cause a violation of the 1933 Act or the 1934 Act and result
in potential liability to DynaGen and/or the Shareholders;
then the Company shall have the right, subject to the limitations set forth in
Section 2.3(d) hereof, to defer the filing or effectiveness, as the case may be,
of such Shelf Registration Statement for such period of time as any of the above
circumstances shall continue, such period not to exceed 60 days following the
date of suspension, provided that the Company may not exercise such right to
defer the filing or effectiveness more than once in any six-month period.
2.3 SELLING PROCEDURES; SUSPENSION. Each Holder of Registrable
Securities agrees to give written notice to the general counsel and the chief
accounting officer of the Company at least two (2) Business Days prior to any
intended sale or distribution of Registrable Securities under the Shelf
Registration Statement, which notice shall specify the date on which such Holder
intends to begin such sale or distribution. As soon as practicable after the
date such notice is received by the Company, and in any event within two (2)
Business Days after such date, the Company shall comply with either paragraph
(a) or (b) below.
(a) Except in the event that paragraph (b) below applies, the
Company shall (i) if deemed necessary by the Company, prepare and file with the
Commission a post-effective amendment to the Shelf Registration Statement or a
supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that such Registration Statement will not contain an 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, and so that, as
thereafter delivered to purchasers of the Registrable Securities being sold
thereunder, such Prospectus will not contain an untrue statement
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of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (ii) provide the
Holders of the Registrable Securities who gave such notice copies of any
documents filed pursuant to Section 2.3(a)(i); and (iii) inform each such Holder
that the Company has complied with its obligations in Section 2.3(a)(i) (or
that, if the Company has filed a post-effective amendment to the Shelf
Registration Statement which has not yet been declared effective, the Company
will notify each such Holder to that effect, will use its best efforts to secure
the effectiveness of such post-effective amendment and will immediately notify
each such Holder when the amendment has become effective). Each Holder who has
given notice of intention to distribute such Holder's Registrable Securities in
accordance with Section 2.3 hereof (a "NOTICE HOLDER") shall sell all or any of
such Registrable Securities pursuant to the Shelf Registration Statement and
related Prospectus only during the 90-day period commencing with the date on
which the Company gives notice, pursuant to Section 2.3(a)(iii), that the
Registration Statement and Prospectus may be used for such purpose, which notice
must be given no later than the close of business on the second Business Day
after the notice described in the first paragraph of this Section 2.3 is given
(such 90-day period is referred to as a "SELLING PERIOD"). The Notice Holders
will not sell any Registrable Securities pursuant to such Registration Statement
or Prospectus after such Selling Period without giving a new notice of intention
to sell pursuant to Section 2.3 hereof and receiving a further notice from the
Company pursuant to Section 2.3(a)(iii) hereof or paragraph (b) below.
(b) In the event (i) of any request by the Commission or any
other federal or state governmental authority during the period of effectiveness
of the Shelf Registration Statement for amendments or supplements to a Shelf
Registration Statement or related Prospectus or for additional information; (ii)
of the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Shelf Registration
Statement or the initiation of any proceedings for that purpose; (iii) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; (iv) of any event or circumstance which
necessitates the making of any changes in the Shelf Registration Statement or
Prospectus, or any document incorporated or deemed to be incorporated therein by
reference, so that, in the case of the Shelf Registration Statement, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; or (v) that, in the good faith judgment of the Company's Board of
Directors, upon the advice of counsel, in accordance with the provision of
Section 2.2, it is advisable to suspend use of the Prospectus for a discrete
period of time due to pending corporate developments, public filings with the
Commission or similar events; then, subject to paragraph (d) below, the Company
shall deliver a certificate in writing to the Notice Holders (the "SUSPENSION
NOTICE") to the effect of the foregoing and, upon receipt of such Suspension
Notice, each such Notice Holder's Selling Period will not commence (a
"SUSPENSION") until such Notice Holder's receipt of copies of the supplemented
or amended Prospectus provided for in Section 2.3(a)(i) hereof, or until it is
advised in writing by the Company that the Prospectus may be used and it has
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received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus.
(c) In the event any of the events or circumstances listed in
the foregoing paragraph (b) occur or exist after a Selling Period has commenced,
subject to paragraph (d) below, the Company shall have the same right to suspend
such Selling Period by delivery of a Suspension Notice as the Company would have
had if the Selling Period had not yet commenced, and any such suspension of a
Selling Period shall be deemed included within the meaning of the term
"Suspension" for all purposes under this Agreement.
(d) In the event of any Suspension, or any delay in effecting
the Shelf Registration under Section 2.2 above, the Company will use its best
efforts to ensure that the use of the Prospectus so suspended or delayed may be
commenced or resumed, as the case may be, and that any Selling Period so
suspended will commence or resume, as the case may be, as soon as practicable
and, in the case of a pending development, filing or event referred to in
Section 2.3(b)(iv) or (v) hereof, as soon, in the judgment of the Company's
Board of Directors (in accordance with the provisions of Section 2.2), as
disclosure of the material relating to such pending development, filing or event
would not have an adverse effect on the Company's ability to consummate the
transaction, if any, to which such development, filing or event relates.
Notwithstanding any other provision of this Agreement, the Company shall have
the right to cause a maximum of two (2) Suspensions, neither of which may be
within 30 days of the other, as provided above (including for this purpose a
delay in effecting the Shelf Registration pursuant to Section 2.2 above) during
any 12-month period after the initial effective date of the Shelf Registration
Statement, and the total number of days in any 12-month period during which a
Suspension or Suspensions (including for this purpose a delay in effecting the
Shelf Registration Statement pursuant to Section 2.2 above) may be in effect
shall not exceed 120 days.
(e) Subject to the provisions of Sections 2.2 and 2.3, the
Company will use its best efforts to maintain the effectiveness of the Shelf
Registration Statement until the date that is twenty-four (24) months from the
initial effective date of the Shelf Registration Statement, except that this
date shall be extended by the aggregate number of days, beginning on the
effective date of the Shelf Registration Statement through twenty-four (24)
months from such initial effective date, during which the Shelf Registration
Statement is not available for sales of the Registrable Securities due to (i) a
Suspension of the Shelf Registration Statement under Section 2.3, or (ii) the
failure of the Company to qualify for the use of Form S-3 because of its failure
to file on a timely basis all reports required to be filed under the 1934 Act.
The Company from time to time will amend or supplement such Registration
Statement and the Prospectus to the extent necessary to comply with the 1933 Act
and any applicable state securities statue or regulation. The Company will also
provide each Holder of Registrable Securities with as many copies of the
Prospectus contained in such Registration Statement as it may reasonably
request.
3. RESTRICTIONS ON TRANSFER OF SHARES. Notwithstanding any other
provision in this Agreement, each Shareholder agrees not to sell, assign,
transfer, grant an option for, engage in any derivative security transaction
with respect to, or otherwise dispose of in any manner any of the Registrable
Securities, whether to the public in the open market or in privately-negotiated
transactions, except with respect to those shares for which the restrictions on
transfer set forth in this Section shall lapse in the increments set forth
below. The amount of Registrable Securities held by each Shareholder listed on
Exhibit A shall then become eligible for the registration rights
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and be released from the restrictions on transfer set forth in this Agreement in
the following increments: (i) no sales, transfers or other dispositions of the
Registrable Securities may be made during the twelve (12) months commencing on
the Effective Time and ending at the end of the day on the one-year anniversary
of the Effective Time; (ii) commencing on the day immediately following the
one-year anniversary of the Effective Time the Shareholders, as amongst
themselves, may sell during any three-month period up to an aggregate of 350,000
shares of DynaGen Common Stock. The Shareholders may not cumulate such sales
beyond any three-month period, such that if any portion of the 350,000 shares is
not sold in such three-month period, the unsold shares may not be carried
forward to the next three-month period for purposes of determining the aggregate
amount of DynaGen Common Stock that may be sold in the next three-month period.
In the event of any attempted transfer of the Registrable Shares in
violation of the foregoing restrictions, the registration rights set forth in
this Agreement shall automatically expire with respect to each Shareholder who
transfers such Registrable Shares in violation of the foregoing restrictions. In
the event of any violation of these restrictions, the Company shall have to
right to issue stop transfer instructions to its transfer agent to prevent any
threatened or continuing violation of these transfer restrictions and to seek a
decree for specific performance of the provisions of this Agreement.
Notwithstanding the foregoing, a Shareholder may (i) transfer up to 30%
of his Registrable Securities by way of gift for estate planning purposes to any
member of his immediate family or to any trust for the benefit of any such
family member, provided that any transferee shall agree in writing with the
Company, as a condition precedent to such transfer, to be bound by all of the
provisions of this Agreement to the same extent as if such transferee were the
original Shareholder hereunder, or (ii) transfer any of his Registrable
Securities by will or the laws of descent and distribution to the heirs of the
Shareholder, or in the event of the disability of the Shareholder, to the legal
representatives of the Shareholder, in which event each such transferee shall
also be bound (and shall agree in writing to be bound) by all of the provisions
of this Agreement to the same extent as if such transferee were the original
Shareholder hereunder.
The provisions of this Section 3 shall not apply to a pledge, mortgage
or other encumbrance of the Registrable Securities pursuant to a bona fide loan
transaction in which the Registrable Securities are given as additional
collateral to secure the loan and the loan obligation is a full recourse
obligation with respect to collateral, with recourse to collateral other than
solely the Registrable Securities. Any pledgee, mortgagee or other permitted
transferee of the Registrable Securities must agree in writing to be bound by
all of the provisions of this Agreement, including the trading restrictions of
this Section 3.
4. EXPENSES. The Company will pay all Registration Expenses in
connection with the registration of Registrable Securities effected by the
Company pursuant to Section 2. Holders of Registrable Securities registered
pursuant to this Agreement shall pay all Selling Expenses associated with such
registration, with each Holder bearing a pro rata portion of the Selling
Expenses based upon the number of Registrable Securities registered by each
Holder.
5. EXPIRATION OF REGISTRATION RIGHTS. The obligations of the Company
under Sections 2 and 6 hereof shall expire on the date that is twenty-four (24)
months from the Effective Time, except that this date shall be extended by the
aggregate number of days, beginning on the Effective Time through twenty-four
(24) months from the Effective Time, during which a
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Registration Statement by the Company is not available for sales of the
Registrable Securities due to (i) a delay in the filing or effectiveness of the
Shelf Registration Statement under Section 2.1 or 2.2, (ii) a Suspension of a
Registration Statement under Section 2.3, or (iii) the failure of the Company to
qualify for the use of Form S-3 because of its failure to file on a timely basis
all reports required to be filed under the 0000 Xxx. The obligations of the
Company under Sections 2 and 6 hereof shall expire with respect to any Holder
who is not an executive officer (as defined in Section 16 of the 0000 Xxx) or
director of Company and is able to sell the Registrable Securities pursuant to
Rule 144 of the 1933 Act.
6. REGISTRATION PROCEDURES. In connection with the registration of
Registrable Securities under this Agreement, and subject to the other provisions
of this Agreement, the Company shall:
(a) use its best efforts to cause the Registration Statement
filed in accordance with Section 2 to become effective as soon as practicable
after the date of filing thereof;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective for the shorter of (i) the duration of its registration obligations,
or (ii) until there are no Registrable Securities outstanding, and to comply
with the provisions of the 1933 Act with respect to the disposition of the
Registrable Securities;
(c) furnish to each Seller of Registrable Securities such
number of copies of the Prospectus included in such Registration Statement as
such Seller may reasonably request in order to facilitate the sale or
disposition of such Registrable Securities;
(d) use its best efforts to register or qualify all securities
covered by such Registration Statement under such other securities or "blue sky"
laws of such jurisdictions as each Seller shall reasonably request, and do any
and all other acts and things that may be necessary to enable such Seller to
consummate the disposition in such jurisdictions of its Registrable Securities
covered by such Registration Statement, except that the Company shall not for
any such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified, or to subject
itself to taxation in respect of doing business in any such jurisdiction, or to
consent to general service of process in any such jurisdiction;
(e) notify each Seller of Registrable Securities covered by
such Registration Statement, at any time when a Prospectus relating thereto is
required to be delivered under the 1933 Act, of the happening of any event as a
result of which the Prospectus included in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing or if it is
necessary to amend or supplement such Prospectus to comply with the law, and at
the request of any such Seller, prepare and furnish to such Seller a reasonable
number of copies of a supplement to or an amendment of such Prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities or securities, such Prospectus, as amended or supplemented, will
comply with the law;
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(f) timely file with the Commission such information as the
Commission may prescribe under Section 13 or 15(d) of the 1934 Act and otherwise
use its best efforts to ensure that the public information requirements of Rule
144 under the 1933 Act are satisfied with respect to the Company. The Company
shall furnish to any Holder of Registrable Securities, upon request, copies of
the Company's most recent annual and quarterly reports and other publicly
available documents filed with the Commission as a Holder may reasonably request
in availing itself of any rule or regulation of the Commission allowing such
Holder to sell Registrable Securities without registration.
(g) use its best efforts to qualify such securities for
inclusion in the Nasdaq SmallCap Market, and provide a transfer agent and
registrar for such Registrable Securities not later than the effective date of
such Registration Statement; and
(h) issue to any person to which any Holder of Registrable
Securities may sell such Registrable Securities in connection with such
registration certificates evidencing such Registrable Securities without any
legend restricting the transferability of the Registrable Securities.
From time to time, the Company will amend or supplement such
Registration Statement and the Prospectus contained therein to the extent
necessary to comply with the 1933 Act and any applicable state securities
statute or regulation. The Company will also provide the holder of Registrable
Securities with as many copies of the Prospectus contained in any such
Registration Statement as it may reasonably request.
7. 1934 ACT REGISTRATION. The Company shall timely file with the
Commission such information as the Commission may require under Section 13 or
15(d) of the 1934 Act; and in such event, the Company shall use its best efforts
to take all action pursuant to Rule 144(c) as may be required as a condition to
the availability of Rule 144 under the 1933 Act (or any successor exemptive rule
hereinafter in effect) with respect to the DynaGen Common Stock. The Company
shall furnish to any holder of Registrable Securities forthwith upon request (i)
a written statement by the Company as to its compliance with the reporting
requirements of Rule 144(c), (ii) a copy of the most recent annual or quarterly
report of the Company as filed with the Commission, and (iii) such other
publicly-filed reports and documents as a holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing a holder to
sell any such Registrable Securities without registration.
8. SHAREHOLDER INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
all Shareholders of Registrable Securities shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them and
the intended method of disposition of such Registrable Securities as shall be
reasonably required to effect the registration of their Registrable Securities
and to execute such documents in connection with such registration as the
Company may reasonably request.
9. INDEMNIFICATION AND CONTRIBUTION. In the event any Registrable
Securities are included in a Registration Statement under this Agreement:
(a) The Company will indemnify and hold harmless each Seller,
the officers, directors, partners, agents and employees of each Seller, any
underwriter (as defined in the 1933
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Act) for such Seller and each person, if any, who controls such Seller or
underwriter within the meaning of the 1933 Act or the 1934 Act, against any
losses, claims, damages or liabilities (joint or several) to which they may
become subject under the 1933 Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively, a "VIOLATION"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such Registration
Statement, including any preliminary Prospectus or final Prospectus contained
therein or any amendments or supplements thereto; (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; or (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any state securities law
or any rule or regulation promulgated under the 1933 Act, the 1934 Act or any
state securities law; and the Company will reimburse each such Seller, officer,
director, partner, agent, employee, underwriter or controlling person for any
reasonable legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
Section 9(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld or
delayed), nor shall the Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Seller, underwriter or controlling person.
(b) Each Seller will, severally and not jointly, indemnify and
hold harmless the Company, each of its officers, directors, partners, agents or
employees, each person, if any, who controls the Company within the meaning of
the 1933 Act, any underwriter and any other Seller or any of its directors,
officers, partners, agents or employees or any person who controls such Seller,
against any losses, claims, damages or liabilities (joint or several) to which
the Company or any such director, officer, partner, agent, employee, controlling
person or underwriter, or other such Seller or director, officer, partner,
agent, employee or controlling person may become subject, under the 1933 Act,
the 1934 Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are 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 by such Seller expressly for use in connection with such
registration; and each such Seller will, severally and not jointly, reimburse
any reasonable legal or other expenses reasonably incurred by the Company or any
such director, officer, partner, agent, employee, controlling person or
underwriter, other Seller, officer, director, partner, agent, employee or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action. Notwithstanding anything contained in this
Agreement to the contrary, the indemnity agreement contained in this Section
9(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Seller, which consent shall not be unreasonably withheld or delayed;
provided further, that the liability of each Seller in connection with any sale
of Registrable Securities pursuant to a Registration Statement in which a
Violation occurred shall be limited to the percentage of the total liability of
the Sellers in connection with such sale that
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corresponds to such Seller's percentage ownership of the outstanding DynaGen
Common Stock. All obligations of the Sellers for indemnification are several and
not joint.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 9, deliver to
the indemnifying party a written notice of the 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 the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing or conflicting interests between such indemnified party
and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action, to the extent prejudicial to its ability to
defend such action, shall relieve such indemnifying party of liability to the
indemnified party under this Section 9 to the extent of such prejudice, but the
omission so to deliver written notice to the indemnifying party will not relieve
it of any liability that it may have to any indemnified party otherwise than
under this Section 9.
(d) If recovery is not available under the foregoing
indemnification provisions of this Section 9, for any reason other than as
specified therein, the parties entitled to indemnification by the terms thereof
shall be entitled to contribution to liabilities and expenses in such proportion
as is appropriate to reflect the relative fault of the indemnifying parties and
the indemnified parties, except to the extent that contribution is not permitted
under Section 11(f) of the 1933 Act. The relative fault of such indemnifying
party and indemnified party shall be determined by reference to, among other
things, the parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity to correct
and prevent any statement or omission and any other equitable considerations
appropriate under the circumstances, including, without limitation, whether any
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company, on the one hand, or by the Holder of Registrable Securities, on the
other hand. The Company and the Shareholders of the Registrable Securities
covered by such Registration Statement agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation. No seller of Registrable Securities covered by such Registration
Statement or person controlling such Seller shall be obligated to make any
contribution hereunder which in the aggregate exceeds the net proceeds of the
securities sold by such seller, less the aggregate amount of any damages which
such seller and its controlling persons have otherwise been required to pay in
respect of the same claim or any substantially similar claim. The obligations of
such Shareholders to contribute are several in proportion to their respective
ownership of the Registrable Securities covered by such Registration Statement
and not joint.
10. TRANSFERABILITY. The registration rights set forth in this
Agreement are not transferable except to the persons permitted in Section 3, and
subject to the trading restrictions of Section 3. All transferees shall agree in
writing to be bound by all of the provisions of this
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Agreement. The Company may issue stop transfer instructions to its transfer
agent to inform the transfer agent of the resale restrictions imposed by the
provisions of Section 3 hereof.
11. MISCELLANEOUS.
11.1 AMENDMENTS AND WAIVERS. Any provision of this Agreement may be
amended and the observance thereof may only be waived (either generally or in a
particular instance and either retroactively or prospectively), with the written
consent of the Company and the Holders of a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this Section 11.1 shall be binding upon each Holder of Registrable Securities at
the time outstanding, each future Holder of Registrable Securities, and the
Company.
11.2 NOTICES. Any notice required or permitted to be given hereunder
shall be in writing and shall be deemed given at the opening of business on the
first Business Day following the time (a) delivery is made, if by hand delivery,
(b) the facsimile is successfully transmitted, if by telecopier or facsimile
machine, or (c) the Business Day after such notice is deposited with a reputable
overnight courier service, postage prepaid, for next-day delivery, addressed as
set forth below on the signature page or to such other address as any party
shall have previously designated by such a notice.
11.3 GOVERNING LAW. This Agreement shall for all purposes be governed
by and construed in accordance with the internal laws of the State of Delaware
with respect to the enforceability of contracts and in accordance with the
United States securities laws with respect to matters involving securities laws
regarding the registration of the Registrable Shares, both without regard to
conflicts-of-laws principles. The parties hereto agree to submit to the
jurisdiction of the federal and state courts of the State of Delaware with
respect to the breach or interpretation of this Agreement or the enforcement of
any and all rights, duties, liabilities, obligations, powers and other relations
between parties arising under this Agreement.
11.4 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excised from
this Agreement, and the remainder of this Agreement shall be interpreted as if
such provision were so excised and shall be enforceable in accordance with its
remaining terms.
11.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
DYNAGEN, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
----------------------------------
Title: Executive Vice President
-------------------------------
SHAREHOLDERS:
/s/ Xxxxxx Xxxxx
---------------------------------
Xxxxxx Xxxxx
/s/ Xxxx X. Xxxxxxxxxxx
---------------------------------
Xxxx X. Xxxxxxxxxxx
/s/ Xxxxxx Xxxxxxx
---------------------------------
Xxxxxx Xxxxxxx
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SCHEDULE A
HOLDERS OF REGISTRABLE SECURITIES REGISTRABLE SECURITIES
--------------------------------- ----------------------
XXXXXX XXXXX 716,667
XXXX X. XXXXXXXXXXX 600,000
XXXXXX XXXXXXX 350,000
