EXHIBIT 99.12
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INDEMNITY AND STOCK ISSUANCE AGREEMENT
THIS AGREEMENT is executed as of the 15th day of February, 2000, by and
among DynaGen, Inc., a Delaware corporation (the "Company"), Infusion Capital
Investment Corporation, a North Carolina corporation ("Infusion"), and Ocean
Marketing Corporation, a Colorado corporation ("Ocean," and together with
Infusion the "Pledgors").
WHEREAS, XxXxxxxx.xxx, Inc., a Delaware corporation ("Bazaar") is a
party to a Securities Purchase Agreement, of even date herewith (the "Purchase
Agreement"), pursuant to which Bazaar issued and sold to the investors signatory
thereto (the "Purchasers") shares of its Series A Convertible Preferred Stock
(the "Bazaar Preferred Stock");
WHEREAS, the Company is a party to a Exchange and Purchase Agreement,
of even date herewith (the "Exchange Agreement"), pursuant to which certain
stockholders (the "Purchasers") of XxXxxxxx.xxx, Inc., a Delaware corporation
("Bazaar") may exchange all or a portion of shares of Series A Preferred Stock
of XxXxxxxx.xxx, Inc., for shares of the Company's 8% Series O Preferred Stock;
WHEREAS, the Pledgors, the Company, Bazaar and Kenilworth LLC (the
"Pledgee") are parties to a Guaranty and Pledge Agreement, of even date herewith
(the "Pledge Agreement"), pursuant to which the Pledgors granted to the Pledgee
a security interest in 2,000,000 shares of common stock, $0.01 par value per
share, of the Company currently owned by the Pledgors (the "Pledged Shares") as
collateral security for the obligations of the Company and Bazaar under the
Exchange Agreement and Purchase Agreement respectively; and
WHEREAS, the Company has agreed, in the event that the Pledged Shares
are foreclosed upon by the Pledgee, to make the Pledgors whole by replacing any
Pledged Shares forfeited by the Pledgors pursuant to the Pledge Agreement with
the same number of newly issued shares of common stock, $0.01 par value per
share, of the Company (the "Replacement Shares").
NOW THEREFORE, the parties hereby agrees as follows:
1. AGREEMENT TO ISSUE SHARES. In the event of notice by the Pledgor of
either (i) a foreclosure and sale by the Pledgee following an "event of Default"
as that term is defined in the Pledge Agreement or (ii) refusal by the Pledgee
to release the Pledged Shares within 120 days of the effective date of this
agreement, the Company agrees to replace any Pledged Shares which are so
forfeited or not returned by the Pledgors by issuing to the Pledgors a number of
shares of Common Stock equal to the number of Pledged Shares forfeited or not
returned. The Company will issue such replacement shares within three (3)
business days of the date the Company receives notice from the Pledgors of the
forfeiture of the Pledged Shares.
2. RETURN OF SHARES. Pledgor agrees to return to the Company all shares
it receives, either from the Company as Replacement Shares or which are returned
by the Pledgee, in excess of the 2,000,000 Pledged Shares.
3. REPLACEMENT SHARES. Each Pledgor severally represents and warrants
as follows:
(a) The Pledgor is an accredited investor.
(b) The Pledgor is acquiring the Replacement Shares, if any,
solely for its own account and not for the interest of any other person or for
resale to others.
(c) The Pledgor understands that none of the Replacement
Shares have been or will be at the time of their issuance, if they are issued,
registered under the federal Securities Act of 1933, as amended (the "1933
Act"), or the securities laws of any state or other jurisdiction ("Blue Sky
Law") in reliance upon the exemption for transactions not involving a public
offering including the exemption provided by Section 4(2) of the 1933 Act.
(d) The Pledgor will under no circumstances attempt to sell,
transfer or assign all or any Replacement Shares except upon prior written
notice to the Company an opinion, satisfactory to counsel for the Company of
counsel skilled in securities matters (reasonably satisfactory to the
Corporation) to the effect that the proposed sale, assignment or transfer may be
made without registration under the 1933 Act, or an interpretive letter from
Securities and Exchange Commission to the effect that no enforcement action will
be taken if the securities are offered or sold without registration under the
1933 Act.
(e) The Company shall place the following legend (or any other
appropriate legend) on each certificate or instrument representing any of the
Common Stock:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
cannot be sold or otherwise transferred except pursuant to
registration under said Act or in compliance with an exemption
therefrom."
4. REGISTRATION RIGHTS. Within thirty (30) days of issuance of any
replacement shares by the Company to the Pledgor pursuant to Section 1, the
Company shall prepare and file with the Commission a "Shelf" Registration
Statement covering the resale of all such replacement shares for an offering to
be made on a continuous basis pursuant to Rule 415, subject to the Pledgors
participation and cooperation with the Company's reasonable requests for
information and documentation in connection with such registration statement,.
The Registration Statement shall be on Form S-3 (except if the Company is not
then eligible to register for resale the shares on Form S-3, in which case such
registration shall be on another appropriate form in accordance herewith as the
Pledgor may consent), and cause the Registration Statement to become effective
and remain effective as provided herein. The Company shall use its best efforts
to cause the Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof, and shall use
its best efforts to keep such Registration Statement continuously effective
under the Securities Act until the date which is two years after the date that
such Registration Statement is declared effective by the Commission or such
earlier date when all shares held by the Pledgor and covered by such
Registration Statement have been sold or may be sold without volume restrictions
pursuant to Rule 144 as determined by the counsel to the Company pursuant to a
written opinion letter to such effect, addressed and acceptable to the Company's
transfer agent and the Pledgor.
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5. NOTICES. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand, sent
via overnight courier, sent by facsimile, or mailed by first class certified or
registered mail, return receipt requested, postage prepaid:
If to the Company, to:
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Executive Vice President
with a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx
Attn: Xxxxx Xxxxxxxx
If to the Pledgors, to:
Infusion Capital Investment Corporation
000 Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxx Xxxxxxxxxxx
Ocean Marketing Corporation
000 Xxxxxx Xxxxxx
Xxx Xxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx
With a copy to
Xxxxxx X. Xxxxxx, Xx.
Hunter, Johnston, Xxxx & Xxxxxxxx
000 Xxxxx Xxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
6. LIQUIDATED DAMAGES. The Company hereby acknowledges that time is of
the essence with respect to reissuance of the Replacement Shares, and that in
the event the shares are not replaced and registered, after written demand, the
Company agrees to issue warrants to purchase DynaGen common stock for one (1)
year at a strike price of $.30 per share equal to 10% of the shares of stock of
DynaGen, Inc. not issued and registered in a timely manner for each additional
thirty (30) day delay in providing an effective registration statement or
removing any Rule 144 legend, or the cash equivalent of such shares. In the
event of a delay of less than a full thirty (30) day period, Pledgees shall be
entitled to a pro-rata allocation of additional shares.
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7. MISCELLANEOUS PROVISIONS
(a) Time. Time is of the essence of this Agreement.
(b) Presumption. This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or
any section thereof was drafted by said party.
(c) Computation of Time. In computing any period of time pursuant to
this Agreement, the day of the act, event or default from which
the designated period of time begins to run shall be included,
unless it is a Saturday, Sunday or a legal holiday, in which event
the period shall begin to run on the next day which is not a
Saturday, Sunday or a legal holiday, in which event the period
shall run until the end of the next day thereafter which is not a
Saturday, Sunday or legal holiday.
(d) Titles and Captions. All article, section and paragraph titles or
captions contained in this Agreement are for convenience only and
shall not be deemed part of the context nor affect the
interpretation of this Agreement.
(e) Pronouns and Plurals. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the Person or Persons may
require.
(f) Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all
such action as may be necessary or appropriate to achieve the
purposes of this Agreement.
(g) Good Faith, Cooperation and Due Diligence. The parties hereto
covenant, warrant and represent to each other good faith, complete
cooperation, due diligence and honesty in fact in the performance
of all obligations of the parties pursuant to this Agreement. All
promises and covenants are mutual and dependent.
(h) Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall
be held invalid, the remainder of this Agreement, or the
application of such provision to persons or circumstances other
than those as to which it is held invalid, shall not be affected
thereby.
(i) Assignment This Agreement may not be assigned by either party
hereto without the written consent of the other, but shall be
binding upon the successors of the parties.
(j) Arbitration
i. If a dispute arises out of or relates to this Agreement, or the
breach thereof, and if said dispute cannot be settled through
direct discussion, the parties agree to first endeavor to settle
the dispute in an amicable manner by mediation under the
Commercial Mediation Rules of the American Arbitration Association
before resorting to arbitration. Thereafter, any unresolved
controversy or claim arising out of or relating to this Agreement
or a breach thereof shall be settled by arbitration in
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accordance with the rules of the American Arbitration Association,
and judgment upon the award rendered by the Arbitrator may be
entered in any court having jurisdiction thereof.
ii. Any provisional remedy which would be available from a court
of law shall be available to the parties to this Agreement from
the Arbitrator pending arbitration.
iii.The situs of the arbitration shall be Volusia County, Florida.
iv. In the event that a dispute results in an arbitration, the
parties agree that the prevailing party shall be entitled to
reasonable attorneys' fees to be fixed by the arbitrator.
(k) Notices All notices required or permitted to be given under this
Agreement shall be given in writing and shall be delivered, either
personally or by express delivery service, to the party to be
notified. Notice to each party shall be deemed to have been duly
given upon delivery, personally or by courier (such as Federal
Express or similar express delivery service), addressed to the
attention of the officer at the address set forth heretofore, or
to such other officer or addresses as either party may designate,
upon at least ten (10) days= written notice, to the other party.
(l) Governing law The Agreement shall be construed by and enforced in
accordance with the laws of the State of Florida.
(m) Entire agreement This Agreement contains the entire understanding
and agreement among the parties. There are no other agreements,
conditions or representations, oral or written, express or
implied, with regard thereto. This Agreement may be amended only
in writing signed by all parties.
(n) Waiver A delay or failure by any party to exercise a right under
this Agreement, or a partial or single exercise of that right,
shall not constitute a waiver of that or any other right.
(o) Counterparts This Agreement may be executed in duplicate
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same Agreement. In
the event that the document is signed by one party and faxed to
another the parties agree that a faxed signature shall be binding
upon the parties to this agreement as though the signature was an
original.
(p) Successors The provisions of this Agreement shall be binding upon
all parties, their successors and assigns.
(q) Counsel The parties expressly acknowledge that each has been
advised to seek separate counsel for advice in this matter and has
been given a reasonable opportunity to do so.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first above written.
DYNAGEN, INC.
By:
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Name:
Title:
INFUSION CAPITAL INVESTMENT CORPORATION
By:
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Name:
Title:
OCEAN MARKETING CORPORATION
By:
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Name:
Title:
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