EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of June 30, 1999 by and between DynaGen, Inc., a
Delaware corporation (the "Company"), and the Purchaser listed on the execution
pages of this Agreement.
ARTICLE I
GRANT OF REGISTRATION RIGHTS
ss.1.01. Investment Documents. Pursuant to the Subscription Agreement
dated as of June 30, 1999 (herein, as amended from time to time, called the
Subscription Agreement), DynaGen, Inc., a Delaware corporation (the Company),
grants to the Purchaser (as defined therein) who is a party thereto, the
registration rights contained in Article II of this Agreement.
ss.1.02. Definitions. For all purposes of this Agreement, all of the
words and expressions used herein which are not defined herein, but which are
defined in the Subscription Agreement, shall have the same respective meanings
herein as the meanings specified therein.
ARTICLE II
REGISTRATION RIGHTS
ss.2. Registration Rights.
ss.2.01. Definitions. As used in this Agreement:
(a) the term Commission shall mean the Securities and Exchange
Commission;
(b) the term Common Stock shall mean the Common Stock, par value $0.01
per share, of the Company or any other security into which the Preferred Stock
may, by its terms, be converted;
(c) the term Exchange Act shall mean the Securities Exchange Act of
1934, as amended, or any federal statute or code which is a successor thereto;
(d) the terms Form SB-2 and Form S-3 shall mean the forms so
designated, promulgated by the Commission for registration of securities under
the Securities Act, and any forms succeeding to the functions of such forms,
whether or not bearing the same designation;
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(e) the term Holder shall mean the original Purchaser, and any person
to whom the Preferred Stock or the Warrant is transferred pursuant to the terms
of the Subscription Agreement;
(f) the terms register, registered and registration shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering by the
Commission of effectiveness of such registration statement;
(g) the term Registrable Securities shall mean, in relation to the
Holder at any particular time: (i) all shares of Common Stock issuable upon
conversion of the Preferred Stock held of record by the Holder at such time;
(ii) all shares of Common Stock issuable upon exercise of the Warrant held of
record by the Holder at such time; and (iii) all shares of Common Stock held of
record at such time by Holder as a result of such conversion or exercise;
(h) the term Rule 144 shall mean Rule 144 issued by the Commission
under the Securities Act, or any subsequent rule pertaining to the disposition
of securities without registration;
(i) the term Securities Act shall mean the Securities Act of 1933, as
amended, or any federal statute or code which is a successor thereto;
(j) the term Preferred Stock shall mean the shares of Series J
Convertible Preferred Stock, par value $0.01 per share, of the Company issued to
the original Purchaser pursuant to the Subscription Agreement and any other
Preferred Stock issued to other purchasers;
(k) the Holder shall, for all purposes of this Agreement, unless the
context shall otherwise require, be deemed to hold, at any particular time, all
shares of Common Stock issuable upon conversion of the Preferred Stock and all
shares of Common Stock issuable upon exercise of the Warrant held of record by
the Holder at such time.
(l) the term Warrant shall have the meaning ascribed to that term in
the Subscription Agreement.
(m) the term Market Value shall have the meaning ascribed to that term
in the Warrant.
ss.2.02. Registration on Form SB-2 or S-3. The Company will use its
best efforts in good faith to register the greater of (i) 150% of all shares of
Common Stock issuable upon conversion of the Preferred Stock held of record by
the Holder on the Effective Date based upon the Market Value of the Common Stock
as of the date hereof, and all shares of
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Common Stock issuable upon exercise of the Warrant as of the date hereof, and
(ii) the Registrable Securities, on Form SB-2 or S-3 within the earlier of (i)
four (4) months of the first date on which the Company originally issued shares
of Preferred Stock and the Warrant to a purchaser (regardless of the number of
times transfer of such shares is made on the stock transfer books maintained by
or for the Company, and regardless of the number of certificates which may be
issued to evidence such shares, and irrespective of any subsequent transfer or
of the disposition of such shares to any other holder) and (ii) fifteen (15)
days of written notice to the Company from the Commission that there will be no
additional comments on the registration statement or that no review will be made
on the same (the "Registration Period"). To the extent not unlawful, the Company
will pay all Registration Expenses of each registration of Registrable
Securities pursuant to this ss.2.02. If (i) the Company has not registered the
Registrable Securities by the end of the Registration Period or (ii) the
Commission suspends the registration statement after the Registration Period,
the Company shall pay to the Holder in cash two percent (2%) of the aggregate
purchase price paid by such Holder for the Preferred Stock and the Warrant for
each month (and in the case of (i) only, or part thereof) that the Registrable
Securities are not registered or such registration statement is suspended, as
the case may be, until the earlier to occur of (i) the registration of the
Registrable Securities (including but limited to by means of the revocation of
the suspension of the registration statement), and (ii) twelve months from the
date on which the Company originally issued shares to the Purchaser, provided,
however, the Company shall not be required to make such payment if the Company's
failure to register the Registrable Securities or the suspension of the
registration statement, is due, in whole or in part, to the Holder's failure to
comply with ss.2.04 hereof. The Company will not include any securities other
than the Registrable Securities in the registration pursuant to this ss.2.02
without the prior written consent of the Holders of a majority of the
Registrable Securities (on an as-converted basis).
ss.2.03. Registration Procedures. When the Company undertakes to effect
a registration pursuant to ss.2.02 hereof of the Registrable Securities, the
Company will use its best efforts in good faith to effect promptly the
registration of such Registrable Securities under the Securities Act and to
permit the public offering and sale of such Registrable Securities in accordance
with the intended method of disposition thereof, and, in connection therewith,
the Company, as expeditiously as shall be reasonably possible, will:
(a) prepare and file with the Commission a registration statement with
respect to such Registrable Securities, and use its best efforts in good faith
to cause such registration statement to become and remain effective as provided
herein;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus included in such
registration statement as may be necessary or advisable to comply in all
material respects with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement or as may
be necessary to keep such registration statement effective and current, but for
no longer than one (1) year subsequent to the effective date of such
registration;
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(c) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto (in
each case including all exhibits thereto), the prospectus included in such
registration statement (including each preliminary prospectus), and such other
documents as any such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities held by such seller;
(d) enter into such customary agreements and take all such other
customary action in connection therewith in order to expedite or facilitate the
disposition of such Registrable Securities; and
(e) use its best efforts in good faith to register and qualify the
Registrable Securities covered by such registration statement under such
securities or Blue Sky laws of such jurisdictions as any seller shall reasonably
request and do any and all such other acts and things as may be reasonably
necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities held by such seller; provided,
however that the Company shall not be required in connection therewith to
qualify to do business or file a general consent to service of process in any
such jurisdiction.
ss.2.04. Cooperation by Prospective Sellers, etc.
(a) The Holder will furnish to the Company in writing such information
as the Company may reasonably require from the Holder or as required by the
Commission, and otherwise reasonably cooperate with the Company in connection
with any registration statement with respect to such Registrable Securities.
(b) The Holder of Registrable Securities included in any registration
statement will not (until further notice) effect sales thereof after receipt of
telegraphic or written notice from the Company to suspend sales to permit the
Company to correct or update such registration statement or prospectus.
ss.2.05. Registration Expenses.
(a) The following costs and expenses incurred or sustained in
connection with or arising out of each registration pursuant to ss.2.02 shall
constitute Registration Expenses: all registration and filing fees, fees and
expenses of compliance with securities or Blue Sky laws, printing expenses,
messenger, telephone and delivery expenses, fees and disbursements of counsel
for the Company, fees and disbursements of all independent certified public
accountants (including the expenses relating to the preparation and delivery of
any special audit or "cold comfort" letters required by or incident to such
registration), and fees and disbursements of underwriters (excluding discounts
and commissions), the reasonable fees and expenses of any special experts
retained by the Company of its own initiative or at the request of the managing
underwriters in connection with such registration, and fees and expenses of all
(if any) other persons retained by the Company. The term "Registration
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Expenses" shall not include, however, any legal fees or disbursements of counsel
for the Holder of Registrable Securities.
(b) The Company will not bear the cost of nor pay for any stock
transfer taxes imposed in respect of the transfer of any Registrable Securities
to any purchaser thereof by any Holder of Registrable Securities in connection
with any registration of Registrable Securities pursuant to this Article II.
(c) To the extent that Registration Expenses incident to any
registration are, under the terms of this Article II, not required to be paid by
the Company, each Holder of Registrable Securities included in such registration
will pay all Registration Expenses which are clearly solely attributable to the
registration of such Holder's Registrable Securities so included in such
registration, and all other Registration Expenses not so attributable to one
Holder will be borne and paid by all sellers of securities included in such
registration in proportion to the number of securities so included by each such
seller.
ss.2.06. Indemnification.
(a) Indemnification by the Company. The Company will indemnify the
Holder, the officers, directors and partners of each such Holder and each person
who controls any thereof (within the meaning of the Securities Act), against any
and all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement) of
any material fact contained in any prospectus, offering circular or other
document incident to any registration, qualification or compliance (or in any
related registration statement, notification or the like) or any omission (or
alleged omission) to state therein any material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to any action or inaction
required of the Company in connection with any such registration, qualification
or compliance, and the Company will reimburse each such Holder, officer,
director, partner and controlling person for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such claim, loss,
damage or liability arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company in an
instrument duly executed by such Holder, officer, director, partner or
controlling person and stated to be exclusively and specifically for use
therein.
(b) Indemnification by the Holder. The Holder will indemnify the
Company and its officers and directors and each person, if any, who controls any
thereof (within the meaning of the Securities Act) and, if required by the
underwriter effecting the related registration, such underwriter, and their
respective successors in title and assigns against any and all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of any material fact
contained in
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any prospectus, offering circular or other document incident to any
registration, qualification or compliance (or in any related registration
statement, notification or the like) or any omission (or alleged omission) to
state therein any material fact required to be stated therein or necessary to
make the statement therein not misleading, and the Holder will reimburse the
Company and each other person indemnified pursuant to this paragraph (b) for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
provided, however, that this paragraph (b) shall apply only if (and only to the
extent that) such statement or omission was made in reliance upon information
furnished to the Company in any instrument duly executed by the Holder and
stated to be exclusively and specifically for use in such prospectus, offering
circular or other document (or related registration statement, notification or
the like) or any amendment or supplement thereto.
(c) Indemnification Proceedings. Each party entitled to indemnification
pursuant to this ss.2.06 (the indemnified party) shall give notice to the party
required to provide indemnification pursuant to this ss.2.06 (the indemnifying
party) promptly after such indemnified party acquires actual knowledge of any
claim as to which indemnity may be sought, and shall permit the indemnifying
party (at its expense) to assume the defense of any claim or any litigation
resulting therefrom; provided that counsel for the indemnifying party, who shall
conduct the defense of such claim or litigation, shall be acceptable to the
indemnified party, and the indemnified party may participate in such defense at
such party's expense; and provided, further, that the failure by any indemnified
party to give notice as provided in this paragraph (c) shall not relieve the
indemnifying party of its obligations under this ss.2.06 except to the extent
that the failure results in a failure of actual notice to the indemnifying party
and such indemnifying party is damaged solely as a result of the failure to give
notice. No indemnifying party, in the defense of any such claim or litigation,
shall, except with the consent of each indemnified party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation. The reimbursement required by this ss.2.06 shall be made by periodic
payments during the course of the investigation or defense, as and when bills
are received or expenses incurred.
ss.2.07. Rule 144 Requirements. The Company will make every effort in
good faith to make publicly available and available to the Holder of Registrable
Securities, pursuant to Rule 144 of the Commission under the Securities Act,
such information as shall be necessary to enable the Holders of Registrable
Securities to make sales of Registrable Securities pursuant to that Rule. The
Company will furnish to any Holder of Registrable Securities, upon request made
by such Holder at any time, a written statement signed by the Company, addressed
to such Holder, describing briefly the action the Company has taken or proposes
to take to comply with the current public information requirements of Rule 144.
The Company will, at the request of any Holder of Registrable Securities, upon
receipt from such Holder of a certificate certifying (i) that such Holder has
held such Registrable Securities for a period of not less than one (1) year,
(ii) that such Holder has not been an affiliate (as defined in Rule
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144) of the Company for more than the ninety (90) preceding days, and (iii) as
to such other matters as may be appropriate in accordance with such Rule, remove
from the stock certificates representing such Registrable Securities that
portion of any restrictive legend which relates to the registration provisions
of the Securities Act.
ss.2.08. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not, at any time after
the date of the Subscription Agreement, enter into any agreement or contract
(whether written or oral) with respect to any of its securities which prevents
the Company from complying in any respect with the registration rights granted
by the Company to the Holder of Registrable Securities pursuant to Article II of
this Agreement.
(b) Amendments and Waivers. The provisions of Article II of this
Agreement, including the provisions of this paragraph (b), may not be amended,
modified or supplemented, and any waiver or consent to or any departure from any
of the provisions of Article II of this Agreement may not be given and shall not
become or be effective, unless and until (in each case) the Company shall have
received the prior written consent of the Holder of the Registrable Securities
for any such amendment, modification, supplement, waiver or consent.
(c) Permitted Transferees.
(i) All of the agreements contained in, and all of the rights
granted by the Company pursuant to, Article II of this Agreement shall inure to
the benefit of and be binding upon the Purchaser.
(ii) None of the agreements contained in, and none of the
rights granted by the Company pursuant to, Article II of this Agreement shall be
assignable or transferable (by operation of law or otherwise) by the Purchaser
to any person except pursuant to the terms of the Subscription Agreement.
(d) Term. The agreements of the Company contained in Article II of this
Agreement shall continue in full force and effect so long as any Holder holds
any Registrable Securities.
(e) Governing Law. The provisions of this Agreement shall be governed
by and construed in accordance with the laws (other than the choice-of-law
rules) of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the undersigned Purchaser and the Company have
caused this Agreement to be duly executed as of the date first above written.
DYNAGEN, INC.
By: _____________________________
Name:___________________________
Title:____________________________
PURCHASER
KENILWORTH LLC
By: _____________________________
Name:___________________________
Title:____________________________
