EXHIBIT 10.4
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of November ___, 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 November __, 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
-2-
any forms succeeding to the functions of such forms, whether or not bearing the
same designation;
(e) the term Holder shall mean the original Purchaser, and any person
to whom the Preferred Stock 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) 150% of 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 held of record at such time by Holder as a
result of such conversion or exercise; and (iii) no other shares of capital
stock of the Company without the consent of the Holder.
(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 K
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 held of
record by the Holder at such time.
ss.2.02. Registration on Form SB-2 or S-3. The Company will use its
best efforts in good faith to register the Registrable Securities on Form SB-2
or S-3 by January 31, 2000 (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) (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 the Company has not
registered the Registrable Securities by the end of the Registration Period or
if the Registration Statement is not effective at the end of the Permitted
Suspension Period (as hereinafter defined), the Company shall pay to the Holder
one and one-half percent (1.5%) of the aggregate purchase price paid
-3-
by such Holder for the Preferred Stock for each month or part thereof that the
Registrable Securities are not registered, until the registration of the
Registrable Securities, provided, however, the Company shall not be required to
make such payment if the Company's failure to register the Registrable
Securities is due, in whole or in part, to the Holder's failure to comply with
ss.2.04 hereof.
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;
(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.
(f) 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 Holder in writing
-4-
of the existence of a Potential Material Event, the Holder shall not offer or
sell any Registrable Securities, or engage in any other transaction involving or
relating to the Registrable Securities, from the time of the giving of notice
with respect to a Potential Material Event until such Holder 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 may not so suspend the right to such Holder
of Registrable Securities for more than two ten (10) day periods in the
aggregate during any 12-month period with at least a ten (10) business day
interval between such periods, during the periods the registration statement is
required to be in effect ("Permitted Suspension Period");
"Potential Material Event" shall mean any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
registration statement, which shall be evidenced by determination in good faith
by the Board of Directors of the Company that disclosure of such information in
the registration statement would be detrimental to the business and affairs of
the Company; or (ii) 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 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.
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
-5-
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 Expenses" shall not include, however, any
legal fees or disbursements of counsel for the Holder of Registrable Securities.
(b) 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 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
-6-
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 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 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
-7-
such Registrable Securities that portion of any restrictive legend which relates
to the registration provisions of the Securities Act, provided, however, in the
event that Xxxxx, Xxxx & Xxxxx LLP is no longer counsel to Company, counsel to
Holder may provide such instructions to the transfer agent regarding the removal
of the restrictive legend.
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.
(e) 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.
(f) 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 State of Delaware.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-8-
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
By: _____________________________
Name:___________________________
Title:____________________________
