EXHIBIT 4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into on
________, 1999 between DYNAMIC ASSOCIATES, INC., a Nevada
corporation ("Dynamic"), and the parties named on Schedule 1
attached hereto (each a "Holder" and, collectively, the "Holders").
WHEREAS, each Holder previously owned stock in ACS2, Inc., a
Delaware corporation ("ACS2"); and
WHEREAS, ACS2, its wholly owned subsidiary Advanced Clinical
Systems, Inc., a Delaware corporation ("Advanced"), Dynamic, and
Dynamic Acquisition Corporation have entered into that certain
Agreement and Plan of Merger dated March __, 1999 (the "Merger
Agreement") pursuant to which ACS2 merged with and into Dynamic
Acquisition Corporation (the "Merger"); and
WHEREAS, as a result of the Merger, the Holders were issued
upon closing of the Merger and now own, in the aggregate,
22,473,413 shares of Dynamic common stock (the "Merger
Consideration").
WHEREAS, Dynamic has agreed to grant the Holders certain
demand registration rights and to file registration statements
pursuant to the 1933 Securities Act (as defined below) in order to
register for sale shares of Dynamic common stock issued to the
Holders pursuant to the Merger.
NOW THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties, intending to be legally
bound hereby, agree as follows:
AGREEMENT
1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"1934 Exchange Act" means the Securities Exchange Act of
1934, as amended, or any similar federal statute, and the
rules and regulations of the SEC thereunder, all as the
same shall be in effect from time to time.
"1933 Securities Act" means the Securities Act of 1933,
as amended, or any similar federal statute, and the rules
and regulations of the SEC thereunder, all as the same
shall be in effect from time to time.
"Register," including "Registered" and "Registration,"
refer to a registration effected by preparing and filing
with the SEC a registration statement in
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compliance with the 1933 Securities Act, and the declaration
or ordering of the effectiveness of such registration
statement. "SEC" means the Securities and Exchange
Commission or any other federal agency at the time
administering the 1933 Securities Act.
"Shares" means all shares of Dynamic common stock owned
by Holders immediately following the consummation of the
Merger, including any shares subject to escrow and any of
securities of Dynamic which may be converted into shares
of common stock of Dynamic, all as may be adjusted from
time to time in the event of a split, reorganization,
merger, consolidation or comparable recapitalization
involving Dynamic securities.
2. Demand Registration.
(a) Dynamic shall, within ninety (90) days after the
consummation of the Merger, cause (a) registration
statement in prescribed form under the 1933 Securities
Act with respect to a number of Shares equal to twenty-
five percent (25%) of the total Merger Consideration,
rounded up to the next higher round lot, to be prepared
and filed with the SEC and any applicable state
authority, to become and remain effective as provided
herein to permit the valid pubic sale of the Shares by
those Holders listed in Schedule 2 attached hereto in
compliance with all such applicable securities laws
pursuant to a public offering, which offering shall be
managed by one or more underwriters of recognized
national standing in the United States on a firm
underwriting basis mutually acceptable to Dynamic and a
majority of participating Holders.
(b) Subject to Section 2(f), Dynamic shall, within thirty
(30) days after the first anniversary of the consummation
of the Merger, cause another registration statement in
prescribed form under the 1933 Securities Act and the
1934 Exchange Act, with respect to a number of Shares
equal to twenty-five percent (25%) of the total Merger
Consideration, rounded up to the next higher round lot,
to be prepared and filed with the SEC and any applicable
state authority, to become and remain effective as
provided herein to permit the valid pubic sale of the
Shares by any and all Holders in compliance with all such
applicable securities laws pursuant to a public offering,
which offering shall be managed by one or more
underwriters of recognized national standing in the
United States on a firm underwriting basis mutually
acceptable to Dynamic and a majority of participating
Holders.
(c) Subject to Section 2(f), Dynamic will give written notice
of the filing of the registration statement referenced in
clause (b) (which notice will include a list of
jurisdictions in which Dynamic intends to attempt to
qualify the offer and sale of Shares under applicable
state securities laws) to each Holder at least forty-five
(45) days before the anticipated filing date of the
registration statement, and such notice will offer
Holders the opportunity to include in
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such registration the number of Shares as held by each
Holder as each Holder may request, and allow any Holder
to participate in such offer and sale of Shares so long
as such Holder notifies Dynamic of its intentions within
thirty (30) days after receipt of such written notice. If
the total number of Shares which Holders elect to make
available for sale exceed twenty-five percent (25%) of the
total Merger Consideration, each participating Holder will
instead be permitted to offer for sale a reduced number
of Shares determined on a proportionate basis based upon
the aggregate number of Shares which the participating
Holders desire to sell, which aggregate number will not
exceed twenty-five percent (25%) of the total Merger
Consideration.
(d) Dynamic may delay the filing of the registration
statement referenced in clause (b) for up to 120 days, if
in the good faith judgment of Dynamic's board of
directors, the financing would be detrimental to a
material transaction which has been approved by Dynamic's
board of directors prior to filing of the applicable
registration statement, or for up to ninety (90) days if
the underwriters determine that it is not possible to
sell the Shares subject to the proposed registration at
a price equal to or greater than ninety percent (90%) of
the average market price of such Shares during the last
twenty (20) trading days prior to such determination. If
Dynamic delays filing of such registration statement, it
must provide each Holder an opportunity to consider
participating in the delayed offering by delivering new
written notices pursuant to the first sentence of clause
(c).
(e) A registration will not be considered to be one of the
demand registrations required under this Agreement unless
it has been kept continuously effective for a period of
at least six (6) months following the date on which such
registration was declared effective, or such shorter
period that will terminate when all of the Shares covered
by the registration have been sold pursuant to the terms
of such registration. In the event that either the
registration anticipated under clauses (a) or (b) above
does not satisfy this criteria, Dynamic shall begin the
registration process again in accordance with the
provisions of this Agreement within ninety (90) days
thereof; provided, that the number of Shares to be then
registered will be reduced by the number of shares sold,
if any, in the previously effective registration
statements filed pursuant to this Agreement.
(f) In the event either a portion of the Merger Consideration
held in escrow pursuant to the Escrow Agreement executed
at Closing of the Merger is returned to Dynamic or, in
the alternative, if additional shares of Dynamic Common
Stock other than those held in escrow are distributed to
the Holders as contemplated under Section 2(c)(ii) of the
Escrow Agreement, then the number of shares subject to
registration pursuant to Section 2(b) of this
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Registration Rights Agreement will be adjusted so that
the total number of shares of Dynamic Common Stock
registered pursuant to Section 2(a) and 2(b) hereof will
equal a total of fifty percent (50%) of the total Merger
Consideration actually delivered to all Holders following
completion of distributions from escrow.
3. Registration Procedures. In connection with the
registration and sale of Shares, and as contemplated hereunder,
Dynamic will as expeditiously as possible:
(a) prepare and file with the SEC a registration
statement with respect to such Shares and use its
best efforts to cause such registration statement
to become effective (provided that before filing a
registration statement or prospectus or any
amendments or supplements thereto, Dynamic will
furnish to a single law firm selected by a majority
of the participating Holders copies of all such
documents proposed to be filed, which documents
would be subject to the reasonable review of such
counsel);
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the
prospectus used in connection therewith as may be
necessary to keep such registration statement effective
for a period of not less than six (6) months and comply
with the provisions of the 1933 Securities Act with
respect to the disposition of all Shares covered by such
registration statement during such period in accordance
with the intended methods of disposition by the Holders
thereof as set forth in such registration statement;
(c) furnish to each Holder such number of copies of such
registration statement, each amendment and supplement
thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and
such other documents as such Holder may reasonably
request in order to facilitate the disposition of the
Shares owned by such Holder;
(d) use its best efforts to register or qualify such Shares
under such other securities or blue sky laws of such
jurisdiction as any Holder reasonably requests and do any
and all other acts and things which may be reasonably
necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of the
Shares owned by such Holder (provided that Dynamic will
not be required to (i) qualify generally to do business
in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph, (ii)
subject itself to taxation in any such jurisdiction, or
(iii) consent to general service of process in any such
jurisdiction);
(e) notify each Holder, at any time when a prospectus
relating thereto is required to be delivered under the
1933 Securities Act, of the happening of any event as a
result of which the prospectus included in such
registration statement
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contains an untrue statement of a material fact or omits
any fact necessary to make the statements therein not
misleading, and, at the request of any such Holder, Dynamic
will prepare a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such
Shares, such prospectus will not contain an untrue statement
of a material fact or omit to state any fact necessary to make
the statements therein not misleading;
(f) cause all such Shares to be listed on each securities
exchange on which similar securities issued by Dynamic
are then listed;
(g) provide a transfer agent and registrar for all such
Shares not later than the effective date of such
registration statement;
(h) enter into such customary agreements and take all such
other customary actions as a majority of the Holders or
the underwriters reasonably request in order to expedite
or facilitate the disposition of such Shares (but
exclusive of effecting a stock split or a combination of
shares);
(i) make available for inspection by any Holder, any
underwriter participating in any disposition pursuant to
such registration statement, and any attorney, accountant
or other agent retained by any such Holder or
underwriter, all financial and other records, pertinent
corporate documents and properties of Dynamic, and cause
Dynamic's officers, directors, employees and independent
accountants to supply all information reasonably
requested by any such Holder, underwriter, attorney,
accountant or agent in connection with such registration
statement subject to the execution of a confidentiality
agreement in a form reasonably acceptable to Dynamic and
in favor of Dynamic by any party receiving such
information; and
(j) obtain a comfort letter from Dynamic's independent public
accountants in customary form and covering such matters
of the type customarily covered by comfort letters as the
holders of a majority of the Shares being sold reasonably
request.
4. Registration Expenses. All expenses incident to
Dynamic's performance under this Agreement, including without
limitation all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, transfer and similar
taxes, printing expenses, messenger and delivery expenses, and fees
and disbursements of counsel for Dynamic and all independent
certified public accountants, underwriters and other persons
retained by Dynamic (all such expenses being herein called
"Registration Expenses"), will be borne by Dynamic. Further,
Dynamic will pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual
audit or quarterly review, the expense of any
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liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which
similar securities issued by Dynamic are then listed.
5. Indemnification.
(a) Dynamic will, and hereby does, indemnify and hold
harmless each participating Holder in any and all
registrations contemplated hereunder, any and all
directors, officers or representatives of a participating
Holder, and each person, if any, who controls a
participating Holder (within the meaning of the 1933
Securities Act), against any losses, claims, damages or
liabilities which a participating Holder or any such
representative or controlling person may become subject
under the 1933 Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any
registration statement under which Shares were
registered under the 1933 Securities Act, any preliminary
prospectus, final prospectus, or summary prospectus
contained therein or filed with the SEC pursuant to Rule
424 under the 1933 Securities Act, or any amendment or
supplement thereto, or (ii) any omission or alleged
omission to state in any document referred to in clause
(i) a material fact required to be stated therein or
necessary to make the statements therein not misleading;
and Dynamic shall reimburse each indemnified party for
and legal or any other expenses incurred by them in
connection with investigating or defending any such loss,
claim, liability, action or proceeding as such expenses
are incurred; provided, however, that Dynamic shall not
be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is
based upon an untrue or alleged untrue statement in or
omission or alleged omission from any of such documents
in reliance upon and in conformity with written
information furnished to Dynamic through an instrument
duly executed by a Holder specifically stating that it is
expressly for use therein. Such indemnity shall remain
in full force and effect regardless of any investigation
made by or on behalf of a participating Holder or such
representative or controlling person, and shall survive
the transfer of such securities by a Holder.
(b) Dynamic may and intends to require, as a condition to
including the Shares of any Holder in any registration
statement pursuant to this Agreement, that Dynamic shall
have received a written undertaking reasonably
satisfactory to it from such Holder to indemnify and hold
harmless, severally but not jointly with any other
Holder, Dynamic, its directors, officers and
representatives against any losses, claims damages or
liabilities which Dynamic, its directors, officers or
representatives may become subject under the 1993
Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of
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any material fact contained in registration statement under
which such Shares were registered under the 1933
Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein or
filed with the SEC pursuant to Rule 424 under the 1933
Securities Act, or any amendment or supplement hereto, or
(ii) any omission or alleged omission to state in any
document referred to in clause (i) a material fact
required to be stated therein or necessary to make the
statement therein not misleading, but only if and to the
extent in the case of clause (i) or (ii) such untrue
statement or alleged untrue statement in or omission or
alleged omission from any such document was made in
reliance upon and in conformity with written information
furnished to Dynamic through an instrument duly executed
by such Holder specifically stating that it is expressly
for use therein; provided, that the liability of each
participating Holder shall be limited to the net proceeds
received by such Holder with respect to the Shares sold
by such Holder thereunder unless such untrue statement or
alleged untrue statement in or omission or alleged
omission from any such document was made as a result of
the intentional withholding of information or intentional
provision of information known to be false by such
participating Holder.
(c) A party from whom indemnity may be sought pursuant to the
provisions of Section 5 (a) or (b) shall not be liable
for such indemnity with respect to any claims as to which
indemnity is sought unless the party seeking such
indemnity shall have notified such indemnifying party in
writing of the nature of such claim promptly after such
indemnified party becomes aware of the assertion thereof;
provided, however, that the failure so to notify such
indemnifying party shall not relieve such party from any
liability which it may have to such indemnified party
otherwise than on account of the provisions of Section 5
(a) or (b) or if the failure to give such notice promptly
shall not have been materially prejudicial to such
indemnifying party. No indemnifying party shall be
liable for any compromises or settlement of any such
action effected without its consent. No indemnifying
party, in the defense of any such claim or suit, shall,
except with the consent of each indemnified party,
consent to any compromise or settlement that does not
include as an unconditional term thereof the giving by
the claimant to such indemnified party of a release from
all liability in respect of such claim or suit. An
indemnifying party may participate with counsel
reasonably satisfactory to the indemnified party in, and
to the extent that it shall wish (except to the extent
set forth below), may direct and assume at its own
expense, either individually or jointly with any other
indemnifying party, the defense of any suit brought to
enforce such claim. Such indemnified party shall have
the right to participate in such suit (but not to control
such suit except to the extent set forth below) unless no
indemnifying party shall have assumed the defense thereof
in accordance with the preceding sentence) and to retain
its own counsel, but the fees and expenses of such
counsel (other than
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reasonable costs of investigation) shall be at the expense
of such indemnified party unless no indemnifying party shall
have assumed the defense thereof in accordance with the
preceding sentence or unless the named parties to any such
suit include one or more indemnifying party and representation
of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them (in
which case such indemnified party shall have the right to
control all aspects of such suit relating to such actual
or potential differing interests). It is understood that
no indemnifying party shall, in connection with any such
suit, be liable under this subsection for the fees and
expense of more than one separate firm (in addition to
any local counsel in each jurisdiction) for all
indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred.
(d) Indemnification similar to that specified in Sections 5
(a), (b), and (c) (with appropriate modifications) shall
be given by Dynamic and each Holder participating in the
registration with respect to any required registration
or other qualification of Shares under any federal or
state law or regulation of governmental authority other
than the 1933 Securities Act
(e) In order to provide for just and equitable contribution
in circumstances in which the indemnification provided
for above is for any reason held to be unenforceable
although applicable in accordance with its terms, Dynamic
and each participating Holder shall contribute to the
losses, claims, damages, liabilities and expenses
described herein, in such proportions so that the portion
thereof for which any particular participating Holder
shall be responsible shall be limited to the portion
determined by a court (or the parties to any settlement)
to be directly attributable to an untrue statement of a
material fact or an omission to state a material fact in
a registration statement, preliminary prospectus,
prospectus or amendment or supplement thereto in specific
reliance upon and in conformity with written information
furnished to Dynamic through an instrument duly executed
by such participating Holder specifically stating that it
is expressly for use therein, and Dynamic shall be
responsible for the balance; provided, that the liability
of each participating Holder shall be limited to the net
proceeds received by such Holder with respect to the
Shares sold by such Holder thereunder unless such untrue
statement or alleged untrue statement in or omission or
alleged omission from any such document was made as a
result of the intentional withholding of information or
intentional provision of information known to be false by
such participating Holder. Dynamic and each
participating Holder agree that it would not be just and
equitable if their respective obligations to contribute
were to be determined by pro rata allocation, by
reference to the proceeds realized by them or in any
manner which does not take into account the equitable
considerations set forth in this Section 5 (e).
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6. Participation in Underwritten Registrations. No person
may participate in any registration hereunder which includes an
underwritten offering unless such person (i) agrees to sell such
person's securities on the basis provided in any reasonable
underwriting arrangements approved by the person entitled hereunder
to approve such arrangements, and (ii) completes and executes all
questionnaires, power of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms
of such underwriting arrangements.
7. Absence of Other Registration Rights. Dynamic has not
granted any other party any demand registration, piggyback
registration or similar rights regarding any securities of Dynamic
other than pursuant to that certain Warrant for the Purchase Of
Shares Of Common Stock from Dynamic to Genesis Merchant Group
Securities LLC covering 250,000 shares of Dynamic common stock.
8. Rule 144 Reporting.
(a) Dynamic shall make and keep public information available,
as those terms are understood and defined in Rule
144(c)(1) or (c)(2), whichever is applicable, under the
1933 Securities Act, at all times from and after the date
it is first required to do so.
(b) Dynamic shall file with the SEC in a timely manner all
reports and other documents as the SEC may prescribe
under Sections 13(a) or 15(d) of the 1934 Exchange Act at
all times during which Dynamic is subject to such
reporting requirements of the 1934 Exchange Act.
(c) Dynamic shall furnish to each and every Holder, upon
request (i) a written statement by Dynamic as to its
compliance with the reporting requirements of Rule 144
and of the 1933 Securities Act and the 1934 Exchange Act,
(ii) a copy of the most recent annual or quarterly report
of Dynamic, and (iii) such other reports and documents
filed with the SEC as the Holder may reasonably request
to avail itself of any rule or regulation of the SEC
allowing a Holder of restricted securities to sell any
such securities without registration.
9. Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended and Dynamic
may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if Dynamic has obtained
the written consent of at least two-thirds of the Holders.
10. Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto will
bind and inure to the benefit of the respective, permitted
successors and assigns of the parties hereto whether or not any
express assignment has been made, the provisions of this Agreement
which are for the
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benefit of Holders are also for the benefit of, and enforceable by,
any subsequent holder of Shares, provided that Dynamic is given
written notice at the time of or within a reasonable time after said
assignment, stating the name and address of the assignee or holder and
identifying the securities with respect to which such registration
rights are being assigned, and provided further, that the assignee
or subsequent holder of such rights assumes the obligations of such
Holder under this Agreement (other than obligations pursuant to
Section 5(b) with respect to written instruments prepared by such
prior Holder). Dynamic may not assign its rights or delegate its
duties hereunder, by transfer, operation of law or otherwise, without
the prior written consent of all of the Holders, and any prohibited
assignment or delegation will be deemed rule and void.
11. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement
is held to be prohibited by or invalid under applicable law, such
provision will be effective only to the extent of such prohibition
or invalidity, without invalidating the remainder of this
Agreement. Further, there shall be automatically added to this
Agreement a provision as similar as possible to the provision (or
that portion thereof), which new provision will be valid and
enforceable under applicable laws.
12. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need
not contain the signature of more than one party, but all such
counterparts taken together will constitute one and the same
Agreement.
13. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute
a part of this Agreement.
14. Governing Law. The construction, validity and
interpretation of this Agreement and the exhibits and schedules
hereto will be governed by the internal law, and not the law of
conflicts, of the State of Nevada.
15. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this
Agreement will be in writing and will be deemed to have been given
when delivered personally or mailed by certified or registered
mail, return receipt requested and postage prepaid, to the
recipient. Such notices, demands and other communications will be
sent to each Holder at the address provided by such Holder and
listed on Schedule 1 hereto and to Company at the address indicated
below:
To Company: Dynamic Associates, Inc.
Suite B-169
7373 North Scottsdale
Xxxxxxxxxx, XX 00000
or to such other address or to the attention of such other person
as the recipient party has specified by prior written notice to the
sending party.
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IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of March 30, 1999.
COMPANY:
DYNAMIC ASSOCIATES, INC.
By:
Title:
HOLDERS:
Healthmark Partners, LLC
By:
Title:
M. Xxxxx Xxxxxxxxx, M.D.
Xxxxxxxx Xxxxxx, R.N.
T.C. Xxxxxx, III, M.D.
Xxxxxxxx X. Xxxxxxxxxx, M.D.
Xxxxxx X. Xxxxxx, M.D.
Xxxxxx X. Xxxxx
Xxxx X. Xxxxxxx
Xxxxx Xxx Xxxxxx, R.N.
Xxxxx X. Xxxxxx, Ph.D.
Xxxxxxxxx Xxx
X. Xxxx XxxXxxxxxxx, M.D.
Xxxxx Xxxxxxx
NationsCredit
By:
Its:
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Schedule 1
Name of Holder Address of Holder Number of Shares Held
Healthmark Partners, LLC 1,236,105
*Xxxxx X. Xxxxxx 30,603
*Xxxxx X. Xxx 40,985
Xxxxx Xxxxxx, X.X. 674
X.X. Xxxxxx, III, M.D. 674
Xxxxxx X. Xxxxxx, M.D. 674
*Xxxx X. Xxxxxxx 1,750
*Xxxxx X. Xxxxxx, Ph.D.
*F. Xxxx XxxXxxxxxxx, M.D.
*X. Xxxxxx Xxxxxx, M.D.
*M. Xxxxx Xxxxxxxxx, M.D.
*NationsCredit
*Xxxxxxxx Xxxxxx, R.N.
*Xxxxxxxx X. Xxxxxxxxxx, M.D.
*Xxxxxx X. Xxxxx
*Xxxxx Xxx Xxxxxx, R.N.
*Xxxxxxx X. (Xxxxxxx) Xxxxxxxx, X.X.
*Xxxxxxxxx Xxx
*Xxxxx Xxxxxxx
(* = option, warrant or SAR holder - need to adjust # shares held
accordingly.)
[Subject to Change]
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Schedule 2
Participating Holders in First Registration
Name: Number of Shares to
be Offered for Sale:
Total:________________
