Exhibit 4.6
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT (this "Agreement"), dated as of June 30, 1999, by
and among DynaGen, Inc., a corporation organized under the laws of the State of
Delaware (the "Company"), with headquarters located at 000 Xxxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000, and the purchaser named on the signature page
hereto "Purchaser").
WHEREAS:
A. The Company and the Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the "Securities
Act").
B. The Company desires to sell and issue to the Purchaser, and the
Purchaser desires to purchase, in consideration for the exchange and
cancellation of that certain 8% Convertible Debenture of the Company dated May
13, 1999 in favor of the Purchaser in the principal amount of $___________ (the
"Debenture"), ________ shares of Series I Preferred Stock, par value $0.01 per
share, of the Company (the "Series I Stock"), in accordance with the terms and
conditions set forth therein (the shares of common stock, $0.01 par value per
share, issuable upon conversion of the Series I Stock are referred to herein as
the "Common Shares," and the Series I Preferred Stock and the Common Shares are
sometimes collectively referred to herein as the "Securities").
NOW, THEREFORE, the Company and the Purchaser hereby agree as follows:
1. PURCHASE AND SALE OF SERIES I STOCK
a. Purchase of Series I Stock. The Company hereby agrees to issue and
sell to the Purchaser, and the Purchaser agrees to purchase from the Company,
the number of shares of Series I Stock set forth next to the Purchaser's name on
the signature page of this Agreement.
b. FORM OF PAYMENT. PURCHASER HEREBY TENDERS TO THE COMPANY THE
DEBENTURE IN PAYMENT OF THE PURCHASE PRICE FOR THE SERIES I STOCK. THE DEBENTURE
AND THE DEBT EVIDENCED THEREBY SHALL BE CANCELED ON THE BOOKS OF THE COMPANY AS
OF THE DATE HEREOF. The Company agrees to pay to the Purchaser, on demand, all
interest accrued on the Debenture from May 13, 1999 to the date hereof, in
shares of Common Stock, valued at the average Market Price of the Common Stock
for the three (3) trading days (which need not be consecutive) selected by the
holder from the five (5) trading days ending on the trading day immediately
before the date such demand is received. Market Price of the Common Stock" means
(x) the closing bid price of the Common Stock for the period indicated in the
relevant provision, as reported by Bloomberg, LP or, if not so reported, as
reported on the over-the-counter market or (y) if the Common Stock is listed on
a stock exchange, the closing price on such exchange, as reported in The Wall
Street Journal.
2. PURCHASER'S REPRESENTATIONS AND WARRANTIES
The Purchaser represents and warrants to the Company that:
a. Investment Purpose. It is purchasing the Securities for its own
account for investment only and not with a present view towards the public sale
or distribution thereof, except pursuant to sales that are exempt from the
registration requirements of the Securities Act and/or sales registered under
the Securities Act. The Purchaser understands that the Purchaser must bear the
economic risk of this investment indefinitely. The Purchaser understands that
the Securities have not been and are not being registered under the Securities
Act or any state securities laws, and may not be transferred unless the
Securities are registered pursuant to the Securities Act and any applicable
state securities or blue sky laws or an exemption from such registration is
available, and that the Company has no present intention of registering, or
obligation to register, any such Securities.
The Purchaser understands that while such restrictions are in effect
the certificates for the Securities may bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of the certificates for such Securities):
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended. The securities have been
acquired for investment and may not be sold, transferred or assigned in
the absence of an effective registration statement for the securities
under said Act, or an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable transactions, that
registration is not required under said Act or unless the Company is
provided with reasonable assurances that the securities were sold
pursuant to Rule 144 under said Act.
b. Accredited Investor Status/Representation by Counsel. The Purchaser
is an "accredited investor" as defined in Rule 501(a) promulgated under the
Securities Act and has reviewed all of the Company's periodic and other filings
with the Securities and Exchange Commission (the "Company SEC Documents"). The
Purchaser is represented by counsel.
c. Reliance on Exemptions. The Purchaser understands that the
Securities are being offered and sold to the Purchaser in reliance upon specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Purchaser set forth herein
in order to determine the availability of such exemptions and the eligibility of
the Purchaser to acquire the Securities.
d. Information. The Purchaser and its counsel or representative, if
any, have been furnished all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities which have been requested by such Purchaser or its counsel or
representative. The Purchaser and its counsel, if any, have been afforded the
opportunity to ask questions of the Company and have received what such
Purchaser believes to be complete and satisfactory answers to any such
inquiries.
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e. Speculative Investment. The Purchaser has been informed and
understands that (i) this investment involves a HIGH DEGREE OF RISK, and (ii)
the Company's independent auditors have included an explanatory paragraph in
their opinion on the Company's financial statements expressing substantial doubt
about the Company's ability to continue as a going concern. In particular, the
Purchaser has read and carefully considered the information set forth in the
Company SEC Documents, including, without limitation, under the heading "Certain
Factors That May Affect Future Results" in the Company's Annual Report on Form
10-KSB for the Year Ended December 31, 1998, as amended through the date hereof,
and the Company's Quarterly Report on Form 10-QSB for the Quarter Ended March
31, 1999, as amended through the date hereof.
f. Authorization; Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Purchaser and constitutes
the valid and binding agreements of the Purchaser enforceable in accordance with
its terms.
g. Location of Purchaser. The Purchaser has advised the Company in
writing with respect to the jurisdiction wherein the investment decision
regarding the Purchaser's acquisition of the Securities has been made.
3. OTHER AGREEMENTS
a. Representations and Warranties of the Company. Reference is made
hereby to that certain Securities Purchase Agreement, dated May 13, 1999 by and
between the Company and the Purchaser (the "Securities Purchase Agreement") as
well as the "Transaction Documents," as defined therein. The Securities Purchase
Agreement is hereby amended to the extent necessary to provide that "Securities"
as defined therein shall include the shares of Series I Preferred Stock to be
issued hereunder. Each of the representations and warranties of the Company made
in the Securities Purchase Agreement is hereby incorporated into this Agreement
by reference with the same force and effect as if such representation or
warranty was set fully forth herein (except for the representation of the
Company in Section 3.4 of the Securities Purchase Agreement as to the
outstanding securities of the Company, which has changed since May 13, 1999).
b. Registration Rights. The Registration Rights Agreement dated May 13,
1999 by and between the Company and the Purchaser is hereby amended to the
extent necessary to provide that "Registrable Securities" as defined therein
shall include the Common Shares issuable upon conversion of shares of Series I
Preferred Stock to be issued hereunder. The Securities Purchase Agreement and
Registration Rights Agreement, as amended hereby, and each other Transaction
Document (except for the Debentures) shall remain in full force and effect after
the execution and delivery of this Agreement, including without limitation all
obligations of the Company under Sections 2 and 3 of the Registration Rights
Agreement.
4. GOVERNING LAW; MISCELLANEOUS
a. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware.
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b. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other parties.
c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
e. Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Purchaser make any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived other than by an instrument in
writing signed by the party to be charged with enforcement and no provision of
this Agreement may be amended other than by an instrument in writing signed by
the Company and the Purchaser.
f. Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier, overnight delivery
service or by confirmed telecopy, and shall be effective five days after being
placed in the mail, if mailed, or upon receipt or refusal of receipt, if
delivered personally or by courier, overnight delivery service or confirmed
telecopy, in each case addressed t a party. The addresses for such
communications shall be:
If to the Company:
DynaGen, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxx
with a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
If to Purchaser, to the address set forth on the signature page hereof.
Each party shall provide notice to the other parties of any change in
address.
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g. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company nor any Purchaser shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have
caused this Agreement to be duly executed as of the date first above written.
PURCHASER
___________________________________
By:________________________________
Name:______________________________
Title:_____________________________
Notice Address:
___________________________________
___________________________________
Telecopy:__________________________
ACCEPTED:
DYNAGEN, INC.
By:________________________________
Name:______________________________
Title:_____________________________
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