Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made effective
as of ___________ __, 2007, by and among Bionovo, Inc., a Delaware corporation
(the "Company"), and the investors signatory hereto (each a "Purchaser" and
collectively, the "Purchasers").
RECITALS
A. Each Purchaser has executed and delivered to the Company a Subscription
Agreement ("Subscription Agreement") to purchase the number of shares of the
Company's common stock, par value $0.0001 per share (the "Common Stock") set
forth on the signature page thereto and warrants (the "Warrants") to purchase
additional shares of Common Stock for a period of five years; and
B. As a condition of the Subscription Agreement, the Company is required
to execute and deliver this Agreement to the Purchasers to provide for certain
registration rights with respect to Common Stock and shares of Common Stock
underlying the Warrants ("Warrant Shares") upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of these premises and the mutual promises
and covenants hereinafter set forth and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. In addition to the terms defined elsewhere in this
Agreement, the following capitalized terms shall have the following meanings:
"Business Day" means any day other than a Saturday, Sunday or legal
holiday in the State of California.
"Closing Date" means the date that the closing of the purchase and sale of
the Common Stock contemplated by the Subscription Agreement occurs.
"Effectiveness Date" means, with respect to the Registration Statement to
be filed pursuant to Section 2(a), the earlier of (a) the 90th calendar day from
the Filing Date (or the 120th day if the Registration Statement is reviewed by
the SEC), and (b) the date on which the SEC declares the Registration Statement
effective.
"Effectiveness Period" is defined in Section 2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Filing Date" means, with respect to the Registration Statement to be
filed hereunder, the date forty-five (45) calendar days from the Closing Date.
"Holder" or "Holders" means the holder or holders, as the case may be,
from time to time of Registrable Securities (including any permitted assignee).
"Holders' Representative" means Cambria Capital, LLC, or any other person
that has been appointed by the Holders of a majority of the Registrable
Securities to act as representative of the Holders for purposes of this
Agreement.
"Indemnified Party" is defined in Section 5(c).
"Indemnifying Party" is defined in Section 5(c).
"Losses" is defined in Section 5(a).
"Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"Registrable Securities" means the shares of Common Stock sold pursuant to
Subscription Agreements, Warrant Shares issuable upon any exercise of Warrants,
and any shares issued upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing; provided, that
the Company shall have the right to reduce the number of Registrable Securities
if in the reasonable opinion of counsel to the Company, the Registration
Statement could not be declared effective by the SEC without such reduction. Any
such reduction shall be pro rata among all Holders.
"Registration Statement" means the registration statements required to be
filed hereunder, including (in each case) the Prospectus, amendments and
supplements to the registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in the registration
statement.
"Rule 144" means Rule 144 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
Rule or regulation hereafter adopted by the SEC having substantially the same
effect as such Rule.
"Rule 144(k)" means Rule 144(k) promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
Rule or regulation hereafter adopted by the SEC having substantially the same
effect as such Rule.
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"Rule 415" means Rule 415 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
Rule or regulation hereafter adopted by the SEC having substantially the same
effect as such Rule.
"Rule 424" means Rule 424 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
Rule or regulation hereafter adopted by the SEC having substantially the same
effect as such Rule.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Shareholder Questionnaire" is defined in Section 2(d).
"Trading Day" means (i) a day on which Common Stock is traded or quoted on
a Trading Market, or (ii) if Common Stock is not traded or quoted on a Trading
Market, a day on which Common Stock is quoted in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting price);
provided, that in the event that Common Stock is not traded or quoted as set
forth in (i), and (ii) hereof, that Trading Day shall mean a Business Day.
"Trading Market" means the following markets or exchanges on which Common
Stock is listed or quoted for trading on the date in question: the NASDAQ
Capital Market, the American Stock Exchange, the New York Stock Exchange, the
NASDAQ National Market or the OTC Bulletin Board.
2. Registration.
(a) Best Efforts Registration. No later than the Filing Date, the Company
shall use its best efforts to prepare and file with the SEC the Registration
Statement covering the resale of all of the Registrable Securities which a
Holder has requested to be included in such Registration Statement (subject to
the proviso set forth in the definition of "Registrable Securities" above) and
for which such Holder has provided the Company with a completed Selling
Shareholder Questionnaire, which offering shall be made on a continuous basis
pursuant to Rule 415. The Registration Statement shall be on Form SB-2 (or other
applicable form at the discretion of the Company). The Registration Statement
shall contain (except if otherwise directed by the Holders) the "Plan of
Distribution" substantially in the form attached hereto as Annex A (which may be
modified as required by the Securities Act and the rules and regulations
thereunder and to respond to comments, if any, received by the SEC). The Company
shall use its best efforts to cause the Registration Statement to be declared
effective under the Securities Act prior to the Effectiveness Date and shall use
its commercially reasonable efforts to keep the Registration Statement
continuously effective under the Securities Act until the date when all
Registrable Securities covered by the Registration Statement (a) have been sold
pursuant to the Registration Statement or an exemption from the registration
requirements of the Securities Act or (b) may be sold without any volume or
other restrictions pursuant to Rule 144(k) (the "Effectiveness Period").
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(b) Sufficient Number of Shares Registered. In the event the number of
shares of Common Stock covered under a Registration Statement filed pursuant to
Section 2(a) is insufficient to cover all of the Registrable Securities which
such Registration Statement is required to cover (subject to the proviso set
forth in the definition of "Registrable Securities" above), the Company shall
use its best efforts to amend the Registration Statement, or file a new
Registration Statement (on the short form available therefor, if applicable), or
both, so as to cover at least 100% of the Registrable Securities, in each case,
as soon as practicable. The Company shall use its commercially reasonable
efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof.
(c) Participation in Underwritten Registrations. No Holder may participate
in any underwritten registration with respect to the Registrable Securities
unless such Holder completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents reasonably required under the terms of such underwriting agreements.
(d) Other Requirements. In connection with any Registration Statement
under Section 2(a), Holders whose Registrable Securities are included therein
shall provide such information and shall execute and deliver to the Company such
documents, including, but not limited to, a selling shareholder questionnaire in
customary form and substance reasonably satisfactory to the Company ("Selling
Shareholder Questionnaire"), as the Company may reasonably request in order to
effect, or maintain the continuous effectiveness of, such registration pursuant
to this Agreement and in accordance with applicable securities laws.
3. Registration Procedures. In connection with the Company's registration
obligations hereunder, the Company shall use commercially reasonable efforts to:
(a) Not less than three (3) Trading Days prior to the filing of the
Registration Statement or any related Prospectus or any amendment or supplement
thereto, (i) furnish to the Holders' Representative copies of all such documents
substantially in the form proposed to be filed (including documents incorporated
or deemed incorporated by reference to the extent requested by such Person)
which documents will be subject to the review of the Holders' Representative,
and (ii) subject, if appropriate, to the execution of confidentiality agreements
in form acceptable to the Company, cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of respective counsel to conduct a
reasonable investigation within the meaning of the Securities Act.
(b) (i) Prepare and file with the SEC such amendments, including
post-effective amendments, to the Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep the Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424; and (iii) respond as promptly as
reasonably practicable to any comments received from the SEC with respect to the
Registration Statement or any amendment thereto and, as promptly as reasonably
practicable, upon request, provide the Holders' Representative true and complete
copies of all correspondence from and to the SEC relating to the Registration
Statement (subject, if appropriate, to the execution of confidentiality
agreements in form acceptable to the Company).
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(c) Notify the Holders of Registrable Securities to be sold as promptly as
reasonably possible (and, in the case of (i)(A) below, not less than three (3)
Trading Days prior to such filing) and (if requested by any such Person) confirm
such notice in writing promptly following the day (i)(A) when a Prospectus or
any Prospectus supplement or post-effective amendment to the Registration
Statement is proposed to be filed; (B) when the SEC notifies the Company whether
there will be a "review" of the Registration Statement and whenever the SEC
comments in writing on the Registration Statement (the Company shall upon
request provide true and complete copies thereof and all written responses
thereto to the Holders' Representative, subject, if appropriate, to the
execution of confidentiality agreements in form acceptable to the Company); and
(C) with respect to the Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the SEC or any other
federal or state governmental authority during the period of effectiveness of
the Registration Statement for amendments or supplements to the Registration
Statement or Prospectus or for additional information; (iii) of the issuance by
the SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement covering any or all
of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event or passage of time that makes the financial statements included in the
Registration Statement ineligible for inclusion therein or any statement made in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Notwithstanding the foregoing, prior notice to the Holders
of Registrable Securities shall not be required with respect to any Prospectus
supplement primarily for the purpose of supplementing the Prospectus with a
periodic report filed by the Company pursuant to the Exchange Act.
(d) Avoid the issuance of, or, if issued, obtain the withdrawal of (i) any
order suspending the effectiveness of the Registration Statement, or (ii) any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest practicable
moment.
(e) Promptly deliver to each Holder no later than five (5) business days
after the Effectiveness Date, without charge, two (2) copies of the Prospectus
or Prospectuses (including each form of prospectus) and each amendment or
supplement thereto (and, upon the request of the Holder such additional copies
as such Persons may reasonably request in connection with resales by the Holder
of Registrable Securities). The Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto, except after
the giving of any notice pursuant to Section 3(c)(ii)-(v).
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(f) Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep such registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by the Registration Statement; provided,
however, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified, subject the
Company to any material tax in any such jurisdiction where it is not then so
subject or file a general consent to service of process in any such
jurisdiction.
(g) If requested by the Holders, cooperate with the Holders to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to the Registration
Statement, which certificates shall be free, to the extent permitted by the
Subscription Agreement, of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names
as any such Holders may request.
(h) Upon the occurrence of any event contemplated by Section 3(c)(v), as
promptly as reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(i) Comply in all material respects with all applicable rules and
regulations of the SEC relating to the registration of the Registrable
Securities pursuant to the Registration Statement or otherwise.
(j) The Company shall not be required to include in any Registration
Statement the Registrable Securities of any Holder that does not complete a
Selling Shareholder Questionnaire.
(k) Maintain at least two (2) market makers that are registered with the
National Association of Securities Dealers, Inc. as such with respect to the
Registrable Securities. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section 3(k).
(l) Make all documents, files, books, records, officers, directors and
employees of the Company reasonably available to the Holders' Representative,
one legal counsel to the Holders and one firm of accountants retained by the
Holders (collectively, the "Inspectors"), and make such other accommodations as
are reasonably necessary for the Inspectors, if any, to perform a due diligence
review of the Company; provided, however, that all such information
("Confidential Information") will be kept confidential and not utilized by the
Inspectors except as contemplated herein and except as required by law or court
order. The term Confidential Information also includes any information included
in a draft Registration Statement or any related Prospectus or any amendment or
supplement thereto provided to a Holder pursuant to Section 3(a); for the
avoidance of doubt, however, the Company shall not furnish to Holders, without
their prior approval, any information that constitutes or might constitute
material, non-public information. The term Confidential Information does not
include information that (a) is already in possession of such other party (other
than that which is subject to another confidentiality agreement or unless
obtained from a third party where the receiving party knows that the third party
was subject to a confidentiality agreement), (b) becomes generally available to
the public other than by disclosure in violation of this Agreement or any other
agreement to which a Holder is a party, or (c) becomes available on a
non-confidential basis from a source other than the Company unless obtained from
a third party where the receiving party knows that the third party was subject
to a confidentiality agreement. Each Holder agrees that it shall, upon learning
that disclosure of such Confidential Information is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the information deemed confidential.
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(m) Hold in confidence and not make any disclosure of information
concerning any Holder provided to the Company unless (a) such information is
already in possession of the Company, (b) such information becomes available to
the Company on a non-confidential basis from a person other than such Holder who
is not known by the Company to be otherwise bound by a confidentiality or
comparable agreement with such Holder, (c) disclosure of such information is
necessary to comply with federal or state securities laws, (d) the disclosure of
such information is necessary to avoid or correct a misstatement or omission in
any Registration Statement or Prospectus, (e) the release of such information is
ordered pursuant to a subpoena or other final, non-appealable order from a court
or governmental body of competent jurisdiction, (f) such information has been
made generally available to the public other than by disclosure in violation of
this Agreement or any other agreement to which the Company is a party, or (g)
such Holder consents to the form and content of any such disclosure (the Holders
shall be deemed to consent to the inclusion of any information provided in the
Selling Shareholder Questionnaire, in the Registration Statement, any Prospectus
related thereto, and any amendments or supplements thereto). The Company agrees
that it shall, upon learning that disclosure of such information concerning any
Holder is sought in or by a court or governmental body of competent jurisdiction
or through other means, give prompt written notice to such Holder and allow such
Holder, at the Holder's expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.
(n) File the reports required to be filed by it under the Securities Act
and the Exchange Act and the rules and regulations adopted by the SEC thereunder
so long as the Holder owns any Registrable Securities, but in no event longer
than two (2) years; provided, however, the Company may delay any such filing but
only pursuant to Rule 12b-25 under the Exchange Act, and the Company shall use
commercially reasonable efforts to take such further action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, or (b) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
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4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company (including,
without limitation, fees and expenses of one counsel for the Holders'
Representative with respect to the review of the Registration Statement,
"Holders' Representative Counsel") shall be borne by the Company whether or not
any Registrable Securities are sold pursuant to the Registration Statement,
other than fees and expenses of counsel (other than the Holder's Representative
Counsel referenced above) or any other advisor retained by the Holders and
discounts, fees and commissions with respect to the sale of any Registrable
Securities by the Holders. The fees and expenses to referred to in the foregoing
sentence to be borne by the Company shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
(A) with respect to filings required to be made with the Trading Market on which
Common Stock is then listed for trading, and (B) to effect compliance with
applicable state securities or Blue Sky laws), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing Prospectuses), (iii) fees and
disbursements of counsel for the Company, (iv) Securities Act liability
insurance, if the Company so desires such insurance, and (v) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement. In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange or other trading market as
required hereunder.
5. Indemnification
(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents and employees of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, reasonable attorneys' fees)
and expenses (including the cost (including without limitation, reasonable
attorneys' fees) and expenses relating to an Indemnified Party's actions to
enforce the provisions of this Section 5) (collectively, "Losses"), as incurred,
to the extent arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (1) such untrue (or alleged untrue) statements or omissions (or alleged
omissions) are based solely upon information regarding such Holder furnished (or
in the case of an omission, results from the failure of such Holder to fully or
accurately complete the Selling Shareholder Questionnaire) in writing to the
Company by or on behalf of such Holder expressly for use therein, or to the
extent that such information relates to such Holder or such Holder's proposed
method of distribution of Registrable Securities and which proposed method was
reviewed by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
(it being understood that the Holder has reviewed Annex A hereto for this
purpose), (2) in the case of an occurrence of an event of the type specified in
Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
the Advice contemplated in Section 6(c), or (3) the failure of the Holder to
deliver a Prospectus as amended or supplemented prior to the confirmation of a
sale. The Company shall notify the Holders promptly of the institution, threat
or assertion of any Proceeding of which the Company is aware in connection with
the transactions contemplated by this Agreement.
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(b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, to the extent arising out of or based upon: (x) such Holder's failure
to comply with the prospectus delivery requirements of the Securities Act or (y)
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
the Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading (i) to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is contained in any information so furnished (or
in the case of an omission, results from the failure of such Holder to fully or
accurately complete the Selling Shareholder Questionnaire) in writing by or on
behalf of such Holder to the Company specifically for inclusion in the
Registration Statement or such Prospectus or (ii) to the extent that (1) such
untrue statements or omissions are based solely upon information regarding such
Holder furnished (or in the case of an omission, results from the failure of
such Holder to fully or accurately complete the Selling Shareholder
Questionnaire) in writing to the Company by or on behalf of such Holder
expressly for use therein, or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable
Securities and which proposed method was reviewed by such Holder expressly for
use in the Registration Statement (it being understood that the Holder has
reviewed Annex A hereto for this purpose), such Prospectus or such form of
Prospectus or in any amendment or supplement thereto, or (2) in the case of an
occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by
such Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice contemplated in Section 6(c),
or (3) the failure of the Holder to deliver a Prospectus as amended or
supplemented prior to the confirmation of a sale. In no event shall the
liability of any selling Holder hereunder be greater in amount than the gross
proceeds received or to be received by the Holder with respect to the sale of
its Registrable Securities.
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(c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that such failure
shall have materially prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in (but not control) the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall have
failed to assume the defense of such Proceeding in a timely manner and to employ
counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel in writing
that a conflict of interest would exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of one separate counsel for all Indemnified
Parties in any matters related on a factual basis shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding affected without its written consent. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.
All reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within fifteen (15) Business Days of written notice thereof to the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is not entitled to
indemnification hereunder, determined based upon the relative faults of the
parties.
(d) Contribution. If a claim for indemnification under Section 5(a) or
Section 5(b) is unavailable to an Indemnified Party (by reason of public policy
or otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
10
(e) The parties hereto agree that it would not be just and equitable if
contribution pursuant to Section 5(d) were determined by pro rata allocation or
by any other method of allocation that does not take into account the equitable
considerations referred to in Section 5(d). Notwithstanding the provisions of
Section 5(d), no Holder shall be required to indemnify or contribute, in the
aggregate, pursuant to this Article 5, any amount in excess of the amount by
which the proceeds actually received by such Holder from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission, except in
the case of fraud by such Holder. The indemnity and contribution agreements
contained in this Section are in addition to any liability that the Indemnifying
Parties may have to the Indemnified Parties. No party guilty of fraudulent
misrepresentation pursuant to Section 11(f) of the Securities Act shall be
entitled to contribution from any other party.
6. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder of
any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement will be entitled to specific performance of its
rights under this Agreement. The Company and each Holder agree that monetary
damages would not provide adequate compensation for any losses incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would be
adequate.
(b) Compliance. Each Holder covenants and agrees that it will comply with
the prospectus delivery requirements of the Securities Act as applicable to it
in connection with sales of Registrable Securities pursuant to the Registration
Statement.
(c) Discontinued Disposition. Each Holder agrees by its acquisition of
such Registrable Securities that, upon receipt of a notice from the Company of
the occurrence of any event of the kind described in Section 3(c)(ii)-(v), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph.
11
(d) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Holders of at least sixty-six percent (66%) of the then outstanding Registrable
Securities (assuming the exercise of all Warrants, whether exercised or not),
whereupon such amendment, modification, supplement or waiver shall be binding on
all Holders; provided, however, that no consideration shall be offered or paid
to any Holder to amend or consent to a waiver or modification of any provision
of this Agreement unless the same consideration (on a pro-rata basis) is also
offered to all of the Holders under this Agreement.
(e) Notices. All notices that are required or may be given pursuant to
this Agreement must be in writing and delivered personally, by a recognized
courier service, by a recognized overnight delivery service, or by registered or
certified mail, postage prepaid, to the parties at the following addresses (or
to the attention of such other person or such other address as any party may
provide to the other parties by notice in accordance with this section):
If to the Company:
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
With a copy to:
Xxxxxxxxx Xxxxxxx, LLP
Met Life Building
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
If to a Purchaser:
At the address indicated on the signature page for such Purchaser
Any such notice or other communication will be deemed to have been given
and received (whether actually received or not) on the day it is
personally delivered or delivered by courier or overnight delivery service
or, if mailed, when actually received.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon each of the parties and their respective successors and
permitted assigns.
12
(g) Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California without regard to
the conflicts of laws principles thereof. The parties hereto hereby irrevocably
agree that any suit or proceeding arising directly and/or indirectly pursuant to
or under this Agreement, shall be brought solely in a federal or state courts
located in the State of California. By its execution hereof, the parties hereby
covenant and irrevocably submit to the in personam jurisdiction of the federal
and state courts located in the State of California and agree that any process
in any such action may be served upon any of them personally, or by certified
mail or registered mail upon them or their agent, return receipt requested, with
the same full force and effect as if personally served upon them in California.
The parties hereto waive any claim that any such jurisdiction is not a
convenient forum for any such suit or proceeding and any defense or lack of in
personam jurisdiction with respect thereto.
(i) Cumulative Remedies. Subject to the first sentence of Section 6(a),
the remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
(j) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(k) Interpretation. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
References to Sections mean Sections of this Agreement unless otherwise stated.
Any term defined in this Agreement shall be deemed to include derivations of
such term (e.g., the term "Indemnified Party" shall include "Indemnified
Parties").
(l) Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser hereunder is several and not joint with the
obligations of any other Purchaser hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to independently protect and enforce its
rights, including without limitation the rights arising out of this Agreement,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose. EACH PURCHASER REPRESENTS
THAT IS HAS BEEN REPRESENTED BY ITS OWN SEPARATE LEGAL COUNSEL IN ITS REVIEW AND
NEGOTIATION OF THIS AGREEMENT. The Company has elected to provide all Purchasers
with the same terms and documents for the convenience of the Company and not
because it was required to do so by the Purchasers.
13
(m) Assignment of Registration Rights. The rights of any Holder under this
Agreement shall be automatically assignable by such Holder to any transferee of
all or any portion of Registrable Securities (other than pursuant to a public
sale or Rule 144) if: (1) such Holder agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company promptly after such assignment; (2) the Company is, promptly after such
transfer or assignment, furnished with written notice of (i) the name and
address of such transferee or assignee, and (ii) the securities with respect to
which such registration rights are being transferred or assigned; and (3) at or
before the time the Company receives the written notice contemplated by clause
(2) of this sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein.
(n) Deferral Period. With respect to any Registration Statement filed or
to be filed pursuant to Section 2, if the Company determines that, in its good
faith judgment, it would (because of the existence of, or in reasonable
anticipation of, any acquisition or corporate reorganization or other
transaction, financing activity, stock repurchase or other material development
involving the Company or any subsidiary, or the unavailability for reasons
beyond the Company's control of any required financial statements or other
material information, or any other event or condition material to the Company or
any subsidiary) be materially disadvantageous to the Company to proceed with
such Registration Statement or that the Company is required by applicable law,
rules or regulations not to proceed with the Registration Statement (a "Material
Development Condition"), then the Company shall, notwithstanding any other
provisions of this Agreement, be entitled, upon the giving of a written notice
that a Material Development Condition has occurred (a "Delay Notice") from an
officer of the Company to the Holders' Representative, as the representative of
the Purchasers, (i) to cause sales of Registrable Securities by the Purchasers
pursuant to such Registration Statement to cease, (ii) to cause such
Registration Statement to be withdrawn and the effectiveness of such
Registration Statement suspended, or (iii) in the event no such Registration
Statement has yet been filed or declared effective, to delay filing or
effectiveness of any such Registration Statement until, in the good faith
judgment of the Company, such Material Development Condition shall be disclosed
or no longer exists (notice of which the Company shall promptly deliver to the
Holders' Representative, as the representative of the Purchasers).
Notwithstanding the foregoing provisions of this Section 6(n), in the event a
Registration Statement is filed and subsequently withdrawn by reason of any
existing or anticipated Material Development Condition as provided above, the
Company shall use commercially reasonable efforts to cause a new Registration
Statement covering the Registrable Securities to be filed with the SEC as soon
as reasonably practicable after such Material Development Condition ceases to
exist or, if sooner, as soon as practicable after the expiration of such ninety
(90) day period.
14
(o) Entire Agreement. This Agreement, any annexes hereto and any writings
incorporated herein by reference set forth the entire understanding of the
parties hereto with respect to the subject matter hereof. The recitals hereto
are a material part of this Agreement and are incorporated in this Agreement by
reference as if fully set forth herein.
[Signatures follow]
15
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
BIONOVO, INC.
By:
-------------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
INDIVIDUALS:
Signature:
------------------------------
Print Name:
-----------------------------
Signature:
------------------------------
Print Name:
-----------------------------
ENTITY:
By:
-------------------------------------
Name:
Title:
ADDRESS:
Attention:
------------------------------
Telephone:
------------------------------
ANNEX A
Plan of Distribution
The Selling Stockholders and any of their pledgees, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. One or more underwriters on a firm commitment or best efforts
basis may sell the shares of common stock directly or through brokers or dealers
or in a distribution. The Selling Stockholders may use any one or more of the
following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker/dealer solicits purchasers;
o block trades (which may involve crosses) in which the broker/dealer
will attempt to sell the shares as agent but may position and resell
a portion of the block, as principal, to facilitate the transaction;
o purchases by a broker/dealer, as principal, and resale by the
broker/dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o put or call options transactions;
o settlement of short sales;
o broker/dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted by applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, if available, rather than under this prospectus.
Broker/dealers engaged by the Selling Stockholders may arrange for other
brokers/dealers to participate in sales. Broker/dealers may receive commissions
from the Selling Stockholders (or, if any broker/dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
Selling Stockholders do not expect these commissions to exceed what is customary
in the types of transactions involved.
The Selling Stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the donees, pledgees or
secured parties may offer and sell the shares of common stock from time to time
under this prospectus, or under an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933 amending
the list of Selling Stockholders to include the donee, pledgee, transferee or
other successors in interest as Selling Stockholders under this prospectus.
The Selling Stockholders and any broker/dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker/dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions under the Securities Act of 1933. The Selling Stockholders have
informed the Company that it does not have any agreement or understanding,
directly or indirectly, with any person to distribute common stock.
At the time a particular offering of securities is made, to the extent
required, a prospectus supplement will be distributed which will set forth the
number of securities being offered and the terms of the offering, including the
purchase price or the public offering price, the name or names of any
underwriters, dealers or agents, the purchase price paid by any underwriters for
securities purchased from the Selling Stockholders, any discounts, commissions
and other items constituting compensation from the selling security holders and
any discounts, commissions or concessions allowed or reallowed or paid to
dealers.
Pursuant to applicable rules and regulations under the Securities Exchange
Act of 1934, any person engaged in the distribution of the securities offered
under this prospectus may not simultaneously engage in market activities for the
shares of common stock for a period of five business days prior to the
commencement of such distribution. In addition, each Selling Stockholder and any
other person who participates in a distribution of the securities will be
subject to applicable provisions of the Securities Exchange Act of 1934 and the
rules and regulations thereunder, including Regulation M, which may limit the
timing of purchases and may affect the marketability of the securities and the
ability of any person to engage in market activities for the shares of common
stock.
The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act of 1933.