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Exhibit 4.06
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made as of
this 12th day of December, 1996, by and among LXR Biotechnology Inc., a Delaware
corporation (the "Company"), Ventec, an investment company chartered in the
British Virgin Islands (the "Placement Agent"), and each purchaser (individually
a "Purchaser" and collectively, the "Purchasers") whose Subscription Agreement
(the "Subscription Agreement") with the Company is accepted for the purchase of
the Company's securities in the non-United States offering described in the
Confidential Private Placement Memorandum of the Company dated October 30, 1996
(the "Memorandum") as the "Foreign Offering."
1. Securities Laws Representations and Covenants of Purchasers
and Placement Agent. This Agreement is made for the benefit of (a) the
Purchasers in reliance upon each Purchaser's representations to the Company
contained in such Purchaser's Subscription Agreement and (b) the Placement
Agent, in reliance upon the Placement Agent's representations to the Company
contained in the Sales Agency Agreement between the Company and the Placement
Agent, dated of even date herewith (the "Agency Agreement").
2. Registration Rights.
2.1 Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
(a) "Commission" shall mean the Securities and
Exchange Commission or any other federal agency at the time administering the
Securities Act.
(b) "Common Stock" shall mean the shares of the
Company's Common Stock, $0.0001 par value per share.
(c) "Form S-3" shall mean Form S-3 promulgated
by the Commission or any substantially similar form then in effect.
(d) "Holder" shall mean any holder of record of
Registrable Securities or any transferee or assignee of record of such
Registrable Securities.
(e) "Purchasers" shall mean collectively, the
Purchasers, their assignees and transferees, and individually, a Purchaser and
any transferee or assignee of such Purchaser.
(f) The terms "Register," "Registered" and
"Registration" refer to a registration effected by preparing and filing a
registration statement ("Registration Statement") in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
Registration Statement.
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(g) "Registrable Securities" shall mean,
collectively, (i) the Common Stock purchased by each Purchaser pursuant to a
Subscription Agreement, (ii) the Common Stock issued to the Placement Agent as
commissions under the Agency Agreement, and (iii) the Warrant Shares (as defined
in the Agency Agreement), in each case so long as the certificates representing
such Common Stock are required to bear the restrictive legend set forth in
Section B(10) of the Subscription Agreement or in Section 6(a)(xi) of the Agency
Agreement, as applicable.
(h) "Registration Expenses" shall mean all
expenses incurred by the Company in complying with Section 2, including without
limitation, all federal and state registration, qualification and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses and the expense of any special audits incident to or required
by any such Registration.
(i) "Restriction Termination Date" shall mean,
with respect to any Registrable Securities, the earliest of (i) the date that
such Registrable Securities shall have been Registered and sold or otherwise
disposed of in accordance with the intended method of distribution by the seller
or sellers thereof set forth in the registration statement covering such
Securities or transferred in compliance with Rule 144, (ii) the date that an
opinion of counsel to the Company containing reasonable assumptions shall have
been rendered to the effect that the legend referred to in Section B(10) of the
Subscription Agreement, or in Section 6(a)(xi) of the Agency Agreement, as
applicable, shall have been removed, and (iii) the date as of which the Company
shall have notified the Purchaser of such shares, or the Placement Agent, as
applicable, in writing that it has determined that such Registrable Securities
may be sold pursuant to paragraph (k) of Rule 144 (or any successor provision)
and, based upon such determination, such legend shall have been removed.
(j) "Rule 144" shall mean Rule 144 promulgated
by the Commission pursuant to the Securities Act.
(k) "Securities Act" shall mean the Securities
Act of 1933, as amended.
(l) "Shares" shall mean Common Stock.
(m) "Selling Expenses" shall mean all
underwriting discounts and selling commissions applicable to the sale of
Registrable Securities pursuant to this Agreement.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Subscription Agreement.
2.2 Registration. The Company covenants and agrees with
each of the Purchasers and the Placement Agent that the Company will prepare and
file with the Commission, within 30 days of the final closing (the "Final
Closing") of the concurrent offering of the Company's securities through Sunrise
Securities Corp. ("Sunrise") described in the Memorandum (the "United States
Offering"), a Registration Statement on Form S-3 covering the
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Registrable Securities, and use its reasonable best efforts to have the
Registration Statement declared effective as promptly as practicable. The Final
Closing is expected to occur on or before December 31, 1996. Such Registration
Statement also may include other shares of the Company's Common Stock, in the
Company's discretion, including, without limitation, shares sold to investors
in, or issued or issuable to Sunrise in connection with, the United States
Offering. The Company shall not be required to file a Registration Statement
under this Section 2.2 unless it continues to be eligible to register Securities
on Form S-3; provided, that the Company shall use its best efforts to (i) file a
Registration Statement on Form S-3 as soon as practicable after the first date
that the Company becomes again eligible therefor and (ii) do such acts as are
necessary for the Company to be eligible to use Form S-3. The Company hereby
agrees timely to file all reports required under the Securities Exchange Act of
1934, as amended, for so long as there are Registrable Securities.
2.3 Blue Sky. The Company will use its best efforts to
Register and qualify the Registrable Securities covered by the Registration
Statement under such other securities or Blue Sky laws of such United States
jurisdictions as shall be reasonably requested by the Purchasers and the
Placement Agent for the distribution of such securities; provided, however, that
the Company shall not be required to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions.
2.4 Expenses of Registration. All Registration Expenses
incurred in connection with the Registration pursuant to Section 2.2 shall be
borne by the Company. All Selling Expenses shall be borne by the persons who
sell the Shares generating said Selling Expenses.
2.5 Registration Procedures.
2.5.1 Advice By Company. The Company will keep
each Holder advised as to the initiation and completion of the Registration. At
its expense the Company will (a) use its best efforts to keep such Registration
effective until the earlier of three years from the Final Closing, or the
Restriction Termination Date and (b) furnish promptly to each Holder such number
of copies of prospectuses (including preliminary prospectuses), and all
amendments and supplements thereto, in conformity with the requirements of the
Securities Act, and such other documents as any such Holder from time to time
may reasonably request.
2.5.2 Notice of Sale and Sale under the
Registration Statement. Any Holder intending to sell Shares under the
Registration Statement shall give at least three (3) business days' prior
written notice (a "Sale Notice") to the Company of any proposed sale of Shares
under the Registration Statement effective pursuant to this Section 2 (provided,
however, that such notice shall not be required during the 60-day period
immediately following the date on which the Registration Statement first becomes
effective) and shall not make such sale (i) unless such three (3) days lapse
without response from the Company, or (ii) in the event the Company responds by
stating that a prospectus supplement or post-effective amendment will be filed
pursuant to Section 2.5.3, until the Company has notified such Holder pursuant
to Section 2.5.3 that any such post-effective amendment has become effective or
prospectus supplement has been filed. A Sale Notice shall be effective for 30
days after it is given.
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2.5.3 Amendments. The Company will prepare and
file with the Commission such amendments and prospectus supplements, including
post-effective amendments, to the Registration Statement as the Company
determines may be necessary or appropriate, and use its best efforts to have
such post-effective amendments declared effective as promptly as practicable;
cause the related prospectus to be supplemented by any prospectus supplement,
and as so supplemented, to be filed with the Commission; and notify the Holders
and the underwriter thereof, if any, promptly when a prospectus, any prospectus
supplement or post-effective amendment must be filed or has been filed
(including any filing in response to notice of any Holder under Section 2.5.2)
and, with respect to any post-effective amendment, when the same has become
effective.
2.5.4 Blackout Period. Notwithstanding any other
provision hereof, the Company may delay the Holders' ability to resell
Registrable Securities pursuant to the Registration Statement if the Company
delivers a certificate in writing to the Holders to the effect that a delay in
such sale is necessary because, in the good faith and reasonable judgment of the
Company's Board of Directors, a sale pursuant to the Registration Statement
would require the public disclosure of information that would have a significant
adverse effect on the Company, is likely to materially adversely affect the
Company, or could constitute a violation of the federal securities laws. In such
an event, the Company shall notify the Holders promptly after it is determined
that such circumstances no longer exist. The Company shall not be entitled to
delay the Holders' ability to resell Registrable Securities more than twice in
any 12-month period, and any individual period during which the Company may
delay the Holders' ability to resell Registrable Securities shall not exceed 30
days.
2.6 Information Furnished by Holder. It shall be a
condition precedent to the Company's obligations under this Agreement as to any
Holder that (i) such Holder furnish to the Company in writing such information
regarding such Holder and the distribution proposed by such Holder as the
Company may reasonably request; and (ii) such Holder, if a Purchaser, is not a
securities market professional, i.e., a market maker, specialist, ordinary
broker dealer, member of the National Association of Securities Dealers, Inc. or
a registered representative thereof, or an affiliate of any of the foregoing.
2.7 Indemnification.
2.7.1 Company's Indemnification of Holders. The
Company will indemnify each Holder, each of its officers, directors and
constituent partners, and each person controlling such Holder, with respect to
which Registration of Registrable Securities has been effected pursuant to this
Agreement, and each underwriter thereof, if any, and each of its officers,
directors, constituent partners, and each person who controls such underwriter,
against all claims, losses, damages or liabilities (or actions in respect
thereof) suffered or incurred by any of them, to the extent such claims, losses,
damages or liabilities arise out of or are based upon any untrue statement (or
alleged untrue statement) of a material fact contained in any prospectus or any
related Registration Statement incident to any such Registration, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to actions or
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inaction required of the Company in connection with any such Registration; and
the Company will reimburse each such Holder, each such underwriter and each
person who controls any such Holder or underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action; provided, however, that the
indemnity contained in this Section 2.7.1 shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if settlement is
effected without the consent of the Company (which consent shall not
unreasonably be withheld); and provided, further, that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based upon any untrue statement or
omission based upon written information furnished to the Company by such Holder,
underwriter, controlling person or other indemnified person and stated to be for
use in connection with the offering of securities of the Company.
Notwithstanding the above, the foregoing indemnity agreement is subject to the
condition that, insofar as it relates to any such untrue statement, alleged
untrue statement, omission or alleged omission made in a preliminary prospectus
on file with the Commission at the time the Registration Statement becomes
effective or a prospectus is filed with the Commission pursuant to Rule 424(b)
(the "Final Prospectus"), such indemnity agreement shall not inure to the
benefit of any underwriter or any Holder, if there is no underwriter, if a copy
of the Final Prospectus was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act.
2.7.2 Holder's Indemnification of Company. Each
Holder will indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company's Shares covered by a Registration
Statement, each person who controls the Company or such underwriter within the
meaning of the Securities Act, and each other Holder, each of its officers,
directors, and constituent partners and each person controlling such other
Holder, against all claims, losses, damages and liabilities (or actions in
respect thereof) suffered or incurred by any of them and arising out of or based
upon any untrue statement (or alleged untrue statement) of a material fact
contained in such Registration Statement or related prospectus, or any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by such Purchaser of any rule or regulation promulgated under the
Securities Act applicable to such Purchaser and relating to action or inaction
required of such Holder in connection with the Registration of Securities
pursuant to such Registration Statement; and will reimburse the Company, such
other Holders, such directors, officers, partners, persons, underwriters and
controlling persons for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such Registration Statement or prospectus in reliance upon
and in conformity with written information furnished to the Company by such
Holder and stated to be specifically for use in connection with the offering of
Securities of the Company; provided, however, that each Holder's liability under
this Section 2.7.2 shall not exceed such Holder's proceeds from the offering of
Shares made in connection with such Registration.
2.7.3 Indemnification Procedure. Promptly after
receipt by an indemnified party under this Section 2.7 of notice of the
commencement of any action which may give rise to a claim for indemnification
hereunder, such indemnified party will, if a claim in
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respect thereof is to be made against an indemnifying party under this Section
2.7, notify the indemnifying party in writing of the commencement thereof and
generally summarize such action. The indemnifying party shall have the right to
participate in and to assume the defense of such claim, and shall be entitled to
select counsel for the defense of such claim with the approval of any parties
entitled to indemnification, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing, the parties entitled to indemnification shall
have the right to employ separate counsel (reasonably satisfactory to the
indemnifying party) to participate in the defense thereof, but the fees and
expenses of such counsel shall be the expense of such indemnified parties unless
the named parties to such action or proceedings include both the indemnifying
party and the indemnified parties and the indemnifying party or such indemnified
parties shall have been advised by counsel that there are one or more legal
defenses available to the indemnified parties which are different from or
additional to those available to the indemnifying party (in which case, if the
indemnified parties notify the indemnifying party in writing that they elect to
employ separate counsel at the reasonable expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
or proceeding on behalf of the indemnified parties, it being understood,
however, that the indemnifying party shall not, in connection with any such
action or proceeding or separate or substantially similar or related action or
proceeding in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate counsel at any time for all indemnified parties, which counsel
shall be designated in writing by the Holders of a majority of the Shares).
2.7.4 Contribution. If the indemnification
provided for in this Section 2.7 from an indemnifying party is unavailable to an
indemnified party hereunder in respect to any losses, claims, damages,
liabilities or expenses referred to herein, then the 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, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified party in connection
with the statements or omissions which result in such losses, claims, damages,
liabilities or expenses, 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 the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such indemnifying party or
indemnified party and the parties' relative intent, knowledge, access to
information supplied by such indemnifying party or indemnified party and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with the investigating
or defending any action, suit, proceeding or claim.
2.8 No-Action Letter or Opinion of Counsel in Lieu of
Registration. Notwithstanding anything else in this Agreement, if the Company
shall have obtained from the Commission a "no-action" letter in which the
Commission has indicated that it will take no action if, without Registration
under the Securities Act, any Holder disposes of Registrable Securities covered
by any request for Registration made under this Section in the specific manner
in which such Holder proposes to dispose of the Registrable Securities included
in such request
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(such as including, without limitation, inclusion of such Registrable Securities
in an underwriting initiated by either the Company or the Holders), or if in the
opinion of counsel for the Company no Registration under the Securities Act is
required in connection with such disposition, such Registrable Securities shall
not be eligible for Registration under this Agreement; provided, however, that
any Registrable Securities not so disposed of shall be eligible for Registration
in accordance with the terms of this Agreement with respect to other proposed
dispositions to which this Section 2.8 does not apply. In addition, the
obligation of the Company to maintain the effectiveness of any Registration
Statement under this Section 2 shall be suspended with respect to any
Registrable Securities held by a Holder at any time following the Restriction
Termination Date with respect to such Registrable Securities.
3. Covenants of the Company. The Company agrees to:
(a) Notify the Holders at any time when a prospectus
relating to Registrable Securities covered by the Registration Statement is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
The Company shall promptly amend or supplement the Registration Statement to
correct any such untrue statement or omission.
(b) Notify the Holders of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible time.
(c) Make available for inspection by the Holders, and the
counsel, accountants or other agents retained by the Holders, all pertinent
financial and other records, corporate documents and properties of the Company,
and cause the Company's officers, directors and employees to supply all
information reasonably requested by the Holders in connection with the
Registration, subject to appropriate confidentiality obligations.
(d) If the Common Stock is then listed on a national
securities exchange, use its best efforts to cause the Registrable Securities to
be listed on such exchange. If the Common Stock is not then listed on a national
securities exchange, use its best efforts to facilitate the securities exchange,
use its best efforts to facilitate the reporting of the Shares on Nasdaq.
(e) Take all other reasonable actions necessary to
expedite and facilitate disposition by the Holders of the Registrable Securities
pursuant to the Registration Statement.
(f) Reports Under Securities Exchange Act of 1934. With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Securities Act and any other rule or regulation of the Commission that
may at any time permit the Holders to sell securities of the Company to the
public without registration, the Company agrees to:
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(i) for at least three years from the date
hereof, make and keep public information available, as those terms are
understood and defined in Rule 144;
(ii) for at least three years from the date
hereof, file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
and Exchange Act of 1934 (the "1934 Act"); and
(iii) furnish to each Holder, so long as such
Holder owns any Registrable Securities, forthwith upon written request (a) a
written statement by the Company whether it has complied with the reporting
requirements of Rule 144, the Securities Act and the 1934 Act (at any time after
it has become subject to such reporting requirements), (b) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company and (c) such other information as may be
reasonably requested in availing the Holders of any rule or regulation of the
Commission which permits the selling of any such securities without
registration.
4. Miscellaneous.
4.1 Notice. Notices required or permitted to be given
hereunder shall be in writing and shall be deemed to be sufficiently given when
personally delivered or sent by registered mail, return receipt requested (for
United States addresses), or by internationally recognized express courier,
addressed (i) if to the Company, at LXR Biotechnology Inc., P. O. Xxx 0000,
Xxxxxxxxxx, Xxxxxxxxxx 00000, Attention: Chief Executive Officer, (ii) if to a
Purchaser, at the address set forth in its questionnaire, and (iii) if to the
Placement Agent, at Ventec, Xxx Xxxxxx Xxxxxxx House, 48-50 The Eplanade, St.
Helier, Jersey JE48XY, Channel Islands, Attention: Xxxxxxx Xxxxxxx, Director, or
at such other address as each such party furnishes by notice given in accordance
with this Section 4.1.
4.2 Amendment and Waiver. Any term of this Agreement may
be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and Holders
representing at least a majority of the Registrable Securities then outstanding.
Any amendment or waiver effected in accordance with this Section 4.2 will be
binding upon each Holder of Registrable Securities then outstanding, each future
Holder of such securities and the Company.
4.3 Governing Law; Severability. This Agreement shall be
enforced, governed and construed in all respects in accordance with the laws of
the State of California, as such laws are applied by California courts to
agreements entered into and to be performed in California by and between
residents of California. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.
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4.4 Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by the Company and the
holders of a majority in interest of the Registrable Securities.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
COMPANY VENTEC
LXR BIOTECHNOLOGY INC.
By: __________________________
By: ___________________________ Title: __________________________
L. Xxxxx Xxxxx, Ph.D.,
Chief Executive Officer
PURCHASER
___________________________________
(print name of purchaser)
By: __________________________
Title: __________________________
[SIGNATURE PAGE TO VENTEC REGISTRATION RIGHTS AGREEMENT]
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EXHIBIT A
LIST OF PURCHASERS
