EXHIBIT 10.22
FIRST AMENDMENT
TO
REGISTRATION RIGHTS AGREEMENT
This FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT (this "Amendment")
is made and entered into effective as of December 31, 2005, by and among
BIONOVO, INC., a Delaware corporation (formerly Lighten Up Enterprises
International, Inc., a Nevada corporation) ("Pubco"), and the other parties
signatory hereto.
RECITALS
A. The parties hereto previously have entered into that certain
Registration Rights Agreement dated effective April 6, 2005 ("Original
Agreement"), which agreement provided for, among other things, the mandatory
registration (as more fully described in the Original Agreement, the "Mandatory
Registration") for resale of shares of common stock of Pubco and shares of Pubco
common stock underlying warrants (as more fully described in the Original
Agreement, the "Pubco Warrants") acquired by the Purchasers (as defined in the
Original Agreement) as of April 6, 2005 and liquidated damages in the event such
registration was not timely accomplished and maintained (as more fully described
in the Original Agreement, the "Liquidated Damages");
B. Pubco has registered such shares of Pubco common stock on a
registration statement on Form SB-2 (File No. 333-126399, the "Effective
Registration Statement"), declared effective by the Securities and Exchange
Commission ("SEC") on November 2, 2005;
C. As a consequence of the Mandatory Registration obligations and
Liquidated Damages provisions, Pubco has been required under Generally Accepted
Accounting Principles to record a liability on its balance sheet relating to the
Pubco Warrants and an expense on its statement of operations reflecting the
change in fair value of such warrant liability;
D. It is the belief of Pubco's management that such warrant liability and
expense relating to the Mandatory Registration obligation and Liquidated Damages
provisions limits Pubco's opportunity to be listed on either the American Stock
Exchange or the NASDAQ SmallCap Market; and
E. In order to permit Pubco to reclassify the accounting treatment of the
Pubco Warrants to additional paid in capital and thereby remove the
above-referenced warrant liability and expense from its balance sheet and
statement of operations, the parties hereto agree to amend the Original
Agreement to delete the Mandatory Registration obligation and the Liquidated
Damages provisions and in partial consideration therefor grant "piggy-back"
registration rights to the Holders, all upon the terms and conditions of this
Amendment;
NOW, THEREFORE, in consideration of the foregoing and of 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 agree as follows:
SECTION 1. Defined Terms. Capitalized terms used in this Amendment but not
otherwise defined herein shall have the meanings ascribed to them in the
Original Agreement.
SECTION 2. Amendments.
(a) The obligation of Pubco to register the Registrable Securities
pursuant to Section 2(a) of the Original Agreement is hereby amended to delete
such obligation of Pubco;
(b) The Original Agreement is hereby amended to delete Section 2(b)
(Filing Default Liquidation Damages) and Section 2(c) (Effectiveness Default
Liquidation Damages) of the Original Agreement.
(c) Notwithstanding the foregoing amendments, Pubco agrees to use
its commercially reasonable best efforts to maintain the effectiveness of the
Effective Registration Statement for the period specified in the Original
Agreement and the Holders shall remain obligated to satisfy their respective
obligations under the Original Agreement relating to the Effective Registration
Statement.
(d) The Original Agreement is hereby amended to add the following
two subsections to Section 2 of the Original Agreement:
"(g) "Piggy-Back" Registration. If (but without any obligation
to do so) Pubco proposes to register (including for this purpose a
registration effected by Pubco for stockholders other than the Holders)
any of its stock or other securities under the Securities Act in
connection with the public offering of such securities solely for cash
(other than a registration relating solely to the sale of securities to
participants in Pubco stock plan, a registration with respect solely to a
corporate reorganization or other transaction under Rule 145 of the
Securities Act, a registration on any form which does not include
substantially the same information as would be required to be included in
a registration statement covering the sale of the Registrable Securities,
or a registration in which the only Pubco Stock being registered is Pubco
Stock issuable upon exercise of debt securities which are also being
registered), Pubco shall, at such time, promptly give each Holder written
notice of such registration. Upon the written request of each Holder given
within twenty (20) days after mailing of such notice by Pubco, Pubco
shall, subject to the provisions of Section 2(h), cause to be registered
under the Securities Act all of the Registrable Securities that each such
Holder has requested to be registered. The registration rights granted to
a Holder pursuant to this paragraph shall terminate with respect to such
Holder on the date when all of the Registrable Securities of such Holder
covered by the Effective Registration Statement or an effective
registration statement under this paragraph (a) have been sold pursuant to
the Effective Registration Statement or such other 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).
(h) Underwriting Requirements. In connection with any
registered offering under Section 2 hereof involving an underwriting of
shares of Pubco's capital stock, Pubco shall not be required to include
any of the Holders' Registrable Securities in such underwriting unless
they accept the terms of the underwriting as agreed upon between Pubco and
the underwriters selected by it (or by other persons entitled to select
the underwriters), and then only in such quantity as the underwriters
determine in their sole discretion will not jeopardize the success of the
offering by Pubco. If the total amount of securities, including
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Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities that may be sold other than by
Pubco that the underwriters determine in their sole discretion is
compatible with the success of the offering, then Pubco shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities
so included to be apportioned pro rata among the selling stockholders
according to the total amount of securities entitled to be included
therein owned by each selling stockholder or in such other proportions as
shall mutually be agreed to by such selling stockholders, provided,
however, that with respect to Pubco's IPO (defined below), all Registrable
Securities may be excluded). For purposes of the preceding parenthetical
concerning apportionment, for any selling stockholder which is a Holder of
Registrable Securities and which is a partnership or corporation, the
partners, retired partners and stockholders of such Holder, or the estates
and family members of any such partners and retired partners and any
trusts for the benefit of any of the foregoing persons shall be deemed to
be a single "selling stockholder", and any pro-rata reduction with respect
to such "selling stockholder" shall be based upon the aggregate amount of
shares carrying registration rights owned by all entities and individuals
included in such "selling stockholder", as defined in this sentence. The
term "IPO" means the first underwritten public offering of Pubco's Stock
registered under the Securities Act, other than a registration relating
solely to a transaction under Rule 145 under the Securities Act or to an
employee benefit plan of Pubco."
SECTION 3. Effectiveness of Amendments. In accordance with Section 6(d) of
the Original Agreement, this Amendment shall not be effective unless and until
executed by Pubco and the Holders of at least sixty-six percent (66%) of the
outstanding Registrable Securities (assuming the exercise of all Pubco Warrants,
whether exercised or not).
SECTION 4. Representations and Warranties.
(a) Each of the undersigned parties (other than Pubco) hereby
affirms and remakes to Pubco all of the representations and warranties set forth
in the Subscription Agreement and in the Investor Questionnaire executed by such
party as of April 6, 2005.
(b) Without limiting the generality of the foregoing, each of the
undersigned parties (other than Pubco) hereby represents and warrants to Pubco
that he, she or it is an "accredited investor" as that term is defined in Rule
501 of Regulation D promulgated under the Securities Act.
(c) Each of the undersigned parties (other than Pubco) hereby
represents and warrants to Pubco that such party has read Pubco's Form SB-2 (SEC
File No. 333-126399), declared effective by the SEC on November 2, 2005, and the
prospectus contained therein as supplemented by Prospectus Supplement No. 1
dated November 14, 2005 and Prospectus Supplement No. 2 dated January 6, 2006,
and has been given the opportunity to ask any questions of and receive answers
from Pubco with respect thereto.
SECTION 5. Ratification of Original Agreement. Except as modified by the
terms of this Amendment, the Original Agreement is hereby ratified and confirmed
in its entirety, and shall remain in full force and effect in accordance with
its terms.
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SECTION 6. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Each party hereto
confirms that any facsimile copy of such party's executed counterpart of this
Amendment (or its signature page thereof) shall be deemed to be an executed copy
thereof.
SECTION 7. Governing Law. This Amendment shall be governed by the laws of
the State of California (other than its rules of conflicts of law to the extent
that the application of the laws of another jurisdiction would be required
thereby).
SECTION 8. Counsel. EACH OF THE UNDERSIGNED PARTIES ACKNOWLEDGES THAT HE,
SHE OR IT HAS BEEN ADVISED TO CONSULT SUCH PARTY'S LEGAL AND FINANCIAL ADVISORS
WITH RESPECT TO THE TERMS AND CONDITIONS OF THIS AMENDMENT AND HAS BEEN GIVEN
THE OPPORTUNITY TO DO SO.
SECTION 9. Entire Agreement. The Original Agreement (including any and all
annexes, exhibits and schedules thereto), as amended by this Amendment,
constitute the entire agreement of the parties hereto with respect to the
subject matter thereof and hereof, and supersede all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter thereof and hereof.
SECTION 10. Other General. The recitals hereto are a material part hereof
and are incorporated in this Amendment by reference as if fully set forth
herein. Captions and headings are for convenience only, are not deemed to be
part of this Amendment and shall not be used in the interpretation of this
Amendment.
[Signatures follow]
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IN WITNESS WHEREOF, the parties have executed this First Amendment to
Registration Rights Agreement effective as of the date first set forth above.
PUBCO:
BIONOVO, INC.
(a Delaware corporation)
By:_____________________________
Name:___________________________
Title:__________________________
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IN WITNESS WHEREOF, the parties have executed this First Amendment to
Registration Rights Agreement effective as of the date first set forth above.
HOLDER:
If Holder is an Entity:
______________________________________________
Print Name of Entity
By (signature):_______________________________
Name (print):_________________________________
Title:________________________________________
If Holder(s) is an Individual(s):
Signature:____________________________________
Print Name:___________________________________
Signature:____________________________________
Print Name:___________________________________
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