Filed Pursuant to Rule 424(b)(3)
File Number 333-126399
PROSPECTUS SUPPLEMENT NO. 12
to Prospectus declared effective
on November 2, 2005
as supplemented by
Supplement No. 1 dated November 14, 2005,
Supplement No. 2 dated January 6, 2006,
Supplement No. 3 dated March 10, 2006,
Supplement No. 4 dated March 20, 2006,
Supplement No. 5 dated March 31, 2006,
Supplement No. 6 dated April 14, 2006,
Supplement No. 7 dated April 17, 2006
Supplement No. 8 dated May 15, 2006
Supplement No. 9 dated July 12, 2006,
Supplement No. 10 dated August 7, 2006, and
Supplement No. 11 dated November 8, 2006
BIONOVO, INC.
This Prospectus Supplement No. 12 supplements our Prospectus dated
November 2, 2005 as supplemented by Prospectus No. 1 dated November 14, 2005,
Prospectus Supplement No. 2, dated January 6, 2006, Prospectus Supplement No. 3,
dated March 10, 2006, Prospectus Supplement No. 4 dated March 20, 2006,
Prospectus Supplement No. 5 dated March 31, 2006, Prospectus Supplement No. 6
dated April 14, 2006, Prospectus Supplement No. 7 dated April 17, 2006,
Prospectus Supplement No. 8 dated May 15, 2006, Prospectus Supplement No. 9
dated July 12, 2006, Prospectus Supplement No. 10 dated August 7, 2006 and
Prospectus Supplement No. 11 dated November 8, 2006. The shares that are the
subject of the Prospectus have been registered to permit their resale to the
public by the selling stockholders named in the Prospectus. We are not selling
any shares of common stock in this offering and therefore will not receive any
proceeds from this offering, except upon the exercise of warrants.
Our common stock is quoted on the Over-the-Counter Bulletin Board under
the symbol BNVI.OB. On January 23, 2007, the closing price of our common stock
on the OTC Bulletin Board was $2.68.
This Prospectus Supplement includes the attached Current Report dated
January 19, 2007 on Form 8-K of Bionovo, Inc., as filed by us with the U.S.
Securities and Exchange Commission.
YOU SHOULD READ THE PROSPECTUS, THIS PROSPECTUS SUPPLEMENT NO. 12 AND
PROSPECTUS SUPPLEMENT NO. 1, PROSPECTUS SUPPLEMENT NO. 2, PROSPECTUS SUPPLEMENT
NO. 3, PROSPECTUS SUPPLEMENT NO. 4, PROSPECTUS SUPPLEMENT NO. 5, PROSPECTUS
SUPPLEMENT NO. 6, PROSPECTUS SUPPLEMENT NO. 7, PROSPECTUS SUPPLEMENT NO. 8,
PROSPECTUS SUPPLEMENT NO. 9, PROSPECTUS SUPPLEMENT NO. 10 AND PROSPECTUS
SUPPLEMENT NO. 11 CAREFULLY BEFORE YOU INVEST, INCLUDING THE RISK FACTORS WHICH
BEGIN ON PAGE 4 OF THE PROSPECTUS.
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus Supplement is January 23, 2007.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 19, 2007
Bionovo, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 000-50073 87-0576481
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
5858 Horton Street, Suite 375
Emeryville, California 94608
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 601-2000
---------------
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4 (c) under the
Exchange Act (17 CFR 240.13e-4(c))
CURRENT REPORT ON FORM 8-K
BIONOVO, INC.
January 19, 2007
Item 3.02. Unregistered Sales of Equity Securities.
On January 19, 2007, we completed a private placement to accredited
investors of approximately 10,521,000 shares of our common stock, at a purchase
price of $1.50 per share, which is equal to a 4.5% discount from the average
closing market price of our common stock over the twenty day period ending on
the pricing date of January 12, 2007, for gross proceeds of $15,781,500. As part
of the private placement, the investors were issued five-year warrants to
purchase up to an aggregate of 3,682,350 shares of our common stock, at an
initial exercise price of $2.25. The warrants are callable by us when the
trailing 10-day average of the closing market share price of our common stock
equals or exceeds $2.75. Holders of called warrants will have 60 days to
exercise their warrants after the call notice.
The net proceeds from the private placement, following the payment of
offering-related expenses, will be used by us largely to fund the Phase I and II
clinical trials for our products and for working capital and other general
corporate purposes. At the closing of the private placement, we paid Cambria
Capital, LLC and Blaylock Capital, LLC, the placement agents for the private
placement, cash compensation of an aggregate of $1,262,520 and five-year
warrants to purchase up to an aggregate of 736,470 shares of our common stock,
at an exercise price of 1.50.
We have agreed, pursuant to the terms of the registration rights
agreements with the investors, to (i) use our best efforts to file a shelf
registration statement with respect to the resale of the shares of our common
stock sold to the investors and shares of our common stock issuable upon
exercise of the warrants with the SEC within 45 days after the closing date;
(ii) use our best efforts to have the shelf registration statement declared
effective by the SEC within 90 days after the closing date (or 120 days in the
event of a full review of the shelf registration statement by the SEC), (iii)
use our commercially reasonable efforts to keep the shelf registration statement
effective until all registrable securities (a) have been sold pursuant to the
registration statement or an exemption from the registration requirements of the
Securities Act of 1933 or (b) may be sold under Rule 144(k) under the Securities
Act.
The common stock, warrants and common stock issuable upon exercise of the
warrants have not been registered under the Securities Act, and were issued and
sold in reliance upon the exemption from registration contained in Section 4(2)
of the Securities Act and Regulation D promulgated thereunder. These securities
may not be offered or sold in the United States in the absence of an effective
registration statement or exemption from the registration requirements under the
Securities Act.
Copies of the definitive agreements relating to the issuance and sale of
the common stock and warrants are filed herewith as Exhibits 4.1, 10.1 and 10.2,
and are incorporated herein by reference. The foregoing summary descriptions of
the definitive agreements are qualified in their entirety by reference to the
full texts of each of such exhibits.
On January 22, 2007, we issued a press release announcing the closing of
the private placement. A copy of the press release is attached hereto as Exhibit
99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
4.1 Form of Warrant to Purchase Common Stock of Bionovo,
Inc. for each investor.
10.1 Form of Subscription Agreement with Bionovo, Inc. for
each investor.
10.2 Form of Registration Rights Agreement with Bionovo, Inc.
for each investor.
99.1 Press Release issued by Bionovo, Inc. on January 22,
2007.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BIONOVO, INC.
Date: January 22, 2007 By: /s/ James P. Stapleton
-------------------------------------
James P. Stapleton
Chief Financial Officer
Exhibit 4.1
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR
OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.
COMMON STOCK PURCHASE WARRANT
To Purchase __________ Shares of Common Stock of
BIONOVO, INC.
THIS COMMON STOCK PURCHASE WARRANT (this "Warrant") CERTIFIES that, for
value received, _________________________ (the "Holder"), is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date of issuance of this Warrant (the
"Initial Exercise Date") and on or prior to the five year anniversary of the
Initial Exercise Date (the "Termination Date") but not thereafter, to subscribe
for and purchase from Bionovo, Inc., a Delaware corporation (the "Company"), up
to _______________ shares (the "Warrant Shares") of Common Stock, par value
$0.0001 per share, of the Company (the "Common Stock"). The purchase price of
one share of Common Stock (the "Exercise Price") under this Warrant shall be
$2.25 subject to adjustment hereunder.
In addition to the terms defined elsewhere in this Warrant 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.
"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 any other entity of any kind.
"Registration Statement" means a registration statement filed by the
Company with the Securities and Exchange Commission ("SEC") for a public
offering and sale of securities of the Company (other than a registration
statement on Form S-8 or Form S-4, or their successors, or any other form for a
limited purpose, or any registration statement covering only securities proposed
to be issued in exchange for securities or assets of another corporation).
"Subscription Agreement" means that certain Subscription Agreement entered
into between the original Holder of this Warrant and Bionovo, Inc., which
provided for, among other things, the original purchase of this Warrant from
Bionovo, Inc.
"Trading Day" means (i) a day on which the Common Stock is traded or
quoted on a Trading Market, or (ii) if the Common Stock is not traded or quoted
on a Trading Market, a day on which the 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 the 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 the
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.
1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, to up to three (3)
Persons in any 12 month period, at the office or agency of the Company by the
Holder in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed. The
transferee shall sign an investment letter in form and substance reasonably
satisfactory to the Company.
2. Authorization of Shares. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of such purchase rights in accordance with the terms
and conditions of this Warrant, including, without limitation, payment of the
Exercise Price, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with
such issue).
3. Exercise of Warrant.
(a) Exercise of the purchase rights represented by this Warrant may
be made at any time or times on or after the Initial Exercise Date and on
or before the Termination Date by delivery to the Company of a duly
executed facsimile copy of the Notice of Exercise Form annexed hereto, at
the office of the Company (or such other office or agency of the Company
as it may designate by notice in writing to the registered Holder at the
address of such Holder appearing on the books of the Company); provided,
however, the Holder shall also have surrendered this Warrant to the
Company and the Company shall have received payment of the aggregate
Exercise Price of the Warrant Shares thereby purchased by wire transfer or
cashier's check drawn on a United States bank. Certificates for shares
purchased hereunder shall be delivered to the Holder promptly following
the latest to occur of delivery to the Company of the Notice of Exercise
Form, surrender of this Warrant and payment of the aggregate Exercise
Price as set forth above. This Warrant shall be deemed to have been
exercised and the Warrant Shares (to which the exercise relates) shall be
deemed to have been issued, and Holder or any other person so designated
to be named therein shall be deemed to have become a holder of record of
such shares for all purposes, as of the date of the latest to occur of (i)
delivery to the Company of the Notice of Exercise Form, (ii) surrender of
this Warrant and (iii) payment of the aggregate Exercise Price as set
forth above and all taxes required to be paid by the Holder, if any,
pursuant to Section 5 ("Exercise Date").
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(b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing
the rights of Holder to purchase the unpurchased Warrant Shares called for
by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
(c) Subject to the provisions of this Section 3, if there is (i) an
effective Registration Statement registering the resale of the Warrant
Shares by the Holder, and (ii) the average of the closing market share
price of the Common Stock during a period of ten (10) consecutive Trading
Days (the "Measurement Period," which period shall not have commenced
until after such Registration Statement shall have been declared effective
by the SEC) equals or exceeds $2.75 (the "Threshold Price") (subject to
adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur
after the date of the Subscription Agreement), then the Company may,
within three (3) Trading Days of such period or event, call for
cancellation of all or any portion of this Warrant for which a Notice of
Exercise has not yet been delivered (such right, a "Call"). To exercise
this right, the Company must deliver to the Holder an irrevocable written
notice (a "Call Notice"), indicating therein the unexercised portion of
this Warrant to which such notice applies. Deposit of such Call Notice
with a recognized courier service, a recognized overnight delivery service
or with the U.S. Postal Service in accordance with Section 17(d) within
the above three (3) Trading Day period shall be considered a timely Call.
If the conditions set forth above for such Call are satisfied, from the
period from the date of the Call Notice through and including the Call
Date (as defined below), then any portion of this Warrant subject to such
Call Notice for which a Notice of Exercise and applicable aggregate
Exercise Price shall not have been received from and after the date of the
Call Notice will be cancelled at 6:30 p.m. (Pacific Standard Time) on the
sixtieth (60th) calendar day after the date the Call Notice is sent to the
Holder (such date, the "Call Date"). Any unexercised portion of this
Warrant to which the Call Notice does not pertain will be unaffected by
such Call Notice. In furtherance thereof, the Company covenants and agrees
that it will honor all Notices of Exercise with respect to Warrant Shares
subject to a Call Notice that are tendered, with the applicable aggregate
Exercise Price, from the time of delivery of the Call Notice through 6:30
p.m. (PST) on the Call Date. The parties agree that any Notice of Exercise
delivered following a Call Notice shall first reduce to zero the number of
Warrant Shares subject to such Call Notice prior to reducing the remaining
Warrant Shares available for purchase under this Warrant. For example, if
(x) this Warrant then permits the Holder to acquire 100 Warrant Shares,
(y) a Call Notice pertains to 75 Warrant Shares, and (z) prior to 6:30
p.m. (PST) on the Call Date the Holder tenders a Notice of Exercise in
respect of 50 Warrant Shares, then (1) on the Call Date the right under
this Warrant to acquire 25 Warrant Shares will be automatically cancelled,
(2) the Company, in the time and manner required under this Warrant, will
have issued and delivered to the Holder 50 Warrant Shares in respect of
the exercise following receipt of the Call Notice, and (3) the Holder may,
until the Termination Date, exercise this Warrant for 25 Warrant Shares
(subject to adjustment as herein provided and subject to subsequent Call
Notices). Subject again to the provisions of this Section 3(c), the
Company may deliver subsequent Call Notices for any portion of this
Warrant for which the Holder shall not have delivered a Notice of
Exercise. The Company's right to Call the Warrant shall be exercised
ratably among all holders of warrants issued pursuant to Subscription
Agreements entered into as part of the same financing.
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4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price.
5. Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
6. Closing of Books. The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
7. Transfer, Division and Combination.
(a) Subject to compliance with any applicable securities laws and
the conditions set forth in Sections 1 and 7(e) hereof, and to the last
sentence of Section 1.8 of the Subscription Agreement and the first
sentence of Section 1.10 of the Subscription Agreement, this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company, together with a
written assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or denominations specified
in such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled.
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(b) This Warrant may be divided or combined with other Warrants (if
such other Warrants are upon the same terms, other than number of Warrant
Shares, as this Warrant) upon presentation hereof at the aforesaid office
of the Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with Section 7(a), as to
any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange
for the Warrant or Warrants to be divided or combined in accordance with
such notice.
(c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section
7.
(d) The Company agrees to maintain, at its aforesaid office, books
for the registration and the registration of transfer of the Warrants.
(e) If, at the time of the surrender of this Warrant in connection
with any transfer of this Warrant, the transfer of this Warrant shall not
be registered pursuant to an effective registration statement under the
Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the
Company a written opinion of counsel reasonably acceptable to the Company
(which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that such
transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws, (ii) that the holder
or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee
be an "accredited investor" as defined in Rule 501 promulgated under the
Securities Act or a qualified institutional buyer as defined in Rule
144A(a) under the Securities Act.
8. No Rights as Shareholder until Exercise. This Warrant does not entitle
the Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the exercise of this Warrant, the Warrant
Shares so purchased shall be, and be deemed to be, issued to such Holder as the
record owner of such shares as of the close of business on the Exercise Date
with respect to such exercise.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to it, and upon surrender and cancellation of such Warrant, if mutilated, the
Company will make and deliver a new Warrant of like tenor and dated as of such
cancellation, in lieu of such Warrant.
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10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.
11. Adjustments of Exercise Price and Number of Warrant Shares; Stock
Splits, etc. The number and kind of securities purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment from time to
time upon the happening of any of the following. In case the Company shall (i)
pay a dividend in shares of Common Stock or make a distribution in shares of
Common Stock to holders of its outstanding Common Stock, (ii) subdivide its
outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
of Common Stock, or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock, then the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior thereto shall be
adjusted so that the Holder shall be entitled to receive the kind and number of
Warrant Shares or other securities of the Company which it would have owned or
have been entitled to receive had such Warrant been exercised in advance
thereof. Upon each such adjustment of the kind and number of Warrant Shares or
other securities of the Company which are purchasable hereunder, the Holder
shall thereafter be entitled to purchase the number of Warrant Shares or other
securities resulting from such adjustment at an Exercise Price per Warrant Share
or other security obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares purchasable
pursuant hereto immediately prior to such adjustment and dividing by the number
of Warrant Shares or other securities of the Company that are purchasable
pursuant hereto immediately after such adjustment. An adjustment made pursuant
to this paragraph shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event. For example,
if the Company declared a 1-for-4 reverse stock split and 400 Warrant Shares
were purchasable hereunder, then immediately after such 1-for-4 reverse stock
split the Warrant Shares purchasable hereunder would become 100 and the Exercise
Price would become $9.00 per share. Such Exercise Price is obtained by
multiplying the current $2.25 Exercise Price by 400 Warrant Shares purchasable
under this example and dividing the product by 100 Warrant Shares purchasable
after the 1-for-4 reverse stock split.
12. Reorganization, Reclassification, Merger, Consolidation or Disposition
of Assets. In case the Company shall reorganize its capital, reclassify its
capital stock, consolidate or merge with or into another corporation (where the
Company is not the surviving corporation or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell, transfer
or otherwise dispose all or substantially all of its property, assets or
business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the number of shares of common stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets ("Extraordinary
Transaction"), the successor or acquiring corporation (if other than the
Company) shall expressly assume the due and punctual observance and performance
of each and every covenant and condition of this Warrant to be performed and
observed by the Company and all the obligations and liabilities hereunder,
subject to such modifications as may be deemed appropriate (as determined in
good faith by resolution of the Board of Directors of the Company) in order to
provide for adjustments of Warrant Shares for which this Warrant is exercisable
which shall be as nearly equivalent as practicable to the adjustments provided
for in this Section 12. As soon as commercially practicable following the
Extraordinary Transaction, the successor or acquiring corporation (if other than
the Company), shall deliver to Holder a new warrant in repacement of this
Warrant consistent with the provisions referenced in the immediately preceding
sentence against receipt by such successor or acquiring corporation of the
original of this Warrant. For purposes of this Section 12, "common stock of the
successor or acquiring corporation" shall include stock of such corporation of
any class which is not preferred as to dividends or assets over any other class
of stock of such corporation and which is not subject to redemption and shall
also include any evidences of indebtedness, shares of stock or other securities
which are convertible into or exchangeable for any such stock, either
immediately or upon the arrival of a specified date or the happening of a
specified event and any warrants or other rights to subscribe for or purchase
any such stock. The foregoing provisions of this Section 12 shall similarly
apply to successive reorganizations, reclassifications, mergers, consolidations
or disposition of assets.
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13. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or number
or kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.
15. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of
its indebtedness, any shares of stock of any class or any other securities
or property, or to receive any other right, or
7
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company
or any consolidation or merger of the Company with (other than a
consolidation or merger in which the Company is the surviving
corporation), or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to,
another corporation, or
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least fifteen (15) days' prior written notice of the date on which a record date
shall be selected for such dividend, distribution or right or for determining
rights to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least
fifteen (15) days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Holder appearing on the books of the Company and delivered in
accordance with Section 17(d).
16. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant (the
"Required Minimum"). If, on any date, the number of authorized but unissued (and
otherwise unreserved) shares of Common Stock is less than the Required Minimum
on such date, then the Board of Directors of the Company shall use commercially
reasonable efforts to amend the Company's certificate or articles of
incorporation to increase the number of authorized but unissued shares of Common
Stock to at least the number of shares of Common Stock that would result from
the full exercise of the Warrant Shares at such time, as soon as possible and in
any event not later than the 75th day after such date. The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which the Common
Stock may be listed.
8
Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the Exercise
Price, the Company shall obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.
17. Miscellaneous.
(a) Governing Law. This Warrant 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 Warrant, 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 the State of
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.
(b) Restrictions. The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.
(c) Nonwaiver and Attorneys' Fees. No course of dealing or any delay
or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice Holder's rights,
powers or remedies, notwithstanding the fact that all rights hereunder
terminate on the Termination Date. If any action, suit, arbitration or
other proceeding for the enforcement of this Warrant is brought with
respect to or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions hereof, the
successful or prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that proceeding, in addition
to any other relief to which it or he may be entitled.
9
(d) Notices. All notices that are required or may be given pursuant
to this Warrant 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 Holder:
Attention:
---------------------------------
Telephone:
---------------------------------
With a copy to:
Attention:
---------------------------------
Telephone:
---------------------------------
If to the Company:
5858 Horton Street, Suite 375
Emeryville, CA 94608
Attention: Isaac Cohen
Telephone: (510) 601-2000
With a copy to:
Greenberg Traurig, LLP
Met Life Building
200 Park Avenue
New York, NY 10166
Attention: Robert H. Cohen, Esq.
Telephone: (212) 801-9200
10
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.
(e) Remedies. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and
hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
(f) Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors of the Company and
the successors and permitted assigns of Holder. The provisions of this
Warrant are intended to be for the benefit of all Holders from time to
time of this Warrant and shall be enforceable by any such Holder.
(g) Amendment. This Warrant may be modified or amended only with the
written consent of the Company and the Holder. Waiver of any provision of
this Warrant shall be in writing.
(h) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this Warrant.
(i) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
********************
11
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.
Dated: ___________ ___, 2007
BIONOVO, INC.
By:
-------------------------------------
Name:
Title:
12
NOTICE OF EXERCISE
To:______Bionovo, Inc.
(1) The undersigned hereby elects to purchase ________ Warrant Shares of
the Company pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together with
all applicable transfer taxes, if any.
(2) Payment shall take the form of lawful money of the United States.
(3) Please issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is specified
below:
----------------------------------------
----------------------------------------
The Warrant Shares shall be delivered to the following:
----------------------------------------
----------------------------------------
----------------------------------------
(4) Accredited Investor. The undersigned is an "accredited investor" as
defined in Regulation D under the Securities Act of 1933, as amended.
[PURCHASER]
By:
-------------------------------------
Name:
Title:
Dated:
----------------------------------
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to
whose address is
- -----------------------------------------------
- ---------------------------------------------------------------.
- ---------------------------------------------------------------
Dated: ______________, _______
Holder's Signature:
----------------------------------
Holder's Address:
------------------------------------
Signature Guaranteed:
-----------------------------------
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
Exhibit 10.1
BIONOVO, INC.
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (also referred to herein as the "Agreement")
made effective as of _____________, 2007, between Bionovo, Inc., a Delaware
corporation (the "Company"), and the undersigned subscriber(s) (the
"Subscriber"). All terms not defined herein shall have the meaning ascribed to
them in the Company's Confidential Private Offering Placement Term Sheet With
Exhibits dated December 4, 2006 as amended by the First Supplement dated January
12, 2007 (collectively, the "Term Sheet").
RECITALS
A. The Company desires to secure equity financing by issuing up to
$__________ in shares of its common stock, par value $0.0001 per share (the
"Common Stock"), subject to an over-allotment right of the Company to issue an
additional $________ in shares of Common Stock, at a purchase price of $1.50 per
share of Common Stock and has engaged Cambria Capital, LLC and Blaylock Capital,
LLC (collectively, the "Placement Agents") as its exclusive placement agents in
connection therewith;
B. As described in the Term Sheet, the Company will issue to the
Subscriber a Warrant (the "Warrant") to purchase thirty-five (35) shares of
Common Stock per every one hundred (100) shares of Common Stock purchased
pursuant to this Agreement; and
C. The Subscriber desires to purchase the number of shares of Common Stock
set forth on the signature page hereof.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
I. SUBSCRIPTION FOR COMMON STOCK AND WARRANTS; REPRESENTATIONS AND WARRANTIES
BY THE SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for and agrees to purchase the number of shares of
Common Stock from the Company set forth on the signature page hereof, and the
Company agrees to issue the Common Stock and Warrants to the Subscriber, in
accordance with the Term Sheet, at a purchase price equal to $1.50 per share of
Common Stock. The subscription price is payable by check made payable to the
order of "Colonial Stock Transfer Co., Inc., as Escrow Agent for Bionovo, Inc."
or by wire transfer of immediately available funds delivered contemporaneously
herewith as follows:
Key Bank
410 East 400 South
Salt Lake City, UT 84111
ABA No. 124 000 737
Account No. 4405 2027 0198
(Colonial Stock Transfer FBO Bionovo, Inc.)
The Common Stock purchased by the Subscriber and the related Warrants will be
delivered by the Company promptly following the Termination Date (as hereinafter
defined).
1.2 The Subscriber recognizes that the purchase of the shares of Common
Stock and Warrants issued in connection therewith (collectively, the
"Securities") involves a high degree of risk and is suitable only for persons of
adequate financial means who have no need for liquidity in this investment in
that (i) he may not be able to liquidate his investment in the event of an
emergency; (ii) transferability is extremely limited; and (iii) in the event of
a disposition, he could sustain a complete loss of his entire investment.
1.3 The Subscriber acknowledges that he is (i) a qualified investor, as
described herein, to qualify for the purchase of the Securities; (ii) competent
to understand and does understand the nature of the investment; and (iii) able
to bear the economic risk of this investment.
1.4 The Subscriber represents that he is an "accredited investor," as such
term is defined in Rule 501 of Regulation D promulgated under the Securities Act
of 1933, as amended (the "Securities Act").
1.5 The Subscriber acknowledges that he has significant prior investment
experience, including investment in non-listed and non-registered securities.
The Subscriber has a sufficient net worth to sustain a loss of its entire
investment in the Company in the event such a loss should occur. The
Subscriber's overall commitment to investments which are not readily marketable
is not excessive in view of the Subscriber's net worth and financial
circumstances and the purchase of the Securities will not cause such commitment
to become excessive. The Subscriber recognizes the highly speculative nature of
this investment.
1.6 The Subscriber: (i) if a natural person, represents that the
Subscriber has reached the age of 21 and has full power and authority to execute
and deliver this Subscription Agreement and all other related agreements or
certificates and to carry out the provisions hereof and thereof; (ii) if a
corporation, partnership, or limited liability company or partnership, or
association, joint stock company, trust, unincorporated organization or other
entity, represents that such entity was not formed for the specific purpose of
acquiring the Securities, such entity is duly organized, validly existing and in
good standing under the laws of the state of its organization, the consummation
of the transactions contemplated hereby is authorized by, and will not result in
a violation of state law or its charter or other organizational documents, such
entity has full power and authority to execute and deliver this Subscription
Agreement and all other related agreements or certificates and to carry out the
provisions hereof and thereof and to purchase and hold the Securities, the
execution and delivery of this Subscription Agreement has been duly authorized
by all necessary action, this Subscription Agreement has been duly executed and
delivered on behalf of such entity and is a legal, valid and binding obligation
of such entity; or (iii) if executing this Subscription Agreement in a
representative or fiduciary capacity, represents that it has full power and
authority to execute and deliver this Subscription Agreement in such capacity
and on behalf of the subscribing individual, ward, partnership, trust, estate,
corporation, or limited liability company or partnership, or other entity for
whom the Subscriber is executing this Subscription Agreement, and such
individual, partnership, ward, trust, estate, corporation, or limited liability
company or partnership, or other entity has full right and power to perform
pursuant to this Subscription Agreement and make an investment in the Company,
and represents that this Subscription Agreement constitutes a legal, valid and
binding obligation of such entity. The execution and delivery of this
Subscription Agreement will not violate or be in conflict with any order,
judgment, injunction, agreement or controlling document to which the Subscriber
is a party or by which it is bound.
2
1.7 The Subscriber hereby represents that the Subscriber and the
Subscriber's attorney, accountant, purchaser representative and/or tax advisor,
if any (collectively, "Advisors") have been furnished by the Company or the
Placement Agents during the course of this transaction with the Term Sheet and
with all information regarding the Company which the Subscriber and his Advisors
have requested or desired to know, subject in all cases to existing
confidentiality obligations and applicable law; and that the Subscriber and his
Advisors have been afforded the opportunity to ask questions of and receive
answers from duly authorized officers or other representatives of the Company
and the Placement Agents concerning the terms and conditions of the offering,
prior to the execution of this Subscription Agreement and all such questions
have been answered to the full satisfaction of the Subscriber and its Advisors,
if any.
1.8 The Subscriber hereby acknowledges that the offering of the Securities
has not been filed with or reviewed by the Securities and Exchange Commission
(the "SEC") because of the Company's representations that this is intended to be
a nonpublic offering pursuant to Section 4(2) and Rule 506 of Regulation D
promulgated under the Securities Act. The Subscriber represents that the
Securities are being purchased for his own account, for investment and not for
distribution or resale to others except pursuant to the Registration Rights
Agreement (defined in Section 4.2 below). The Subscriber agrees that he will not
sell, transfer or otherwise dispose of any of the Securities unless they are
registered under the Securities Act or unless an exemption from such
registration is available.
1.9 The Subscriber understands that the Securities have not been
registered under the Securities Act by reason of a claimed exemption under the
provisions of the Securities Act which depends, in part, upon his investment
intention. In this connection, the Subscriber understands that it is the
position of the SEC that the statutory basis for such exemption would not be
present if his representation merely meant that his present intention was to
hold the Securities for a short period, for a deferred sale, for a market rise,
assuming that a market develops and is maintained, or for any other fixed
period. The Subscriber realizes that, in the view of the SEC, a purchase now
with an intent to resell would represent a purchase with an intent inconsistent
with his representation to the Company, and the SEC might regard such a sale,
transfer or disposition as a deferred sale to which the exemption is not
available.
1.10 The Subscriber consents that the Company may, if it desires, permit
the transfer of the shares of Common Stock or Warrants by the Subscriber out of
his name only when his request for transfer (except for transfers pursuant to
the Registration Rights Agreement) is accompanied by an opinion of counsel
reasonably satisfactory to the Company that the proposed sale, transfer or
disposition does not result in a violation of the Securities Act or any
applicable state "blue sky" laws (collectively, "Securities Laws"). The
Subscriber agrees to hold the Company, the Placement Agents and any of their
respective directors, executive officers and controlling persons and their
respective heirs, representatives, successors and assigns harmless and to
indemnify them against all liabilities, costs and expenses incurred by them as a
result of any sale, transfer or disposition of the Securities by the undersigned
Subscriber in violation of any Securities Laws or any misrepresentation herein.
3
1.11 The Subscriber consents to the placement of a legend on the
certificates evidencing the shares of Common Stock and the instruments
evidencing the Warrants stating that they have not been registered under the
Securities Act and setting forth or referring to the restrictions on the sale,
transfer or disposition thereof. The Subscriber is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on
the sale, transfer or disposition of the shares of Common Stock and the
Warrants.
1.12 The Subscriber acknowledges and agrees that the Company is relying on
the Subscriber's representations contained in this Agreement in determining
whether to accept this subscription. The Subscriber hereby gives the Company
authority to call his bank or place of employment or otherwise review the
financial standing of the Subscriber and it is further agreed that the Company
reserves the unrestricted right to reject or limit any subscription and to close
the offer at any time.
1.13 The Subscriber represents and warrants that all representations made
by the Subscriber hereunder are true and correct in all material respects as of
the date of execution hereof, and the Subscriber covenants that until the
closing on the Securities subscribed for he shall inform the Company and the
Placement Agents immediately of any changes in any of the representations
provided by the Subscriber hereunder.
1.14 The Subscriber is unaware of, is in no way relying on, and did not
become aware of the offering of the Securities through or as a result of, any
form of general solicitation or general advertising including, without
limitation, any article, notice, advertisement or other communication published
in any newspaper, magazine or similar media or broadcast over television, radio
or over the Internet, in connection with the offering and sale of the Securities
and is not subscribing for Securities and did not become aware of the offering
of the Securities through or as a result of any seminar or meeting to which the
Subscriber was invited by, or any solicitation of a subscription by, a person
not previously known to the Subscriber in connection with investments in
securities generally.
1.15 The Subscriber has taken no action which would give rise to any claim
by any person for brokerage commissions, finders' fees or the like relating to
this Subscription Agreement or the transactions contemplated hereby (other than
commissions to be paid by the Company to the Placement Agents or as otherwise
described in the Term Sheet).
1.16 The Subscriber has adequate means of providing for such Subscriber's
current financial needs and foreseeable contingencies and has no need for
liquidity of the investment in the Securities for an indefinite period of time.
4
1.17 The Subscriber is aware that an investment in the Common Stock and
Warrants involves a number of very significant risks and has carefully read and
considered the matters set forth in the Term Sheet and in particular the matters
under the caption "Risk Factors" therein.
1.18 The Subscriber acknowledges that any estimates or forward-looking
statements included in the Term Sheet were prepared by the Company in good
faith, but that the attainment of any such estimates or forward-looking
statements cannot be guaranteed by the Company and should not be relied upon.
1.19 No oral or written representations have been made, or oral or written
information furnished, to the Subscriber or its Advisors, if any, in connection
with the offering of the Securities which are in any way inconsistent with the
information contained in the Term Sheet.
1.20 Within five (5) days after receipt of a request from the Company or
either of the Placement Agents, the Subscriber shall provide such information
and deliver such documents as may reasonably be necessary to comply with any and
all laws and ordinances to which the Company or either of the Placement Agents
are subject.
1.21 The Subscriber's substantive relationship with the Placement Agents
or subagents through which the Subscriber is subscribing for Securities predates
such Placement Agents' or such subagents' contact with the Subscriber regarding
an investment in the Common Stock and Warrants.
1.22 (For ERISA plans only) The fiduciary of the ERISA plan (the "Plan")
represents that such fiduciary has been informed of and understands the
Company's investment objectives, policies and strategies, and that the decision
to invest "plan assets" (as such term is defined in ERISA) in the Company is
consistent with the provisions of ERISA that require diversification of plan
assets and impose other fiduciary responsibilities. The Subscriber or Plan
fiduciary (a) is responsible for the decision to invest in the Company; (b) is
independent of the Company and any of its affiliates; (c) is qualified to make
such investment decision; and (d) in making such decision, the Subscriber or
Plan fiduciary has not relied primarily on any advice or recommendation of the
Company or any of its affiliates.
II. REPRESENTATIONS AND WARRANTIES BY THE COMPANY
The Company represents and warrants to the Subscriber as follows:
2.1 The Company is a corporation duly organized, existing and in good
standing under the laws of the state of its incorporation and has the corporate
power to conduct its business.
2.2 The execution, delivery and performance of this Agreement by the
Company has been duly approved by the Board of Directors of the Company.
2.3 The shares of Common Stock have been duly and validly authorized and,
when issued in accordance with the terms hereof, will be duly and validly
issued, fully paid and non-assessable. The Company has duly and validly
reserved, out of its authorized and unissued Common Stock, for issuance upon
exercise of the Warrants a number of shares sufficient for such purposes.
5
III. TERMS OF OFFERING
3.1 The subscription period will begin as of December 4, 2006 and will
terminate on the 60th day thereafter, unless extended by the Company and the
Placement Agents for a period of up to an additional 10 days or earlier
terminated by the Company (the "Termination Date").
3.2 The Subscriber hereby agrees to purchase the number of shares of
Common Stock from the Company set forth upon the signature page hereof payable
to the escrow agent, Colonial Stock Transfer Co., Inc., by check in the amount
thereof made payable to "Colonial Stock Transfer Co., Inc., as Escrow Agent for
Bionovo, Inc." or by wire transfer of immediately available funds as set forth
in Section 1.1. If (i) Subscriber's subscription is rejected in whole, or (ii)
the offering is terminated, all funds received from the Subscriber will be
returned without interest, penalty, expense or deduction, and this Subscription
Agreement shall thereafter be of no further force or effect. If Subscriber's
subscription is rejected in part, the funds for the rejected portion of such
subscription will be returned without interest, penalty, expense or deduction
and this Subscription Agreement will continue in full force and effect to the
extent such subscription was accepted.
3.3 The Company has retained the Placement Agents to coordinate the
offering as the Company's exclusive placement agents and financial advisors. See
the Term Sheet for a description of the compensation payable to the Placement
Agents and other terms of the offering.
IV. CONDITIONS TO ACCEPTANCE OF SUBSCRIPTION
The Company's right to accept the subscription of the Subscriber is
conditioned upon satisfaction of the following conditions precedent on or before
the date the Company accepts such subscription (the "Closing Date") (any or all
of which may be waived by the Subscriber in his sole discretion):
4.1 On the Closing Date, no legal action, suit or proceeding shall be
pending which seeks to restrain or prohibit the transactions contemplated by
this Agreement.
4.2 The Company shall have executed and delivered a counterpart signature
page to the Registration Rights Agreement executed by Subscriber in connection
with the within subscription ("Registration Rights Agreement").
4.3 The representations and warranties of the Company contained in this
Agreement shall have been true and correct on the date of this Agreement and
shall be true and correct on the Closing Date as if made on the Closing Date.
V. NOTICES TO SUBSCRIBERS
5.1 THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE
SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE
FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE
ACCURACY OR ADEQUACY OF THE TERM SHEET. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
6
5.2 THE COMMON STOCK AND WARRANTS ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT, AND APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. SUBSCRIBERS SHOULD BE AWARE
THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
VI. MISCELLANEOUS
6.1 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): to the
Company, Bionovo, Inc. 5858 Horton Street, Suite 375, Emeryville, CA 94608,
Attention: Isaac Cohen, telephone number (510) 601-2000; and to the Subscriber
at his address indicated on the last page of this Agreement. 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.
6.2 This Agreement shall not be changed, modified, or amended except by a
writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
6.3 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives, successors
and assigns. This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter thereof and merges and supersedes
all prior discussions, agreements and understandings of any and every nature
between them.
6.4 This Agreement and its validity, construction and performance shall be
governed in all respects by the laws of the State of California, without
reference to its rules and principles governing conflicts of laws. Any suit,
action or proceeding arising out of or relating to this Agreement shall be
brought in the state or Federal courts located in the Sate of California. Each
party irrevocably agrees not to assert (a) any objection that it may ever have
to the laying of venue of any such suit, action or proceeding in any Federal or
state court located in the Commonwealth of Virginia and (b) any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Each party waives any right to a trial by jury, to the
extent lawful.
7
6.5 This Agreement may be executed in counterparts. Any manual signature
upon this Agreement that is faxed, scanned or photocopied shall for all purposes
have the same validity effect and admissibility in evidence as an original
signature and the parties hereby waive any objection to the contrary. Upon the
execution and delivery of this Agreement by the Subscriber, this Agreement shall
become a binding obligation of the Subscriber with respect to the purchase of
the Common Stock and Warrants as herein provided.
6.6 The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
any provisions of this Agreement. All personal pronouns used in this Agreement,
whether used in the masculine, feminine or neuter gender, shall include all
other genders, and the singular shall include the plural, and vice versa as the
context may require.
[Signatures follow]
8
SUBSCRIBER SIGNATURE PAGE
IN WITNESS WHEREOF, the Subscriber has executed this Subscription
Agreement as of the day and year first written above.
Number of Shares of Common
Stock:
---------------------------
Total Purchase Price
($1.50 x number of Shares):
---------------------------
If a legal entity:
Entity Name: Tax ID No:
------------------------------------ ------------------
By (signature):
-----------------------------
Name (print):
----------------------------------------
Title:
-----------------------------------------------
If an individual:
Social Security No:
- ------------------------------------ ---------------------
Subscriber's Signature
- ---------------------------------
Printed Name of Subscriber
Social Security No:
- ------------------------------------ ---------------------
Co-Subscriber's Signature, if any
- ---------------------------------
Printed Name of Co-Subscriber
If more than one individual is purchasing, please check the applicable box:
|_| Joint tenants, with right of survivorship
|_| Tenants by the entirety
|_| Tenants in common
|_| Community property
Mailing Address of Subscriber(s) (please print or type):
Street Address:
-----------------------------
City, State, Zip Code:
----------------------
Telephone Number:
---------------------------
Facsimile Number:
---------------------------
IN WITNESS WHEREOF, the Company has accepted and executed this
Subscription Agreement of the below-named Subscriber effective as of the day and
year first written above with respect to the number of shares of Common Stock
set forth below.
BIONOVO, INC.
By:
-------------------------------------
Name:
Title:
Date of Execution: _______________, 2007
Name(s) of Subscriber:
- ------------------------------------
- ------------------------------------
Number of Shares of Common Stock:
- --------------------------
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").
3
(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).
4
(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).
5
(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.
6
(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.
7
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.
8
(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.
9
(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:
5858 Horton Street, Suite 375
Emeryville, CA 94608
Attention: Isaac Cohen
Telephone: (510) 601-2000
With a copy to:
Greenberg Traurig, LLP
Met Life Building
200 Park Avenue
New York, NY 10166
Attention: Robert H. Cohen, Esq.
Telephone: (212) 801-9200
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.
Company Contacts:
BioNovo, Inc.
Jim Stapleton
Chief Financial Officer
Phone: 510.601.2000
BioNovo jim@bionovo.com
---------------
Media:
Jennifer Larson
Phone: 415.409.2729
jlarson@labfive.com
---------------
Investors:
Jordan Silverstein
Investor Relations Group
Phone: 212.825.3210
BIONOVO CLOSES $15.7 MILLION PRIVATE PLACEMENT
Financing Will Be Used For Ongoing and New Product Development
Emeryville, CA, January 22, 2007 - Bionovo, Inc. (OTC BB: BNVI) today announced
that it closed on the private sale of shares of common stock to a select group
of individual and institutional investors for gross proceeds of $15.7 million.
Participating in this round were RA Capital, Paramount, BioCapital Asset
Management, Ironwood Capital a group of new and existing private shareholders.
Cambria Capital, LLC and Blaylock & Company, Inc. acted as the exclusive
placement agents.
"We are pleased with the quality of the investors in this financing and their
support of our development initiatives," said Isaac Cohen, chief executive
officer of Bionovo. "This raise significantly strengthens our balance sheet and
provides greater flexibility for advancing our clinical programs, such as our
lead drug MF101 for menopausal hot flashes, BZL101, our lead candidate for
advanced breast cancer, and VG101 for menopausal vaginal dryness."
This press release shall not constitute an offer to sell or the solicitation of
an offer to buy nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state or
jurisdiction.
Bionovo, Inc.
Bionovo is a drug development company focusing on the discovery of novel
pharmaceutical agents for cancer and women's health. The company has two drugs
in clinical testing. MF101 is in Phase 2 for quality of life conditions
associated with menopause and BZL101 is in Phase 1/2 for the treatment of
advanced breast cancer. The company has an additional pipeline of drugs in
development for breast cancer, pancreatic cancer and other menopausal symptoms
with a total of 5 drug candidates expected to be in clinical trials by the end
of 2007. The company is developing its products in close collaboration with
leading U.S. academic research centers, including the University of California,
San Francisco, University of Colorado Health Sciences Center, University of
California, Berkeley, and the University of Texas Southwestern Medical Center in
Dallas, TX. For further information please visit: http://www.bionovo.com.
Forward-Looking Statements
This release contains certain forward-looking statements relating to the
business of Bionovo, Inc. that can be identified by the use of forward-looking
terminology such as "believes," "expects," or similar expressions. Such
forward-looking statements involve known and unknown risks and uncertainties,
including uncertainties relating to product development, efficacy and safety,
regulatory actions or delays, the ability to obtain or maintain patent or other
proprietary intellectual property protection, market acceptance, physician
acceptance, third party reimbursement, future capital requirements, competition
in general and other factors that may cause actual results to be materially
different from those described herein as anticipated, believed, estimated or
expected. Certain of these risks and uncertainties are or will be described in
greater detail in our filings with the Securities and Exchange Commission, which
are available at www.sec.gov. Bionovo, Inc. is under no obligation (and
expressly disclaims any such obligation) to update or alter its forward-looking
statements whether as a result of new information, future events or otherwise.
# # #