REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (the “Agreement”) is made and entered into as of
this 20th
day of
December, 2006 by and between NexMed, Inc., a Nevada corporation (the
“Company”), and the “Purchasers” named in that certain Common Stock and Warrant
Purchase Agreement of even date herewith by and between the Company and the
Purchasers named on Schedule 1 thereto (the “Purchase Agreement”).
The
parties hereby agree as follows:
1. Certain
Definitions
As
used
in this Agreement, defined terms not otherwise defined herein shall have the
meanings assigned to them in the Purchase Agreement and the following terms
shall have the following meanings:
“Effectiveness
Deadline”
means
the earlier to occur of (i) the date which is five (5) days after the Company
learns that no review of the initial Registration Statement filed pursuant
to
Section 2(a) hereof will be made by the staff of the SEC or that the staff
has
no further comments on such initial Registration Statement, or (ii) if there
is
a review of such initial Registration Statement by the SEC, one hundred and
fifty (150) days after the Closing Date.
“Investor”
and
“Investors”
shall
mean the Purchaser(s) identified in the Purchase Agreement and any transferee
of
the Purchaser(s) who is a permitted assignee of any Registrable Securities
or
Warrants.
“Prospectus”
shall
mean the prospectus included in any Registration Statement, 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 such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated
by
reference in such prospectus.
“Register,”
“registered”
and
“registration”
refer
to a registration made by preparing and filing a registration statement or
similar document in compliance with the 1933 Act (as defined below), and the
declaration or ordering of effectiveness of such registration statement or
document.
“Registrable
Securities”
shall
mean (a) the Shares and the Warrant Shares (without regard to any limitations
on
beneficial ownership contained in the Warrants) or other securities issued
or
issuable to each Investor (i) upon exercise of the Warrants, or (ii) upon any
distribution with respect to, any exchange for or any replacement of such Shares
or Warrants or (iii) upon any conversion, exercise or exchange of any securities
issued in connection with any such distribution, exchange or replacement; (b)
securities issued or issuable upon any stock split, stock dividend,
recapitalization or similar event with respect to the foregoing; and (c) any
other security issued as a dividend or other distribution with respect to,
in
exchange for or in replacement of the securities referred to in the preceding
clauses; provided, however, that such securities shall cease to be Registrable
Securities when such securities have been sold to or through a broker or dealer
or underwriter in a public distribution or a public securities transaction
or
when such securities may be sold without any restriction pursuant to Rule 144(k)
as determined by the counsel to the Company pursuant to a written opinion
letter, addressed to the Company’s transfer agent to such effect.
“Registration
Statement”
shall
mean any registration statement filed under the 1933 Act of the Company that
covers the resale of any of the Registrable Securities pursuant to the
provisions of this Agreement, amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits and all material
incorporated by reference in such Registration Statement.
“Trading
Day”
shall
mean any day on which the primary market on which the shares of Common Stock
are
listed is open for trading.
2. Registration.
(a) Registration
Statements.
Following the closing of the purchase and sale of the Shares and Warrants
contemplated by the Purchase Agreement (the “Closing Date”) (but no later than
thirty (30) days after the Closing Date), the Company shall prepare and file
with the SEC one Registration Statement on Form S-3 (or, if Form S-3 is not
then
available to the Company, on such form of registration statement as is then
available to effect a registration for resale of the Registrable Securities)
(which shall include a Plan of Distribution substantially in the form of
Exhibit
A
attached
hereto) covering the resale of the Registrable Securities. Such Registration
Statement also shall cover, to the extent allowable under the 1933 Act and
the
Rules promulgated thereunder (including Rule 416), such indeterminate number
of
additional shares of Common Stock resulting from stock splits, stock dividends
or similar transactions with respect to the Registrable Securities. In the
event
any Registrable Securities are not covered by the Registration Statement, the
Company shall promptly amend such Registration Statement or prepare and file
with the SEC a new Registration Statement in accordance with the terms hereof
in
order to cause such Registrable Securities to be covered by a Registration
Statement.
(b) Expenses.
The
Company will pay all expenses associated with each registration, but excluding
discounts, commissions and fees of underwriters, selling brokers, dealer
managers or similar securities industry professionals.
(c) Effectiveness.
(i)
The
Company shall use its best efforts to have each Registration Statement declared
effective as soon as practicable. In connection therewith, the Company shall
respond to all SEC comments on the Registration Statement and file any
amendments to the Registration Statement as soon as reasonably practicable
following any date on which the SEC furnishes comments to, asks questions of,
or
requests further information from, the Company or its counsel with respect
to
the Registration Statement or any part thereof or any document incorporated
by
reference therein. After any Registration Statement is declared effective by
the
SEC, the Company shall cause such Registration Statement to remain effective
in
accordance with the terms hereof, subject to permitted suspension of such
effectiveness only for Allowed Delays (as defined below).
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(ii)
If
(1) a Registration Statement covering all of the Registrable Securities required
to be covered thereby and required to be filed by the Company pursuant to this
Agreement is (A) not filed with the SEC on or before the date which is thirty
(30) days after the Closing Date (a “Filing Failure”) or (B) not declared
effective by the SEC on or before the Effectiveness Deadline (an “Effectiveness
Failure”) or (2) on any day after the date the initial Registration Statement
filed pursuant to Section 2(a) hereof is declared effective by the SEC sales
of
all of the Registrable Securities required to be included on such Registration
Statement cannot be made (other than during an Allowed Delay (as defined in
Section 2(c)(iii) below) pursuant to such Registration Statement or otherwise
(including, without limitation, because of a failure to keep such Registration
Statement effective until the end of the Registration Period); to disclose
such
information as is necessary for sales to be made pursuant to such Registration
Statement; to register a sufficient number of shares of Common Stock or to
maintain the listing of the shares of Common Stock) (a “Maintenance Failure”),
then, as liquidated damages and not as a penalty to any holder by reason of
any
such delay in or reduction of its ability to sell the underlying shares of
Common Stock (which remedy shall be the exclusive economic remedy available
with
respect to Filing Failures, Effectiveness Failures and Maintenance Failures),
the Company shall pay to each holder of Registrable Securities relating to
such
Registration Statement an amount equal to two percent (2.0%) of the aggregate
Purchase Price (as such term is defined in the Securities Purchase Agreement)
of
such Investor’s Registrable Securities included in such Registration
Statement.
(iii)
For
not more than twenty (20) consecutive Trading Days and for a total of not more
than forty five (45) Trading Days in any twelve (12) consecutive month period,
the Company may delay the disclosure of material non-public information
concerning the Company, by terminating or suspending effectiveness of any
registration contemplated by this Section not containing such information,
the
disclosure of which at the time is not, in the good faith opinion of the
Company, in the best interests of the Company (an “Allowed Delay”); provided,
that the Company shall promptly (a) notify the Investors in writing of the
existence of (but in no event, without the prior written consent of an Investor,
shall the Company disclose to the Investor any of the facts or circumstances
regarding) material non-public information giving rise to an Allowed Delay,
and
(b) advise the Investors in writing to cease all sales under the Registration
Statement until the end of the Allowed Delay. The duration of the Registration
Period will be extended by the number of days of any and all Allowed
Delays.
3. Company
Obligations.
The
Company will use its best efforts to effect the registration of the Registrable
Securities in accordance with the terms hereof, and pursuant thereto the Company
will, as expeditiously as possible:
(a) use
its
best efforts to cause such Registration Statement to become effective and to
remain continuously effective for a period (the “Registration Period”) that will
terminate upon the earlier of (i) the date on which all Registrable Securities,
covered by such Registration Statement, as amended from time to time have been
sold or (ii) the second anniversary of the Closing Date; provided,
however,
that if
the Company is notified by an Investor at least 10 business days prior to the
second anniversary of the Closing Date that such Investor will continue to
hold
Registrable Securities after such second anniversary date (e.g., such Investor
is an Affiliate of the Company and such Registrable Securities may not be sold
pursuant to Rule 144(k)) and such Investor agrees to inform the Company promptly
when it no longer holds Registrable Securities, the Company shall use its best
efforts to cause such Registration Statement to remain continuously effective
until such Investor no longer holds Registrable Securities;
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(b) prepare
and file with the SEC such amendments and post-effective amendments to the
Registration Statement and the Prospectus as may be necessary to keep the
Registration Statement effective for the period specified in Section 3(a) and
to
comply with the provisions of the 1933 Act and the 1934 Act with respect to
the
distribution of all Registrable Securities;
(c) furnish
to the Investors such number of copies of a Prospectus, including a preliminary
prospectus, and all amendments and supplements thereto and such other documents
as each Investor may reasonably request in order to facilitate the disposition
of the Registrable Securities owned by such Investor;
(d) make
reasonable effort to prevent the issuance of any stop order or other suspension
of effectiveness and, if such order is issued, obtain the withdrawal of any
such
order at the earliest possible moment;
(e) prior
to
any public offering of Registrable Securities, use its reasonable best efforts
to register or qualify or cooperate with the Investors and their counsel in
connection with the registration or qualification of such Registrable Securities
for offer and sale under the securities or blue sky laws of such jurisdictions
as the Investors reasonably request in writing and do any and all other
reasonable acts or things necessary or advisable to enable the distribution
in
such jurisdictions of the Registrable Securities covered by the Registration
Statement, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions,
or to
become subject to any tax in any such state or jurisdiction where it is not
otherwise subject;
(f) cause
all
Registrable Securities covered by a Registration Statement to be listed on
each
securities exchange, interdealer quotation system or other market on which
similar securities issued by the Company are then quoted or listed;
and
(g) immediately
notify the Investors, at any time when a Prospectus relating to the Registrable
Securities is required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which, the Prospectus
included in such Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to
be
stated therein or necessary to make the statements therein not misleading in
the
light of the circumstances then existing, and at the request of any such holder,
promptly prepare and furnish to such holder a reasonable number of copies of
a
supplement to or an amendment of such Prospectus as may be necessary so that,
as
thereafter delivered to the purchasers of such Registrable Securities, such
Prospectus shall not include 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 not misleading in the light of the circumstances then
existing.
4
4. Obligations
of the Investors.
(a) It
shall
be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities, that the Investors shall furnish in writing to the Company such
information regarding themselves, the Registrable Securities held by them and
the intended method of disposition of the Registrable Securities held by them,
as shall be reasonably required to effect the registration of such Registrable
Securities, and shall execute such documents in connection with such
registration as the Company may reasonably request, including, without
limitation, a Selling Shareholder Questionnaire in substantially the form
attached as Exhibit B hereto. At least ten (10) business days prior to the
first
anticipated filing date of any Registration Statement, the Company shall notify
the Investors of the information the Company requires from the Investors if
the
Investors elect to have any of the Registrable Securities included in the
Registration Statement. The Investors shall provide such information to the
Company at least five (5) business days prior to the first anticipated filing
date of such Registration Statement if the Investors elect to have any of the
Registrable Securities included in the Registration Statement.
(b) The
Investors, by their acceptance of the Registrable Securities, agree to cooperate
with the Company as reasonably requested by the Company in connection with
the
preparation and filing of a Registration Statement hereunder, unless an Investor
has notified the Company in writing of its election to exclude all of its
Registrable Securities from the Registration Statement, in which case the
Investor shall be deemed to have waived its rights to have Registrable
Securities registered under this Agreement.
(c) The
Investors agree that, upon receipt of any notice from the Company of the
happening of any event rendering a Registration Statement no longer effective,
the Investors will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities,
until the Investors’ receipt of the copies of the supplemented or amended
prospectus filed with the SEC and, if an amendment, declared effective and,
if
so directed by the Company, the Investors shall deliver to the Company (at
the
expense of the Company) or destroy (and deliver to the Company a certificate
of
destruction) all copies in the Investors’ possession of the prospectus covering
the Registrable Securities, current at the time of receipt of such
notice.
5. Indemnification.
5
(a) Indemnification
by Company.
The
Company agrees to indemnify and hold harmless, to the fullest extent permitted
by law each Investor, its officers, directors, stockholders and employees and
each person who controls such Investor (within the meaning of the 0000 Xxx)
against all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable attorney’s fees) and expenses imposed on such person
caused by (i) any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus or any preliminary
prospectus or any amendment or supplement thereto or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
the
same are based upon any information furnished in writing to the Company by
such
Investor, expressly for use therein, or (ii) any violation by the Company of
any
federal, state or common law, rule or regulation applicable to the Company
in
connection with any Registration Statement, Prospectus or any preliminary
prospectus, or any amendment or supplement thereto, and shall reimburse in
accordance with subparagraph (c) below, each of the foregoing persons for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claims. The foregoing is subject to the
condition that, insofar as the foregoing indemnities relate to any untrue
statement, alleged untrue statement, omission or alleged omission made in any
preliminary prospectus or Prospectus that is eliminated or remedied in any
Prospectus or amendment or supplement thereto, the above indemnity obligations
of the Company shall not inure to the benefit of any indemnified party if a
copy
of such corrected Prospectus or amendment or supplement thereto had been made
available to such indemnified party and was not sent or given by such
indemnified party at or prior to the time such action was required of such
indemnified party by the 1933 Act and if delivery of such Prospectus or
amendment or supplement thereto would have eliminated (or been a sufficient
defense to) any liability of such indemnified party with respect to such
statement or omission. Indemnity under this Section 5(a) shall remain in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the permitted transfer of the Registrable
Securities.
(b) Indemnification
by Investors.
In
connection with any registration pursuant to the terms of this Agreement, each
Investor will furnish to the Company in writing such information as the Company
reasonably requests concerning the holders of Registrable Securities or the
proposed manner of distribution for use in connection with any Registration
Statement or Prospectus and agrees to indemnify and hold harmless, to the
fullest extent permitted by law, the Company, its directors, officers,
employees, stockholders and each person who controls the Company (within the
meaning of the 0000 Xxx) against any losses, claims, damages, liabilities and
expense (including reasonable attorney’s fees) resulting from any untrue
statement of a material fact or any omission of a material fact required to
be
stated in the Registration Statement or Prospectus or preliminary prospectus
or
amendment or supplement thereto or necessary to make the statements therein
not
misleading, to the extent, but only to the extent that such untrue statement
or
omission is contained in any information furnished in writing by such Investor
to the Company specifically for inclusion in such Registration Statement or
Prospectus or amendment or supplement thereto and that such information was
substantially relied upon by the Company in preparation of the Registration
Statement or Prospectus or any amendment or supplement thereto. In no event
shall the liability of an Investor be greater in amount than the dollar amount
of the proceeds (net of all expense paid by such Investor and the amount of
any
damages such holder has otherwise been required to pay by reason of such untrue
statement or omission) received by such Investor upon the sale of the
Registrable Securities included in the Registration Statement giving rise to
such indemnification obligation.
6
(c) Conduct
of Indemnification Proceedings.
Any
person entitled to indemnification hereunder shall (i) give prompt notice to
the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim
with
counsel reasonably satisfactory to the indemnified party; provided
that any
person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such person unless
(a)
the indemnifying party has agreed to pay such fees or expenses, or (b) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such person or (c) in the reasonable
judgment of any such person, based upon written advice of its counsel, a
conflict of interest exists between such person and the indemnifying party
with
respect to such claims (in which case, if the person notifies the indemnifying
party in writing that such person elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such person); and
provided,
further,
that
the failure of any indemnified party to give notice as provided herein shall
not
relieve the indemnifying party of its obligations hereunder, except to the
extent that such failure to give notice shall materially adversely affect the
indemnifying party in the defense of any such claim or litigation. It is
understood that the indemnifying party shall not, in connection with any
proceeding in the same jurisdiction, be liable for fees or expenses of more
than
one separate firm of attorneys at any time for all such indemnified parties.
No
indemnifying party will, except with the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect of such
claim or litigation.
(d) Contribution.
If for
any reason the indemnification provided for in the preceding paragraphs (a)
and
(b) is unavailable to an indemnified party or insufficient to hold it harmless,
other than as expressly specified therein, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result
of
such loss, claim, damage or liability in such proportion as is appropriate
to
reflect the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations. No person guilty of
fraudulent misrepresentation within the meaning of Section 11(f) of the 1933
Act
shall be entitled to contribution from any person not guilty of such fraudulent
misrepresentation. In no event shall the contribution obligation of a holder
of
Registrable Securities be greater in amount than the dollar amount of the
proceeds (net of all expenses paid by such holder and the amount of any damages
such holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission) received by it upon
the sale of all the Registrable Securities sold by such indemnified party which
were covered by the relevant Registration Statement or Prospectus contained
therein.
6. Miscellaneous.
(a) Amendments
and Waivers.
This
Agreement may be amended only by a writing signed by the Company and the holders
of a majority of the Registrable Securities.
7
(b) Notices.
All
notices and other communications provided for or permitted hereunder shall
be
made as set forth in the Purchase Agreement.
(c) Assignments
and Transfers by Investor.
This
Agreement and all the rights and obligations of the Investors hereunder may
not
be assigned or transferred to any transferee or assignee except to a holder
of
Registrable Securities or Warrants which is a permitted assignee pursuant to
the
assignment provisions of such instruments.
(d) Assignments
and Transfers by the Company.
This
Agreement may not be assigned by the Company without the prior written consent
of the holders of a majority of the Registrable Securities, except that without
the prior written consent of such Investors, but after notice duly given, the
Company shall assign its rights and delegate its duties hereunder to any
successor-in-interest corporation, and such successor-in-interest shall assume
such rights and duties, in the event of a merger or consolidation of the Company
with or into another corporation or the sale of all or substantially all of
the
Company’s assets.
(e) Benefits
of the Agreement.
The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective permitted successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
(f) Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
(g) Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
(h) Severability.
If one
or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision(s) shall be excluded from this Agreement and
the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms to the fullest
extent permitted by law.
(i) Further
Assurances.
The
parties shall execute and deliver all such further instruments and documents
and
take all such other actions as may reasonably be required to carry out the
transactions contemplated hereby and to evidence the fulfillment of the
agreements herein contained.
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(j) Entire
Agreement.
This
Agreement is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(k) Applicable
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York without regard to principles of conflicts of
law.
[REMAINDER
OF PAGE INTENTIONALLY BLANK]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
The
Company:
| NEXMED, INC. | |
| By: /s/ Xxxx Xxxxxxxx | |
| Name: Xxxx Xxxxxxxx | |
| Title: Vice President and Chief Financial Officer | |
The
Investors:
| SOUTHPOINT MASTER FUND, LP | |
| By: Southpoint GP, LP, its general partner | |
| By: Southpoint Capital Advisors LLC, its general partner | |
| By:/s/ | |
| Name: Xxxxxx X. Xxxxx | |
| Title: Member | |
| RA CAPITAL BIOTECH FUND, L.P. | |
| By: RA Capital Management, LLC, its general partner | |
| By: /s/ | |
| Name: | |
| Title: |
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EXHIBIT
A
PLAN
OF
DISTRIBUTION
We
are
registering the shares of common stock on behalf of the selling security
holders. Sales of shares may be made by selling security holders, including
their respective donees, transferees, pledgees or other successors-in-interest
directly to purchasers or to or through underwriters, broker-dealers or through
agents. Sales may be made from time to time on the Nasdaq National Market,
any
other exchange upon which our shares may trade in the future, in the
over-the-counter market or otherwise, at market prices prevailing at the time
of
sale, at prices related to market prices, or at negotiated or fixed prices.
The
shares may be sold by one or more of, or a combination of, the
following:
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a
block trade in which the broker-dealer so engaged will attempt to
sell the
shares as agent but may position and resell a portion of the block
as
principal to facilitate the transaction (including crosses in which
the
same broker acts as agent for both sides of the
transaction);
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purchases
by a broker-dealer as principal and resale by such broker-dealer,
including resales for its account, pursuant to this
prospectus;
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ordinary
brokerage transactions and transactions in which the broker solicits
purchases;
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through
options, swaps or derivatives;
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in
privately negotiated transactions;
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in
making short sales entered into after the date of this prospectus
or in
transactions to cover such short sales; and
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put
or call option transactions relating to the shares.
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The
selling security holders may effect these transactions by selling shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. These broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling security holders and/or
the purchasers of shares for whom such broker-dealers may act as agents or
to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). The selling security
holders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of their securities.
The
selling security holders may enter into hedging transactions with broker-dealers
or other financial institutions. In connection with those transactions, the
broker-dealers or other financial institutions may engage in short sales of
the
shares or of securities convertible into or exchangeable for the shares in
the
course of hedging positions they assume with the selling security holders.
The
selling security holders may also enter into options or other transactions
with
broker-dealers or other financial institutions which require the delivery of
shares offered by this prospectus to those broker-dealers or other financial
institutions. The broker-dealer or other financial institution may then resell
the shares pursuant to this prospectus (as amended or supplemented, if required
by applicable law, to reflect those transactions).
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The
selling security holders and any broker-dealers that act in connection with
the
sale of shares may be deemed to be “underwriters” within the meaning of Section
2(11) of the Securities Act of 1933, and any commissions received by
broker-dealers or any profit on the resale of the shares sold by them while
acting as principals may be deemed to be underwriting discounts or commissions
under the Securities Act. The selling security holders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares against liabilities, including liabilities arising under
the
Securities Act. We have agreed to indemnify each of the selling security holders
and each selling security holder has agreed, severally and not jointly, to
indemnify us against some liabilities in connection with the offering of the
shares, including liabilities arising under the Securities Act.
The
selling security holders will be subject to the prospectus delivery requirements
of the Securities Act. We have informed the selling security holders that the
anti-manipulative provisions of Regulation M promulgated under the Securities
Exchange Act of 1934 may apply to their sales in the market.
Selling
security holders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act, provided they
meet the criteria and conform to the requirements of Rule 144.
Upon
being notified by a selling security holder that a material arrangement has
been
entered into with a broker-dealer for the sale of shares through a block trade,
special offering, exchange distribution or secondary distribution or a purchase
by a broker or dealer, we will file a supplement to this prospectus, if required
pursuant to Rule 424(b) under the Securities Act, disclosing:
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the
name of each such selling security holder and of the participating
broker-dealer(s);
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the
number of shares involved;
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the
initial price at which the shares were
sold;
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the
commissions paid or discounts or concessions allowed to the
broker-dealer(s), where applicable;
|
|
-
|
that
such broker-dealer(s) did not conduct any investigation to verify
the
information set out or incorporated by reference in this prospectus;
and
|
|
-
|
other
facts material to the transactions.
|
In
addition, if required under applicable law or the rules or regulations of the
Commission, we will file a supplement to this prospectus when a selling security
holder notifies us that a donee or pledgee intends to sell more than 500 shares
of common stock.
We
are
paying all expenses and fees in connection with the registration of the shares.
The selling security holders will bear all brokerage or underwriting discounts
or commissions paid to broker-dealers in connection with the sale of the
shares.
12
EXHIBIT
B
NEXMED,
INC.
Form
of Selling Shareholder Questionnaire
This
Questionnaire is being furnished to all of the individuals and entities who
hold
shares of the Company’s Common Stock and Warrants to purchase shares of the
Company’s Common Stock issued in connection with the Common Stock and Warrant
Purchase Agreement dated December 20, 2006 between the Company and the
Purchasers listed on Schedule 1 thereto (such shares of Common Stock and the
shares of Common Stock issuable on the exercise of the Warrants, collectively
“the Shares”), that are to be registered for resale under a registration
statement on Form S-3 (the “Registration Statement”) to be filed with the
Securities and Exchange Commission in connection with the public offering of
the
Shares by the undersigned (the “Offering”). The Company will rely on the
information supplied by you in response to this Questionnaire to prepare such
registration statement.
Please
Print or Type.
| 1. |
Name
of individual or entity:
|
| 2. |
Address
of principal place of business or, if an individual, address of residence
|
| 3. |
Jurisdiction
of formation or incorporation (if the undersigned is an
entity):
|
| 4. |
Telephone
and fax numbers:
|
| 5. |
Contact
person:
|
Shares
Purchased in December 20, 2006 Offering
| 6. |
Number
of Shares of Common Stock purchased by Purchaser in connection
with the
December 20, 2006 Common Stock and Warrant Purchase
Agreement:
|
| 7. |
Number
of Shares issuable upon the exercise of Warrants purchased in
connection
with the December 20, 2006 Common Stock and Warrant Purchase
Agreement:
|
13
| 8. |
Do
you wish for all Shares listed in Questions 6 and 7 to
be registered for
resale in the Registration Statement?
|
|
Yes
No
|
Shares
held by undersigned other than those Purchased in December 20, 2006
Offering
| 9. |
Number
of shares of Common Stock owned by the undersigned, other
than those
shares purchased in connection with the December 20, 2006
Common Stock and
Warrant Purchase
Agreement:
|
| 10. |
Number
of shares issuable upon the exercise of warrants owned by the
undersigned,
other than those Warrants purchased in connection with the December
20,
2006 Common Stock and Warrant Purchase Agreement:
|
| 11. |
Number
of shares of the Company’s Series C 6% Cumulative Convertible Preferred
Stock owned by the undersigned:
|
| 12. |
Number
of shares issuable upon conversion of the Company’s 5% Convertible
Notes:
|
| 13. |
Relationship
of the undersigned or its affiliates with the Company or its
affiliates,
other than as a holder of Shares (include any material relationship
within
the past three years). If “none”, so state:
|
| 14. |
Are
you a member, an affiliate of a member, or a person associated
with a
member, of the National Association of Securities Dealers, Inc.
(the
“NASD”)?
|
|
Yes
No
|
If
the
answer to Question 14 is “yes”, state (a) the name of any such NASD member, (b)
the nature of your affiliation or association with such NASD member, (c)
information as to such NASD member’s participation in any capacity in the
offering or the original placement of the Securities.
|
|
|
14
| 15. |
If
you answered “yes” to Question 14 above, please fill out the following
table with respect to any purchases from the Company or any of its
affiliates in a private placement within twelve months prior to the
date
hereof (excluding your purchase of the
Shares).
|
|
Date
of Purchase
|
Seller
|
Amount
and Name
of
Securities
|
Price
or Other
Consideration
|
| 16. |
Have
you entered into any agreements, understandings or arrangements with
any
underwriters or broker-dealers regarding the sale of the
Shares?
|
Yes No
The
undersigned consents to the disclosure of the answers to the above in the
registration statement.
IN
WITNESS WHEREOF, the undersigned executed this Questionnaire on this ___ day
of
______, 2006.
| (Signature) | |
| (Print Name and Title, if applicable) |
15
