REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is entered into as of June 17, 2005, by and among Minrad International, Inc., a Delaware corporation (the "Company") and the buyers identified as buyers subsequent to June 10, 2005 on the Schedule of Buyers attached hereto as Exhibit A (each, a "Buyer" and, collectively, the "Buyers").
THE PARTIES TO THIS AGREEMENT enter into this agreement on the basis of the following facts, intentions and understanding:
A. The Company and the Buyers entered into a Securities Purchase Agreements, dated as of June 17, 2005 (the "Securities Purchase Agreement"), and, upon the terms and subject to the conditions of the Securities Purchase Agreement, the Company has agreed to issue and sell to the Buyers an aggregate of (i) 3,000 shares (the "Shares") of the Company's Series A Convertible Preferred Stock, $0.25 par value (the "Preferred Stock"), which will be convertible into shares of the Company's common stock, $0.01 par value (the "Common Stock") (which aggregate number for all Buyers will be 1,500,000 shares of Common Stock) (as converted, collectively the "Conversion Shares") in accordance with the terms of the Company's Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (the "Certificate of Designations"), and (ii) Warrants (as the same may be amended, modified or supplemented from time to time in accordance with the terms thereof, the "Warrants") to purchase in the aggregate up to 750,000 shares of Common Stock (as exercised, collectively, the "Warrant Shares").
B. To induce the Buyers to execute and deliver the Securities Purchase Agreement, the Company has agreed to provide certain registration rights to the Buyers under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "1933 Act"), and applicable state securities laws.
NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the following meanings:
"Business Day" means any day other than Saturday, Sunday or any other day on which commercial banks in The City of New York are required by law to remain closed.
"Commission" means the Securities and Exchange Commission.
"Investor" means each Buyer and any transferee or assignee thereof to whom a Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 of this Agreement, and any subsequent transferee or assignee thereof to whom a transferee or assignee assigns its rights under this
Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 of this Agreement.
"Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or association and governmental or any department or agency thereof.
"register," "registered," and "registration" means a registration effected by preparing and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed basis ("Rule 415"), and the declaration or ordering of effectiveness of such Registration Statements by the Commission.
"Registrable Securities" means (i) the Conversion Shares, (ii) the maximum number of Dividend Shares issued or issuable in connection with the Shares, assuming all of the Shares remain outstanding through the Maturity Date (as defined in the Certificate of Designations) and assuming no conversions or redemptions of the Shares prior to Maturity Date (iii) the Warrant Shares issued or issuable upon exercise of the Warrants, (iv) any shares of capital stock issued or issuable with respect to securities referenced in the preceding clause, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on exercise of the Warrants, (v) any shares of capital stock of any entity issued in respect of the capital stock referenced in the immediately preceding clauses as a result of a merger, consolidation, sale of assets, sale or exchange of capital stock or other similar transaction; provided, that any Registrable Securities that have been sold pursuant to a Registration Statement or Rule 144 promulgated under the 1933 Act shall no longer be Registrable Securities.
"Registration Statement" means a registration statement or registration statements of the Company filed under the 1933 Act and covering all of the Registrable Securities.
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement.
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b. Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement and each increase in the number thereof included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities held by each Investor at the time the Registration Statement covering such initial number of Registrable Securities or increase thereof is declared effective by the Commission. In the event that an Investor sells or otherwise transfers any of such Investor's Registrable Securities, each transferee shall be allocated the portion of the then remaining number of the applicable Registrable Securities included in such Registration Statement allocable to the transferor. Except with respect to any securities indicated in Exhibit C that may be included in any Registration Statement with the Registrable Securities, in no event shall the Company include any securities other than Registrable Securities on any Registration Statement without the prior written consent of the Investors holding at least a majority in interest of the applicable Registrable Securities, determined as if all Shares and Warrants then outstanding had been converted and exercised for Conversion Shares and Warrant Shares without regard to any limitations on exercise of the Shares and the Warrants (the "Required Holders").
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f. Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement. Subject to any elections made pursuant to Section 4(b), if (i) a Registration Statement covering all the Registrable Securities is not filed with the Commission on or before the Filing Deadline or is not declared effective by the Commission on or before the Effectiveness Deadline, (ii) a Registration Statement covering all of the Registrable Securities required to be covered thereby, as described in Section 2(e) of this Agreement, is not filed with the Commission on or before the deadline described in Section 2(e) of this Agreement or is not declared effective by the Commission on or before the deadline described in Section 2(e) of this Agreement, (iii) on any day after such Registration Statement has been declared effective by the Commission, sales of all of the Registrable Securities required to be included on such Registration Statement cannot be made as a matter of law (other than during an Allowable Grace Period (as defined in Section 3(n) of this Agreement) pursuant to such Registration Statement (including, without limitation, because of a failure to keep such Registration Statement effective, to disclose such information as is necessary for sales to be made pursuant to such Registration Statement or to register a sufficient number of shares of Common Stock but excluding failures caused solely by a breach of the applicable Investor's obligations hereunder), or (iv) a Grace Period (as defined in Section 3(n) of this Agreement) exceeds the length of an Allowable Grace Period (each of the items described in clauses (i), (ii), (iii) and (iv) above shall be referred to as a "Registration Delay"), then, as partial relief for the damages 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 not be exclusive of any other remedies available at law or in equity) the Company shall pay on the occurrence of each Registration Delay and every thirtieth day (pro rated for periods totaling less than thirty days) thereafter until such Registration Delay is cured, (the Company shall, for each such day, pay each Investor in cash, as liquidated damages and not as a penalty, an
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amount equal to 0.033% of the Purchase Price of the Shares and Warrants purchased by such Investor with respect to any such failure; and for any such day. Such payment shall be made no later than the first business day of the calendar month next succeeding the month in which such day occurs; provided, however, that the aggregate amount of such damages shall not exceed 25% of the Purchase Price of the Shares and Warrants purchased by the Investor. The payments to which a holder shall be entitled pursuant to this Section 2(f) are referred to herein as "Registration Delay Payments." The Registration Delay Payments shall be paid in cash on the earlier of (A) the last day of the calendar month during which such Registration Delay Payments are incurred and (B) the third Business Day after the event or failure giving rise to the Registration Delay Payments is cured. In the event the Company fails to make Registration Delay Payments in a timely manner, such Registration Delay Payments shall bear interest at the rate of one and two-tenths percent (1.2%) per month (prorated for partial months) until paid in full.
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e. Subject to Section 3(n) of this Agreement, and excluding any Registrable Shares held by Investors electing to exclude their Registrable Shares from the Registration Statement under Section 4(b), the Company shall use reasonable efforts to (i) promptly register and qualify, unless an exemption from registration and qualification applies, the resale of the Registrable Securities under such other securities or "blue sky" laws of all applicable jurisdictions in the United States as any holder of Registrable Shares reasonably
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requests in writing, (ii) promptly prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) promptly take such other actions as may be reasonably necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) promptly take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to file a general consent to service of process in any such jurisdiction, except in such jurisdictions where the Company is subject to service of process. The Company shall promptly notify each Investor who holds Registrable Securities and Legal Counsel of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or "blue sky" laws of any jurisdiction in the United States or its receipt of notice of the initiation or threatening of any proceeding for such purpose.
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o. If reasonably requested in writing in connection with any disposition of Registrable Securities pursuant to a Registration Statement, make reasonably available for inspection during normal business hours by a representative for the Investors of such Registrable Securities and any broker-dealers, attorneys and accountants retained by such Investors, all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the appropriate executive officers, directors and designated employees of the Company and its subsidiaries to make reasonably available for inspection during normal business hours all relevant information reasonably requested by such representative for the Investors or any such broker-dealers, attorneys or accountants in connection with such disposition, in each case as is customary for similar "due diligence" examinations; provided, however, that any information that is designated by the Company, in good faith, as confidential at the time of delivery of such information shall be kept confidential by such Persons, unless disclosure thereof is made in connection with a court, administrative or regulatory proceeding or required by law, or such information has become available to the public generally through the Company or through a third party without an accompanying obligation of confidentiality.
p. The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the 0000 Xxx) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the effective date of a Registration Statement.
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4. Obligations of the Investors.
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(i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable Securities who is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who is not guilty of fraudulent misrepresentation, and (iii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement. The provisions of this Section 7 shall remain in full force and effect, regardless of the investigation made by or on behalf of the beneficiaries of this Section 7 and shall survive the transfer of Registrable Securities by the Investors pursuant to Section 9 of this Agreement.
8. Reporting.
(a) make and keep public information available, as those terms are understood and defined in Rule 144;
(b) file with the Commission in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act; and
(c) furnish to each Investor, so long as such Investor owns Registrable Securities, promptly upon request, (A) a written statement by the Company, if true, that it has complied with the applicable reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (B) a copy of the most recent annual or quarterly report of the Company and copies of such other reports and documents so filed by the Company, and (C) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.
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automatically assignable by the Investors to any transferee of all or any portion of such Investor's Registrable Securities if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such rights are being transferred or assigned; (iii) immediately following such transfer or assignment, the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act and applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with the Company to be bound by all of the obligations of an Investor under this Agreement; (v) such transfer shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement and the Warrants; and (vi) such transfer shall have been conducted in accordance with all applicable federal and state securities laws. The Company hereby shall extend the benefits of this Agreement to any Investor and any such Investor may specifically enforce the provisions of this Agreement as if an original party hereto.
11. Miscellaneous.
If to the Company:
Minrad International, Inc.
000 Xxxx Xxxxxx
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Xxxxxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
With a copy (for informational purposes only) to:
Xxxxxxx Xxxx LLP
One M&T Plaza
Suite 2000
Buffalo, New York 14203
Attention: Xxxx Xxxxxx, Esq.
Fax: (000) 000-0000
If to Legal Counsel, to such address as Legal Counsel shall advise the Company in writing to deliver notices to. If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers attached hereto as Exhibit A, with copies to such Buyer's representatives as set forth on the Schedule of Buyers, or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party.
d. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting the City of New York, borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
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HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
e. This Agreement, the Securities Purchase Agreement, the Warrants and the other documents referenced herein and therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the Securities Purchase Agreement and the Warrants supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.
f. This Agreement shall become effective as of the Closing Date.
h. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
i. This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other parties hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.
j. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
k. All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Required Holders.
l. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
m. The obligations of each Buyer under any Transaction Document are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Buyers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Buyer confirms that it has
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independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose.
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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be duly executed as of day and year first above written.
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COMPANY |
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By: |
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Name: |
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Title: |
[Signatures of Buyers on Following Page]
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
BUYER |
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Name: Xxxxxxx Xxxxx |
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[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
BUYER |
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Name: Xxxx Xxxxx Carrier |
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[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
BUYER XXXXX X. & XXXXXX X. XXXXXXX LIVING TRUST 2003 |
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By: | ||
Name: |
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Title: |
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
BUYER | |
Name: Xxxxxx Xxxxxxxx |
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[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
BUYER HLTGT LLC By: Toibb Management LLC, its Manager |
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By: | ||
Name: Xxxxxx Xxxxx |
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Title: Manager |
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
BUYER TOIBB INVESTMENT LLC By: Toibb Management, its Manager |
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By: | ||
Name: Xxxxxx Xxxxx |
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Title: Manager |
EXHIBIT A
EXHIBIT A TO REGISTRATION RIGHTS AGREEMENT
SCHEDULE OF BUYERS
NAME OF BUYERS |
AGGREGATE NUMBER |
NUMBER OF CONVERSION SHARES |
NUMBER OF WARRANT SHARES |
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Rubicon Master Fund | 4,000 | 2,000,000 | 1,000,000 | |||
Crestview Capital Master LLC | 2,000 | 1,000,000 | 500,000 | |||
Enable Growth Partners LP | 370 | 185,000 | 92,500 | |||
Enable Opportunities Partners LP | 65 | 32,500 | 16,250 | |||
Xxxxxxx Xxxxx Illumination Fund, LLC | 250 | 125,000 | 62,500 | |||
International Capital Advisory, Inc. | 140 | 70,000 | 35,000 | |||
Xxxxx Xxxxx | 105 | 52,500 | 26,250 | |||
Xxxx XxXxxx | 105 | 52,500 | 26,250 | |||
TOTAL |
7,035 | 3,517,500 | 1,758,750 | |||
Buyers Subsequent to June 10, 2005: | ||||||
Xxxxxxx Xxxxx | 50 | 25,000 | 12,500 | |||
Xxxx Xxxxx Carrier | 50 | 25,000 | 12,500 | |||
Xxxxx X. & Xxxxxx X. Xxxxxxx Living Trust 2003 | 50 | 25,000 | 12,500 | |||
Xxxxxx Xxxxxxxx | 25 | 12,500 | 6,250 | |||
HLTGT LLC | 300 | 150,000 | 75,000 | |||
Toibb Investment LLC | 2,525 | 1,262,500 | 631,250 | |||
TOTAL for subsequent Buyers | 3,000 | 1,500,000 | 750,000 |
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EXHIBIT B
SELLING SECURITYHOLDERS
The shares of Series A preferred stock and warrants were originally issued by us in transactions exempt from the registration requirements of the 1933 Act to persons reasonably believed to be "accredited investors" as defined in Regulation D under the 0000 Xxx. For additional information regarding the shares of Series A preferred stock and warrants see "Private Placement of Shares and Warrants" above. We are registering the shares of common stock underlying the Series A preferred stock and the warrants in order to permit the selling securityholders to offer the shares of common stock for resale from time to time.
The table below lists the selling securityholders and other information regarding the beneficial ownership of the shares of common stock by each of the selling securityholders. The second column lists the number of shares of common stock beneficially owned by each selling stockholder as of ________, 2005, assuming conversion of all Series A preferred stock and exercise of all of the warrants held by the selling securityholders on that date, without regard to any limitations on conversion or exercise. The third column lists the shares of common stock being offered pursuant to this prospectus by each of the selling securityholders. The fourth column lists the number of shares that will be beneficially owned by the selling securityholders assuming all of the shares offered pursuant to this prospectus are sold and that shares beneficially owned by them, as of __________, 2005, but not offered hereby are not sold.
In accordance with the terms of registration rights agreements with the holders of shares of Series A preferred stock and warrants, this prospectus generally covers the resale of 130% of the maximum number of shares of common stock issuable upon dividends paid in stock on the Series A preferred stock, upon conversion of the shares of Series A preferred stock, and upon exercise of the warrants (in each case without taking into account any limitations on the conversion of the shares of Series A preferred stock and exercise of the warrants set forth in the Certificate of Designations, Preferences and Rights of Series A Preferred Stock and the warrants) as of the trading day immediately preceding the date this registration statement was initially filed with the SEC. Because the conversion price of the Series A preferred stock and the exercise price of the warrants may be adjusted, the number of shares that will actually be issued may be more or less than the number of shares being offered by this prospectus.
Under the terms of the Series A preferred stock and the warrants, a selling securityholder may not convert the Series A preferred stock or exercise the warrants, to the extent such conversion or exercise would cause such selling securityholder, together with its affiliates, to beneficially own a number of shares of common stock which would exceed 9.99% of our then outstanding shares of common stock following such conversion or exercise, excluding for purposes of such determination shares of common stock issuable upon conversion of the shares of Series A preferred stock which have not be converted and exercise of the warrants which have not been exercised. The numbers in the second column do not reflect this limitation. The selling securityholders may sell all, some or none of their shares in this offering. See "Plan of Distribution."
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The inclusion of any securities in the following table does not constitute an admission of beneficial ownership by the persons named below.
Name of Selling Securityholder |
Shares of Common Stock Owned Before the Offering |
Shares of Common Stock Offered Hereby |
Shares of Common Stock Owned After the Offering (1) |
(1) Assumes that all of the shares offered hereby are sold and that shares owned before the offering but not offered hereby are not sold.
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PLAN OF DISTRIBUTION
We are registering shares of common stock to permit the resale of such common stock by the holders from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling securityholders of the securities. We will bear all fees and expenses incident to our obligation to register the shares of common stock.
The selling securityholders may sell all or a portion of the securities beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the securities are sold through underwriters or broker-dealers, the selling securityholders will be responsible for underwriting discounts or commissions or agent's commissions. The securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions,
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on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; |
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in the over-the-counter market; |
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in transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
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through the writing of options, whether such options are listed on an options exchange or otherwise; |
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
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block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
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an exchange distribution in accordance with the rules of the applicable exchange; |
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privately negotiated transactions; |
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short sales; |
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pursuant to Rule 144 under the Securities Act; |
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broker-dealers may agree with the selling securityholders to sell a specified number of such securities at a stipulated price per security; |
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a combination of any such methods of sale; and |
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any other method permitted pursuant to applicable law. |
If the selling securityholders effect such transactions by selling the warrants, or shares of common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling securityholders or commissions from purchasers of the warrants or shares of common stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of any securities or otherwise, the selling securityholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the securities in the course of hedging in positions they assume. The selling securityholders may also sell securities short and deliver securities covered by this prospectus to close out short positions. The selling securityholders may also loan or pledge securities to broker-dealers that in turn may sell such securities.
The selling securityholders may pledge or grant a security interest in some or all of the warrants or shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling securityholders to include the pledgee, transferee or other successors in interest as selling securityholders under this prospectus. The selling securityholders also may transfer and donate the warrants or shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The selling securityholders and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be "underwriters" within the meaning of the 1933 Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the 1933 Act. At the time a particular offering of the securities is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of securities being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling securityholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.
Under the securities laws of some states, the securities may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the warrants and shares of common stock may not be sold unless such warrants or shares of common stock have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
The selling securityholders may choose not to sell any or may choose to sell less than all of the shares of common stock registered pursuant to the shelf registration statement, of which this prospectus forms a part.
The selling securityholders and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the 1934 Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling securityholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.
We will pay all expenses of the registration of the warrants and shares of common stock pursuant to the registration rights agreement, estimated to be $[ ] in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or "blue sky" laws; provided, however, that a selling securityholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling securityholders against liabilities, including some liabilities under the 1933 Act, in accordance with the registration rights agreements, or the selling securityholders will be entitled to contribution. We may be indemnified by the selling securityholders against civil liabilities, including liabilities under the 1933 Act, that may arise from any written information furnished to us by the selling securityholder specifically for use in this prospectus, in accordance with the related registration rights agreements, or we may be entitled to contribution.
Once sold under the shelf registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than our affiliates.
EXHIBIT C
OTHER SECURITIES TO BE INCLUDED IN REGISTRATION
Minrad | ||||||
Shares To Be |
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Registered |
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Officers & Directors | ||||||
Xxxxxxx Xxxxx |
3,334 |
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Xxxxxx Xxxxxx |
29,151 |
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Xxxxxx Xxxxxx |
146,667 |
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Xxxx XxXxxxxxx |
889 |
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Xxxx Xxxxxxx |
1,556 |
|||||
Subtotal |
181,597 |
|||||
Related Parties | ||||||
Lincoln Partners |
294,195 |
|||||
New England Partners |
3,505,392 |
|||||
Xxxxx Family Trust |
500,000 |
|||||
Xxxxx Xxxxx |
786,358 |
|||||
ICA |
0 |
|||||
Xxxx XxXxxx |
250,000 |
|||||
CMCP |
0 |
|||||
Subtotal |
5,335,945 |
|||||
$1.25 Investors |
3,201,084 |
|||||
$1.75 Investors |
906,960 |
|||||
Options Exercised |
25,000 |
|||||
Others Converted |
314,101 |
|||||
Total Shares to be Registered |
9,964,686 |
|||||
Underlying Current Warrants (B) | ||||||
CMCP & all associated |
365,152 |
|||||
Xxxxx Trust & ICA |
420,653 |
|||||
Total Shares Underlying Warrants to be Registered |
785,805 |
|||||
Total Shares To be Registered - before conversion |
10,750,491 |
|||||
Possible Conversion of $2.5 Notes @ $1.75 |
1,428,571 |
|||||
Total Shares To be Registered |
12,179,062 |
In addition, Chadbourn Securities, Inc will have the right to have registered a number of shares of Common Stock equal to 10% of the Shares to be sold in this offering, which shares of Common Stock are issuable upon the exercise of warrants to be issued by the Company to Chadbourn upon consummation of the offering.