-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G5lmpTF4XfnkaLR8TGyMQLsjz32TVnDGx8y8EPlRwUZ5WmlpcTtdAGmY7bDPSrmn ajcEfG6Wti+feLJwCSByrA== 0000898432-07-000189.txt : 20070221 0000898432-07-000189.hdr.sgml : 20070221 20070221172454 ACCESSION NUMBER: 0000898432-07-000189 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20070221 DATE AS OF CHANGE: 20070221 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MINRAD INTERNATIONAL, INC. CENTRAL INDEX KEY: 0001121225 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 870299034 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-80813 FILM NUMBER: 07639711 BUSINESS ADDRESS: STREET 1: 847 MAIN ST. CITY: BUFFALO STATE: NY ZIP: 14203 BUSINESS PHONE: 716-855-1068 MAIL ADDRESS: STREET 1: 847 MAIN ST. CITY: BUFFALO STATE: NY ZIP: 14203 FORMER COMPANY: FORMER CONFORMED NAME: TECHNOLOGY ACQUISITION CORP DATE OF NAME CHANGE: 20000804 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KIMBERLIN KEVIN CENTRAL INDEX KEY: 0000904841 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: SPENCER TRASK SECURITIES INC STREET 2: 535 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2123555565 SC 13D/A 1 sc-13da.txt SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 SCHEDULE 13D/A (Amendment No. 1) Under the Securities Exchange Act of 1934 MINRAD INTERNATIONAL, INC. (Name of Issuer) COMMON STOCK, $0.01 PAR VALUE PER SHARE. (Title of Class of Securities) 60443P103 (CUSIP Number) KEVIN B. KIMBERLIN C/O SPENCER TRASK & CO. 535 MADISON AVENUE, 18TH FLOOR NEW YORK, NY 10022 Tel: (212) 355-5565 Fax: 212-751-3483 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) DECEMBER 11, 2006 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box: [ ]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act. CUSIP NO.: 60443P103 1. NAME OF REPORTING PERSON: Kevin B. Kimberlin 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) (b) x 3. SEC USE ONLY 4. SOURCE OF FUNDS: AF 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e): Yes No X 6. CITIZENSHIP OR PLACE OF ORGANIZATION: UNITED STATES 7. SOLE VOTING POWER: 8,480,905 shares 8. SHARED VOTING POWER: 0 shares 9. SOLE DISPOSITIVE POWER: 8,480,905 shares 10. SHARED DISPOSITIVE POWER: 0 shares 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 8,480,905 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: Yes No x 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 18.59% 14. TYPE OF REPORTING PERSON: IN 2 The information reported in Items 1, 2, 4, 5, and the first paragraph of Item 3, hereof amends and restates the information reported in corresponding Items 1, 2, 4, 5, and the first two paragraphs of Item 3 of the Schedule 13D filed by the Reporting Person on September 26, 2005 (the "Schedule 13D"). The information reported in Items 6 and 7 hereof supplements the information reported in Items 6 and 7 of the Schedule 13D. The information reported in Item 3 hereof, other than the first paragraph thereof, supplements the information reported in Item 3 of the Schedule 13D. Among other things, this Schedule 13D/A is being filed to consolidate reporting of the beneficial ownership of the holdings reported herein under a single reporting person. ITEM 1. SECURITY AND ISSUER This Statement relates to the common stock, $0.01 par value per share (the "Common Stock"), of Minrad International, Inc. (the "Company"), a Nevada corporation (formerly Technology Acquisition Corporation, a Nevada corporation), whose principal executive offices are located at 50 Cobham Drive, Orchard Park, NY 14127. ITEM 2. IDENTITY AND BACKGROUND (a) This Statement is filed by Kevin B. Kimberlin ("Mr. Kimberlin"). (b) The business address of Mr. Kimberlin is c/o Spencer Trask & Co., 535 Madison Avenue, New York, NY 10022. (c) Mr. Kimberlin's principal occupations are Chairman of the Board of Directors of Spencer Trask & Co. and a private investor. (d) Mr. Kimberlin has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) Mr. Kimberlin has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Kimberlin is a United States citizen. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION As set forth in more detail below, the shares of Common Stock and warrants of the Company exercisable for shares of Common Stock reported herein are held directly by: Kevin Kimberlin Partners, L.P. ("KKP"), a Delaware limited partnership; Spencer Trask & Co. ("ST&Co."), a Delaware corporation; Spencer Trask Ventures, Inc. ("STVI"), a Delaware corporation; and Spencer Trask Private Equity Fund I LP ("Fund I"), a Delaware limited partnership. KKP, ST&Co., STVI and Fund I are sometimes collectively referred to herein as the "Spencer Trask Entities". Mr. Kimberlin is the general partner of KKP. Mr. Kimberlin is the sole stockholder and Chairman of the Board of Directors of ST&Co., and STVI is a wholly owned subsidiary of ST&Co. The general partner of Fund I is Trask Partners LLC, a Delaware limited liability company, which is wholly owned by ST&Co., and the manager of Fund I is ST Management LLC, a Delaware limited liability company that also is wholly owned by ST&Co. The source of funds for 3 the purchase of securities by Fund I was the assets of Fund I, and the source of funds for the purchase of securities by each of the other Spencer Trask Entities was the working capital of each such Spencer Trask Entity. On January 1, 2006, Spencer Trask Specialty Group, LLC, a Delaware limited liability company of which Mr. Kimberlin is the principal owner and non-member manager ("STSG"), and KKP entered into a Securities Purchase Agreement (the "Agreement"), whereby STSG sold to KKP (a) 4,825,000 shares of Common Stock in exchange for the cancellation of $5,133,800 in indebtedness owed by STSG to KKP pursuant to that certain grid note of STSG, dated August 11, 1999 (the "Grid Note"), and (b) currently exercisable warrants to purchase up to 746,414 shares of Common Stock at an exercise price of $1.15 per share and expiring on March 28, 2009, in exchange for the cancellation of $128,756 in indebtedness owed by STSG to KKP pursuant to the Grid Note. By Amendment No. 1 to the Agreement, dated as of October 25, 2006 (the "Amendment"), STSG and KKP amended the Agreement to reduce the amount of securities STSG sold to KKP pursuant to the Agreement to (a) 4,385,500 shares of Common Stock in exchange for the cancellation of $4,666,172 in indebtedness owed by STSG to KKP pursuant to the Grid Note and (b) warrants to purchase up to 701,629 shares of Common Stock in exchange for the cancellation of $90,498.21 in indebtedness owed by STSG to KKP pursuant to the Grid Note. In addition, the Amendment provided for KKP to sell to STSG currently exercisable warrants to purchase up to 150,000 shares of Common Stock at an exercise price of $1.00 per share, expiring on August 9, 2008, and currently exercisable warrants to purchase up to 27,000 shares of Common Stock at an exercise price of $0.75 per share, expiring on May 31, 2010, for a purchase price of $30,532.40, which amount was netted against the aggregate amount of indebtedness owed by STSG pursuant to the Grid Note that was cancelled, as described above. In accordance with the Operating Agreement of STSG, on December 11, 2006, STSG distributed to one of its members, Spencer Trask Investment Partners, LLC, a Delaware limited liability company of which Mr. Kimberlin is the non-member manager ("STIP"): (a) 439,500 shares of Common Stock; (b) warrants to purchase up to 44,785 shares of Common Stock at an exercise price of $1.15 per share and expiring on March 28, 2009; (c) warrants to purchase up to 150,000 shares of Common Stock at an exercise price of $1.00 per share and expiring on August 9, 2008; and (d) warrants to purchase up to 27,000 shares of Common Stock at an exercise price of $0.75 per share and expiring on May 31, 2010. In accordance with the Operating Agreement of STIP, on December 11, 2006, STIP distributed to: (a) ST&Co., one of STIP's members, 150,000 shares of Common Stock; (b) William P. Dioguardi, an individual member of STIP, (i) 241,250 shares of Common Stock, (ii) warrants to purchase up to 37,321 shares of Common Stock at an exercise price of $1.15 per share and expiring on March 28, 2009, (iii) warrants to purchase up to 125,000 shares of Common Stock at an exercise price of $1.00 per share and expiring on August 9, 2008, and (iv) warrants to purchase up to 22,500 shares of Common Stock at an exercise price of $0.75 per share and expiring on May 31, 2010; and (c) Bruno Lerer, an individual member of STIP, (i) 48,250 shares of Common Stock, (ii) warrants to purchase up to 7,464 shares of Common Stock at an exercise price of $1.15 per share and expiring on March 28, 2009, (iii) warrants to purchase up to 25,000 shares of 4 Common Stock at an exercise price of $1.00 per share and expiring on August 9, 2008 and (iv) warrants to purchase up to 4,500 shares of Common Stock at an exercise price of $0.75 per share and expiring on May 31, 2010. As of the date of this Statement: (a) ST&Co. directly owns 150,000 shares of Common Stock and warrants to purchase up to 190,628 shares of Common Stock at an exercise price of $1.15 per share, expiring March 28, 2009; (b) STVI directly owns warrants to purchase up to 19,278 shares of Common Stock at an exercise price of $1.15, expiring March 28, 2009; (c) Fund I directly owns warrants to purchase up to 260,870 shares of Common Stock at an exercise price of $1.15, expiring March 28, 2009; and (d) KKP directly owns 4,385,500 shares of Common Stock and warrants to purchase up to 3,474,629 shares of Common Stock at the following exercise prices and with the following expiration dates: NUMBER OF UNDERLYING SHARES EXERCISE PRICE EXPIRATION DATE 701,629 $1.15 March 28, 2009 2,350,000 $1.00 August 9, 2008 50,000 $0.75 September 30, 2009 50,000 $0.75 October 30, 2009 50,000 $0.75 November 30, 2009 50,000 $0.75 December 30, 2009 50,000 $0.75 January 31, 2010 50,000 $0.75 February 28, 2010 50,000 $0.75 March 31, 2010 50,000 $0.75 April 30, 2010 23,000 $0.75 May 31, 2010 By virtue of his ability to control the Spencer Trask Entities, Mr. Kimberlin is an indirect beneficial owner of all such securities. ITEM 4. PURPOSE OF TRANSACTION (a) All of the shares of Common Stock reported herein were acquired for investment purposes. Mr. Kimberlin retains the right, through his control of the Spencer Trask Entities, to change his investment intent from time to time, to, directly or indirectly, acquire additional shares of Common Stock, acquire other securities of the Company or sell or otherwise dispose of all or part of the Common Stock or other securities of the Company beneficially owned by him, directly or indirectly, in any manner permitted by law. Mr. Kimberlin presently has no plans or proposals that relate to or would result in any of the following: (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of the Company or of any of its subsidiaries; (d) Any change in the present Board of Directors or management of the Company; 5 (e) Any material change in the present capitalization or dividend policy of the Company; (f) Any other material change in the Company's business or corporate structure; (g) Any changes in the Company's charter, by-laws or instruments corresponding thereto or other actions that may impede the acquisition of control of the Company by any person; (h) A class of securities of the Company being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) A class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or (j) Any action similar to any of those enumerated above. As part of the ongoing evaluation of his investments and investment alternatives, however, Mr. Kimberlin may consider effecting any of the foregoing transactions and, subject to applicable law, may, directly or indirectly, formulate a plan or plans with respect to such transactions and may, from time to time, hold discussions with or make proposals to management and/or the Board of Directors of the Company, other stockholders of the Company or third parties regarding such matters. Mr. Kimberlin will further amend the Schedule 13D if there is any material change in his plans with respect to the foregoing. Mr. Kimberlin may also, directly or indirectly, buy and/or sell securities of the Company consistent with his investment objectives. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) As of the date of this Statement, Mr. Kimberlin is a beneficial owner, for purposes of Section 13(d) of the Act, of 8,480,905 shares of Common Stock, which represents beneficial ownership of approximately 18.59% of the Common Stock. Specifically, Mr. Kimberlin may be deemed to beneficially own the 4,535,500 shares of Common Stock and the currently exercisable warrants to purchase up to 3,945,405 shares of Common Stock held by the Spencer Trask Entities in the aggregate. The percentage of shares of Common Stock reported beneficially owned by the Reporting Person is based upon 41,666,819 shares of Common Stock outstanding, which is the total number of shares of Common Stock reported by the Company as outstanding as of September 30, 2006 in its Form 10-QSB filed with the Securities and Exchange Commission (the "Commission") on November 6, 2006. Beneficial ownership has been determined in accordance with the rules of the Commission. (b) Mr. Kimberlin indirectly has the sole power to vote or direct the vote of and dispose or direct the disposition of all shares of Common Stock that may be deemed to be beneficially owned by him. (c) See Item 3, which is incorporated herein by reference. 6 (d) With respect to the securities held by Fund I, the investors of Fund I have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such securities. With respect to the securities held by each of the other Spencer Trask Entities, no person other than Mr. Kimberlin (indirectly) and such other Spencer Trask Entity is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such securities. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER See the description of the Securities Purchase Agreement and Amendment No. 1 to the Securities Purchase Agreement in Item 3 above, which is incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS The Securities Purchase Agreement between STSG and KKP, dated as of January 1, 2006, is filed hereto as Exhibit 7.5. Amendment No.1 to the Securities Purchase Agreement, dated as of October 25, 2006, is filed hereto as Exhibit 7.6. [SIGNATURE PAGE FOLLOWS] 7 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. February 21, 2007 KEVIN B. KIMBERLIN /s/ Kevin B. Kimberlin ------------------------------- Kevin B. Kimberlin 8 EXHIBIT INDEX 7.5 The Securities Purchase Agreement between STSG and KKP, dated as of January 1, 2006. 7.6 Amendment No.1 to the Securities Purchase Agreement, dated as of October 25, 2006. EX-99 2 exhibit_7-5.txt EXHIBIT 7.5 Exhibit 7.5 SECURITIES PURCHASE AGREEMENT SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), effective as of January 1, 2006, by and between Kevin Kimberlin Partners, L.P., a Delaware limited partnership (the "PURCHASER"), and Spencer Trask Specialty Group, LLC, a Delaware limited liability company (the "SELLER"). W I T N E S S E T H: WHEREAS, the Seller is the holder of 4,825,000 shares of common stock, par value $0.01 per share (the "COMMON STOCK"), of Minrad International, Inc., a Delaware corporation (the "COMPANY"), and currently exercisable warrants to purchase up to 746,414 shares of Common Stock at an exercise price of $1.15 per share and expiring May 2, 2010 (the "WARRANTS"); and WHEREAS, the Purchaser desires to purchase such 4,825,000 shares of Common Stock (the "SHARES") and such Warrants (together with the Shares, the "SECURITIES") from the Seller, and the Seller desires to sell to the Purchaser the Securities, subject to the terms and conditions provided herein. NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. PURCHASE AND SALE. 1.1 SALE AND PURCHASE OF COMMON STOCK. At the Closing (as defined below), the Seller shall sell to the Purchaser, and the Purchaser shall purchase from the Seller, for the Purchase Price (as defined in Section 1.2 hereof), the Securities. 1.2 PURCHASE PRICE. The purchase price for the Shares shall be the cancellation by the Purchaser of $5,133,800 in current indebtedness owed by the Seller to the Purchaser pursuant to that certain grid note of the Seller, dated August 11, 1999 (the "GRID NOTE"), and the purchase price for the Warrants shall be the cancellation by the Purchaser of $128,756 in current indebtedness owed by the Seller to the Purchaser pursuant to the Grid Note, reflecting an aggregate purchase price of $5,262,556 (the "PURCHASE PRICE"). 2. CLOSING. 2.1 CLOSING. The purchase and sale of the Shares (the "CLOSING") shall be deemed to have taken place at the offices of Kirkpatrick & Lockhart LLP, 599 Lexington Avenue, New York, NY 10022, at 10:00 a.m., local time, on the date hereof. 2.2 TRANSACTIONS AT CLOSING. At the Closing, (i) the Seller shall deliver to the Purchaser, in accordance with the terms hereof, certificates evidencing the Shares and the Warrants and (ii) the Purchaser shall deliver to the Seller written evidence of cancellation of the indebtedness representing the Purchase Price. 2.3 CONDITIONS TO CLOSING. The Purchaser and the Seller agree that the Closing shall be subject to the Company's (or its transfer agent's) acceptance of an opinion letter of counsel to the Seller and agreement to permit the transfer contemplated hereby on the books and records of the Company. 3. REPRESENTATIONS AND WARRANTIES OF SELLER. The Seller hereby represents and warrants to the Purchaser that: 3.1 PROCEEDINGS. There is no suit, action or proceeding pending or, to the best of the knowledge of the Seller, threatened against the Seller that could delay or impair in any material respect or prevent the consummation of the transaction contemplated by this Agreement. There is no judgment, decree, injunction, rule or order outstanding against the Seller having, or that could reasonably be expected to have, any effect referred to in the immediately preceding sentence. 3.2 AUTHORITY; BINDING AGREEMENT. The execution and delivery by the Seller of this Agreement and the performance by the Seller of its obligations hereunder, and the consummation of the transaction contemplated hereby, have been validly authorized by all necessary company action on the part of the Seller. The Seller has all necessary company power with respect to the foregoing. This Agreement is the valid and binding obligation of the Seller, enforceable against it in accordance with its terms. 3.3 NONCONTRAVENTION. Neither the execution and delivery by the Seller of this Agreement, nor the performance by it of any of its obligations hereunder, will (i) conflict with any provision of any organizational or governing document of the Seller, (ii) give rise to a default under or violate the terms of any agreement to which the Seller is a party or to which it is otherwise bound, or require any consent, approval or notice thereunder, or (iii) violate any order, decree, statute, rule or regulation of any court or governmental authority applicable to the Seller. 3.4 OWNERSHIP. The Seller is the sole record holder and beneficial owner of the Securities, and the Securities are free and clear of all pledges and restrictions on transfer, other than restrictions of general applicability under the Securities Act of 1933, as amended (the "SECURITIES ACT"), and state securities laws. The Seller has not granted any person any rights under and is not a party to (or has, as of the date hereof, irrevocably waived all rights under) any option, warrant, right, agreement or commitment providing for the disposition or acquisition of any of the Securities (other than this Agreement). The Seller is not a party to (or has, as of the date hereof, irrevocably terminated) any voting trust, proxy or other agreement or understanding with respect to the voting of any of the Securities. The resale of such Securities by the Seller as provided herein shall, upon the Closing, vest the Purchaser with good and unencumbered title to such Securities. 3.5 INVESTMENT INTENT. The Seller acquired the Securities over three (3) years prior to the date hereof and has held such Securities continuously from such time. The Seller acquired the Securities for its own 2 account, for investment and not with a view to, or for resale in connection with, any distribution of such Securities or any part thereof. 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER. The Purchaser hereby represents and warrants to the Seller that: 4.1 PROCEEDINGS. There is no suit, action or proceeding pending or, to the best of the knowledge of the Purchaser, threatened against the Purchaser that could delay or impair in any material respect or prevent the consummation of the transaction contemplated by this Agreement. There is no judgment, decree, injunction, rule or order outstanding against the Purchaser having, or that could reasonably be expected to have, any effect referred to in the immediately preceding sentence. 4.2 AUTHORITY; BINDING AGREEMENT. The execution and delivery by the Purchaser of this Agreement and the performance by the Purchaser of its obligations hereunder, and the consummation of the transaction contemplated hereby, have been validly authorized by all necessary partnership action on the part of the Purchaser. The Purchaser has all necessary partnership power with respect to the foregoing. This Agreement is the valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms. 4.3 NONCONTRAVENTION. Neither the execution and delivery by the Purchaser of this Agreement, nor the performance by it of any of its obligations hereunder, will (i) conflict with any provision of any organizational or governing document of the Purchaser, (ii) give rise to a default under or violate the terms of any agreement to which the Purchaser is a party or to which it is otherwise bound, or require any consent, approval or notice thereunder, or (iii) violate any order, decree, statute, rule or regulation of any court or governmental authority applicable to the Purchaser. 4.4 INVESTMENT REPRESENTATIONS. The Purchaser is acquiring the Securities for the Purchaser's own account, for investment and not with a view to, or for resale in connection with, any distribution of such Securities or any part thereof, subject to any registration rights of such Securities. 4.5 INVESTMENT EXPERIENCE; ACCESS TO INFORMATION. The Purchaser (i) is an "accredited investor" as that term is defined in Rule 501(a) promulgated under the Securities Act, (ii) is able to fend for itself in transactions of the type contemplated by this Agreement, (iii) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of this investment, (iv) has the ability to bear the economic risks of this investment and understands that it must bear such economic risks for an indefinite period, (v) has been afforded the opportunity to ask questions of, and to receive answers from, the Company and to obtain any additional information, to the extent the Company had such information or could have acquired it without reasonable effort or expense, necessary for the Purchaser to make an informed investment decision with respect to its purchase of the Securities and (vi) acknowledges that the Securities are "restricted securities" under the Securities Act. 3 5. INDEMNIFICATION. 5.1 OBLIGATION OF THE SELLER TO INDEMNIFY. Subject to the expiration date contained in Section 5.3 hereof, the Seller shall indemnify, defend and hold harmless the Purchaser and its officers, partners, agents, affiliates, successors and permitted assigns from and against, and shall pay and/or reimburse the foregoing persons for, any and all losses, liabilities, claims, obligations, damages and costs and expenses (including reasonable attorneys' fees and disbursements and other costs incurred or sustained in connection with the investigation, defense or prosecution of any such claim or obligation), whether or not involving a third-party claim (collectively, "LOSSES"), relating to or arising out of the breach of any representation, warranty, covenant or agreement of the Seller contained in this Agreement. 5.2 OBLIGATION OF THE PURCHASER TO INDEMNIFY. Subject to the expiration date contained in Section 5.3 hereof, the Purchaser shall indemnify, defend and hold harmless the Seller and its officers, members, managers, agents, affiliates, successors and permitted assigns from and against, and shall pay and/or reimburse the foregoing persons for, any and all Losses relating to or arising out of the breach of any representation, warranty, covenant or agreement of the Purchaser contained in this Agreement. 5.3 SURVIVAL. The representations and warranties contained in this Agreement shall survive the consummation of the transaction contemplated hereby for 12 months. 6. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been given when delivered by hand or by facsimile transmission, when transmitted by facsimile transmission, or upon receipt, when mailed by registered or certified mail (return receipt requested), postage prepaid. 7. MODIFICATIONS; WAIVER. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally or in writing, except that any provision of this Agreement may be amended and the observance of any provision hereof may be waived (either generally or in a particular instance and either retroactively or prospectively) with (but only with) the written consent of the parties. 8. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the parties with respect to the transactions contemplated hereby, and supersedes all negotiations, agreements, representations, warranties, commitments, whether in writing or oral, prior to the date hereof. 9. SUCCESSORS AND ASSIGNS. All of the terms of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto. 10. EXECUTION AND COUNTERPARTS. This Agreement may be executed in counterparts, each of which when so executed and delivered shall be deemed an original, and both of which together shall constitute one instrument. 11. GOVERNING LAW AND SEVERABILITY. This Agreement shall be governed by the laws of the State of New York. Each of the parties hereby consents to the exclusive jurisdiction of the Federal and New York State courts located in Manhattan, New York and hereby waives any objection to venue or forum laid therein. In the event any provision of this Agreement or the application of any 4 such provision to any party shall be held by a court of competent jurisdiction to be contrary to law, the remaining provisions of this Agreement shall remain in full force and effect. 12. HEADINGS. The descriptive headings of the Sections hereof are inserted for convenience only and do not constitute a part of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. Dated: May 3, 2006 SPENCER TRASK SPECIALTY GROUP, LLC By: /s/ Kevin Kimberlin -------------------------- Name:Kevin Kimberlin Title:Nonmember Manager KEVIN KIMBERLIN PARTNERS, L.P. By: /s/ Kevin Kimberlin -------------------------- Name:Kevin Kimberlin Title:Nonmember Manager 5 EX-99 3 exhibit_7-6.txt EXHIBIT 7.6 Exhibit 7.6 AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT AMENDMENT NO. 1 (this "AMENDMENT") to the SECURITIES PURCHASE AGREEMENT, dated as of January 1, 2006 (the "AGREEMENT"), by and between Kevin Kimberlin Partners, L.P., a Delaware limited partnership (the "PURCHASER"), and Spencer Trask Specialty Group, LLC, a Delaware limited liability company (the "SELLER"). A copy the Agreement is attached hereto as Exhibit A. All capitalized terms used but not specifically defined herein shall have the meanings given to them in the Agreement. W I T N E S S E T H: WHEREAS, the Purchaser and the Seller entered into the Agreement, whereby, for valid consideration, the Seller sold to the Purchaser, and the Purchaser purchased from the Seller, the Securities, subject to the terms provided therein; WHEREAS, it had been the intention of the non-member manager of the Seller (the "NON-MEMBER MANAGER") to, pursuant to and in accordance with Section 4.4 of the Operating Agreement of the Seller, distribute a portion of the Securities to one of its members and to omit the same from the Securities subject to the Agreement, and such portion of the Securities were sold to the Purchaser under the Agreement by mutual mistake; and WHEREAS, it had been the intention of both parties that the Purchaser sell to the Seller, and the Seller purchase from the Purchaser, certain warrants to purchase shares of Common Stock of the Company in the amounts, at the exercise prices and expiring on the expiration dates as set forth on Schedule 1 hereto (the "ADDITIONAL WARRANTS"), and that the consideration for such sale to be netted against the consideration for the sale of Securities from the Seller to the Purchaser. NOW, THEREFORE, in order to effectuate the Non-Member Manager's intention to distribute a portion of the Securities to one of the Seller's members and to omit the same from the Securities subject to the Agreement, and in order to effectuate the parties' intention that the Purchaser convey the Additional Warrants to the Seller, and in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. AMENDMENT. The Agreement is hereby amended as follows: A. The term "SHARES" shall mean 4,385,500 shares of Common Stock. B. The term "WARRANTS" shall mean currently exercisable warrants to purchase up to 701,629 shares of Common Stock at an exercise price of $1.15 per share and expiring on March 29, 2009, represented by Warrant Certificates nos. W-8, W-59, W-64, W-65 and a portion of Warrant Certificate no. W-63. The term "ADDITIONAL WARRANTS" shall mean currently exercisable warrants to purchase up to 150,000 shares of Common Stock at an exercise price of $1.00 per share and expiring on August 10, 2008, represented by a portion of Warrant Certificate no. W-53, and currently exercisable warrants to purchase up to 27,000 shares of Common Stock at an exercise price of $0.75 per share and expiring on May 31, 2010, represented by a portion of Warrant Certificate no. W-96. C. Section 1.2 of the Agreement shall be amended and restated in its entirety to read as follows: "1.2 SALE AND PURCHASE OF ADDITIONAL WARRANTS. Purchaser hereby sells to Seller, and Seller shall purchase from the Purchaser, the Additional Warrants, for the Additional Warrant Purchase Price defined in Section 1.3 below." D. The following shall be inserted as a new Section 1.3 of the Agreement: 1.3 PURCHASE PRICE. The purchase price for the Shares shall be the cancellation by the Purchaser of $4,666,172.00 in current indebtedness owed by the Seller to the Purchaser pursuant to that certain grid note of the Seller, dated August 11, 1999 (the "GRID NOTE"). The purchase price for the Warrants shall be the cancellation by the Purchaser of $90,498.21 in current indebtedness owed by the Seller to the Purchaser pursuant to the Grid Note, net of $30,532.40 due to the Purchaser from the Seller as consideration for the Additional Warrants (the "ADDITIONAL WARRANT PURCHASE PRICE"), reflecting a net purchase price for the Warrants of $59,965.81 and an aggregate net purchase price for the Shares and the Warrants of $4,726,137.81 (the "PURCHASE PRICE"). E. The following shall be inserted as new Sections 3.6 and 3.7 of the Agreement: 3.6 INVESTMENT REPRESENTATIONS. The Seller is acquiring the Additional Warrants for the Seller's own account, for investment and not with a view to, or for resale in connection with, any distribution of such Additional Warrants or any part thereof, subject to any registration rights of such Additional Warrants. 3.7 INVESTMENT EXPERIENCE; ACCESS TO INFORMATION. The Seller (i) is an "accredited investor" as that term is defined in Rule 501(a) promulgated under the Securities Act, (ii) is able to fend for itself in transactions of the type contemplated by this Agreement, (iii) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of this investment, (iv) has the ability to bear the economic risks of this investment and understands that it must bear such economic risks for an indefinite period, (v) has been afforded the opportunity to ask questions of, and to receive answers from, the Company and to obtain any additional information, to the extent the Company had such information or could have acquired it without reasonable effort or expense, necessary for the Seller to make an informed investment decision with respect to its purchase of the Additional Warrants and (vi) acknowledges that the Additional Warrants are "restricted securities" under the Securities Act. 2 F. The following shall be inserted as new Sections 4.6 and 4.7 of the Agreement: 4.6. OWNERSHIP. The Purchaser is the sole record holder and beneficial owner of the Additional Warrants, and the Additional Warrants are free and clear of all pledges and restrictions on transfer, other than restrictions of general applicability under the Securities Act and state securities laws. The Purchaser has not granted any person any rights under and is not a party to (or has, as of the date hereof, irrevocably waived all rights under) any option, warrant, right, agreement or commitment providing for the disposition or acquisition of any of the Additional Warrants (other than this Agreement). The Purchaser is not a party to (or has, as of the date hereof, irrevocably terminated) any voting trust, proxy or other agreement or understanding with respect to the voting of any of the Additional Warrants. The resale of such Additional Warrants by the Purchaser as provided herein shall vest the Seller with good and unencumbered title to such Additional Warrants. 4.7 INVESTMENT INTENT. The Purchaser acquired the Additional Warrants for its own account, for investment and not with a view to, or for resale in connection with, any distribution of such Additional Warrants or any part thereof. 2. NO OTHER EFFECT. Except as expressly modified hereby, the Agreement shall remain in full force and effect. 3. NONCONTRAVENTION. Each party hereto severally represents and warrants that the execution and delivery by it of this Amendment and the performance by it of its obligations under the Agreement, as amended hereby, do not and will not (with or without the giving of notice or the passage of time) (a) contravene or conflict with or constitute a violation of any provision of law applicable to it or its properties, assets or activities, (b) result in the creation or imposition of any lien upon any of its properties or assets or (c) constitute a default or breach under or a violation of, or give rise to any right of termination, cancellation or acceleration of, any of its organizational documents or any material contract or agreement to which it is a party or by which it is otherwise bound. 4. GOVERNING LAW/COUNTERPARTS. This Amendment shall be deemed to have been made under, and shall be governed by, the laws of the State of New York applicable to contracts entered into and to be performed solely within such State. This Amendment may be executed in counterparts, each of which shall be deemed an original and both of which shall constitute a single agreement. [SIGNATURE PAGE FOLLOWS.] 3 IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date written below. Dated: October 25, 2006 SPENCER TRASK SPECIALTY GROUP, LLC By: /s/ Kevin Kimberlin -------------------------- Name:Kevin B. Kimberlin Title:Non-Member Manager KEVIN KIMBERLIN PARTNERS, L.P. By: /s/ Kevin Kimberlin -------------------------- Name:Kevin B. Kimberlin Title:General Partner SCHEDULE 1 ---------- ADDITIONAL WARRANTS - -------------------------------------------------------------------- CERTIFICATE NUMBER AMOUNT EXERCISE PRICE EXPIRATION DATE - -------------------------------------------------------------------- W-53 150,000 $1.00 08/10/2008 - -------------------------------------------------------------------- W-96 27,000 $0.75 05/31/2010 - -------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----