EXHIBIT 10.2
ADVANCED AESTHETICS, INC.
REGISTRATION RIGHTS AGREEMENT
September 1, 2005
The parties to this agreement are Advanced Aesthetics, Inc., a Delaware
corporation (the "Company"), and each of the individuals or entities executing a
signature page to this agreement (collectively, the "Stockholders").
Simultaneously with or after the execution and delivery of this
agreement, (i) each of the Stockholders is acquiring shares of the Company's
Series G Preferred Stock, par value $0.01 per share ("Series G Preferred
Stock"), which are convertible into the Company's common stock, par value $0.01
per share ("Common Stock") and a warrant ("Series G Warrant") to purchase shares
of Common Stock, pursuant to Subscription Agreements, dated as of the date
hereof, between the Company and the Stockholders, and (ii) certain of the
Stockholders are acquiring shares of the Company's Series H Preferred Stock, par
value $0.01 per share ("Series H Preferred Stock"), which are convertible into
Common Stock and a warrant ("Series H Warrant") to purchase shares of Common
Stock, as described in Letter Agreements, dated as of the date hereof, between
the Company and those Stockholders.
The shares of Common Stock that any Stockholder may hereafter acquire
upon conversion of his, her or its shares of Series G Preferred Stock and/or
Series H Preferred Stock, as the case may be, and/or exercise of his, her or its
Series G Warrant and/or Series H Warrant, as the case may be, are the only
shares of capital stock of the Company entitled to the rights and benefits, and
subject to the terms and conditions, of this agreement, and are collectively
referred to as, the "Shares."
The Company desires to provide the Stockholders with certain rights
regarding the registration of the Shares, all upon the terms and conditions set
forth below.
The parties agree as follows:
1. Resale Registration.
1.1 Obligation to File. On or prior to the 60th day following
the consummation of the Public Transaction (as defined in the Company's Private
Placement Memorandum, dated September 1, 2005) (the "Filing Date") the Company
shall prepare and file with the Securities and Exchange Commission (the
"Commission") a "resale" Registration Statement (the "Registration Statement")
covering the Shares together with any additional shares of Common Stock issued
in a stock split or stock dividend (collectively, "Registrable Securities") for
an offering to be made on a continuous basis pursuant to Rule 415. The
Registration Statement shall be on Form XX-0, X-0, X-0 or S-3. The Company shall
use commercially reasonable efforts to cause the Registration Statement to be
declared effective under the Securities Act of 1933, as amended (the "Securities
Act") as promptly as possible after the filing thereof, but in any event prior
to the 105th day following the Filing Date (the "Effectiveness Date"), and to
keep such Registration Statement continuously effective under the Securities Act
until such date as is the earlier of (x) the date when all Registrable
Securities
covered by such Registration Statement have been sold, (y) the date on which the
Registrable Securities may be sold without any restriction pursuant to Rule 144
as determined by the counsel to the Company pursuant to a written opinion
letter, addressed to the Company's transfer agent to such effect and (z) the
second anniversary of the Effectiveness Date (such period, the "Effectiveness
Period").
1.2 Liquidated Damages. If: (i) the Registration Statement is
not filed on or prior to the Filing Date, (ii) the Registration Statement filed
or required to be filed hereunder is not declared effective by the Commission by
the Effectiveness Date, or (iii) during the Effectiveness Period, the
Registration Statement ceases for any reason to remain continuously effective as
to all Registrable Securities for which it is required to be effective (any such
failure or breach, an "Event" and the date of the occurrence of such Event, the
"Event Date"), then on each monthly anniversary of each such Event Date, the
Company shall pay to each Stockholder an amount in cash, as partial liquidated
damages and not as a penalty, of 1% of the aggregate purchase price paid by such
Holder for any Registrable Securities then held by such Stockholder for each
30-day period, or pro rata for any portion thereof, following such Event Date
that the applicable Event shall remain uncured. For the purposes of calculating
the amount due, each month will be deemed to be 30 days in length. Any
liquidated damages payable under this Section 1.2, shall be in addition to any
remedies available to the Stockholders at law or in equity by reason of any
breach of this Agreement by the Company.
2. Registration Procedures.
2.1 Obligations of the Company. In connection with the
registration of any Registrable Securities under the Securities Act as provided
in Section 1, the Company shall:
(a) prepare and file with the SEC the requisite registration
statement to effect such registration and thereafter use its commercially
reasonable efforts to cause such registration statement to become and remain
effective (subject to clause (b) below); provided, however, that the Company may
discontinue any registration of its securities that are not Registrable
Securities at any time prior to the effective date of the registration statement
relating thereto;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration statement
for such period as shall be required for the disposition of all of such
Registrable Securities;
(c) furnish to the Stockholders such number of conformed
copies of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed under Rule
424 under the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, as the Stockholders may reasonably
request;
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(d) use its commercially reasonable efforts (x) to register or
qualify all Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of such
states of the United States of America where an exemption is not available and
as the Stockholders shall reasonably request, (y) to keep such registration or
qualification in effect for so long as such registration statement remains in
effect, and (z) to take any other action that may reasonably be necessary or
advisable to enable the Stockholders to consummate the disposition in such
jurisdictions of the securities to be sold by the Stockholders, except that the
Company shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would not, but
for the requirements of this paragraph (d), be obligated to be so qualified or
to so consent to general service of process in any such jurisdiction;
(e) notify the Stockholders when a prospectus relating thereto
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 under which they were made, and at the request of the
Stockholders promptly prepare and furnish to them 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 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 under which
they were made; and
(f) pay all expenses incident to the Company's performance of
or compliance with its obligations hereunder, including, without limitation, all
listing fees, all printing expenses, the fees and disbursements of counsel for
the Company; its independent public accountants and of one counsel to the
Stockholders; provided, however, that the foregoing obligation of the Company
shall exclude, and the Stockholders shall pay, underwriters fees and
underwriting discounts and commissions in respect of the Registrable Securities
being registered hereunder.
2.2 Obligations of the Stockholders.
(a) The Company may require the Stockholders to furnish the
Company such information regarding the Stockholders and the distribution of the
Stockholders' Registrable Securities as the Company may from time to time
reasonably request in writing, based on its reasonable belief that such
information is required to be disclosed in the Registration Statement pursuant
to the Securities Act and applicable state securities laws.
(b) Upon receipt of any notice from the Company of the
happening of an event of the kind described in Section 2.1(e), the Stockholders
shall forthwith discontinue their disposition of Registrable Securities pursuant
to the registration statement relating to such Registrable Securities until the
Stockholders' receipt of the copies of the supplemented or amended prospectus
contemplated by Section 2.1(e) and, if so directed by the Company, the
Stockholders shall deliver to the Company all copies, other than permanent file
copies, then in the Stockholders' possession, of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice.
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3. Indemnification.
3.1 Indemnification by the Company. In the event of any
registration statement filed pursuant to Section 1, the Company shall indemnify
and hold harmless the Stockholders and their respective directors, officers and
affiliates and each other individual or entity, if any, who controls (within the
meaning of the Securities Act) any Stockholder (each of the foregoing, a
"Stockholder Indemnitee"), insofar as losses, claims, damages, or liabilities
(or actions or proceedings, whether commenced or threatened, in respect thereof)
("Losses") to a Stockholder Indemnitee arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any such
registration statement, any preliminary prospectus, final prospectus, or summary
prospectus contained therein, 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 (in the case of any
preliminary prospectus, final prospectus, or summary prospectus, in light of the
circumstances in which they were made) not misleading, and the Company shall
reimburse each Stockholder Indemnitee for any legal or any other fees, costs and
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon an untrue statement or
omission made in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of a Stockholder or such underwriter, as
the case may be, for use in the preparation thereof; and provided, further,
however, that the Company shall not be liable to any Stockholder Indemnitee in
any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of such person's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such person if such
statement or omission was corrected in such final prospectus so long as such
final prospectus, and any amendments or supplements thereto, have been furnished
to such underwriter or any Stockholder, as applicable.
3.2 Indemnification by the Stockholders. If any Registrable
Securities are included in any registration statement, the Stockholders of such
Registrable Securities so registered shall, severally and not jointly, indemnify
and hold harmless the Company and each director, officer and affiliate of the
Company, and each other individual or entity, if any, who controls (within the
meaning of the Securities Act) the Company (each of the foregoing, a "Company
Indemnitee") insofar as Losses to a Company Indemnitee arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or an omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of any preliminary prospectus, final prospectus, or summary
prospectus, in light of the circumstances in which they were made) not
misleading, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written information
pertaining to such Stockholder and furnished to the Company by such Stockholder
for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement,
provided, however, that no
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Stockholder shall have any liability under this Section 3.2 for any amount in
excess of the net proceeds actually received by such Stockholder from the sale
of the Registrable Securities included in such registration statement.
3.3 Notice of Claims, Etc.
(a) Promptly after receipt by an indemnified party of notice
of the commencement of any action or proceeding involving a claim referred to in
Sections 3.1 or 3.2, such indemnified party will, if a claim in respect thereof
is to be made against an indemnifying party, immediately give written notice to
the latter of the commencement of such action; provided, however, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its indemnity obligations, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in the reasonable judgment of counsel for such indemnified party, a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim (in which case the indemnified party shall be entitled
to retain separate counsel as provided below), the indemnifying party shall be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may wish and
at any time, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof other
than reasonable costs related to the indemnified party's cooperation with the
indemnifying party; provided, however, that the indemnified party may, at its
own expense, retain separate counsel to participate in such defense.
(b) No indemnifying party shall be liable for any settlement
of any action or proceeding affected without its written consent, which consent
shall not be unreasonably withheld. No indemnifying party shall, without 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 to such claim or litigation.
3.4 Contribution. If indemnification shall for any reason be
held by a court to be unavailable to an indemnified party in respect of any
loss, claim, damage or liability, or any action in respect thereof, then, in
lieu of the amount paid or payable under Section 3.1 or Section 3.2, as
applicable, the indemnified party and the indemnifying party shall contribute to
the aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating the same), (a) in
such proportion as is appropriate to reflect the relative fault of the Company
on the one hand and the Stockholders on the other hand that resulted in such
loss, claim, damage or liability, or action in respect thereof, with respect to
the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations or (b) if the allocation provided by item (a) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Stockholders on the other, as determined by a court of competent jurisdiction.
No individual or entity guilty of fraudulent
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misrepresentation (within the meaning of the Securities Act) shall be entitled
to contribution from any individual or entity that was not guilty of such
fraudulent misrepresentation. In addition, no individual or entity shall be
obligated to contribute hereunder any amounts in payment for any settlement of
any action or claim, affected without such individual or entity's consent, which
consent shall not be unreasonably withheld.
4. Miscellaneous.
4.1 Reorganization, Consolidation, Merger, etc. In case that
at any time the Company shall (a) effect an exchange or conversion of the Common
Stock for or into securities of another corporation or other entity, (b) effect
a consolidation or merger of the Company with or into any other person (other
than a merger that does not result in any reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock), (c) effect a sale, lease
or other conveyance of all or substantially all of the assets of the Company, or
(d) effect a Public Transaction (as defined in the Company's Private Placement
Memorandum dated September 1, 2005), the Company shall, as a condition to the
consummation of such transaction, cause its successor in interest to assume all
of its obligations under this Agreement.
4.2 Notices; Etc. All notices and other communications
required or permitted to be given pursuant to this agreement shall be in writing
signed by the sender, and shall be deemed duly given (a) on the date delivered
if personally delivered; (b) on the date sent by telecopier with automatic
confirmation by the transmitting machine showing the proper number of pages were
transmitted without error; (c) on the next business day after being sent by
Federal Express or other recognized overnight mail service for next day or next
business day delivery; or (d) five business days after mailing, if mailed by
United States postage-prepaid certified or registered mail, return receipt
requested, in each case addressed to the parties at the following addresses or
telecopier numbers (or such other address or telecopier number as may be
specified in a notice given in accordance with the provisions hereof):
If to the Company:
000 Xxxxxxx Xxx., Xxxxx 000
Xxx Xxxx, XX 00000
Attention: President
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
If to a Stockholder, to the address or telecopier number of
such Stockholder set forth on a signature page below.
4.3 Waivers. No course of dealing and no delay on the part of
any party hereto in exercising any right, power or remedy conferred by this
agreement shall operate
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as a waiver thereof or otherwise prejudice such party's rights, powers and
remedies conferred by this agreement or shall preclude any other or further
exercise thereof or the exercise of any other right, power and remedy. The
Company may waive performance of any obligation owing to it, as to some or all
of the Stockholders, or agree to accept alternatives to such performance,
without obtaining the consent of any Stockholder.
4.4 Binding Effect; Assignability. This agreement shall be
binding upon and, except as otherwise provided herein, shall inure to the
benefit of the respective parties and their permitted successors and assigns. A
Stockholder may only assign his, her or its rights hereunder in accordance with
a transfer of his, her or its Shares and only pursuant to a written instrument
in form and substance satisfactory to the Company in which the transferee agrees
to assume the obligations of such Stockholder hereunder.
4.5 Severability. Any provision of this agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which renders
any provisions hereof prohibited or unenforceable in any respect.
4.6 Amendment, Etc. No term or provision of this Agreement may
be amended, waived (except as otherwise provided in Section 4.3), altered,
modified, rescinded or terminated except by a written instrument signed by the
Company and a majority of the Stockholders, and any such amendment, waiver,
alteration, modification, rescission or termination shall be binding on all of
the Stockholders.
4.7 Law Governing. This agreement shall be governed by and
construed in accordance with the law of the state of Delaware, applicable to
agreements made and to be performed entirely in Delaware, without regard to the
principles of conflicts of law of such state.
4.8 Entire Agreement. This agreement contains, and is intended
as, a complete statement of all the terms of the arrangements between the
parties with respect to the matters provided for, supersedes any previous
agreements and understandings between the parties with respect to those matters
and cannot be changed or terminated orally.
4.9 Legal Fees. In the event that it becomes necessary for any
of the parties hereto to retain legal counsel to enforce such party's rights
under this agreement and such party prevails in such enforcement, all reasonable
out-of-pocket costs and expenses and all reasonable out-of-pocket attorneys'
fees associated with the retention of such counsel shall be borne by the other
parties hereto with respect to whom the enforcing party shall have enforced its
rights.
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The parties have executed and delivered this Registration
Rights Agreement as of the date first written above.
The Company: ADVANCED AESTHETICS, INC.
By: ______________________________
Name: Xxxxxx Xxxxxx
Title: Vice President
The Stockholder: ________________________________
By:_____________________________
Name:
Title:
________________________________
By:_____________________________
Name:
Title:
________________________________
By:_____________________________
Name:
Title:
________________________________
By:_____________________________
Name:
Title:
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________________________________
By:_____________________________
Name:
Title:
________________________________
By:_____________________________
Name:
Title:
________________________________
By:_____________________________
Name:
Title:
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By:_____________________________
Name:
Title
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