EXHIBIT 10.24
EXECUTION COPY
ADVANCED AESTHETICS, INC.
SECURITYHOLDERS AGREEMENT
March 31, 2004
This SECURITYHOLDERS AGREEMENT (this "AGREEMENT"), dated March 31, 2004,
is entered into between Advanced Aesthetics, Inc., a Delaware corporation (the
"COMPANY") and Technology Investment Capital Corp., a Maryland corporation (the
"INVESTOR").
WHEREAS, the Investor owns a warrant ("WARRANT") to purchase shares of
common stock, par value $0.01 per share, of the Company ("COMMON STOCK"; the
shares of Common Stock into which the Warrant is exercisable, the "WARRANT
SHARES"; and the Warrant and the Warrant Shares, collectively, the
"SECURITIES"); and
WHEREAS, the Company and the Investor desire to promote their mutual
interests by imposing certain limitations on the transfer of the Securities.
NOW THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. Certain Transfer Restrictions.
(a) The Investor may only transfer any right, title or interest in any or
all of its Securities, in compliance with the terms of in accordance with
Section 1, Section 2 or Section 3 of this Agreement.
(b) Any purported transfer in violation of this Agreement shall be void
and of no force and effect.
(c) Any transferee of Securities hereunder shall execute and deliver to
the Company an instrument, satisfactory to the Company, that evidences such
transferee's agreement to be bound by the provisions hereof with the same rights
and obligations as the Investor; and the Investor shall cause each such
transferee to agree to the foregoing as a condition to such transfer.
(d) The Investor may not transfer any Securities if such transfer would
subject the Company to the reporting requirements of the Securities Exchange Act
of 1934, as amended.
2. Certain Rights to Cause Sales of Securities by the Investor.
(a) In the event that stockholders of the Company, whether or not a party
to this Agreement, who collectively own a majority of the Common Stock (the
"SELLING STOCKHOLDERS"), including, without limitation, the Common Stock
issuable upon exercise, exchange or conversion of all outstanding convertible
securities and options to purchase Common Stock (together with the Common Stock,
"COMMON SHARE EQUIVALENTS") other than options to purchase Common Stock granted
to the Company's directors, officers, employees and consultants, determine to
participate in or otherwise effect a Sale Transaction (as defined below),
then the Selling Stockholders shall have the right (but not the obligation) to
require the Investor to participate in the same transaction on the same terms
and conditions as the Selling Stockholders, subject to the right of the Selling
Stockholders in Section 2(b)(iii). The Selling Stockholders shall give the
Company and the Investor written notice of such determination not less than 10
days prior to the proposed date of the Sale Transaction (a "COMPANY SALE
NOTICE").
A "SALE TRANSACTION" means a merger or consolidation of the Company with
or into another corporation or other entity (whether or not the Company is the
surviving corporation), a reclassification, redemption, sale or exchange of all
or any part of the Common Stock or other capital stock of the Company owned by
the Selling Stockholders or a sale of all or substantially all of the assets of
the Company but only if, immediately following any of the foregoing
transactions, a party or parties other than the Selling Stockholders and persons
who were affiliates of the Selling Stockholders immediately prior to such
transaction own a majority of the business, stock or assets (as applicable) of
the Company or its successor.
(b) In any Sale Transaction, the Investor:
(i) shall be required to transfer the same percentage of Securities
as the percentage of Common Share Equivalents transferred by the Selling
Stockholders, such percentage to be determined by dividing the number of
Common Share Equivalents being transferred by the Selling Stockholders by
the aggregate number of Common Share Equivalents owned by such Selling
Stockholders;
(ii) to the extent the Investor is transferring shares of Common
Stock, it shall receive the same consideration per share of Common Stock
as is being received upon such transfer per share of Common Stock being
transferred by the Selling Stockholders;
(iii) may exercise the Warrant into the Warrant Shares prior to the
consummation thereof or, to the extent it does not so convert such
Warrant, it shall receive the same consideration per share of Common Stock
as is being received upon such transfer per share of Common Stock being
transferred by the Selling Stockholders, minus the aggregate exercise
price of the Warrant Shares so sold as set forth in the Warrant;
(iv) shall make appropriate and customary representations,
warranties and covenants and indemnifications in such sale; provided, that
the Investor shall not be required to make representations, warranties,
covenants and indemnifications more onerous than those made by the Selling
Stockholders in such transaction.
(c) In any Sale Transaction, the Company and the Investor shall take all
action in their power necessary to cause the consummation of such Sale
Transaction, including, without limitation, exercising, converting and
exchanging any securities that are exchangeable for, or convertible into, Common
Stock and obtaining all consents and approvals reasonably necessary, desirable
or appropriate for the Investor to consummate the Sale Transaction. Accordingly,
the Investor:
(i) agrees to vote, or to execute and deliver written consents in respect
of, all Securities owned in connection with the approval of a Sale Transaction
and all related
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matters; and
(ii) affirms the Investor's agreement to vote for such Sale Transaction is
given as a condition of this Agreement and as such is coupled with an interest
and is irrevocable.
The above voting agreement shall not terminate with respect to any
Securities owned by the Investor until the earlier to occur of (x) such time as
such Securities are no longer owned by the Investor and (y) the termination of
this Agreement.
(d) With respect to all matters that are the subject of the above voting
agreement, the Investor hereby:
(i) irrevocably appoints the President and Secretary of the Company,
and each of them, with full power of substitution and resubstitution,
together with their respective heirs, successors and assigns, as the
Investor's attorney-in-fact to vote and give or withhold consent with
respect to all Securities held by (or subject to a proxy in favor of) the
Investor from time to time in such manner as either of them shall
determine in his sole and absolute discretion, at any meeting (whether
annual or special and whether or not an adjourned meeting) of the Company
or by written consent or otherwise, giving and granting to them all powers
the Investor would possess if personally present and hereby ratifying and
confirming all that they shall lawfully do or cause to be done by virtue
hereof; and
(ii) affirms that the irrevocable proxy granted above is coupled
with an interest and may not, under any circumstances, be revoked.
The Investor hereby agrees to recognize the foregoing proxy holders as the
sole attorney and proxy for the Investor (with respect to all matters that are
subject to such proxy). The proxy granted in this Section 2(d) shall not
terminate with respect to any Securities owned by the Investor until the earlier
to occur of (x) such time as such Securities are no longer owned by the Investor
and (y) the termination of this Agreement.
(e) In the event of a proposed Sale Transaction, the Investor shall in all
events be required to deliver each of the Investor's Securities in exchange for
the payment therefor and take such other actions as are required to effect the
closing of such Sale Transaction regardless of whether there is any dispute
between the Company and the Investor or between the Investor and any of the
other stockholders of the Company. Any such dispute shall be resolved after the
closing and shall in no event delay the closing.
(f) At the closing of any Sale Transaction, the Investor shall deliver
certificates or other instruments evidencing the Securities to be transferred in
valid form for transfer with appropriate duly executed assignments, stock powers
or endorsements, as the case may be, bearing any necessary documentary stamps
and accompanied by such certificates of authority, consents to transfer or other
instruments or evidences of the good title of the Investor to such Securities,
free and clear of all liens, claims and other encumbrances as may reasonably be
requested by the Selling Stockholders.
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3. Right of First Offer.
(a) Other than a transfer pursuant to Section 2, the Investor may transfer
any of its Securities (the "OFFERED SECURITIES") only if the Investor receives a
bona fide offer from an independent third-party (an "INDICATIVE OFFER") and
causes the Company to be given notice thereof (a "FIRST OFFER NOTICE"). The
First Offer Notice shall describe the Indicative Offer in reasonable detail.
(b) The Company shall have the right, exercisable by written notice (the
"PURCHASE NOTICE") given to the Investor within 10 business days after the date
the First Offer Notice is received, to offer to purchase from the Investor all
(but not less than all) of the Securities that are the subject of the First
Offer Notice on terms no less favorable to the Investor than the terms of the
Indicative Offer. In the event that the Investor and the Company are unable to
agree upon whether the terms set forth in the Purchase Notice are no less
favorable than the terms of the Indicative Offer, then such determination shall
be made in good faith by the independent investment banking firm selected
jointly by the Company and the Investor or, if that selection cannot be made
within 15 days, by an independent investment banking firm selected by the
American Arbitration Association in accordance with its rules. If given, the
Purchase Notice shall constitute the irrevocable offer by the Company to
purchase such Securities subject only to the conditions set forth in the First
Office Notice and as set forth in Section 3(c).
(c) In the event the Company elects to purchase the Offered Securities,
such Offered Securities shall be purchased and sold in accordance with the terms
set forth in the Purchase Notice no more than 15 business days after the date of
the Purchase Notice. At the closing of such purchase and sale, the Investor
shall deliver the Offered Securities to the Company in valid form for transfer
with appropriate duly executed assignments, stock powers or endorsements, as the
case may be, bearing any necessary documentary stamps and accompanied by such
certificates of authority, consents to transfer or other instruments or
evidences of good title of the Investor to the Offered Securities, free and
clear of all Liens, against receipt of the purchase price therefor in cash.
(d) In the event the Company shall not elect to purchase the Offered
Securities, the Investor may thereafter transfer all of the Offered Securities
to a third party at any time during the 120-day period following the expiration
of the 10 business day period in which the Company was required to send the
Purchase Notice at a price per share of not less than 95% of the price per share
set forth in the First Offer Notice. Any such transfer of Offered Securities to
a third party shall be subject, with respect to a Sale Transaction, to Section
2.
4. Preemptive Right.
(a) In the event that the Company at any time proposes to issue any Common
Share Equivalents (other than Excluded Securities, as defined below) pursuant to
an offering by the Company that is exempt from the registration requirements of
the Securities Act of 1933, as amended (the "PREEMPTIVE SECURITIES"), the
Company shall promptly provide written notice thereof (a "PREEMPTIVE RIGHTS
NOTICE") to the Investor. Such notice shall specify total size of the offering
and the number and terms of each type and class of Preemptive Security that the
Company proposes to issue and shall include therewith any documentation relating
thereto. The Investor shall have the option, exercisable by giving written
notice to the Company within five business days after receipt of the Preemptive
Rights Notice (the "PREEMPTIVE RIGHTS PERIOD"),
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to purchase from the Company such amount of the Preemptive Securities determined
by dividing (x) the number of shares of Common Stock held by the Investor and
issuable to the Investor, assuming conversion in full of any convertible
securities then held by the Investor, by (y) the total number of shares of
Common Stock then outstanding, including for purposes of this calculation all
shares of Common Stock issuable upon conversion in full of any then outstanding
convertible securities.
(b) The provisions of this Section 4 shall not be applicable to the
issuance of the following securities (the securities issued pursuant to (i)
through (vii) below, "EXCLUDED SECURITIES"):
(i) securities issued in connection with the acquisition by the
Company of a business entity or segment of any such entity by merger,
purchase of stock or assets or otherwise approved by the Board;
(ii) securities issued to employees, consultants, officers or
directors of the Company pursuant to any stock option, stock purchase or
stock bonus plan, agreement or arrangement, which issuance has been
approved by the Board;
(iii) securities issued in connection with any direct or indirect
borrowings by the Company, including any type of loan or payment evidenced
by any type of debt instrument;
(iv) securities issued in connection with any stock split, stock
dividend or similar transaction of the Company;
(v) securities issued in connection with the initial underwritten
public offering of Common Stock pursuant to a registration statement on
Form X-0, X-0 or S-3 (or similar form of general application prescribed by
the Securities and Exchange Commission) (such offering, an "IPO");
(vi) securities issued in connection with the conversion of any
Common Stock Equivalents outstanding as of the date hereof;
(vii) any securities issuable upon exercise, exchange or conversion
of any security referred to in the preceding clauses (i) through (vi).
(c) Any Preemptive Securities purchased by the Investor shall be sold by
the Company at the same price (except that, at its option, the Investor may, if
the consideration proposed to be received by the Company is other than cash, pay
cash in an amount equal to the fair market value (as determined by the Board) of
such other consideration), and on the same terms and conditions set forth in the
Preemptive Rights Notice. The closing for such transaction shall take place as
proposed by the Company (but in no event (x) prior to the closing of the sale of
the Preemptive Securities to the other purchasers or (y) less than 10 business
days after the Investor shall have exercised its option to purchase Preemptive
Securities offered pursuant to a Preemptive Rights Notice), at which closing the
Company shall deliver certificates for the Preemptive Securities in the name of
the Investor against receipt of the consideration therefor. All Preemptive
Securities acquired by the Investor pursuant to this Section 4 shall
automatically and without further action be subject to this Agreement.
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(d) Unless the Company shall have previously sold Preemptive Securities in
the manner referred to in Section 4(a), the Company may sell any Preemptive
Securities that the Investor shall decline to purchase on terms and subject to
conditions that are no less favorable to the Company than those set forth in the
Preemptive Rights Notice at any time during the 120-day period following
expiration of the Preemptive Rights Period.
5. Termination. Each provision of this Agreement shall automatically and
without further action terminate upon: (a) the closing of the Company's IPO; and
(b) the consummation of a Sale Transaction.
6. Miscellaneous.
6.1. Notices, Etc. All communications under this Agreement shall be in
writing and shall be delivered by hand or facsimile or mailed by overnight
courier or by registered or certified mail, postage prepaid:
(a) if to the Investor, at 0 Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxxxxx 00000, marked for the attention of Xxxx X. Xxxxxxxxx, (facsimile:
(000) 000-0000), or at such other address as the Investor may have furnished the
Company in writing; with a copy to Xxxxxx X. Xxxxxxx, Esq. at Xxxxxxx Xxxx &
Xxxxxxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (facsimile: (212)
728-9763); and
(b) if to the Company, at 000 Xxxxx Xxxxxxx Xxxxx, X-000, Xxxx Xxxx Xxxxx,
Xxxxxxx 00000 (facsimile: (000) 000-0000), marked for attention of Xx. Xxxxxx
Xxxxxx, or at such other address as it may have furnished in writing to the
Investor; with a copy to Xxxxxx X. Xxxxxxx, Esq. at Jenkens & Xxxxxxxxx Xxxxxx
Xxxxxx LLP, The Chrysler Building, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (facsimile: (000) 000-0000).
Any notice so addressed shall be deemed to be given: if delivered by hand or
facsimile, on the date of such delivery; if mailed by courier, on the first
business day following the date of such mailing; and if mailed by registered or
certified mail, on the third business day after the date of such mailing.
6.2. Further Assurances. From and after the date hereof, the parties
hereto will, without further consideration, execute and deliver such further
documents and instruments and take such other actions as may be necessary or
desirable to perfect the transactions contemplated hereby.
6.3. Entire Agreement. This agreement supersedes all prior and/or
contemporaneous negotiations, understandings, discussions and agreements
(written or oral) between the parties with respect to the subject matter hereof
(all of which are merged herein) and contains the sole and entire agreement
among the parties hereto with respect to the subject matter hereof.
6.4. Governing Law. This agreement shall be construed, interpreted and
enforced in accordance with, and shall be governed by, the laws of the state of
New York (other than those conflict of law rules that would defer to the
substantive laws of another jurisdiction).
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6.5. Jurisdiction; Venue. Each of the parties hereto hereby irrevocably
consents and submits to the exclusive jurisdiction of the courts of the State of
New York, the courts of the United States for the Southern District of New York
and appellate courts from any thereof in connection with any dispute arising out
of or relating to this Agreement or the transactions contemplated hereby, waives
any objection to venue in such court and agrees that service of any summons,
complaint, notice or other process relating to such dispute may be effected in
the manner provided by Section 6.1.
6.6. 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. This agreement
shall not be assignable by the Investor except as otherwise provided herein.
6.7. No Third Party Beneficiaries. Nothing contained in this Agreement,
whether express or implied, is intended, or shall be deemed, to create or confer
any right, interest or remedy for the benefit of any person other than as
otherwise provided in this Agreement.
6.8. Amendments and Waiver. No term or provision of this Agreement may be
amended, waived, altered, modified, rescinded or terminated except by a written
instrument signed by the Company and the Investor.
6.9. Severability. If any provision of this Agreement is found to be void
or unenforceable by a court of competent jurisdiction, the remaining provisions
of this Agreement shall nevertheless be binding upon the parties with the same
force and effect as though the unenforceable part had been severed and deleted.
6.10. Specific Performance. Inasmuch as the Securities cannot be readily
purchased or sold in the open market and the parties hereto desire to impose
certain restrictions on transfers of the Securities, irreparable damage will
result in the event that this Agreement is not specifically enforced and the
parties hereto agree that any damages available at law for a breach of this
Agreement would not be an adequate remedy. Therefore, the provisions hereof and
the obligations of the parties hereunder shall be enforceable in a court of
equity, or other tribunal having jurisdiction, by a decree of specific
performance, and appropriate injunctive relief may be applied for and granted in
connection therewith.
6.11. Counterparts; Effectiveness. This agreement may be executed in one
or more counterparts (including signature pages delivered by facsimile
transmission), each of which shall be deemed an original but all of which
together shall constitute one and the same agreement. This agreement shall
become effective when each party hereto shall have received counterparts hereof
signed by all of the other parties hereto.
[The next page is the signature page]
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands to
this Securityholders Agreement as of the date first written above.
ADVANCED AESTHETICS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Vice Presiden
TECHNOLOGY INVESTMENT CAPITAL
CORP.
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
Title: Chief Operating Officer
