December 20, 2006
XxxxXxx.Xxx Inc.
000 Xxxxxxx 0, 0xx Xxxxx
Xxxxxxx, XX 00000
Re: AMENDMENT OF REGISTRATION RIGHTS AGREEMENT
Gentlemen:
Reference is made to that certain Registration Rights
Agreement, dated September 1, 2005 (the "Registration Rights Agreement"), among
Xxxxxxx Advanced Aesthetics, Inc. and the investors listed therein (the
"Stockholders") which agreement has been assumed by XxxxXxx.Xxx Inc. (the
"Company"). Unless otherwise defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Registration Rights Agreement.
The Company and the undersigned investors, constituting a
majority of the Stockholders, hereby amend the Registration Rights Agreement,
pursuant to Section 4.6 thereto, by deleting Section 1.2 of the Registration
Rights Agreement in its entirety and replacing it with the following:
"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 the Company shall pay
liquidated damages and not as damages for such failure in an
amount equal to 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. The liquidated damages payable
hereunder shall be paid to the Holders by the issuance of
warrants to purchase shares of Common Stock, at an exercise
price of $0.001 per share ("COMMON STOCK WARRANTS"). The
number of shares of Common Stock underlying the Common Stock
Warrants to be issued for each period shall be calculated by
dividing the liquidated damages due to the Holders, by the
higher of (A) the average closing trading price of the Common
Stock during the 30-day period immediately before the last day
of any relevant period and (B) $0.211254. Notwithstanding the
foregoing, with respect to any liquidated damages payable
hereunder accruing for periods after September 30, 2006, a
Holder may elect to
receive such Holder's Periodic Amount in cash in lieu of
Common Stock Warrants; PROVIDED, that such Holder shall
provide the Company with written notice of such election
within 10 days following the end of each period. Any
liquidated damages payable under this Section 1.2, shall be
paid monthly, on the last day of the calendar month subsequent
to the month during which such liquidated damages accrued
(commencing on January 31, 2007) and is 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."
It is hereby agreed that, except as specifically provided
herein, this Amendment does not in any way affect or impair the terms,
conditions and other provisions of the Registration Rights Agreement and all
terms, conditions and other provisions of the Registration Rights Agreement
shall remain in full force and effect except to the extent specifically amended,
modified or waived pursuant to the provisions of this Amendment.
2
This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.
Very truly yours,
PEQUOT MARINER MASTER FUND, L.P.
By:
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Name:
Title:
PREMIUM SERIES PPC LIMITED-CELL 32
By:
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Name:
Title:
PEQUOT HEALTHCARE FUND, L.P.
By:
--------------------------------------
Name:
Title:
PEQUOT HEALTHCARE OFFSHORE FUND, INC.
By:
--------------------------------------
Name:
Title:
PEQUOT SCOUT FUND, L.P.
By:
--------------------------------------
Name:
Title:
3
PEQUOT NAVIGATOR OFFSHORE FUND, INC.
By:
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Name:
Title:
PEQUOT DIVERSIFIED MASTER FUND, LTD.
By:
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Name:
Title:
PEQUOT HEALTHCARE INSTITUTIONAL FUND, L.P.
By:
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Name:
Title:
PREMIUM SERIES PCC LIMITED-CELL 33
By:
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Name:
Title:
XXXXXX AND XXXXXXX INTERNATIONAL
By:
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Name:
Title:
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X. XXXXXXXXX MCBAINE
4
LAGUNITAS PARTNERS, L.P.
By:
--------------------------------------
Name:
Title:
FIREFLY PARTNERS
By:
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Name:
Title:
XXX X. AND XXXXX X. XXXXXX TRUST
By:
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Name:
Title:
VFT SPECIAL VENTURES, LTD.
By:
--------------------------------------
Name:
Title:
BALLYSHANNON FAMILY PARTNERSHIP, L.P.
By:
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Name:
Title:
BALLYSHANNON PARTNERS, L.P.
By:
--------------------------------------
Name:
Title:
5
CABERNET PARTNERS, L.P.
By:
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Name:
Title:
NORTHWOOD CAPITAL PARTNERS, L.P.
By:
--------------------------------------
Name:
Title:
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XXXXXX XXXXXX
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XXX XXXX
GGCP, INC.
By:
--------------------------------------
Name:
Title:
Agreed:
XXXXXXX.XXX INC.
By:
------------------------------------
Name:
Title:
6
