EXHIBIT 10.25
THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL
REASONABLY SATISFACTORY TO XXXXXXX.XXX, INC., QUALIFIES AS AN EXEMPT TRANSACTION
UNDER THE ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
XXXXXXX.XXX, INC.
COMMON STOCK PURCHASE WARRANT
Xxxxxxx.xxx, Inc., a Delaware corporation (the "COMPANY"), hereby
certifies that, for value received, Technology Investment Capital Corp., a
Maryland corporation, or its assigns (the "HOLDER"), is entitled, subject to the
terms set forth below, to purchase from the Company, at any time and from time
to time during the period beginning on December ____, 2005 and ending on March
31, 2011 (the "EXPIRATION DATE"), in whole or in part, an aggregate of Seven
Million Two Hundred Sixty-Four Thousand Two Hundred Eighteen (7,264,218) fully
paid and non-assessable shares of the Common Stock, par value $0.001 per share,
of the Company ("COMMON STOCK"), subject to certain adjustment pursuant to
Section 3 hereof (the "WARRANT SHARES"), at an exercise price of $0.001 per
share (the "EXERCISE PRICE").
1. EXERCISE OF WARRANT. The purchase rights evidenced by this warrant
(this "WARRANT") shall be exercised by the Holder surrendering this Warrant,
with the form of subscription at the end hereof duly executed by the Holder, to
the Company at its office in ___________________________, accompanied by payment
of an amount (the "EXERCISE PAYMENT") equal to the Exercise Price multiplied by
the number of shares being purchased pursuant to such exercise, payable as
follows: (a) by payment to the Company in cash, by certified or official bank
check, or by wire transfer of the Exercise Payment, (b) by surrender to the
Company for cancellation of securities of the Company having a Market Price (as
defined below) on the date of exercise equal to the Exercise Payment; or (c) by
a combination of the methods described in clauses (a) and (b) above. In lieu of
exercising the Warrant, the holder may elect to receive a payment equal to the
difference between (i) the Market Price on the date of exercise multiplied by
the number of shares as to which the Warrant is then being exercised and (ii)
the Exercise Payment with respect to such shares, payable by the Company to the
Holder only in shares of Common Stock valued at the Market Price on the date of
exercise. For purposes hereof, the term "MARKET Price" shall mean, with respect
to any day, the average closing price of a share of Common Stock for the 15
consecutive trading days preceding such day on the principal national securities
exchange on which the shares of Common Stock or securities are listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, the average of the reported bid and asked prices during
such 15 trading day period in the over-the-counter market as furnished by the
National Quotation Bureau, Inc., or, if such firm is not then engaged in the
business of reporting such prices, as furnished by any
member of the National Association of Securities Dealers, Inc. selected by the
Company or, if the shares of Common Stock or securities are not publicly traded,
the Market Price for such day shall be the fair market value thereof determined
jointly by the Company and the holder of this Warrant; provided, however, that
if such parties are unable to reach agreement within a reasonable period of
time, the Market Price shall be determined in good faith by the independent
investment banking firm selected jointly by the Company and the holder of this
Warrant 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. In no event may this Warrant be exercised at any time
after the Expiration Date. Notwithstanding the foregoing, if this Warrant is
being exercised in connection with the Company's initial public offering of its
Common Stock, Market Price shall mean the initial public offering price per
share.
1.1 Partial Exercise. This Warrant may be exercised for less than the
full number of shares of Common Stock, in which case the number of shares
receivable upon the exercise of this Warrant as a whole, and the sum payable
upon the exercise of this Warrant as a whole, shall be proportionately reduced.
Upon any such partial exercise, the Company at its expense will forthwith issue
to the Holder a new Warrant or Warrants of like tenor calling for the number of
shares of Common Stock as to which rights have not been exercised, such Warrant
or Warrants to be issued in the name of the Holder hereof or his or its nominee
(upon payment by the Holder of any applicable transfer taxes).
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable
after the exercise of this Warrant and payment of the Exercise Payment, and in
any event within ten (10) days thereafter, the Company, at its expense, will
cause to be issued in the name of and delivered to the Holder a certificate or
certificates for the number of fully paid and non-assessable shares or other
securities or property to which the Holder shall be entitled upon such exercise,
plus, in lieu of any fractional share to which the Holder would otherwise be
entitled, cash in an amount determined in accordance with Paragraph 3.9 hereof.
The Company agrees that the shares so purchased shall be deemed to be issued to
the Holder as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered and payment made for such
shares as aforesaid.
3. ANTI-DILUTION PROVISIONS AND OTHER ADJUSTMENTS. In order to prevent
dilution of the right granted hereunder, the number of Warrant Shares shall be
subject to adjustment from time to time in accordance with this Paragraph 3.
Upon each adjustment of number of Warrant Shares pursuant to this Paragraph 3,
the registered Holder of this Warrant shall thereafter be entitled to acquire
upon exercise, at the Exercise Price, the adjusted number of Warrant Shares.
3.1 Adjustment for Issue or Sale of Common Stock at Less than the
Trigger Price. Except as provided in Paragraph 3.2 or 3.5 below, if and whenever
on or after the date of issuance hereof the Company shall issue or sell, or
shall in accordance with subparagraphs 3.1(1) to (9), inclusive, be deemed to
have issued or sold, any shares of its Common Stock for a consideration per
share of less than $0.18998 per share (the "TRIGGER PRICE" and such transaction
being called the "TRIGGERING TRANSACTION"), then forthwith upon such Triggering
Transaction, the number of Warrant Shares shall, subject to subparagraphs (1) to
(9) of this
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Paragraph 3.1, be increased to the number of Warrant Shares (calculated to the
nearest whole share of Common Stock) determined as follows:
W' = W + [N - (P x N / T)] x W / [O + (P x N / T)]
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1 - {W / [O + (P x N / T)]}
Where:
O= the number of shares of Common Stock outstanding, on
a fully diluted basis, immediately prior to the
Triggering Transaction.
T= the Trigger Price.
W= the number of Warrant Shares immediately prior to the
Triggering Transaction.
N= the number of new shares of Common Stock issued in
connection with the Triggering Transaction.
P= the aggregate consideration and deemed consideration
paid per share of Common Stock issued or issuable as
a result of the Triggering Transaction (the "PURCHASE
PRICE").
W'= the adjusted number of Warrant Shares pursuant to
this Section 3.
By way of example only, if (i) the Company has 100,000,000 shares of
Common Stock outstanding, on a fully diluted basis, immediately prior to the
Triggering Transaction (O=100,000,000), (ii) the number of Warrant Shares
immediately prior to the Triggering Transaction is 300,0000 (W=300,000), (iii)
the Trigger Price is $0.18 (T=0.18), (iv) the price per share paid for the newly
issued shares of Common Stock is $0.05 (P=$0.05) and (v) the number of new
shares to be issued by the Company in connection with the Triggering Transaction
is 1,000,000 (N=1,000,000), the adjusted number of Warrant Shares would be
calculated as follows:
W' = 300,000 + [1,000,000 - (0.05 x 1,000,000 / 0.18)] x 300,000 / [100,000,000 + (0.05 x 1,000,000 / 0.18)]= 302,167
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1 - {300,000 / [100,000,000 + (0.05 x 1,000,000 / 0.18)]}
For purposes hereof, "ON A FULLY DILUTED BASIS" shall mean, as of any
date of determination, (a) all shares of Common Stock issued and outstanding on
such date of determination; (b) all shares of Common Stock issuable upon
conversion of the Series A Preferred Stock, par value $0.001 per share ("Series
A Preferred Stock"), of the Company issued and outstanding on such date of
determination; (c) all shares of Common Stock issuable upon conversion of the
Series B Preferred Stock, par value $0.001 per share("Series B Preferred
Stock"), of the Company issued and outstanding on such date of determination;
(d) all shares of Common Stock issuable upon conversion of the Series C
Preferred Stock, par value $0.001 per share("Series C Preferred Stock"), of the
Company issued and outstanding on such date of determination; and (e) all shares
of Common Stock into which any Convertible Securities and Options outstanding on
such date of determination are convertible or exercisable into; provided, that
such number shall exclude up to 23,478,820 shares of Common Stock to be issued
upon the
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exercise of Options granted pursuant to the Company's stock incentive plan.
For purposes of determining the number of Warrant Shares, the following
subsections (1) to (9), inclusive, shall be applicable:
(1) In case the Company at any time shall in any manner grant
(whether directly or by assumption in a merger or otherwise) any rights
to subscribe for or to purchase, or any options for the purchase of,
Common Stock or any stock or other securities convertible into or
exchangeable for Common Stock (such rights or options being herein
called "OPTIONS" and such convertible or exchangeable stock or
securities being herein called "CONVERTIBLE SECURITIES"), whether or
not such Options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, the Purchase Price
with respect to such Options shall be determined by dividing (x) the
total amount, if any, received or receivable by the Company as
consideration for the granting of such Options, plus the minimum
aggregate amount of additional consideration payable to the Company
upon the exercise of all such Options, plus, in the case of such
Options which relate to Convertible Securities, the minimum aggregate
amount of additional consideration, if any, payable upon the issue or
sale of such Convertible Securities and upon the conversion or exchange
thereof, by (y) the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or the conversion or
exchange of such Convertible Securities).
(2) In case the Company at any time shall in any manner issue
(whether directly or by assumption in a merger or otherwise) or sell
any Convertible Securities, whether or not the rights to exchange or
convert thereunder are immediately exercisable, the Purchase Price of
such Convertible Securities shall be determined by dividing (x) the
total amount received or receivable by the Company as consideration for
the issue or sale of such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof, by (y) the total
maximum number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities).
(3) If the purchase price provided for in any Options referred
to in subparagraph (1), the additional consideration, if any, payable
upon the conversion or exchange of any Convertible Securities referred
to in subparagraphs (1) or (2), or the rate at which any Convertible
Securities referred to in subparagraph (1) or (2) are convertible into
or exchangeable for Common Stock shall change at any time, including by
reason of provisions with respect thereto designed to protect against
dilution, the number of Warrant Shares in effect at the time of such
change shall forthwith be adjusted to the number of Warrant Shares
which would have been in effect at such time had such Options or
Convertible Securities outstanding at the time of such adjustment
provided for such changed purchase price, additional consideration or
conversion rate, as the case may be, at the time initially granted,
issued or sold.
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(4) On the expiration of any Option or the termination of any
right to convert or exchange any Convertible Securities, the number of
Warrant Shares then in effect hereunder shall forthwith be decreased to
the number of Warrant Shares which would have been in effect at the
time of such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such
expiration or termination, never been issued.
(5) In case any Options shall be issued in connection with the
issue or sale of other securities of the Company, together comprising
one integral transaction in which no specific consideration is
allocated to such Options by the parties thereto, such Options shall be
deemed to have been issued without consideration.
(6) In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold or deemed to have been issued or
sold for cash, the consideration received therefor shall be deemed to
be the amount received by the Company therefor. In case any shares of
Common Stock, Options or Convertible Securities shall be issued or sold
for a consideration other than cash, the amount of the consideration
other than cash received by the Company shall be the fair value of such
consideration as determined in good faith by the Board of Directors of
the Company. In case any shares of Common Stock, Options or Convertible
Securities shall be issued in connection with any merger in which the
Company is the surviving corporation, the amount of consideration
therefor shall be deemed to be the fair value of such portion of the
net assets and business of the non-surviving corporation as shall be
attributed by the Board of Directors of the Company in good faith to
such Common Stock, Options or Convertible Securities, as the case may
be.
(7) The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any shares so owned or held
shall be considered an issue or sale of Common Stock for the purpose of
this Paragraph 3.1.
(8) In case the Company shall declare a dividend or make any
other distribution upon the stock of the Company payable in Options or
Convertible Securities, then in such case any Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without
consideration.
(9) For purposes of this Paragraph 3.1, in case the Company
shall take a record of the holders of its Common Stock for the purpose
of entitling them (x) to receive a dividend or other distribution
payable in Common Stock, Options or in Convertible Securities, or (y)
to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the
issue or sale of the shares of Common Stock deemed to have been
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issued or sold upon the declaration of such dividend or the making of
such other distribution or the date of the granting of such right or
subscription or purchase, as the case may be.
3.2 Dividends Not Paid Out of Earnings or Earned Surplus. In the event
the Company shall declare a dividend upon the Common Stock (other than a
dividend payable in Common Stock) payable otherwise than out of earnings or
earned surplus, determined in accordance with generally accepted accounting
principles, including the making of appropriate deductions for minority
interests, if any, in subsidiaries (herein referred to as "LIQUIDATING
DIVIDENDS"), then, as soon as possible after the exercise of this Warrant, the
Company shall pay to the person exercising such Warrant an amount equal to the
aggregate value at the time of such exercise of all Liquidating Dividends
(including but not limited to the Common Stock which would have been issued at
the time of such earlier exercise and all other securities which would have been
issued with respect to such Common Stock by reason of stock splits, stock
dividends, mergers or reorganizations, or for any other reason). For the
purposes of this Paragraph 3.2, a dividend other than in cash shall be
considered payable out of earnings or earned surplus only to the extent that
such earnings or earned surplus are charged an amount equal to the fair value of
such dividend as determined in good faith by the Board of Directors of the
Company.
3.3 Subdivisions and Combinations. In case the Company shall at any
time (i) subdivide the outstanding Common Stock or (ii) issue a stock dividend
on its outstanding Common Stock, the number of Warrant Shares in effect
immediately prior to such subdivision or dividend shall be proportionately
increased by the same ratio as the subdivision or dividend. In case the Company
shall at any time combine its outstanding Common Stock, the number of Warrant
Shares in effect immediately prior to such combination shall be proportionately
decreased by the same ratio as the combination.
3.4 Reorganization, Reclassification, Consolidation, Merger or Sale of
Assets. If any capital reorganization or reclassification of the capital stock
of the Company, or consolidation or merger of the Company with or into another
corporation, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities, cash or other property with respect to
or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the Holder shall have the right to acquire and receive,
upon exercise of this Warrant, such shares of stock, securities, cash or other
property issuable or payable (as part of the reorganization, reclassification,
consolidation, merger or sale) with respect to or in exchange for such number of
outstanding shares of the Common Stock as would have been received upon exercise
of this Warrant at the Exercise Price. The Company will not effect any such
consolidation, merger or sale, unless prior to the consummation thereof the
successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets shall assume
by written instrument mailed or delivered to the Holder at the last address of
the Holder appearing on the books of the Company, the obligation to deliver to
the Holder such shares of stock, securities or assets as, in accordance with the
foregoing provisions, the Holder may be entitled to purchase. If a purchase,
tender or exchange offer is made to and accepted by the holders of more than 50%
of the outstanding shares of Common
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Stock of the Company, the Company shall not effect any consolidation, merger or
sale with the person having made such offer or with any Affiliate of such
person, unless prior to the consummation of such consolidation, merger or sale
the Holder shall have been given a reasonable opportunity to then elect to
receive upon the exercise of this Warrant either the stock, securities or assets
then issuable with respect to the Common Stock or the stock, securities or
assets, or the equivalent, issued to previous holders of the Common Stock in
accordance with such offer. For purposes hereof the term "AFFILIATE" with
respect to any given person shall mean any person controlling, controlled by or
under common control with the given person.
3.5 No Adjustment for Certain Issuances, Exercise of Certain Options,
Warrants, Etc. The provisions of this Section 3 shall not apply to any Common
Stock issued, issuable or deemed outstanding:
(1) 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 that was approved by the Board of
Directors of the Company;
(2) issuances of shares of Common Stock or Convertible
Securities or Options convertible or exchangeable into shares of Common
Stock, of up to 3% of the then outstanding Common Stock of the Company
on a fully diluted basis, 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;
(3) in a public offering;
(4) in connection with the conversion of any outstanding
shares of Series A Preferred Stock;
(5) with respect to which the Holders shall have waived their
rights to receive any such adjustment;
(6) in connection with issuance of any shares of Series B
Preferred Stock, Series C Preferred Stock, or warrants pursuant to that
certain Share Exchange Agreement dated as of December ____, 2005 by and
among the Company, Advanced Aesthetics, Inc. and certain
securityholders of Advanced Aesthetics, Inc.;
(7) issuable upon exercise, exchange or conversion of any
Convertible Securities outstanding as of the date hereof; or
(8) issuable upon exercise, exchange or conversion of any
security referred to in the preceding clauses 1 through 7.
3.6 Notices of Record Date, Etc. In the event that:
(1) the Company shall declare any cash dividend upon its
Common Stock,
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(2) the Company shall declare any dividend upon its Common
Stock payable in stock or make any special dividend or other
distribution to the holders of its Common Stock,
(3) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class
or other rights,
(4) there shall be any capital reorganization or
reclassification of the capital stock of the Company, including any
subdivision or combination of its outstanding shares of Common Stock,
or consolidation or merger of the Company with, or sale of all or
substantially all of its assets to, another corporation,
(5) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in connection with such event, the Company shall give to the Holder:
(ii) at least twenty (20) days' prior written notice of the
date on which the books of the Company shall close or a record shall be
taken for such dividend, distribution or subscription rights or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation
or winding up; and
(iii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation
or winding up, at least twenty (20) days' prior written notice of the
date when the same shall take place. Such notice in accordance with the
foregoing clause (i) shall also specify, in the case of any such
dividend, distribution or subscription rights, the date on which the
holders of Common Stock shall be entitled thereto, and such notice in
accordance with the foregoing clause (ii) shall also specify the date
on which the holders of Common Stock shall be entitled to exchange
their Common Stock for securities or other property deliverable upon
such reorganization, reclassification consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be. Each such
written notice shall be given by first class mail, postage prepaid,
addressed to the Holder at the address of the Holder as shown on the
books of the Company.
3.7 Grant, Issue or Sale of Options, Convertible Securities, or Rights.
If at any time or from time to time on or after the date of issuance hereof, the
Company shall grant, issue or sell any Options, Convertible Securities or rights
to purchase property (the "PURCHASE RIGHTS") pro rata to the record holders of
any class of Common Stock and such grants, issuances or sales do not result in
an adjustment of the number of Warrant Shares under Paragraph 3.1 hereof, then
the Holder shall be entitled to acquire (within thirty (30) days after the later
to occur of the initial exercise date of such Purchase Rights or receipt by such
holder of the notice concerning Purchase Rights to which such holder shall be
entitled under Paragraph 3.6) and upon
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the terms applicable to such Purchase Rights either:
(i) the aggregate Purchase Rights which the Holder could have
acquired if it had held the number of shares of Common Stock acquirable
upon exercise of this Warrant immediately before the grant, issuance or
sale of such Purchase Rights; provided that if any Purchase Rights were
distributed to holders of Common Stock without the payment of
additional consideration by such holders, corresponding Purchase Rights
shall be distributed to the exercising Holder as soon as possible after
such exercise and it shall not be necessary for the Holder specifically
to request delivery of such rights; or
(ii) in the event that any such Purchase Rights shall have
expired or shall expire prior to the end of said thirty (30) day
period, the number of shares of Common Stock or the amount of property
which the Holder could have acquired upon such exercise at the time or
times at which the Company granted, issued or sold such expired
Purchase Rights.
3.8 Fractional Shares. The Company shall not issue fractions of shares
of Common Stock upon exercise of this Warrant or scrip in lieu thereof. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 3.9, be issuable upon exercise of this Warrant, the Company shall in
lieu thereof pay to the person entitled thereto an amount in cash equal to such
fraction, calculated to the nearest one-hundredth (1/100) of a share, multiplied
by the Market Price for the Common Stock, determined as of the date of exercise;
provided, however, that if the Market Price is to be determined by the Company
and the Holder and the parties are unable to reach agreement after a reasonable
period of time, the Market Price shall be determined by the Company's Board of
Directors in good faith rather than by an independent investment banking firm.
3.9 Officers' Statement as to Adjustments. Whenever the number of
Warrant Shares shall be adjusted as provided in Section 3 hereof, the Company
shall forthwith file at the Company's office a statement signed by the Chairman
of the Board, the President, any Vice President or Treasurer of the Company,
showing in reasonable detail the facts requiring such adjustment, the method by
which such adjustment was calculated and the number of Warrant Shares that will
be effective after such adjustment. The Company shall also cause a notice
setting forth any such adjustments to be sent by mail, first class, postage
prepaid, to the record Holder at his or its address appearing on the stock
register. If such notice relates to an adjustment resulting from an event
referred to in Paragraph 3.6, such notice shall be included as part of the
notice required to be mailed and published under the provisions of Paragraph 3.6
hereof.
4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
certificate of incorporation or through reorganization, consolidation, merger,
dissolution, sale of assets or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder set forth herein. Without limiting the
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generality of the foregoing, the Company will not increase the par value of any
shares of stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and at all times will take all such action
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable stock upon the exercise of this
Warrant.
5. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company shall at all times reserve and keep available out of its authorized but
unissued stock, solely for the issuance and delivery upon the exercise of this
Warrant, such number of its duly authorized shares of Common Stock as from time
to time shall be issuable upon the exercise of this Warrant.
6. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to it, or (in the case of mutilation) upon surrender and
cancellation thereof, the Company will issue, in lieu thereof, a new Warrant of
like tenor.
7. REMEDIES. The Company stipulates that the remedies at law of the
Holder in the event of any default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will not be
adequate, and that the same may be specifically enforced.
8. NEGOTIABILITY, ETC. This Warrant is issued upon the following terms,
to all of which each taker or owner hereof consents and agrees:
(a) Subject to the legend appearing on the first page hereof,
title to this Warrant may be transferred by endorsement (by
the Holder executing the form of assignment at the end hereof
including guaranty of signature) and delivery in the same
manner as in the case of a negotiable instrument transferable
by endorsement and delivery.
(b) Any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and
is granted power to transfer absolute title hereto by
endorsement and delivery hereof to a bona fide purchaser
hereof for value; each prior taker or owner waives and
renounces all of his equities or rights in this Warrant in
favor of every such bona fide purchaser, and every such bona
fide purchaser shall acquire title hereto and to all rights
represented hereby.
(c) Until this Warrant is transferred on the books of the Company,
the Company may treat the registered Holder as the absolute
owner hereof for all purposes without being affected by any
notice to the contrary.
(d) Prior to the exercise of this Warrant, the Holder shall not be
entitled to any
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rights of a shareholder of the Company with respect to shares
for which this Warrant shall be exercisable, including,
without limitation, the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings
of the Company, except as provided herein.
(e) The Company shall not be required to pay any Federal or state
transfer tax or charge that may be payable in respect of any
transfer involved in the transfer or delivery of this Warrant
or the issuance or conversion or delivery of certificates for
Common Stock in a name other than that of the registered
Holder or to issue or deliver any certificates for Common
Stock upon the exercise of this Warrant until any and all such
taxes and charges shall have been paid by the Holder or until
it has been established to the Company's satisfaction that no
such tax or charge is due.
9. REDEMPTION OF WARRANT.
(a) If on or before the Expiration Date (i) the Holder has not
exercised this Warrant in whole and (ii) the Company has not
conducted a Qualified Public Offering (as defined below), then
the Holder may elect to require the Company to redeem the
Warrant for an amount in cash equal to the price determined
pursuant to Section 9(b) below (the "WARRANT REDEMPTION
PRICE"). During the 10-day period prior to the Expiration
Date, the Holder shall deliver written notice to the Company
of its election to exercise its rights under this Section 9
(such notice to be accompanied by this Warrant, or if this
Warrant has been lost or stolen, an affidavit evidencing such
loss). For the purposes of this Section 9, a "QUALIFIED PUBLIC
OFFERING" shall mean an underwritten public offering pursuant
to an effective registration statement under the Act covering
the offer and sale of Common Stock for the account of the
Company to the public in which the aggregate net proceeds to
the Company are not less than $25,000,000, and as a result of
which shares of Common Stock are designated for trading on The
New York Stock Exchange, The American Stock Exchange or the
Nasdaq National Market.
(b) The Warrant Redemption Price shall be the fair market value
determined jointly by the Company and the Holder; provided,
however, that if such parties are unable to reach agreement
within 15 days, the Warrant Redemption Price shall be
determined in good faith by the independent investment banking
firm selected jointly by the Company and the Holder 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.
(c) Within thirty business days of the determination of the
Warrant Redemption Price pursuant to Section 9(b) hereof, the
Company shall pay
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the Warrant Redemption Price via wire transfer of immediately
available funds to such account as the Holder shall designate
in writing.
10. SUBDIVISION OF RIGHTS. This Warrant (as well as any new warrants
issued pursuant to the provisions of this paragraph) is exchangeable, upon the
surrender hereof by the Holder, at the principal office of the Company for any
number of new warrants of like tenor and date representing in the aggregate the
right to subscribe for and purchase the number of shares of Common Stock which
may be subscribed for and purchased hereunder.
11. MAILING OF NOTICES, ETC. All notices and other communications from
the Company to the Holder shall be mailed by first-class certified mail, postage
prepaid, to the address furnished to the Company in writing by the last holder
of this Warrant who shall have furnished an address to the Company in writing.
12. HEADINGS, ETC. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect the meaning hereof.
13. CHANGE, WAIVER, ETC. Neither this Warrant nor any term hereof may
be changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
14. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES.
[Signature Page Follows]
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XXXXXXX.XXX, INC.
By: /s/ Xxxx Xxxxxxx
------------------------------
Name:
Title
Dated: December 20, 2005
Attest:
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[TO BE SIGNED ONLY UPON EXERCISE OF WARRANT]
EXERCISE NOTICE
Xxxxxxx.xxx, Inc.
-----------------------------
-----------------------------
Attention: Chief Financial Officer
The undersigned hereby elects to purchase, pursuant to the provisions of the
Warrant to Purchase Shares of Common Stock, par value $0.001 per share, issued
by Xxxxxxx.xxx, Inc. and held by the undersigned, the original of which is
attached hereto, and (check the applicable box):
|_| Tenders herewith payment of the Exercise Payment (as defined in the
Warrant) in full in the form of cash, certified check, official bank
check or wire transfer or check in the amount of $__________________
for _______________ such securities.
|_| Confirms that payment of the Exercise Payment (as defined in the
Warrant) in full by means of a wire transfer in the amount of
$__________________ for _______________ such securities has been made
to the Company.
|_| Elects to surrender to the Company for cancellation securities of the
Company having Market Price (as defined in the Warrant) on the date
hereof equal to the Exercise Payment.
|_| Elects to receive a payment equal to the difference between the Market
Price (as defined in the Warrant), multiplied by the number of shares
as to which the Warrant is being exercised and the Exercise Payment (as
defined in the Warrant) with respect to such shares, payable in shares
of Common Stock valued at the Market Price on the date hereof.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.
The undersigned requests that the certificates for such shares be
issued in the name of, and be delivered to ______________________, whose address
is ________________________.
Dated:
________________________
_____________________________________
(Signature must conform in all respects to name of Holder as specified on the
face of the Warrant)
_____________________________________
Address
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[TO BE SIGNED ONLY UPON TRANSFER OF WARRANT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the right represented by the within Warrant to
purchase __________________ shares of Common Stock of Xxxxxxx.xxx, Inc. to which
the within Warrant relates, and appoints ____________________ attorney to
transfer said right on the books of Advanced Aesthetics, Inc, with full power of
substitution in the premises.
Dated:
___________________________
_____________________________________
(Signature must conform in all respects to name of Holder as specified on the
face of the Warrant)
_____________________________________
Address
IN THE PRESENCE OF:
__________________________
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