EXHIBIT 10.15
ADVANCED AESTHETICS, INC.
REGISTRATION RIGHTS AGREEMENT
November 25, 2003
The parties to this agreement are Advanced Aesthetics, Inc., a Delaware
corporation (the "Company"), and each of the other individuals or entities
executing a signature page to this agreement (collectively, the "Stockholders").
Simultaneously with the execution and delivery of this agreement, the
Stockholders are acquiring shares of the Company's Series A Preferred Stock, par
value $0.01 per share ("Series A Preferred Stock"), which are convertible into
the Company's common stock, par value $0.01 per share ("Common Stock").
The shares of Common Stock that any Stockholder may hereafter acquire
upon conversion of his, her or its shares of Series A Preferred Stock or
otherwise 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."
Subject to the terms and conditions set forth in that certain
stockholders agreement dated this date among the parties, (the "Stockholders
Agreement"), 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. Piggyback Registrations.
1.1 Right to Include Registrable Securities. If at any time
following the consummation of the Company's initial public offering, the Company
shall propose to register any Common Stock, whether or not for sale for its own
account, under the Securities Act of 1933 or any subsequent similar federal
statute and the rules and regulations thereunder (the "Securities Act"), by
registration on Form XX-0, X-0, X-0 or S-3 (but not Form S-4 or S-8) or any
successor or similar forms (except for any registrations in connection with (x)
an employee benefit plan or dividend reinvestment plan or a merger,
consolidation or other business combination or (y) debt securities that are not
convertible into Common Stock) it shall give written notice to the holders (the
"Holders") of the Shares that have not been previously registered pursuant to a
registration statement that shall have become effective under the Securities Act
(the foregoing Shares, together with any additional shares of Common Stock
issued in a stock split or stock dividend are "Registrable Securities") of its
intention to do so and of the Holders' rights under this Section 1 at least 30
days prior to the filing of a registration statement with respect to such
registration with the Securities and Exchange Commission (the "SEC"). Upon the
written request of any Holder made within 20 days after the receipt of that
notice, which request shall specify the Registrable Securities intended to be
registered and disposed of by such Holder, the Company shall, subject to the
provisions hereof, use its commercially reasonable efforts to include in such
registration statement all Registrable Securities that the Company has been so
requested to register by such Holder. If a Holder decides not to include all of
its Registrable Securities in any
statement all Registrable Securities that the Company has been so requested to
register by such Holder.
1.2 Right to Abandon or Delay Registration. If, at any time after
giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to each Holder and upon giving that notice
(i) in the case of a determination not to register, the Company shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration without prejudice and (ii) in the case of a determination
to delay registering, the Company shall be permitted to delay registering any
Registrable Securities for the same period as the delay in registering such
other securities.
2. Demand Registration
2.1 Right to Demand Registration
(a) If, at any time after the first anniversary of the date of the
consummation of the Company's initial public offering of Common Stock, the
Company shall receive a written request from Holders to register at least
two-thirds of the shares of Common Stock issued or issuable upon conversion of
Series A Preferred Stock (of which not less then one-third of such shares will
be Registrable Securities originally subject to this agreement), all of which
are at such time eligible for registration hereunder (a "Demand Notice"), the
Company shall promptly give written notice of such proposed registration to all
other Holders and shall offer to include in such proposed registration any
Registrable Securities requested to be included in such proposed registration by
the Holders who shall respond in writing to the Company's notice within 10 days
after receipt by the Holders in question of such notice (which response shall
specify the number of Registrable Securities proposed to be included in such
registration); provided, however, that in the event the number of Registrable
Securities included in the registration is reduced pursuant to Section 4.1, the
registration shall not be counted as the demand for registration by any Holder
for purposes of Section 2.1(c) unless at least two-thirds of the Registrable
Securities and all other shares of Common Stock issued or issuable upon
conversion of Series A Preferred Stock and registered to be included in the
proposed registration shall be so included.
(b) A registration requested pursuant to this Section 2.1 shall be
deemed to have been effected following such time as the registration statement
with respect thereto has become effective.
(c) The Company shall not be obligated to file a registration
statement and cause it to become effective more than once under this Section
2.1.
2.2 Limits on Demand Rights.
(a) The Company shall not be obligated to file a registration
statement and cause it to become effective if at the time the Company receives a
Demand Notice the Company is engaged in an underwritten public offering.
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(b) The Company may, on one occasion, delay the filing of any
registration statement pursuant to a Demand Notice for a period of up to 90 days
after the date of delivery of the Demand Notice by giving the Holders sending
the Demand Notice written notice of such delay.
(c) If, while a registration request is pending pursuant to Section 2.1, the
Company has been advised by legal counsel that (i) the filing of a registration
statement would require the disclosure of a material transaction or other factor
that the Company reasonably determines in good faith would have a material
adverse effect on the Company or (ii) the Company then is unable to comply with
SEC requirements applicable to the requested registration, then in each instance
the Company shall not be required to effect a registration pursuant to this
Section 2 until the earlier of (x) the date upon which such material information
is otherwise disclosed to the public or ceases to be material or the Company is
able to so comply with applicable requirements of the SEC, as the case may be,
and (y) 60 days after the Company has been so advised by legal counsel.
3. Registration Procedures; Listing
3.1 Obligations of the Company. In connection with the registration
of any Registrable Securities under the Securities Act as provided in Section 1
or Section 2, the Company shall:
(a) use its commercially reasonable efforts to 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) use its commercially reasonable efforts to 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; provided, however that
such period need not exceed 90 days;
(c) furnish to the Holders 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 Holders may reasonably request;
(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
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exemption is not available and as the Holders 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 Holders to consummate the
disposition in such jurisdictions of the securities to be sold by the Holders,
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 Holders 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 Holders
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;
(f) pay, in pro rata portions relative to their respective holdings
of Registrable Securities being registered hereunder, 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 and of its independent public
accountants; provided, however that the foregoing obligation of the Company
shall exclude, and the Holders shall pay, underwriters fees and underwriting
discounts and commissions in respect of the Registrable Securities being
registered hereunder as well as any fees and expenses of counsel to the Holders
hereunder; and
(g) cause the Registrable Securities to be listed on a national
securities exchange or on the Nasdaq National Stock Market.
3.2 Obligations of the Holders
(a) The Company may require the Holders, after receipt thereby of a
written request from Holders pursuant to Section 1.1 or a Demand Notice pursuant
to Section 2.1(a), to furnish the Company such information regarding the Holders
and the distribution of the Holders' 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 3.1(e), the Holders shall forthwith
discontinue their disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3.1(e) and, if so directed by the Company, the Holders
shall
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deliver to the Company all copies, other than permanent file copies, then in the
Holders' possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.
4. Underwritten Offerings
4.1 Underwriter Cutbacks. If any managing underwriter for a public
offering contemplated by Section 1 or 2 advises the Company of its belief that
the number or type of Registrable Securities to be included in such offering
would adversely affect such offering, then the Company shall include in such
registration,, to the extent of the number and type that the Company is so
advised can be sold in (or during the time of) such offering:
(a) first, all securities proposed by the Company to be sold for its
own account;
(b) then Registrable Securities to be sold by the holders of Common
Stock that constitute "registrable securities" that were (A) converted or
exchanged from shares of the Company's preferred stock ranking senior to the
Series A Preferred Stock, (B) held by the Company's institutional lenders or
investors or (C) were received upon exercise of warrants held by any holders of
any preferred stock or debt issued to the Company's institutional lenders or
investors;
(c) then, Registrable Securities to be sold by the Holders and all
other shares of Common Stock outstanding on the date hereof or subsequently
acquired by the holders thereof or that constitute "Registrable Securities"
under and as defined in registration rights agreements containing piggyback
registration rights intended to have the same priority as those provided in this
Section 4.1 to be sold by the holders thereof, including, without limitation,
Xxxx & Co., LLC and its affiliates in proportion to the respective numbers of
their Registrable Securities that are proposed to be sold in such offering by
the Holders and the other Holders, as the case may be; and
(d) finally, other securities to be sold by other holders of
securities in proportion to the respective numbers of securities proposed to be
sold in such offering by such holders.
4.2 Underwriting Agreement. The Holders shall become a party to any
underwriting agreement negotiated between the Company and the underwriters in
any underwritten public offering hereunder and shall make all representations
and warranties to and shall enter into all agreements with the Company and the
underwriters and shall deliver all opinions of counsel and other documents as
shall be reasonably requested of them and shall make all representations and
warranties required by law, customarily given or reasonably requested of selling
shareholders by an underwriter in an underwritten public offering.
4.3 Holdback Agreements. If the Company, in connection with an
underwritten offering of securities for its own account, at any time shall
register shares of Common Stock under the Securities Act for sale to the public
(other than on Forms S-4 or S-8 or a shelf registration), the Holders shall not
directly or indirectly sell, transfer or otherwise dispose of or encumber any
Shares or enter into any swap or other arrangement that transfers to another
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all or part of the economic consequences of ownership of the Shares (other than
those Shares included in such registration pursuant to Sections 1 or 2) without
the prior written consent of the managing underwriter for a period required by
the underwriters and designated by the Company, which period shall begin not
more than 30 days prior to the effectiveness of the registration statement
pursuant to which such public offering shall be made and shall last not more
than 180 days after the effective date of such registration statement in the
case of the Company's initial public offering, or 90 days after the effective
date of such registration statement in the case of any such other offering. The
Company may legend and impose stop transfer instructions on any certificate
evidencing Registrable Securities relating to the restrictions provided in this
Section 4.3.
5. Indemnification
5.1 Indemnification by the Company. In the event of any registration
statement filed pursuant to Sections 1 or 2, the Company shall indemnify and
hold harmless the Holders 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 Holder (each of the foregoing, a "Holder
Indemnitee"), insofar as losses, claims, damages, or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) ("Losses") to
a Holder 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 light of the circumstances in
which they were made not misleading, and the Company shall reimburse each Holder
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 to the Company by or on behalf of a Holder
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 Holder
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 Holder, as applicable.
5.2 Indemnification by the Holders. If any Registrable Securities
are included in any registration statement, the Holders 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
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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 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 Holder and furnished
to the Company by such Holder for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement, provided, however that no Holder shall have any
liability under this Section 5.2 for any amount in excess of the net proceeds
actually received by such Holder from the sale of the Registrable Securities
included in such registration statement.
5.3 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 5.1 or 5.2, 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 effected 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.
5.4 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 5.1 or Section 5.2, as applicable, the
indenmified 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
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reflect the relative fault of the Company on the one hand and the Holders 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 Holders on the other, as determined by a court of competent
jurisdiction. No individual or entity guilty of fraudulent misrepresentation
(within the meaning of the Securities Act) shall be entitled to contribution
from any individual or entity who 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, effected without such individual or entity's consent, which consent shall
not be unreasonably withheld.
6. Miscellaneous.
6.1 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 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000X
Xxxx Xxxx Xxxxx, XX 00000
Attention: President
Telecopier No.: (000) 000-0000
with a copy to:
Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx 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.
6.2 No Waiver. 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 as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies conferred by this
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agreement or shall preclude any other or further exercise thereof or the
exercise of any other right, power and remedy.
6.3 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 permitted by the Stockholders Agreement 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.
6.4 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.
6.5 Amendment, Etc. 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 holders of at least a majority in
interest of the Shares at the time such instrument is signed by such persons,
and any such amendment, waiver, alteration, modification, rescission or
termination shall be binding on all of the Stockholders, but in no event shall
(i) the obligation of any Stockholder be materially increased, except upon the
written consent of such Stockholder, or (ii) the rights of any Stockholder under
Sections 1 and/or 2 hereof be terminated except upon the written consent of such
Stockholder; provided, however, that a waiver shall, in any event, be effective
against the person who signs it. For purposes of the foregoing, a "majority in
interest" of the Shares means a majority of the Registrable Securities (assuming
conversion of the Series A Preferred Stock) and all other shares of Common Stock
issuable upon conversion of Series A Preferred Stock, other than shares of
Common Stock owned by Xxxx & Co., LLC and its affiliates, successors and
assigns. In addition, 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.
6.6 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 principals
of conflicts of law of such state.
6.7 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.
6.8 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
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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.
[next page is the signature page]
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The parties have executed and delivered this Registration Rights
Agreement as of the date first written above.
ADVANCED AESTHETICS, INC.
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Vice President
[signatures begin on the next page]
S-1
LORD & FOURSIGHT, LLC
By its members
/s/ Ford X. Xxxxxx
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Ford X. Xxxxxx
/s/ Xxx Xxxx
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Xxx Xxxx
/s/ Xxxxxx Worth
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Xxxxxx Worth
Address:
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Telecopier No.: ( ) -
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S-2
