INVESTMENT AGREEMENT
THIS AGREEMENT is being entered into as of the 17 day of August, 2000
by and between Nurescell, Inc., a Nevada corporation, with its principal place
of business in Newport Beach, California ("USA") and AG, an entity formed under
the laws of the Federal Republic of Germany ("AG").
WHEREAS, AG has concurrently entered into an exclusive Licensing
Agreement for technology developed by USA (hereinafter, "Technology") for the
purpose of commercialization and marketing of said Technology in Europe, the
British Isles and countries of the former Soviet Union; and
WHEREAS, as additional consideration for entering into the License
Agreement, AG, with the assistance of Advanced Technology Industries, Inc., a
Delaware corporation (ATI), shall exercise its best efforts in good faith to
raise as investment capital the sum of Twenty Million Deutsche Marks
(DM20,000,000), a portion of which shall be subject to the terms and conditions
of this Agreement; and
WHEREAS, USA shall initially own fifty-one percent (51%) of AG and ATI
shall own forty-nine percent (49%) of AG.
For the mutual promises and covenants contained herein and for
valuable consideration, the parties herewith agree as follows:
1. AG, with the assistance of ATI, shall exercise its best efforts in
good faith to cause to be raised the sum of Twenty Million Deutsche Marks
(DM20,000,000) as investment capital for the operations of AG, a portion of
which shall be subject to a "put option" by USA.
2. AG shall have the option to purchase from USA up to Four Million
Dollars ($4,000,000.00) worth of USA stock ("Call"), The Call(s) shall be in the
form attached hereto as Exhibit A. The right to exercise said Call shall be
effective upon signing of this Investment Agreement and shall continue for a
period of five (5) years thereafter. It is acknowledged by the parties that said
transfer of stock pursuant to the Call may be subject to various restrictions on
resale pursuant to the rules and regulations of the Securities and Exchange
Commission of the United States of America and other applicable securities laws.
AG acknowledges and warrants that the Call shares will be purchased for its own
account and not for the beneficial interest of any other person or for resale in
connection with any other distribution of those shares; provided, however, that
AG shall be entitled to the benefit of that certain Registration Right
Agreement, attached hereto as Exhibit "B".
3. All shares of USA delivered pursuant to the Call Option shall be
deemed restricted shares, subject to the attached Registration Rights Agreement
attached as
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Exhibit "B," and may not be sold, transferred, assigned or hypothecated without
compliance with all rules and regulations of the U.S. Securities Act of 1933.
All such shares shall contain a restrictive legend as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE "ACT") OR QUALIFIED UNDER
THE LAWS OF ANY OTHER JURISDICTION. THEY MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES OR TO U.S. PERSONS IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ALL
OTHER REQUIRED QUALIFICATIONS OR AN OPINION OF COUNSEL
SATISFACTORY TO NURESCELL TO THE EFFECT THAT SUCH REGISTRATION
AND QUALIFICATIONS ARE NOT REQUIRED. HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE ACT.
4. The Board of Directors of AG shall include sufficient directors
appointed by USA to equal its percentage of ownership of AG. Said appointments
to be in accordance with the laws of the Federal Republic of Germany.
5. It is understood and agreed that the raising of said Investment
Capital by AG from third party investors, shall be in exchange for shares of
stock of AG not to exceed thirty-four percent (34%) of the outstanding shares of
AG. It is agreed that any such dilution shall apply equally to the holdings of
AG by ATI and USA, respectively.
6. The share of certificates of AG shall be delivered to USA not later
than ten (30) days after the execution of the License Agreement. Should said
shares not be delivered to USA within the said time, then in that event,
Nurescell may forthwith terminate said License Agreement.
7. CORPORATE GOVERNANCE
a. As further consideration for AG to enter into this
Agreement, USA shall cause to be named to the Board of Directors of USA, one
director as specified by ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇ who shall also be named President of
USA. ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall forthwith resign as President while retaining
his position as Chairman of the Board. Said resignation shall be signed upon
execution of this Agreement. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ shall each, within five (5) days of execution of this Agreement,
execute and deliver their resignations as members of the Board to the corporate
secretary of USA pending the receipt by USA of the $1 million due under the
License Agreement. Except as specified in this paragraph and provided that AG is
not in default under the License Agreement, without prior written approval of
both Boards of Directors, neither USA nor AG shall make any changes in their
respective corporate management, including members of the Board, until such time
that the full One Million Dollars ($1,000,000) due under the License Agreement
has been paid.
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8. MISCELLANEOUS
a. GOVERNING LAWS: WAIVER JURY. This Agreement and the
obligations of the parties hereunder shall be interpreted, construed and
enforced in accordance with the internal laws of the State of California. In the
event of legal proceedings, the parties hereby knowingly, voluntarily and
intentionally WAIVE THE RIGHT EITHER OF THEM OR THEIR HEIRS, REPRESENTATIVES,
SUCCESSORS OR ASSIGNS MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY AGREEMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
DEALING, STATEMENTS OR ACTIONS OF EITHER PARTY. EACH OF THE PARTIES CONSENT TO
THE JURISDICTION AND VENUE OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL
DISTRICT OF CALIFORNIA.
b. ENTIRE AGREEMENT. This Agreement and the License Agreement
referred to herein contain the entire agreement between the parties hereto with
respect to the subject matter hereof. No variations from, modifications of,
amendments to or changes in this Agreement shall be binding upon any party
hereto unless set forth in a document duly executed by or on behalf of such
party.
c. SEVERABILITY. If any provision of this Agreement or the
application thereof to any Person or circumstance shall be invalid or
unenforceable to any extent the remainder of this Agreement and the application
of such provisions to other Persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
d. ATTORNEY FEES. If any litigation arises between the parties
concerning this Agreement or its enforcement the prevailing party in such
litigation shall be entitled to collect in such action from the non-prevailing
party all costs of such litigation, including reasonable attorney fees at all
levels of proceedings.
e. NO THIRD PARTY BENEFICIARIES. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit at nor may any provision hereof be
enforced by, any other person.
f. PUBLICITY. Each of the party shall have the right to review
before issuance the others press releases, or any other public statements, with
respect to the transactions contemplated hereby; provided, however, each of the
companies shall be entitled, without prior consultation with or approval of the
other, to make any press release or other public disclosure with respect to
transactions as is required by applicable laws and regulations of the
jurisdictions of the United Stales of America and/or the Federal Republic of
Germany.
g. FURTHER ASSURANCE. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and
to accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
h. REMEDIES. No provision of this Agreement providing for any
specific remedy to a party shall be construed to limit such party to the
specific remedy described and any other remedy that would otherwise be available
to such party at law or in equity shall also be available.
i. COUNTERPARTS: EXECUTION BY FACSIMILE. This Agreement and/or
any amendments to this Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Any signature transmitted via facsimile
shall be deemed an original signature for all purposes.
IN WITNESS WHEREOF, the parties hereto have executed this Investment
Agreement effective as of the day end year first written above.
NURESCELL, INC. NURESCELL AG
a Nevada corporation An entity formed under the laws of the
Federal Republic of Germany
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------- ------------------------------
Its: Chairman Its: President
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EXHIBIT A
FORM OF NOTICE OF CALL OPTION
Pursuant to the Investment Agreement executed the ___ day of _______,
_____, AG herewith exercises its Call Option rights pursuant to said agreement
by requesting USA to deliver to AG ____ shares of stock of USA at a price in
accordance with said agreement of ___ which is based upon eighty percent (80%)
of the average five (5) day bid price trading range of said USA stock for the
period.
Executed this __day of _______, 2000.
NURESCELL AG
An entity formed under the laws of the
Federal Republic of Germany
By:
-----------------------------
Its:
----------------------------
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EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is entered into as
of August 15, 2000, by and between Nurescell Inc., a Nevada corporation (the
"Company"), and Nurescell AG, an entity formed under the laws of the Republic of
Germany ("Nurescell AG"), with reference to the following facts and
circumstances:
A. Capitalized terms used and not otherwise defined herein shall have
the same meaning as set forth in the License and Investment Agreement entered
into concurrently herewith by and between the Company and Nurescell AG (the
"Investment Agreement").
B. Pursuant to the Call, the Company may in the future issue to
Nurescell AG certain shares of the $.0001 par value common stock of the Company
(the "Common Stock").
C. In connection with the Investment Agreement, the Company desires to
grant certain registration rights with respect to the shares of Common Stock
obtainable upon the exercise of the Call.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties agree as follows.
SECTION 1
DEFINITIONS
-----------
Capitalized terms used in this Agreement and not defined elsewhere
herein shall have the meanings set forth below:
"COMMISSION" means the Securities and Exchange Commission, or any other
federal agency then administrating the Securities Act.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"LOSSES" means all losses, claims, damages or liabilities and
reasonable expenses related thereto.
"CALL SHARES" means any shares of Common Stock obtainable upon the
exercise of the Call. As used herein, "Call Shares" also includes any shares of
equity securities of the Company or of a successor company that are issued with
respect to or on account of the Call Shares, including without limitation shares
distributed as stock dividends, shares issued under stock splits or other
recapitalizations, and shares issued under mergers or other reorganizations.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in affect from time to time.
SECTION 2
DEMAND REGISTRATION
-------------------
2.1 At any time within 30 days (5) years following the first exercise
of the Call, upon the written demand of Nurescell AG, the Company shall prepare
and file a registration statement under the Securities Act covering an offering
of such number of Call Shares as shall have been requested to be registered by
Nurescell AG in such demand; provided, however, that (i) the Company shall be
obligated to effect a registration pursuant to this Section 2.1 no more than 4
times (4) times, and (ii) no demand shall be made within six (6) months
following the date of the exercise of the Call.
2.2 The Company shall proceed as expeditiously as possible after
receipt of a demand pursuant to Section 2.1 hereof to file a registration
statement and use its best efforts to cause such registration statement to
become effective within one hundred twenty (120) days after the receipt of such
written demand or, in the case of a demand made with sixty (60) days prior to
the end of the Company's then fiscal year, within two hundred ten (210) days
after the receipt of such written demand. The Company shall select any
underwriter(s) to be engaged in connection with any such registration.
SECTION 3
PIGGYBACK REGISTRATION
----------------------
3.1 If at any time with 5 years (5) years following the first exercise
of the Call, the Company proposes to register any offering of shares of its
capital stock under the Securities Act, and if such registration is to be on a
form of the Commission that may include, or is at any time amended or changed to
such a form that may include the Call Shares, the Company will provide written
notice to Nurescell AG of the Company's intention to register the offering at
least thirty (30) days prior to the filing of said registration statement.
3.2 Unless objected to by any underwriter(s) participating in the sale
and distribution of the Company's securities covered by the registration
statement referred to in Section 3.1 hereof, the Company's notice shall give
Nurescell AG the opportunity to elect to include in the registration some or all
of the Call Shares. Nurescell AG shall have thirty (30) days after receipt of
the Company's notice to notify the Company in writing of the number of Call
Shares (the "Elected Shares") which Nurescell AG elects to include in the
offering. If the number of Elected Shares that Nurescell AG requests to include
in each registration exceeds the number of Call Shares permitted by any
underwriter, then Nurescell AG, and each other selling shareholder who also has
piggyback registration rights and has elected to include shares of Common Stock
in the registration, shall be entitled to include that number of shares of
Common Stock that bears the same ratio to the number of shares permitted by the
underwriter as the number of Elected Shares which Nurescell AG requests to
include bears to the aggregate number of shares that Nurescell AG and any other
selling shareholders request to include. The piggyback registration rights
provided by this Section 3.2 with respect to the Call Shares shall not apply to
offerings that are registered on Form ▇-▇, ▇▇▇▇ ▇-▇, or successor forms thereto
for registering stock issued under business combinations or employee plans.
-2-
3.3 The inclusion of Call Shares in registered offerings pursuant to
this Section 3 shall be upon the condition that Nurescell AG sells its Elected
Shares to any underwriter at the same price and on substantially the same terms
and conditions as the Company.
3.4 The Company shall give Nurescell AG the right to participate in
each registration pursuant to this Section 3 without limitation as to the number
of registrations.
3.5 In the case of any public offering of securities of the Company
pursuant to which Nurescell AG exercises registration rights under this Section
3, the Company shall designate any underwriters in connection therewith.
SECTION 4
CONDITIONS TO PARTICIPATION
---------------------------
To include any Call Shares in a registration under Section 2 or Section
3 hereof, Nurescell AG shall:
(a) cooperate with the Company in preparing the registration statement
and execute such agreements in connection therewith as the Company or any
underwriter may deem reasonably necessary;
(b) promptly supply the Company with such information, documents,
representations and warranties as the Company or any underwriter may deem
reasonably necessary in connection with such registration; and
(c) as requested by the Company or any underwriter, agree in writing
not to sell or transfer any Common Stock not included in such registration for a
period of fifteen (15) days prior to and one hundred eighty (180) days after the
effective date of the registration without the underwriter's consent, but
Nurescell AG shall not be required to make such agreement unless the other
holders of Common Stock included in the offering covered by such registration
shall similarly agree.
SECTION 5
OPINION OF COUNSEL
------------------
The Company shall have no obligation under Section 2 or Section 3
hereof to register any Call Shares if the Company delivers to Nurescell AG an
opinion of counsel reasonably satisfactory to Nurescell AG to the effect that
the proposed sale or disposition of the Call Shares for which registration was
requested does not require registration under the Securities Act for a sale or
disposition in a single public transaction. The Company hereby agrees to
indemnify Nurescell AG against, and to hold it harmless from, all Losses,
including liability for rescission, that it may incur under the Securities Act
or otherwise by reason of it proceeding in accordance with such opinion of
counsel.
-3-
SECTION 6
REGISTRATION PROCEDURES
-----------------------
If and whenever the Company is obligated by the provisions of this
Agreement to effect the registration of any offering of Call Shares under the
Securities Act, as expeditiously as possible the Company will, or will use its
best efforts to, as the case may be:
(a) Prepare and file with the Commission a registration statement with
respect to such Call Shares and cause such registration statement to become
effective; provided, however; that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company shall furnish
to Nurescell AG and its counsel selected pursuant to Section 7.2 hereof copies
of all such documents proposed to be filed, which documents will be subject to
the review of Nurescell AG and its counsel and, in the event of a demand
registration which is not accompanied by a registration of Common Stock for sale
by the Company, the Company shall not file any registration statement or
Prospectus or any amendments or supplements thereto to which Nurescell AG or its
counsel shall reasonably object on a timely basis.
(b) Prepare and file with the Commission such amendments and
supplements to the registration statement and the prospectus used in connection
therewith as may be necessary to keep the registration statement effective until
the earlier of the sale of all Call Shares covered thereby or the expiration of
a period of two hundred seventy (270) days after its effective date, and comply
with the provisions of the Securities Act with respect to the disposition of all
shares of Common Stock covered by the registration statement provided, however,
that if maintaining the effectiveness of the registration statement would
require the filing of a post-effective amendment including new financial
statements (other than financial statements which the Company would be required
to include in a current report on Form 10-Q or Form 10-QSB), the Company shall
be obligated to use its best efforts to maintain the effectiveness of such
registration statement for only six (6) month, in the case of the first
registration filed hereunder, and ninety (90) days in the case of any other
registration filed hereunder. In the event that any Call Shares included in a
registration statement subject to this Agreement remain unsold at the end of the
period during which the Company is obligated to use its best efforts to maintain
the effectiveness of the registration statement, the Company, if and when a
further amendment or supplement would be required to comply with Section 10 of
the Securities Act, may file a post-effective amendment to the registration
statement for the purpose of removing such Call Share from registered status.
(c) Furnish to Nurescell AG as many copies of prospectuses, including
the preliminary prospectus, in conformity with the requirements of the
Securities Act and other related documents, as Nurescell AG may reasonably
request.
-4-
(d) Register or qualify the Call Shares covered by the registration
statement under the securities or blue sky laws of such jurisdictions as
Nurescell AG shall reasonably request, and do any acts that may be reasonably
necessary or advisable to enable Nurescell AG to consummate the disposition in
such jurisdictions of the Call Shares; provided, however, that the Company shall
not be obligated, by reason thereof, to qualify as a foreign corporation or file
any general consent to service of process under the laws at any such
jurisdiction or subject itself to taxation as doing business in any such
jurisdiction.
(e) Furnish to Nurescell AG an opinion of counsel for the Company,
which opinion shall be reasonably acceptable to Nurescell AG and its counsel
selected pursuant to Section 7.2 hereof, to this effect that (i) a registration
statement covering the offering of the Call Shares has been filed with the
Commission under the Securities Act and has been made effective by order oft,
Commission, (ii) a prospectus complying as to form with the requirements of the
Securities Act is available for delivery. (iii) no stop order has been issued by
the Commission suspending the effectiveness of such registration statement and
that to the best of such counsels knowledge, no proceedings for the issuance of
such a stop order are threatened or contemplated and (iv) the securities
included in the offering covered by such registration statement have been
registered or qualified, or exempted from such registration or qualification,
under the securities or blue sky laws of each state in which the Company has
been required to register or qualify such shares under Section 6(d) hereof. In
giving such opinion, counsel for the Company shall be entitled to rely upon the
opinion of counsel for any underwriter.
(f) Notify Nurescell AG promptly after the Company shall receive notice
that (i) any registration statement, supplement or amendment has become
effective, (ii) any registration statement is required to be amended or
supplemented or (iii) any stop order with respect thereto has been issued.
(g) Enter into such agreements, including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings, and take
all other actions in connection therewith, including actions reasonably
requested by any underwriter or Nurescell AG, in order to expedite or facilitate
the disposition of the Call Shares. The Company's obligations pursuant to the
preceding sentence can include without limitation, the Company; (i) making
representations and warranties to the underwriters with respect to the business
of the Company, the registration statement, the prospectus and the documents, if
any, incorporated or deemed to be incorporated by reference in the registration
statement in each case in form, substance and scope as are customarily made by
issuers to underwriters in underwritten secondary offerings and confirm such
matters if and when requested; (ii) obtaining opinions of counsel to the Company
and updates thereof, which counsel and opinions, in form, scope and substance
shall be reasonably satisfactory to the underwriters covering the matters
customarily covered in opinions requested in underwritten offerings, (iii)
obtaining "cold comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company or of
any business acquired by the Company for which financial statements and
financial data are or are required to be included in the registration statement)
addressed to the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters to
underwriters in connection with underwritten offerings; (iv) agreeing in any
underwriting agreement to the indemnification and contribution provisions and
procedures of Sections 9 through 12 hereof (or such other less favorable
provisions and procedures for the underwriters that is acceptable to the
underwriters) with respect to all parties to be indemnified pursuant to said
Sections; and (v) delivering such documents and certificates as may be requested
by any underwriter to evidence the continued validity of the representations and
warranties made pursuant to clause (i) of this Section 6(g), and to evidence
compliance with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.
-5-
(h) Make available for inspection, by any underwriter and any counsel
or accountant retained by the underwriter, financial and other records,
pertinent corporate documents and properties of the Company; and cause the
officers, directors and employees of the Company to supply information
reasonably requested by any underwriter, counsel or accountant in connection
with such registration statement; provided, however, that any records,
information or documents that we designated by the Company in writing as
confidential shall be kept confidential by such persons unless (i) disclosure of
such records, information or documents is required by court or administrative
order, (ii) disclosure of such records, information or documents, in the opinion
of counsel to such person, is required by law, including without limitation
pursuant to the requirements of the Securities Act or (iii) such records,
information or documents are in the public domain or otherwise publicly
available.
SECTION 7
REGISTRATION EXPENSES; COUNSEL FOR NURESCELL AG
-----------------------------------------------
7.1 The costs and expenses in connection with registrations and
qualifications of Call Shares under Section 2 hereof shall be paid by Nurescell
AG. The costs and expenses (other than underwriting discounts or commissions and
such fees for counsel, printing, registration and other fees as state securities
officials may require that Nurescell AG and other selling shareholders pay) of
all registrations and qualifications of Call Shares under Section 3 hereof shall
be paid by the Company, including without limitation all registration and filing
fees, printing expenses, costs of special audits incident to or required by any
registration, fees and disbursements of counsel for the Company and the fees and
disbursement of one special counsel acting for Nurescell AG and selected
pursuant to Section 7.2 hereof except that all such expenses in connection with
any amendment or supplement to the registration statement or the prospectus used
in connection therewith required to be filed more than two hundred seventy (270)
days after the date on which such registration statement becomes effective under
the Securities Act because Nurescell AG has not effected the disposition of all
Call Shares covered by such registration statement shall be borne pro rata by
Nurescell AG and any other selling shareholders benefitted thereby.
7.2 Nurescell AG may select the counsel to act on its behalf in
connection with a registration under this Agreement, provided that such counsel
is reasonably acceptable to the Company.
-6-
SECTION 8
RULE 144
--------
The Company shall file the reports required under the Securities Act
and the Exchange Act and the rules and regulations adopted by the Commission
thereunder, and shall take such further action as Nurescell AG may reasonably
request, as required from time to time, to enable Nurescell AG to sell the Call
Shares without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
SECTION 9
INDEMNIFICATION BY THE COMPANY
------------------------------
In the event of any registration under the Securities Act of any
offering of Call Shares, the Company hereby agrees to indemnify and bold
harmless Nurescell AG, its officers and directors, and each other person, if
any, who controls Nurescell AG (within the meaning of the Securities Act) and
each other person (including each underwriter, and each other person, if any,
who controls such underwriting) who participates in the offering of such Call
Shares against any Losses, joint or several, to which Nurescell AG or such
controlling person or participating person may became subject under the
Securities Act or otherwise, insofar as such Losses (or proceedings in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained, on the effective date thereof, in any
registration statement under which Call Shares were registered under the
Securities Act in any preliminary prospectus or final prospectus contained
therein or in any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse Nurescell AG and each such controlling person or
participating person for any legal or other expenses reasonably incurred by
Nurescell AG or such controlling person or participating person in connection
with investigating or defending any such Loss; provided, however, that, the
Company will not be liable in any such case to the extent that any such Loss
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, said
preliminary or final prospectus or said amendment or supplement in reliance upon
and in conformity with written information furnished by Nurescell AG or such
controlling or participating person, as the case may be, specifically for use in
the preparation thereof. The Company shall also indemnify underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers, directors, agents and
employees and each person who controls such persons (within the meaning of the
Securities Act or the Exchange Act) to the same extent as provided above with
respect to the indemnification of Nurescell AG.
-7-
SECTION 10
INDEMNIFICATION BY NURESCELL AG
-------------------------------
In the event of any registration under the Securities Act of any
offering of Call Shares, Nurescell AG hereby agrees to indemnify and hold
harmless the Company and each person who controls the Company within the meaning
of the Securities Act and each other person (including each underwriter, and
each other person, if any, who controls such underwriter, and each other selling
shareholder, and each other person, if any, who controls such selling
shareholder) who participates in the offering of such Call Shares, against any
Losses, joint or several, to which the Company, other selling shareholder, or
controlling person or participating person may become subject under to
Securities Act or otherwise, insofar as such Losses (or proceedings in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained, on the effective date thereof in any
registration statement under which an offering of such Call Shares was
registered under the Securities Act, in any preliminary prospectus or final
prospectus contained therein, or in any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, other selling
shareholders, and each such controlling person or participating person for any
legal or other expenses reasonably incurred by the Company, other selling
shareholders, or such controlling person or participating person in connection
with investigating or defending any such Loss or proceeding; provided, however,
that Nurescell AG will be liable in any such case to the extent, and only to the
extent, that any such Loss arise out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, said preliminary or final prospectus or said amendment
or supplement in reliance upon and in conformity with written information
furnished by Nurescell AG specifically for use in the preparation thereof.
Notwithstanding the foregoing, the liability of Nurescell AG under this Section
10 shall be limited to an amount equal to the price of the Call Shares sold by
Nurescell AG in connection with such registration unless such liability arises
out of acts based on willful conduct of Nurescell AG.
SECTION 11
CONDUCT OF INDEMNIFICATION PROCEEDINGS
--------------------------------------
If any action or proceeding (including any governmental investigation
or inquiry) shall be brought or any claim shall be asserted against any person
entitled to indemnity hereunder (an "indemnified party"), such indemnified party
shall promptly notify the party from which such indemnity is sought (the
"indemnifying party") in writing, and the indemnifying party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the indemnified party and the payment of all fees and expenses incurred in
connection with the defense thereof. Any such indemnified party shall have the
right to employ separate counsel in any such action, claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be the expenses of such indemnified party unless (i) the indemnifying
party has agreed to pay such fees and expenses or (ii) the indemnifying party
shall have failed to promptly assume the defense of such action, claim or
proceeding
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or (iii) the named parties to any such action, claim or proceeding (including
any impleaded parties) include both such indemnified party and the indemnifying
party, and such indemnified party shall have been advised by counsel that there
may be one or more legal defenses available to it which are different from or in
addition to those available to the indemnifying party and that the assertion of
such defenses would create a conflict of interest such that counsel employed by
the indemnifying party could not faithfully represent the indemnified party (in
which case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
in the reasonable judgement of such indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified parties
with respect to such action, claim or proceeding, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels). The indemnifying party shall not be liable for
any settlement of any such action or proceeding effected without its written
consent.
SECTION 12
CONTRIBUTION
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If the indemnification provided for in this Agreement is unavailable to
an indemnified party under Section 9 or Section 10 hereof (other than by reason
of exceptions provided in such Sections) in respect of any Losses, then each
applicable indemnifying party in lieu of indemnifying such indemnified party
shall contribute to the amount paid or payable by such indemnified party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions, statements or omissions which resulted in such Losses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and the indemnified parties shall be determined by reference
to, among other things, whether any action in, question, including any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or relates to
information supplied by such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set worth in Section 11 hereof, any legal or other fees or
expenses reasonably incurred by such party in connection with any action, suit,
claim, investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 12 were determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 12, Nurescell AG shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Call Shares said by it exceeds the amount of any damages
which such indemnifying party has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
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SECTION 13
EQUITABLE RELIEF
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The parties agree and declare that legal remedies may be inadequate to
enforce the provisions of this Agreement and that equitable relief, including
specific performance and injunctive relief, may be used to enforce such
provisions.
SECTION 14
M1SCELLANEOUS
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14.1 NOTICES. Any notices or other communication provided for herein
shall be given in writing, and delivered personally, by courier, by facsimile,
or by registered or certified mail postage prepaid, addressed, if to the
Company, to Nurescell Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; facsimile (▇▇▇) ▇▇▇-▇▇▇▇, and if to Nurescell AG, at the
address or facsimile number indicated on the records of the Company, or to such
other address or facsimile number as may be designated in writing by the Company
or Nurescell AG. Except as otherwise provided in this Agreement, each such
notice shall be deemed given when received by the person to whom the notice is
addressed.
14.2 TERMINATION OF REGISTRATION RIGHTS. The obligations of the Company
to register Call Shares pursuant to Section 2 or Section 3 hereof; and the
rights of Nurescell AG to include its Call Shares in registration statements
pursuant to such Sections, shall terminate five (5) years following the date of
the first exercise of the Call.
14.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that Nurescell AG's rights under this Agreement
shall not be assigned other than pursuant to a merger or similar business
succession.
14.4 WAIVER. No failure or delay on the part of the parties in
exercising any right, power or privilege hereunder, nor any course of dealing
among the parties shall operate as a waiver of any such right, power or
privilege nor shall any single or partial exercise of any such right, power or
privilege preclude the simultaneous or later exercise of any other right, power
or privilege. The rights and remedies
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provided herein are cumulative and are not exclusive of any rights or remedies
which any of the parties would otherwise have.
14.5 FURTHER ASSURANCES. Each party agrees to execute and deliver such
additional documents and take such other actions as the other party may
reasonably request for purposes of carrying out the transactions contemplated by
this Agreement.
14.6 ATTORNEYS' FEES. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees (including any fees incurred in any appeal) in
addition to its costs and expenses and any other available remedy.
14.7 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, USA, without reference
to principles of conflict of laws.
14.8 ENTIRE AGREEMENT; MODIFICATION. This Agreement expresses the
entire understanding of the parties as to its subject matter and supersedes any
prior discussions, negotiations and agreements with respect to such subject
matter. The terms of this Agreement may be amended or waived only in writing
that is approved by the Company and Nurescell AG.
14.9 SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective only to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
14.10 CAUTION HEADINGS; SINGULAR AND PLURAL; PERSONS. Caption headings
are provided for convenience only and shall not affect the interpretation of
this Agreement. As used herein references to the singular include the plural and
the plural include the singular, except where the context requires otherwise. As
used herein references to person includes individuals and entities.
14.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
NURESCELL INC.
By:
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Its:
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NURESCELL AG
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Its: President
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