EXHIBIT 4.4
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
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This AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (this "Agreement") is made
and entered into as of August 7, 2001, by and among THE PLASTIC SURGERY COMPANY,
INC. a Georgia corporation (the "Company"), PACIFIC MEZZANINE FUND, L.P., a
California limited partnership ("PMF"), ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ (together with any subsequent Investor pursuant to
Section 5.12 hereof, each an "Investor" and collectively, the "Investors").
A. The Investors are holders of certain promissory notes (the "Notes") and
warrants to purchase shares of the Company's Common Stock (the "Warrants")
issued by the Company to such Investors pursuant to (x) a Loan Agreement by and
among the Company and the Investors dated as of the date hereof (the "August
Loan Agreement") and (y) a Loan Agreement, by and between the Company and PMF,
dated as of December 18, 2000, as amended by Amendment No. 1 to December 2000
Loan Agreement (the "December Loan Agreement" and, together with the August Loan
Agreement, the "Loan Agreements").
B. The August Loan Agreement provides that, as a condition to the Investors'
purchase of Notes and Warrants thereunder, the Company will enter into this
Agreement and the Investors will be granted the rights set forth herein.
C. PMF and the Company are parties to an Investors' Rights Agreement, dated as
of December 18, 2001, as amended by Amendment No. 1 to Investors' Rights
Agreement (the "Prior Agreement") and desire and hereby consent to amend and
restate the Prior Agreement by their respective signatures hereto.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
VOTING AND BOARD REPRESENTATION RIGHTS.
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BOARD VISITATION RIGHTS. PMF (through up to two of its officers, employees or
agents) shall (i) be entitled to attend all meetings of the Company's
shareholders and Board of Directors (including meetings of any committees
thereof), provided, however, that PMF shall be subject to exclusion of
reasonable scope and duration in the event of communications between the
Company and legal counsel thereto, which communications relate to the active
legal representation of the Company; (ii) be given notice of all such
meetings and of all resolutions which are proposed to be adopted by written
consent at the time such notice is given to the Company's shareholders,
directors or Committee members (as the case may be), and (iii) receive all
the minutes, documents and other information as are provided by the Company
to the members of the Board of Directors and Committees thereof. PMF
acknowledges that the information received by its designee(s) hereunder may
be confidential and is for PMF's use only. PMF will not use such confidential
information in violation of the Securities Exchange Act of 1934, as amended,
or any other applicable securities laws, or reproduce, disclose or
disseminate such information to any other person or entity (other than its
officers, partners, employees or agents or other Investors having a need to
know the contents of such information, and its attorneys, provided such
persons also agree in writing to keep such information confidential), except
in connection with the exercise of rights or remedies under this Agreement,
the Loan Agreements or any other agreement referred to in the Loan
Agreements, unless the Company has made such information available to the
public generally or if PMF gives the Company written notice at least twenty
(20) days prior to disclosure (or such reasonable notice that may be
necessary to provide the Company with an opportunity to seek a protective
order covering such information) that PMF is required to disclose such
information by a governmental body.
REPRESENTATION ON BOARD OF DIRECTORS. So long as the shares of the Company's
Common Stock issued or issuable under the Warrants and Notes and any other
equity securities held by the Investors constitute at least five percent (5%)
of the then-outstanding shares of Common Stock of the Company, assuming
exercise of all then outstanding options and warrants and conversion of all
securities by their terms convertible into or exchangeable for Common Stock
of the Company (collectively, "Fully-Diluted Shares"), PMF shall have the
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right, exercisable from time to time at its option by giving prior written
notice to the Company, to nominate one representative of PMF to the Company's
Board of Directors at the next annual meeting of shareholders of the Company.
Following receipt of such written notice, the Company shall as soon as
reasonably practicable after receipt of such notice and in order to nominate
such designee to the Company's Board of Directors (a) take all steps
necessary to nominate the designee of PMF to serve as a member of the Board
of Directors of the Company and (b) recommend the election of such designee
to the shareholders of the Company in any proxy statement, or preliminary
proxy statement, request for written consent of shareholders or any other
solicitation of the consent or vote of shareholders of the Company for the
purpose of nominating or electing members of the Board of Directors or
removing directors.
TERMINATION. The parties further agree that Section 1.1 above shall (i) be in
effect only during such periods that the Investors' nominee has not been
appointed or elected director of the Company pursuant to Section 1.2 above
and (ii) shall terminate upon the date that (x) the shares of Company's
Common Stock issued or issuable under the Warrants and any other equity
securities held by the Investors do not constitute at least two and one half
percent (2.5%) of the Fully Diluted Shares and (y) the Company has both
performed all of its obligations and discharged all of its indebtedness to
PMF in connection with the Loan Documents (as defined in the Loan
Agreements). Section 1.2 above shall terminate upon the date that the shares
of the Company's Common Stock issued or issuable under the Warrants and any
other equity securities held by the Investors do not constitute at least five
percent (5%) of the Fully-Diluted Shares.
REGISTRATION RIGHTS.
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DEFINITIONS. For purposes of this Section 2:
REGISTRATION. The terms "register," "registration" and "registered" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement.
INVESTORS' REGISTRABLE SECURITIES. The term "Investors' Registrable
Securities" means: (1) all the shares of Common Stock of the Company issued or
issuable upon exercise of the Warrants; (2) all the shares of Common Stock of
the Company issued or issuable upon conversion of those certain Convertible
Promissory Notes issued by the Company pursuant to the August Loan Agreement
(the "Convertible Notes"); (3) all the shares of Common Stock of the Company
issued as in-kind interest payments on the Notes issued pursuant to the December
Loan Agreement (such Notes, the "December Notes") and (4) any shares of Common
Stock of the Company issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, all such
shares of Common Stock described in clauses (1), (2) and (3) of this subsection
(b); excluding in all cases, however, any Investors' Registrable Securities sold
to the public or sold pursuant to Rule 144 promulgated under the Securities Act.
HOLDER. For purposes of this Section 2 hereof, the term "Holder" means any
person owning of record Registrable Securities that have not been sold to the
public or pursuant to Rule 144 promulgated under the Securities Act.
FORM S-3. The term "Form S-3" means such form under the Securities Act as is
in effect on the date hereof or any successor registration form under the
Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
SEC. The term "SEC" or "Commission" means the U.S. Securities and Exchange
Commission.
OTHER REGISTRABLE SECURITIES. The term "Other Registrable Securities" means
the any shares of common stock of the Company that have piggyback registration
rights as of the date hereof, which shares are more fully identified on Schedule
2.1(f).
REGISTRABLE SECURITIES. "Registrable Securities" means the Investors'
Registrable Securities and the Other Registrable Securities, collectively.
DEMAND REGISTRATION.
REQUEST BY HOLDERS. If the Company shall receive at any time, a written
request from the Holders of at least a majority of shares of the Investors'
Registrable Securities then outstanding that the Company file a registration
statement under the Securities Act covering the registration of Investors'
Registrable Securities pursuant to this Section 2.2, then the Company shall (1)
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within twenty (20) days after the receipt of such written request, give written
notice of such request ("Request Notice") to all Holders of Investors'
Registrable Securities, and (2) as soon as reasonably practicable file a
registration statement under the Securities Act with respect to all Investors'
Registrable Securities which Holders of Investors' Registrable Securities
request to be registered and included in such registration by written notice
given by such Holders to the Company within twenty (20) days after receipt of
the Request Notice and use its reasonable best efforts to effect the
registration as soon as practicable, subject only to the limitations of this
Section 2.
UNDERWRITING. If the Holders of Investors' Registrable Securities initiating
the registration request under this Section 2.2 or 2.4 ("Initiating Holders")
intend to distribute the Investors' Registrable Securities covered by their
request by means of an underwriting, then they shall so advise the Company as a
part of their request made pursuant to this Section 2.2 or 2.4, as the case may
be, and the Company shall include such information in the written notice
referred to in subsection 2.2(a) or 2.4(a), as the case may be. In such event,
the right of any Holder to include his Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall enter
into an underwriting agreement in customary form with the managing underwriter
or underwriters selected for such underwriting by the Company and a majority in
interest of the Initiating Holders. Notwithstanding any other provision of this
Section 2.2 or Section 2.4, if the underwriter(s) advise(s) the Company in
writing that marketing factors require a limitation of the number of securities
to be underwritten then the Company shall so advise all Holders of Registrable
Securities that would otherwise be registered and underwritten pursuant hereto,
and the number of Registrable Securities that may be included in the
underwriting shall be reduced as required by the underwriter(s) and allocated
among the Holders of Registrable Securities on a pro rata basis according to the
number of Registrable Securities then outstanding held by each person requesting
registration (including the Initiating Holders); provided, however, that the
number of shares of Registrable Securities to be included in such underwriting
and registration shall not be reduced unless all securities proposed to be
registered for the account of the Company are first entirely excluded from the
underwriting. Any Registrable Securities excluded and withdrawn from such
underwriting shall be withdrawn from the registration.
MAXIMUM NUMBER OF DEMAND REGISTRATIONS. The Company is obligated to effect
only two (2) such registrations pursuant to this Section 2.2.
DEFERRAL. Notwithstanding the foregoing, if the Company shall furnish to
Initiating Holders, a certificate signed by the President or Chief Executive
Officer of the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its shareholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, then the Company
shall have the right to defer such filing for a period of not more than 90 days
after receipt of the Request Notice; provided, however, that the Company may not
utilize this right more than once in any twelve (12) month period.
EXPENSES. All expenses incurred in connection with a registration pursuant to
this Section 2.2, including without limitation all registration and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company, and reasonable fees of one counsel to the selling
Holders (but excluding underwriters' discounts and commissions), shall be borne
by the Company. Each Holder participating in a registration pursuant to this
Section 2.2 shall bear such Holder's proportionate share (based on the total
number of shares sold in such registration other than for the account of the
Company) of all discounts, commissions or other amounts payable to underwriters
or brokers in connection with such offering. Notwithstanding the foregoing, the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to this Section 2.2 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Investors' Registrable Securities to be registered, unless the Holders of a
majority of the Investors' Registrable Securities then outstanding agree to
forfeit their right to one (1) demand registration granted pursuant to this
Section 2.2 (in which case such right shall be forfeited by all Holders of
Investors' Registrable Securities); provided, further, however, that if at the
time of such withdrawal, the participating Holders of Investors' Registrable
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Securities have learned of a material adverse change in the condition, business,
or prospects of the Company not known to such Holders at the time of their
request for such registration and have withdrawn their request for registration
with reasonable promptness after learning of such material adverse change, then
such Holders shall not be required to pay any of such expenses and shall retain
their rights pursuant to this Section 2.2.
PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of Investors'
Registrable Securities in writing at least thirty (30) days prior to filing any
registration statement under the Securities Act for purposes of effecting a
public offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company and demand registrations made by holders of Registrable Securities but
excluding registration statements relating to any employee benefit plan or a
corporate reorganization, including securities issued by the Company in an
acquisition transaction) and will afford each such Holder of Investors'
Registrable Securities an opportunity to include in such registration statement
all or any part of the Investors' Registrable Securities then held by such
Holder. Each Holder desiring to include in any such registration statement all
or any part of the Investors' Registrable Securities held by such Holder shall,
within twenty (20) days after receipt of the above-described notice from the
Company, so notify the Company in writing, and in such notice shall inform the
Company of the number of Investors' Registrable Securities such Holder wishes to
include in such registration statement. If a Holder decides not to include all
of its Investors' Registrable Securities in any registration statement
thereafter filed by the Company, such Holder shall nevertheless continue to have
the right to include any Investors' Registrable Securities in any subsequent
registration statement or registration statements as may be filed by the Company
with respect to offerings of its securities, all upon the terms and conditions
set forth herein.
UNDERWRITING. If a registration statement under which the Company gives
notice under this Section 2.3 is for an underwritten offering, then the Company
shall so advise the Holders of Investors' Registrable Securities. In such event,
the right of any such Holder's Investors' Registrable Securities to be included
in a registration pursuant to this Section 2.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Investors' Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their Investors' Registrable
Securities through such underwriting shall enter into an underwriting agreement
in customary form with the managing underwriter or underwriter(s) selected for
such underwriting. Notwithstanding any other provision of this Agreement, if the
managing underwriter determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then the managing
underwriter(s) may exclude shares (including Registrable Securities) from the
registration and the underwriting, and the number of shares that may be included
in the registration and the underwriting shall be allocated, first, to the
Company, and second, to each of the Holders requesting inclusion of their
Registrable Securities in such registration statement on a pro rata basis based
on the total number of Registrable Securities then held by each such person. If
any Holder of Investors' Registrable Securities disapproves of the terms of any
such underwriting, such Holder may elect to withdraw therefrom by written notice
to the Company and the underwriter, delivered at least twenty (20) days prior to
the effective date of the registration statement. Any Investors' Registrable
Securities excluded or withdrawn from such underwriting shall be excluded and
withdrawn from the registration. For any Holder that is a partnership or
corporation, the partners, retired partners and shareholders of such Holder, or
the estates and family members of any such partners and retired partners and any
trusts for the benefit of any of the foregoing persons shall be deemed to be a
single "Holder," and any pro rata reduction with respect to such "Holder" shall
be based upon the aggregate amount of shares carrying registration rights owned
by all entities and individuals included in such "Holder," as defined in this
sentence.
EXPENSES. All expenses incurred in connection with a registration pursuant to
this Section 2.3 (excluding underwriters' and brokers' discounts and
commissions), including, without limitation all federal registration and
qualification fees, "blue sky" registration and qualification fees for up to ten
(10) states, printers' and accounting fees, fees and disbursements of counsel
for the Company and reasonable fees of one counsel to participating Holders,
shall be borne by the Company.
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FORM S-3 REGISTRATION. The Company shall use its best efforts to qualify for
registration on Form S-3 or any comparable or successor form or forms. In case
the Company shall receive from any Holder or Holders of Investors' Registrable
Securities then outstanding a written request or requests that the Company
effect a registration on Form S-3 and any related qualification or compliance
with respect to all or a part of the Investors' Registrable Securities owned by
such Holder or Holders, then the Company will:
NOTICE. Promptly give written notice of the proposed registration and the
Holder's or Holders' request therefor, and any related qualification or
compliance, to all other Holders of Investors' Registrable Securities; and
REGISTRATION. As soon as practicable, file such registration statement and
use its reasonable best efforts to effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Investor's Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders requesting to participate in such registration as are
specified in a written request given within twenty (20) days after receipt of
such written notice from the Company; provided, however, that the Company shall
not be obligated to effect any such registration, qualification or compliance
pursuant to this Section 2.4:
IF FORM S-3 IS NOT AVAILABLE FOR SUCH OFFERING;
IF THE HOLDERS REQUESTING TO PARTICIPATE IN SUCH REGISTRATION, PROPOSE TO
SELL REGISTRABLE SECURITIES AT AN AGGREGATE PRICE TO THE PUBLIC OF LESS THAN
$75,000;
IF THE COMPANY SHALL FURNISH TO THE REQUESTING HOLDERS A CERTIFICATE SIGNED
BY THE PRESIDENT OR CHIEF EXECUTIVE OFFICER OF THE COMPANY STATING THAT IN THE
GOOD FAITH JUDGMENT OF THE BOARD OF DIRECTORS OF THE COMPANY, IT WOULD BE
SERIOUSLY DETRIMENTAL TO THE COMPANY AND ITS SHAREHOLDERS FOR SUCH FORM S-3
REGISTRATION TO BE EFFECTED AT SUCH TIME, IN WHICH EVENT THE COMPANY SHALL HAVE
THE RIGHT TO DEFER THE FILING OF THE FORM S-3 REGISTRATION STATEMENT NO MORE
THAN ONCE DURING ANY TWELVE MONTH PERIOD FOR A PERIOD OF NOT MORE THAN 90 DAYS
AFTER RECEIPT OF THE REQUEST OF THE HOLDER OR HOLDERS UNDER THIS SECTION 2.4;
IF THE COMPANY HAS, WITHIN THE SIX (6) MONTH PERIOD PRECEDING THE DATE OF
SUCH REQUEST, ALREADY EFFECTED ONE (1) REGISTRATION ON FORM S-3 FOR ANY HOLDERS
OF INVESTORS' REGISTRABLE SECURITIES PURSUANT TO THIS SECTION 2.4; OR
IN ANY PARTICULAR JURISDICTION IN WHICH THE COMPANY WOULD BE REQUIRED TO
QUALIFY TO DO BUSINESS OR TO EXECUTE A GENERAL CONSENT TO SERVICE OF PROCESS IN
EFFECTING SUCH REGISTRATION, QUALIFICATION OR COMPLIANCE.
EXPENSES. Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered pursuant to this Section 2.4 as soon as
practicable after receipt of the request or requests of the Holders for such
registration. The Company shall pay all expenses incurred in connection with
each registration requested pursuant to this Section 2.4 (excluding
underwriters' or brokers' discounts and commissions), including without
limitation all filing, federal registration and qualification fees, "blue sky"
registration and qualification fees for up to ten (10) states, printers' and
accounting fees, the reasonable fees and disbursements of counsel for the
Company and the reasonable fees of one counsel to participating Holders.
NOT DEMAND REGISTRATION. Form S-3 registrations shall not be deemed to be
demand registrations as described in Section 2.2 above.
UNDERWRITING. If the Holders of Investors' Registrable Securities initiating
registration pursuant to this Section 2.4 intend to distribute the Investors'
Registrable Securities covered by their request by means of an underwriting,
then they shall advise the Company as part of their request made pursuant to
this Section 2.4, and the provisions of Section 2.2(b) above shall apply to such
registration.
OBLIGATIONS OF THE COMPANY. Whenever required to effect the registration of
any Investors' Registrable Securities under this Agreement, the Company shall,
as expeditiously as reasonably possible: Prepare and file with the SEC a
registration statement with respect to such Investors' Registrable Securities
and use reasonable, diligent efforts to cause such registration statement to
become effective, and, upon the request of the Holders of a majority of the
Investors' Registrable Securities registered thereunder, keep such registration
statement effective for up to ninety (90) days.
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Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
Furnish to the participating Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of the Investors' Registrable Securities owned by
them that are included in such registration.
Use reasonable, diligent efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions (not to exceed ten states) as shall be reasonably
requested by the participating Holders, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions.
In the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter(s) of such offering. Each Holder participating in such
underwriting shall also enter into and perform its obligations under such an
agreement.
Notify each Holder of Investors' Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of 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 a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
Furnish, at the request of any Holder requesting registration of Investors'
Registrable Securities, on the date that such Investors' Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (1) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders of
Investors' Registrable Securities requesting registration, addressed to the
underwriters, if any, and to the Holders requesting registration of Investors'
Registrable Securities and (2) to the extent permitted under the rules of AICPA
a "comfort" letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders of Investors' Registrable Securities requesting registration, addressed
to the underwriters, if any, and to the Holders requesting registration of
Investors' Registrable Securities.
FURNISH INFORMATION. It shall be a condition precedent to the obligations of
the Company to take any action pursuant to Sections 2.2, 2.3 or 2.4 that the
selling Holders shall furnish to the Company such information regarding
themselves, the Investors' Registrable Securities held by them, and the
intended method of disposition of such securities as shall be required to
timely effect the registration of their Investors' Registrable Securities.
DELAY OF REGISTRATION. No Holder of Investors' Registrable Securities shall
have any right to obtain or seek an injunction restraining or otherwise
delaying any such registration as the result of any controversy that might
arise with respect to the interpretation or implementation of this Section 2.
INDEMNIFICATION. In the event any Investors' Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:
BY THE COMPANY. To the extent permitted by law, the Company will indemnify
and hold harmless each Holder of such Investors' Registrable Securities, the
partners, officers and directors of each such Holder, any underwriter (as
defined in the Securities Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act or
the Securities Exchange Act of 1934, as amended, (the "1934 Act"), against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the l934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
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respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively, "Violations" and, individually, a
"Violation"):
ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED
IN SUCH REGISTRATION STATEMENT, INCLUDING ANY PRELIMINARY PROSPECTUS OR FINAL
PROSPECTUS CONTAINED THEREIN OR ANY AMENDMENTS OR SUPPLEMENTS THERETO;
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,
OR
ANY VIOLATION OR ALLEGED VIOLATION BY THE COMPANY OF THE SECURITIES ACT, THE
1934 ACT, ANY FEDERAL OR STATE SECURITIES LAW OR ANY RULE OR REGULATION
PROMULGATED UNDER THE SECURITIES ACT, THE 1934 ACT OR ANY FEDERAL OR STATE
SECURITIES LAW IN CONNECTION WITH THE OFFERING COVERED BY SUCH REGISTRATION
STATEMENT;
and the Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED HOWEVER, that the
indemnity agreement contained in this subsection 2.8(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person of such Holder.
BY SELLING HOLDERS. To the extent permitted by law, each selling Holder of
Investors' Registrable Securities will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company within the meaning of
the Securities Act, any underwriter and any other Holder selling securities
under such registration statement or any of such other Holder's partners,
directors or officers or any person who controls such Holder within the meaning
of the Securities Act or the 1934 Act, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person, underwriter or other such Holder, partner or
director, officer or controlling person of such other Holder may become subject
under the Securities Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly for use
in connection with such registration; and each such Holder will reimburse any
legal or other expenses reasonably incurred by the Company or any such director,
officer, controlling person, underwriter or other Holder, partner, officer,
director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the indemnity agreement contained in this subsection
2.8(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; and PROVIDED
FURTHER, that the total amounts payable in indemnity by a Holder under this
Section 2.8(b) in respect of any Violation shall not exceed the net proceeds
received by such Holder in the registered offering out of which such Violation
arises.
NOTICE. Promptly after receipt by an indemnified party under this Section 2.8
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 2.8, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; PROVIDED,
HOWEVER, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflict of
7
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
2.8, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 2.8.
DEFECT ELIMINATED IN FINAL PROSPECTUS. The foregoing indemnity agreements of
the Company and Holders are subject to the condition that, insofar as they
relate to any Violation made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the SEC at the time the
registration statement in question becomes effective or the amended prospectus
filed with the SEC pursuant to SEC Rule 424(b) (the "Final Prospectus"), such
indemnity agreement shall not inure to the benefit of any person if a copy of
the Final Prospectus was furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Securities Act.
CONTRIBUTION. In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either (1) any
Holder exercising rights under this Agreement, or any controlling person of any
such Holder, makes a claim for indemnification pursuant to this Section 2.8 but
it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 2.8 provides
for indemnification in such case, or (2) contribution under the Securities Act
may be required on the part of any such selling Holder or any such controlling
person in circumstances for which indemnification is provided under this Section
2.8; then, and in each such case, the Company and such Holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such Holder
is responsible for the portion represented by the percentage that the public
offering price of its Registrable Securities offered by and sold under the
registration statement bears to the public offering price of all securities
offered by and sold under such registration statement, and the Company and other
selling Holders are responsible for the remaining portion; PROVIDED, HOWEVER,
that, in any such case, (A) no such Holder will be required to contribute any
amount in excess of the public offering price of all such Registrable Securities
offered and sold by such Holder pursuant to such registration statement; and (B)
no person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from
any person or entity who was not guilty of such fraudulent misrepresentation.
SURVIVAL. The obligations of the Company and Holders of Investors'
Registrable Securities under this Section 2.8 shall survive the completion of
any offering of Investors' Registrable Securities in a registration statement,
and otherwise.
RULE 144 REPORTING. With a view to making available the benefits of certain
rules and regulations of the Commission which may at any time permit the sale of
the Registrable Securities to the public without registration, after such time
as a public market exists for the Common Stock of the Company, the Company
agrees to:
Make and keep public information available, as those terms are understood and
defined in Rule 144 under the Securities Act, at all times after the effective
date of the first registration under the Securities Act filed by the Company for
an offering of its securities to the general public;
Use reasonable, diligent efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the 1934 Act (at any time after it has become subject to such
reporting requirements); and
So long as a Holder owns any Investors' Registrable Securities, to furnish to
such Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time after
90 days after the effective date of the first registration statement filed by
the Company for an offering of its securities to the general public), and of the
Securities Act and the 1934 Act (at any time after it has become subject to the
reporting requirements of the 1934 Act), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company as such Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing such Holder to sell any such securities
without registration (at any time after the Company has become subject to the
reporting requirements of the 1934 Act).
8
OTHER RIGHTS. From and after the date of this Agreement, the Company shall
not, without the prior written consent of the holders of a majority of the
Investors' Registrable Securities, grant to any shareholder of the Company any
demand, piggyback, or S-3 registration rights superior to those of the Holders
of the Investors' Registrable Securities or rights pari passu with the Holders
of the Investors' Registrable Securities with respect to Sections 2.2(b), 2.3(a)
and 2.4(e) hereof. In addition, the Company will grant Holders of the Investors'
Registrable Securities any registration rights granted to subsequent purchasers
of securities of the Company to the extent that such subsequent rights are
superior, as determined in good faith by the Company's Board of Directors, to
those granted to Holders of the Investors' Registrable Securities.
RIGHT OF FIRST REFUSAL.
-----------------------
GENERAL. Each Investor (a "Rights Holder") has the right of first refusal to
purchase such Rights Holder's Pro Rata Share (as defined below), of all (or any
part) of any "New Securities" (as defined in Section 3.2) that the Company may
from time to time issue after the date of this Agreement. A Rights Holder's "Pro
Rata Share" for purposes of this right of first refusal is the ratio of (a) the
number of Investors' Registrable Securities as to which such Rights Holder is
the Holder (and/or is deemed to be the Holder under Section 2.1(b)), to (b) a
number of shares of Common Stock of the Company equal to the sum of (1) the
total number of shares of Common Stock of the Company then outstanding plus (2)
the total number of shares of Common Stock of the Company into which all then
outstanding Warrants and Notes are then convertible plus (3) the number of
shares of Common Stock of the Company reserved for issuance under stock purchase
and stock option plans of the Company and outstanding warrants and other
convertible securities. New Securities.
"NEW SECURITIES" shall mean any Common Stock or Preferred Stock of the
Company, whether now authorized or not, and rights, options or warrants to
purchase such Common Stock or Preferred Stock issued after the date hereof, and
securities of any type whatsoever that are, or may become, convertible or
exchangeable into such Common Stock or Preferred Stock, unless waived by PMF;
PROVIDED, HOWEVER, that the term "New Securities" DOES NOT INCLUDE:
shares of Common Stock issued or issuable upon (i) exercise of the
Warrants, (ii) conversion of the Convertible Notes, or (iii) in-kind payment
of interest on the December Notes;
any shares of Common Stock issued or issuable upon conversion or exercise
of currently outstanding options, warrants or convertible securities;
shares of Common Stock or Preferred Stock issued pursuant to the
acquisition of another corporation or entity by the Company by consolidation,
merger, purchase of all or substantially all of the assets, or other
reorganization in which the Company acquires, in a single transaction or
series of related transactions, all or substantially all of the assets of
such other corporation or entity or fifty percent (50%) or more of the voting
power of such other corporation or entity or fifty percent (50%) or more of
the equity ownership of such other entity;
shares of the Company's Common Stock or Preferred Stock issued in
connection with any stock split or stock dividend;
securities offered by the Company to the public pursuant to a registration
statement filed under the Securities Act; and
securities issued or issuable under the Company's stock purchase and stock
option plans approved by the Company's Board of Directors.
PROCEDURES. In the event that the Company proposes to undertake an issuance
of New Securities, it shall give to each Rights Holder written notice of its
intention to issue New Securities (the "Notice"), describing the type of New
Securities and the price and the general terms upon which the Company proposes
to issue such New Securities. Each Rights Holder shall have twenty (20) days
from the date of mailing of any such Notice to agree in writing to purchase such
Rights Holder's Pro Rata Share of such New Securities for the price and upon the
general terms specified in the Notice by giving written notice to the Company
and stating therein the quantity of New Securities to be purchased (not to
exceed such Rights Holder's Pro Rata Share). If any Rights Holder fails to so
agree in writing within such twenty (20) day period to purchase such Rights
9
Holder's full Pro Rata Share of an offering of New Securities (a "Nonpurchasing
Holder"), then such Nonpurchasing Holder shall forfeit the right hereunder to
purchase that part of his Pro Rata Share of such New Securities that he did not
so agree to purchase and the Company shall promptly give each Rights Holder who
has timely agreed to purchase his full Pro Rata Share of such offering of New
Securities (a "Purchasing Holder") written notice of the failure of any
Nonpurchasing Holder to purchase such Nonpurchasing Rights Holder's full Pro
Rata Share of such offering of New Securities (the "Overallotment Notice"). Each
Purchasing Holder shall have a right of overallotment such that such Purchasing
Holder may agree to purchase a portion of the Nonpurchasing Holders' unpurchased
Pro Rata Shares of such offering on a pro rata basis according to the relative
Pro Rata Shares of the Purchasing Rights Holders, at any time within ten (10)
days after receiving the Overallotment Notice. Rights Holders exercising the
right of first refusal set forth in this Section 3 may pay the purchase price
for such securities (i) in cash (by check) or by wire transfer, (ii) by
cancellation of any outstanding debt and/or accrued interest, including the
Notes, owed by the Company to the Rights Holder; (iii) by exchange of the
Company's securities held by Rights Holder at the Fair Market Value thereof or
(iv) by a combination of (i), (ii) and (iii).
The term "Fair Market Value" of a share of Common Stock as of a particular date
shall mean:
IF TRADED ON A SECURITIES EXCHANGE OR THE NASDAQ NATIONAL MARKET, THE FAIR
MARKET VALUE SHALL BE DEEMED TO BE THE AVERAGE OF THE CLOSING PRICES OF THE
COMMON STOCK OF THE COMPANY ON SUCH EXCHANGE OR MARKET OVER THE 5 BUSINESS
DAYS ENDING IMMEDIATELY PRIOR TO THE APPLICABLE DATE OF VALUATION;
IF ACTIVELY TRADED OVER-THE-COUNTER, THE FAIR MARKET VALUE SHALL BE DEEMED
TO BE THE AVERAGE OF THE CLOSING BID PRICES OVER THE 30-DAY PERIOD ENDING
IMMEDIATELY PRIOR TO THE APPLICABLE DATE OF VALUATION; AND
IF THERE IS NO ACTIVE PUBLIC MARKET, THE FAIR MARKET VALUE SHALL BE THE
VALUE THEREOF, AS DETERMINED IN GOOD FAITH BY THE COMPANY'S BOARD OF
DIRECTORS; PROVIDED, HOWEVER, THAT IF THE RIGHTS HOLDER OBJECTS IN GOOD FAITH
TO SUCH DETERMINATION, THEN SUCH VALUE SHALL BE DETERMINED BY AN INDEPENDENT
VALUATION FIRM EXPERIENCED IN VALUING BUSINESSES SUCH AS THAT OF THE COMPANY
AND JOINTLY SELECTED IN GOOD FAITH BY THE COMPANY AND THE RIGHTS HOLDER. FEES
AND EXPENSES OF THE VALUATION FIRM SHALL BE SHARED EQUALLY BY THE COMPANY AND
THE RIGHTS HOLDER.
FAILURE TO EXERCISE. In the event that the Rights Holders fail to exercise in
full the right of first refusal within such twenty (20) plus ten (10) day
period, then the Company shall have 120 days thereafter to sell the New
Securities with respect to which the Rights Holders' rights of first refusal
hereunder were not exercised, at a price and upon general terms not materially
more favorable to the purchasers thereof than specified in the Company's Notice
to the Rights Holders. In the event that the Company has not issued and sold the
New Securities within such 120 day period, then the Company shall not thereafter
issue or sell any New Securities without again first offering such New
Securities to the Rights Holders pursuant to this Section 3.
TERMINATION. This right of first refusal shall terminate upon (1) the
acquisition of all or substantially all the assets of the Company, (2) an
acquisition of the Company by another corporation or entity by consolidation,
merger or other reorganization in which the holders of the Company's outstanding
voting stock immediately prior to such transaction own, immediately after such
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transaction, securities representing less than fifty percent (50%) or more of
the voting power of the corporation or other entity surviving such transaction
or (3) upon the date that the shares of the Company's Common Stock issued or
issuable under the Warrants and any other equity securities held by the
Investors do not constitute at least five percent (5%) of the Fully-Diluted
Shares.
OTHER RIGHTS. From and after the date of this Agreement, the Company will
grant the Investors any rights of first refusal granted to subsequent purchasers
of preferred stock of the Company to the extent that such subsequent rights are
superior, as determined in good faith by the Company's Board of Directors, to
those granted to the Investors.
ASSIGNMENT AND AMENDMENT.
-------------------------
ASSIGNMENT. The rights of an Investor under Sections 1 and 2 hereof may be
assigned to a party who acquires any Note or Warrant issued under the Loan
Agreements; provided, however that any such assignee shall receive such assigned
rights subject to all the terms and conditions of this Agreement, including
without limitation the provisions of this Section 4 and provided further that
the assignor of rights under Sections 1 and 2 hereof shall provide prompt
written notice or such assignment to the Company. The rights of an Investor
under Section 3 hereof may not be assigned.
AMENDMENT OF RIGHTS. Any provision of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and holders of more than 50% of the outstanding principal balance under
the Notes (as defined in the Loan Agreements). Any amendment or waiver effected
in accordance with this Section 4.2 shall be binding upon each Investor, each
Holder, each permitted successor or assignee of such Investor or Holder and the
Company. Notwithstanding the foregoing, additional parties may advance certain
funds to the Company in accordance with Section 1.2(e) of the August Loan
Agreement, and such parties shall be bound by and entitled to the terms,
benefits and conditions contained herein by the execution and delivery of a
signature page to this Agreement; such subsequent addition shall not be deemed a
modification, amendment or waiver of the terms of this Agreement.
GENERAL PROVISIONS.
-------------------
NOTICES. Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered or if deposited in the U.S. mail by registered or certified
mail, return receipt requested, postage prepaid, as follows: if to an Investor,
at such Investor's respective address as set forth on the signature page hereof.
if to the Company, at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇.
Any party hereto (and such party's permitted assigns) may by notice so given
change its address for future notices hereunder. Notice shall conclusively be
deemed to have been given when personally delivered or when deposited in the
mail in the manner set forth above.
ENTIRE AGREEMENT. This Agreement, together with all the Exhibits hereto,
constitutes and contains the entire agreement and understanding of the parties
with respect to the subject matter hereof and supersedes any and all prior
negotiations, correspondence, agreements, understandings, duties or obligations
between the parties respecting the subject matter hereof and amends and restates
the Prior Agreement in its entirety.
GOVERNING LAW. This Agreement shall be governed by and construed exclusively
in accordance with the internal laws of the State of California as applied to
agreements among California residents entered into and to be performed entirely
within California, excluding that body of law relating to conflict of laws.
SEVERABILITY. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, then such provision(s) shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
its terms.
THIRD PARTIES. Nothing in this Agreement, express or implied, is intended to
confer upon any person, other than the parties hereto and their successors and
assigns, any rights or remedies under or by reason of this Agreement.
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SUCCESSORS AND ASSIGNS. Subject to the provisions of Section 4.1, the
provisions of this Agreement shall inure to the benefit of, and shall be binding
upon, the successors and permitted assigns of the parties hereto.
CAPTIONS. The captions to sections of this Agreement have been inserted for
identification and reference purposes only and shall not be used to construe or
interpret this Agreement.
COUNTERPARTS. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
COSTS AND ATTORNEYS' FEES. In the event that any action, suit or other
proceeding is instituted concerning or arising out of this Agreement or any
transaction contemplated hereunder, the prevailing party shall recover all of
such party's costs and attorneys' fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
ADJUSTMENTS FOR STOCK SPLITS, ETC. Wherever in this Agreement there is a
reference to a specific number of shares of Common Stock of the Company, then,
upon the occurrence of any subdivision, combination or stock dividend of such
stock, the specific number of shares so referenced in this Agreement shall
automatically be proportionally adjusted to reflect the effect on the
outstanding shares of such stock by such subdivision, combination or stock
dividend.
AGGREGATION OF STOCK. All shares held or acquired by affiliated entities or
persons shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.
ADDITIONAL INVESTORS. The parties acknowledge and agree that additional
parties may lend funds to Borrower under the same terms as PMF under the Loan
Agreements. Such additional lenders shall execute this Agreement together with
such additional documents as PMF may reasonably require in form and content
satisfactory to PMF prior to making such loan.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first written above.
THE PLASTIC SURGERY COMPANY
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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President and Chief Executive Officer
THE INVESTORS:
PACIFIC MEZZANINE FUND, L.P.
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By: Pacific Private Capital
Its: General Partner
By:/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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General Partner
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇
Address:
/S/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------
Address:
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
Address:
/S/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Address:
[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]
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/S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/S/ ▇▇▇ ▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇▇▇ London
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▇▇▇▇▇▇ London
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/S/ Curting J. ▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]
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/S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Address:
/S/ ▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇
Address:
▇▇▇▇ Capital Partners, LLC
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Chief Financial Officer
Address:
[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]
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