Void after 5:00 p.m., Eastern Standard Time on December 20, 2012 UNIT PURCHASE WARRANT
NEITHER
THIS SECURITY NOR THE SECURITY INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE OFFERED
OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.
Warrant
No. W-_________
Void
after 5:00 p.m., Eastern Standard Time on December 20, 2012
UNIT
PURCHASE WARRANT
DRTATTOFF,
LLC, a California limited liability company (the “Company”),
hereby certifies that, for value received,
▇▇▇▇▇
▇▇▇▇▇▇▇▇ (the “Warrant
Holder”)
is the
owner of the number of unit purchase warrants (“Warrants”)
which
entitles the holder thereof to purchase, at any time during the period
commencing on the Commencement Date (as defined herein) and ending on the
Expiration Date (as defined herein), Thirty Two Thousand Six Hundred Forty
One
(32,641) fully paid and non-assessable units of Membership Interest (as defined
in the Company’s Operating Agreement dated as of July 5, 2005, as amended to
date (the “Operating
Agreement”))
in
the Company (each a “Unit”),
at a
purchase price equal to the Exercise Price (as defined below) in lawful money
of
the United States of America in cash, subject to adjustment as hereinafter
provided. Each Unit shall include the right to receive allocations of Net
Profits and Net Losses and distributions from the Company.
| 1. |
WARRANT;
EXERCISE PRICE.
|
1.1 This
Warrant is issued pursuant to a Subscription Agreement dated as of the date
hereof, by and among the Company and the Warrant Holder (the “Subscription
Agreement”).
1.2 Each
Warrant shall entitle the Warrant Holder to purchase one Unit (individually,
a
“Warrant
Unit”
severally, the “Warrant
Units”).
Each
Warrant Unit shall provide the holder of such Unit with a capital account
balance equal to the exercise price paid for such Warrant Unit.
1.3 The
purchase price payable upon exercise of each Warrant (the “Exercise
Price”)
shall
be $1.25 per Unit, or the equivalent thereof, subject to any adjustments
pursuant to Section 8. Notwithstanding the foregoing, the Exercise Price and
number of Warrant Units purchasable pursuant to each Warrant are subject to
adjustment as provided in Section 8.
2. EXERCISE
OF WARRANT; EXPIRATION DATE.
2.1 This
Warrant is exercisable at any time and from time to time commencing the date
hereof (“Commencement
Date”)
and
ending at 5:00 p.m., Eastern Time on December 20, 2012 (the “Expiration
Date”),
in
whole or from time to time in part, at the option of the Warrant Holder, upon
surrender of this Warrant to the Company together with a duly completed Notice
of Exercise in the form attached hereto and payment of an amount equal to the
then applicable Exercise Price multiplied by the number of Warrant Units then
being purchased upon such exercise.
2.2 Each
exercise of this Warrant shall be deemed to have been effected immediately
prior
to the close of business on the day on which this Warrant shall have been
surrendered to the Company as provided in Section 2.1. At such time, the person
or persons in whose name or names any certificates for Warrant Units shall
be
issuable upon such exercise as provided in Section 2.3 below shall be deemed
to
have become the holder or holders of record of the Warrant Units represented
by
such certificates.
2.3 Within
five business days after the exercise of the purchase right represented by
this
Warrant, the Company at its expense will use its reasonable best efforts to
cause to be issued in the name of, and delivered to, the Warrant Holder, or,
subject to the terms and conditions hereof, to such other individual or entity
as such Warrant Holder (upon payment by such Warrant Holder of any applicable
transfer taxes) may direct:
(a) a
certificate or certificates for the number of full Warrant Units to which such
Warrant Holder shall be entitled upon such exercise, and
(b) in
case
such exercise is in part only, a new Warrant or Warrants (dated the date hereof)
of like tenor, stating on the face or faces thereof the number of Units
currently stated on the face of this Warrant minus the number of such Units
purchased by the Warrant Holder upon such exercise as provided in Section 2.2
(in each case prior to any adjustments made thereto pursuant to the provisions
of this Warrant).
3. REGISTRATION
AND TRANSFER ON COMPANY BOOKS.
3.1 The
Company (or an agent of the Company) will maintain a register containing the
names and addresses of the Warrant Holders. Any Warrant Holder may change its,
his or her address as shown on the Warrant register by written notice to the
Company requesting such change.
3.2 The
Company shall register upon its books any transfer of a Warrant upon surrender
of same as provided in Section 5.
4. RESERVATION
OF UNITS.
The
Company will at all times reserve and keep available, solely for issuance and
delivery upon the exercise of this Warrant, such Warrant Units and other stock,
securities and property, as from time to time shall be issuable upon the
exercise of this Warrant.
2
5. EXCHANGE,
TRANSFER, ASSIGNMENT OR LOSS OR MUTILATION OF WARRANTS.
This
Warrant is exchangeable, without expense, at the option of the Warrant Holder,
upon presentation and surrender hereof to the Company for other warrants of
different denominations entitling the holder thereof to purchase in the
aggregate the same number of Units purchasable hereunder. Subject to the terms
of Sections 6 and 7, upon surrender of this Warrant to the Company at its
principal office or at the office of its transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment
and
this Warrant shall be promptly canceled. Subject to the terms of Sections 6
and
7, this Warrant may be divided or combined with other Warrants which carry
the
same rights upon presentation hereof at the principal office of the Company
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Warrant Holder hereof. The
term
“Warrant” as used herein includes any Warrants into which this Warrant may be
divided or exchanged. Upon receipt by the Company of reasonable evidence of
the
ownership of and the loss, theft, destruction or mutilation of this Warrant
and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant, the Company shall execute and deliver in lieu thereof
a new Warrant of like tenor and date representing an equal number of Warrants.
6. LIMITATION
ON EXERCISE AND SALES.
6.1 Each
holder of this Warrant acknowledges that this Warrant and the Warrant Units
have
not been registered under the Securities Act, as of the date of issuance hereof.
This Warrant may only be transferred in compliance with this Section 6 and
Section 7. The Company shall be under no obligation to issue the Units covered
by such exercise unless and until the Warrant Holder shall have executed the
form of exercise annexed hereto that states that at the time of such exercise
that it is then an “accredited investor” within the meaning of Rule 501 of
Regulation D, is acquiring such Units for its own account, and will not transfer
the Warrant Units unless pursuant to an effective and current registration
statement under the Securities Act or an exemption from the registration
requirements of the Securities Act and any other applicable restrictions, in
which event the Warrant Holder shall be bound by the provisions of a legend
or
legends to such effect that shall be endorsed upon the certificate(s)
representing the Warrant Units issued pursuant to such exercise. In such event,
the Warrant Units issued upon exercise hereof shall be imprinted with a legend
in substantially the form provided in Section 7.2.
6.2 Warrant
Holder represents and warrants that it is acquiring this Warrant for its own
account, for purposes of investment, and not with a view to, or for sale in
connection with, any distribution thereof within the meaning of the Securities
Act and the rules and regulations promulgated thereunder. Warrant Holder
represents, warrants and agrees that it will not sell, exercise, transfer or
otherwise dispose of this Warrant (or any interest therein) or any of the Units
purchasable upon exercise hereof, except pursuant to (i) an effective
registration statement under the Securities Act and applicable state securities
laws or (ii) an opinion of counsel, satisfactory to Company, that an exemption
from registration under the Securities Act and such laws is available. Warrant
Holder further acknowledges and agrees that Company is not required, legally
or
contractually, so to register or qualify the Warrant or such Units or to take
any action to make such an exemption available. Warrant Holder understands
that
Company will be relying upon the truth and accuracy of the representations
and
warranties contained in this Section 6 in issuing this Warrant and such Units
without first registering the issuance thereof under the Securities Act or
qualifying or registering the issuance thereof under any state securities laws
that may be applicable.
3
6.3 Warrant
Holder acknowledges that (i) there is not now, and there may not be in the
future, any public market for the Warrant or the Units, (ii) although there
currently is not a public trading market for the Units, there can be no
assurance that any such market will be created and sustained, and (iii) there
can be no assurance that Warrant Holder will be able to liquidate its investment
in Company. Warrant Holder represents and warrants that it is familiar with
and
understands the terms and conditions of Rule 144 promulgated under the
Securities Act.
6.4 Warrant
Holder represents and warrants to Company that (i) it has such knowledge and
experience in financial and business matters as is necessary to enable it to
evaluate the merits and risks of any investments in Company and is not utilizing
any other person to be a purchaser representative in connection with evaluation
of such merits and risks; and (ii) it has no need for liquidity in an investment
in Company and is able to bear the risk of that investment for an indefinite
period and to afford a complete loss thereof.
6.5 Warrant
Holder represents and warrants that it has had access to, and has been furnished
with, all of the information it has requested from Company and has had an
opportunity to review the books and records of Company and to discuss with
management and members of the board of directors of Company the business and
financial affairs of Company.
6.6 Warrant
Holder agrees that at the time of each exercise of this Warrant, unless the
issuance of Units issuable thereupon is pursuant to an effective registration
statement under the Securities Act and under applicable state blue sky laws,
Warrant Holder will provide Company with a letter embodying the representations
and warranties set forth in Sections 6.2 through 6.5, in form and substance
reasonably satisfactory to Company, and agrees that the certificate(s)
representing any securities issued to it upon any exercise of this Warrant
may
bear such restrictive legend as Company may deem necessary to reflect the
restricted status of such securities under the Securities Act unless Company
shall have received from Warrant Holder an opinion of counsel to Warrant Holder,
reasonably satisfactory in form and substance to Company and its counsel, that
such restrictive legend is not required.
7. TRANSFER
RESTRICTIONS.
7.1 If,
at
the time of the surrender of this Warrant in connection with any transfer of
this Warrant, the transfer of this Warrant shall not be registered pursuant
to
an effective registration statement under the Securities Act and under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer (i) that the Warrant Holder or transferee
of
this Warrant, as the case may be, furnish to the Company a written opinion
of
counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions and reasonably satisfactory
to
counsel for the Company) to the effect that such transfer may be made without
registration under the Securities Act and under applicable state securities
or
blue sky laws, (ii) that the holder or transferee execute and deliver to the
Company an investment letter in form and substance acceptable to the Company,
(iii) that transferee agree in writing with the Company to be bound by the
terms
and conditions of this Warrant applicable to the Warrant Holder and (iv) that
the transferee be an “accredited investor” as defined in Regulation D
promulgated under the Securities Act.
4
7.2 The
Units
issuable on the exercise of the Warrant shall bear the following
legend:
THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION,
OR THE SECURITIES COMMISSION OF ANY STATE, IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
7.3 The
Holder acknowledges that the Warrant Units acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.
8. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF UNITS DELIVERABLE.
The
Exercise Price and the number of Warrant Units purchasable pursuant to each
Warrant shall be subject to adjustment from time to time as hereinafter set
forth in this Section 8:
8.1 In
case,
prior to the expiration of this Warrant by exercise or by its terms, the Company
shall issue any additional units of Membership Interest as a dividend or
subdivide the number of outstanding Units into a greater number of units of
Membership Interest, then in either of such cases, the then applicable Exercise
Price per Warrant Unit purchasable pursuant to this Warrant in effect at the
time of such action shall be proportionately reduced and the number of Warrant
Units at that time purchasable pursuant to this Warrant shall be proportionately
increased; and conversely, in the event the Company shall reduce the number
of
outstanding units of Membership Interest by combining such units into a smaller
number of units of Membership Interest then, in such case, the then applicable
Exercise Price per Warrant Unit purchasable pursuant to this Warrant in effect
at the time of such action shall be proportionately increased and the number
of
Warrant Units at that time purchasable pursuant to this Warrant shall be
proportionately decreased. If the Company shall, at any time during the life
of
this Warrant, declare a dividend payable in cash on its Membership Interest
and
shall at substantially the same time offer to its Unitholders a right to
purchase new units of Membership Interest from the proceeds of such dividend
or
for an amount substantially equal to the dividend, all units of Membership
Interest so issued shall, for the purpose of this Warrant, be deemed to have
been issued as a dividend. Any dividend paid or distributed upon the Membership
Interests in units of any other class of securities convertible into units
of
Membership Interest shall be treated as a dividend paid in units of Membership
Interest to the extent that units of Membership Interest are issuable upon
conversion thereof.
5
8.2 In
case,
prior to the expiration of this Warrant by exercise or by its terms, the Company
shall be recapitalized by reclassifying its outstanding units of Membership
Interest, or the Company or a successor entity (“successor
Entity”)
shall
consolidate or merge with or convey all or substantially all of its or of any
successor Entity’s property and assets to any other Entity or Entities (any such
other Entities being included within the meaning of the term “successor Entity”
hereinbefore used in the event of any consolidation or merger of any such other
Entity with, or the sale of all or substantially all of the property of any
such
other Entity to, another Entity or Entities), then, as a condition of such
recapitalization, consolidation, merger or conveyance, lawful and adequate
provision shall be made whereby the holder of this Warrant shall thereafter
have
the right to purchase, upon the same basis and on the otherwise same terms
and
conditions specified in this Warrant, in lieu of the Warrant Units theretofore
purchasable upon the exercise of this Warrant, such shares of stock, securities
or assets, as may be issued or payable with respect to, or in exchange for,
the
number of Warrant Units theretofore purchasable upon the exercise of this
Warrant had such recapitalization, consolidation, merger, or conveyance not
taken place, and the exercise price for which shall have been appropriately
adjusted, if necessary, to reflect the number of securities which the Warrant
Holder is entitled to purchase in exchange for such Warrant; and in any such
event, the rights of the Warrant Holder to any adjustment in the number of
Warrant Units purchasable upon the exercise of this Warrant, as herein provided,
shall continue and be preserved in respect of any securities which the Warrant
Holder becomes entitled to purchase.
8.3 In
case
the Company at any time while this Warrant shall remain unexpired and
unexercised shall sell all or substantially all of its property or dissolve,
liquidate, or wind up its affairs, lawful provision shall be made as part of
the
terms of any such sale, dissolution, liquidation or winding up, so that the
holder of this Warrant may thereafter receive upon exercise hereof in lieu
of
each Warrant Unit that it would have been entitled to receive, the same kind
and
amount of any securities or assets as may be issuable, distributable or payable
upon any such sale, dissolution, liquidation or winding up with respect to
each
Unit of the Company, provided, however, that in any case of any such sale or
of
dissolution, liquidation or winding up, the right to exercise this Warrant
shall
terminate on a date fixed by the Company; such date so fixed to be not earlier
than 5:00 p.m., Eastern Time, on the forty-fifth day next succeeding the date
on
which notice of such termination of the right to exercise this Warrant has
been
given by mail to the registered holder of this Warrant at its address as it
appears on the books of the Company.
8.4 If
the
Company shall at any time prior to the expiration of this Warrant issue any
Units or securities convertible into Units to a person other than the Warrant
Holder for a consideration per Unit (the “Offer
Price”),
less
than the Exercise Price in effect at the time of such issuance, then the
Exercise Price shall be immediately reset to such lower Offer Price. The
Exercise Price, as so adjusted, shall be readjusted in the same manner upon
the
happening of any successive event or events described herein in this Section
8.
Notwithstanding the foregoing, no adjustment will be made under this Section
8.4
in respect of any “Excluded Securities”. “Excluded
Securities”
means
any Units or Unit equivalents issued or issuable to any persons and entities
arising from any (i) issuance of securities pursuant to any stock option or
equity incentive plan of the Company, (ii) any securities issued in connection
with the acquisition of assets, stock purchase or merger whereby the Company
is
the surviving corporation, (iii) issuance of any securities pursuant to any
subsequent agreement between Warrant Holder or any of its affiliates, and the
Company, and (iv) issuances of Units or other securities arising from any
existing obligation of the Company prior to the date of this
Warrant.
6
No
adjustment in the per Unit Exercise Price shall be required unless such
adjustment would require an increase or decrease in the Exercise Price by at
least $0.01; provided, however, that any adjustments that by reason of this
subsection are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 8
shall be made to the nearest cent or to the nearest 1/100th of a share, as
the
case may be.
8.5 In
case,
prior to the expiration of this Warrant by exercise or by its terms, the Company
(or its successor Entity) shall offer its securities for sale to the public
pursuant to an effective registration statement under the Securities Act of
1933, as amended, the per Unit Exercise Price shall be adjusted to the lesser
of
$1.00 or fifty percent (50%) of the public offering price of the Company’s
securities at that time.
9. VOLUNTARY
ADJUSTMENT BY THE COMPANY.
The
Company may, at its option, at any time during the term of the Warrants, reduce
the then current Exercise Price to any amount deemed appropriate by the Managing
Members of the Company and/or extend the date of the expiration of the Warrants.
10. RIGHTS
OF THE HOLDER.
The
Warrant Holder shall not, by virtue hereof, be entitled to any rights of a
member in the Company, either at law or equity, and the rights of the Warrant
Holder are limited to those expressed in this Warrant and are not enforceable
against the Company except to the extent set forth herein. This Warrant does
not
entitle the Holder to any voting rights or other rights as a member of the
Company prior to the Exercise Date and then only with respect to the Warrant
Units to be issued with respect thereto.
11. NOTICES
OF RECORD DATE.
In
case:
11.1 the
Company shall take a record of the holders of its Units (or other stock or
securities at the time deliverable upon the exercise of this Warrant) for the
purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any
Membership Interests or any other securities, or to receive any other right,
or
7
11.2 of
any
capital reorganization of the Company, any reclassification of the equity
capital of the Company, any consolidation or merger of the Company with or
into
a Entity or other entity (other than a consolidation or merger in which the
Company is the surviving entity), or any transfer of all or substantially all
of
the assets of the Company, or
11.3 of
the
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
then,
and
in each such case, the Company will mail or cause to be mailed to the Warrant
Holder a notice specifying, as the case may be, (i) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or
(ii) the effective date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up is
to
take place, and the time, if any is to be fixed, as of which the holders of
record of Units (or such other stock or securities at the time deliverable
upon
the exercise of this Warrant) shall be entitled to exchange their Units (or
such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice shall be mailed at least
ten
days prior to the record date or effective date for the event specified in
such
notice, provided that the failure to mail such notice shall not affect the
legality or validity of any such action.
12. REGISTRATION
RIGHTS.
The
Warrant Holder is entitled to the registration rights set forth in Annex A
attached hereto and made a part hereof.
8
13. SUCCESSORS.
The
rights and obligations of the parties to this Warrant will inure to the benefit
of and be binding upon the parties hereto and their respective heirs,
successors, assigns, pledgees, transferees and purchasers.
14. CHANGE
OR WAIVER.
Any
term of this Warrant may be changed or waived only by an instrument in writing
signed by the party against whom enforcement of the change or waiver is sought.
15. HEADINGS.
The
headings in this Warrant are for purposes of reference only and shall not limit
or otherwise affect the meaning of any provision of this Warrant. Wherever
possible, each provision of this Warrant shall be interpreted in such manner
as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.
16. GOVERNING
LAW.
This
Warrant shall be governed by and construed in accordance with the laws of the
State of California. Any action or litigation brought by either party against
the other concerning the transactions contemplated by this Warrant shall be
brought only in the state courts or in the federal courts located in the State
of California. The prevailing party shall be entitled to recover from the other
party its reasonable attorney’s fees and costs.
17. MAILING
OF NOTICES, ETC.
All
notices and other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given one (1) business day after
delivery to an overnight carrier with instructions to deliver to the applicable
address set forth below, or, if sent by facsimile, upon receipt of a
confirmation of delivery:
Registered
Holder:
To
his or
her last known address as indicated on the Company’s books and
records.
The
Company:
DRTATTOFF,
LLC
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇.
Suite
120
Beverly
Hills, CA 90211
Attention:
▇▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
[Signature
Page Follows]
9
IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer as of December 20, 2007.
|
DRTATTOFF,
LLC
|
||
| |
|
|
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇ ▇▇▇▇▇ |
||
| Title: Chief Executive Officer | ||
10
| Notice of Exercise | |
| To Be Executed by the Warrant Holder | |
| In Order to Exercise Warrants |
TO:
DRTATTOFF,
LLC
The
undersigned hereby: (1) irrevocably subscribes for and offers to purchase
_______ Units (“Units”),
of
DRTATTOFF,
LLC,
pursuant to Warrant No. ___ heretofore issued to ___________________ dated
_____________, 20___ and (2) encloses a cash payment of $__________ representing
the aggregate exercise price for such Units.
The
undersigned hereby represents and warrants to the Company that it is an
“Accredited Investor” within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act of 1933, as amended (the “Securities
Act”),
and is acquiring these securities for its own account and not with a view to,
or
for sale in connection with, any distribution thereof, nor with any present
intention of distributing or selling the same. The undersigned further
represents that it does not have any contract, agreement, understanding or
arrangement with any person to sell, transfer or grant the Units issuable under
this Warrant. The undersigned understands that the securities it will be
receiving are “restricted securities” under Federal securities laws inasmuch as
they are being acquired from DRTATTOFF,
LLC, in transactions not including any public offering and that under such
laws,
such securities may only be sold pursuant to an effective and current
registration statement under the Securities Act or an exemption from the
registration requirements of the Securities Act and any other applicable
restrictions, in which event a legend or legends will be placed upon the
certificate(s) representing the Units issuable under this Warrant denoting
such
restrictions. The undersigned understands and acknowledges that the Company
will
rely on the accuracy of these representations and warranties in issuing the
securities underlying the Warrant.
Date: ______________________________________________________________________
Warrant
Holder Name: __________________________________________________________
Taxpayer
Identification Number: ___________________________________________________
By:
_________________________________________________________________________
Printed
Name: _________________________________________________________________
Title: _______________________________________________________________________
Address:
____________________________________________________________________
Note:
The
above signature should correspond exactly with the name on the face of this
Warrant or with the name of assignee appearing in assignment form below.
AND,
if
said number of Units shall be less than the total number of Units purchasable
under the Warrant, a new Warrant is to be issued in the name of said undersigned
for the balance remaining of the Units purchasable thereunder less any fraction
of a Unit paid in cash and delivered to the address stated above.
ASSIGNMENT
FORM
To
be
executed by the Warrant Holder
In
order
to Assign Warrants
FOR
VALUE
RECEIVED,____________________________________ hereby sells, assigns and
transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
(Please
print or type name and address)
______________________
of the Warrants represented by this Warrant, and hereby irrevocably constitutes
and appoints ________________________ Attorney to transfer this Warrant on
the
books of the Company, with full power of substitution in the
premises.
Dated:______________________
____________________________
(Signature
of Registered Holder)
18.
In
addition to executing this Assignment Form, the Warrant Holder and the
transferee must comply with the other requirements for transfer set forth in
Sections 6 and 7 of the Warrant.
CERTIFICATION
OF STATUS OF TRANSFEREE
TO
BE
EXECUTED BY THE TRANSFEREE OF THIS WARRANT
The
undersigned transferee hereby certifies to the registered holder of this Warrant
and to DRTATTOFF, LLC that the transferee is an “accredited investor” within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act of
1933, as amended.
19.
Dated:_____________________ __________________________
(Signature
of Transferee)
ANNEX
A
REGISTRATION
RIGHTS
1. DEFINITIONS.
Capitalized terms used and not otherwise defined herein that are defined in
the
Warrant shall have the meanings given such terms in the Warrant. As used herein,
the following terms shall have the following meanings:
“Commission”
means
the Securities and Exchange Commission.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and any successor
statute.
“Holder”
or
“Holders”
means
the Warrant Holder or Holders to the extent any of them hold Registrable
Securities.
“Indemnified
Party”
shall
have the meaning set forth in Section 5.2.
“Indemnifying
Party”
shall
have the meaning set forth in Section 5.2.
“Piggy-Back
Registration”
is
defined in Section 2.1.
“Proceeding”
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Prospectus”
means
the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Registrable
Securities”
means
the membership interests issuable upon exercise of the Warrants, or other
securities of the Company or any other issuer or issuable in respect of such
Units (because of stock splits, stock dividends, reclassifications,
recapitalizations, mergers, combinations or similar events, if applicable);
provided, however, that the Units which are Registrable Securities shall cease
to be Registrable Securities upon any sale or transfer of such securities
pursuant to a Registration Statement, Section 4(1) of the Securities Act, Rule
144 under the Securities Act or otherwise.
“Registration
Statement”
means
a
registration statement filed by the Company with the Commission on any
registration form prescribed by the Commission permitting a secondary offering
or distribution, other than on Form S-4, Form S-8 or similar forms.
“Rule
144”
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Securities
Act”
means
the Securities Act of 1933, as amended, and any successor statute.
“Trading
Market”
means
any of the Pink Sheets LLC electronic quotation service, NASD OTC Bulletin
Board, NASDAQ Global Select Market, NASDAQ Global Market, NASDAQ Capital Market,
American Stock Exchange or the New York Stock Exchange.
“Warrants”
means
the Unit purchase warrants issued by the Company.
2. PIGGY-BACK
REGISTRATION.
2.1 At
any
time and from time to time during the Warrant exercise period, whenever the
Company proposes to file a Registration Statement, the Company will prior to
such filing give written notice to Holder of its intention to do so and, upon
the written request of Holder given within ten (10) days after the Company
provides such notice, the Company shall use its good faith efforts to cause
all
Registrable Securities which the Company has been requested by Holder to
register to be registered under the Securities Act to the extent necessary
to
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of Holder; provided that the Company
shall have the right to postpone or withdraw any registration effected pursuant
to this Section 2 without obligation or liability to Holder. In the Holder’s
request, the Holder will be required to describe briefly its proposed
disposition of the Registrable Securities. However, in connection with any
registration under Section 2, the Holder’s Registrable Securities shall be
junior and subordinate to any registration rights granted by the Company which
are already outstanding, and any senior registration rights granted by the
Company in the future.
2.2 In
connection with any registration under Section 2 involving an underwritten
offering of the Company’s securities, the Company shall not be required to
include any Registrable Securities in such underwriting unless ▇▇▇▇▇▇ accepts
the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it, and then only in such quantity as will not, in
the
sole discretion of the underwriters, jeopardize the success of the offering
by
the Company. If in the sole discretion of the managing underwriter or
underwriters the registration of all, or part of, the Registrable Securities
which Holder has requested to be included would adversely affect such public
offering, then the Company shall be required to include in the underwriting
only
that number of Registrable Securities, if any, which the managing underwriter
or
underwriters believe may be sold without causing such adverse effect. If the
number of Registrable Securities to be included in the underwriting in
accordance with the foregoing is less than the total number of Registrable
Securities which Holder has requested to be included, then Holder and each
participant other than the Company in such underwriting shall participate in
the
underwriting pro rata based upon their total ownership of Registrable
Securities. Any such limitation shall be imposed in such manner so as to avoid
any diminution in the number of securities the Company may register for sale
by
giving first priority for the securities to be registered for issuance and
sale
by the Company and the underwriter, and by giving second priority for the
securities to be registered for sale by any holder of Registrable Securities
pursuant to the terms of this Agreement.
2.3 In
connection with any registration under this Section 2 involving a selling
stockholder registration statement or any other registration statement not
involving an underwritten offering of the Company’s securities, the Company
reserves the right to include only that number of Registrable Securities, if
any, as it shall determine in its sole discretion, may be sold without
jeopardizing the success of the offering or having an adverse effect on the
offering. If the number of Registrable Securities to be included in the offering
in accordance with the foregoing is less than the total number of Registrable
Securities which Holder has requested to be included, then Holder and each
participant other than the Company in such offering shall participate in the
offering pro rata based upon their total ownership of Registrable Securities.
Any such limitation shall be imposed in such manner so as to avoid any
diminution in the number of securities the Company may register for sale by
giving first priority for the securities to be registered for issuance and
sale
by the Company, and by giving second priority for the securities to be
registered for sale by any holder of Registrable Securities pursuant to the
terms of this Agreement.
2.4
Any
holder of Registrable Securities may elect to withdraw such holder’s request for
inclusion of Registrable Securities in any Piggy-Back Registration by giving
written notice to the Company of such request to withdraw prior to the
effectiveness of the Registration Statement. The Company may also elect to
withdraw a registration statement at any time prior to the effectiveness of
the
Registration Statement. Notwithstanding any such withdrawal, the Company shall
pay all expenses incurred by the holders of Registrable Securities in connection
with such Piggy-Back Registration as provided in Section 4.
3. REGISTRATION
PROCEDURES.
When
the Company proposes to effect the registration of any of the Registrable
Securities under the Securities Act, the Company shall:
3.1 furnish
to the Holder such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus) as the
Holder reasonably may request to facilitate the public sale or disposition
of
the Registrable Securities covered by the Registration Statement;
3.2 use
its
commercially reasonable efforts to register or qualify the Holder’s Registrable
Securities covered by the Registration Statement under the securities or “blue
sky” laws of such jurisdictions within the United States as the Holder may
reasonably request, provided, however, that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent
to
general service of process in any such jurisdiction; and
3.3 list
the
Registrable Securities covered by the Registration Statement with any Trading
Market on which the equity securities of the Company is then listed.
20.
4. REGISTRATION
EXPENSES.
All
expenses relating to the Company’s compliance with Sections 2 and 3 hereof,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and independent public accountants
for the Company, fees and expenses (including reasonable counsel fees) incurred
in connection with complying with state securities or “blue sky” laws, fees of
the NASD, transfer taxes, fees of transfer agents and registrars are called
“Registration Expenses.” All selling commissions applicable to the sale of
Registrable Securities, including any fees and disbursements of any counsel
to
the Holders, are called “Selling Expenses” and shall be the responsibility of
the Holder. The Company shall only be responsible for all Registration
Expenses.
5. INDEMNIFICATION.
5.1 In
the
event of a registration of the Registrable Securities, the Holder (subject
to
the provisions of Section 5.2) will indemnify and hold harmless the Company
or
its successor, and its officers, directors and each other person, if any, who
controls the Company within the meaning of the Securities Act, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or such persons may become subject under the Securities Act, the Exchange Act
or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in
respect thereof) arise out of or are based upon: (i) any untrue statement
or alleged untrue statement of any material fact which was furnished in writing
by the Holder to the Company expressly for use in (and such information is
contained in) the Registration Statement under which such Registrable Securities
were registered under the Securities Act pursuant to the Warrant, any
preliminary Prospectus or final Prospectus contained therein, or any amendment
or supplement thereof, 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 and each such person for any reasonable legal or other expenses incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action, provided, however, that such Holder will be liable
in any such case if and only to the extent that any such loss, claim, damage
or
liability arises out of or is based upon said Holder’s untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished in writing to the Company by or on behalf of said
▇▇▇▇▇▇ specifically for use in any such document, or (ii) in connection
with a Holder’s sale of Registrable Securities, including without limitation
alleged violations of Regulation M. Notwithstanding the provisions of this
paragraph, no Holder shall be required to indemnify any person or entity in
excess of the amount of the aggregate net proceeds received by said Holder
in
respect of Registrable Securities in connection with any such registration
under
the Securities Act.
5.2 Promptly
after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified Party”) of notice of the commencement of any action, such
Indemnified Party shall, if a claim for indemnification in respect thereof
is to
be made against a party hereto obligated to indemnify such Indemnified Party
(an
“Indemnifying Party”), notify the Indemnifying Party in writing thereof, but the
omission so to notify the Indemnifying Party shall not relieve it from any
liability which it may have to such Indemnified Party other than under this
Section 5.2 and shall only relieve it from any liability which it may have
to
such Indemnified Party under this Section 5.2 if and to the extent the
Indemnifying Party is prejudiced by such omission. In case any such action
shall
be brought against any Indemnified Party and it shall notify the Indemnifying
Party of the commencement thereof, the Indemnifying Party shall be entitled
to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such Indemnified Party,
and, after notice from the Indemnifying Party to such Indemnified Party of
its
election so to assume and undertake the defense thereof, the Indemnifying Party
shall not be liable to such Indemnified Party under this Section 5.2 for any
legal expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof; if the Indemnified Party retains its own counsel,
then
the Indemnified Party shall pay all fees, costs and expenses of such counsel,
provided, however, that, if the defendants in any such action include both
the
Indemnified Party and the Indemnifying Party and if counsel shall have
reasonably concluded that there may be reasonable defenses available to the
Indemnified Party which are different from or additional to those available
to
the Indemnifying Party or if the interests of the Indemnified Party reasonably
may be deemed to conflict with the interests of the Indemnifying Party in either
case which would prohibit such counsel from representing both parties under
applicable conflicts of interest rules of professional ethics, the Indemnified
Party shall have the right to select one separate counsel and to assume such
legal defenses and otherwise to participate in the defense of such action,
with
the reasonable expenses and fees of such separate counsel and other expenses
related to such participation to be reimbursed by the Indemnifying Party as
incurred. Neither party shall settle any proceeding for which indemnification
is
sought without the written consent of the other party, which shall not be
unreasonably withheld.
5.3
Notwithstanding
any provision herein to the contrary, each Holder shall be treated individually
and separately from all other Holders under this Section 5, and will not become
the subject of any obligation under this Section 5 as a result of any action,
failure to act, statement, omission, or otherwise of any other Holder
hereunder.