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EXHIBIT 10.11
WARRANT
THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK
ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("THE ACT") AND MAY NOT BE SOLD, OFFERED FOR
SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT
UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE
SALE OF SUCH SECURITIES IS MADE PURSUANT TO SECURITIES AND EXCHANGE COMMISSION
RULE 144.
WARRANT TO PURCHASE COMMON STOCK OF THE PLASTIC SURGERY COMPANY
(Subject to Adjustment)
THIS CERTIFIES THAT, for value received, Pacific Mezzanine Fund, L.P.,
a California limited partnership, or its permitted registered assigns
("Holder"), is entitled, subject to the terms and conditions of this warrant, at
any time or from time to time after the date of issuance hereof and before the
expiration date specified in section 2.8 (the "Expiration Date"), to purchase
from The Plastic Surgery Company, a Georgia Corporation, (the "Company"), Four
Hundred Five Thousand One Hundred Fifty Four (405,154) shares of Warrant Stock
(as defined in section 1 below) of the company at a price per share of $2.50
(the "Purchase Price"). Both the number of shares of Warrant Stock purchasable
upon exercise of this Warrant and the Purchase Price are subject to adjustment
and change as provided herein. This Warrant is issued in connection with that
certain Loan Agreement, dated of even date herewith (the "Agreement"), between
the Company and Holder.
1. CERTAIN DEFINITIONS. As used in this Warrant the following terms
shall have the following respective meanings:
1.1 "Fair Market Value" of a share of Common Stock as of a
particular date shall mean:
(a) 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;
(b) 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
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(c) 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 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 Holder. Fees
and expenses of the valuation firm shall be shared equally by the Company and
the Holder.
(d) If the Company has entered into an agreement or
has received a binding letter of intent for a proposed Acquisition Transaction
(as such term is defined in Section 4.6 hereof), the Fair Market Value shall be
the price per share of the Common Stock in the Acquisition Transaction,
regardless of whether such transaction has been publicly announced or
consummated. Whenever the consideration to be paid in any Acquisition
Transaction is assets other than cash or securities, the value thereof shall be
determined in good faith by the Company's board of directors; provided, however,
that if the 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 Holder. Fees and expenses of the valuation firm shall be shared
equally by the Company and the Holder. If the consideration to be paid in any
Acquisition Transaction is securities, the value of such securities shall be
determined in substantially the same manner used to determine the value of the
Company's Common Stock set forth in Section 1.1(a), (b) and (c) above.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976.
"Registered Holder" shall mean any Holder in whose name this Warrant is
registered upon the books and records maintained by the Company.
"Warrant" as used herein, shall include this Warrant and any warrant
delivered in substitution or exchange therefor as provided herein.
"Warrant Stock" shall mean the Common Stock of the Company and any
other securities at any time receivable or issuable upon exercise of this
Warrant.
2. EXERCISE OF WARRANT
2.1 Payment. Subject to compliance with the terms and
conditions of this Warrant and applicable securities laws, this Warrant may be
exercised, in whole or in part at any time or from time to time, on or before
the Expiration Date by the delivery (including, without limitation, delivery by
facsimile) of the form of Notice of Exercise attached hereto as Exhibit 1 (the
"Notice of Exercise"), duly executed by the Holder, at the principal office of
the Company, and as soon as practicable after such date, surrendering
(a) this Warrant at the principal office of the
Company, and
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(b) payment, (i) in cash (by check) or by wire
transfer, (ii) by cancellation by the Holder of indebtedness of the Company to
the Holder; (iii) by exchange of the Company's securities held by Holder, at the
Fair Market Value thereof or (iv) by a combination of (i), (ii) and (iii), of an
amount equal to the product obtained by multiplying the number of shares of
Warrant Stock being purchased upon such exercise by the then effective Purchase
Price (the "Exercise Amount"), except that if Holder is subject to HSR Act
Restrictions (as defined in Section 2.5 below), the Exercise Amount shall be
paid to the Company within five (5) business days of the termination of all HSR
Act Restrictions.
2.2 Net Issue Exercise. In lieu of the payment methods set
forth in Section 2.1(b) above, the Holder may elect to exchange all or some of
the Warrant for shares of Warrant Stock equal to the value of the amount of the
Warrant being exchanged on the date of exchange. If Holder elects to exchange
this Warrant as provided in this Section 2.2, Holder shall tender to the Company
the Warrant for the amount being exchanged, along with written notice of
Holder's election to exchange some or all of the Warrant, and the Company shall
issue to Holder the number of shares of Warrant Stock computed using the
following formula:
X = Y (A-B)
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A
Where X = the number of shares of Warrant Stock to be issued to Holder.
Y = the number of shares of Warrant Stock purchasable under the amount
of the Warrant being exchanged (as adjusted to the date of such
calculation).
A = the Fair Market Value of one share of the Company's Common Stock.
B = Purchase Price (as adjusted to the date of such calculation).
All references herein to an "exercise" of the Warrant shall include an exchange
pursuant to this Section 2.2.
2.3 "Easy Sale" Exercise. In lieu of the payment methods set
forth in Section 2.1(b) above, when permitted by law and applicable regulations
(including the American Stock Exchange and NASD rules), the Holder may pay the
Purchase Price through a "same day sale" commitment from the Holder (and if
applicable a broker-dealer that is a member of the National Association of
Securities Dealers (a "NASD Dealer")), whereby the Holder irrevocably elects to
exercise this Warrant and to sell a portion of the Shares so purchased to pay
for the Purchase Price and the NASD Dealer commits upon receipt of such Shares
to forward the Purchase Price directly to the Company.
2.4 Stock Certificates; Fractional Shares. As soon as
practicable on or after such date, the Company shall issue and deliver to the
person or persons
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entitled to receive the same a certificate or certificates for the number of
whole shares of Common Stock issuable upon such exercise, together with cash in
lieu of any fraction of a share equal to such fraction of the current Fair
Market Value of one whole share of Common Stock as of the date of exercise of
this Warrant. No fractional shares or scrip representing fractional shares shall
be issued upon an exercise of this Warrant.
2.5 HSR Act. The Company hereby acknowledges that exercise of
this Warrant by Holder may subject the Company and/or the Holder to the filing
requirements of the HSR Act and that Holder may be prevented from exercising
this Warrant until the expiration or early termination of all waiting periods
imposed by the HSR Act ("HSR Act Restrictions"). If on or before the Expiration
Date Holder has sent the Notice of Exercise to Company and Holder has not been
able to complete the exercise of this Warrant prior to the Expiration Date
because of HSR Act Restrictions, the Holder shall be entitled to complete the
process of exercising this Warrant in accordance with the procedures contained
herein notwithstanding the fact that completion of the exercise of this Warrant
would take place after the Expiration Date.
2.6 Partial Exercise; Effective Date of Exercise. In case of
any partial exercise of this Warrant, the Company shall cancel this Warrant upon
surrender hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares of Warrant Stock purchasable hereunder. Any
partial exercise of this Warrant, other than the final exercise, shall be for a
minimum of one thousand (1,000) shares of Warrant Stock. This Warrant shall be
deemed to have been exercised immediately prior to the close of business on the
date of its surrender for exercise as provided above together with the payment
of the exercise price pursuant to Sections 2.1, 2.2 and 2.3 hereof. However, if
Holder is subject to HSR Act filing requirements this Warrant shall be deemed to
have been exercised on the date immediately following the date of the expiration
of all HSR Act Restrictions. The person entitled to receive the shares of
Warrant Stock issuable upon exercise of this Warrant shall be treated for all
purposes as the holder of record of such shares as of the close of business on
the date the Holder is deemed to have exercised this Warrant.
2.7 Expiration Date; Notice of Expiration. The Company shall
deliver to Holder a written Notice of Expiration in the form attached hereto as
Exhibit 2 at least thirty (30) days but not more than sixty (60) days before the
Expiration Date. Subject to Section 5.6 hereof, this Warrant shall expire on the
earliest to occur of the following: (i) the tenth (10th) anniversary of the date
of issuance hereof or (ii) the sixth (6th) anniversary of the date of repayment
in full of the promissory note issued contemporaneously herewith pursuant to the
Loan Agreement (the "Expiration Date"); provided, however, that the Expiration
Date shall be extended until the date thirty (30) days after delivery of the
Notice of Expiration.
3. VALID ISSUANCE; TAXES. All shares of Warrant Stock issued upon the
exercise of this Warrant shall be validly issued, fully paid and non-
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assessable, and the Company shall pay all taxes and other governmental charges
that may be imposed in respect of the issue or delivery thereof. The Company
shall not be required to pay any tax or other charge imposed in connection with
any transfer involved in the issuance of any certificate for shares of Warrant
Stock in any name other than that of the Registered Holder of this Warrant, and
in such case the Company shall not be required to issue or deliver any stock
certificate or security until such tax or other charge has been paid, or it has
been established to the Company's reasonable satisfaction that no tax or other
charge is due.
4. ANTIDILUTION. If during the twelve month period following the date
hereof Company issues additional shares of Common Stock ("Additional Common
Stock") at a price per share less than the Purchase Price (as adjusted pursuant
to the terms and conditions contained herein), the Purchase Price shall be
reduced concurrently with such issue, to a price equal to the price for one
share of such Additional Common Stock. As used herein, Additional Common Stock
shall exclude the following shares of Common Stock issued or issuable: (i) to
officers, directors or employees of, or consultants to, the Company pursuant to
stock option or stock purchase plans or agreements on terms approved by the
Company's Board of Directors, provided that shares of common stock of the
Company issued pursuant to this Section 4(i) shall not at any time constitute
more than twenty percent (20%) of the issued and outstanding capital stock of
the Company on a fully diluted basis; (ii) upon exercise or conversion of
options or warrants outstanding as of the date hereof; (iii) in connection with
the acquisition by the Company of another person by way of merger, stock
purchase or purchase of all or substantially all of the assets of such person;
and (iv) related to warrants issued to any lessor of capital equipment or any
lender of borrowed monies pursuant to financing arrangements with such lessor or
lender approved by the Board of Directors of the Company.
5. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of
shares of Warrant Stock issuable upon exercise of this Warrant (or any shares of
stock or other securities or property receivable or issuable upon exercise of
this Warrant) and the Purchase Price are subject to adjustment upon occurrence
of the following events:
5.1 Adjustment for Stock Splits, Stock Subdivisions or
Combinations of Shares. The Purchase Price of this Warrant shall be
proportionally decreased and the number of shares of Warrant Stock issuable upon
exercise of this Warrant (or any shares of stock or other securities at the time
issuable upon exercise of this Warrant) shall be proportionally increased to
reflect any stock split or subdivision of the Company's Common Stock. The
Purchase Price of this Warrant shall be proportionally increased and the number
of shares of Warrant Stock issuable upon exercise of this Warrant (or any shares
of stock or other securities at the time issuable upon exercise of this Warrant)
shall be proportionally decreased to reflect any combination of the Company's
Common Stock.
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5.2 Adjustment for Dividends or Distributions of Stock or
Other Securities or Property. In case the Company shall make or issue, or shall
fix a record date for the determination of eligible holders entitled to receive,
a dividend or other distribution with respect to the Common Stock (or any shares
of stock or other securities at the time issuable upon exercise of the Warrant)
payable in (a) securities of the Company or (b) assets (excluding cash dividends
paid or payable solely out of retained earnings), then, in each such case, the
Holder of this Warrant on exercise hereof at any time after the consummation,
effective date or record date of such dividend or other distribution, shall
receive, in addition to the shares of Warrant Stock (or such other stock or
securities) issuable on such exercise prior to such date, and without the
payment of additional consideration therefor, the securities or such other
assets of the Company to which such Holder would have been entitled upon such
date if such Holder had exercised this Warrant on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional stock available
by it as aforesaid during such period giving effect to all adjustments called
for by this Section 4.
5.3 Reclassification. If the Company, by reclassification of
securities or otherwise, shall change any of the securities as to which purchase
rights under this Warrant exist into the same or a different number of
securities of any other class or classes, this Warrant shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities that
were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change and the Purchase Price therefore shall be
appropriately adjusted, all subject to further adjustment as provided in this
Section 4. No adjustment shall be made pursuant to this Section 4.3 upon any
conversion or redemption of the Common Stock which is the subject of Section
4.5.
5.4 Adjustment for Capital Reorganization. In case of any
capital reorganization of the capital stock of the Company (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), then, as a part of such reorganization, lawful provision
shall be made so that the Holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified herein and
upon payment of the Purchase Price then in effect, the number of shares of stock
or other securities or property of the successor corporation resulting from such
reorganization that a holder of the shares deliverable upon exercise of this
Warrant would have been entitled to receive in such reorganization, if this
Warrant had been exercised immediately before such reorganization, all subject
to further adjustment as provided in this Section 4. The foregoing provisions of
this Section 4.4 shall similarly apply to successive reorganizations and to the
stock or securities of any other corporation that are at the time receivable
upon the exercise of this Warrant. If the per-share consideration payable to the
Holder hereof for shares in connection with any such transaction is in a form
other than cash or marketable securities, then the value of such consideration
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shall be determined in good faith by the Company's Board of Directors. In all
events, appropriate adjustment (as determined in good faith by the Company's
Board of Directors) shall be made in the application of the provisions of this
Warrant with respect to the rights and interests of the Holder after the
transaction, to the end that the provisions of this Warrant shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event upon exercise of this Warrant.
5.5 Conversion of Common Stock. In case all or any portion of
the authorized and outstanding shares of Common Stock of the Company are
redeemed or converted or reclassified into other securities or property pursuant
to the Company's Articles of Incorporation or otherwise, or the Common Stock
otherwise ceases to exist, then, in such case, the Holder of this Warrant, upon
exercise hereof at any time after the date on which the Common Stock is so
redeemed or converted, reclassified or ceases to exist (the "Termination Date"),
shall receive, in lieu of the number of shares of Common Stock that would have
been issuable upon such exercise immediately prior to the Termination Date, the
securities or property that would have been received if this Warrant had been
exercised in full and the Common Stock received thereupon had been
simultaneously converted immediately prior to the Termination Date, all subject
to further adjustment as provided in this Warrant. Additionally, the Purchase
Price shall be immediately adjusted to equal the quotient obtained by dividing
(x) the aggregate Purchase Price of the maximum number of shares of Common Stock
for which this Warrant was exercisable immediately prior to the Termination Date
by (y) the number of shares of Common Stock of the Company for which this
Warrant is exercisable immediately before the Termination Date, all subject to
further adjustment as provided herein.
5.6 Acquisition Transactions. Notwithstanding anything to the
contrary herein, in the event that the Company proposes to enter into any
transaction, or series of transactions, in which substantially all of its
securities are to be acquired by another entity or entities for cash, securities
of another entity or other assets (collectively, an "Acquisition Transaction"),
then the Company shall provide to the Holder thirty (30) days' written notice of
the Acquisition Transaction, which notice shall describe the transaction in
reasonable detail, including the consideration to be paid for the Company's
securities by the acquiring entities and the date of the closing of the
Acquisition Transaction (the "Closing Date"), and the Company shall not
consummate the Acquisition Transaction(s) until after the expiration of such
notice period. The Holder shall have the right to exercise this Warrant at any
time before the Closing Date. If Holder fails to exercise this Warrant before
the Closing Date, this Warrant shall expire on the Closing Date. In addition, if
Holder elects to exercise this Warrant and pay the exercise price, or any
portion thereof, with securities of the Company during any period in which the
Company has entered into discussions regarding an Acquisition Transaction or
otherwise has proposed or received a proposal for such a transaction (and prior
to the delivery of a notice of such transaction as set forth above), the Company
shall (i) inform Holder of such proposal
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or discussions prior to effectuating such exercise and (ii) give Holder the
option of terminating or delaying the exercise hereof until an agreement or
binding commitment regarding such Acquisition Transaction is entered into, if
any.
6. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in the
Purchase Price, or number or type of shares issuable upon exercise of this
Warrant, the Chief Financial Officer or Controller of the Company shall compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of the adjusted Purchase
Price. The Company shall promptly send (by facsimile and by either first class
mail, postage prepaid or overnight delivery) a copy of each such certificate to
the Holder.
7. LOSS OR MUTILATION. Upon receipt of evidence reasonably satisfactory
to the Company of the ownership of and the loss, theft, destruction or
mutilation of this Warrant, and of indemnity reasonably satisfactory to it, and
(in the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will execute and deliver in lieu thereof a new Warrant of like tenor as
the lost, stolen, destroyed or mutilated Warrant.
8. RESERVATION OF COMMON STOCK. The Company hereby covenants that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of shares of Common Stock or other shares of capital
stock of the Company as are from time to time issuable upon exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
Articles of Incorporation to provide sufficient reserves of shares of Common
Stock issuable upon exercise of this Warrant. All such shares shall be duly
authorized, and when issued upon such exercise, shall be validly issued, fully
paid and non- assessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale and free and clear of all
preemptive rights, except encumbrances or restrictions arising under federal or
state securities laws. Issuance of this Warrant shall constitute full authority
to the Company's officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for shares of
Common Stock upon the exercise of this Warrant.
9. TRANSFER AND EXCHANGE. Subject to the terms and conditions of this
Warrant and compliance with all applicable securities laws, this Warrant and all
rights hereunder may be transferred to any Registered Holder's parent,
subsidiary or affiliate, in whole or in part, on the books of the Company
maintained for such purpose at the principal office of the Company referred to
above, by the Registered Holder hereof in person, or by duly authorized
attorney, upon surrender of this Warrant together with a properly endorsed form
of Notice of Assignment attached hereto as Exhibit 3 and upon payment of any
necessary transfer tax or other governmental charge imposed upon such transfer.
Upon any permitted partial transfer, the Company will issue and deliver to the
Registered Holder a new Warrant
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or Warrants with respect to the shares of Warrant Stock not so transferred. Each
taker and holder of this Warrant, by taking or holding the same, consents and
agrees that when this Warrant shall have been so endorsed, the person in
possession of this Warrant may be treated by the Company, and all other persons
dealing with this Warrant, as the absolute owner hereof for any purpose and as
the person entitled to exercise the rights represented hereby, any notice to the
contrary notwithstanding; provided, however that until a transfer of this
Warrant is duly registered on the books of the Company, the Company may treat
the Registered Holder hereof as the owner for all purposes.
10. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof, agrees
that, absent an effective registration statement filed with the SEC under the
Securities Act of 1933, as amended (the "1933 Act"), covering the disposition or
sale of this Warrant or the Warrant Stock issued or issuable upon exercise
hereof, as the case may be, and registration or qualification under applicable
state securities laws, such Holder will not sell, transfer, pledge, or
hypothecate any or all such Warrants or Warrant Stock, as the case may be,
unless either (i) the Company has received an opinion of counsel, in form and
substance reasonably satisfactory to the Company, to the effect that such
registration is not required in connection with such disposition or (ii) the
sale of such securities is made pursuant to SEC Rule 144.
11. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this Warrant, the
holder hereby represents, warrants and covenants that any shares of stock
purchased upon exercise of this Warrant or acquired upon conversion thereof
shall be acquired for investment only and not with a view to, or for sale in
connection with, any distribution thereof; that the Holder has had such
opportunity as such Holder has deemed adequate to obtain from representatives of
the Company such information as is necessary to permit the Holder to evaluate
the merits and risks of its investment in the Company; that the Holder is able
to bear the economic risk of holding such shares as may be acquired pursuant to
the exercise of this Warrant for an indefinite period; that the Holder
understands that the shares of stock acquired pursuant to the exercise of this
Warrant or acquired upon conversion thereof will not be registered under the
1933 Act (unless otherwise required pursuant to exercise by the Holder of the
registration rights, if any, previously granted to the Registered Holder) and
will be "restricted securities" within the meaning of Rule 144 under the 1933
Act and that the exemption from registration under Rule 144 will not be
available for at least one year from the date of exercise of this Warrant,
subject to any special treatment by the SEC for exercise of this Warrant
pursuant to Section 2.2, and even then will not be available unless a public
market then exists for the stock, adequate information concerning the Company is
then available to the public, and other terms and conditions of Rule 144 are
complied with; and that all stock certificates representing shares of stock
issued to the Holder upon exercise of this Warrant may have affixed thereto a
legend substantially in the following form:
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE
AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
12. REGISTRATION RIGHTS. All shares of Warrant Stock issuable upon
exercise of this Warrant shall be "Registrable Securities" or such other
definition of securities entitled to registration rights pursuant to the
Investors' Rights Agreement dated as of the date hereof, by and among the
Company and the Holder.
13. NOTICES. All notices and other communications from the Company to
the Holder shall be given in accordance with the Agreement.
14. HEADINGS. The headings in this Warrant are for purposes of
convenience in reference only, and shall not be deemed to constitute a part
hereof.
15. LAW GOVERNING. This Warrant shall be construed and enforced in
accordance with, and governed by, the laws of the State of California.
16. NO IMPAIRMENT. The Company will not, by amendment of its Articles
of Incorporation or bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Registered Holder of this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock issuable
upon the exercise of this Warrant above the amount payable therefor upon such
exercise, and (b) will take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and non-
assessable shares of Common Stock upon exercise of this Warrant.
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17. NOTICES OF RECORD DATE. In case:
17.1 the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time receivable upon the
exercise of this Warrant), for the purpose of entitling them to receive any
dividend or other distribution, or any right to subscribe for or purchase any
shares of stock of any class or any other securities or to receive any other
right; or
17.2 of any consolidation or merger of the Company with or
into another corporation, any capital reorganization of the Company, any
reclassification of the Common Stock of the Company, or any conveyance of all or
substantially all of the assets of the Company to another corporation in which
holders of the Company's stock are to receive stock, securities or property of
another corporation; or
17.3 of any voluntary dissolution, liquidation or winding-up
of the Company; or
17.4 of any redemption of all outstanding Common Stock; then,
and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant 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, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation,
winding-up, redemption or conversion is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock or (such stock or
securities as at the time are receivable upon the exercise of this Warrant),
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities), for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be delivered at least
thirty (30) days prior to the date therein specified.
18. SEVERABILITY. If any term, provision, covenant or restriction of
this Warrant is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
19. NO INCONSISTENT AGREEMENTS. The Company will not on or after the
date of this Warrant enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holders of this Warrant or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to holders of the Company's securities under any other
agreements, except rights that have been waived.
20. SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a
Saturday, Sunday or legal holiday, the Expiration Date shall automatically be
extended until 5:00 p.m. the next business day.
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IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of
the Effective Date.
THE PLASTIC SURGERY COMPANY PACIFIC MEZZANINE
FUND, L.P.
By: /S/ Dennis Condon By:/S/ Nathan W. Bell
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Name: Dennis Condon Name: Nathan W. Bell
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Title: President & CEO Title: General Parnter
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SIGNATURE PAGE TO WARRANT
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EXHIBIT 1
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
The Plastic Surgery Company WARRANT NO. ___
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, the securities of The Plastic Surgery Company as provided for
therein, and (check the applicable box):
[ ] Tenders herewith payment of the exercise price in full in the form
of cash or a certified or official bank check in same-day funds in the amount of
$____________ for _________ such securities.
[ ] Elects the Net Issue Exercise option pursuant to Section 2.2 of the
Warrant, and accordingly requests delivery of a net of ______________ of such
securities, according to the following calculation:
X = Y (A-B) = (____) [(_____) -(_____)]
------- (_____)
A
Where X = the number of shares of Common Stock to be issued to Holder.
Y = the number of shares of Common Stock purchasable under the amount
of the Warrant being exchanged (as adjusted to the date of such
calculation).
A = the Fair Market Value of one share of the Company's Common Stock.
B = Purchase Price (as adjusted to the date of such calculation).
[ ] Elects the Easy Sale Exercise option pursuant to Section 2.4 of the
Warrant, and accordingly requests delivery of a net of ______________ of such
securities.
Please issue a certificate or certificates for such securities in the
name of, and pay any cash for any fractional share to (please print name,
address and social security number):
Name:_______________________________
Address:____________________________
Signature:__________________________
Note: The above signature should correspond exactly with the name on the first
page of this Warrant Certificate or with the name of the assignee appearing in
the assignment form below.
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EXHIBIT 2
NOTICE OF EXPIRATION
The Plastic Surgery Company WARRANT NO. ___
Dated:
To __________________, the Holder of this Warrant:
You are hereby notified that the Warrant will expire on
___________________________ (the "Expiration Date"). The Expiration Date is
(check one):
(i) _________ The sixth (6th) anniversary of the payment in full of
the note issued together with the Warrant.
(ii) _________ The tenth (10th) anniversary of the date of issuance
of the Warrant.
(iii) _________ Thirty (30) days after the date of delivery of this
Notice (if later than (i) and (ii) above.
In order to exercise the Warrant, you must comply with the
provisions of Section 2 thereof on or before the Expiration Date.
THE PLASTIC SURGERY COMPANY
By:_______________________
Name:_____________________
Title:____________________
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EXHIBIT 3
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
WARRANT NO. ___
For value received, _________________ hereby sells, assigns and
transfers unto _________________ the within Warrant Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint __________________ ___________________ attorney, to transfer said
Warrant Certificate on the books of the within-named Company with respect to the
number of Warrants set forth below, with full power of substitution in the
premises:
NAME(S) OF ASSIGNEE(S) ADDRESS # OF WARRANTS
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
And if said number of Warrants shall not be all the Warrants
represented by the Warrant Certificate, a new Warrant Certificate is to be
issued in the name of said undersigned for the balance remaining of the Warrants
registered by said Warrant Certificate.
Dated:_____________________
Signature:______________________________________
Notice: The signature to the foregoing Assignment must correspond to the name as
written upon the face of this security in every particular, without alteration
or any change whatsoever; signature(s) must be guaranteed by an eligible
guarantor institution (banks, stock brokers, savings and loan associations and
credit unions with membership in an approved signature guarantee medallion
program) pursuant to Securities and Exchange Commission Rule 17Ad-15.
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