Exhibit 10.14

NEITHER THIS SECURITY NOR THE SECURITY INTO WHICH THIS SECURITY IS CONVERTIBLE
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.

SECURED CONVERTIBLE PROMISSORY NOTE

$_________
________, 20__

FOR VALUE RECEIVED, DRTATTOFF, LLC, a California limited liability company
located at 8447 Wilshire Boulevard, Suite 102, Beverly Hills CA 90211 (the
“Borrower”) hereby promises to pay to the order of _________________ (the
“Holder”), the principal sum of _________________ Dollars ($_________), upon the
following terms:

1. Security. This Note is secured as set forth in the Pledge and Security
Agreement of even date herewith.

2. Interest Rate. Interest shall accrue on the unpaid principal balance of this
Note from the date of issuance until paid or converted in full at the rate of
ten percent (10%) per year, calculated on a 365/366 day year, as applicable,
provided, however, that upon an Event of Default, interest shall accrue as
provided in Section 8 hereof.

3.  Payment Terms. The Borrower agrees to pay the unpaid principal balance of
this Note and all accrued and unpaid interest on the date that is the earlier of
(i) six months from the date of issuance, or (ii) five (5) business days from
the date of closing by Borrower of equity financing in the aggregate of not less
than $5.0 million (the “Maturity Date”), unless previously converted in
accordance with Section 5 hereof. Borrower may prepay all or any part of
interest or principal at any time without penalty.

4. Manner and Place of Payment; Holidays. All payments on this Note shall be
made in coin or currency which, at the time or times of payment, constitute
legal tender for public or private debts in the United States of America. All
payments on this Note shall be made to Holder at the address stated above, or at
such other address as Holder shall designate in writing. If the prescribed date
of payment of any of the principal or interest hereon is a Saturday, Sunday or
legal holiday, such payment shall be due on the next succeeding business day.

 
 

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5. Conversion Rights. 

(i) Conversion. The Holder, at its option, so long as any portion of this Note
remains outstanding, may elect to convert any outstanding and unpaid principal
portion of this Note, and any accrued and unpaid interest (the date of giving of
such notice of conversion being a “Conversion Date”) into units of membership
interests of the Company (“Units”) as such interests exist on the date of
issuance of this Note, or any shares of capital stock or securities of Borrower
into which such Units shall hereafter be changed or reclassified, at the
conversion price as defined in Section 5(ii) hereof (the “Conversion Price”),
determined as provided herein. Upon delivery to the Borrower of a completed
Notice of Conversion, a form of which is annexed hereto, Borrower shall issue
and deliver to the Holder within three (3) business days after the Conversion
Date (such third day being the “Delivery Date”) a certificate evidencing the
Units issuable for the portion of the Note converted in accordance with the
foregoing. The Units issuable upon conversion of this Note shall be determined
by dividing that portion of the principal of the Note and interest, if any, to
be converted, by the Conversion Price. On the Conversion Date any and all
obligations of the Borrower with respect to the portion of the Note so converted
shall be deemed satisfied, and the Borrower will have no further obligation
under the Note with respect to such converted portion in any way other than to
issue the Units and Warrants (as set forth in Section 6 below).

(ii) Conversion Price. Subject to adjustment as provided in Section 5(iii)
hereof, the Conversion Price per Unit shall be $1.00. Fractional Units will not
be issued and will instead be rounded up to the nearest whole Unit.

(iii)  Adjustment. The Conversion Price and number and kind of shares or other
securities to be issued upon conversion determined pursuant to Section 5(i),
shall be subject to adjustment from time to time upon the happening of certain
events while this conversion right remains outstanding, as follows:

A. Merger, Sale of Assets, etc. If the Borrower at any time shall consolidate
with or merge into or sell or convey all or substantially all its assets to any
other corporation, this Note, as to the unpaid principal portion thereof and
accrued interest thereon, shall thereafter be deemed to evidence the right to
purchase such number and kind of shares or other securities and property as
would have been issuable or distributable on account of such consolidation,
merger, sale or conveyance, upon or with respect to the securities subject to
the conversion or purchase right immediately prior to such consolidation,
merger, sale or conveyance. The foregoing provision shall similarly apply to
successive transactions of a similar nature by any such successor or purchaser.

B. Reclassification, etc. If the Borrower at any time shall, by reclassification
or otherwise, change the Units into the same or a different number of securities
of any class or classes that may be issued or outstanding, this Note, as to the
unpaid principal portion thereof and accrued interest thereon, shall thereafter
be deemed to evidence the right to purchase an adjusted number of such
securities and kind of securities as would have been issuable as the result of
such change with respect to the Units issuable immediately prior to such
reclassification or other change.

 
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C. Splits, Combinations and Dividends. If the Units are subdivided or combined
into a greater or smaller number of Units, or if a dividend is paid on the Units
in the form of additional Units, the Conversion Price shall be proportionately
reduced in case of subdivision of Units or Unit dividend or proportionately
increased in the case of combination of Units, in each such case by the ratio
which the total number of Units outstanding immediately after such event bears
to the total number of Units outstanding immediately prior to such event.
 
(iv) Method of Conversion. This Note may be converted by the Holder in whole or
in part as described in Section 5(i) hereof. Upon partial conversion of this
Note, a new Note containing the same date and provisions of this Note shall, at
the request of the Holder, be issued by the Borrower to the Holder for the
principal balance of this Note and interest which shall not have been converted
or paid.

(v) Registration Rights. The Holder is entitled to the registration rights set
forth in Annex A attached hereto and made a part hereof.

6. Warrant Coverage.

(i) Upon Conversion. In the event this Note is converted, in whole or in part,
in the manner set forth in Section 5 herein, then Holder shall also receive at
the time of conversion a Unit purchase warrant (“Warrant”) to purchase ½ Unit,
or the equivalent thereof, at an exercise price of $1.00 per Unit, subject to
adjustment in accordance with the Warrant agreement, for each Unit issued upon
conversion of the Note.

(ii)  At Maturity. In the event all or a portion of this Note remains
outstanding on the Maturity Date, then Holder shall receive on such date a
Warrant to purchase one (1) Unit, or the equivalent thereof, at an exercise
price of $1.00 per Unit, for each Unit which would have been issued had the
principal balance and accrued and unpaid interest outstanding on the Maturity
Date been converted in accordance with Section 5 herein.

(iii)  Expiration Date. All Warrants will expire five years from the date of
this Note.

7. Events of Default and Acceleration. Time is of the essence of this Note. The
occurrence of any of the following events shall constitute an “Event of Default”
hereunder: (i) Borrower's failure to pay timely any amount due hereunder, and
such failure continues for ten (10) business days; (ii) bankruptcy,
reorganization, insolvency or liquidation proceedings or other proceedings for
relief under any bankruptcy law or any law for the relief of debtors shall be
instituted by or against Borrower and, if instituted against Borrower, Borrower
shall by any action or answer approve of, consent to or acquiesce in any such
proceedings or admit the material allegations of, or default in answering a
petition filed in any such proceeding or such proceedings shall not be dismissed
within ninety (90) calendar days thereafter; (iii) any material breach by
Borrower, that remains uncured for greater than 5 days after receipt of written
notice of same, of any of the terms of this Note (other than payment
obligations) or the Warrants issued by Borrower in connection with this Note;
(iv) dissolution of the Borrower; or (v) cessation or liquidation of the
Borrower's business or suspension of the Borrower's business for more than
forty-five consecutive days. If any such Event of Default occurs, Holder may,
then or at any time thereafter, and at its option, accelerate maturity and cause
the entire unpaid principal balance of this Note, together with interest accrued
hereon, to become immediately due and payable. If Holder waives Holder's right
to accelerate maturity as a result of an Event of Default hereunder, either one
or more times or repeatedly, nevertheless Holder shall not be deemed to have
waived the right to require strict compliance with the terms of this Note
thereafter.

 
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8. Interest After Event of Default, Acceleration or Maturity. Upon an occurrence
of an Event of Default hereunder, the entire unpaid balance of said principal
sum and interest then accrued shall bear interest, while such Event of Default
continues both before and after judgment, at ten percent (10%) per year on the
unpaid balance until paid, calculated on a 365/366 day year, as applicable.

9. Application of Payments. All sums paid hereon shall be applied first to the
payment of accrued interest due on the unpaid principal balance and the
remainder to the reduction of unpaid principal.

10. Attorney's Fees and Expenses. In the event that Holder or other holder of
this Note brings suit hereon, or employs an attorney or incurs expenses to
compel payment of this Note or any portion of the indebtedness evidenced hereby,
or to cure any Event of Default under this Note, whether through suit, probate,
insolvency, reorganization, bankruptcy or any other legal or informal
proceeding, the Borrower and all endorsers, guarantors and sureties agree
additionally to pay all reasonable attorney's fees, court costs and other
reasonable expenses thereby incurred by Holder or other holder of this Note.

11. Waiver. Except as may be required by law, Borrower and all guarantors of
this Note, both before and after maturity, hereby expressly (i) waive all
protest, notice of protest, demand for payment, presentment for payment, notice
of intention to accelerate maturity, notice of acceleration of maturity, notice
of dishonor, bringing of suit, and diligence in taking any action to collect any
amounts called for hereunder and in the handling of properties, rights or
collateral at any time existing in connection herewith; (ii) consent to and
waive notice of any one or more renewal, extension or modification of this Note,
whether made to or in favor of the Borrower or any other person or persons,
regardless whether such renewal, extension or modification modifies the terms,
interest rate or time for payment of the Note and regardless of the length of
term of the renewal, extension or modification; (iii) consent to and waive
notice of any substitution, exchange or release of any security hereafter given
for this Note; (iv) consent to and waive notice of the release of any party
primarily or secondarily liable hereon; (v) consent to and waive notice of any
other indulgences, none of which shall otherwise affect the liability of any of
said parties for the indebtedness evidenced by this Note; and (vi) agree that it
will not be necessary for Holder, in order to enforce payment of this Note,
first to institute suit against or to exhaust Holder's remedies against Borrower
or any other party liable hereunder, or to proceed against any other security
for this Note.

12. Parties in Interest. This Note may be assigned by Holder at any time upon
notice to and with written consent of Borrower. This Note may not be assigned by
Borrower without the prior written consent of Holder. This Note will be binding
in all respects upon Borrower and inure to the benefit of Holder and its
permitted successors and assigns.

 
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13. Definitions. The terms "Borrower" and "Holder" and other nouns and pronouns
include the singular and/or the plural, as appropriate. The terms "Borrower" and
"Holder" also include their respective heirs, personal representatives,
permitted successors and assigns. The term "Holder" includes subsequent
permitted holders of this Note.

14. Choice of Law; Venue. All questions concerning the construction, validity,
enforcement and interpretation of this Note shall be governed by and construed
and enforced in accordance with the laws of the State of California, without
regard to the principles of conflicts of law thereof. Each party agrees that all
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Note (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders, employees or
agents) shall be commenced exclusively in the state and federal courts of
California. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts of California for the adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such proceeding is improper.
The parties hereto hereby irrevocably waive, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Note or the transactions contemplated hereby.
Neither party shall be entitled to injunctive relief to prevent or cure breaches
of the provisions of this Note. If any party shall commence a proceeding to
enforce any provisions of this Note, then the prevailing party in such
proceeding shall be reimbursed by the other party for its reasonable attorneys
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such proceeding.

15. Notice. 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 above, or, if sent by facsimile, upon receipt of a
confirmation of delivery.

16. Severability. If any part of this Note is adjudged illegal, invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Note that can be given effect without such provision.

17. Amendments. This Note may not be varied, amended or modified except in
writing signed by the Borrower and the Holder.

18. Member Status. The Holder shall not have rights as a member of the Borrower
with respect to unconverted portions of this Note. However, the Holder will have
all the rights of a member of the Borrower with respect to the Units to be
received by Holder after delivery by the Holder of a Conversion Notice to the
Borrower.

THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.

 
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THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

IN WITNESS WHEREOF, Borrower has executed this Note effective as of the date
first set forth above.

BORROWER:
   
By:
 
Name:
James Morel
Its:
Chief Executive Officer

 
 
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Exhibit 10.14
 
NOTICE OF CONVERSION

(To be executed and delivered by the Holder in order to convert the Note)
 
The undersigned hereby elects to convert $_________ of the principal and
$_________ of the interest due on the Note issued by DRTATTOFF, LLC (the
“Borrower”) on ______________, 20___ into Units of the Borrower according to the
conditions set forth in such Note, as of the date written below.

Date of
Conversion:________________________________________________________________________________

Conversion
Price:__________________________________________________________________________________

Units To Be
Issued:________________________________________________________________________________

Signature:________________________________________________________________________________________
 
Print
Name:_______________________________________________________________________________________
 
Address:________________________________________________________________________________________

_______________________________________________________________________________________________

 
 

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Exhibit 10.14

ANNEX A

REGISTRATION RIGHTS

 
1. DEFINITIONS. Capitalized terms used and not otherwise defined herein that are
defined in the Note shall have the meanings given such terms in the Note. 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 Note 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 conversion
of the Note, 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.
 
 
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“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.
 
“Note” means the Convertible Promissory Note issued by the Company.

 
2. PIGGY-BACK REGISTRATION.
 
2.1 At any time and from time to time while any portion of the Note remains
outstanding, 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
Holder 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.
 
 
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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 hereof.
 
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.
 
 
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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
Note, 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 Holder 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.
 
 
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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.
 
 
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