Document:

Exhibit 4.8

 

THIS NOTE AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OF AMERICA AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR, IF REQUESTED BY THE CORPORATION, AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

 

THE INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR DEBT OF THE COMPANY NOW OR HEREAFTER OUTSTANDING, ON THE TERMS SET FORTH IN SECTION 4 OF THIS NOTE.

 

SENIOR SUBORDINATED CONVERTIBLE PROMISSORY NOTE

	 	 
	$______ 	 ___________, 2013

 

FOR VALUE RECEIVED, Dr. Tattoff, Inc., a corporation organized and existing under the laws of the State of Florida (the “Company”), hereby promises to pay to the order of ________________________, [a _________________________] [an individual resident of __________________] (the “Holder”), whose address for notice purposes is ______________________________, ____________, ___________ _______ [,         Attention: _______________] , the principal sum of __________ and No/100 U.S. Dollars (US $_______) (the “Principal Amount”), together with interest thereon as hereinafter provided, pursuant to the following terms.

 

This Note is a part of a series of senior subordinated convertible promissory notes issued and sold by the Company in the maximum aggregate principal amount at any time outstanding of $2,00,000.00 (collectively, the “2013 Convertible Notes”), pursuant to the terms and conditions of the Company’s Confidential Private Placement Memorandum dated April 1, 2013.  All payments of principal, interest and other amounts from time to time owing under this Note shall be payable in lawful money of the United States of America, at such place as the Holder may designate from time to time in writing to the Company.

 

	
1. 

	
    Administration and Payment.

 

1.1   Interest Rate.  Except as otherwise described herein, simple interest (the “Interest”) shall be charged on the outstanding Principal Amount from the date hereof until the payment in full of the outstanding Principal Amount, or the Note has otherwise been converted in full pursuant to the terms hereof, at a rate of seven percent (7%) per annum.  The Interest shall be computed on the basis of a three hundred sixty-five (365) day year, for the actual number of days elapsed.  Interest accrued hereunder shall be payable on the earlier of the Maturity Date or the date of conversion of the Note, in accordance with the terms hereof.

 

1.2          Repayment and Optional Prepayment of Principal.

 

(a)           This Note matures on _______________, 2015 (the “Maturity Date”), and the entire Principal Amount then outstanding, together with all accrued and unpaid interest on this Note, shall become due and payable on the Maturity Date.

 

    	  

    	 

    
 

 

(b)           Subject to subsection (c) below, upon at least ten (10) Business Day’s prior written notice, the Company may, at its option, prepay the outstanding Principal Amount, in whole or in part, without premium or penalty, at any time and from time to time prior to the Maturity Date.  Such notice shall state the date of prepayment, which shall be no more than thirty (30) days following the date of the prepayment notice, and the portion of the Principal Amount to be repaid.  Following the Holder’s receipt of such notice but before the prepayment date stated therein, the Holder shall have, at its option, the right to convert this Note in accordance with the terms hereof.  Each such prepayment shall be accompanied by accrued and unpaid Interest on the portion of the Principal Amount described in the prepayment notice, to but not including the date of prepayment.  The term “Business Day,” as used in this Note, shall mean each day other than a Saturday, Sunday, legal holiday or other day on which commercial banks in New York, New York are required or authorized to be closed by law or executive order.

 

 (c)           Any payments made by the Company hereunder, whether at maturity, acceleration or in the case of a prepayment, shall be made to all holders of the 2013 Convertible Notes pro rata based on the outstanding Principal Amounts thereunder.  If any holder of a 2013 Convertible Note has payment made to it pursuant to its note in a greater proportion than that received by any other holder, then such holder agrees to pay such greater proportion to the other holders so that each holder of the 2013 Convertible Notes will receive its ratable portion of the aggregate payments received by all holders pursuant to their 2013 Convertible Notes.

 

1.3   Replacement.  Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Note and (except in the case of mutilation) upon indemnification therefor satisfactory to the Company, and in the case of any such mutilation, upon surrender and cancellation of this Note, the Company will issue to the Holder a new Note in the then outstanding Principal Amount of the lost, stolen, destroyed or mutilated Note.

 

1.4   Qualified Sale.  The Company shall provide the holders of the 2013 Convertible Notes with at least ten (10) Business Days prior written notice of the consummation of any of the following events (each such event referred to herein as a “Qualified Sale,” and each such notice being referred to herein as a “Qualified Sale Notice”): (i) a sale of common stock of the Company or a consolidation, merger or combination of the Company with or into any other entity, in each case where the holders of the Company’s voting securities immediately prior to such transaction hold less than a majority of the voting securities of the Company or such other entity immediately following such transaction, or (ii) a sale or conveyance of all or substantially all of the properties, assets, or business of the Company to any other unaffiliated person.  Subject to Section 2.2 below, at the election of the Directing Holders (as defined below) by making written demand on the Company therefor within five (5) Business Days after the date of the Qualified Sale Notice (the “Mandatory Prepayment Demand”), the principal amount of the 2013 Convertible Notes then outstanding, all accrued and unpaid interest hereon and thereon, and all other amounts then owing under the terms of the 2013 Convertible Notes shall become due and payable on the first Business Day which is at least thirty (30) days after the date of the Mandatory Prepayment Demand (or any later date as agreed to by the Company and the Directing Holders) (or any later date as agreed to by the Company and the Directing Holders).  In no event will the Company be obligated to prepay this Note if the Company shall have received a notice of conversion of this Note pursuant to Section 2.2(a).

 

1.5   Payments Due on Days other than Business Days.  Any payment due under the terms of this Note on a day other than a Business Day may be made on the next succeeding Business Day, and any interest payable on such date shall include interest accrued to, but not including, such Business Day.

 

    	- 2 -

    	 

    
 

 

	
2.

	
Conversion.

 

2.1   Conversion Rights.

 

	
(a)           

	
Voluntary Conversion.  The Holder has the right, at the Holder’s option, at any time and prior to payment in full of the Principal Amount, to convert this Note in accordance with the provisions of Section 2.2(a) hereof, in whole and not in part, into fully paid and nonassessable shares of common stock of the Company (“Common Stock”).  The number of shares of Common Stock into which this Note may be converted (“Conversion Shares”) shall be determined by dividing the then-outstanding Principal Amount by the “Voluntary Conversion Price” in effect at the time of such conversion. The initial Voluntary Conversion Price for shall be equal to $0.65 and is subject to adjustment as set forth in Section 2.4.

 

	
(b)           

	
Mandatory Conversion.  The Holder shall, upon the closing of either (a) a registered public offering resulting in gross proceeds to the Company of at least $4,000,000 and which results in the Company being listed on a national exchange such as Nasdaq, the NYSE or the NYSE Amex (a “National Exchange”), or (b) a merger with another company that results in gross proceeds to the Company of at least $4 million and which results in either the Company or the surviving company of the merger being listed on a National Exchange (a “Qualified Transaction”) convert this Note in accordance with the provisions of Section 2.2(b) hereof, in whole and not in part, into fully paid and nonassessable shares of Common Stock.  The number of Conversion Shares into which this Note shall be converted shall be determined by dividing the then-outstanding Principal Amount by the Mandatory Conversion Price in effect at the time of such conversion. The initial “Mandatory Conversion Price” shall equal the lower of (i) $0.65 or (ii) 75% of the offering price of one share of Common Stock sold in a Qualified Transaction, subject to adjustment as set forth in Section 2.4.

 

2.2            Conversion Procedure.

 

	
(a)           

	
Voluntary Conversion.  To exercise its right to voluntarily convert this Note into Conversion Shares, the Holder shall surrender this Note at the office of the Company, accompanied by written notice of the election to convert in substantially the form attached to this Note as Annex A and made a part hereof (the “Conversion Notice”).  The information to be provided in the Conversion Notice shall include, without limitation, the name or names in which the certificate or certificates for shares of Conversion Shares are to be issued and, in the case of multiple certificate holders, the relative proportion of shares to be issued to each.  Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of this Note, and the person or persons entitled to receive the Conversion Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Conversion Shares as of such date (the “Voluntary Conversion Date”).  The Company shall, as soon as practicable thereafter, issue and deliver at such office to the Holder of this Note a certificate or certificates (bearing such legend as required by applicable law) for the number of Conversion Shares to which the Holder of this Note shall be entitled, and will pay to the Holder an amount equal to all accrued and unpaid Interest on this Note to, but not including, the Voluntary Conversion Date.

 

    	- 3 -

    	 

    
 

 

	
(b)           

	
Mandatory Conversion.  Upon the notice from the Company of the closing of a Qualified Transaction, the Holder shall surrender this Note at the office of the Company.  Included with the Note shall be the name or names in which the certificate or certificates for shares of Conversion Shares are to be issued and, in the case of multiple certificate holders, the relative proportion of shares to be issued to each.  Such conversion shall be deemed to have been made immediately prior to effective date of the Qualified Transaction (the “Mandatory Conversion Date”), and the person or persons entitled to receive the Conversion Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Conversion Shares as of the Mandatory Conversion Date.  The Company shall, as soon as practicable thereafter, issue and deliver at such office to the Holder of this Note a certificate or certificates (bearing such legend as required by applicable law) for the number of Conversion Shares to which the Holder of this Note shall be entitled, and will pay to the Holder an amount equal to all accrued and unpaid Interest on this Note to, but not including, the Mandatory Conversion Date.  From and after the Mandatory Conversion Date, the Note shall no longer accrue any Interest and shall only be payable by delivery of the Conversion Shares

 

2.3           Fractional Shares. No fractional shares shall be issued upon conversion of this Note.  The number of shares of Common Stock to be issued upon conversion of this Note shall be rounded down to the closest whole number.

 

2.4           Conversion Price Adjustments.

 

(a)   Adjustments for Stock Splits and Subdivisions.  If the Company should at any time or from time to time after the date of issuance hereof fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents, then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Voluntary Conversion Price and the fixed portion of the Mandatory Conversion Price shall be automatically decreased so that the number of Conversion Shares issuable upon conversion of this Note shall be increased in proportion to such increase of outstanding shares.

 

(b)   Adjustment for Reverse Stock Splits.  If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Voluntary Conversion Price and the fixed portion of the Mandatory Conversion Price for this Not shall be automatically increased so that the number of Conversion Shares issuable on conversion hereof shall be decreased in proportion to such decrease in outstanding shares.

 

	
       2.5  

	
No Rights as a Shareholder.  Except as otherwise described herein, the Holder shall not be entitled (directly or indirectly) to vote, receive distributions on, or be deemed the holder of any Common Stock of the Company which may at any time be issuable on the conversion of this Note for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a shareholder of the Company or any right to vote as a shareholder of the Company or upon any matter submitted to the shareholders of the Company, or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive distributions, dividends or subscription rights or otherwise, as the holder of any such shares of Common Stock, unless and until this Note is converted in accordance with the terms hereof.

 

    	- 4 -

    	 

    
 

 

	
3.

	
Events of Default.

 

3.1   Events of Default.  If any of the following conditions or events (“Events of Default”) occurs and is continuing:

 

(a)   the Company defaults in the payment of the Principal Amount of this Note, whether at maturity, upon call for mandatory prepayment, declaration of acceleration or otherwise, and such default continues uncured for forty-five (45) days after the due date thereof;

 

(b)           the Company defaults in the payment of accrued and unpaid interest and fails to cure such default within forty-five (45) days after the due date thereof;

 

(c)   the breach by the Company of any representation, warranty or covenant of the Company in this Note (other than covenants referred to in clauses (a) or (b) of this Section 3.1),; provided, however, that in the event of any such breach, to the extent such breach is susceptible to cure, it shall not constitute an Event of Default unless the Company shall have failed to cure such breach within forty-five (45) days after written notice of such breach is given to the Company by or on behalf of the Directing Holders (as defined below);

 

(d)   the Company makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts as they become due, or a voluntary petition for reorganization under Title 11 of the United States Code (“Title 11”) is filed by the Company or an order is entered granting relief to the Company under Title 11 or a petition is filed by the Company in bankruptcy, or the Company is adjudicated a bankrupt or insolvent, or files any petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, or files any answer admitting or not contesting the material allegations of a petition filed against the Company in any such proceeding, or seeks or consents to or acquiesces in the appointment of any trustee, receiver or liquidator of the Company or of all or any substantial part of the properties of the Company;

 

(e)   within sixty (60) days after the commencement of an action against the Company seeking a reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statue, law or regulation, such action has not been dismissed or nullified or all orders or proceedings thereunder affecting the operations or the business of the Company stayed, or if the stay of any such order or proceeding is thereafter set aside, or if, within sixty (60) days after the appointment without the consent or acquiescence of the Company of any trustee, receiver or liquidator of the Company or of all or any substantial part of the properties of the Company such appointment has not been vacated;

 

(f)   an Event of Default occurs and is continuing under any of the other 2013 Convertible Notes; or

 

(g)   the Company’s Board of Directors votes to cease substantially all of the Company’s operations or wind up the Company’s affairs;

 

    	- 5 -

    	 

    
 

 

then, and in any such event, (i) interest shall accrue at the Default Rate on the entire principal amount outstanding hereunder, and on any overdue interest (but only to the extent permitted by law), unless waived by the holders of at least seventy five percent (75%) of the aggregate outstanding principal amount of the 2013 Convertible Notes (the “Directing Holders”), and (ii) the Directing Holders may elect, with such election being binding on all such holders of the 2013 Convertible Notes, by written notice to the Company, to declare all of the 2013 Convertible Notes, including this Note, to be due and payable, whereupon the principal amount then outstanding under this Note and all other 2013 Convertible Notes shall forthwith mature and become immediately due and payable, together with any outstanding accrued and unpaid interest.  For the purposes hereof, “Default Rate” shall mean fifteen percent (15%) per annum.

 

4.            Subordination.  By its acceptance of this Note, the Holder covenants and agrees that the payment of the Principal Amount of this Note and all accrued, unpaid Interest thereon, is and shall be in all respects subject and subordinate to the prior payment of the Senior Debt (as hereinafter defined), as and to the extent herein provided, but shall be pari passu in right of payment to all other indebtedness and other liabilities and obligations of the Company, whether now existing or hereafter created, incurred or assumed.  The term “Senior Debt,” as used herein, shall mean the principal of and unpaid accrued interest on all senior indebtedness, liabilities and obligations for money borrowed by the Company from banks, insurance companies or other financial institutions regularly engaged in the business of lending money, and owing to lessors under capitalized lease obligations, whether now existing or hereafter arising or created at any time, and all other indebtedness and other obligations that, by their terms, are subordinate in right of payment to the 2013 Convertible Notes, whether now existing or hereafter created, incurred or assumed.  For so long as no event of default under any Senior Debt has occurred and is continuing, all payments hereunder shall be paid by the Company as and when due in accordance with the terms hereof.

 

5.            Miscellaneous.

 

5.1           Remedies.  The remedies of the Holders of the 2013 Convertible Notes as provided herein and in the Agreement shall be cumulative and concurrent and may be pursued singly, successively, or together, and may be exercised as often as occasion therefor shall arise.

 

5.2           Governing Law.  THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OF CONFLICT OR CHOICE OF LAW OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE N.Y. GENERAL OBLIGATIONS LAW.

 

5.3           Consent to Jurisdiction and Venue.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS NOTE, THE PLEDGE AGREEMENT OR ANY OTHER DOCUMENT RELATED THERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE.  THE COMPANY, BY ITS EXECUTION AND DELIVERY HEREOF, AND THE HOLDER, BY ACCEPTANCE OF THIS NOTE, EACH CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  THE COMPANY AND THE HOLDER EACH IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS NOTE, THE PLEDGE AGREEMENT OR OTHER DOCUMENT RELATED THERETO.

 

    	- 6 -

    	 

    
 

 

5.4           Severability.  If any provision of this Note or application thereof to any person, entity or circumstance is held invalid, such invalidity shall not affect other provisions of this Note which can be given effect without the invalid provisions, and to this end, the provisions of this Note shall be severable.

 

5.5           Binding Effect; Assignment or Transfer.  This Note shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.  The Company may not assign or delegate its rights or obligations under the 2013 Convertible Notes without the prior written consent of the Directing Holders, other than any assignment resulting from a Qualified Sale, or from a merger or consolidation in which the Company is not the surviving entity and the holders of a majority of the issued and outstanding voting securities of the Company immediately prior to such merger or consolidation hold a majority of the issued and outstanding voting securities of the surviving entity immediately after such transaction, and such surviving entity assumes the rights and obligations of the Company under the 2013 Convertible Notes.  So long as this Note is not registered under the federal Securities Act of 1933, the Holder may not transfer or assign this Note without delivering an opinion of counsel satisfactory to the Company that such registration is not required as a result of such transfer or assignment.  Neither the Company nor the Holder of this Note may assign or delegate its respective rights or obligations under this Note without the prior written consent of the other.

 

5.6           Modifications.  The 2013 Convertible Notes may be amended or modified by the Company without the consent of the Holders, in order to cure any defect, ambiguity or inconsistency which would not, in the reasonable opinion of the Company, adversely affect any of the Holders.  Otherwise, no amendment or modification of, or waiver or consent with respect to, the 2013 Convertible Notes will be effective without the written consent of the Company and the Holders of more than fifty percent (50%) in aggregate outstanding principal amount of the 2013 Convertible Notes (the “Requisite Holders”); provided, however, that no such amendment, modification, waiver or consent may, without the consent of each Holder affected thereby: (a) change the stated maturity of the principal of, or any instalment of interest on, any 2013 Convertible Note;  (b) reduce the principal amount of, or the rate of interest on, any 2013 Convertible Note; (c) reduce the percentages of outstanding 2013 Convertible Notes the consent of whose Holders is necessary to modify or amend, or to waive compliance with provisions of, the 2013 Convertible Notes; (d) waive a default or Event of Default in the payment of principal of or interest on the 2013 Convertible Notes; (e) modify or change any provisions of the 2013 Convertible Notes affecting the ranking of the 2013 Convertible Notes in any manner adverse to the Holders of the 2013 Convertible Notes;  (f) modify or change any provisions of the 2013 Convertible Notes affecting the option of the Holders of the 2013 Convertible Notes to require the Company to prepay their outstanding 2013 Convertible Notes in full following the consummation of a Qualified Sale, in any manner adverse to the Holders of the 2013 Convertible Notes; or (g) modify or change any provisions of the 2013 Convertible Notes to increase the Conversion Price applicable to the 2013 Convertible Notes.

 

5.7           No Usurious Amounts.  Anything herein contained to the contrary notwithstanding, the Company does not agree and shall not be obligated to pay Interest hereunder at a rate which is in excess of the maximum rate permitted by applicable law.  If by the terms of this Note, the Company is at any time required to pay Interest at a rate in excess of such maximum rate, the rate of interest under this Note shall be deemed to be immediately reduced to such maximum legal rate and the portion of all prior Interest payments in excess of such maximum legal rate shall be applied to and shall be deemed to have been payments in reduction of the outstanding principal amount.

 

5.8           Time of the Essence.  Time is of the essence of this Note.

 

    	- 7 -

    	 

    
 

 

5.9           Application of Payments.  Any payments under this Note shall be applied in the following manner and order:  (i) first, against interest accrued but unpaid hereunder, and (ii) second, to the payment of the principal amount outstanding.

 

5.10           No Personal Liability of Incorporators, Stockholders, Officers, Directors, or Employees.  No recourse for the payment of the principal of or interest on any of the 2013 Convertible Notes, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the 2013 Convertible Notes, or because of the creation of any indebtedness represented hereby or thereby, shall be had against any incorporator, stockholder, officer, director, employee or controlling person of the Company or of any successor thereof.  The Holder, by accepting this Note, waives and releases all such liability.

 

5.11           Notices. All notices, requests, demands, waivers or other communications (each, a “Notice”) under this Note shall be in writing and sent either (a) by registered or certified U.S. Mail, return receipt requested, (b) by nationally recognized overnight courier, or (c) by personal delivery, in each case with all postage or courier charges prepaid, and shall be given, if to the Holder, to it at its address set forth in the introductory paragraph of this Note, and if to the Company, to it at the following address (or, in each case, at such other subsequent address for such party as is designated in written Notice given to the other party in the manner provided herein):

 

	
If to the Company:

	
Dr. Tattoff, Inc.

	
  

	
8500 Wilshire Boulevard, Suite 105

Beverly Hills, California  90211

Attention:  Chief Executive Officer

 

	
With a copy to:

	
Bryan Cave LLP

One Atlantic Center, Fourteenth Floor

1201 W. Peachtree Street, NW

Atlanta, Georgia  30309-3488

Attention:  Terrence A. Childers

 

Each Notice given in the manner prescribed above shall be deemed to have been given (i) in the case of a Notice given in the manner provided in clause (a) of this Section 5.11, on the date of receipt indicated on the return receipt therefor, (ii) in the case of a Notice given in the manner provided in clause (b) of this Section 5.11, on the next Business Day, and (iii) in the case of a Notice given in the manner provided in clause (c) of this Section 5.11, on the date of actual receipt.  Any attempt by a party to reject delivery of a Notice given in the manner provided herein shall be deemed to constitute receipt.

 

[The Remainder of this Page has been Intentionally Left Blank]

 

    	- 8 -

    	 

    
 

 

IN WITNESS WHEREOF, DR. TATTOFF, INC. has caused this Note to be executed and delivered as of the day and year first above written.

 

	 	DR. TATTOFF, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ John P. Keefe 	 
	 	 	John Keefe, Chief Executive Officer	 

 

    	- 9 -

    	 

    
 

 

ANNEX A

 

Form of

Notice of Election to Convert

2013 Convertible Note to Common Stock

of Dr. Tattoff, Inc.

 

TO:   Dr. Tattoff, Inc.

 

The undersigned hereby: (1) represents and warrants that he, she or it is the owner and holder of a Subordinated Convertible Promissory Note dated ___________, 2013, issued pursuant to the Confidential Private Placement Memorandum dated April 1, 2013, by Dr. Tattoff, Inc., a Florida corporation (the “Company”), in the original principal amount of $___________ (the “Note”), free and clear of any lien, claim or encumbrance, and that the undersigned is authorized to make this election without the consent of any third party (or that all necessary third party consents have been obtained), (2)  irrevocably elects to convert the Note into fully paid, nonassessable shares of common stock of the Company (“Common Stock”) in accordance with the terms and conditions for conversion set forth in the Note, (3) surrenders the original Note to the Company in connection with such conversion and (4) directs the Company to issue a certificate or certificates evidencing the shares of Common Stock issuable upon such conversion (the “Conversion Shares”) to the person(s) or entity(s) identified below as Certificate holder(s), in the relative proportions indicated below, and to mail such certificate(s) to such Certificate holders at their respective addresses indicated below.

	 	 
	Note Holder Name:	 

	 	 
	Taxpayer Identification Number:	 

	 	 	 
	
Certificate holder #1: Exact Legal Name:     

	 

	 	 	 
	 	
Taxpayer Identification Number:         

	 
	 	
 

Mailing address:   

	 	 
	 	 	 	 
	 	Percentage of Conversion Shares:	 

	 	 	 

	
Certificate holder #2: Exact Legal Name:     

	 

	 	 	 
	 	
Taxpayer Identification Number:         

	 
	 	
 

Mailing address:   

	 	 
	 	 	 	 
	 	Percentage of Conversion Shares:	 

 

[CAN SPECIFY ADDITIONAL CERTIFICATE HOLDERS IF DESIRED]

 

[SIGNATURE PAGE FOLLOWS]

 

    	  

    	 

    
 

This Notice of Election to Convert is executed by the undersigned, or by its duly authorized officer or representative, on this ____ day of ________________, 201__.

	 	 
	 Name of Entity, if applicable:       	 

	 	 	 	 
	By: 	 	 	 	 
	
 

Printed Name:  

	 	 	 
	
 

Title: 

	 	 	 	 

 

	Address:  	 	 	 	 

 

Note: The name of the Note Holder above should correspond exactly with the name on of the Note Holder on the face of the Note, and the signature of the Note Holder, if an individual, should also correspond exactly to the name of the Note Holder on the face of the Note.Exhibit 4.9

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR, IF REQUESTED BY THE CORPORATION, AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

THIS WARRANT IS PART OF A SERIES OF WARRANTS ISSUED AND SOLD PURSUANT TO THE TERMS AND CONDITIONS OF THE CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM DATED APRIL 1, 2013 OF DR. TATTOFF, INC.

 

	Warrant No. ________ 	
Issue Date: _______, 2013

 

Void after 5:00 p.m., Eastern Time on ______, 2018

Dr. Tattoff, Inc.

Dr. Tattoff, Inc., a Florida corporation (the “Company”), hereby certifies that, for value received, _____________ (the “Warrant Holder”) is entitled to purchase, at any time during the period commencing on the date set forth above (the “Commencement Date”) and ending at 5:00 p.m., Eastern Time on __________, 2018 (the “Expiration Time”), that number of fully paid and non-assessable shares (as adjusted herein, the “Warrant Shares”) of the Company’s common stock, par value $.0001 (“Common Stock”) equal to twenty-five percent (25%) of the number of Conversion Shares (as defined in Section 2.1 of the Senior Subordinated Convertible Promissory Note dated ______, 2013 (the “2013 Convertible Note”)) issued to the Warrant Holder by the Company upon the conversion of the 2013 Convertible Note (or if the 2013 Convertible Note is repaid prior to conversion, then to the deemed number of shares that the Warrant Holder would have received had the principal amount of the 2013 Convertible Note that was repaid been divided by 0.65), at a purchase price equal to 120% of the Conversion Price as established pursuant to the terms of Section 2.1 of the 2013 Convertible Note (or if the 2013 Convertible Note is repaid prior to conversion at a price equal to $0.78) (the “Exercise Price”) in lawful money of the United States of America in cash or securities.

 

	
1.

	
Exercise.

 

1.1           General.  Subject to the provisions hereof, this Warrant is exercisable at any time after the earlier of the conversion or repayment of the 2013 Convertible Note and from time to time prior to the Expiration Time, in whole or in part, at the option of the Warrant Holder, upon (i) surrender of this Warrant to the Company at its then-principal executive offices together with a duly completed Notice of Exercise in the form attached hereto, and (ii) payment of an amount, in cash, equal to the then applicable Exercise Price multiplied by the number of Warrant Shares then being purchased upon such exercise.

 

1.2           Timing.  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 1.1.  At such time, the person or persons in whose name or names any certificates for Warrant Shares shall be issuable upon such exercise as provided in Section 1.3 below shall be deemed to have become the holder or holders of record of the Warrant Shares represented by such certificates.

 

1.3           Stock Certificates; New Warrants.  Promptly following 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 Shares to which such Warrant Holder shall be entitled upon such exercise, and

 

	
  

	
(b)

	
in case such exercise is in part only, a new Warrant (dated the date hereof) of like tenor, stating on the face thereof the number of shares of Common Stock currently stated on the face of this Warrant minus the number of such Warrant Shares purchased by the Warrant Holder upon such exercise as provided in Section 1.1.

 

1.4           Fractional Shares.  The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant.  No fractional shares shall be issued upon the exercise of this Warrant.  If a fractional share of Common Stock would be issuable upon exercise of the rights represented by this Warrant, upon exercise the fractional share theretofore issuable shall be rounded up to the nearest whole share of Common Stock.

 

2.             Registration. The Company (or an agent of the Company) will maintain a register containing the name and address of the Warrant Holder.  The 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.             Reservation of Shares. As long as the Warrant shall be outstanding, the Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, such Warrant Shares and other stock, securities and property, as from time to time shall be issuable upon the exercise of this Warrant.

  

4.             Transfer. Subject to the transfer conditions referred to in the legend endorsed hereon and Section 6, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment Form attached hereto, together with funds sufficient to pay any transfer taxes in connection with the making of such transfer.  Upon such compliance, surrender and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.  Notwithstanding anything to the contrary contained herein, the Warrants (or, upon the exercise thereof, the Warrant Shares) shall not be transferable to any person without the consent of the Company, provided that in all events such transfers shall be made in accordance with the terms hereof and applicable law.

 

5.             Mutilated or Missing Warrants. 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.             Compliance with the Securities Act.

 

	
  

	
6.1

	
Securities Act; Legend.  The Warrant Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 6 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Warrant Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”).  This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

 

“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR, IF REQUESTED BY THE CORPORATION, AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

	
  

	
6.2

	
Representations of Warrant Holder.  In connection with the issuance of this Warrant, the Warrant Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

 

	
  

	
(a)

	
The Warrant Holder is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act.  The Warrant Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.

 

	
  

	
(b)

	
The Warrant Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances.

 

	
  

	
(c)

	
The Warrant Holder acknowledges that it can bear the economic risk of its investment and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares.  The Warrant Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects and financial condition of the Company.

 

    	 

    	 

    
 

 

7.             Adjustment. The Exercise Price and the number of Warrant Shares purchasable pursuant to each Warrant shall be subject to adjustment from time to time as hereinafter set forth in this Section 7:

 

	
  

	
7.1

	
Stock Dividends, Splits and Combinations.  In case, prior to the expiration of this Warrant by exercise or by its terms, the Company shall issue any additional shares of Common Stock as a dividend or subdivide the number of outstanding shares of Common Stock into a greater number of shares of Common Stock, then in either of such cases, the then applicable Exercise Price per Warrant Share purchasable pursuant to this Warrant in effect at the time of such action shall be proportionately reduced and the number of Warrant Shares 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 shares of Common Stock by combining such shares of Common Stock into a smaller number of shares of Common Stock then, in such case, the then applicable Exercise Price per Warrant Share purchasable pursuant to this Warrant in effect at the time of such action shall be proportionately increased and the number of Warrant Shares at that time purchasable pursuant to this Warrant shall be proportionately decreased.  If the Company shall, prior to the expiration of this Warrant by exercise or by its terms, declare a dividend payable in cash on its shares of Common Stock and shall at substantially the same time offer to its shareholders a right to purchase new shares of Common Stock from the proceeds of such dividend or for an amount substantially equal to the dividend, all shares of Common Stock 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 Common Stock in shares of any other class of securities convertible into shares of Common Stock shall be treated as a dividend paid in shares of Common Stock to the extent that shares of Common Stock are issuable upon conversion thereof.

 

	
  

	
7.2

	
Recapitalization, Consolidation, Merger, or Conveyance.  In case, prior to the expiration of this Warrant by exercise or by its terms, the Company shall be recapitalized by reclassifying its outstanding shares of Common Stock, or the Company or a successor corporation shall consolidate or merge with or convey all or substantially all of its or of any successor corporation’s property and assets to any other corporation or corporations (any such other corporations being included within the meaning of the term “successor corporation” hereinbefore used in the event of any consolidation or merger of any such other corporation with, or the sale of all or substantially all of the property of any such other corporation to, another corporation or corporations), 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 basis and on the terms and conditions specified in this Warrant, in lieu of the Warrant Shares 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 Shares 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 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 Shares purchasable upon the exercise of this Warrant, as herein provided, shall continue and be preserved in respect of any stock which the Warrant Holder becomes entitled to purchase.

 

	
  

	
7.3

	
Dissolution, Liquidation or Winding Up.  In case the Company at any time while this Warrant shall remain unexpired and unexercised shall dissolve, liquidate or wind up its affairs, lawful provision shall be made as part of the terms of any such dissolution, liquidation or winding up, so that the holder of this Warrant may thereafter receive upon exercise hereof in lieu of each Warrant Share 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 dissolution, liquidation or winding up with respect to each share 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 thirtieth 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.             Rights of the Holder. The Warrant Holder shall not, by virtue hereof, be entitled to any rights of a shareholder 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 shareholder of the Company prior to the Exercise Time and then only with respect to the Warrant Shares to be issued with respect thereto.

 

9.             Notices to Warrant Holder. Upon the happening of any event requiring an adjustment of the Exercise Price, the Company shall promptly give written notice thereof to the Warrant Holder at the address appearing in the records of the Company, stating the adjusted Exercise Price and the adjusted number of Warrant Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  Failure to give such notice to the Warrant Holder or any defect therein shall not affect the legality or validity of the subject adjustment.

 

10.           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.

 

11.           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.

  

12.           Headings. The headings in this Warrant are for purposes of reference only and shall not amend, modify, restrict, limit or otherwise affect the meaning of any provision of this Warrant.

  

13.           Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to any law or principles that would make this choice of law provision invalid.

  

14.           Payment of Taxes. The Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificates for Warrant Shares in a name other than that of the Warrant Holder in respect of which such shares are issued, and in such case, the Company shall not be required to issue or deliver any certificate for Warrant Shares until the person requesting the same has paid to the Company the amount of such tax or has established to the Company’s reasonable satisfaction that such tax has been paid.  The Warrant Holder shall be responsible for income taxes due under federal, state or other law, if any such tax is due.

 

    	  

    	 

    
 

  

15.           Mailing of Notices, Etc. Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by facsimile, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier.  All notices shall be addressed as follows: if to the Warrant Holder, at its address as set forth in the Company’s books and records and, if to the Company, at the address as follows, or at such other address as the Warrant Holder or the Company may designate by ten (10) days’ advance written notice to the other:

 

	 	The Company:	Dr. Tattoff, Inc.
	 	 	8500 Wilshire Blvd, Suite 105
	 	 	Beverly Hills, CA 90211
	 	 	Attention: Chief Executive Officer
	 	 	Fax: 310-659-4141

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer as of the date first written above.

 

	 	
Dr. Tattoff, Inc.

	 
	
 

	
By: 

	/s/ John P. Keefe	 
	 	
Name:  John Keefe

	 
	 	
Title:  Chief Executive Officer

	 

 

    	  

    	 

    
 

 

Notice of Exercise

To Be Executed by the Warrant Holder

In Order to Exercise Warrants

TO:   Dr. Tattoff, Inc.

The undersigned hereby: (1) irrevocably subscribes for and offers to purchase _______ shares of Common Stock (“Shares”) of Dr. Tattoff, Inc., pursuant to Warrant No. ___ heretofore issued to ___________________ on ___________, 20__ and (2) encloses a cash payment of $__________ representing the aggregate exercise price for such Shares.

 

	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 the Warrant or with the name of assignee appearing in assignment form below.

 

    	  

    	 

    
 

 

ASSIGNMENT FORM

To be executed by the Warrant Holder

In order to Assign Warrants

Warrant No.___________

FOR VALUE RECEIVED,_____________________________________________________________________________ hereby sell, assigns and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

	  

 

	 
	 
	 
	 
	 

(Please print or type name and address)

 

______________________ of the Warrants represented by the Warrant, and hereby irrevocably constitutes and appoints ________________________ to transfer this Warrant on the books of the Company, with full power of substitution in the premises.

 

	Dated:	 	 	 
	 	 	
(Signature of Registered Holder)

 

In addition to executing this Assignment Form, the Warrant Holder and the transferee must comply with the other requirements for transfer set forth in the Warrant.

 

CERTIFICATION OF STATUS OF TRANSFEREE

TO BE EXECUTED BY THE TRANSFEREE OF THE WARRANT

 

 

 

The undersigned transferee hereby certifies to the registered holder of the Warrant and to Dr. Tattoff, Inc. 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.

 

	Dated:	 	 	 
	 	 	
(Signature of Transferee)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}]]