Document:

Unassociated Document

    

    THIS
      WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
      OR ANY OTHER SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED,
      PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION
      STATEMENT COVERING SUCH SECURITIES UNDER THE SECURITIES ACT AND ANY OTHER
      APPLICABLE SECURITIES LAWS, OR (2) AN OPINION OF COUNSEL REASONABLY SATISFACTORY
      TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

    

    IN
      ADDITION, THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
MAY
      NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED, OR BE THE SUBJECT
      OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT, OR CALL TRANSACTION THAT WOULD
      RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF SUCH SECURITIES BY ANY PERSON
      FOR A PERIOD OF ONE (1) YEAR IMMEDIATELY FOLLOWING THE DATE OF EFFECTIVENESS
      OF
      THE PUBLIC OFFERING OF THE COMPANY’S SECURITIES PURSUANT TO REGISTRATION
      STATEMENT NO.: 333-144034
      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, EXCEPT IN ACCORDANCE
      WITH
      NASD RULE 2710(G)(2).

    

    CAMPUSU,
      INC.

    

    REPRESENTATIVE’S
      WARRANT

    

    [
      ] shares of Common Stock

    

    _____________________,
      2007

    

    This
      REPRESENTATIVE’S WARRANT
      (this
“Warrant”)
      of
      CampusU, Inc., a corporation duly organized and validly existing under the
      laws
      of the State of Delaware (the “Company”),
      is
      being issued pursuant to that certain Underwriting Agreement, dated as of
      ________________________, 2007 (the “Underwriting
      Agreement”),
      by
      and between the Company and Maxim Group LLC, the representative of the
      underwriters named therein (the “Representative”)
      relating to a firm commitment public offering (the “Offering”)
      of [ ]
      shares of common stock, $0.00041 par value per share, of the Company (the
“Common
      Stock”)
      underwritten by the Representative and the underwriters named in the
      Underwriting Agreement.

    

    FOR
      VALUE RECEIVED,
      the
      Company hereby grants to [ ] and its permitted successors and assigns
      (collectively, the “Holder”)
      the
      right to purchase from the Company up to [ ] ([ ]) shares [6%
      of the shares subject to the offering] of
      Common
      Stock (such shares underlying this Warrant, the “Warrant
      Shares”),
      at a
      per share purchase price equal to $[ ] [120%
      of the public offering price]
      (the
“Exercise
      Price”),
      subject to the terms, conditions and adjustments set forth below in this
      Warrant. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1. Date
      of Warrant Exercise.
      This
      Warrant shall become exercisable on the date that is one (1) year from the
      Base
      Date (the “Exercise
      Date”).
      As
      used in this Warrant, the term “Base
      Date”
shall
      mean ________________, 2007. Except as otherwise provided for herein or as
      permitted by applicable rules of the National Association of Securities Dealers,
      Inc., this Warrant shall not be sold, transferred, assigned, pledged or
      hypothecated prior to the Exercise Date.

    

    2.
       Expiration
      of Warrant.
      This
      Warrant shall expire on the five (5) year anniversary of the Base Date (the
      “Expiration
      Date”).

    

    3.
       Exercise
      of Warrant.
      This
      Warrant shall be exercisable pursuant to the terms of this Section
      3.

    

    3.1
       Manner
      of Exercise.
      

    

    (a) This
      Warrant may only be exercised by the Holder hereof on or after the Exercise
      Date
      and on or prior to the Expiration Date, in accordance with the terms and
      conditions hereof, in whole or in part (but not as to fractional shares) with
      respect to any portion of this Warrant, during the Company’s normal business
      hours on any day other than a Saturday or a Sunday or a day on which commercial
      banking institutions in New York, New York are authorized by law to be closed
      (a
“Business
      Day”),
      by
      surrender of this Warrant to the Company at its office maintained pursuant
      to
      Section 10.2(a) hereof, accompanied by a written exercise notice in the form
      attached as Exhibit
      A
      to this
      Warrant (or a reasonable facsimile thereof) duly executed by the Holder,
      together with the payment of the aggregate Exercise Price for the number of
      Warrant Shares purchased upon exercise of this Warrant. Upon surrender of this
      Warrant, the Company shall cancel this Warrant document and shall, in the event
      of partial exercise, replace it with a new Warrant document in accordance with
      Section 3.3

    

    (b) Except
      as
      provided for in Section 3.1(c) below, each exercise of this Warrant must be
      accompanied by payment in full of the aggregate Exercise Price in cash by check
      or wire transfer in immediately available funds for the number of Warrant Shares
      being purchased by the Holder upon such exercise. 

    

    (c) The
      aggregate Exercise Price for the number of Warrant Shares being purchased may
      also, in the sole discretion of the Holder, be paid in full or in part on a
      “cashless basis” at the election of the Holder: 

    

    (i)
       in
      the
      form of Common Stock owned by the Holder (based on the Fair Market Value (as
      defined below) of such Common Stock on the date of exercise);

    

    (ii)
       in
      the
      form of Warrant Shares withheld by the Company from the Warrant Shares otherwise
      to be received upon exercise of this Warrant having an aggregate Fair Market
      Value on the date of exercise equal to the aggregate Exercise Price of the
      Warrant Shares being purchased by the Holder; or 

    

    
      
         

      

      
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    (iii)
       by
      a
      combination of the foregoing, provided that the combined value of all cash
      and
      the Fair Market Value of any shares surrendered to the Company is at least
      equal
      to the aggregate Exercise Price for the number of Warrant Shares being purchased
      by the Holder.

    

    For
      purposes of this Warrant, the term “Fair
      Market Value”
means
      with respect to a particular date, the average closing price of the Common
      Stock
      for the ten (10) trading days immediately preceding the applicable exercise
      herein as officially reported by the principal securities exchange on which
      the
      Common Stock is then listed or admitted to trading, or, if the Common Stock
      is
      not listed or admitted to trading on any securities exchange as determined
      in
      good faith by resolution of the Board of Directors of the Company, based on
      the
      best information available to it.

    

    For
      purposes of illustration of a cashless exercise of this Warrant under Section
      3.1(c)(ii) (or for a portion thereof for which cashless exercise treatment
      is
      requested as contemplated by Section 3.1(c)(iii) hereof), the calculation of
      such exercise shall be as follows:

    

    X
      = Y
      (A-B)/A

    

    where:

    

    X
      =
 the
      number of Warrant
      Shares
      to be issued to the Holder (rounded to the nearest whole share).

    

    Y
      =
 the
      number of Warrant
      Shares
      with respect to which this Warrant
      is being
      exercised.

    

    A
      =
 the
      Fair
      Market Value of the Common Stock.

    

    B
      =
 the
      Exercise Price.

    

    (d) For
      purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is intended,
      understood, and acknowledged that the Common Stock issuable upon exercise of
      this Warrant in a cashless exercise transaction as described in Section 3.1(c)
      above shall be deemed to have been acquired at the time this Warrant was issued.
      Moreover, it is intended, understood, and acknowledged that the holding period
      for the Common Stock issuable upon exercise of this Warrant in a cashless
      exercise transaction as described in Section 3.1(c) above shall be deemed to
      have commenced on the date this Warrant was issued.

    

    3.2 When
      Exercise Effective.
      Each
      exercise of this Warrant shall be deemed to have been effected immediately
      prior
      to the close of business on the Business Day on which this Warrant shall have
      been duly surrendered to the Company as provided in Sections 3.1 and 12 hereof,
      and, at such time, the Holder in whose name any certificate or certificates
      for
      Warrant Shares shall be issuable upon exercise as provided in Section 3.3 hereof
      shall be deemed to have become the holder or holders of record thereof of the
      number of Warrant Shares purchased upon exercise of this Warrant. 

    

    
      
         

      

      
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    3.3 Delivery
      of Common Stock Certificates and New Warrant.
      As soon
      as reasonably practicable after each exercise of this Warrant, in whole or
      in
      part, and in any event within five (5) Business Days thereafter, the Company,
      at
      its expense (including the payment by it of any applicable issue taxes), will
      cause to be issued in the name of and delivered to the Holder hereof or, subject
      to Sections 9 and 10 hereof, as the Holder (upon payment by the Holder of any
      applicable transfer taxes) may direct:

    

    (a) a
      certificate or certificates (with appropriate restrictive legends, as
      applicable) for the number of duly authorized, validly issued, fully paid and
      nonassessable Warrant Shares to which the Holder shall be entitled upon
      exercise; and 

    

    (b) in
      case
      exercise is in part only, a new Warrant document of like tenor, dated the date
      hereof, for the remaining number of Warrant Shares issuable upon exercise of
      this Warrant after giving effect to the partial exercise of this Warrant
      (including the delivery of any Warrant Shares as payment of the Exercise Price
      for such partial exercise of this Warrant). 

    

    4. Certain
      Adjustments.
      For so
      long as this Warrant is outstanding:

    

    4.1 Mergers
      or Consolidations.
      If at
      any time after the date hereof there shall be a capital reorganization (other
      than a combination or subdivision of Common Stock otherwise provided for herein)
      resulting in a reclassification to or change in the terms of securities issuable
      upon exercise of this Warrant (a “Reorganization”),
      or a
      merger or consolidation of the Company with another corporation, association,
      partnership, organization, business, individual, government or political
      subdivision thereof or a governmental agency (a “Person”
or
      the
“Persons”)
      (other
      than a merger with another Person in which the Company is a continuing
      corporation and which does not result in any reclassification or change in
      the
      terms of securities issuable upon exercise of this Warrant or a merger effected
      exclusively for the purpose of changing the domicile of the Company) (a
“Merger”),
      then,
      as a part of such Reorganization or Merger, lawful provision and adjustment
      shall be made so that the Holder shall thereafter be entitled to receive, upon
      exercise of this Warrant, the number of shares of stock or any other equity
      or
      debt securities or property receivable upon such Reorganization or Merger by
      a
      holder of the number of shares of Common Stock which might have been purchased
      upon exercise of this Warrant immediately prior to such Reorganization or
      Merger. In any such case, appropriate adjustment shall be made in the
      application of the provisions of this Warrant with respect to the rights and
      interests of the Holder after the Reorganization or Merger to the end that
      the
      provisions of this Warrant (including adjustment of the Exercise Price then
      in
      effect and the number of Warrant Shares) shall be applicable after that event,
      as near as reasonably may be, in relation to any shares of stock, securities,
      property or other assets thereafter deliverable upon exercise of this Warrant.
      The provisions of this Section 4.1 shall similarly apply to successive
      Reorganizations and/or Mergers.

    

    4.2 Splits
      and Subdivisions; Dividends.
      In the
      event the Company should at any time or from time to time effectuate a split
      or
      subdivision of the outstanding shares of Common Stock or pay a dividend in
      or
      make a distribution payable in additional shares of Common Stock or Common
      Stock
      Equivalents without payment of any consideration by such holder for the
      additional shares of Common Stock or Common Stock Equivalents (including the
      additional shares of Common Stock issuable upon conversion or exercise thereof),
      then, as of the applicable record date (or the date of such distribution, split
      or subdivision if no record date is fixed), the per share Exercise Price shall
      be appropriately decreased and the number of Warrant Shares shall be
      appropriately increased in proportion to such increase (or potential increase)
      of outstanding shares; provided, however, that no adjustment shall be made
      in
      the event the split, subdivision, dividend or distribution is not effectuated.
      

    

    
      
         

      

      
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    4.3 Combination
      of Shares.
      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, the
      per
      share Exercise Price shall be appropriately increased and the number of shares
      of Warrant Shares shall be appropriately decreased in proportion to such
      decrease in outstanding shares. 

    

    4.4 Adjustments
      for Other Distributions.
      In the
      event the Company shall declare a distribution payable in securities of other
      Persons, evidences of indebtedness issued by the Company or other Persons,
      assets (excluding cash dividends or distributions to the holders of Common
      Stock
      paid out of current or retained earnings and declared by the Company’s board of
      directors) or options or rights not referred to in Sections 4.2, 4.3 or 4.4,
      then, in
      each
      such case for the purpose of this Section 4.5, upon exercise of this Warrant,
      the Holder shall be entitled to a proportionate share of any such distribution
      as though the Holder was the actual record holder of the number of Warrant
      Shares as of the record date fixed for the determination of the holders of
      Common Stock of the Company entitled to receive such distribution. 

    

    5. No
      Impairment.
      The
      Company will not, by amendment of its articles of incorporation or by-laws
      or
      through any consolidation, merger, reorganization, transfer of assets,
      dissolution, issue or sale of securities 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 of the
      terms and in the taking of all actions necessary or appropriate in order to
      protect the rights of the Holder against impairment. 

    

    6. Chief
      Financial Officer’s Report as to Adjustments.
      With
      respect to each adjustment pursuant to Section 4 of this Warrant, the Company,
      at its expense, will promptly compute the adjustment or re-adjustment in
      accordance with the terms of this Warrant and cause its Chief Financial Officer
      to certify the computation (other than any computation of the fair value of
      property of the Company, as the case may be) and prepare a report setting forth,
      in reasonable detail, the event requiring the adjustment or re-adjustment and
      the amount of such adjustment or re-adjustment, the method of calculation
      thereof and the facts upon which the adjustment or re-adjustment is based,
      and
      the Exercise Price and the number of Warrant Shares or other securities
      purchasable hereunder after giving effect to such adjustment or re-adjustment,
      which report shall be mailed by first class mail, postage prepaid to the Holder.
      The Company will also keep copies of all reports at its office maintained
      pursuant to Section 10.2(a) hereof and will cause them to be available for
      inspection at the office during normal business hours upon reasonable notice
      by
      the Holder or any prospective purchaser of the Warrant designated by the Holder
      thereof. 

    

    
      
         

      

      
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    7. Reservation
      of Shares.
      The
      Company shall, solely for the purpose of effecting the exercise of this Warrant,
      at all times during the term of this Warrant, reserve and keep available out
      of
      its authorized shares of Common Stock, free from all taxes, liens and charges
      with respect to the issue thereof and not subject to preemptive rights or other
      similar rights of shareholders of the Company, such number of its shares of
      Common Stock as shall from time to time be sufficient to effect in full the
      exercise of this Warrant. If at any time the number of authorized but unissued
      shares of Common Stock shall not be sufficient to effect in full the exercise
      of
      this Warrant, in addition to such other remedies as shall be available to
      Holder, the Company will promptly take such corporate action as may, in the
      opinion of its counsel, be necessary to increase the number of authorized but
      unissued shares of Common Stock to such number of shares as shall be sufficient
      for such purposes, including without limitation, using its Reasonable Best
      Efforts (as defined in Section 14 hereof) to obtain the requisite shareholder
      approval necessary to increase the number of authorized shares of Common Stock.
      The Company hereby represents and warrants that all shares of Common Stock
      issuable upon exercise of this Warrant shall be duly authorized and, when issued
      and paid for upon exercise, shall be validly issued, fully paid and
      nonassessable.

    

    8. Registration
      and Listing.
      

    

    8.1 Definition
      of Registrable Securities; Majority.
      As used
      herein, the term “Registrable
      Securities”
means
      any shares of Common Stock issuable upon the exercise of this Warrant, until
      the
      date (if any) on which such shares shall have been transferred or exchanged
      and
      new certificates for them not bearing a legend restricting further transfer
      shall have been delivered by the Company and subsequent disposition of them
      shall not require registration or qualification of them under the Securities
      Act
      or any similar state law then in force. For purposes of this Warrant, the term
      “Majority”,
      in
      reference to the holders of Registrable Securities, shall mean in excess of
      fifty percent (50%) of the then outstanding Warrant Shares (assuming the
      exercise of the entire Warrant) that: (i) are not held by the Company, an
      affiliate, officer, creditor, employee or agent thereof or any of their
      respective affiliates, members of their family, Persons acting as nominees
      or in
      conjunction therewith and (ii) have not be resold to the public pursuant to
      a
      registration statement filed under the Securities Act.

    

    8.2 Required
      Registration.
      

    

    (a) At
      any
      time on or after the Exercise Date and on or before the five (5) year
      anniversary of the Base Date, but in no event on more than one (1) occasion,
      upon the written request of the holders of the Registrable Securities
      representing a Majority of such Registrable Securities, the Company will use
      its
      Reasonable Best Efforts to effect the registration of the respective shares
      of
      the holders of Registrable Securities under the Securities Act to
      the
      extent requisite to permit the public disposition thereof as expeditiously
      as
reasonably
      possible, but in no event later than 120 days from the date of such
      request.

    

    (b) Registration
      of Registrable Securities under this Section 8.2 shall be on such appropriate
      registration form: (i) as shall be selected by the Company, and (ii) as shall
      permit the public disposition of such Registrable Securities in accordance
      with
      this Section 8.2. The Company agrees to include in any such registration
      statement all information which the requesting holders of Registrable Securities
      shall reasonably request, which is required to be contained therein. The Company
      will pay all Registration Expenses in connection with each registration of
      Registrable Securities pursuant to this Section 8.2.

    

    
      
         

      

      
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    (c) A
      registration requested pursuant to this Section 8.2 shall not be deemed to
      have
      been effected: (i) unless a registration statement with respect thereto has
      become effective or (ii) if, after it has become effective, such registration
      is
      interfered with by any stop order, injunction or other order or requirement
      of
      the Securities and Exchange Commission (the “SEC”)
      or
      other governmental agency or court of competent jurisdiction for any reason,
      other than by reason of some act or omission by a holder of Registrable
      Securities.

    

    8.3 Incidental
      Registration Rights.

    

    (a) If
      the
      Company, at any time on or after the Exercise Date and on or before the five
      (5)
      year anniversary of the Base Date, proposes to register any of its securities
      under the Securities Act (other than in connection with a registration on Form
      S-4 or S-8 or any successor forms) whether for its own account or for the
      account of any holder or holders of its shares other than Registrable Securities
      (any shares of such holder or holders (but not those of the Company and not
      Registrable Securities) with respect to any registration are referred to herein
      as, “Other
      Shares”),
      the
      Company shall each such time give prompt (but not less than thirty (30) days
      prior to the anticipated effectiveness thereof) written notice to the holders
      of
      Registrable Securities of its intention to do so. Upon the written request
      of
      any such holder of Registrable Securities made within twenty (20) days after
      the
      receipt of any such notice (which request shall specify the Registrable
      Securities intended to be disposed of by such holder), except as set forth
      in
      Section 8.3(b), the Company will use its Reasonable Best Efforts to effect
      the
      registration under the Securities Act of all of the Registrable Securities
      which
      the Company has been so requested to register by such holder, to the extent
      requisite to permit the disposition of the Registrable Securities so to be
      registered, by inclusion of such Registrable Securities in the registration
      statement which covers the securities which the Company proposes to register;
      provided,
      however,
      that if,
      at any time after giving written notice of its intention to register any
      securities and prior to the effective date of the registration statement filed
      in connection with such registration, the Company shall determine for any reason
      in its sole discretion either to not register, to delay or to withdraw
      registration of such securities, the Company may, at its election, give written
      notice of such determination to such holder and, thereupon: (i) in the case
      of a
      determination not to register, shall be relieved of its obligation to register
      any Registrable Securities in connection with such registration (but not from
      its obligation to pay the Registration Expenses in connection therewith),
      without prejudice, however, to the rights of the holders of Registrable
      Securities entitled to request that such registration be effected as a
      registration under Section 8.2, (ii) in the case of a determination to delay
      registration, shall be permitted to delay registering any Registrable Securities
      for the same period as the delay in registering such other securities (including
      the Other Shares), without prejudice, however, to the rights of the holders
      of
      Registrable Securities entitled to request that such registration be effected
      as
      a registration under Section 8.2 and (iii) in the case of a determination to
      withdraw registration, shall be permitted to withdraw registration, without
      prejudice, however, to the rights of the holders of Registrable Securities
      entitled to request that such registration be effected as a registration under
      Section 8.2. No registration effected under this Section 8.3 shall relieve
      the
      Company of its obligation to effect any registration upon request under Section
      8.2, nor shall any such registration hereunder be deemed to have been effected
      pursuant to Section 8.2. The Company will pay all Registration Expenses in
      connection with each registration of Registrable Securities pursuant to this
      Section 8.3. 

    

    
      
         

      

      
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    (b) If
      the
      Company at any time proposes to register any of its securities under the
      Securities Act as contemplated by this Section 8.3 and such securities are
      to be
      distributed by or through one or more underwriters, the Company will, if
      requested by a holder of Registrable Securities, use its Reasonable Best Efforts
      to arrange for such underwriters to include all the Registrable Securities
      to be
      offered and sold by such holder among the securities to be distributed by such
      underwriters, provided that if the managing underwriter of such underwritten
      offering shall inform the Company by letter of its belief that inclusion in
      such
      distribution of all or a specified number of such securities proposed to be
      distributed by such underwriters would interfere with the successful marketing
      of the securities being distributed by such underwriters (such letter to state
      the basis of such belief and the approximate number of such Registrable
      Securities, such Other Shares and shares held by the Company proposed so to
      be
      registered which may be distributed without such effect), then the Company
      may,
      upon written notice to such holder, the other holders of Registrable Securities,
      and holders of such Other Shares, reduce pro rata in accordance with the number
      of shares of Common Stock desired to be included in such registration (if and
      to
      the extent stated by such managing underwriter to be necessary to eliminate
      such
      effect) the number of such Registrable Securities and Other Shares the
      registration of which shall have been requested by each holder thereof so that
      the resulting aggregate number of such Registrable Securities and Other Shares
      so included in such registration, together with the number of securities to
      be
      included in such registration for the account of the Company, shall be equal
      to
      the number of shares stated in such managing underwriter’s letter. 

    

    8.4 Registration
      Procedures.
      Whenever the holders of Registrable Securities have properly requested that
      any
      Registrable Securities be registered pursuant to the terms of this Warrant,
      the
      Company shall use its Reasonable Best Efforts to effect the registration and
      the
      sale of such Registrable Securities in accordance with the intended method
      of
      disposition thereof, and pursuant thereto the Company shall as expeditiously
      as
      possible:

    

    (a) prepare
      and file with the SEC a registration statement with respect to such Registrable
      Securities and use its Reasonable Best Efforts to cause such registration
      statement to become effective;

    (b) notify
      such holders of the effectiveness of each registration statement filed hereunder
      and prepare and file with the SEC such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as may
      be
      necessary to (i) keep such registration statement effective and the prospectus
      included therein usable for a period commencing on the date that such
      registration statement is initially declared effective by the SEC and ending
      on
      the date when all Registrable Securities covered by such registration statement
      have been sold pursuant to the registration statement or cease to be Registrable
      Securities, and (ii) comply with the provisions of the Securities Act with
      respect to the disposition of all securities covered by such registration
      statement during such period in accordance with the intended methods of
      disposition by the sellers thereof set forth in such registration
      statement;

    

    
      
         

      

      
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    (c) furnish
      to such holders such number of copies of such registration statement, each
      amendment and supplement thereto, the prospectus included in such registration
      statement (including each preliminary prospectus) and such other documents
      as
      such seller may reasonably request in order to facilitate the disposition of
      the
      Registrable Securities owned by such holders;

    

    (d) use
      its
      Reasonable Best Efforts to register or qualify such Registrable Securities
      under
      such other securities or blue sky laws of such jurisdictions as such holders
      reasonably request and do any and all other acts and things which may be
      reasonably necessary or advisable to enable such holders to consummate the
      disposition in such jurisdictions of the Registrable Securities owned by such
      holders; provided,
      however,
      that the
      Company shall not be required to: (i) qualify generally to do business in any
      jurisdiction where it would not otherwise be required to qualify but for this
      subparagraph; (ii) subject itself to taxation in any such jurisdiction; or
      (iii)
      consent to general service of process in any such jurisdiction;

    

    (e) notify
      such holders, at any time when a prospectus relating thereto is required to
      be
      delivered under the Securities Act, of the happening of any event as a result
      of
      which the prospectus included in such registration statement contains an untrue
      statement of a material fact or omits any material fact necessary to make the
      statements therein, in light of the circumstances in which they are made, not
      materially misleading, and, at the reasonable request of such holders, the
      Company shall prepare a supplement or amendment to such prospectus so that,
      as
      thereafter delivered to the purchasers of such Registrable Securities, such
      prospectus shall not contain an untrue statement of a material fact or omit
      to
      state any material fact necessary to make the statements therein, in light
      of
      the circumstances in which they are made, not materially
      misleading;

    

    (f) provide
      a
      transfer agent and registrar for all such Registrable Securities not later
      than
      the effective date of such registration statement;

    

    (g) make
      available for inspection by any underwriter participating in any disposition
      pursuant to such registration statement, and any attorney, accountant or other
      agent retained by any such underwriter, all financial and other records,
      pertinent corporate documents and properties of the Company, and cause the
      Company’s officers, directors, managers, employees and independent accountants
      to supply all information reasonably requested by any such underwriter,
      attorney, accountant or agent in connection with such registration
      statement;

    

    (h) otherwise
      use its Reasonable Best Efforts to comply with all applicable rules and
      regulations of the SEC, and make available to its security holders, as soon
      as
      reasonably practicable, an earnings statement of the Company, which earnings
      statement shall satisfy the provisions of Section 11(a) of the Securities Act
      and, at the option of the Company, Rule 158 thereunder;

    

    (i) in
      the
      event of the issuance of any stop order suspending the effectiveness of a
      registration statement, or of any order suspending or preventing the use of
      any
      related prospectus or suspending the qualification of any Registrable Securities
      included in such registration statement for sale in any jurisdiction, the
      Company shall use its Reasonable Best Efforts promptly to obtain the withdrawal
      of such order;

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (j) use
      its
      Reasonable Best Efforts to cause any Registrable Securities covered by such
      registration statement to be registered with or approved by such other
      governmental agencies or authorities as may be necessary to enable the sellers
      thereof to consummate the disposition of such Registrable Securities;
      and

    

    (k) if
      the
      offering is underwritten, use its Reasonable Best Efforts to furnish on the
      date
      that Registrable Securities are delivered to the underwriters for sale pursuant
      to such registration, an opinion dated such date of counsel representing the
      Company for the purposes of such registration, addressed to the underwriters
      covering such issues as are reasonably required by such
      underwriters.

    

    8.5 Listing.
      The
      Company shall secure the listing of the Common Stock underlying this Warrant
      upon each national securities exchange or automated quotation system upon which
      shares of Common Stock are then listed or quoted (subject to official notice
      of
      issuance) and shall maintain such listing of shares of Common Stock. The Company
      shall at all times comply in all material respects with the Company’s reporting,
      filing and other obligations under the by-laws or rules of the American Stock
      Exchange (or such other national securities exchange or market on which the
      Common Stock may then be listed, as applicable).

    

    8.6 Expenses.
      The
      Company shall pay all Registration Expenses relating to the registration and
      listing obligations set forth in this Section 8. For purposes of this Warrant,
      the term “Registration
      Expenses”
means:
      (a)
      all
      registration, filing and NASD fees, (b) all reasonable fees and expenses of
      complying with securities or blue sky laws, (c) all word processing, duplicating
      and printing expenses, (d) the fees and disbursements of counsel for the Company
      and of its independent public accountants, including the expenses of any special
      audits or “cold comfort” letters required by or incident to such performance and
      compliance, (e) premiums and other costs of policies of insurance (if any)
      against liabilities arising out of the public offering of the Registrable
      Securities being registered if the Company desires such insurance, if any,
      and
      (f) fees and disbursements of one counsel for the selling holders of Registrable
      Securities; provided
      however,
      that, in
      any case where Registration Expenses are not to be borne by the Company, such
      expenses shall not include (and such expenses shall be borne by the Company):
      (i) salaries of Company personnel or general overhead expenses of the Company,
      (ii) auditing fees, (iii) premiums or other expenses relating to liability
      insurance required by underwriters of the Company, or (iv) other expenses for
      the preparation of financial statements or other data, to the extent that any
      of
      the foregoing either is normally prepared by the Company in the ordinary course
      of its business or would have been incurred by the Company had no public
      offering taken place. Registration Expenses shall not include any underwriting
      discounts and commissions which may be incurred in the sale of any Registrable
      Securities and transfer taxes of the selling holders of Registrable
      Securities.

    8.7 Information
      Provided by Holders.
      Any
      holder of Registrable Securities included in any registration shall furnish
      to
      the Company such information as the Company may reasonably request in writing
      to
      enable the Company to comply with the provisions hereof in connection with
      any
      registration referred to in this Warrant.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    8.8 FINRA
      CobraDesk Filings.
      In the
      event that a registration statement covering the Registrable Securities is
      filed
      and a filing of such registration statement for review by the Financial Industry
      Regulatory Authority, Inc. (“FINRA”)
      via
      the FINRA’s CobraDesk filing system (“CobraDesk
      Filing”)
      is
      required pursuant to the rules and regulations of FINRA, within one (1) Business
      Day of the filing of such registration statement, the Company will prepare
      and
      make a COBRADesk Filing of the selling stockholder resale offering described
      in
      such registration statement for review by FINRA for the purpose of having the
      prospectus contained within such registration statement treated as a “base
      prospectus” in connection with such resale offering. If the CobraDesk Filing is
      required, the Company will use its Reasonable Best Efforts to have the CobraDesk
      Filing approved by FINRA within thirty (30) days of such filing date. The
      Company shall bear all expenses of the CobraDesk Filing, if any, including
      fees
      and expenses of counsel or other advisors to the Holder. In all circumstances,
      the Company shall pay for all FINRA filing fees associated with any CobraDesk
      Filing. 

    

    8.9 Effectiveness
      Period.
      The
      Company shall use its Reasonable Best Efforts to keep each registration
      statement contemplated hereunder continuously effective under the Securities
      Act
      until the date which is the earlier date of when (i) all Registrable Securities
      covered by such Registration Statement have been sold or (ii) all Registrable
      Securities covered by such Registration Statement may be sold immediately
      without registration under the Securities Act and without volume restrictions
      pursuant to Rule 144(k) under the Securities Act, as determined by the counsel
      to the Company pursuant to a written opinion letter to such effect, addressed
      and reasonably acceptable to the Company’s transfer agent and the affected
      holders of Registrable Securities.

    

    8.10 Net
      Cash Settlement.
      Notwithstanding anything herein to the contrary, in no event will the Holder
      hereof be entitled to receive a net-cash settlement as liquidated damages in
      lieu of physical settlement in shares of Common Stock, regardless of whether
      the
      Common Stock underlying this Warrant is registered pursuant to an effective
      registration statement; provided, however, that the foregoing will not preclude
      the Holder from seeking other remedies at law or equity for breaches by the
      Company of its registration obligations hereunder.

    

    9. Restrictions
      on Transfer.

    

    9.1 Restrictive
      Legends.
      This
      Warrant and each Warrant issued upon transfer or in substitution for this
      Warrant pursuant to Section 10 hereof, each certificate for Common Stock issued
      upon the exercise of the Warrant and each certificate issued upon the transfer
      of any such Common Stock shall be transferable only upon satisfaction of the
      conditions specified in this Section 9. Each of the foregoing securities shall
      be stamped or otherwise imprinted with a legend reflecting the restrictions
      on
      transfer set forth herein and any restrictions required under the Securities
      Act
      or other applicable securities laws.

    

    9.2 Notice
      of Proposed Transfer.
      Prior
      to any transfer of any securities which are not registered under an effective
      registration statement under the Securities Act (“Restricted
      Securities”),
      which
      transfer may only occur if there is an exemption from the registration
      provisions of the Securities Act and all other applicable securities laws,
      the
      Holder will give written notice to the Company of the Holder’s intention to
      effect a transfer (and shall describe the manner and circumstances of the
      proposed transfer). The following provisions shall apply to any proposed
      transfer of Restricted Securities:

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (i) If
      in the
      opinion of counsel for the Holder reasonably satisfactory to the Company the
      proposed transfer may be effected without registration of the Restricted
      Securities under the Securities Act (which opinion shall state in detail the
      basis of the legal conclusions reached therein), the Holder shall thereupon
      be
      entitled to transfer the Restricted Securities in accordance with the terms
      of
      the notice delivered by the Holder to the Company. Each certificate representing
      the Restricted Securities issued upon or in connection with any transfer shall
      bear the restrictive legends required by Section 9.1 hereof.

    

    (ii) If
      the
      opinion called for in (i) above is not delivered, the Holder shall not be
      entitled to transfer the Restricted Securities until either: (x) receipt by
      the
      Company of a further notice from such Holder pursuant to the foregoing
      provisions of this Section 9.2 and fulfillment of the provisions of clause
      (i)
      above, or (y) such Restricted Securities have been effectively registered under
      the Securities Act.

    

    9.3 Certain
      Other Transfer Restrictions.
      Notwithstanding any other provision of this Section 9: (i) prior to the Exercise
      Date, this Warrant or the Restricted Securities thereunder may only be
      transferred or assigned to the persons permitted under FINRA Rule 2710(g),
      and
      (ii) no opinion of counsel shall be necessary for a transfer of Restricted
      Securities by the holder thereof to any Person employed by or owning equity
      in
      the Holder, if the transferee agrees in writing to be subject to the terms
      hereof to the same extent as if the transferee were the original purchaser
      hereof and such transfer is permitted under applicable securities laws.

    

    9.4
       Termination
      of Restrictions.
      Except
      as set forth in Section 9.3 hereof, the restrictions imposed by this Section
      9
      upon the transferability of Restricted Securities shall cease and terminate
      as
      to any particular Restricted Securities: (a) which shall have been effectively
      registered under the Securities Act, or (b) when, in the opinions of both
      counsel for the holder thereof and counsel for the Company, such restrictions
      are no longer required in order to insure compliance with the Securities Act
      or
      Section 10 hereof. Whenever such restrictions shall cease and terminate as
      to
      any Restricted Securities, the Holder thereof shall be entitled to receive
      from
      the Company, without expense (other than applicable transfer taxes, if any),
      new
      securities of like tenor not bearing the applicable legends required by Section
      9.1 hereof.

    

    10.
       Ownership,
      Transfer, Sale and Substitution of Warrant.

    

    10.1 Ownership
      of Warrant.
      The
      Company may treat any Person in whose name this Warrant is registered in the
      Warrant Register maintained pursuant to Section 10.2(b) hereof as the owner
      and
      holder thereof for all purposes, notwithstanding any notice to the contrary,
      except that, if and when any Warrant is properly assigned in blank, the Company
      may (but shall not be obligated to) treat the bearer thereof as the owner of
      such Warrant for all purposes, notwithstanding any notice to the contrary.
      Subject to Sections 9 and 10 hereof, this Warrant, if properly assigned, may
      be
      exercised by a new holder without a new Warrant first having been issued.

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    10.2 Office;
      Exchange of Warrant.

    

    (a) The
      Company will maintain its principal office at the location identified in the
      prospectus relating to the Offering or at such other offices as set forth in
      the
      Company’s most current filing (as of the date notice is to be given) under the
      Exchange Act or as the Company otherwise notifies the Holder.

    

    (b) The
      Company shall cause to be kept at its office maintained pursuant to Section
      10.2(a) hereof a Warrant Register for the registration and transfer of the
      Warrant. The name and address of the holder of the Warrant, the transfers
      thereof and the name and address of the transferee of the Warrant shall be
      registered in such Warrant Register. The Person in whose name the Warrant shall
      be so registered shall be deemed and treated as the owner and holder thereof
      for
      all purposes of this Warrant, and the Company shall not be affected by any
      notice or knowledge to the contrary.

    

    (c) Upon
      the
      surrender of this Warrant, properly endorsed, for registration of transfer
      or
      for exchange at the office of the Company maintained pursuant to Section 10.2(a)
      hereof, the Company at its expense will (subject to compliance with Section
      9
      hereof, if applicable) execute and deliver to or upon the order of the Holder
      thereof a new Warrant of like tenor, in the name of such holder or as such
      holder (upon payment by such holder of any applicable transfer taxes) may
      direct, calling in the aggregate on the face thereof for the number of shares
      of
      Common Stock called for on the face of the Warrant so surrendered (after giving
      effect to any previous adjustment(s) to the number of Warrant
      Shares).

    

    10.3
       Replacement
      of Warrant.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant and, in the case of any such loss,
      theft or destruction of this Warrant, upon delivery of indemnity reasonably
      satisfactory to the Company in form and amount or, in the case of any
      mutilation, upon surrender of this Warrant for cancellation at the office of
      the
      Company maintained pursuant to Section 10.2(a) hereof, the Company, at its
      expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor
      and dated the date hereof.

    

    10.4 Opinions.
      In
      connection with the sale of the Warrant Shares by Holder, the Company agrees
      to
      cooperate with the Holder, and at the Company’s expense, have its counsel
      provide any legal opinions required to remove the restrictive legends from
      the
      Warrant Shares in connection with a sale, transfer or legend removal request
      of
      Holder. 

    

    11.
       No
      Rights or Liabilities as Stockholder.
      No
      Holder shall be entitled to vote or receive dividends or be deemed the holder
      of
      any shares of Common Stock or any other securities of the Company which may
      at
      any time be issuable on the exercise hereof for any purpose, nor shall anything
      contained herein be construed to confer upon the Holder, as such, any of the
      rights of a stockholder of the Company or any right to vote for the election
      of
      directors or upon any matter submitted to stockholders at any meeting thereof,
      or to give or withhold consent to any corporate action (whether upon any
      recapitalization, issuance of stock, reclassification of stock, change of par
      value, consolidation, merger, conveyance, or otherwise) or to receive notice
      of
      meetings, or to receive dividends or subscription rights or otherwise until
      the
      Warrant shall have been exercised and the shares of Common Stock purchasable
      upon the exercise hereof shall have become deliverable, as provided herein.
      The
      Holder will not be entitled to share in the assets of the Company in the event
      of a liquidation, dissolution or the winding up of the Company.

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    12.
       Notices.
      Any
      notice or other communication in connection with this Warrant shall be given
      in
      writing and directed to the parties hereto as follows: (a) if to the Holder,
      c/o
      Edward Rose, General Counsel, Maxim Group LLC, Fax No: (212) 895-3860; or (b)
      if
      to the Company, to the attention of its Chief Executive Officer at its office
      maintained pursuant to Section 10.2(a) hereof; provided,
      that the
      exercise of the Warrant shall also be effected in the manner provided in Section
      3 hereof. Notices shall be deemed properly delivered and received when delivered
      to the notice party (i) if personally delivered, upon receipt or refusal to
      accept delivery, (ii) if sent via facsimile, upon mechanical confirmation of
      successful transmission thereof generated by the sending telecopy machine,
      (iii)
      if sent by a commercial overnight courier for delivery on the next Business
      Day,
      on the first Business Day after deposit with such courier service, or (iv)
      if
      sent by registered or certified mail, five (5) Business Days after deposit
      thereof in the U.S. mail.

    

    13. Payment
      of Taxes.
      The
      Company will pay all documentary stamp taxes attributable to the issuance of
      shares of Common Stock underlying this Warrant upon exercise of this Warrant;
      provided,
      however,
      that the
      Company shall not be required to pay any tax which may be payable in respect
      of
      any transfer involved in the transfer or registration of this Warrant or any
      certificate for shares of Common Stock underlying this Warrant in a name other
      that of the Holder. The Holder is responsible for all other tax liability that
      may arise as a result of holding or transferring this Warrant or receiving
      shares of Common Stock underlying this Warrant upon exercise
      hereof.

    

    14.
       Miscellaneous.
      This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of the change, waiver, discharge or termination is sought. This Warrant shall
      be
      construed and enforced in accordance with and governed by the laws of the State
      of New Jersey. The section headings in this Warrant are for purposes of
      convenience only and shall not constitute a part hereof. When used herein,
      the
      term “Reasonable
      Best Efforts”
means,
      with respect to the applicable obligation of the Company, reasonable best
      efforts for similarly situated, publicly-traded companies.

    

    

    [Signature
      Page Follows]

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Representative’s Warrant to be duly executed as of the
      date first above written.

    

    

     

    
      	 	 	 
	 	CAMPUSU,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            
	 	Name:
              
	 	Title:

    

    

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      A

    FORM
      OF EXERCISE NOTICE

    [To
      be
      executed only upon exercise of Warrant]

    

    To
      CAMPUSU, INC.:

    

    The
      undersigned registered holder of the within Warrant hereby irrevocably exercises
      the Warrant pursuant to Section 3.1 of the Warrant with respect to
      ________________________ Warrant Shares, at an exercise price per share of
      $[ ],
      and requests that the certificates for such Warrant Shares be issued, subject
      to
      Sections 9 and 10, in the name of, and delivered to:

    

    ______________________________________

    ______________________________________

    ______________________________________

    ______________________________________

    

    The
      undersigned is hereby making payment for the Warrant Shares in the following
      manner: [check one]

    

    [
      ] by
      cash
      in accordance with Section 3.1(b) of the Warrant

    

    [
      ] via
      cashless exercise in accordance with Section 3.1(c) of the Warrant in the
      following manner:

    

    ______________________________________________________________________________

    ______________________________________________________________________________

    ______________________________________________________________________________

    

    The
      undersigned hereby represents and warrants that it is, and has been since its
      acquisition of the Warrant, the record and beneficial owner of the
      Warrant.

    

    Dated:
      _______________ 

    

    ________________________________________

    Print
      or
      Type Name

    

    ________________________________________

    (Signature
      must conform in all respects to name of holder as specified on the face of
      Warrant)

    

    ________________________________________

    (Street
      Address)

    

    ________________________________________

    (City)
      (State) (Zip Code)

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      B

    FORM
      OF ASSIGNMENT

    [To
      be
      executed only upon transfer of Warrant]

    

    For
      value
      received, the undersigned registered holder of the within Warrant hereby sells,
      assigns and transfers unto _____________________ [include name and addresses]
      the rights represented by the Warrant to purchase __________ shares of Common
      Stock of CAMPUSU, INC. to which the Warrant relates, and appoints
      _____________________ Attorney to make such transfer on the books of CAMPUSU,
      INC. maintained for the purpose, with full power of substitution in the
      premises.

    

    

    Dated:       
      ________________________________________

    (Signature
      must conform in all respects 

    to
      name
      of holder as specified on the

    face
      of
      Warrant)

    

    ________________________________________

    (Street
      Address)

    

    ________________________________________

    (City)
      (State) (Zip Code)

    

    Signed
      in
      the presence of:

    

    ________________________________________

    (Signature
      of Transferee)

    

    ________________________________________

    (Street
      Address)

    

    ________________________________________

    (City)
      (State) (Zip Code)

    Signed
      in
      the presence of:Exhibit
      10.1

    
 

    MANAGEMENT
      SERVICES AGREEMENT

    

    THIS
      MANAGEMENT SERVICES AGREEMENT (the “Agreement”) is made and entered into
      effective as of December 20, 2005, by and between DRTATTOFF, LLC, a California
      limited liability company (“Manager”) and William Kirby, D.O., an individual
      (“Physician”). 

    

    RECITALS

    

    A. Physician
      is licensed to practice osteopathic medicine in the State of California, and
      has
      special expertise in the removal of tattoos.

    

    B. Manager
      is a company specializing in providing management services to healthcare
      professionals, and is experienced in providing management services to practices
      of the type operated by Physician.

    

    C. Physician
      desires to provide tattoo removal services at the “Practice Site,” as such term
      is defined below, and Manager and Physician desire that Manager provide
      management services to Physician on the terms and conditions contained in this
      Agreement.

    

    NOW,
      THEREFORE, the parties to this Agreement do hereby agree as
      follows:

    

    1. Relationship
      of Physician and Manager.

    

    a. Appointment
      of Manager.
      Physician hereby appoints Manager as the exclusive manager of Physician’s tattoo
      removal practice (the “Practice”) at the “Practice Site,” as such term is
      defined in Section 2.e. below, and at any other Practice Sites at which
      Physician provides or supervises tattoo removal services, and Manager shall
      provide to Physician the technical, management, administrative and support
      services and equipment described in Section 2 below.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    b. Retention
      of Authority and Control. Notwithstanding
      the authority granted to Manager in this Agreement, Manager and Physician agree
      that Physician shall at all times exercise overall control of the operations
      of
      the Practice, and shall retain legal responsibility for all professional medical
      and ethical matters in connection with the Practice. Manager’s duties for
      Physician under this Agreement shall be purely non-medical and administrative
      in
      nature, and Manager shall in no way exercise any clinical judgment as to the
      nature of professional or ancillary services or type of practitioner that any
      patient requires or receives. Rather, Physician shall be solely responsible
      for
      and have complete authority, supervision and control over the provision of
      professional healthcare services performed by Physician and the “Licensed Health
      Professionals,” as such term is defined below in Section 2.b.iv., as Physician,
      in his sole discretion, deems appropriate and in accordance with all applicable
      laws and regulations. This Agreement shall in no way be construed to mean or
      suggest that Manager is engaged, or permitted to engage, in the practice of
      osteopathic medicine. Any delegation of authority by Physician to Manager that
      would require or permit Manager to engage in the practice of osteopathic
      medicine shall be prohibited and deemed ineffective and Physician shall retain
      and have sole authority at all times with respect to all such
      matters.

    

    2. Manager’s
      Services. Manager
      shall provide the following management services (collectively, “Services”) with
      respect to the Practice conducted by Physician:

    

    a. Day-to-Day
      Management. Physician
      hereby engages Manager as his sole and exclusive agent to manage and administer
      the day-to-day business functions related to the Practice conducted by Physician
      at the Practice Site. Manager’s performance of the Services shall involve such
      expenditure of time as Manager determines is necessary or advisable in its
      reasonable discretion.

    

    b. Personnel.

    

    i. Manager
      shall employ or engage and provide to Physician all administrative personnel,
      including a receptionist, secretarial and transcribing personnel, billing
      personnel, purchasing personnel, janitorial and maintenance personnel, and
      such
      other administrative and management personnel that Manager determines to be
      necessary or appropriate, after consultation with Physician, for the efficient
      and proper operation of Physician’s Practice. All such administrative and
      non-licensed personnel engaged by Manager shall be referred to collectively
      as
      the “Support Personnel.”

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    ii. Manager
      shall be responsible for the hiring, supervising, training, disciplining, and
      termination of the Support Personnel, including all determinations regarding
      the
      retention, promotion, demotion, awarding of bonuses, salary adjustments and
      other matters affecting the terms and conditions of the employment or engagement
      of the Support Personnel in accordance with and subject to such personnel
      policies as may be adopted from time to time by Manager. Staffing levels, work
      hours and shifts and employee benefit programs shall be established and
      implemented by Manager in accordance with the policies and funding arrangements
      developed by Manager. 

    

    iii.  Manager
      shall be responsible for compensating the Support Personnel, and shall provide
      payroll accounting services and maintain employee records, workers’ compensation
      insurance, unemployment insurance, and such employee benefit programs for the
      Support Personnel as it determines are necessary or advisable in its sole
      discretion. 

    

    iv.  Physician
      shall be responsible for employing or engaging, at Physician’s sole cost and
      expense, additional physicians or licensed allied health professionals,
      including but not limited to Registered Nurses and/or Physician Assistants
      (collectively, the “Licensed Health Professionals”), which Physician shall
      supervise in accordance with all applicable laws and regulations. If Physician
      engages Licensed Health Professionals, Manager shall administer the payment
      of
      compensation of the Licensed Health Professionals, including providing payroll
      and accounting services, preparing checks for the signature of Physician and
      maintaining employee records. Manager shall also administer the payment of
      all
      applicable vacation pay, sick leave, and retirement, health and life insurance
      benefits provided by Physician, at Physician’s sole cost and expense, to the
      Licensed Health Professionals.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    c. Billing
      and Collection.

    

    i. Manager
      shall provide all billing and collection services that Manager determines to
      be
      necessary or appropriate in connection with the charges resulting from the
      performance of services by Physician and the Licensed Health Professionals.
      Specifically, Manager shall prepare patient invoices; input billing information;
      prepare computerized billing statements and submit bills and claims to patients
      and third party payors; respond to telephone inquiries from patients and payors
      concerning their bills; diligently pursue collection of unpaid bills for up
      to
      180 days from the initial billing, and, thereafter; refer such unpaid bills
      to
      collection agencies or attorneys for collection, the cost and expense of which
      shall be borne solely by Physician. Manager shall deposit all payments into
      the
“Operational Account” described in Section 3 below. Manager shall provide
      monthly and year-to-date reports showing all billings, collections, and accounts
      receivable and the aging of same.

    

    ii. Physician
      hereby appoints Manager for the term of this Agreement as his true and lawful
      attorney-in-fact for the following purposes:

    

    1. To
      bill
      in Physician’s name and on his behalf: (a) patients; (b) third party payors and
      (c) any other persons or entities who are obligated to pay for services
      performed by Physician and the Licensed Health Professionals.

    

    2. To
      collect in the name of Physician and on his behalf all charges, fees or other
      amounts resulting from or related to the professional and ancillary services
      performed by Physician and the Licensed Health Professionals.

    

    3. To
      receive all payments arising from the professional and ancillary services
      performed by Physician and the Licensed Health Professionals; take possession
      of
      and endorse in the name of Physician all cash, notes, checks, money orders,
      insurance payments and any other instruments received as payments of accounts
      receivable of Physician, however arising. Physician shall immediately forward
      to
      Manager any such payments that may come into the possession of Physician or
      the
      Licensed Health Professionals. Physician hereby expressly authorizes and grants
      Manager the right to open any mail or messengered envelopes or packages sent
      by
      any Practice patient or third party payor which lists Physician or any Licensed
      Health Professional as the addressee. Physician agrees that he shall not attempt
      to stop, hinder, interfere with, re-direct or divert any claims, payments or
      explanation of benefits, whether submitted or paid in a written form, by
      facsimile or electronically, during the term of this Agreement or after its
      expiration.

     

    
      
        
        

      

      
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    4. To
      deposit all “Gross Revenues,” as such term is defined in Section 3.a. below,
      directly into the Operational Account, in accordance with Section 3
      below.

    

    iii. Physician
      acknowledges and agrees that Manager shall have discretion to compromise, settle
      or write off any amount due from a patient or third party payor, or determine
      not to appeal a denial by any third party payor of any claim for payment, for
      any particular professional service rendered by or on behalf of Physician.
      

    

    d. Supplies,
      Equipment, and Furniture.

    

    i. Manager
      shall be responsible for furnishing all management information systems
      (collectively, the “Management Information System”), office supplies, equipment,
      furnishings, furniture and personal property, including all telephones, postage
      and duplication services, stationery, forms and other items (collectively,
      the
“Office Equipment”) which Manager, after consultation with Physician, determines
      to be necessary or appropriate for the operation of Physician’s Practice.
      Manager also shall be responsible for providing, either by purchase or by lease,
      such medical equipment (the “Medical Equipment”) as Physician and Manager
      determine is necessary or appropriate for the operation of the Practice.

    

    ii. Manager
      shall arrange for the maintenance and repair of the Office Equipment and the
      Medical Equipment. If Manager determines, after consultation with Physician,
      that any item of existing the Office Equipment or Medical Equipment utilized
      in
      Physician’s practice is worn out or obsolete and that it is unreasonable,
      impossible or economically impractical to repair, and if Manager, after
      consultation with Physician, further determines that such item is necessary
      or
      appropriate for the efficient operation of Physician’s practice, then Manager
      shall purchase Office Equipment or Medical Equipment which is the same model
      or
      functional equivalent as the item of equipment to be replaced for use in the
      Practice.

    

    
      
        
        

      

      
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    e. Practice
      Site.

    

    i. Manager
      shall provide to Physician, for his non-exclusive
      use in operating the Practice, the premises located at 8670 Wilshire Boulevard,
      Suite 203, Beverly Hills, California 90211, together with all appurtenances,
      improvements and fixtures (collectively, the “Practice Site”). Changes in
      location of the Practice Site may be effected by Manager as of the expiration
      of
      any lease or other arrangement by which Manager leases or occupies the Practice
      Site or at any other time as may be approved in writing by Manager after
      consultation with Physician. Further, Manager shall have the exclusive right
      to
      manage Physician’s Practice at any additional location at which Physician
      provides tattoo removal services, and such additional locations shall be
      considered a “Practice Site” for purposes of this Agreement, and Physician’s
      performance of tattoo removal services at such additional Practice Site(s)
      shall
      be subject to the terms and conditions contained in this Agreement. Physician
      acknowledges that this Agreement and Manager’s provision of any Practice Site to
      Physician gives Physician only a conditional right to use the Practice Site,
      which right shall automatically expire, without notice or further action by
      Manager, upon the expiration or early termination of this Agreement for any
      reason, and Physician shall immediately vacate the Practice Site upon such
      expiration or early termination. Physician further acknowledges that no
      leasehold interest is created or conveyed by this Agreement, and that no
      landlord-tenant relationship is created by this Agreement or otherwise exists
      between Manager and Physician. 

    

    ii. Manager
      shall provide or arrange for the provision of all of the lessee maintenance
      and
      repair obligations for the Practice Site that are required to be performed
      pursuant to the terms of the Practice Site lease between Manager and its
      landlord, as well as any and all other maintenance and repairs to the Practice
      Site which Manager, after consultation with Physician, determines to be
      necessary.

     

    
      
        
        

      

      
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    iii. Manager
      shall provide or arrange for all utilities and building services related to
      the
      utilization by Physician and the Licensed Health Professionals of the Practice
      Site.

    

    iv. Physician
      acknowledges that Manager is the owner of the name, “Dr. Tattoff,” and any
      related names or derivations thereof (collectively, the “Name”) and has the
      right to use the Name in connection with Manager’s business. Manager hereby
      grants to Physician a revocable license to use the Name in connection with
      the
      practice conducted by Physician at the Practice Site. Physician acknowledges
      that this Agreement gives Physician only a conditional right to use the Name,
      which right shall automatically expire, without notice or further action by
      Manager, upon the expiration or early termination of this Agreement for any
      reason, and Physician shall immediately cease using the Name in connection
      with
      its practice at the Practice Site. Further, Physician agrees to not use the
      Name
      in connection with any other business or professional practice he may conduct
      without the prior written consent of Manager. Physician shall cooperate fully
      with Manager in completing, renewing and filing any documents that must be
      submitted to the Osteopathic Medical Board of California, and any fictitious
      business name statement related to the Name, to evidence Physician’s agreement
      to the provisions contained in this Section 7. 

    

    f. Advertising
      and Marketing.
       Upon
      request by Physician, Manager shall assist Physician in arranging for third
      parties to provide advertising and marketing services (collectively,
“Advertising Services”) in connection with the tattoo removal services provided
      by Physician at the Practice Site. In assisting Physician, Manager is acting
      solely in its capacity as an administrator to Physician. At no time shall
      Manager hold itself out as providing, or actually provide, tattoo removal
      services on behalf of Physician. In engaging or employing personnel to provide
      Advertising Services, Physician shall ensure that all such Advertising Services
      conducted on behalf of Physician shall be performed in accordance with all
      applicable laws, regulations, rules and guidelines, including but not limited
      to
      those promulgated by the Osteopathic Medical Board of California. Physician
      shall directly pay the providers of such Advertising Services for the actual
      cost and expense of all Advertising Services performed on behalf of
      Physician.

     

    
      
        
        

      

      
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    g. Additional
      Services.
      If
      Physician desires that Manager provide services in addition to those listed
      in
      this Section 2, and Manager desires to provide such additional services, the
      parties may negotiate for Manager to provide such additional services on such
      terms and for such additional compensation as the parties may agree upon in
      writing. 

     

    3. Bank
      Account.

    

    Manager
      shall deposit all payments into a checking account established in Physician’s
      name at a bank or other financial institution (“Agent”) mutually agreed upon by
      the parties (the “Operational Account”). The Operational Account shall require
      two (2) signatures for all drafts, checks and withdrawals: (a) the signature
      of
      a representative of Manager; and (b) the signature of Physician. Manager shall
      deposit into the Operational Account all cash, checks, money orders and other
      instruments received by Physician in connection with the operation of the
      Practice. Physician shall pay Manager the amount of compensation due on a
      semi-monthly basis, as set forth below in Section 4.b.

    

    4. Compensation
      for Services.

    

    a. Management
      Fee. Manager
      and Physician acknowledge and agree that Manager shall incur substantial time,
      costs and expense in performing the Services on behalf of Physician, and that
      such costs and expenses will vary over the term of this Agreement. Additionally,
      the parties acknowledge and agree that the level and intensity of the Services
      will increase as the volume of Physician’s Practice increases. Manager and
      Physician acknowledge that the Fee, as such term is defined below, has resulted
      from arm’s length negotiations between the parties and does not take into
      account the volume or value of referrals or business otherwise generated between
      the parties, and is consistent with fair market value for the Services,
      including the Office Equipment, Medical Equipment and Practice Site provided
      by
      Manager to Physician. Accordingly, as compensation in full for the performance
      of the Services hereunder, Physician shall pay Manager a fee of forty-five
      percent (45%) of Physician’s Gross Revenues received during each calendar month
      during the term of this Agreement (the “Management Fee”). As used herein, the
      term “Gross Revenues” shall be defined to mean all amounts received by Physician
      relating to any and all professional services and ancillary services related
      to
      tattoo removal rendered by Physician and the Licensed Health Professionals
      to
      patients at the Practice Site, whether such revenues are received in cash from
      patients, private or prepaid insurance, other third party payors or any other
      source. If Physician or the Licensed Health Professionals directly receive
      any
      Gross Revenues, Physician shall immediately deliver any and all such Gross
      Revenues to Manager for deposit into the Operational Account.

     

    
      
        
        

      

      
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    b. Payment
      Date. 
      Due to
      its substantial investment and the costs and expenses Manager has incurred
      and
      will incur in performing its duties hereunder, the Management Fee shall be
      payable as follows: On the first (1st)
      and
      fifteenth (15th)
      days of
      each month during the term of this Agreement, Manager shall calculate the
      portion of the Gross Revenues in the Operational Account to be paid to Company
      for the Services it provides hereunder, and Manager shall prepare a check,
      drawn
      on the Operational Account, in the amount to be paid to Manager (the “Manager
      Check”). Company shall also calculate the portion of the Gross Revenues in the
      Operational Account that Physician is entitled to retain and shall prepare
      a
      check, drawn on the Operational Account, in the amount to be paid to Physician
      (the “Physician Check”). Manager shall deliver to Physician the Physician Check,
      together with its written calculation of the amount due to each party. Manager
      shall retain the Manager Check in payment of its Management Fee. If Physician
      fails or refuses to pay, or prevents payment of the Management Fee, or any
      portion thereof, to Manager when due, Manager shall be entitled to interest
      on
      the overdue amount at the greater of ten percent (10%) per annum or the highest
      amount allowed by law, such interest to commence accruing as of the due date
      of
      such payment. The foregoing remedies of Manager, together with all other
      remedies of Manager set forth herein, shall be cumulative and in addition to
      all
      other rights and remedies afforded to Manager at law or in equity.

     

    
      
        
        

      

      
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    c. Semi-Annual
      Review. 
      Manager
      shall review annually, and have the right to adjust, the Management Fee if
      necessary to insure that Manager is being paid its costs plus a reasonable
      profit. If Manager proposes a change in the amount of the Management Fee,
      Manager shall notify Physician at least sixty (60) days in advance of the date
      on which the revised Management Fee is to be effective and shall provide to
      Physician a written statement of the basis for the change, and Physician shall
      pay the revised Management Fee beginning on the effective date. 

    

    d. Collection
      Continuation Period.
      Notwithstanding the termination or expiration of this Agreement, for a period
      of
      ninety (90) days following such termination or expiration (the “Collection
      Continuation Period”), Manager shall have the right, but not the obligation, to
      continue to provide, at the same compensation rate set forth in Section 4.a.
      above, the collection services described in Section 2.c. above with respect
      to
      all Practice services related to tattoo removal provided by Physician and the
      Licensed Health Professionals prior to the expiration or termination of this
      Agreement. Physician specifically agrees that the foregoing provision is fair
      and reasonable and is intended to compensate Manager for the Services it
      provided during the term of the Agreement.

    

    5. Security
      Interest.

    

    In
      order
      to secure Physician’s timely payment of the Management Fee, any other sums owed
      to Manager by Physician, and the performance of any other obligation of
      Physician under this Agreement, Physician hereby grants Manager a security
      interest in and to all of the Gross Revenues, accounts receivable, cash and
      all
      funds in the Operational Account and other deposit accounts, whether now
      existing or hereafter acquired, pertaining to and generated by or in connection
      with the Practice conducted by Physician. To evidence the security interest
      granted to Manager herein, Manager and Physician shall enter into the “Security
      Agreement,” attached hereto as Exhibit “A” and incorporated herein by this
      reference. Manager shall file a UCC-1 financing statement with the California
      Secretary of State documenting the security interest granted to Manager, and
      Physician shall cooperate with Manager in filing such UCC-1. Upon the release
      of
      the security interest granted herein, Manager shall complete and file a UCC-2
      releasing such security interest.

     

    
      
        
        

      

      
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    6. Term
      and Termination.

    

    a. Term. The
      initial term of this Agreement shall be for one (1) year commencing as of the
      date first written above; thereafter, this Agreement shall renew automatically
      for successive terms of one (1) year each, unless either party notifies the
      other party in writing, not less than ninety (90) days’ prior to the end of the
      then current term, of its intention to not renew this Agreement.

     

    b. Termination. 

    

    i. Either
      party may terminate this Agreement for cause upon the material breach of this
      Agreement by the other party, if such breach is not cured within ten (10) days
      following written notice of such breach. 

    

    ii. Either
      party may terminate this Agreement immediately upon the filing, with respect
      to
      the other party, of a voluntary or involuntary petition in bankruptcy if such
      petition is not dismissed within thirty (30) days of such filing; or upon the
      appointment of a receiver or trustee to take possession of all, or substantially
      all, of the assets of a party, if such appointment is not terminated within
      thirty (30) days, or upon the garnishment or attachment of the Gross Revenues
      generated by Physician at the Practice Site.

    

    iii. Manager
      may terminate this Agreement immediately upon the occurrence of any of the
      following events:

     

    
      
        
        

      

      
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    (a) Manager’s
      good faith determination that Physician’s operation of the Practice does not
      meet the accepted professional or ethical standards of the osteopathic medicine
      profession or that Physician or the Licensed Health Professionals are
      jeopardizing the health or welfare of Physician’s patients;

    

    (b) The
      suspension, revocation, restriction, termination or non-renewal of Physician’s
      professional license; 

    

    (c) The
      suspension, revocation, restriction, termination or non-renewal of Physician’s
      medical staff membership or practice privileges at any hospital;

    

    (d) The
      felony conviction, or conviction of any crime involving moral turpitude, of
      Physician;

    

    (e) Physician’s
      inability, due to illness or physical or mental disability, to perform or
      supervise tattoo removal services at the Practice Site during Physician’s normal
      hours of operation for thirty (30) or more days, consecutively or cumulatively,
      during any twelve (12) month period of this Agreement;

    

    (f) If,
      for
      any reason, Manager no longer has the right to use the Practice Site, due to
      Manager’s landlord’s termination of the Premises Lease, its expiration, or
      otherwise; or

     

    (g) Physician’s
      breach of any of the provisions of Section 7 below.

    

    iv. Either
      party may terminate this Agreement immediately upon the dissolution of the
      other
      party, if such party is an entity, for any reason.

    

    c. Effect
      of Termination. Upon
      termination or expiration of this Agreement, each party’s respective obligations
      hereunder shall terminate in full, except for those obligations which either
      explicitly, as set forth in this Agreement, or by their nature survive the
      termination or expiration of this Agreement. In addition, Physician shall return
      all documents, data and other materials or information that constitute
“Confidential Information” as such term is defined in Section 11.a.
      below.

     

    
      
        
        

      

      
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    7. Physician
      Covenants. Physician
      covenants and agrees that, at all times during the term hereof, Physician shall
      (a) insure that he is duly licensed to practice osteopathic medicine in the
      State of California, without restriction; (b) insure that the Licensed Health
      Professionals are duly licensed to perform their respective professions, without
      restriction, and that they have the appropriate level of education and
      experience to perform the services required of them in connection with the
      Practice; (c) conduct the Practice and supervise the Licensed Health
      Professionals in compliance with all applicable federal, state and local laws,
      rules and regulations; (d) not enter into discussions or negotiations or an
      agreement with any other person or entity regarding some or all of the Services
      or for the sale or merger of the Practice, unless Physician obtains Manager’s
      prior written consent; (e) be open for business during regular business hours,
      Monday through Friday, in accordance with the schedule adopted by Physician,
      but
      Physician shall provide no less than twenty (20) hours of tattoo removal
      services, including supervision services, per month; and (f) continuously
      practice at the Practice Site during Physician’s normal business hours, provided
      that Physician may take such reasonable amounts of time off for vacation,
      illness or family emergencies.

    

    8. Records.

    

    a. Patient
      Records. Although
      Manager shall maintain Physician’s patient charts and records on behalf of
      Physician, Physician shall be solely responsible for making and reviewing all
      entries made by Physician and the Licensed Health Professionals on all Physician
      patient charts and records, and all such patient records and charts maintained
      by Manager in connection with professional medical services provided by
      Physician shall be Physician’s property. Each of the parties hereto shall
      maintain and safeguard the confidentiality of all patient records, charts and
      other information generated in connection with the professional medical services
      provided hereunder in accordance with federal and state confidentiality laws
      and
      regulations, including without limitation, the California Confidentiality of
      Medical Information Act, Civil Code Section 56 et seq. and the Health Insurance
      Portability and Accountability Act of 1996 (“HIPAA”) and the regulations
      thereunder. Notwithstanding the foregoing, Manager shall have a continuing
      right
      to inspect and copy (at Manager’s expense) all records pertaining to Physician’s
      patients as may be necessary in connection with Manager’s performance of
      services pursuant to this Agreement or for other reasonable purposes, subject
      to
      federal and state confidentiality laws, and provided Manager gives Physician
      at
      least five (5) days’ prior written notice. 

     

    
      
        
        

      

      
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    b. Business
      Records. All
      business and administrative records maintained by Manager in connection with
      the
      Services provided to Physician shall be Manager’s property. Notwithstanding the
      foregoing, Physician shall have a continuing right to inspect and copy (at
      Physician’s expense) all such business records for any reasonable purpose,
      provided Physician gives Manager at least five (5) days’ prior written
      notice.

     

    9. Insurance;
      Indemnification.

    

    a. General
      Liability Insurance. Manager
      shall procure and maintain at all times during this Agreement, at Manager’s sole
      cost and expense, comprehensive general liability and property insurance
      covering the Practice Site with general liability limits in commercially
      reasonable amounts, as determined by Manager. Within ten (10) days after
      Physician’s request, Manager shall furnish certificates, endorsements and copies
      of all insurance policies to Physician.

    

    b. Indemnification. Physician
      agrees to defend, indemnify and hold harmless Manager, its officers, directors,
      members, representatives, employees and agents, from and against any and all
      losses, liabilities, damages, claims, judgments, costs or expenses, including
      attorneys’ fees, that Manager may suffer, incur or become liable for, as a
      result of any action or omission by Physician and/or the Licensed Health
      Professionals. Manager agrees to defend, indemnify and hold harmless Physician,
      its officers, directors, members, representatives, employees and agents, from
      and against any and all losses, liabilities, damages, claims, judgments, costs
      or expenses, including attorneys’ fees, that Physician may suffer, incur or
      become liable for, as a result of any action or omission by Manager.

     

    
      
        
        

      

      
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    10. Compliance
      with Laws. The
      obligations of Manager pursuant to this Agreement shall be subject to any
      limitations or restrictions which may be imposed by law or regulation, and
      Manager may suspend any or all obligations hereunder, or, at its option,
      terminate this Agreement, if it determines, upon advice of counsel, that the
      performance of any obligation pursuant to this Agreement may contravene
      applicable law or regulation. 

    

    11. Non-Disclosure
      of Manager’s Professional and Business Practices, Trade Secrets, or Privileged
      Information; Non-Solicitation and Non-Interference.

    

    a. Confidentiality. Physician
      agrees to keep confidential and to not use or disclose the business practices,
      trade secrets or privileged information of Manager and to keep such knowledge
      confidential in Physician’s dealings with any healthcare practice, clinic or
      practice, hospital, health care facility or other person or entity. Further,
      Physician agrees that Physician will not at any time disclose to any person
      or
      use (except for the benefit of Manager) information obtained by Physician during
      the period of Physician’s relationship with Manager regarding Manager’s business
      plans, business methods, strategic plans, financial statements, financial
      information, any and all data base or data input programs, computer programs
      and
      software (whether or not completed or in use), any and all operating manuals
      or
      similar materials that constitute Manager’s systems, templates or forms,
      techniques, or any other trade secrets, confidential or proprietary information
      respecting Manager and its business operations (collectively, “Confidential
      Information”). Except to the extent necessary for Physician to carry out his
      duties and obligations under this Agreement, Physician acknowledges and agrees
      that he is expressly prohibited from creating, making, duplicating, copying,
      retaining, taking, maintaining or possessing, by any means or method, such
      Confidential Information either during or after the term of this Agreement.
      Notwithstanding the foregoing, Manager may from time to time license to
      Physician the use of any logo, trademark or tradename Manager develops from
      time
      to time, including the “Name,” as discussed above in Section 2.e.iv. above.
      Physician shall immediately cease using such logo, trademark or tradename for
      any purpose whatsoever upon the expiration or earlier termination of this
      Agreement, and shall immediately return to Manager all materials containing
      any
      logo, trademark or tradename.

     

    
      
        
        

      

      
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    b. Non-Interference. Physician
      agrees that Physician will not disrupt, damage, impair or interfere with the
      business of Manager, whether by way of interfering with or raiding its employees
      or independent contractors, disrupting its relationship with agents, suppliers,
      business contacts, representatives, vendors or otherwise. 

    

    c. Survival
      of Obligations. The
      obligations of this Section 11 shall be in full force and effect during the
      term
      of this Agreement and shall survive the termination or expiration of this
      Agreement. Notwithstanding Section 13. of this Agreement, in the event of a
      breach of this Section 11, Physician acknowledges that any violation of this
      Section 11 could result in irreparable injury to Manager, and the remedy at
      law
      would be inadequate. Accordingly, Manager shall be entitled to injunctive relief
      in addition to any other remedies to which Manager may be entitled at law or
      in
      equity. 

    

    12. Independent
      Contractor In
      performing all Services under this Agreement, Manager is, and shall at all
      times
      be acting and performing as, an independent contractor to Physician, with
      Manager practicing and performing its business in accordance with its own
      judgment as to the method of rendering such services, except as limited by
      this
      Agreement. The relationship between Manager and Physician is not one of
      partners, joint venturers, principal and agent or employer and employee, or
      any
      relationship other than that of independent parties contracting with each other
      solely for the purpose of carrying out the provisions of this Agreement. Except
      as specifically provided herein, Physician shall neither have nor exercise
      any
      control or direction over the methods by which Manager and its employees and
      independent contractors provide the Services required of it hereunder. Manager
      shall neither have nor exercise any control or direction over the professional
      judgment of Physician or the manner in which Physician performs his professional
      services. The parties hereto understand that Manager, in its capacity as
      Manager, does not practice osteopathic medicine and shall not employ, engage
      or
      supervise Physician in his provision of medical services. Each party hereto
      shall be solely responsible for the compensation, benefits, insurance coverage,
      employer taxes and any other obligations of its own employees or independent
      contractors.

     

    
      
        
        

      

      
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    13. Resolution
      of Disputes. 

    

    a. For
      all
      disputes, claims or controversies arising in connection with, relating to,
      or
      arising out of this Agreement, the parties agree to first attempt to resolve
      such dispute, claim or controversy by non-binding mediation. The mediation
      shall
      be conducted by a mediator agreed upon by the parties. If the parties are unable
      to resolve their dispute, claim or controversy within thirty (30) days after
      a
      party’s request for mediation, then except as otherwise provided in Section 11
      of this Agreement, such dispute, claim or controversy shall be settled by
      arbitration in accordance with Sections 1280 through 1286.4 of the California
      Code of Civil Procedure and the Commercial Arbitration Rules of the American
      Arbitration Association (the “AAA Rules”). 

    

    b. 
      Each of
      the parties specifically agrees that the provisions of this Section 13 shall
      govern the resolution of any such controversy or claim. The controversies and
      claims so governed by this Section 13 therefore include, but are not limited
      to,
      any claim for a tort, breach of contract, or a violation of any federal or
      California statute or regulation, regardless
      of
      whether such controversy or claim is based on California case law, a California
      statute, federal common law or a federal statute. 

    

    c. Each
      of
      the parties specifically waives the right to a jury trial to resolve a
      controversy or claim arising out of or relating to this Agreement. 

    

    d. In
      the
      event of any conflict between the California Code of Civil Procedure Sections
      1280 through 1286.4 and the AAA Rules, the Code of Civil Procedure shall
      control. Judgment on the award rendered may be entered in any court having
      jurisdiction thereof. 

    

    e. Such
      arbitration shall be held in Los Angeles County, California. 

     

    
      
        
        

      

      
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    f. The
      arbitrator shall make written findings of fact and conclusions of law. The
      arbitrator shall have no authority to make conclusions of law or an award that
      could not have been made by a court of law. If either party initiates legal
      proceedings against the other party, other than arbitration in accordance with
      the rules of the American Arbitration Association as described above, the
      prevailing party shall be allowed such costs and reasonable attorneys’ fees as
      the court may allow. 

    

    g. All
      documents, exhibits, transcripts, decisions, awards, and other information
      produced or created in connection with the arbitration proceeding shall be
      kept
      strictly confidential by the parties. 

    

    14. General
      Provisions.

    

    a. No
      Assignment. Unless
      otherwise permitted in this Agreement, neither party hereto shall assign any
      of
      its rights, nor delegate any of its duties under this Agreement, without first
      obtaining the express written consent of the other party. Subject to the
      foregoing restriction, this Agreement shall be binding on the parties hereto
      and
      their successors and permitted assigns.

    

    b. Severability. If
      any
      provision of this Agreement as applied to any party or to any circumstance
      shall
      be found by a court to be invalid or unenforceable, the same shall in no way
      affect any other provision of this Agreement, the application of any such
      provision in any other circumstance, or the validity or enforceability of this
      Agreement, unless such invalidity or unenforceability would defeat an essential
      business purpose hereof, or except as otherwise provided herein.

    

    c. Notice.
      All
      notices or demands shall be in writing and shall be given personally, by
      electronic facsimile, or by certified mail. Notice shall be deemed conclusively
      made at the time of notice if given personally or if by certified mail, three
      (3) days after deposit thereof in the United States mail, properly addressed
      and
      postage pre-paid to the following addresses:

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	 	Physician:	 	William Kirby, D.O.
	 	
            	 	13044 West Pacific Promenade
              #424
	 	
            	 	Playa Del Rey, CA 90094
	 	
            	 	Attention: Dr. Will Kirby
	 	
            	 	
            
	 	Manager:	 	DRTATTOFF Management Company,
              LLC
	 	
            	 	8500 Wilshire Blvd #105
	 	
            	 	Beverly Hills, California 90211
	 	
            	 	Attention: James Morel,
              Manager

    

     

    d. Waiver. A
      waiver
      by either party of any of the terms and conditions of this Agreement in any
      instance shall not be deemed or construed to be a waiver of such term or
      condition for the future, or of any subsequent breach thereof, nor shall it
      be
      deemed a waiver of performance of any other obligation hereunder.

    

    e. Entire
      Understanding. This
      Agreement and any exhibits attached hereto contain the entire understanding
      of
      the parties hereto relating to the subject matter contained herein, and
      supersede all prior and collateral agreements, understanding, statements and
      negotiations of the parties. This Agreement can only be changed, modified,
      amended, rescinded or supplemented by a written agreement executed by both
      parties.

    

    f. California
      Law. This
      Agreement shall be construed and enforced in all respects according to the
      laws
      of the State of California.

    

    g. Attorney’s
      Fees. Should
      either party institute any action or proceeding, including without limitation
      arbitration, relating to this Agreement, the prevailing party in any such action
      or proceeding shall be entitled to receive from the other party all costs and
      expenses, including reasonable attorney’s fees, incurred in connection with such
      action or proceeding.

    

    h. Interpretation
      of Agreement. The
      parties acknowledge and agree that because all parties and their attorneys
      participated in negotiating and drafting this Agreement, no rule of construction
      shall apply to this Agreement which construes any language, whether ambiguous,
      unclear or otherwise, in favor of, or against any party by reason of that
      party’s role in drafting this Agreement.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    i. Additional
      Acts. The
      parties hereto agree to perform such other acts, and to execute such additional
      documents, as may be required from time to time to carry out the provisions
      of
      this Agreement or the intentions of the parties.

    

    IN
      WITNESS WHEREOF, this Agreement is executed effective as of the date and year
      first set forth above.

     

    
      	 	“MANAGER”	 	“PHYSICIAN”
	 	DRTATTOFF, LLC,	 	
            
	 	a California limited liability
              company	 	
            
	 	
            	 	
            
	 	By:
              /s/ James Morel	 	/s/
              William Kirby
	 	Manager	 	William Kirby, D.O.
	 	
            	 	
            
	 	
            	 	
            

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      “A”

    

    SECURITY
      AGREEMENT

    

    THIS
      SECURITY AGREEMENT (“Security Agreement”) is made and entered into effective as
      of December 20, 2005 by and between DRTATTOFF, LLC, a California limited
      liability company (“Secured Party”) and William Kirby, D.O., an individual
      (“Debtor”).

    

    RECITALS

    

    A. Debtor
      and Secured Party have entered into that certain “Management Services
      Agreement,” of even date herewith (the “MSA”), by which Secured Party provides
      management services to Debtor in connection with the tattoo removal practice
      conducted by Debtor at 8670 Wilshire Boulevard, Suite 203, Beverly Hills,
      California 90211 (the “Practice Site”) and at other Practice Sites the parties
      may agree upon from time to time, as set forth in the MSA. 

    

    B. Debtor
      has agreed to enter into this Security Agreement in order to grant Secured
      Party
      a first priority security interest in the Collateral (as hereinafter defined)
      to
      secure prompt payment and performance of Debtor’s obligations to Secured Party,
      including, without limitation, Debtor’s obligation to pay Secured Party the
      Management Fee set forth in the MSA. 

    

    NOW,
      THEREFORE, in consideration of the mutual promises, covenants, conditions,
      representations, and warranties hereinafter set forth, and for other good and
      valuable consideration, the parties hereto agree as follows:

    

    AGREEMENT

    

    1. Definitions.
      As
      used
      in this Security Agreement, the following terms shall have the following
      meanings:

    

    “Account
      Debtor”
      means
      any person or entity who is or who may become obligated with respect to, or
      on
      account of, an Account. 

    

    “Accounts”
      means
      all
      accounts, as that term is defined in section 9102(a)(2) of the California
      Commercial Code, now owned or hereafter acquired by Debtor in connection with
      or
      arising out of the Practice conducted by Debtor at any and all Practice Sites,
      including (a) all accounts receivable, other receivables, book debts and other
      forms of obligations (other than forms of obligations evidenced by Chattel
      Paper
      or Instruments), whether arising out of Goods sold or services rendered by
      Debtor or any “Licensed Health Professional,” as such term is defined in the
      MSA, at any Practice Site (including any such obligations that may be
      characterized as an account or contract right under the Code); (b) all of
      Debtor’s rights in, to, and under all purchase orders or receipts for Goods or
      services; (c) all of Debtor’s rights to any Goods represented by any of the
      foregoing (including unpaid sellers’ rights of rescission, replevin,
      reclamation, and stoppage in transit, and rights to returned, reclaimed, or
      repossessed Goods); (d) all money due or to become due Debtor under all purchase
      orders and contracts for the sale of Goods or the performance of services or
      both by Debtor or in connection with any other transaction (whether or not
      yet
      earned by performance by Debtor), including the right to receive the proceeds
      of
      those purchase orders and contracts; and (e) all collateral security and
      guaranties of any kind given by any other Debtor with respect to any of the
      foregoing. 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “California
      Commercial Code” means
      the
      Uniform Commercial Code as may, from time to time, be enacted and in effect
      in
      the State of California. Terms defined in the California Commercial Code not
      otherwise defined in this Security Agreement or the MSA are used in this
      Security Agreement as defined in that Code on the date of this Security
      Agreement. 

    

    “Collateral”
      means
      all
      of Debtor’s personal property, furniture and fixtures, whether now owned or
      hereafter acquired, located at any Practice Site or elsewhere and resulting
      from
      Debtor’s operation of the Practice conducted at any Practice Site, including,
      but not limited to, all of Debtor’s interest in Accounts, Chattel Paper,
      Contracts, Debtor’s Books, Equipment, Fixtures, General Intangibles, Goods,
      Instruments and letters of credit, Inventory, Investment Property, Deposit
      Accounts, money, cash or cash equivalents, and to the extent not otherwise
      included, all proceeds and products of the foregoing and all accessions to,
      substitutions and replacements for, and rents and profits of each of the
      foregoing.

    

    “Debtor’s
      Books” means
      any
      and all presently existing and hereafter acquired or created books and records
      of Debtor, including all records (including maintenance and warranty records),
      ledgers, computer programs, disc or tape files, printouts, runs, and other
      computer prepared information summarizing, or evidencing the Accounts.

    

    “Deposit
      Account” means
      any
      deposit account, as that term is defined in section 9102(a)(29) of the
      California Commercial Code, now owned or hereafter acquired by Debtor.

    

    “Equipment”
      means
      all
      equipment, as that term is defined in section 9102(a)(33) of the California
      Commercial Code, now owned or hereafter acquired by Debtor, wherever located,
      including all of data processing and computer equipment with software and
      peripheral equipment, office machinery, furniture, tools, attachments,
      accessories, medical and laser equipment, and other equipment of every kind
      and
      nature, trade fixtures and other fixtures, together with all additions and
      accessions, replacements, parts, substitutes for any of the foregoing, and
      all
      manuals, drawings, instructions, warranties, and rights with respect to the
      foregoing, and all products and proceeds of the foregoing and condemnation
      awards and insurance proceeds with respect thereto. 

    

    “Fixtures”
      means
      all
      fixtures, as that term is defined in section 9102(a)(41) of the California
      Commercial Code, now owned or hereafter acquired by Debtor, wherever located.
       

    

    “General
      Intangibles”
      means
      all general intangibles, as that term is defined in section 9102(a)(42) of
      the
      California Commercial Code, now owned or hereafter acquired by Debtor in
      connection with the Practice conducted at any and all Practice Sites, including
      all right, title, and interest that Debtor may now or hereafter have in or
      under
      any Contracts, Licenses, Copyrights, Trademarks, and Patents and all
      applications therefore and reissues, extensions, or renewals; interests in
      partnerships, joint ventures, and other business associations; permits;
      inventions (whether or not patented or patentable); knowledge, know-how, skill,
      expertise, or experience; software; databases; data; processes; models,
      drawings, materials, and records; goodwill (including the goodwill associated
      with any Trademark or Trademark License); all rights and claims in or under
      insurance policies (including insurance for fire, damage, loss, and casualty,
      whether covering personal property, real property, tangible rights, or
      intangible rights, all liability, life, key man, and business interruption
      insurance, and all unearned premiums); uncertificated and certificated
      securities; chooses in action; deposit, checking, and other bank accounts;
      rights to receive tax refunds and other payments; rights to receive dividends,
      distributions, cash, instruments, and other property in respect of or in
      exchange for pledged shares or other equity interests; rights of
      indemnification; all ledgers, correspondence, credit files, invoices, and other
      papers and records; magnetic tapes, CD-ROMs, zip drives, and other data storage
      media; and other papers and documents in the possession or under the control
      of
      Debtor or any computer bureau or service company from time to time acting for
      Debtor. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Goods”
      means
      any
      goods, as that term is defined in section 9102(a)(44) of the California
      Commercial Code, now owned or hereafter acquired by Debtor.

    

    “Licenses”
      means
      Copyright Licenses, Patent Licenses, and Trademark Licenses.

    

    “Obligations”
      means
      any
      and all debts, liabilities, obligations, or undertakings owing by Debtor to
      Secured Party, including, without limitation, all debts, liabilities,
      obligations or undertakings arising under, advanced pursuant to, or evidenced
      by
      the MSA and this Security Agreement, whether direct or indirect, absolute or
      contingent, matured or unmatured, due or to become due, voluntary or
      involuntary, whether now existing or hereafter arising. 

    

    “Practice”
      means
      the
      tattoo removal services and any other services provided by Debtor and the
“Licensed Health Professionals,” as such term is defined in the MSA, at any and
      all Practice Sites.

    

    “Practice
      Site” or “Practice Sites”
      means
      the premises located at 8670 Wilshire Boulevard, Suite 203, Beverly Hills,
      California 90211, together with all appurtenances, improvements and fixtures.
      The term “Practice Site” or “Practice Sites” also includes any additional or
      replacement locations at which Debtor conducts a Practice and which are managed,
      or entitled to be managed, by Secured Party pursuant to the MSA.

    

    2. Grant
      of Security Interest.
      Debtor
      hereby grants to Secured Party a continuing security interest in all presently
      existing and hereafter acquired or arising Collateral in order to secure the
      prompt payment and performance of all of the Obligations. Debtor acknowledges
      and affirms that such security interest in the Collateral has attached to all
      Collateral without further act on the part of Secured Party or Debtor.

    

    3. Perfection
      and Further Assurances.
      

    

    a. Debtor
      authorizes Secured Party to authenticate and file all records (including initial
      financing statements, certificates of title, and control instructions to third
      parties, amendments, continuation statements, etc.) that are reasonably required
      by Secured Party to perfect and continue its security interest in the
      Collateral. Debtor authorizes Secured Party to indicate that the financing
      statement covers all assets or all personal property owned by Debtor and used
      in
      connection with the Practice operated by Debtor at any Practice Site. Debtor
      will execute (sign, acknowledge when necessary, and deliver) any other records
      or documents necessary to perfect and continue the security interest under
      applicable federal or state statute, regulation, or treaty, including any
      financing statement necessary to perfect a security interest in
      fixtures.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    b. Debtor
      agrees to authenticate and to cause all necessary third parties to authenticate
      any and all records necessary for Secured Party’s control over Deposit Accounts,
      electronic Chattel Paper, and letter-of-credit rights. Debtor agrees that the
      third party will have the right to comply with the instructions originated
      by
      Secured Party directing disposition of such Collateral without further consent
      by Debtor and will indemnify and defend the third party from all claims by
      Debtor arising from or related to the third party’s compliance with Secured
      Party’s disposition instructions. Debtor will cause any bank with which a
      Deposit Account is maintained to subordinate its rights of recoupment and setoff
      to Secured Party’s security interest.

    

    c. Debtor
      represents and warrants that (1) his exact name is as set forth in the preamble
      to this Security Agreement; and (2) Debtor is located (as that term is used
      in
      California Commercial Code section 9307) in California.

    

    d. Debtor
      authorizes Secured Party to take possession of any and all items of the
      Collateral at any time. Debtor promises to deliver possession of the Collateral
      promptly upon receipt of an authenticated request from Secured Party for
      delivery of possession.

    

    e. Whether
      or not Debtor is then in default, Secured Party will have the right, but not
      the
      obligation, to (1) notify Account Debtor and other persons obligated on the
      Collateral to make payment or otherwise render performance to or for the benefit
      of Secured Party, (2) enforce the obligations of Account Debtor and other
      persons obligated on the Collateral, (3) apply the balance of any Deposit
      Account which it controls to the Obligations, and (4) take any proceeds to
      which
      it is entitled for application to the Obligations.

    

    4. Notice
      of Postperfection Changes.
      Debtor
      will immediately notify Secured Party of:

    

    a. Any
      change in the name of Debtor or Debtor’s use of an assumed business or trade
      name;

    

    b. Any
      change in Debtor’s location;

    

    c. Any
      merger between Debtor and any third party or transfer by or to Debtor of
      substantially all of the assets and liabilities of another person;

    

    d. Any
      substantial damage to or loss or destruction of any essential or material part
      of the Collateral, whether or not covered by insurance.

    

    5. Inspection
      and Verification Rights.
      Debtor
      will keep accurate records and documents relating to the Collateral at its
      principal business office. Secured Party will have the unconditional right
      at
      all reasonable times and upon reasonable prior notice to Debtor to:

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    a. Inspect
      the Collateral, including the records and documents related
      thereto;

    

    b. Make
      copies of the records and documents;

    

    c. After
      notice to Debtor (unless it is in default), verify orally and in writing
      directly with third parties, including Account Debtor, the accuracy of any
      information provided by Debtor with respect to the Collateral;

    

    d. Determine
      through employees, agents, or independent contractors the value of the
      Collateral at the expense of Debtor no more than once per calendar year and
      at
      any time reasonably prudent when Debtor is in default;

    

    e. Enter
      upon any premises owned, leased, or otherwise controlled by Debtor for the
      foregoing purposes. 

    

    f. Debtor
      promises and agrees to provide to Secured Party access to the Collateral and
      to
      provide any office space (including computer hardware, operating systems, and
      software and access to safes and other areas of safekeeping) that is reasonably
      necessary for the exercise of the foregoing rights. Debtor grants to Secured
      Party an easement over all premises owned, leased, or otherwise controlled
      by
      Debtor for the purpose of inspecting and valuing the Collateral and, following
      any default, repossessing, storing, preparing for disposition, and disposing
      of
      the Collateral. Debtor authorizes and instructs all third parties who have
      information relating to the Collateral (such as customers, Account Debtor,
      obligors, government agencies, employees, and outside accountants) to provide
      any and all information, records, and documents relating to the Collateral
      to
      Secured Party upon its written request provided that Secured Party has given
      Debtor prior notice in writing of its intention to ask for such
      information.

    

    6. Covenants.
      Debtor
      promises and agrees to:

    

    a. Pay
      and
      perform the Obligations when and as due;

    

    b. Cooperate
      completely and promptly with Secured Party in perfecting and foreclosing Secured
      Party’s security interest, in locating, inspecting, evaluating, collecting,
      assembling, repossessing, and disposing of the Collateral, and in notifying
      third parties about Secured Party’s security interest and collection
      rights;

    

    c. Operate
      its business in the ordinary course and not change the size, nature, or emphasis
      of that business in any materially adverse way;  

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    d. To
      maintain fire and extended coverage insurance on the Collateral in the amounts
      and under policies acceptable to Secured Party, naming Secured Party under
      a
      lender’s loss-payable clause, and to provide Secured Party with the original
      policies and certificates at Secured Party’s request;

    

    e. Pay
      all
      taxes, assessments, and similar charges (“taxes”) levied against the Collateral
      as and when the same become due and payable;

    

    f. Pay
      all
      amounts when due which, if not so paid, may become the subject of a lien against
      the Collateral which might have or gain priority over Secured Party’s security
      interest (a “lien claim”);

    

    g. Perform
      all maintenance, repairs, and replacements that are necessary to keep the
      Fixtures and Equipment in good and safe operating condition and promptly pay
      all
      costs of such work;  

    

    h. Take
      all
      reasonable steps to protect the tangible items of the Collateral against theft,
      loss, or damage;

    

    i. Provide
      to Secured Party upon authenticated request evidence of insurance coverage
      and
      the payment of taxes and lien claims; and

    

    j. Indemnify
      and defend Secured Party against all claims, loss, liability, cost, or expense
      asserted against or incurred by Secured Party by reason of Debtor’s failure to
      provide a perfected, first-priority security interest in any item or items
      of
      the Collateral or the breach or default of Debtor under this Security
      Agreement.

    

    k. Debtor
      hereby authorizes Secured Party to pay the premiums for insurance, taxes, and
      the principal, interest, fees, and costs constituting lien claims if Debtor
      does
      not do so in a timely manner (unless Debtor is then contesting such obligation
      in good faith and by appropriate means) and Secured Party reasonably believes
      such payment is necessary for the protection of the Collateral and/or Secured
      Party’s security interest in the Collateral (a “security protection advance”).
      Debtor promises and agrees to reimburse Secured Party on demand for any security
      protection advance made by Secured Party and to pay interest thereon at the
      rate
      of 10% per annum from the date of the advance until the date of
      reimbursement.

    

    l. To
      pay
      all expenses, including attorney fees, incurred by Secured Party in the
      perfection, preservation, realization, enforcement, and exercise of Secured
      Party’s rights under this Security Agreement.

     

    m. 
      To
      indemnify Secured Party against loss of any kind, including reasonable attorney
      fees, caused to Secured Party by reason of its interest in the
      Collateral.

     

    n. To
      conduct Debtor’s business efficiently and without voluntary
      interruption.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    o. To
      preserve all rights, privileges, and franchises held by Debtor’s
      business.

     

    p. To
      give
      Secured Party notice of any litigation that may have a material adverse effect
      on Debtor’s business.

     

    q.
       Not
      to
      change the name or place of Debtor’s business, or to use a fictitious business
      name, without first notifying Secured Party in writing.

     

    r.
       Not
      to
      sell, lease, transfer, or otherwise dispose of the Collateral except, before
      the
      occurrence of a default, for cash proceeds of Accounts collected in the ordinary
      course of business.

     

    s.
       Not
      to
      use the Collateral for any unlawful purpose or in any way that would void any
      effective insurance.

     

    t.
       To
      notify
      Secured Party promptly in writing of any default, potential default, or any
      development that might have a material adverse effect on the
      Collateral.

    

    7. Representations
      and Warranties.
      Debtor
      represents and warrants to Secured Party that:

    

    a. Debtor
      is
      duly licensed to practice osteopathic medicine in the State of California,
      without restriction;

    

    b. Debtor
      is
      authorized to execute and deliver this Security Agreement. The Security
      Agreement is a valid and binding obligation of Debtor. The Security Agreement
      creates a perfected, first-priority security interest enforceable against the
      Collateral in which Debtor now has rights, and will create a perfected,
      first-priority security interest enforceable against the Collateral in which
      Debtor later acquires rights, when Debtor acquires those rights.

    

    c.
       Neither
      the execution and delivery of this Security Agreement, nor the taking of any
      action in compliance with it, will (1) violate or breach any law, regulation,
      rule, order, or judicial action binding on Debtor, any agreement to which Debtor
      is a party, Debtor’s articles of incorporation or bylaws; or (2) result in the
      creation of a lien against the Collateral except that created by this Security
      Agreement.

    

    d. 
      No
      default or potential default exists.

    

    e. Debtor
      has not (1) made any assignment for the benefit of creditors, (2) applied for
      or
      consented to the appointment of a receiver or trustee for its affairs, or (3)
      been the subject of any voluntary or involuntary bankruptcy, insolvency,
      reorganization or liquidation proceeding. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    f. Other
      than financing statements in favor of Secured Party, no effective financing
      statement naming Debtor as debtor, assignor, grantor, mortgagor, pledgor or
      the
      like and covering any part of the Collateral is on file in any filing or
      recording office in any jurisdiction. 

    

    8. Power
      of Attorney.
      Debtor
      hereby irrevocably appoints Secured Party as Debtor’s attorney in fact with full
      power of substitution to do any and all acts which Debtor is obligated by this
      Security Agreement to do and for the purpose of, subsequent to any default
      of
      Debtor hereunder, taking any action and executing any instruments which Secured
      Party may deem necessary or advisable to accomplish the purposes of this
      Security Agreement. Without limiting the generality of the foregoing, Secured
      Party shall have the following powers:

     

    a.
       To
      perform any of Debtor’s obligations under the Security Agreement in Debtor’s
      name or otherwise.

    

    b.
       To
      give
      notice of Debtor’s right to payment, to enforce that right, and to make
      extension agreements with respect to it.

    

    c.
       To
      release persons liable on rights to payment, to compromise disputes with those
      persons, and to surrender security, all as Secured Party determines in its
      sole
      discretion when acting in good faith based on information known to it when
      it
      acts.

    

    d.
       To
      prepare and file financing statements, continuation statements, statements
      of
      assignment, termination statements, and the like, as necessary to perfect,
      protect, preserve, or release Secured Party’s interest in the
      Collateral.

     

    e.
       To
      endorse Debtor’s name on instruments, documents, or other forms of payment or
      security that come into Secured Party’s possession.

    

    f.
       To
      take
      cash in payment of obligations.

    

    g.
       To
      verify
      information concerning rights to payment by inquiry in its own name or in a
      fictitious name.

    

    h. To
      prepare, execute, and deliver insurance forms; to adjust insurance claims;
      to
      receive payment under insurance claims; and to apply such payment to reduce
      Debtor’ Obligations.

    

    This
      power of attorney is coupled with an interest and may not be revoked or
      cancelled by Debtor without Secured Party’s written consent. 

    

    9. Events
      of Default.
      Debtor
      will be in default under this Security Agreement if:

    

    a. Debtor
      fails to pay any Obligations, or any portion thereof, to Secured Party when
      due,
      at stated maturity, on accelerated maturity, or otherwise.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    b. Debtor
      fails to make any remittances required by this Security Agreement.

    

    c. Debtor
      commits any breach of this Security Agreement, or any present or future rider
      or
      supplement to this Security Agreement, or any other agreement between Debtor
      and
      Secured Party evidencing the Obligations or securing them, including without
      limitation the MSA and any amendments or supplements thereto.

    

    d. Any
      warranty, representation, or statement, made by or on behalf of Debtor in or
      with respect to the Security Agreement, is false.

    

    e. The
      Collateral is lost, stolen, or damaged.

    

    f. There
      is
      a seizure or attachment of, or a levy on, the Collateral.

    

    g. Debtor
      ceases operations, is dissolved, terminates its existence, does or fails to
      do
      anything that allows Obligations to become due before their stated maturity,
      or
      becomes insolvent or unable to meet its debts as they mature.

     

    h.
       Secured
      Party for any reason deems itself insecure.

     

    i.
       Debtor
      (1) applies for or consents to the appointment of a receiver, trustee,
      liquidator, or custodian of himself or of a substantial part of his property;
      (2) is unable, or admits in writing its inability, to pay its debts generally
      as
      they mature; (3) makes a general assignment for the benefit of his creditors
      or
      any of them; (4) is dissolved or liquidated in full or in part; (5) commences
      a
      voluntary case or other proceeding seeking liquidation, reorganization, or
      other
      relief with respect to itself or its debts under any bankruptcy, insolvency,
      or
      other similar law now or hereafter in effect, or consents to any relief or
      to
      the appointment of or taking possession of its property by any official in
      an
      involuntary case or other proceeding commenced against it; or (6) takes any
      action for the purpose of effecting any of the foregoing.

     

    j.
       Proceedings
      for the appointment of a receiver, trustee, liquidator, or custodian of Debtor
      or of all or a substantial part of its property, or an involuntary case or
      other
      proceedings seeking liquidation, reorganization, or other relief with respect
      to
      such Debtor or its debts under any bankruptcy, insolvency, or other similar
      law
      now or hereafter in effect are commenced and an order for relief is entered
      or
      such a proceeding is not dismissed or discharged within 60 days of commencement.
      

    

     

    
      
        10.
          Rights
          and Remedies.
          When
          an
          event of default occurs:

      

    

    

    a. Secured
      Party may exercise all rights and remedies available to Secured Party under
      this
      Security Agreement and the California Commercial Code, including acceleration
      of
      the Obligations (that is, make such Obligations immediately due and payable).
      All such rights and remedies are cumulative.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    b. Without
      thereby limiting the generality of the foregoing or of Secured Party’s rights
      under any other section of this Security Agreement, Secured Party, upon Debtor’s
      default, will be entitled to immediate possession of all items of the Collateral
      and to collect and apply all payments from, and to enforce performance by,
      third
      parties as to the Collateral.  

    

    c. Debtor
      will assemble the tangible items of the Collateral and make such items available
      to Secured Party at the location or locations designated by Secured Party.
      Debtor must also allow Secured Party, its representatives, and its agents to
      enter the premises where all or any part of the Collateral, the records, or
      both
      may be, and remove any or all of it.

    

    d. Debtor
      agrees that it will be commercially reasonable if (1) Secured Party gives Debtor
      and other persons entitled to notice written notice at least 10 days in advance
      of any public or private disposition of all or any nonperishable part of the
      Collateral. 

    

    

    e. Secured
      Party and Debtor each waives the right to trial by jury in any action or
      proceeding relating to any claim, offset, defense, or counterclaim, whether
      in
      contract or tort, at law or in equity, arising out of or relating to this
      Security Agreement.

    

    f. The
      prevailing party in the trial or appeal of any civil action, arbitration, or
      other adversary proceeding relating to this Security Agreement or any related
      offset, defense, or counterclaim, whether in contract or tort, at law or in
      equity, will be entitled to the award of a reasonable attorney fee in addition
      to costs and disbursements.

    

    11. Attorneys’
      Fees, Costs and Expenses.
      Debtor
      shall pay all costs and expenses of Secured Party enforcing its rights under
      this Security Agreement, including reasonable attorneys fees. 

    

    12. No
      Waiver.
      No
      waiver
      by Secured Party of any default shall be deemed to be a waiver of any other
      subsequent default, nor shall any such waiver by Secured Party be deemed to
      be a
      continuing waiver. 

    

    13. Survival.
      Debtor’s
      representations and warranties made in this Security Agreement will survive
      its
      execution, delivery, and termination.

    

    14. Successors
      and Assigns.
      This
      Security Agreement will bind and benefit the successors and assigns of the
      parties, but Debtor may not assign his rights under the Security Agreement
      without Secured Party’s prior written consent. 

    

    15. Governing
      Law.
      This
      Security Agreement will be governed by, and construed in accordance with, the
      laws of the State of California.

    

    16. Entire
      Agreement.
      This
      Security Agreement is the entire agreement and supersedes any prior agreement
      or
      understandings between Secured Party and Debtor relating to the Collateral.
      

    

    17. Notices.
      All
      notices hereunder by a party to another party shall be in writing, delivered
      personally, by means of electronic communications, by certified or registered
      mail, return receipt requested, or by overnight courier, and shall be deemed
      to
      have been duly given when delivered personally or by electronic communication,
      or when deposited in the United States mail, postage prepaid, or deposited
      with
      the overnight courier addressed as follows: 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      
        	 	Debtor:	 	William Kirby, D.O.
	 	
              	 	13044 West Pacific Promenade
                #424
	 	
              	 	Playa Del Rey, CA 90094
	 	
              	 	Attention: Dr. Will Kirby
	 	
              	 	
              
	 	Secured Party:	DRTATTOFF Management Company,
                LLC
	 	
              	 	232 N. Almont Drive
	 	
              	 	Beverly Hills, California 90211
	 	
              	 	Attention: James Morel,
                Manager

      

       

    

    or
      to
      such other persons or places as any party may from time to time designate by
      written notice to the others. 

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Security Agreement to
      be
      executed effective as of the date first written above.

     

    
      
        	SECURED PARTY:	 	DEBTOR:
	 	 	 	
              
	DRTATTOFF,
                LLC 	 	
              
	a
                California limited liability company	 	 
	 	
              	 	
              
	By:	/s/
                James Morel	 	/s/
                William Kirby
	 	Manager	 	William Kirby,
                D.O.

      

       

      
        
          
          

        

        
          11

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