Document:

ex_10-1.htm

    
      

    

    
      

    

    EXHIBIT
10.1

     

     

    AMENDMENT
NO. 1 TO AGREEMENT AND PLAN OF MERGER

     

    THIS
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this “Amendment”) is made
and entered into as of October 15, 2008, by and among Balqon Corporation, a
California corporation, with its principal office at 1701 E. Edinger, Unit E-3,
Santa Ana, California, 92705 (“Balqon”), BMR
Solutions, Inc., a Nevada corporation, with its principal office at 1184 Rutland
Road, Suite 2, Newport Beach, CA 92660 (“BMR”), and Balqon
Acquisition Corp., a newly-formed wholly-owned subsidiary of BMR (“Acquisition
Sub”).

     

    R E C I T A L S

     

    A.           Balqon,
BMR and Acquisition Sub entered into that certain Agreement and Plan of Merger
dated September 15, 2008 (the “Merger
Agreement”).

     

    B.           Balqon,
BMR and Acquisition Sub now desire to amend a certain provision of the Merger
Agreement as set forth below.

     

    NOW
THEREFORE, in consideration of the foregoing premises and the respective
promises and agreements of the parties set forth herein, the parties hereto
agree as follows:

     

    1.      Definitions.  Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings ascribed thereto in the Merger Agreement.

     

    2.      Amendment.  Section
14(a)(iii) of the Merger Agreement is hereby amended by deleting the reference
to October 15, 2008 and replacing it with October 24, 2008.

     

    3.      Miscellaneous.  Except
as modified and amended pursuant to this Amendment, the Merger Agreement shall
remain in full force and effect.  This Amendment may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument. This
Amendment will become binding when one or more counterparts hereof, individually
or taken together, will bear the signatures of all the parties reflected hereon
as signatories.

    

    [Signatures
on Following Page]

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 to
Agreement and Plan of Merger as of the date first above written.

     

    
      
        	 	 	 	

                BMR
      SOLUTIONS, INC.

              	 
	 	 	 	 	 
	
                 

              	 	By: 
      	
                

                  /s/
      K. John Shukur

                

              	 
	
                 

              	 	 	
                Name: K. John
      Shukur 
      
                  Title: President

                

              	 

      

       

      
        
          	 	 	 	

                  

                    BALQON
      ACQUISITION CORP.

                  

                	 
	 	 	 	 	 
	
                   

                	 	By: 
      	
                  /s/
      K. John Shukur

                	 
	
                   

                	 	 	
                  Name: K. John
      Shukur 
      
                    Title: President

                  

                	 

        

         

        
          
            	 	 	 	

                    

                      BALQON
      CORPORATION

                    

                  	 
	 	 	 	 	 
	
                     

                  	 	
                     By: 

                  	
                    

                      /s/
      Balwinder Samra 

                    

                  	 
	
                     

                  	 	 	
                    Name: Balwinder
      Samra 
      
                      Title: PresidentUnassociated Document

    NEITHER
      THIS SECURITY NOR THE SECURITY INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
      BEEN
      REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
      COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE OFFERED
      OR
      SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
      ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
      TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
      APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
      TO
      THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
      ACCEPTABLE TO THE COMPANY.

     

    

    Warrant
      No. W-_________

     

    Void
      after 5:00 p.m., Eastern Standard Time on December 20, 2012

    

    UNIT
      PURCHASE WARRANT

     

    DRTATTOFF,
      LLC, a California limited liability company (the “Company”),
      hereby certifies that, for value received,
      William
      Kirby, D.O. (the “Warrant
      Holder”)
      is the
      owner of the number of unit purchase warrants (“Warrants”)
      which
      entitles the holder thereof to purchase, at any time during the period
      commencing on the Commencement Date (as defined herein) and ending on the
      Expiration Date (as defined herein), Twenty Seven Thousand Five Hundred Thirty
      Six (27,536) fully paid and non-assessable units of Membership Interest (as
      defined in the Company’s Operating Agreement dated as of July 5, 2005, as
      amended to date (the “Operating
      Agreement”))
      in
      the Company (each a “Unit”),
      at a
      purchase price equal to the Exercise Price (as defined below) in lawful money
      of
      the United States of America in cash, subject to adjustment as hereinafter
      provided. Each Unit shall include the right to receive allocations of Net
      Profits and Net Losses and distributions from the Company. 

     

    1. WARRANT;
      EXERCISE PRICE.

     

    1.1 This
      Warrant is issued pursuant to a Subscription Agreement dated as of the date
      hereof, by and among the Company and the Warrant Holder (the “Subscription
      Agreement”).
      

     

    1.2 Each
      Warrant shall entitle the Warrant Holder to purchase one Unit (individually,
      a
“Warrant
      Unit”
      severally, the “Warrant
      Units”).
      Each
      Warrant Unit shall provide the holder of such Unit with a capital account
      balance equal to the exercise price paid for such Warrant Unit. 

     

    1.3 The
      purchase price payable upon exercise of each Warrant (the “Exercise
      Price”)
      shall
      be $1.25 per Unit, or the equivalent thereof, subject to any adjustments
      pursuant to Section 8. Notwithstanding the foregoing, the Exercise Price and
      number of Warrant Units purchasable pursuant to each Warrant are subject to
      adjustment as provided in Section 8. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2. EXERCISE
      OF WARRANT; EXPIRATION DATE.
      

     

    2.1 This
      Warrant is exercisable at any time and from time to time commencing the date
      hereof (“Commencement
      Date”)
      and
      ending at 5:00 p.m., Eastern Time on December 20, 2012 (the “Expiration
      Date”),
      in
      whole or from time to time in part, at the option of the Warrant Holder, upon
      surrender of this Warrant to the Company together with a duly completed Notice
      of Exercise in the form attached hereto and payment of an amount equal to the
      then applicable Exercise Price multiplied by the number of Warrant Units then
      being purchased upon such exercise. 

     

    2.2 Each
      exercise of this Warrant shall be deemed to have been effected immediately
      prior
      to the close of business on the day on which this Warrant shall have been
      surrendered to the Company as provided in Section 2.1. At such time, the person
      or persons in whose name or names any certificates for Warrant Units shall
      be
      issuable upon such exercise as provided in Section 2.3 below shall be deemed
      to
      have become the holder or holders of record of the Warrant Units represented
      by
      such certificates.

     

    2.3 Within
      five business days after the exercise of the purchase right represented by
      this
      Warrant, the Company at its expense will use its reasonable best efforts to
      cause to be issued in the name of, and delivered to, the Warrant Holder, or,
      subject to the terms and conditions hereof, to such other individual or entity
      as such Warrant Holder (upon payment by such Warrant Holder of any applicable
      transfer taxes) may direct: 

     

    (a) a
      certificate or certificates for the number of full Warrant Units to which such
      Warrant Holder shall be entitled upon such exercise, and 

     

    (b) in
      case
      such exercise is in part only, a new Warrant or Warrants (dated the date hereof)
      of like tenor, stating on the face or faces thereof the number of Units
      currently stated on the face of this Warrant minus the number of such Units
      purchased by the Warrant Holder upon such exercise as provided in Section 2.2
      (in each case prior to any adjustments made thereto pursuant to the provisions
      of this Warrant).

     

    3. REGISTRATION
      AND TRANSFER ON COMPANY BOOKS.
      

     

    3.1 The
      Company (or an agent of the Company) will maintain a register containing the
      names and addresses of the Warrant Holders. Any Warrant Holder may change its,
      his or her address as shown on the Warrant register by written notice to the
      Company requesting such change. 

     

    3.2 The
      Company shall register upon its books any transfer of a Warrant upon surrender
      of same as provided in Section 5. 

     

    4. RESERVATION
      OF UNITS.
      The
      Company will at all times reserve and keep available, solely for issuance and
      delivery upon the exercise of this Warrant, such Warrant Units and other stock,
      securities and property, as from time to time shall be issuable upon the
      exercise of this Warrant. 

     

    
      
        
        

      

      
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    5. EXCHANGE,
      TRANSFER, ASSIGNMENT OR LOSS OR MUTILATION OF WARRANTS.
      This
      Warrant is exchangeable, without expense, at the option of the Warrant Holder,
      upon presentation and surrender hereof to the Company for other warrants of
      different denominations entitling the holder thereof to purchase in the
      aggregate the same number of Units purchasable hereunder. Subject to the terms
      of Sections 6 and 7, upon surrender of this Warrant to the Company at its
      principal office or at the office of its transfer agent, if any, with the
      Assignment Form annexed hereto duly executed and funds sufficient to pay any
      transfer tax, the Company shall, without charge, execute and deliver a new
      Warrant in the name of the assignee named in such instrument of assignment
      and
      this Warrant shall be promptly canceled. Subject to the terms of Sections 6
      and
      7, this Warrant may be divided or combined with other Warrants which carry
      the
      same rights upon presentation hereof at the principal office of the Company
      together with a written notice specifying the names and denominations in which
      new Warrants are to be issued and signed by the Warrant Holder hereof. The
      term
“Warrant” as used herein includes any Warrants into which this Warrant may be
      divided or exchanged. Upon receipt by the Company of reasonable evidence of
      the
      ownership of and the loss, theft, destruction or mutilation of this Warrant
      and,
      in the case of loss, theft or destruction, of indemnity reasonably satisfactory
      to the Company, or, in the case of mutilation, upon surrender and cancellation
      of the mutilated Warrant, the Company shall execute and deliver in lieu thereof
      a new Warrant of like tenor and date representing an equal number of Warrants.
      

     

    6. LIMITATION
      ON EXERCISE AND SALES.
      

     

    6.1 Each
      holder of this Warrant acknowledges that this Warrant and the Warrant Units
      have
      not been registered under the Securities Act, as of the date of issuance hereof.
      This Warrant may only be transferred in compliance with this Section 6 and
      Section 7. The Company shall be under no obligation to issue the Units covered
      by such exercise unless and until the Warrant Holder shall have executed the
      form of exercise annexed hereto that states that at the time of such exercise
      that it is then an “accredited investor” within the meaning of Rule 501 of
      Regulation D, is acquiring such Units for its own account, and will not transfer
      the Warrant Units unless pursuant to an effective and current registration
      statement under the Securities Act or an exemption from the registration
      requirements of the Securities Act and any other applicable restrictions, in
      which event the Warrant Holder shall be bound by the provisions of a legend
      or
      legends to such effect that shall be endorsed upon the certificate(s)
      representing the Warrant Units issued pursuant to such exercise. In such event,
      the Warrant Units issued upon exercise hereof shall be imprinted with a legend
      in substantially the form provided in Section 7.2. 

     

    6.2 Warrant
      Holder represents and warrants that it is acquiring this Warrant for its own
      account, for purposes of investment, and not with a view to, or for sale in
      connection with, any distribution thereof within the meaning of the Securities
      Act and the rules and regulations promulgated thereunder. Warrant Holder
      represents, warrants and agrees that it will not sell, exercise, transfer or
      otherwise dispose of this Warrant (or any interest therein) or any of the Units
      purchasable upon exercise hereof, except pursuant to (i) an effective
      registration statement under the Securities Act and applicable state securities
      laws or (ii) an opinion of counsel, satisfactory to Company, that an exemption
      from registration under the Securities Act and such laws is available. Warrant
      Holder further acknowledges and agrees that Company is not required, legally
      or
      contractually, so to register or qualify the Warrant or such Units or to take
      any action to make such an exemption available. Warrant Holder understands
      that
      Company will be relying upon the truth and accuracy of the representations
      and
      warranties contained in this Section 6 in issuing this Warrant and such Units
      without first registering the issuance thereof under the Securities Act or
      qualifying or registering the issuance thereof under any state securities laws
      that may be applicable. 

     

    
      
        
        

      

      
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    6.3 Warrant
      Holder acknowledges that (i) there is not now, and there may not be in the
      future, any public market for the Warrant or the Units, (ii) although there
      currently is not a public trading market for the Units, there can be no
      assurance that any such market will be created and sustained, and (iii) there
      can be no assurance that Warrant Holder will be able to liquidate its investment
      in Company. Warrant Holder represents and warrants that it is familiar with
      and
      understands the terms and conditions of Rule 144 promulgated under the
      Securities Act. 

     

    6.4 Warrant
      Holder represents and warrants to Company that (i) it has such knowledge and
      experience in financial and business matters as is necessary to enable it to
      evaluate the merits and risks of any investments in Company and is not utilizing
      any other person to be a purchaser representative in connection with evaluation
      of such merits and risks; and (ii) it has no need for liquidity in an investment
      in Company and is able to bear the risk of that investment for an indefinite
      period and to afford a complete loss thereof. 

     

    6.5 Warrant
      Holder represents and warrants that it has had access to, and has been furnished
      with, all of the information it has requested from Company and has had an
      opportunity to review the books and records of Company and to discuss with
      management and members of the board of directors of Company the business and
      financial affairs of Company. 

     

    6.6 Warrant
      Holder agrees that at the time of each exercise of this Warrant, unless the
      issuance of Units issuable thereupon is pursuant to an effective registration
      statement under the Securities Act and under applicable state blue sky laws,
      Warrant Holder will provide Company with a letter embodying the representations
      and warranties set forth in Sections 6.2 through 6.5, in form and substance
      reasonably satisfactory to Company, and agrees that the certificate(s)
      representing any securities issued to it upon any exercise of this Warrant
      may
      bear such restrictive legend as Company may deem necessary to reflect the
      restricted status of such securities under the Securities Act unless Company
      shall have received from Warrant Holder an opinion of counsel to Warrant Holder,
      reasonably satisfactory in form and substance to Company and its counsel, that
      such restrictive legend is not required.

     

    7. TRANSFER
      RESTRICTIONS.

     

    7.1 If,
      at
      the time of the surrender of this Warrant in connection with any transfer of
      this Warrant, the transfer of this Warrant shall not be registered pursuant
      to
      an effective registration statement under the Securities Act and under
      applicable state securities or blue sky laws, the Company may require, as a
      condition of allowing such transfer (i) that the Warrant Holder or transferee
      of
      this Warrant, as the case may be, furnish to the Company a written opinion
      of
      counsel (which opinion shall be in form, substance and scope customary for
      opinions of counsel in comparable transactions and reasonably satisfactory
      to
      counsel for the Company) to the effect that such transfer may be made without
      registration under the Securities Act and under applicable state securities
      or
      blue sky laws, (ii) that the holder or transferee execute and deliver to the
      Company an investment letter in form and substance acceptable to the Company,
      (iii) that transferee agree in writing with the Company to be bound by the
      terms
      and conditions of this Warrant applicable to the Warrant Holder and (iv) that
      the transferee be an “accredited investor” as defined in Regulation D
      promulgated under the Securities Act. 

     

    
      
        
        

      

      
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    7.2 The
      Units
      issuable on the exercise of the Warrant shall bear the following
      legend:

     

    THESE
      SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION,
      OR THE SECURITIES COMMISSION OF ANY STATE, IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY.

     

    7.3 The
      Holder acknowledges that the Warrant Units acquired upon the exercise of this
      Warrant, if not registered, will have restrictions upon resale imposed by state
      and federal securities laws.

     

    8. ADJUSTMENT
      OF EXERCISE PRICE AND NUMBER OF UNITS DELIVERABLE.
      The
      Exercise Price and the number of Warrant Units purchasable pursuant to each
      Warrant shall be subject to adjustment from time to time as hereinafter set
      forth in this Section 8: 

     

    8.1 In
      case,
      prior to the expiration of this Warrant by exercise or by its terms, the Company
      shall issue any additional units of Membership Interest as a dividend or
      subdivide the number of outstanding Units into a greater number of units of
      Membership Interest, then in either of such cases, the then applicable Exercise
      Price per Warrant Unit purchasable pursuant to this Warrant in effect at the
      time of such action shall be proportionately reduced and the number of Warrant
      Units at that time purchasable pursuant to this Warrant shall be proportionately
      increased; and conversely, in the event the Company shall reduce the number
      of
      outstanding units of Membership Interest by combining such units into a smaller
      number of units of Membership Interest then, in such case, the then applicable
      Exercise Price per Warrant Unit purchasable pursuant to this Warrant in effect
      at the time of such action shall be proportionately increased and the number
      of
      Warrant Units at that time purchasable pursuant to this Warrant shall be
      proportionately decreased. If the Company shall, at any time during the life
      of
      this Warrant, declare a dividend payable in cash on its Membership Interest
      and
      shall at substantially the same time offer to its Unitholders a right to
      purchase new units of Membership Interest from the proceeds of such dividend
      or
      for an amount substantially equal to the dividend, all units of Membership
      Interest so issued shall, for the purpose of this Warrant, be deemed to have
      been issued as a dividend. Any dividend paid or distributed upon the Membership
      Interests in units of any other class of securities convertible into units
      of
      Membership Interest shall be treated as a dividend paid in units of Membership
      Interest to the extent that units of Membership Interest are issuable upon
      conversion thereof.

     

    
      
        
        

      

      
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    8.2 In
      case,
      prior to the expiration of this Warrant by exercise or by its terms, the Company
      shall be recapitalized by reclassifying its outstanding units of Membership
      Interest, or the Company or a successor entity (“successor
      Entity”)
      shall
      consolidate or merge with or convey all or substantially all of its or of any
      successor Entity’s property and assets to any other Entity or Entities (any such
      other Entities being included within the meaning of the term “successor Entity”
hereinbefore used in the event of any consolidation or merger of any such other
      Entity with, or the sale of all or substantially all of the property of any
      such
      other Entity to, another Entity or Entities), then, as a condition of such
      recapitalization, consolidation, merger or conveyance, lawful and adequate
      provision shall be made whereby the holder of this Warrant shall thereafter
      have
      the right to purchase, upon the same basis and on the otherwise same terms
      and
      conditions specified in this Warrant, in lieu of the Warrant Units theretofore
      purchasable upon the exercise of this Warrant, such shares of stock, securities
      or assets, as may be issued or payable with respect to, or in exchange for,
      the
      number of Warrant Units theretofore purchasable upon the exercise of this
      Warrant had such recapitalization, consolidation, merger, or conveyance not
      taken place, and the exercise price for which shall have been appropriately
      adjusted, if necessary, to reflect the number of securities which the Warrant
      Holder is entitled to purchase in exchange for such Warrant; and in any such
      event, the rights of the Warrant Holder to any adjustment in the number of
      Warrant Units purchasable upon the exercise of this Warrant, as herein provided,
      shall continue and be preserved in respect of any securities which the Warrant
      Holder becomes entitled to purchase.

     

    8.3 In
      case
      the Company at any time while this Warrant shall remain unexpired and
      unexercised shall sell all or substantially all of its property or dissolve,
      liquidate, or wind up its affairs, lawful provision shall be made as part of
      the
      terms of any such sale, dissolution, liquidation or winding up, so that the
      holder of this Warrant may thereafter receive upon exercise hereof in lieu
      of
      each Warrant Unit that it would have been entitled to receive, the same kind
      and
      amount of any securities or assets as may be issuable, distributable or payable
      upon any such sale, dissolution, liquidation or winding up with respect to
      each
      Unit of the Company, provided, however, that in any case of any such sale or
      of
      dissolution, liquidation or winding up, the right to exercise this Warrant
      shall
      terminate on a date fixed by the Company; such date so fixed to be not earlier
      than 5:00 p.m., Eastern Time, on the forty-fifth day next succeeding the date
      on
      which notice of such termination of the right to exercise this Warrant has
      been
      given by mail to the registered holder of this Warrant at its address as it
      appears on the books of the Company.

     

    8.4 If
      the
      Company shall at any time prior to the expiration of this Warrant issue any
      Units or securities convertible into Units to a person other than the Warrant
      Holder for a consideration per Unit (the “Offer
      Price”),
      less
      than the Exercise Price in effect at the time of such issuance, then the
      Exercise Price shall be immediately reset to such lower Offer Price. The
      Exercise Price, as so adjusted, shall be readjusted in the same manner upon
      the
      happening of any successive event or events described herein in this Section
      8.
      Notwithstanding the foregoing, no adjustment will be made under this Section
      8.4
      in respect of any “Excluded Securities”. “Excluded
      Securities”
means
      any Units or Unit equivalents issued or issuable to any persons and entities
      arising from any (i) issuance of securities pursuant to any stock option or
      equity incentive plan of the Company, (ii) any securities issued in connection
      with the acquisition of assets, stock purchase or merger whereby the Company
      is
      the surviving corporation, (iii) issuance of any securities pursuant to any
      subsequent agreement between Warrant Holder or any of its affiliates, and the
      Company, and (iv) issuances of Units or other securities arising from any
      existing obligation of the Company prior to the date of this
      Warrant.

     

    
      
        
        

      

      
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    No
      adjustment in the per Unit Exercise Price shall be required unless such
      adjustment would require an increase or decrease in the Exercise Price by at
      least $0.01; provided, however, that any adjustments that by reason of this
      subsection are not required to be made shall be carried forward and taken into
      account in any subsequent adjustment. All calculations under this Section 8
      shall be made to the nearest cent or to the nearest 1/100th of a share, as
      the
      case may be.

     

    8.5 In
      case,
      prior to the expiration of this Warrant by exercise or by its terms, the Company
      (or its successor Entity) shall offer its securities for sale to the public
      pursuant to an effective registration statement under the Securities Act of
      1933, as amended, the per Unit Exercise Price shall be adjusted to the lesser
      of
      $1.00 or fifty percent (50%) of the public offering price of the Company’s
      securities at that time.

     

    9. VOLUNTARY
      ADJUSTMENT BY THE COMPANY.
      The
      Company may, at its option, at any time during the term of the Warrants, reduce
      the then current Exercise Price to any amount deemed appropriate by the Managing
      Members of the Company and/or extend the date of the expiration of the Warrants.
      

     

    10. RIGHTS
      OF THE HOLDER.
      The
      Warrant Holder shall not, by virtue hereof, be entitled to any rights of a
      member in the Company, either at law or equity, and the rights of the Warrant
      Holder are limited to those expressed in this Warrant and are not enforceable
      against the Company except to the extent set forth herein. This Warrant does
      not
      entitle the Holder to any voting rights or other rights as a member of the
      Company prior to the Exercise Date and then only with respect to the Warrant
      Units to be issued with respect thereto. 

     

    11. NOTICES
      OF RECORD DATE.
      In
      case: 

     

    11.1 the
      Company shall take a record of the holders of its Units (or other stock or
      securities at the time deliverable upon the exercise of this Warrant) for the
      purpose of entitling or enabling them to receive any dividend or other
      distribution, or to receive any right to subscribe for or purchase any
      Membership Interests or any other securities, or to receive any other right,
      or

     

    
      
        
        

      

      
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    11.2 of
      any
      capital reorganization of the Company, any reclassification of the equity
      capital of the Company, any consolidation or merger of the Company with or
      into
      a Entity or other entity (other than a consolidation or merger in which the
      Company is the surviving entity), or any transfer of all or substantially all
      of
      the assets of the Company, or 

     

    11.3 of
      the
      voluntary or involuntary dissolution, liquidation or winding-up of the Company,
      

     

    then,
      and
      in each such case, the Company will mail or cause to be mailed to the Warrant
      Holder a notice specifying, as the case may be, (i) the date on which a record
      is to be taken for the purpose of such dividend, distribution or right, and
      stating the amount and character of such dividend, distribution or right, or
      (ii) the effective date on which such reorganization, reclassification,
      consolidation, merger, transfer, dissolution, liquidation or winding-up is
      to
      take place, and the time, if any is to be fixed, as of which the holders of
      record of Units (or such other stock or securities at the time deliverable
      upon
      the exercise of this Warrant) shall be entitled to exchange their Units (or
      such
      other stock or securities) for securities or other property deliverable upon
      such reorganization, reclassification, consolidation, merger, transfer,
      dissolution, liquidation or winding-up. Such notice shall be mailed at least
      ten
      days prior to the record date or effective date for the event specified in
      such
      notice, provided that the failure to mail such notice shall not affect the
      legality or validity of any such action. 

     

    12. REGISTRATION
      RIGHTS.
      The
      Warrant Holder is entitled to the registration rights set forth in Annex A
      attached hereto and made a part hereof.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    13. SUCCESSORS.
      The
      rights and obligations of the parties to this Warrant will inure to the benefit
      of and be binding upon the parties hereto and their respective heirs,
      successors, assigns, pledgees, transferees and purchasers. 

     

    14. CHANGE
      OR WAIVER.
      Any
      term of this Warrant may be changed or waived only by an instrument in writing
      signed by the party against whom enforcement of the change or waiver is sought.
      

     

    15. HEADINGS.
      The
      headings in this Warrant are for purposes of reference only and shall not limit
      or otherwise affect the meaning of any provision of this Warrant. Wherever
      possible, each provision of this Warrant shall be interpreted in such manner
      as
      to be effective and valid under applicable law, but if any provision of this
      Warrant shall be prohibited by or invalid under applicable law, such provision
      shall be ineffective to the extent of such prohibition or invalidity, without
      invalidating the remainder of such provisions or the remaining provisions of
      this Warrant.

     

    16. GOVERNING
      LAW.
      This
      Warrant shall be governed by and construed in accordance with the laws of the
      State of California. Any action or litigation brought by either party against
      the other concerning the transactions contemplated by this Warrant shall be
      brought only in the state courts or in the federal courts located in the State
      of California. The prevailing party shall be entitled to recover from the other
      party its reasonable attorney’s fees and costs.

     

    17. MAILING
      OF NOTICES, ETC.
      All
      notices and other communications required or permitted hereunder shall be in
      writing and shall be deemed to have been duly given one (1) business day after
      delivery to an overnight carrier with instructions to deliver to the applicable
      address set forth below, or, if sent by facsimile, upon receipt of a
      confirmation of delivery: 

     

    Registered
      Holder: 

     

    To
      his or
      her last known address as indicated on the Company’s books and
      records.

     

    The
      Company:  

    DRTATTOFF,
      LLC

    8447
      Wilshire Blvd.

    Suite
      120

    Beverly
      Hills, CA 90211

    Attention:
      James Morel, Chief Executive Officer

    Fax:
      (323) 653-2661

    

    

    [Signature
      Page Follows]

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
      authorized officer as of December 20, 2007.

     

    
      	 	
              DRTATTOFF,
                LLC

            	 
	 	 	 	 
	 	
              By:
                

            	
              /s/
                James Morel

            	 
	 	
              Name:
                

            	
              James
                Morel

            	 
	 	
              Title:
                

            	
              Chief
                Executive Officer

            	 

    

     

    

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

     

    
      
        	
                 

              	
                Notice
                  of Exercise 

                To
                  Be Executed by the Warrant Holder

                In
                  Order to Exercise Warrants

              

      

    

    

    TO:
      DRTATTOFF,
      LLC

    

    The
      undersigned hereby: (1) irrevocably subscribes for and offers to purchase
      _______ Units (“Units”),
      of
DRTATTOFF,
      LLC,
      pursuant to Warrant No. ___ heretofore issued to ___________________ dated
      _____________, 20___ and (2) encloses a cash payment of $__________ representing
      the aggregate exercise price for such Units. 

     

    The
      undersigned hereby represents and warrants to the Company that it is an
“Accredited Investor” within the meaning of Rule 501 of Regulation D promulgated
      under the Securities Act of 1933, as amended (the “Securities
      Act”),
      and
      is acquiring these securities for its own account and not with a view to, or
      for
      sale in connection with, any distribution thereof, nor with any present
      intention of distributing or selling the same. The undersigned further
      represents that it does not have any contract, agreement, understanding or
      arrangement with any person to sell, transfer or grant the Units issuable under
      this Warrant. The undersigned understands that the securities it will be
      receiving are “restricted securities” under Federal securities laws inasmuch as
      they are being acquired from DRTATTOFF,
      LLC, in
      transactions not including any public offering and that under such laws, such
      securities may only be sold pursuant to an effective and current registration
      statement under the Securities Act or an exemption from the registration
      requirements of the Securities Act and any other applicable restrictions, in
      which event a legend or legends will be placed upon the certificate(s)
      representing the Units issuable under this Warrant denoting such restrictions.
      The undersigned understands and acknowledges that the Company will rely on
      the
      accuracy of these representations and warranties in issuing the securities
      underlying the Warrant.

     

    Date:  ________________________________________________________________________

    

    Warrant
      Holder Name: __________________________________________________________

    

    Taxpayer
      Identification Number: ____________________________________________________

    

    By:
      ________________________________________________________________________________

    

    Printed
      Name: _________________________________________________________________

    

    Title:  ________________________________________________________________________

    

    Address:
       ________________________________________________________________________

     

    Note:
      The
      above signature should correspond exactly with the name on the face of this
      Warrant or with the name of assignee appearing in assignment form below.

    

    AND,
      if
      said number of Units shall be less than the total number of Units purchasable
      under the Warrant, a new Warrant is to be issued in the name of said undersigned
      for the balance remaining of the Units purchasable thereunder less any fraction
      of a Unit paid in cash and delivered to the address stated above.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    ASSIGNMENT
      FORM

    To
      be
      executed by the Warrant Holder

    In
      order
      to Assign Warrants

     

    FOR
      VALUE
      RECEIVED,____________________________________ hereby sells, assigns and
      transfers unto

     

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

     

    

    
      	 

    

     

    (Please
      print or type name and address)

     

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

     

    Dated:______________________
       ____________________________

     

    (Signature
      of Registered Holder)

     

    18. 

    In
      addition to executing this Assignment Form, the Warrant Holder and the
      transferee must comply with the other requirements for transfer set forth in
      Sections 6 and 7 of the Warrant.

     

    CERTIFICATION
      OF STATUS OF TRANSFEREE

    TO
      BE
      EXECUTED BY THE TRANSFEREE OF THIS WARRANT

     

    The
      undersigned transferee hereby certifies to the registered holder of this Warrant
      and to DRTATTOFF, LLC that the transferee is an “accredited investor” within the
      meaning of Rule 501 of Regulation D promulgated under the Securities Act of
      1933, as amended.

     

    19. 

    Dated:_____________________ __________________________ (Signature
      of Transferee)

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    ANNEX
      A

    

    REGISTRATION
      RIGHTS

     

    1. DEFINITIONS.
      Capitalized terms used and not otherwise defined herein that are defined in
      the
      Warrant shall have the meanings given such terms in the Warrant. As used herein,
      the following terms shall have the following meanings:

     

    “Commission”
means
      the Securities and Exchange Commission.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, and any successor
      statute.

     

    “Holder”
or
      “Holders”
means
      the Warrant Holder or Holders to the extent any of them hold Registrable
      Securities.

     

    “Indemnified
      Party”
shall
      have the meaning set forth in Section 5.2.

     

    “Indemnifying
      Party”
shall
      have the meaning set forth in Section 5.2.

     

    “Piggy-Back
      Registration”
is
      defined in Section 2.1.

     

    “Proceeding”
means
      an action, claim, suit, investigation or proceeding (including, without
      limitation, an investigation or partial proceeding, such as a deposition),
      whether commenced or threatened. 

     

    “Prospectus”
means
      the prospectus included in the Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by the Registration Statement,
      and
      all other amendments and supplements to the Prospectus, including post-effective
      amendments, and all material incorporated by reference or deemed to be
      incorporated by reference in such Prospectus. 

     

    “Registrable
      Securities”
means
      the membership interests issuable upon exercise of the Warrants, or other
      securities of the Company or any other issuer or issuable in respect of such
      Units (because of stock splits, stock dividends, reclassifications,
      recapitalizations, mergers, combinations or similar events, if applicable);
      provided, however, that the Units which are Registrable Securities shall cease
      to be Registrable Securities upon any sale or transfer of such securities
      pursuant to a Registration Statement, Section 4(1) of the Securities Act, Rule
      144 under the Securities Act or otherwise.

     

    “Registration
      Statement”
means
      a
      registration statement filed by the Company with the Commission on any
      registration form prescribed by the Commission permitting a secondary offering
      or distribution, other than on Form S-4, Form S-8 or similar forms.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    “Rule
      144”
means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule. 

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, and any successor statute.

     

    “Trading
      Market”
means
      any of the Pink Sheets LLC electronic quotation service, NASD OTC Bulletin
      Board, NASDAQ Global Select Market, NASDAQ Global Market, NASDAQ Capital Market,
      American Stock Exchange or the New York Stock Exchange.

     

    “Warrants”
means
      the Unit purchase warrants issued by the Company.

     

    2. PIGGY-BACK
      REGISTRATION.
      

     

    2.1 At
      any
      time and from time to time during the Warrant exercise period, whenever the
      Company proposes to file a Registration Statement, the Company will prior to
      such filing give written notice to Holder of its intention to do so and, upon
      the written request of Holder given within ten (10) days after the Company
      provides such notice, the Company shall use its good faith efforts to cause
      all
      Registrable Securities which the Company has been requested by Holder to
      register to be registered under the Securities Act to the extent necessary
      to
      permit their sale or other disposition in accordance with the intended methods
      of distribution specified in the request of Holder; provided that the Company
      shall have the right to postpone or withdraw any registration effected pursuant
      to this Section 2 without obligation or liability to Holder. In the Holder’s
      request, the Holder will be required to describe briefly its proposed
      disposition of the Registrable Securities. However, in connection with any
      registration under Section 2, the Holder’s Registrable Securities shall be
      junior and subordinate to any registration rights granted by the Company which
      are already outstanding, and any senior registration rights granted by the
      Company in the future. 

     

    2.2 In
      connection with any registration under Section 2 involving an underwritten
      offering of the Company’s securities, the Company shall not be required to
      include any Registrable Securities in such underwriting unless Holder accepts
      the terms of the underwriting as agreed upon between the Company and the
      underwriters selected by it, and then only in such quantity as will not, in
      the
      sole discretion of the underwriters, jeopardize the success of the offering
      by
      the Company. If in the sole discretion of the managing underwriter or
      underwriters the registration of all, or part of, the Registrable Securities
      which Holder has requested to be included would adversely affect such public
      offering, then the Company shall be required to include in the underwriting
      only
      that number of Registrable Securities, if any, which the managing underwriter
      or
      underwriters believe may be sold without causing such adverse effect. If the
      number of Registrable Securities to be included in the underwriting in
      accordance with the foregoing is less than the total number of Registrable
      Securities which Holder has requested to be included, then Holder and each
      participant other than the Company in such underwriting shall participate in
      the
      underwriting pro rata based upon their total ownership of Registrable
      Securities. Any such limitation shall be imposed in such manner so as to avoid
      any diminution in the number of securities the Company may register for sale
      by
      giving first priority for the securities to be registered for issuance and
      sale
      by the Company and the underwriter, and by giving second priority for the
      securities to be registered for sale by any holder of Registrable Securities
      pursuant to the terms of this Agreement.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    2.3 In
      connection with any registration under this Section 2 involving a selling
      stockholder registration statement or any other registration statement not
      involving an underwritten offering of the Company’s securities, the Company
      reserves the right to include only that number of Registrable Securities, if
      any, as it shall determine in its sole discretion, may be sold without
      jeopardizing the success of the offering or having an adverse effect on the
      offering. If the number of Registrable Securities to be included in the offering
      in accordance with the foregoing is less than the total number of Registrable
      Securities which Holder has requested to be included, then Holder and each
      participant other than the Company in such offering shall participate in the
      offering pro rata based upon their total ownership of Registrable Securities.
      Any such limitation shall be imposed in such manner so as to avoid any
      diminution in the number of securities the Company may register for sale by
      giving first priority for the securities to be registered for issuance and
      sale
      by the Company, and by giving second priority for the securities to be
      registered for sale by any holder of Registrable Securities pursuant to the
      terms of this Agreement.

     

    2.4
       Any
      holder of Registrable Securities may elect to withdraw such holder’s request for
      inclusion of Registrable Securities in any Piggy-Back Registration by giving
      written notice to the Company of such request to withdraw prior to the
      effectiveness of the Registration Statement. The Company may also elect to
      withdraw a registration statement at any time prior to the effectiveness of
      the
      Registration Statement. Notwithstanding any such withdrawal, the Company shall
      pay all expenses incurred by the holders of Registrable Securities in connection
      with such Piggy-Back Registration as provided in Section 4.

     

    3.  REGISTRATION
      PROCEDURES.
      When
      the Company proposes to effect the registration of any of the Registrable
      Securities under the Securities Act, the Company shall: 

     

    3.1 furnish
      to the Holder such number of copies of the Registration Statement and the
      Prospectus included therein (including each preliminary Prospectus) as the
      Holder reasonably may request to facilitate the public sale or disposition
      of
      the Registrable Securities covered by the Registration Statement;

     

    3.2 use
      its
      commercially reasonable efforts to register or qualify the Holder’s Registrable
      Securities covered by the Registration Statement under the securities or “blue
      sky” laws of such jurisdictions within the United States as the Holder may
      reasonably request, provided, however, that the Company shall not for any such
      purpose be required to qualify generally to transact business as a foreign
      corporation in any jurisdiction where it is not so qualified or to consent
      to
      general service of process in any such jurisdiction; and

     

    3.3 list
      the
      Registrable Securities covered by the Registration Statement with any Trading
      Market on which the equity securities of the Company is then listed.

     

    20. 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    4. REGISTRATION
      EXPENSES.
      All
      expenses relating to the Company’s compliance with Sections 2 and 3 hereof,
      including, without limitation, all registration and filing fees, printing
      expenses, fees and disbursements of counsel and independent public accountants
      for the Company, fees and expenses (including reasonable counsel fees) incurred
      in connection with complying with state securities or “blue sky” laws, fees of
      the NASD, transfer taxes, fees of transfer agents and registrars are called
      “Registration Expenses.” All selling commissions applicable to the sale of
      Registrable Securities, including any fees and disbursements of any counsel
      to
      the Holders, are called “Selling Expenses” and shall be the responsibility of
      the Holder. The Company shall only be responsible for all Registration
      Expenses.

     

    5. INDEMNIFICATION.

     

    5.1 In
      the
      event of a registration of the Registrable Securities, the Holder (subject
      to
      the provisions of Section 5.2) will indemnify and hold harmless the Company
      or
      its successor, and its officers, directors and each other person, if any, who
      controls the Company within the meaning of the Securities Act, against all
      losses, claims, damages or liabilities, joint or several, to which the Company
      or such persons may become subject under the Securities Act, the Exchange Act
      or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon: (i) any untrue statement
      or alleged untrue statement of any material fact which was furnished in writing
      by the Holder to the Company expressly for use in (and such information is
      contained in) the Registration Statement under which such Registrable Securities
      were registered under the Securities Act pursuant to the Warrant, any
      preliminary Prospectus or final Prospectus contained therein, or any amendment
      or supplement thereof, or arise out of or are based upon the omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements therein not misleading, and will reimburse
      the
      Company and each such person for any reasonable legal or other expenses incurred
      by them in connection with investigating or defending any such loss, claim,
      damage, liability or action, provided, however, that such Holder will be liable
      in any such case if and only to the extent that any such loss, claim, damage
      or
      liability arises out of or is based upon said Holder’s untrue statement or
      alleged untrue statement or omission or alleged omission so made in conformity
      with information furnished in writing to the Company by or on behalf of said
      Holder specifically for use in any such document, or (ii) in connection
      with a Holder’s sale of Registrable Securities, including without limitation
      alleged violations of Regulation M. Notwithstanding the provisions of this
      paragraph, no Holder shall be required to indemnify any person or entity in
      excess of the amount of the aggregate net proceeds received by said Holder
      in
      respect of Registrable Securities in connection with any such registration
      under
      the Securities Act.

     

    5.2 Promptly
      after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified Party”) of notice of the commencement of any action, such
      Indemnified Party shall, if a claim for indemnification in respect thereof
      is to
      be made against a party hereto obligated to indemnify such Indemnified Party
      (an
“Indemnifying Party”), notify the Indemnifying Party in writing thereof, but the
      omission so to notify the Indemnifying Party shall not relieve it from any
      liability which it may have to such Indemnified Party other than under this
      Section 5.2 and shall only relieve it from any liability which it may have
      to
      such Indemnified Party under this Section 5.2 if and to the extent the
      Indemnifying Party is prejudiced by such omission. In case any such action
      shall
      be brought against any Indemnified Party and it shall notify the Indemnifying
      Party of the commencement thereof, the Indemnifying Party shall be entitled
      to
      participate in and, to the extent it shall wish, to assume and undertake the
      defense thereof with counsel reasonably satisfactory to such Indemnified Party,
      and, after notice from the Indemnifying Party to such Indemnified Party of
      its
      election so to assume and undertake the defense thereof, the Indemnifying Party
      shall not be liable to such Indemnified Party under this Section 5.2 for any
      legal expenses subsequently incurred by such Indemnified Party in connection
      with the defense thereof; if the Indemnified Party retains its own counsel,
      then
      the Indemnified Party shall pay all fees, costs and expenses of such counsel,
      provided, however, that, if the defendants in any such action include both
      the
      Indemnified Party and the Indemnifying Party and if counsel shall have
      reasonably concluded that there may be reasonable defenses available to the
      Indemnified Party which are different from or additional to those available
      to
      the Indemnifying Party or if the interests of the Indemnified Party reasonably
      may be deemed to conflict with the interests of the Indemnifying Party in either
      case which would prohibit such counsel from representing both parties under
      applicable conflicts of interest rules of professional ethics, the Indemnified
      Party shall have the right to select one separate counsel and to assume such
      legal defenses and otherwise to participate in the defense of such action,
      with
      the reasonable expenses and fees of such separate counsel and other expenses
      related to such participation to be reimbursed by the Indemnifying Party as
      incurred. Neither party shall settle any proceeding for which indemnification
      is
      sought without the written consent of the other party, which shall not be
      unreasonably withheld.

     

    5.3
       Notwithstanding
      any provision herein to the contrary, each Holder shall be treated individually
      and separately from all other Holders under this Section 5, and will not become
      the subject of any obligation under this Section 5 as a result of any action,
      failure to act, statement, omission, or otherwise of any other Holder
      hereunder.

     

    
      
        
        

      

      
        16

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