EXHIBIT 10.12
ADVANCED AESTHETICS, INC.
STOCKHOLDERS AGREEMENT
December 17, 2003
The
parties to this agreement are Advanced Aesthetics, Inc., a
Delaware
corporation (the "Company"), and each of
the other persons executing a signature
page to this agreement (the
"Stockholders").
The
Stockholders are acquiring shares of the Company's common stock,
par
value $0.01 per share ("Common Stock"),
and/or Series E preferred stock, par
value $0.01 per share ("Series E Preferred
Stock"), which is convertible into
Common Stock. The Common Stock, the Series
E Preferred Stock and all other
securities of the Company that may now or
at any time in the future be
authorized, issued and outstanding and that
represent any other direct or
indirect rights to acquire, or constitute
interests or participations in, Common
Stock or rights to acquire securities that
are directly or indirectly
exercisable for, convertible into or
exchangeable for Common Stock are referred
to as "Common Equivalent Securities."
The
Company and the Stockholders desire to promote their mutual
interests
by imposing certain limitations on the
transfer of the shares of Common Stock
and other Common Equivalent Securities now
owned by any Stockholder, being
acquired by any Stockholder concurrently
with this agreement, and that may be
acquired from time to time after the date
of this agreement by any Stockholder,
whether by purchase or grant directly from
the Company, by purchase from a third
party, or pursuant to the exercise of any
option (all of the foregoing shares of
Common Stock and other Common Equivalent
Securities are sometimes referred to
collectively as the "Shares"), all upon the
terms and conditions set forth
below.
The
parties agree as follows:
1.
Certain
Transfer Restrictions.
(a) No
Stockholder may sell, assign, give, transfer, convey or
otherwise
dispose of, pledge or otherwise encumber
(collectively, "Transfer") any right,
title or interest in any or all of his, her
or its Shares, except that:
(i) a Stockholder may Transfer all or part of his, her or its
Shares
to:
(A) the Company
or such Stockholder's spouse, children,
parents, brothers, sisters, nieces or nephews or to a trust for
the
benefit of any of such persons; and
(B) a corporation, limited liability company or limited or
general partnership of which the shareholders, members or
partners
consist entirely of the Stockholder and/or persons or entities
to
whom the Stockholder is otherwise permitted to make Transfers
under
this Section 1(a)(i)
or Section 1(a)(ii);
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(ii) each of Kidd & Company, LLC and any affiliate thereof
may
Transfer
all or a part of his, her or its Shares to Kidd & Company, LLC
or
other
affiliate thereof;
(iii) a Stockholder may transfer his, her or its Shares in
accordance
with Section 2, Section 3 or Section 4; and
(iv) a Stockholder may transfer Shares to any affiliate (as
defined
in the
Securities Act of 1933, as amended).
(b) Any
purported Transfer in violation of this agreement shall be void
and of no force and effect.
2.
Involuntary Transfers of Shares. In the event of any
Involuntary
Transfer by any Stockholder of any Shares,
the following procedures shall apply:
(a) If a
Stockholder (the "Transferor") is deprived or divested of
Shares
by any Transfer by or in which he, she or
it shall be involuntarily deprived or
involuntarily divested of any right, title
or interest in or to any Shares,
including, without limitation, any levy of
execution, transfer in connection
with bankruptcy, reorganization, insolvency
or similar proceedings (an
"Involuntary Transfer"), he, she or it
shall promptly give written notice of
such Transfer in reasonable detail to the
Company (an "Involuntary Transfer
Notice"). The person or persons (the
"Transferee") who take or propose to take
any interest in the Shares subject or
proposed to be subject to such Involuntary
Transfer (the "Subject Shares") shall hold
such interest subject to the rights
of the Company and its designees set forth
below.
(b) Upon
receipt of an Involuntary Transfer Notice or upon discovery of
an
Involuntary Transfer, the Company (and its
designees) shall have the irrevocable
option, but not the obligation, to purchase
the Subject Shares by giving written
notice (specifying the number of Subject
Shares to be purchased) to the
Transferor within 60 days following the
receipt of such Involuntary Transfer
Notice or following discovery of such
Involuntary Transfer, if later. The
Company and/or any of its designees may
exercise the option for all or any part
of the Subject Shares.
(c) The
closing of any such sale of Subject Shares to the Company or
any
of its designees, as the case may be, shall
be at the offices of the Company on
the date specified in the notice pursuant
to which the Company or any of such
designees, as the case may be, exercised
the option pursuant to Section 2(b),
but in no event shall such closing be more
than 30 days after the date of such
notice. The purchase price per share of any
Subject Shares purchased pursuant to
this Section 2 shall be the amount that is
equal to the fair market value of the
Subject Shares as determined in good faith
by a majority of the members of the
Board of Directors of the Company as of the
proposed date of their Involuntary
Transfer, payable in immediately available
funds.
(d) To the
extent the Subject Shares are not purchased by the Company or
its designees pursuant to this Section 2,
the Transferee shall execute and
deliver to the Company an instrument,
satisfactory to the Company, which
evidences the Transferee's agreement to be
bound by the provisions hereof with
the same rights and obligations as the
Transferor.
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3.
Certain
Rights to Cause Sales of Shares by Stockholders.
(a) In the
event that stockholders of the Company, whether or not a party
to this agreement, who collectively own a
majority of the Common Stock (the
"Selling Stockholders"), including, without
limitation, the Common Stock
issuable upon exercise, exchange or
conversion of all outstanding Common
Equivalent Securities that are not Common
Stock (together with the Common Stock,
"Common Share Equivalents") other than
options to purchase Common Stock granted
to the Company's directors, officers,
employees and consultants determine to
participate in or otherwise effect a Sale
Transaction, then the Selling
Stockholders shall have the right (but not
the obligation) to require each
Stockholder to participate in the same
transaction on the same terms and
conditions as the Selling Stockholders,
subject to the right of the Selling
Stockholders in Section 3(b)(iii). The
Selling Stockholders shall give the
Company and each other Stockholder of the
Company written notice of such
determination not less than 30 days prior
to the proposed date of the Sale
Transaction (a "Company Sale Notice"). A
"Sale Transaction" means a merger or
consolidation of the Company with or into
another corporation or other entity
(whether or not the Company is the
surviving corporation), a reclassification,
redemption, sale or exchange of all or
substantially all of the Common Stock or
other capital stock of the Company owned by
the Selling Stockholders or a sale
of all or substantially all of the assets
of the Company but only if,
immediately following any of the foregoing
transactions, a party or parties
other than the Selling Stockholders and
persons who were affiliates of the
Selling Stockholders immediately prior to
such transaction own a majority of the
business, stock or assets (as applicable)
of the Company or its successor.
(b) In any
Sale Transaction, each Stockholder:
(i) shall be required to Transfer the same percentage of such
Stockholder's Common Share Equivalents as the percentage of Common
Share
Equivalents determined by dividing the number of Common Share
Equivalents
being
Transferred by the Selling Stockholders by the aggregate number
of
Common
Share Equivalents owned by the Selling Stockholders;
(ii) to the extent he, she or it is Transferring shares of
Common
Stock,
shall receive the same consideration per share of Common Stock
as
is being
received upon such Transfer per share of Common Stock being
Transferred by the Selling Stockholders;
(iii) may convert any shares of Series E Preferred Stock into
Common
Stock
prior to the consummation thereof or, to the extent he, she or
it
does not
so convert such Series E Preferred Stock shall receive the full
liquidation preference and accrued but unpaid dividends
thereon;
(iv) to the extent he, she or it is Transferring Shares other
than
shares of
Common Stock or Series E Preferred Stock shall receive the same
consideration for each share of Common Stock into which his, her,
or its
Shares are
then exercisable or exchangeable for, or convertible into, as
is being
received upon such Transfer for each share of Common Stock
being
sold by
the Selling Stockholders; provided, however, that each such
Stockholder shall be required to convert, exchange or otherwise
transfer
or deliver
to the Company any Shares representing the right to acquire
shares of
Common Stock; provided, further, however, that any per-share
consideration to be received in
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respect of
such Shares shall be reduced by any amount of additional
consideration then required to be paid pursuant to the terms
thereof in
order to
acquire the underlying shares of Common Stock; and
(v) shall not be required to make any representations,
warranties
and
covenants and indemnifications in such sale except with respect to
the
ownership
of the Shares.
(c) In any
Sale Transaction, the Company and each Stockholder shall take
all action in their power necessary to
cause the consummation of such Sale
Transaction, including, without limitation,
exercising, converting and
exchanging any securities that are
exchangeable for, or convertible into, Common
Stock and obtaining all consents and
approvals reasonably necessary, desirable
or appropriate for such Stockholder to
consummate the Sale Transaction.
Accordingly, each Stockholder:
(i) agrees to vote, or to execute and deliver written consents
in
respect
of, all Shares owned in connection with the approval of a Sale
Transaction and all related matters; and
(ii) affirms that such Stockholder's agreement to vote for such
Sale
Transaction is given as a condition of this agreement and as such
is
coupled
with an interest and is irrevocable.
The above
voting agreement shall not terminate with respect to any Shares
owned by a Stockholder until the earlier to
occur of (x) such time as such
Shares are no longer owned by such
Stockholder and (y) termination of this
agreement.
(d) With
respect to all matters that are the subject of the above voting
agreement, each Stockholder hereby:
(i) (i) irrevocably appoints the President and Secretary of the
Company,
and each of them, with full power of substitution and
resubstitution, together with their respective heirs, successors
and
assigns,
as such Stockholder's attorney-in-fact to vote and give or
withhold
consent with respect to all Shares held by (or subject to a
proxy
in favor
of) such Stockholder from time to time in such manner as either
of them
shall determine in his sole and absolute discretion, at any
meeting
(whether annual or special and whether or not an adjourned
meeting)
of the Company or by written consent or otherwise, giving and
granting
to them all powers such Stockholder would possess if personally
present
and hereby ratifying and confirming all that they shall
lawfully
do or
cause to be done by virtue hereof; and
(ii)
(iii) (ii) affirms that the irrevocable proxy granted above is
coupled
with an interest and may not, under any circumstances, be
revoked.
Each
Stockholder hereby agrees to recognize the foregoing proxy holders
as
the sole attorney and proxy for such
Stockholder (with respect to all matters
that are subject to such
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proxy). The proxy granted in this Section
3(d) shall not terminate with respect
to any Shares owned by a Stockholder until
the earlier to occur of (x) such time
as such Shares are no longer owned by such
Stockholder and (y) termination of
this Agreement.
(e) In the
event of a proposed Sale Transaction, a Stockholder shall in
all events be required to deliver each of
the Stockholder's Shares in exchange
for the payment therefor and take such
other actions as are required to effect
the closing of such Sale Transaction
regardless of whether there is any dispute
between the Company and such Stockholder or
between such Stockholder and any of
the other stockholders of the Company. Any
such dispute shall be resolved after
the closing and shall in no event delay the
closing.
(f) At the
closing of any Sale Transaction, each Stockholder shall deliver
certificates or other instruments
evidencing the Shares to be Transferred in
valid form for transfer with appropriate
duly executed assignments, stock powers
or endorsements, as the case may be,
bearing any necessary documentary stamps
and accompanied by such certificates of
authority, consents to transfer or other
instruments or evidences of the good title
of such Stockholder to such Shares,
free and clear of all liens, claims and
other encumbrances as may reasonably be
requested by the Selling Stockholders.
4.
Tag-Along
Rights.
(a) Other
than with respect to a Transfer of shares pursuant to Section
1(a)(i), 1(a)(ii) or 2, a Stockholder may
Transfer such Stockholder's Shares
only if such Stockholder (for purposes of
this Section 4, an "Initiating
Stockholder"):
(i) gives the Company written notice (a "Tag Along Notice") of
the
proposed
transaction, including, without limitation, the date (not less
than 30
days after the date of the Tag Along Notice), time and place of
the
closing thereof, the terms and conditions the
