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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15(d) of
the Securities exchange act of 1934
Date of Report (Date of earliest event reported): June 4, 1999
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BriteSmile, Inc.
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(Exact name of registrant as specified in its charter)
Utah
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(State or other jurisdiction of incorporation or organization)
0-17594 87-0410364
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(Commission file number) (I.R.S. Employer Identification No.)
Airport Business Center
200 Diplomat Drive, Bay 204
Lester, PA 19113
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 362-1111
Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
Effective June 4, 1999, the Registrant issued and sold in a private
placement 1,355,555 shares (the "New Shares") of its Common Stock, par value
$.001 per share, for aggregate proceeds of $15,000,000 (the "Private
Placement"). The New Shares represent 7.3 percent of the Registrant's total
shares of Common Stock issued and outstanding, after giving effect to the
Private Placement.
1,004,043 of the New Shares were issued to nine private investors for
aggregate proceeds of $11,120,000, including LCO Investments Limited ("LCO"),
the Registrant's largest shareholder. The remaining New Shares (351,512)were
sold to a group of up to 18 members of senior management of the Registrant,
including directors and executive officers (the "Management Purchasers") for
aggregate consideration of $3,880,000 (the "Management Purchasers Purchase
Price").
The purchase price of the New Shares was $10.95 per share, representing a
5% discount to the average closing price of the Registrant's Common Stock during
the 10-day period immediately prior to closing. However, four of the purchasers,
including three non-employee directors of the Registrant and LCO, purchased the
New Shares without a discount to the 10-day average closing price, or at $11.525
per share.
CAP Advisers Limited, an entity affiliated with LCO, provided financing for
the Management Purchasers in the full amount of the Management Purchasers
Purchase Price. Terms of the promissory notes signed by Management Purchasers in
favor of CAP provided for full recourse, interest free loans due in five years
from the date of closing.
Pursuant to Registration Rights Agreements entered into with the
Registrant, the non-Management Purchasers acquired certain rights to cause the
Registrant to register their New Shares for offer and sale under the Securities
Act of 1933, as amended (the "Piggyback Registration Rights"). Pursuant to
Amended and Restated Registration Rights Agreements entered into with the
Registrant, the Management Purchasers acquired Piggyback Registration Rights,
and also certain limited demand registration rights.
LCO is a corporation organized under the laws of Guernsey, Channel Islands,
and is wholly owned by The ERSE Trust. The sole trustee of The ERSE Trust is CAP
Advisers Limited, a company organized under the laws of the United Kingdom.
Anthony M. Pilaro, a director of the Registrant, is a director of LCO and a
director of CAP Advisers Limited.
The terms of the private placement are set forth in full in the forms of
Stock Purchase Agreement, Registration Rights Agreement, and Amended and
Restated Registration Rights Agreement, which are filed as exhibits to this
Report.
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ITEM 7. EXHIBITS.
Exhibit No. Description
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(10)(a) Form of Stock Purchase Agreement dated as of June 3, 1999,
between the Registrant and purchasers who acquired New Shares at
a 5% discount to the 10-day average market price preceding
closing.
(10)(b) Registration Rights Agreement dated as of June 3, 1999 between
the Registrant and the non-Management Purchasers.
(10)(c) Amended and Restated Registration Rights Agreement dated as of
June 3, 1999 between the Registrant and the Management
Purchasers.
(99) Press release dated June 7, 1999 issued by the Registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BriteSmile, Inc.
By: /s/ Michael F. Bonner
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Michael F. Bonner
Chief Financial Officer
Date: June 21, 1999
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EXHIBIT INDEX
Exhibit No.
Under Reg. Sequential
S-K, Item 601 Description Page Number
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(10)(a) Form of Stock Purchase Agreement
dated as of June 3, 1999, between
the Registrant and purchasers who
acquired New Shares at a 5%
discount to the 10-day average
market price.
(10)(b) Registration Rights Agreement dated
as of June 3, 1999 between the
Registrant and the non-Management
Purchasers.
(10)(c) Amended and Restated Registration
Rights Agreement dated as of June 3,
1999 between the Registrant and the
Management Purchasers.
(99) Press release dated June 7,
1999 issued by the Registrant.
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THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE, AND WILL BE OFFERED AND SOLD BY THE COMPANY IN
RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF FEDERAL AND STATE
LAW BY VIRTUE OF THE COMPANY'S INTENDED COMPLIANCE WITH THE PROVISIONS OF
SECTION 4(2) UNDER THE ACT. THE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY ANY REGULATORY AUTHORITY. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
STOCK PURCHASE AGREEMENT
BriteSmile, Inc. June 3, 1999
Airport Business Center
200 Diplomat Drive, Bay 204
Lester, PA 19113
Gentlemen:
In connection with the offer and proposed issuance (the "Offering") of
shares of common stock, par value $.01 per share ("Common Stock") of BriteSmile,
Inc., a Utah corporation ("BriteSmile" or the "Company"), in reliance on
exemptions from the registration requirements of the U.S. Securities Act of
1933, as amended (the "Act"), each Purchaser identified on Schedule A hereto
(each, a "Purchaser") and the Company agree as follows:
1. Purchase of Securities. Subject to the terms and conditions of this
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Agreement, each Purchaser hereby agrees, severally and not jointly, to purchase
from the Company, and the Company agrees to issue and sell to each Purchaser,
the number of shares of Common Stock set forth opposite such Purchaser's name on
Schedule A. The agreement of any single Purchaser to purchase Shares is not
conditioned upon the agreement of any other Purchaser to purchase Shares. All
shares of Common Stock to be purchased hereunder shall be referred to in this
Agreement as the "Shares." The aggregate purchase price for the Shares shall be
as set forth opposite such Purchaser's name on Schedule A, the purchase price
per Share (the "Purchase Price") being Ninety-Five Percent (95%) of the lesser
of: (i) the average closing sale price per share of the Common Stock on the
American Stock Exchange ("AMEX") during the period of ten (10) trading days
immediately preceding the Closing; and (ii) the closing sale price per share of
the Common Stock on AMEX on the date of Closing. Each Purchaser shall pay the
Purchase Price for all Shares to be acquired by such Purchaser in full prior to
or at Closing, via wire
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transfer to an account of the Company designated by the Company. Wire
instructions shall be provided prior to the Closing.
2. Registration Rights. The Shares shall be entitled to certain
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registration rights, as provided in that certain Registration Rights Agreement,
dated as of the date hereof (the "1999 Registration Rights Agreement"), between
the Company and the Purchasers named therein and by this reference made a part
hereof (such Registration Rights Agreement and this Agreement constitute the
"Transaction Documents").
3. Closing. Payment for the Shares by the Purchasers and delivery of the
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Shares by the Company shall be deemed to complete the transactions contemplated
by this Agreement (the "Closing"). The Closing shall occur concurrently with
the execution of this Agreement, or such later date as all of the conditions
precedent set forth in Section 11 shall have been satisfied or waived, or on
such later date as the parties may hereafter agree in writing (the "Closing
Date"). At the Closing, the Company shall deliver to each Purchaser a
certificate or certificates representing the Shares purchased by such Purchaser.
4. Representations and Warranties of Purchasers. To induce the Company's
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acceptance of this Agreement, each Purchaser hereby represents and warrants,
severally and not jointly, to the Company, its agents and attorneys, as follows:
4.1 Investor Status. It is [ ] is not [ ] (check one) an
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"accredited investor" within the meaning of Section 501(a) of Regulation D
under the Act. [If such Purchaser is or is purchasing Shares on behalf of
a fund or other collective investment vehicle formed for the purpose of
passive investment by its equity owners (an "Investment Fund"), each
beneficial owner of shares or other equity interests in the Investment Fund
(a "Beneficial Owner") is an "accredited investor".]
4.2 Liquidity. It presently has sufficient liquid assets to pay the
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Purchase Price for all Shares to be purchased by it hereunder. It has
adequate means of providing for its current needs and contingencies and has
no need for liquidity in its investment in the Company or for a source of
income from the Company. It is capable of bearing the economic risk and
the burden of the investment contemplated by this Agreement including, but
not limited to, the possibility of the complete loss of the value of the
Shares and the limited transferability of the Shares, which may make the
liquidation of the Shares impossible in the near future.
4.3 Authorization. It has the requisite power and authority
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(corporate, partnership or other) or, if such Purchaser is a natural
person, all requisite capacity, to enter into this Agreement, acquire the
Shares, and execute and deliver any documents or instruments in connection
with this Agreement. The execution and delivery of this
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Agreement, and all other documents and instruments executed by such
Purchaser in connection with any of the transactions contemplated by this
Agreement, have been duly authorized by all required action of such
Purchaser and, if applicable, such Purchaser's owners or managers. The
person executing this Agreement and any other documents or instruments in
connection with this Agreement is duly authorized to do so on behalf of
such Purchaser.
4.4 Absence of Conflicts. Neither the execution and delivery of the
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Transaction Agreements or any other agreement or instrument to be executed
in connection therewith, nor the consummation of the transactions
contemplated thereby, and compliance with the requirements thereof, will
violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on it, or the provision of any indenture,
instrument or agreement to which it is a party or is subject, or by which
it or any of its properties is bound, or conflict with or constitute a
material default thereunder, or result in the creation or imposition of any
lien pursuant to the terms of any such indenture, instrument or agreement,
or constitute a breach of any fiduciary duty owed by or to it to any third
party, or require the approval of any third party pursuant to any material
contract, agreement, instrument, relationship or legal obligation to which
it is subject or to which any of its properties, operations or management
may be subject. If Purchaser is, or is purchasing Shares on behalf of, an
Investment Fund, Purchaser has made its own determination of the
suitability of an investment in Shares for the Investment Fund and an
investment in Shares satisfies all diversification, liquidity and other
requirements applicable to an investment by such Investment Fund.
4.5 Sole Party in Interest. It is the sole and true party in
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interest, and no other person or entity has or will have upon the issuance
of the Shares beneficial ownership (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) in
the Shares or any portion thereof.
4.6 Investment Purpose. It represents that it is acquiring the
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Shares for its own account, for investment purposes, and not for the
account or benefit of any other person or entity or for or with a view to
resale or distribution.
4.7 Knowledge and Experience. It is experienced in evaluating and
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making speculative investments, and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits
and risks of its investment in the Company. It understands that an
investment in the Company is speculative and has concluded that its
proposed investment is appropriate in light of its overall investment
objectives and financial situation.
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4.8 Disclosure; Access to Information. It has received and read and
---------------------------------
is familiar with and understands this Agreement, and that all documents,
records, books and other information pertaining to its investment in the
Company requested by it have been made available for inspection and copying
and that there are no additional materials or documents that have been
requested by it that have not been made available by or on behalf of the
Company. It further acknowledges that the Company is subject to the
periodic reporting requirements of the Exchange Act, and it has reviewed or
received copies of any such reports that have been requested by it.
Without limiting the generality of the foregoing, it acknowledges that it
has received and reviewed copies of the following documents and materials,
all of which are incorporated herein by reference:
(1) Articles of Amendment Adopting Revised Articles of
Incorporation of the Company, filed on August 11, 1998 with
the Utah Division of Corporations and Commercial Code;
(2) Bylaws of the Company, as amended;
(3) Annual Report on Form 10-KSB for the fiscal year ended March
31, 1998 (the "1998 10-KSB");
(4) Quarterly Reports on Form 10-QSB for the quarters ended June
30, September 30, and December 31, 1998 (the "1998 10-
QSBs");
(5) Current Reports on Form 8-K filed on May 6, 1998 and
December 22, 1998 (the "1998 8-Ks");
(6) The Company's Proxy Statement, dated July 17, 1998, for the
Company's 1998 Annual Meeting of Shareholders (the "1998
Annual Proxy Statement");
(7) The Business Presentation, as defined in Section 11.6;
(8) The Disclosure Schedules attached to this Agreement; and
(9) All of the documents identified on Schedule B hereto [ALL
DOCUMENTS DELIVERED IN RESPONSE TO DUE DILIGENCE
INVESTIGATION].
4.9 Exclusive Reliance on this Agreement. In making the decision to
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purchase the Shares, it has relied exclusively upon information included in
this Agreement or
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incorporated herein by reference, and not on any other representations,
promises or information, whether written or verbal, by any person.
4.10 Advice of Counsel. It understands the terms and conditions of
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this Agreement, has investigated all issues to its satisfaction, has
consulted with such of its own legal counsel or other advisors as it deems
necessary, and is not relying, and has not relied on the Company for an
explanation of the terms or conditions of this Agreement or any document or
instrument related to the transactions contemplated thereby. It further
acknowledges, understands and agrees that, in arranging for the preparation
of this Agreement and all other documents and materials related thereto,
the Company has not attempted to procure, and has not procured, legal
representation for it.
4.11 Accuracy of Representations and Information. All representations
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made by it in this Agreement, and all information provided by it to the
Company concerning it are correct and complete in all material respects as
of the date hereof. If there is any material change in such information
before the Closing Date and the issuance of the Shares, it immediately will
provide such information to the Company.
4.12 No Representations. None of the following has ever been
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represented, guaranteed, or warranted to it by the Company or any of its
directors, officers, employees, agents, representatives or affiliates, or
any broker or any other person, expressly or by implication:
(1) The approximate or exact length of time that such Purchaser
will be required to remain as owner of the Shares; or
(2) The percentage of profit or amount of or type of
consideration, profit or loss (including tax write-offs or other tax
benefits) to be realized, if any, as a result of an investment in the
Shares.
4.13 Tax Matters. It has reviewed and understands the U.S. federal
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and any applicable state income tax aspects of its purchase of the Shares,
and has received such advice in this regard as it deems necessary from
qualified sources such as attorneys, tax advisors or accountants, and is
not relying on any representative or employee of the Company for such
advice.
4.14 No Brokers or Finders. No third person has in any way brought
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the parties together or been instrumental in the negotiation, execution, or
consummation of this Agreement or any instrument, document or agreement
related to this Agreement, other than any financial advisor to such
Purchaser whose fee or compensation in connection
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with the matters covered by this Agreement is solely the obligation of such
Purchaser and has been previously disclosed to the Company.
4.15 Certain Risk Factors. It has been informed about and fully
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understands that there are risks associated with an investment in the
Company, including those disclosed in documents incorporated herein by
reference pursuant to Section 4.8 of this Agreement.
4.16 Manner of Sale. At no time was such Purchaser presented with or
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solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising.
5. Representations and Warranties of the Company. The Company hereby
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represents and warrants to the Purchasers that, except as disclosed in the
Disclosure Schedules:
5.1 Organization, Standing, Etc. The Company is duly organized,
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validly existing, and in good standing under the laws of the State of Utah,
and has the requisite corporate power and authority to enter into and
perform this Agreement and to execute and perform under the documents,
instruments and agreements related to this Agreement.
5.2 Authorization. The execution and delivery of this Agreement and
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the consummation of the transactions contemplated herein have been duly
authorized by all requisite action of the Company, including any necessary
approval by its Board of Directors or shareholders, and each of the
Transaction Documents and all instruments and agreements to be delivered in
connection therewith constitute its legally, valid and binding obligation,
enforceable against the Company in accordance with their respective terms,
subject to laws of general application relating to the rights of creditors
generally. The approval of the shareholders of the Company is not required
for the execution or performance of this Agreement under any applicable law
or regulation, the rules and policies of the American Stock Exchange (the
"AMEX") or the Company's Articles of Incorporation or Bylaws.
5.3 Absence of Conflicts. Neither the execution and delivery of the
--------------------
Transaction Documents or any other agreement or instrument to be delivered
to the Purchaser in connection therewith, nor the consummation of the
transactions contemplated thereby, by the Company, will (i) conflict with
or result in a breach of or constitute a violation or default under (A) any
provision of the Articles of Incorporation or By-laws, each as amended to
date, of the Company, or (B) the provision of any indenture, instrument or
agreement to which the Company is a party or by which it or any of its
properties is bound, or (C) any order, writ, judgment, award, injunction,
decree, law, statute, rule or regulation, license or permit applicable to
the Company; (ii) result in
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the creation or imposition of any lien pursuant to the terms of any such
indenture, instrument or agreement, or constitute a breach of any fiduciary
duty owed by the Company to any third party, or (iii) require the approval
of any third party pursuant to any material contract, agreement,
instrument, relationship or legal obligation to which the Company is
subject or to which it or any of its properties, operations or management
may be subject.
5.4 Capitalization. The authorized capital stock of the Company
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consists of 50,000,000 shares of Common Stock par value $.001 per share.
As of June 2, 1999, 17,148,354 shares of Common Stock were issued and
outstanding, no shares were held in the Company's treasury and
approximately 5,784,167 shares were reserved for issuance pursuant to any
outstanding options or other rights to acquire or receive Common Stock. All
of the outstanding shares of Common Stock are, and the Shares will be, when
paid for and issued, duly authorized, validly issued, fully paid and non-
assessable and free of any preemptive rights.
5.5 SEC Reports and Financial Statements. The Company's 1998 Form
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10-KSB, 1998 10-QSBs, 1998 8-Ks and 1998 Annual Proxy Statement, copies of
which have been filed with or furnished to the Securities and Exchange
Commission (collectively, the "SEC Reports"), were when filed with the SEC
accurate in all material respects and did not include any untrue statement
of material fact or omit to state any material fact necessary to make the
statements therein not misleading. The financial statements included in
the SEC Reports (the "Financial Statements") present fairly the financial
position of the Company at their respective dates and the results of its
operations and cash flows for the periods then ended, in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods covered by such statements (subject, in the case of
unaudited financial statements, to the absence of notes and year-end
adjustments which, in the aggregate, will not be material in amount or
effect).
5.6 Business Presentation. The BriteSmile, Inc. Business
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Presentation and Financial Plans dated as of March, 1999 (the "Business
Presentation") is in all material respects an accurate presentation of the
current plans and projections of the management of the Company through the
fiscal year ending March 31, 2001. All financial assumptions and
projections contained in the Business Presentation are based on the
reasonable belief of management of the Company as of the date thereof.
5.7 Litigation, Etc. Except as disclosed in the SEC Reports, there
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are no (a) suits, actions or legal, administrative, arbitration or other
proceedings or governmental investigations or other controversies pending,
or to the knowledge of the Company threatened, or as to which the Company
has received any notice, claim or assertion, or (b)
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obligations or liabilities (other than obligations and liabilities arising
in the ordinary course of business subsequent to December 31, 1998),
whether accrued, contingent or otherwise, which, in either case (a) or (b),
involve a potential cost or liability to the Company which would,
individually or in the aggregate, materially and adversely affect the
financial condition, results of operations, business or prospects of the
Company. The Company is not in default with respect to any order, writ,
injunction or decree of any court or before any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting or relating to it which is
material to the financial condition, results of operations or business of
the Company.
5.8 Brokers and Finders. Neither the Company nor any person acting
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on behalf of the Company has employed any broker, agent or finder, or
incurred any liability for any brokerage fees, agents' commissions or
finders' fees, in connection with the transactions contemplated herein.
5.9 Regulatory Compliance. To the best knowledge of the Company, it
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has operated and is currently operating in compliance in all material
respects with all laws, rules, regulations, orders, decrees, licenses or
permits applicable to it or to its business. The Company has not received
any notice from the U.S. Food and Drug Administration or any other
governmental agency or authority of any noncompliance by the Company with
any law, rule, regulation, order, decree, license or permit applicable to
it or its business or properties.
5.10 Articles of Incorporation and By-laws. The Company has delivered
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to each Purchaser copies of its Articles of Incorporation and all
amendments thereto, which copies are complete and correct. The Company is
not in default under or in violation of any provisions of its Articles of
Incorporation. The Company's Articles of Incorporation have not been
amended since the date of the Amendments thereof delivered to the
Purchasers and no action has been taken for the purpose of effecting any
amendment thereto. The Company has delivered to the Purchaser copies of
its By-laws and all amendments thereto, which copies are complete and
correct. The Company is not in default under or in violation of any
provision of its Bylaws.
5.11 Product Liability. The Company has not received any notice,
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claim or assertion regarding an actual or alleged material liability of the
Company with respect to any of its products.
5.12 Manufacturing Relationships. The Company has not received any
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notice, claim or assertion from or with respect to any OEM counterparty of
the Company
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regarding any intention of such OEM party to either discontinue its
relationship with the Company or develop or market products in competition
with the Company.
5.13 Patents and Proprietary Rights. The Company has no reason to
------------------------------
believe that any of its patents or proprietary rights infringe upon or
otherwise violate the patents or proprietary rights of any other party.
The Company has not received any notice, claim or assertion that its
patents or proprietary rights or products or proposed products infringe
upon or otherwise violate the patents or proprietary rights of any other
party.
5.14 Unincorporated Documents or Materials. With respect to any
-------------------------------------
document or other materials received by the Purchaser from the Company or
its representatives which are not incorporated herein by reference, (i) the
Company has no reason to believe any of such documents and materials or any
projections contained therein contain errors or misstatements or do not
adequately describe the transactions contemplated by this Agreement or the
status of the development of the Company's technology and products, and
(ii) such documents, materials and projections were prepared by the Company
and its management in good faith.
5.15 Information. To the best knowledge of the Company, the
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information concerning the Company set forth in or incorporated by
reference in this Agreement, when considered together, is complete and
accurate in all material respects and does not contain any untrue statement
of a material fact or omit to state a material fact required to make the
statements made, in the light of the circumstances under which they were
made, not misleading.
6. Covenants.
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6.1 Restricted Shares. Each Purchaser understands and acknowledges
-----------------
that the Shares have not been registered under the Act, or any state
securities laws, and that they will be issued in reliance upon certain
exemptions from the registration requirements of those laws, and thus
cannot be resold unless they are registered under the Act or unless the
Company has first received an opinion of competent securities counsel
satisfactory to the Company that registration is not required for such
resale. Each Purchaser agrees that it will not resell any Shares unless
such resale transaction is in accordance with Regulation S and/or Rule 144
under the Act, pursuant to registration under the Act, or pursuant to an
available exemption from registration. With regard to the restrictions on
resales of the Shares, each Purchaser is aware (i) of the limitations and
applicability of Securities and Exchange Commission Rule 144; (ii) that the
Company will issue stop transfer orders to its stock transfer agent in the
event of any attempts improperly to transfer any such securities; and (iii)
that a restrictive legend will be placed on certificates representing the
Shares, which legend will read substantially as follows:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO
A CLAIM OF EXEMPTION FROM THE REGISTRATION OR QUALIFICATION PROVISIONS OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND STATE SECURITIES
LAWS AND THEREFORE HAVE NOT BEEN REGISTERED UNDER THE ACT OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT COMPLIANCE WITH THE PROVISIONS
OF RULE 144 OR, IF APPLICABLE, REGULATION S UNDER THE ACT, COMPLIANCE WITH
THE REGISTRATION OR QUALIFICATION PROVISIONS OF THE ACT OR APPLICABLE STATE
LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS. THE COMPANY WILL INSTRUCT ITS STOCK TRANSFER AGENT NOT TO
RECOGNIZE ANY SALE OF THESE SECURITIES UNLESS SUCH SALE IS MADE PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR THE COMPANY HAS FIRST
RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
SECURITIES COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
6.2 Nondisclosure. Except as required by applicable securities laws,
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rules and regulations, prior to the Closing Date no press release or other
announcement concerning the proposed transactions will be issued (i) by the
Company without advance notice to and consultation with the Purchasers or
(ii) by any Purchaser without the consent of the Company. This Agreement
and all negotiations and discussions between the parties in connection with
this Agreement shall be strictly confidential and will not be disclosed in
any manner prior to the Closing Date, except to employees and agents of the
parties on a need-to-know basis, as required by applicable law or
regulations or as otherwise agreed by the parties. After Closing,
disclosure shall be at the sole discretion of the Company.
6.3 Confidentiality. Subject to the requirements of law, pending
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consummation of the transactions herein contemplated, each Purchaser will
keep confidential, and will cause its representatives to keep confidential,
all information and documents obtained pursuant to Section 4.8 unless such
information (i) was already known to such Purchaser, (ii) becomes available
to Purchaser from other sources not known by Purchaser to be bound by a
confidentiality obligation, (iii) is independently acquired by such
Purchaser as a result of work carried out by any employee or representative
of such Purchaser to whom no disclsure of such information has been made,
(iv) is disclosed with the prior written approval of the Company or (v) is
or becomes readily ascertainable from published information or trade
sources.] Upon any termination of this Agreement, each Purchaser will
collect and deliver to the Company all
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documents obtained by it or any of its representatives then in their
possession and any copies thereof.
7. Conditions to Closing. Closing of the transactions contemplated by
---------------------
this Agreement shall be contingent upon the satisfaction or waiver of the
following conditions precedent:
7.1 Approvals, Waivers, Etc. The Company shall have delivered to
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each Purchaser evidence of all approvals, including waivers and consents,
of its board of directors, government or third parties which may be
required for the sale of the Shares, in full force and effect as of the
Closing Date.
7.2 Absence of Litigation and Government Orders or Proceedings. No
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litigation nor any order or proceeding of any governmental authority or
self-regulatory organization shall have been entered or threatened or shall
be pending challenging the purchase of the Shares contemplated by the
Transaction Agreements or which could have a material adverse effect on the
Company.
7.3 No Bankruptcy. The Company shall not have filed for bankruptcy
-------------
protection, the appointment of a trustee or receiver, assignment for the
benefit of creditors, nor have taken any other action designed to protect
the Company, its property or assets from the rights of creditors; and no
other person shall have made any such filing or taken any such action in
respect of the Company.
7.4 Compliance with Covenants. The Company and each Purchaser shall
-------------------------
have performed or satisfied in all material respects all of its respective
obligations and agreements under the Transaction Agreements.
7.5 Representations and Warranties. The representations and
------------------------------
warranties of the Company and each Purchaser set forth in this Agreement
shall be true and correct in all material respects (disregarding, for
purposes of such determination of materiality, all qualifications in such
representations and warranties regarding "material") as of the date of this
Agreement and as of the Closing Date as though made on and as of the
Closing Date (except that representations and warranties that by their
terms speak as of the date of this Agreement or some other date shall be
true and correct only as of such date).
7.6 AMEX Additional Listing Application. The Company shall have made
-----------------------------------
all appropriate filings under the rules of the American Stock Exchange and
shall have received notification from AMEX that the Shares have been
approved for listing, subject to notice of issuance.
11
<PAGE>
7.7 Opinions. The Company shall have delivered to the Purchaser an
--------
opinion of counsel to the Company that (i) the Company has been duly
incorporated and is in good standing in the jurisdiction of its
incorporation, (ii) the Shares, when paid for and issued, will be validly
issued, fully paid and non-assessable, and (iii) the Transaction Document
has been duly authorized by all necessary corporate action and constitutes
a valid and legally binding obligation of the Company enforceable in
accordance with its terms, subject to customary qualifications.
8. Indemnification.
---------------
8.1 Indemnification by the Company. The Company agrees to indemnify
------------------------------
each Purchaser, its officers, employees and agents, and any persons
controlling such Purchaser, and hold them harmless from and against any and
all liability, damage, cost or expense, including attorney's fees but
excluding any diminution in the value of such Purchaser's Shares incurred
on account or arising out of any inaccuracy or omission in or breach of the
declarations, covenants, agreements, representations, and warranties by the
Company set forth or incorporated by reference herein. The Company agrees
to indemnify each Purchaser, its directors, officers and controlling
persons, against any claim by any third person for any commission,
brokerage fee, finders fee, or other payment with respect to this Agreement
or the transactions contemplated hereby based upon any alleged agreement or
understanding between such party and such third person, whether expressed
or implied, arising from the actions of such party. The covenants set forth
in the preceding sentence shall survive the Closing Date and any
termination of this Agreement.
8.2 Indemnification by Purchasers. Each Purchaser agrees to
-----------------------------
indemnify the Company against any claim by any third person for any
commission, brokerage fee, finders fee, or other payment with respect to
this Agreement or the transactions contemplated hereby based upon any
alleged agreement or understanding between such party and such third
person, whether expressed or implied, arising from the actions of such
party. The covenant set forth in this Section shall survive the Closing
Date and any termination of this Agreement.
9. General Provisions.
------------------
9.1 Attorneys' Fees. In the event of a default in the performance of
---------------
this Agreement or any document or instrument executed in connection with
this Agreement, the defaulting party, in addition to all other obligations
and liabilities it shall have hereunder or under applicable laws, shall pay
reasonable attorneys' fees and costs incurred by the non-defaulting party.
12
<PAGE>
9.2 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York applicable to
contracts wholly to be performed in such state.
9.3 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which when so signed shall be deemed to be an
original, and such counterparts together shall constitute one and the same
instrument.
9.4 Entire Agreement. This Agreement, the 1999 Registration Rights
----------------
Agreement, the Disclosure Schedule and the other attachments referred to
herein (all of which are incorporated in this Agreement by reference)
collectively set forth the entire agreement between the parties as to the
subject matter hereof, supersede any and all prior or contemporaneous
agreements or understandings of the parties relating to the subject matter
of this Agreement, and may not be amended except by an instrument in
writing signed by all of the parties to this Agreement.
9.5 Expenses. Each party shall be responsible for and shall pay its
--------
own costs and expenses, including without limitation attorneys' fees and
accountants' fees and expenses, in connection with the conduct of the due
diligence inquiry, negotiation, execution and delivery of this Agreement
and the instruments, documents and agreements executed in connection with
this Agreement. The Company shall bear all expenses in connection with the
listing of the Shares on AMEX. Notwithstanding the foregoing, the Company
shall pay any stock issuance or transfer taxes payable in connection with
the issue and sale of the Shares to Purchaser, and expenses which the
Company is obligated to pay under the Registration Rights Agreement with
respect to the Shares.
9.6 Termination. This Agreement may be terminated at any time prior
-----------
to the Closing with respect to any Purchaser by mutual agreement of the
Company and that Purchaser set forth in writing. This Agreement may also
be terminated by the Company or by any Purchaser (solely with respect to
such Purchaser's representations, warranties and other agreements
hereunder) by written notice to the other parties hereto, in the event that
the Closing shall not have occurred on or prior to June 30, 1999. The
agreement set forth in Section 9.5 and each other provision hereof
expressly stated to survive the termination, shall survive the termination
of this Agreement.
9.7 Headings. The headings of the sections and paragraphs of this
--------
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
9.8 Notices. All notices or other communications provided for under
-------
this Agreement shall be in writing, and mailed, telecopied or delivered by
hand delivery or by
13
<PAGE>
overnight courier service, (i) if to any Purchaser, to its address
indicated on Schedule A or (ii) if to the Company, to its address indicated
below or, in any case, at such other address as the parties may designate
in writing:
BriteSmile, Inc.
Attn. Michael F. Bonner, CFO
Airport Business Center
200 Diplomat Drive, Bay 204
Lester, PA 19113
Fax: (610) 362-1130
14
<PAGE>
With copies to:
Jeffrey M. Jones, Esq.
Wayne D. Swan, Esq.
DURHAM, JONES & PINEGAR, P.C.
Key Bank Tower, Suite 800
50 South Main Street
Salt Lake City, Utah 84144
Phone: (801) 538-2424
Fax: (801) 538-2425
All notices and communications shall be effective as follows: When mailed,
on the third business day after the day of deposit in the mail (postage
prepaid); when telecopied, upon confirmed transmission of the telecopied
notice; when hand delivered, upon delivery; and when sent by overnight
courier, the next business day after deposit of the notice with the
overnight courier.
9.9 Severability. If any one or more of the provisions of this
------------
Agreement is determined to be illegal or unenforceable, all other
provisions of this Agreement shall be given effect separately from the
provision or provisions determined to be illegal or unenforceable and shall
not be affected thereby.
9.10 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties and their successors, but shall not be
assignable by any Purchaser without the prior written consent of the
Company.
9.11 Survival of Representations, Warranties and Covenants Closing.
-------------------------------------------------------------
All warranties, representations, indemnities and agreements made in this
Agreement by a party hereto shall survive the date of this Agreement, the
Closing Date, the consummation of the transactions contemplated by this
Agreement and the issuance by the Company of the Shares.
IN WITNESS WHEREOF, the parties named below have signed this Agreement as
of the date first above written.
[INDIVIDUAL PURCHASER]
_____________________________
Printed Name
_____________________________
Signature
15
<PAGE>
DATE: June 3, 1999
[ENTITY PURCHASER]
[NAME OF ENTITY]
- -------------------------------------
BY:_________________________
TITLE: _____________________
DATE: June 3, 1999
ACCEPTED AND AGREED:
BRITESMILE, INC., the "Company"
BY:______________________
TITLE:___________________
DATE:__________ ___, 1999
16
<PAGE>
Schedule A
----------
Purchaser and Address Number of Shares Aggregate Purchase Price
- ----------------------- ---------------- ------------------------
17
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") between BriteSmile,
Inc., a Utah corporation (the "Company"), and the several Purchasers
(collectively, the "Purchasers", and individually, a "Purchaser") under the
Stock Purchase Agreement referred to in Recital A and listed on Schedule A
thereto, is made and entered into as of June 3, 1999.
Recitals
A. The Company and the Purchasers have entered into a certain Stock
Purchase Agreement (the "Purchase Agreement") of even date with this Agreement,
pursuant to which each of the Purchasers has agreed to purchase and the Company
has agreed to sell to each Purchaser a specified number of shares of its Common
Stock, par value $.001 per share (the "Common Stock"), which shares (the
"Shares") are now restricted and not registered under the Securities Act of
1933, as amended (the "Securities Act"), or under the provisions of any state
securities law.
B. The Purchasers would not have executed and delivered the Purchase
Agreement unless the Company had simultaneously executed and delivered this
Agreement.
Agreement
In consideration of the representations, warranties and agreements of the
Purchasers and the Company set forth in this Agreement and the Purchase
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which the parties acknowledge by their signatures below, the
Company and the Purchasers agree as follows:
11. Piggyback Registrations.
-----------------------
1.1 Participation. If at any time after 180 days from the date of
-------------
this Agreement the Company proposes to file a registration statement under the
Securities Act covering proposed sales by it, or by LCO Investments, Inc. or any
successor thereto ("LCO") under that certain Registration Rights Agreement,
dated as of May 8, 1998, as amended as of December 2, 1998, of Shares of its
capital stock in a manner which would permit registration of Shares of Common
Stock for sale to the public (other than a registration statement (i) covering
only Shares issuable upon (a) the exercise of employee or consultant stock
options or pursuant to an employee stock purchase, dividend reinvestment or
similar plan, or (b) the exercise of a convertible security, or (ii) filed on
Form S-4 or S-8 or any similar form under the Act, the Company will give prompt
notice to the Purchasers of such proposed registration, which notice shall
describe the proposed filing date and the date by which the registration rights
granted pursuant to this Section 1 must be exercised, the nature and method of
any such sale or
<PAGE>
disposition of securities and shall include a listing of the jurisdictions, if
any, in which the Company proposes to register or qualify the securities under
the applicable state securities or "Blue Sky" laws of such jurisdictions. Such
notice shall offer each Purchaser to include in such registration an amount of
Registrable Securities (as defined in Section 1.3) held by such Purchaser as it
may request, subject to Section 1.2 hereof, which request shall specify the
number of Registrable Securities proposed to be included in such registration by
such Purchaser (a "Participating Purchaser") and shall be given within thirty
(30) calendar days after the receipt of notice from the Company by such
Purchaser (a "Piggyback Registration"). The Company will use its best efforts to
cause all Shares as to which registration has been requested by the
Participating Purchasers to be included in such registration statement for sale
or disposition in accordance with the method described in the initial notice
given to the Participating Purchasers and subject to the same terms and
conditions as the other Shares of capital stock being sold, and thereafter shall
cause such registration statement to be filed and become effective; provided,
however, that the Company shall be permitted to withdraw the registration
statement for any reason in its sole and exclusive discretion and upon the
written notice of such decision to the Purchasers shall be relieved of all of
its obligations under this Section 1 with respect to that particular
registration.
1.2 Cutback. The Company shall cause all such Registrable Securities
-------
requested to be included by each such Participating Purchaser to be included in
such registration on the same terms and conditions as the securities otherwise
being sold in such registration; provided, however, that, if the offering of the
Shares in such registration is an underwritten offering, and the managing
underwriter of the offering determines that the inclusion of such Registrable
Securities, together with all other securities of the Company that are entitled
to registration rights and are proposed to be included in such offering, would
be materially detrimental to the offering of the remaining Shares of capital
stock, then the priority of the securities to be included in such registration
shall be (i) first, 100% of the securities that the Company proposes to sell,
(ii) second, the amount, if any, of securities proposed to be registered by LCO,
equal to 25% of the aggregate amount of securities remaining to be included in
such registration, if any, after giving effect to (i), and (iii) third, to the
extent any other securities may be included after giving effect to (i) and (ii),
Registrable Securities the Participating Purchasers propose to sell, with any
excess Registrable Securities to be excluded pro rata among the Participating
Purchasers based on the total number of Registrable Securities proposed to be
sold by all Participating Purchasers.
1.3 Registrable Securities shall mean the Shares and all shares of
----------------------
Common Stock issued or issuable upon conversion or exercise of any securities of
the Company, which may be issued or distributed with respect to, or in exchange
for, the Shares pursuant to a stock dividend, stock split or other distribution,
merger, consolidation, recapitalization or reclassification or otherwise, and
any securities of the Company which may be issued or distributed with respect
to, or in exchange for, any such Common Stock or such other securities pursuant
to a stock dividend, stock split or other distribution, merger, consolidation,
recapitalization or reclassification or otherwise; provided, however, that any
such Registrable Securities shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale of such
2
<PAGE>
Registrable Securities has been declared effective under the Securities Act and
such Registrable Securities have been disposed of in accordance with the plan of
distribution set forth in such registration statement, (ii) such Registrable
Securities are distributed pursuant to Rule 144 or Rule 144A (or any similar
provision then in force) under the Securities Act or (iii) such Registrable
Securities shall have been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer under the Securities Act shall
have been delivered by the Company and they may be resold without subsequent
registration under the Securities Act; provided, further, however, that any
securities that have ceased to be Registrable Securities cannot thereafter
become Registrable Securities, and any security that is issued or distributed in
respect to securities that have ceased to be Registrable Securities are not
Registrable Securities.
2. Registration Procedures. If and whenever this Agreement contemplates
-----------------------
that the Company will effect the registration under the Act of any Shares held
by the Purchasers, the Company shall:
2.1 Prepare and file with the Securities and Exchange Commission (the
"SEC") a registration statement on the appropriate form with respect to such
Shares and use its reasonable best efforts to cause such registration statement
to become and remain effective as provided herein, provided that before filing
any amendments or supplements to a registration statement or prospectus,
including documents incorporated by reference after the initial filing of the
registration statement, the Company will promptly furnish to the Purchasers and
the underwriters, if any, any information regarding such Purchasers individually
that is proposed to be included in any such document at least two business days
prior to the filing thereof, which will be subject to the reasonable review of
the Purchasers and underwriters, and the Company will not file any such
information to which the Purchasers or the underwriters, if any, shall
reasonably object;
2.2 Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith and
to take such other action as may be necessary to keep such registration
statement effective until the earlier of (i) the completion of the distribution
of Shares so registered, or (ii) expiration of the 120 day period following
immediately the effective date of such registration statement (at which time
unsold Shares may be deregistered), and otherwise comply with applicable
provisions of the Act and the rules and regulations promulgated under the Act;
2.3 Furnish to each Purchaser and its counsel, and to each
underwriter of the Shares to be sold by the Purchasers, without charge, such
number of copies of one or more preliminary prospectuses, any supplements
thereto and a final prospectus and any supplements thereto in conformity with
the requirements of the Act, and such other documents as the Purchasers or such
underwriter may reasonably request, in order to facilitate the public sale or
other disposition of such Shares;
3
<PAGE>
2.4 If, during any period in which, in the opinion of the Company's
counsel, a prospectus relating to the Shares is required to be delivered under
the Act in connection with any offer or sale contemplated by any registration
statement, any event known to the Company occurs as a result of which the
prospectus would include an untrue statement of material fact or omit to state
any material fact necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, or if it is necessary
at any time to amend or supplement the related prospectus to comply with the
Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
the respective rules and regulations thereunder, to notify the Purchasers
promptly and to prepare and file with the SEC an amendment or supplement,
whether by filing such documents pursuant to the Act or the Exchange Act as may
be necessary to correct such untrue statement or omission or to make any
registration statement or the related prospectus comply with such requirements
and to furnish to each Purchaser and its counsel such amendment or supplement to
such registration statement or prospectus;
2.5 Timely to file with the SEC (i) any amendment or supplement to
any registration statement or to any related prospectus that is required by the
Act or the Exchange Act or requested by the SEC, and (ii) all documents (and any
amendments to previously filed documents) required to be filed by the Company
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act;
2.6 Within five days of filing with the SEC of (i) any amendment or
supplement to any registration statement, (ii) any amendment or supplement to
the related prospectus, or (iii) any document incorporated by reference in any
of the foregoing or any amendment of or supplement to any such incorporated
document, to furnish a copy thereof to the Purchasers;
2.7 To advise each Purchaser and its counsel promptly (i) when any
post-effective amendment to any registration statement becomes effective and
when any further amendment of or supplement to the prospectus shall be filed
with the SEC, (ii) of any request or proposed request by the SEC for an
amendment or supplement to any registration statement, to the related
prospectus, to any document incorporated by reference in any of the foregoing or
for any additional information, (iii) of the issuance by the SEC of any stop
order suspending the effectiveness of any registration statement or any order
directed to the related prospectus or any document incorporated therein by
reference or the initiation or threat of any stop order proceeding or of any
challenge to the accuracy or adequacy of any document incorporated by reference
in such prospectus, (iv) of receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threat of any proceeding for such purpose, and
(v) of the happening of any event which makes untrue any statement of a material
fact made in any registration statement or the related prospectus as amended or
supplemented or which requires the making of a change in such registration
statement or such prospectus as amended or supplemented in order to make any
material statement therein not misleading;
4
<PAGE>
2.8 On or before the date a registration statement is declared
effective, use its best efforts to register or qualify the Shares covered by
such registration statement under the securities or blue sky laws of such
jurisdictions as the Purchasers shall reasonably request, considering the nature
and size of the offering, and do such other acts and things as may be reasonably
necessary to enable the Purchasers to consummate the public sale or other
disposition in each such jurisdiction of such Shares; provided, however, that
the Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it has not been qualified,
or to file any general consent to service of process;
2.9 Use its best efforts to cause all Shares sold pursuant to any
registration statement to be listed on each national securities exchange, if
any, on which such Shares are then listed;
2.10 Enter into customary agreements (including, if applicable, an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities;
2.11 If such registration is an underwritten public offering, enter
into an underwriting agreement in form and substance customary under the
circumstances;
2.12 Make reasonably available for inspection by the Purchasers, any
underwriter participating in any disposition pursuant to the registration
statement, and any attorney, accountant or other agent retained by the
Purchasers or underwriter (collectively, the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records") as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such Inspector in connection with such registration statement. Records
and other information which the Company determines, in good faith, to be
confidential and which it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of such Records, in the
opinion of counsel reasonably acceptable to the Company, is necessary to avoid
or correct a misstatement or omission in the registration statement, or (ii) the
release of such records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction. Each Purchaser agrees that it will, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential;
2.13 Use its best efforts to obtain a "cold comfort" letter from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by "cold comfort" letters as the
Purchasers or the managing underwriter reasonably requests;
5
<PAGE>
2.14 Use its best efforts to obtain an opinion or opinions from
counsel for the Company in customary form;
2.15 Make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the registration statement at the earliest
possible moment; and
2.16 Cooperate with the Purchasers and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing securities to be
sold under the registration statement, and enable such securities to be in such
denominations and registered in such names as the managing underwriter or
underwriters, if any, or a Purchaser may request.
3. Agreements of each Purchaser.
----------------------------
3.1 Each Purchaser (i) upon receipt of a notice from the Company of
the occurrence of any event of the kind described in Subsection 2.4 shall
forthwith discontinue its disposition of securities included in the registration
statement until such Purchaser receives copies of the supplemented or amended
prospectus, and (ii) if so directed by the Company, shall deliver to the
Company, at the Company's expense, all copies (other than permanent file copies)
then in the Purchaser's possession of the prospectus covering such securities
that was in effect at the time of receipt of such notice.
3.2 The Company may require each Purchaser to furnish to the Company
such information regarding the Purchaser and his intended method or methods of
distribution of the Registrable Securities as the Company may from time to time
reasonably request in writing. Each Purchaser agrees to notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by such Purchaser to the Company or of the occurrence of any event
which causes any prospectus relating to such registration to contain an untrue
statement of a material fact (or omit to state any material fact) regarding such
Purchaser or such Purchaser's intended method or methods of distribution of such
Registrable Securities, which is required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing.
4. Withdrawal. If any Purchaser disapproves of the terms of any
----------
offering, the sole remedy of such Purchaser shall be to withdraw the Purchaser's
securities therefrom by giving written notice to the Company and any managing
underwriter (if any). The Purchaser's securities of the Company so withdrawn
from the offering also shall be withdrawn from registration.
5. Participation in Underwritten Registrations. If the Company
-------------------------------------------
determines to enter into an underwriting agreement in connection with a
Piggyback Registration, (i) all Shares of the each Purchaser's securities to be
included in such registration shall be subject to an underwriting agreement,
which shall be in customary form and contain such terms as are customarily
contained in such agreements, and (ii) no person may participate in any such
registration unless
6
<PAGE>
such person (A) agrees to sell such person's securities on the basis provided in
such underwriting arrangement, and (B) completes and executes all
questionnaires, powers-of-attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
6. Registration Expenses. With respect to each Piggyback Registration
---------------------
effected pursuant to this Agreement, the Company shall pay the following fees,
disbursements and expenses: all registration and filing fees, printing expenses,
auditors' fees, listing fees, registrar and transfer agent's fees, fees and
disbursements of counsel to the Company, reasonable fees and disbursements of
not more than one counsel to all Purchasers, expenses (including reasonable fees
and disbursements of counsel) of complying with applicable securities or "Blue
Sky" laws, and the fees of any securities exchange in connection with the review
of such offering. The underwriting discounts and commissions allocable to the
Shares included in any offering shall be borne by the Participating Purchasers
pro rata based on the total number of Registrable Securities being sold by all
Participating Purchasers.
7. Indemnification.
---------------
7.1 In each case of a registration of Shares under the Securities Act
pursuant to this Agreement, the Company will indemnify and hold harmless each
Purchaser, its officers and directors, each underwriter (as defined in the Act),
and each other person, if any, who controls a Purchaser or any such underwriter
within the meaning of the Act or the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including the fees and expenses of
counsel in connection therewith), arising out of any untrue statement or alleged
untrue statement of a material fact contained in any registration statement
under which such Shares were registered under the Act, any prospectus or
preliminary prospectus contained therein, or any amendment or supplement thereto
(including, in each case, documents incorporated by reference therein), or
arising out of any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements made therein
not misleading, except insofar as such losses, claims, damages or liabilities
arise out of any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to any Purchaser, such Purchaser's
counsel, or any underwriter, and furnished to the Company in writing by the
Purchaser or such counsel or underwriter; provided that the foregoing
indemnification with respect to a preliminary prospectus shall not inure to the
benefit of any underwriter (or the benefit of any person controlling such
underwriter) from whom the person asserting any such losses, claims, damages or
liabilities purchased Shares to the extent such losses, claims, damages or
liabilities result from the fact that a copy of the final prospectus had not
been sent or given to such person at or prior to written confirmation of the
sale of such Shares to such person.
7.2 In each case of a registration of Shares under the Act pursuant
to this Agreement, each Purchaser, severally and not jointly, will indemnify and
hold harmless the Company, its directors, its officers who sign the registration
statement, its attorneys, each
7
<PAGE>
underwriter and each person, if any, who controls the Company or such
underwriter within the meaning of the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Purchaser, but only
with reference to information provided to the Company in writing by any
Purchaser and furnished to the Company by such Purchaser expressly for use in
the registration statement, any publicly available report of any Purchaser
published within the time frame of the registration statement, any prospectus or
preliminary prospectus contained therein, or any amendment or supplement
thereto.
7.3 In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 7, such person (the "Indemnified Party") shall
promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party, upon request of the
Indemnified Party, shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own counsel
and to participate in the defense of such claim, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party has agreed in writing to the retention of such counsel at its
expense, or (ii) the Indemnifying Party shall have failed to assume the defense
of such claim within a reasonable time after receipt of notice of such claim
from the Indemnified Party and employ counsel reasonably satisfactory to such
indemnified party, or (iii) the named parties to any such proceeding (including
any impleaded parties) include both the Indemnifying Party and the Indemnified
Party, and the Indemnifying Party proposes that the same counsel represent both
the Indemnified Party and the Indemnifying Party and representation of both
parties by the counsel would be inappropriate due to actual or potential
differing interests between them (in which case, if the Indemnified Party
notifies the Indemnifying Party in writing that such indemnified party elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense of such claim
on behalf of such Indemnified Party). It is understood, where the expense of
separate counsel shall be borne by the Indemnifying Party pursuant to the
foregoing sentence, that the Indemnifying Party shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one separate firm qualified in such
jurisdiction to act as counsel for such Indemnified Party. The Indemnifying
Party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Party agrees to indemnify the
Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. In the event that several Purchasers are Indemnified
Parties for the purposes of this Section 7.3, such Indemnified Parties shall
only be entitled to employ one legal counsel representing such parties
collectively, unless the Company agrees otherwise in writing.
7.4 If for any reason the indemnification provided for in the
preceding paragraphs 7.1 and 7.2 is unavailable to an Indemnified Party or
insufficient to hold it harmless
8
<PAGE>
as contemplated by the preceding paragraphs 7.1 and 7.2, then the Indemnifying
Party shall contribute to the amount paid or payable by the Indemnified Party as
a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnified Party and the Indemnifying Party, but also the relative fault of the
Indemnified Party and the Indemnifying Party, as well as any other relevant
equitable considerations, provided that each Purchaser shall not be required to
contribute in an amount greater than the dollar amount of the proceeds received
by such Purchaser with respect to the sale of any such Registrable Securities.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
7.5 The indemnification pursuant to this Section 7 shall be on such
other terms and conditions as are at the time customary and reasonably required
by underwriters in public offerings.
8. Holdback Agreement. Each Purchaser, severally and not jointly, agrees
------------------
not to effect any public sale or distribution of the Company's Shares of capital
stock during the seven (7) calendar days prior to and the ninety (90) calendar
day period beginning on the effective date of any underwritten registration
statement effected pursuant to this Agreement (except as part of such
underwritten registration) unless the managing underwriter or underwriters with
respect to such offering otherwise agree.
9. Selection of Underwriters. The Company will have the right to select
-------------------------
the investment banking firm(s) acting as managing underwriter in connection with
any underwritten public offering.
10. Underwritten Offerings. If the Company proposes to register any of its
----------------------
securities under the Securities Act as contemplated by Section 1 and such
securities are to be distributed by or through one or more underwriters, the
Company will, if requested by the Purchasers pursuant to Section 1.1 and subject
to the provisions of Section 1.2, use its best efforts to arrange for such
underwriters to include all the Registrable Securities to be offered and sold by
the Purchasers among the securities of the Company to be distributed by such
underwriters. The Purchasers shall not be required to make any representations
or warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding each Purchaser, each such
Purchaser's Registrable Securities and its intended method of distribution or
any other representations required by law.
11. Survival. The indemnification and contribution provisions of Section
--------
7 shall not terminate and shall survive forever.
12. Rule 144. The Company agrees that it will use its best efforts to
--------
file in a timely manner all reports required to be filed by it pursuant to the
Exchange Act and, at any time and upon request of the Purchasers, will furnish
the Purchasers and others with such public
9
<PAGE>
information as may be necessary to enable the Purchasers to effect sales of
Registrable Securities without registration pursuant to Rule 144 under the Act.
13. General.
-------
13.1 Assignment. Except in connection with the transfer by any
----------
Purchaser of not less than 100,000 Shares of Common Stock, each Purchaser's
rights under this Agreement shall not be transferable without the written
consent of the Company; provided that each Purchaser may assign its rights under
this Agreement to one or more affiliates or to one or more funds managed or
advised by any Purchaser who agree to be bound by this Agreement as if they were
a Purchaser. Any attempted assignment or other transfer of this Agreement in
contravention of this Section 13.1 shall be null and void.
13.2 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which when so signed shall be deemed to be an original,
and such counterparts together shall constitute one and the same instrument.
13.3 Entire Agreement. This Agreement sets forth the entire agreement
----------------
between the parties as to the subject matter hereof, supersedes any and all
prior or contemporaneous agreements or understandings of the parties relating to
the subject matter of this Agreement, and may not be amended except by an
instrument in writing signed by all of the parties to this Agreement.
13.4 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York applicable to contracts
wholly to be performed in such state.
13.5 Headings. The headings of the sections and paragraphs of this
--------
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
13.6 Notices. All notices or other communications provided for under
-------
this Agreement shall be in writing, and mailed, telecopied or delivered by hand
delivery or by overnight courier service, to the parties at their respective
addresses as indicated below or at such other address as the parties may
designate in writing:
If to the Purchasers:
With a copy to:
10
<PAGE>
If to the Company:
BriteSmile, Inc.
Airport Business Center
200 Diplomat Drive, Bay 204
Lester, PA 19113
With a copy to:
Durham, Jones & Pinegar
50 South Main, Suite 800
Salt Lake City, Utah 84144
Attn: Wayne Swan, Esq.
All notices and communications shall be effective as follows: When mailed, on
the third business day after the day of deposit in the mail (postage prepaid);
when telecopied, upon confirmed transmission of the telecopied notice; when hand
delivered, upon delivery; and when sent by overnight courier, the next business
day after deposit of the notice with the overnight courier.
13.7 Remedies. Any person having rights under any provision of this
--------
Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.
DATED: June 3, 1999
BRITESMILE, INC., a Utah corporation
By: _______________________________
Title: ____________________________
11
<PAGE>
___________________________________ (Purchaser, if individual)
Name Printed
___________________________________
Signature
___________________________________ (Purchaser, if entity)
By: _______________________________
Title: ____________________________
12
<PAGE>
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this "Agreement")
between BriteSmile, Inc., a Utah corporation (the "Company"), and the several
-------
purchasers who are officers and/or directors of the Company (collectively, the
"Purchasers,"and individually, a "Purchaser,") under the Stock Purchase
---------- ---------
Agreement referred to in Recital A and listed on Schedule A thereto, is entered
into as of June 3, 1999.
Recitals
A. The Company and the Purchasers have entered into a certain Stock
Purchase Agreement (the "Purchase Agreement") dated June 3, 1999, pursuant to
------------------
which each of the Purchasers has agreed to purchase and the Company has agreed
to sell shares of its Common Stock, par value $.001 per share (the "Common
------
Stock"), which shares acquired by the Purchasers (the "Shares") are now
- ----- ------
restricted and not registered under the Securities Act of 1933, as amended (the
"Securities Act"), or under the provisions of any state securities law.
--------------
B. In connection with signing the Purchase Agreement, the Purchasers
entered into a Registration Rights Agreement, also dated June 3, 1999 (the
"Original Agreement"), pursuant to which the Company granted to the Purchasers
------------------
certain piggyback registration rights.
C. The Company has agreed to grant to the Purchasers certain demand
registration rights, in addition to their piggyback registration rights. The new
provisions regarding demand registration rights are set forth in section 2 of
this Agreement.
D. This Agreement amends and supercedes in all respect the Original
Agreement.
E. The Purchasers would not have executed and delivered the Purchase
Agreement unless the Company had agreed to execute and deliver this Agreement.
Agreement
In consideration of the representations, warranties and agreements of the
Purchasers and the Company set forth in this Agreement and the Purchase
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which the parties acknowledge by their signatures below, the
Company and the Purchasers agree as follows:
1. Piggyback Registrations.
-----------------------
1.1 Participation. If at any time after 180 days from the date of
-------------
this Agreement the Company proposes to file a registration statement under the
Securities Act
<PAGE>
covering proposed sales by it, or by LCO Investments, Inc. or any successor
thereto ("LCO") under that certain Registration Rights Agreement, dated as of
---
May 8, 1998, as amended as of December 2, 1998, of shares of its capital stock
in a manner which would permit registration of shares of Common Stock for sale
to the public (other than a registration statement (i) covering only shares
issuable upon (a) the exercise of employee or consultant stock options or
pursuant to an employee stock purchase, dividend reinvestment or similar plan,
or (b) the exercise of a convertible security, or (ii) filed on Form S-4 or S-8
or any similar form under the Act), the Company will give prompt notice to the
Purchasers of such proposed registration, which notice shall describe the
proposed filing date and the date by which the registration rights granted
pursuant to this Section 1 must be exercised, the nature and method of any such
sale or disposition of securities and shall include a listing of the
jurisdictions, if any, in which the Company proposes to register or qualify the
securities under the applicable state securities or "Blue Sky" laws of such
jurisdictions. Such notice shall offer each Purchaser the right to include in
such registration an amount of Shares held by such Purchaser as it may request,
subject to Section 1.2 hereof, which request shall specify the number of Shares
proposed to be included in such registration by such Purchaser (a "Participating
-------------
Purchaser") and shall be given within thirty (30) calendar days after the
- ---------
receipt of notice from the Company by such Purchaser (a "Piggyback
---------
Registration"). The Company will use its best efforts to cause all Shares as to
- ------------
which registration has been requested by the Participating Purchasers to be
included in such registration statement for sale or disposition in accordance
with the method described in the initial notice given to the Participating
Purchasers and subject to the same terms and conditions as the other Shares of
capital stock being sold, and thereafter shall cause such registration statement
to be filed and become effective; provided, however, that the Company shall be
permitted to withdraw the registration statement for any reason in its sole and
exclusive discretion and upon the written notice of such decision to the
Purchasers shall be relieved of all of its obligations under this Section 1 with
respect to that particular registration.
1.2 Cutback. The Company shall cause all such Shares requested to be
-------
included by each such Participating Purchaser to be included in such
registration on the same terms and conditions as the securities otherwise being
sold in such registration; provided, however, that, if the offering of the
Shares in such registration is an underwritten offering, and the managing
underwriter of the offering determines that the inclusion of such Shares,
together with all other securities of the Company that are entitled to
registration rights and are proposed to be included in such offering, would be
materially detrimental to the offering of the remaining shares of capital stock,
then the priority of the securities to be included in such registration shall be
(i) first, 100% of the securities that the Company proposes to sell, (ii)
second, the amount, if any, of securities proposed to be registered by LCO,
equal to 25% of the aggregate amount of securities remaining to be included in
such registration, if any, after giving effect to (i), and (iii) third, to the
extent any other securities may be included after giving effect to (i) and (ii),
Shares the Participating Purchasers propose to sell, with any excess Shares to
be excluded pro rata among the Participating Purchasers based on the total
number of Shares proposed to be sold by all Participating Purchasers.
2
<PAGE>
1.3 Registrable Securities. The Shares registrable pursuant to
----------------------
Sections 1 and 2 of this Agreement shall mean the Shares and all shares of
Common Stock issued or issuable upon conversion or exercise of any securities of
the Company, which may be issued or distributed with respect to, or in exchange
for, the Shares pursuant to a stock dividend, stock split or other distribution,
merger, consolidation, recapitalization or reclassification or otherwise, and
any securities of the Company which may be issued or distributed with respect
to, or in exchange for, any such Common Stock or such other securities pursuant
to a stock dividend, stock split or other distribution, merger, consolidation,
recapitalization or reclassification or otherwise; provided, however, that any
such Shares shall cease to be registrable securities when (i) a registration
statement with respect to the sale of such Shares has been declared effective
under the Securities Act and such Shares have been disposed of in accordance
with the plan of distribution set forth in such registration statement, (ii)
such Shares are distributed pursuant to Rule 144 or Rule 144A (or any similar
provision then in force) under the Securities Act or (iii) such Shares shall
have been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer under the Securities Act shall have been delivered
by the Company and they may be resold without subsequent registration under the
Securities Act; provided, further, however, that any securities that have ceased
to be registrable Shares cannot thereafter become registrable Shares, and any
security that is issued or distributed in respect to securities that have ceased
to be registrable Shares are not registrable Shares.
2. Demand Registration. If at any time after two (2) years from the
-------------------
effective date of this Agreement the Company shall be requested in writing by
Purchasers owning at least Forty Percent (40%) of the Shares to effect the
registration under the Act of the Shares then owned by all of the Purchasers
(which request shall specify the aggregate number of shares intended to be
offered and sold by the Purchasers, shall describe the nature or method of the
proposed offer and sale thereof and shall contain an undertaking by the
Purchasers to cooperate fully with the Company in order to permit the Company to
comply with all applicable requirements of the Act and the rules and regulations
thereunder and to obtain acceleration of the effective date of the registration
statement contemplated thereby), the Company shall effect the registration of
such securities on an appropriate form under the Act, provided that:
2.1 The Purchasers' rights under this Section 2 shall be exercisable
only if the shares as to which Purchasers request registration constitute at
least 40% (forty percent) of all of the Shares, and have an aggregate value of
at least $1,000,000 based on the average of the closing sale price for the
Company's common stock as listed on the American Stock Exchange or any other
exchange on which the Company's common stock then may be traded for the thirty
(30) trading-day period immediately preceding the date of such request for
registration;
2.2 The Purchasers shall be entitled to one demand registration,
provided that any request for registration pursuant to this Section 2 which does
not result in the declaration of effectiveness of a registration statement
(which effectiveness is maintained continuously for at least 120 days or such
shorter period ending when all shares to which Purchasers have requested
registration in accordance herewith have been sold in accordance with such
registration) covering
3
<PAGE>
the offer and sale of Shares owned by Purchasers and requested to be included in
such registration statement, whether as a result of the withdrawal of the
registration statement by the Company or through other action or inaction of the
Company or for any other reason except for the voluntary decision of Purchasers
to terminate the registration after the request for such registration has been
delivered to the Company, shall not be counted in determining whether
registration rights have been exercised pursuant to this Section 2;
2.3 The Company shall be entitled to postpone the filing of any
registration statement otherwise required to be prepared and filed by it
pursuant to this Section 2, if at the time it receives a request for such
registration, the Company's Board of Directors determines that such registration
and offering would materially interfere with any existing or then presently
contemplated financing, acquisition, corporate reorganization or other material
transaction involving the Company, and the Company promptly gives the Purchasers
written notice of such determination, provided, however, that such postponement
shall not extend beyond the time that such material interference continues to
exist; and
2.4 Purchasers shall have no right to demand registration with
respect to any shares within ninety (90) calendar days after the effective date
of any registration statement previously filed by the Company, other than a
registration statement on Form S-8 or similar form.
2.5 Purchasers agree that any cash proceeds received by them pursuant
to public sales of their Shares which have been registered pursuant to this
Section 2, shall be used first to satisfy any outstanding obligations such
Purchasers may owe to CAP Advisers Limited, its successors or assigns, pursuant
to those certain Promissory Notes dated June 3, 1999 entered into in connection
with Purchasers' acquisition of the Shares.
3. Registration Procedures. If and whenever this Agreement contemplates
-----------------------
that the Company will effect the registration under the Act of any Shares held
by the Purchasers, the Company shall:
3.1 Prepare and file with the Securities and Exchange Commission (the
"SEC") a registration statement on the appropriate form with respect to such
Shares and use its reasonable best efforts to cause such registration statement
to become and remain effective as provided herein, provided that before filing
any amendments or supplements to a registration statement or prospectus,
including documents incorporated by reference after the initial filing of the
registration statement, the Company will promptly furnish to the Purchasers and
the underwriters, if any, any information regarding such Purchasers individually
that is proposed to be included in any such document at least two business days
prior to the filing thereof, which will be subject to the reasonable review of
the Purchasers and underwriters, and the Company will not file any such
information to which the Purchasers or the underwriters, if any, shall
reasonably object;
4
<PAGE>
3.2 Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith and
to take such other action as may be necessary to keep such registration
statement effective until the earlier of (i) the completion of the distribution
of Shares so registered, or (ii) expiration of the 120 day period following
immediately the effective date of such registration statement (at which time
unsold Shares may be deregistered), and otherwise comply with applicable
provisions of the Act and the rules and regulations promulgated under the Act;
3.3 Furnish to each Purchaser and its counsel, and to each
underwriter of the Shares to be sold by the Purchasers, without charge, such
number of copies of one or more preliminary prospectuses, any supplements
thereto and a final prospectus and any supplements thereto in conformity with
the requirements of the Act, and such other documents as the Purchasers or such
underwriter may reasonably request, in order to facilitate the public sale or
other disposition of such Shares;
3.4 If, during any period in which, in the opinion of the Company's
counsel, a prospectus relating to the Shares is required to be delivered under
the Act in connection with any offer or sale contemplated by any registration
statement, any event known to the Company occurs as a result of which the
prospectus would include an untrue statement of material fact or omit to state
any material fact necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, or if it is necessary
at any time to amend or supplement the related prospectus to comply with the
Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
the respective rules and regulations thereunder, to notify the Purchasers
promptly and to prepare and file with the SEC an amendment or supplement,
whether by filing such documents pursuant to the Act or the Exchange Act as may
be necessary to correct such untrue statement or omission or to make any
registration statement or the related prospectus comply with such requirements
and to furnish to each Purchaser and its counsel such amendment or supplement to
such registration statement or prospectus;
3.5 Timely to file with the SEC (i) any amendment or supplement to
any registration statement or to any related prospectus that is required by the
Act or the Exchange Act or requested by the SEC, and (ii) all documents (and any
amendments to previously filed documents) required to be filed by the Company
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act;
3.6 Within five days of filing with the SEC of (i) any amendment or
supplement to any registration statement, (ii) any amendment or supplement to
the related prospectus, or (iii) any document incorporated by reference in any
of the foregoing or any amendment of or supplement to any such incorporated
document, to furnish a copy thereof to the Purchasers;
3.7 To advise each Purchaser and its counsel promptly (i) when any
post-effective amendment to any registration statement becomes effective and
when any further
5
<PAGE>
amendment of or supplement to the prospectus shall be filed with the SEC, (ii)
of any request or proposed request by the SEC for an amendment or supplement to
any registration statement, to the related prospectus, to any document
incorporated by reference in any of the foregoing or for any additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of any registration statement or any order directed to the related
prospectus or any document incorporated therein by reference or the initiation
or threat of any stop order proceeding or of any challenge to the accuracy or
adequacy of any document incorporated by reference in such prospectus, (iv) of
receipt by the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or
threat of any proceeding for such purpose, and (v) of the happening of any event
which makes untrue any statement of a material fact made in any registration
statement or the related prospectus as amended or supplemented or which requires
the making of a change in such registration statement or such prospectus as
amended or supplemented in order to make any material statement therein not
misleading;
3.8 On or before the date a registration statement is declared
effective, use its best efforts to register or qualify the Shares covered by
such registration statement under the securities or blue sky laws of such
jurisdictions as the Purchasers shall reasonably request, considering the nature
and size of the offering, and do such other acts and things as may be reasonably
necessary to enable the Purchasers to consummate the public sale or other
disposition in each such jurisdiction of such Shares; provided, however, that
the Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it has not been qualified,
or to file any general consent to service of process;
3.9 Use its best efforts to cause all Shares sold pursuant to any
registration statement to be listed on each national securities exchange, if
any, on which such Shares are then listed;
3.10 Enter into customary agreements (including, if applicable, an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Shares;
3.11 If such registration is an underwritten public offering, enter
into an underwriting agreement in form and substance customary under the
circumstances;
3.12 Make reasonably available for inspection by the Purchasers, any
underwriter participating in any disposition pursuant to the registration
statement, and any attorney, accountant or other agent retained by the
Purchasers or underwriter (collectively, the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records") as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such Inspector in connection with such registration statement. Records
and other information which the Company
6
<PAGE>
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records, in the opinion of counsel reasonably acceptable
to the Company, is necessary to avoid or correct a misstatement or omission in
the registration statement, or (ii) the release of such records is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction.
Each Purchaser agrees that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential;
3.13 Use its best efforts to obtain a "cold comfort" letter from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by "cold comfort" letters as the
Purchasers or the managing underwriter reasonably requests;
3.14 Use its best efforts to obtain an opinion or opinions from
counsel for the Company in customary form;
3.15 Make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the registration statement at the earliest
possible moment; and
3.16 Cooperate with the Purchasers and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing securities to be
sold under the registration statement, and enable such securities to be in such
denominations and registered in such names as the managing underwriter or
underwriters, if any, or a Purchaser may request.
4. Agreements of each Purchaser.
----------------------------
4.1 Each Purchaser (i) upon receipt of a notice from the Company of
the occurrence of any event of the kind described in Subsection 3.4 shall
forthwith discontinue its disposition of securities included in the registration
statement until such Purchaser receives copies of the supplemented or amended
prospectus, and (ii) if so directed by the Company, shall deliver to the
Company, at the Company's expense, all copies (other than permanent file copies)
then in the Purchaser's possession of the prospectus covering such securities
that was in effect at the time of receipt of such notice.
4.2 The Company may require each Purchaser to furnish to the Company
such information regarding the Purchaser and his intended method or methods of
distribution of the Shares as the Company may from time to time reasonably
request in writing. Each Purchaser agrees to notify the Company as promptly as
practicable of any inaccuracy or change in information previously furnished by
such Purchaser to the Company or of the occurrence of any event which causes any
prospectus relating to such registration to contain an untrue statement of a
material fact (or omit to state any material fact) regarding such Purchaser or
such Purchaser's
7
<PAGE>
intended method or methods of distribution of the Shares, which is required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing.
5. Withdrawal. If any Purchaser disapproves of the terms of any
----------
offering, the sole remedy of such Purchaser shall be to withdraw the Purchaser's
securities therefrom by giving written notice to the Company and any managing
underwriter (if any). The Purchaser's securities of the Company so withdrawn
from the offering also shall be withdrawn from registration.
6. Participation in Underwritten Registrations. If the Company
-------------------------------------------
determines to enter into an underwriting agreement in connection with a
Piggyback Registration, (i) all Shares of the each Purchaser's securities to be
included in such registration shall be subject to an underwriting agreement,
which shall be in customary form and contain such terms as are customarily
contained in such agreements, and (ii) no person may participate in any such
registration unless such person (A) agrees to sell such person's securities on
the basis provided in such underwriting arrangement, and (B) completes and
executes all questionnaires, powers-of-attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
7. Registration Expenses. With respect to each registration effected
---------------------
pursuant to this Agreement, the Company shall pay the following fees,
disbursements and expenses: all registration and filing fees, printing
expenses, auditors' fees, listing fees, registrar and transfer agent's fees,
fees and disbursements of counsel to the Company, reasonable fees and
disbursements of not more than one counsel to all Purchasers, expenses
(including reasonable fees and disbursements of counsel) of complying with
applicable securities or "Blue Sky" laws, and the fees of any securities
exchange in connection with the review of such offering. The underwriting
discounts and commissions allocable to the Shares included in any offering shall
be borne by the Participating Purchasers pro rata based on the total number of
Shares being sold by all Participating Purchasers.
8. Indemnification.
---------------
8.1 In each case of a registration of Shares under the Securities Act
pursuant to this Agreement, the Company will indemnify and hold harmless each
Purchaser, its officers and directors, each underwriter (as defined in the Act),
and each other person, if any, who controls a Purchaser or any such underwriter
within the meaning of the Act or the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including the fees and expenses of
counsel in connection therewith), arising out of any untrue statement or alleged
untrue statement of a material fact contained in any registration statement
under which such Shares were registered under the Act, any prospectus or
preliminary prospectus contained therein, or any amendment or supplement thereto
(including, in each case, documents incorporated by reference therein), or
arising out of any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements made therein
not misleading,
8
<PAGE>
except insofar as such losses, claims, damages or liabilities arise out of any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Purchaser, such Purchaser's counsel, or any
underwriter, and furnished to the Company in writing by the Purchaser or such
counsel or underwriter; provided that the foregoing indemnification with respect
to a preliminary prospectus shall not inure to the benefit of any underwriter
(or the benefit of any person controlling such underwriter) from whom the person
asserting any such losses, claims, damages or liabilities purchased Shares to
the extent such losses, claims, damages or liabilities result from the fact that
a copy of the final prospectus had not been sent or given to such person at or
prior to written confirmation of the sale of such Shares to such person.
8.2 In each case of a registration of Shares under the Act pursuant
to this Agreement, each Purchaser, severally and not jointly, will indemnify and
hold harmless the Company, its directors, its officers who sign the registration
statement, its attorneys, each underwriter and each person, if any, who controls
the Company or such underwriter within the meaning of the Act or the Exchange
Act, to the same extent as the foregoing indemnity from the Company to each
Purchaser, but only with reference to information provided to the Company in
writing by any Purchaser and furnished to the Company by such Purchaser
expressly for use in the registration statement, any publicly available report
of any Purchaser published within the time frame of the registration statement,
any prospectus or preliminary prospectus contained therein, or any amendment or
supplement thereto.
8.3 In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 8, such person (the "Indemnified Party") shall
promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party, upon request of the
Indemnified Party, shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own counsel
and to participate in the defense of such claim, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party has agreed in writing to the retention of such counsel at its
expense, or (ii) the Indemnifying Party shall have failed to assume the defense
of such claim within a reasonable time after receipt of notice of such claim
from the Indemnified Party and employ counsel reasonably satisfactory to such
indemnified party, or (iii) the named parties to any such proceeding (including
any impleaded parties) include both the Indemnifying Party and the Indemnified
Party, and the Indemnifying Party proposes that the same counsel represent both
the Indemnified Party and the Indemnifying Party and representation of both
parties by the counsel would be inappropriate due to actual or potential
differing interests between them (in which case, if the Indemnified Party
notifies the Indemnifying Party in writing that such indemnified party elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense of such claim
on behalf of such Indemnified Party). It is understood,
9
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where the expense of separate counsel shall be borne by the Indemnifying Party
pursuant to the foregoing sentence, that the Indemnifying Party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm qualified in
such jurisdiction to act as counsel for such Indemnified Party. The Indemnifying
Party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Party agrees to indemnify the
Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. In the event that several Purchasers are Indemnified
Parties for the purposes of this Section 8.3, such Indemnified Parties shall
only be entitled to employ one legal counsel representing such parties
collectively, unless the Company agrees otherwise in writing.
8.4 If for any reason the indemnification provided for in the
preceding paragraphs 8.1 and 8.2 is unavailable to an Indemnified Party or
insufficient to hold it harmless as contemplated by the preceding paragraphs 8.1
and 8.2, then the Indemnifying Party shall contribute to the amount paid or
payable by the Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by the Indemnified Party and the Indemnifying Party, but also
the relative fault of the Indemnified Party and the Indemnifying Party, as well
as any other relevant equitable considerations, provided that each Purchaser
shall not be required to contribute in an amount greater than the dollar amount
of the proceeds received by such Purchaser with respect to the sale of any such
Registrable Securities. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
8.5 The indemnification pursuant to this Section 8 shall be on such
other terms and conditions as are at the time customary and reasonably required
by underwriters in public offerings.
9. Holdback Agreement. Each Purchaser, severally and not jointly, agrees
------------------
not to effect any public sale or distribution of the Company's Shares of capital
stock during the seven (7) calendar days prior to and the ninety (90) calendar
day period beginning on the effective date of any underwritten registration
statement effected pursuant to this Agreement (except as part of such
underwritten registration) unless the managing underwriter or underwriters with
respect to such offering otherwise agree.
10. Selection of Underwriters. The Company will have the right to select
-------------------------
the investment banking firm(s) acting as managing underwriter in connection with
any underwritten public offering.
11. Underwritten Offerings. If the Company proposes to register any of its
----------------------
securities under the Securities Act as contemplated by Section 1 and such
securities are to be distributed by or through one or more underwriters, the
Company will, if requested by the Purchasers pursuant
10
<PAGE>
to Section 1.1 and subject to the provisions of Section 1.2, use its best
efforts to arrange for such underwriters to include all the Shares to be offered
and sold by the Purchasers among the securities of the Company to be distributed
by such underwriters. The Purchasers shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding each
Purchaser, each such Purchaser's Shares, and its intended method of distribution
or any other representations required by law.
12. Survival. The indemnification and contribution provisions of Section
--------
8 shall not terminate and shall survive forever.
13. Rule 144. The Company agrees that it will use its best efforts to
--------
file in a timely manner all reports required to be filed by it pursuant to the
Exchange Act and, at any time and upon request of the Purchasers, will furnish
the Purchasers and others with such public information as may be necessary to
enable the Purchasers to effect sales of Shares without registration pursuant to
Rule 144 under the Act.
14. General.
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14.1 Assignment. Except in connection with the transfer by any
----------
Purchaser of not less than 100,000 Shares of Common Stock, each Purchaser's
rights under this Agreement shall not be transferable without the written
consent of the Company; provided that each Purchaser may assign its rights under
this Agreement to one or more affiliates or to one or more funds managed or
advised by any Purchaser who agree to be bound by this Agreement as if they were
a Purchaser. Any attempted assignment or other transfer of this Agreement in
contravention of this Section shall be null and void.
14.2 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which when so signed shall be deemed to be an original,
and such counterparts together shall constitute one and the same instrument.
14.3 Entire Agreement. This Agreement sets forth the entire agreement
----------------
between the parties as to the subject matter hereof, supersedes any and all
prior or contemporaneous agreements or understandings of the parties relating to
the subject matter of this Agreement, and may not be amended except by an
instrument in writing signed by all of the parties to this Agreement.
14.4 Governing Law. This Agreement shall be governed by and construed
------------
in accordance with the laws of the State of New York applicable to contracts
wholly to be performed in such state.
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<PAGE>
14.5 Headings. The headings of the sections and paragraphs of this
--------
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
14.6 Notices. All notices or other communications provided for under
-------
this Agreement shall be in writing, and mailed, telecopied or delivered by hand
delivery or by overnight courier service, to the parties at their respective
addresses as indicated below or at such other address as the parties may
designate in writing:
If to Purchaser:
With a copy to:
If to the Company:
BriteSmile, Inc.
Airport Business Center
200 Diplomat Drive, Bay 204
Lester, PA 19113
With a copy to:
Durham, Jones & Pinegar
50 South Main, Suite 800
Salt Lake City, Utah 84144
Attn: Wayne Swan, Esq.
All notices and communications shall be effective as follows: When mailed, on
the third business day after the day of deposit in the mail (postage prepaid);
when telecopied, upon confirmed transmission of the telecopied notice; when hand
delivered, upon delivery; and when sent by overnight courier, the next business
day after deposit of the notice with the overnight courier.
12
<PAGE>
14.7 Remedies. Any person having rights under any provision of this
--------
Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.
14.8 Amendment and Restatement. This Agreement amends, supercedes,
-------------------------
and restates in its entirety the Original Agreement.
DATED EFFECTIVE June 3, 1999.
BRITESMILE, INC., a Utah corporation
By: __________________________________________
Title: _______________________________________
______________________________________________ (Purchaser, if individual)
Name Printed
______________________________________________
Signature
______________________________________________ (Purchaser, if entity)
By: __________________________________________
Title: _______________________________________
13
<PAGE>
BRITESMILE, INC. NEWS RELEASE
Airport Business Center
200 Diplomat Drive, Suite 204
Lester, PA 19113
FOR IMMEDIATE RELEASE
- ---------------------
Contact: Investors: Media:
Michael F. Bonner Heather Reeves/Tracy Williams
Chief Financial Officer Sard Verbinnen & Co.
610-362-1111 212-687-8080
BRITESMILE, INC. SECURES $15 MILLION IN FINANCING
Company Continues Successful Roll-Out of BriteSmile Teeth Whitening Centers
_______________________________________________________________
Lester, PA - June 7, 1999 -- BriteSmile, Inc. (AMEX: BWT) today announced
that it would obtain at least $15 million in financing from private investors
and virtually every member of BriteSmile senior management. The financing
involves the issuance of BriteSmile common stock and will be concluded in two
phases. The first closing, occurring Friday, June 4, 1999, totals $12,380,000,
including private investors and $3,780,000 from BriteSmile's management. The
second closing, which will total no less than $2,620,000, will include
additional private investors and LCO Investments Limited, the Company's largest
shareholder.
The funds will be used to further the expansion of BriteSmile's retail
platform. The Company continues to open BriteSmile Teeth Whitening Centers and
Associated Centers in strategic locations across the U.S. as well as in various
international markets, including Japan. In addition, the Company recently
signed an agreement with Orthodontic Centers of America to offer the BriteSmile
System in selected OCA locations.
The purchase price of the Company's restricted common stock sold in the
offering is $10.95 per share, which represents a 5% discount to BriteSmile's
recent 10 day average closing price. CAP Advisers Limited will provide
financing for the management portion of the purchase. Three non-employee
BriteSmile directors participating in the first closing of the financing will
purchase the stock without a discount to the recent 10 day average closing
price, or at $11.525 per share. The Company expects to complete the second
phase of financing within the next several days. At an aggregate of $15 million
for both closings, BriteSmile would issue approximately 1,370,000 common shares,
or 7.4% of its outstanding stock after giving effect to the new issuances.
"This substantial capital investment in BriteSmile illustrates the
tremendous confidence that both outside investors and the Company's management
team have in our strategic business plan," said John Reed, Chief Executive
Officer of BriteSmile. "BriteSmile continues to build on its successful launch
of BriteSmile Teeth Whitening Centers by forging new partnerships with
organizations such as OCA and Mejiro, expanding into new domestic and
international markets, and providing customers with a cutting-edge teeth
whitening process that is faster and more effective than other available
procedures."
About BriteSmile
- ----------------
BriteSmile, Inc. develops and manufactures the most advanced teeth-whitening
technology in the United States, as well as manages state-of-the-art BriteSmile
Professional Teeth Whitening Centers. BriteSmile Centers are currently
operating in Beverly Hills, Irvine, Pasadena and Walnut Creek, CA, with
Associated Centers located within existing dentist offices in Denver, CO;
Louisville, KY; Houston, TX; and Toronto, ONT. For more information about
BriteSmile's procedure, call 1-877-BRITESMILE or visit the Website at
www.britesmile.com.
This release, other than historical information, consists of forward-looking
statements that involve risks and uncertainties such as the development and
introduction of new products, acceptance of those new products in the
marketplace and development of new strategic and marketing relationships in the
United States and internationally. Readers are referred to the documents filed
by BriteSmile with the Securities and Exchange Commission, specifically the
Company's current and past reports on forms 10-QSB and 10-KSB, that identify
important risk factors which could cause actual results to differ materially
from those contained in the forward-looking statements. BriteSmile, its
subsidiaries and affiliates disclaim any intent or obligation to update these
forward-looking statements.
