EXHIBIT 4.3
[Form of]
WARRANT
THE SECURITIES
REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED BY THE HOLDER FOR
ITS OWN ACCOUNT, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO THE
DISTRIBUTION OF SUCH SECURITIES. NEITHER THE SECURITIES REPRESENTED
BY THIS WARRANT NOR THE SECURITIES WHICH ARE ISSUABLE UPON EXERCISE
OR CONVERSION OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) AND ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND COMPLIANCE WITH
SUCH STATE SECURITIES LAWS, IN COMPLIANCE WITH RULE 144 UNDER THE
SECURITIES ACT, OR OTHERWISE DISPOSED OF WITHOUT AN OPINION OF
COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION AND/OR COMPLIANCE IS NOT
REQUIRED.
WARRANT TO PURCHASE COMMON SHARES
OF
PHOTOMEDEX, INC.
1. Issuance of Warrant . FOR VALUE RECEIVED, on and after the First
Tranche Closing Date (such term, and each other capitalized term
used in this Warrant but not defined herein, having the meaning
assigned thereto in the Purchase Agreement (as defined below)), and
on the terms and subject to the conditions herein set forth,
Perseus Partners VII, L.P., or its registered assigns (the “
Holder ”) is entitled to purchase from PhotoMedex,
Inc., a Delaware corporation (the “ Company
”), at any time before 5:00 p.m. New York time on
[
] 1 (or, if such day is not a Business Day, the next
succeeding Business Day) (the “ Termination Date
”), at a price per share equal to the Warrant Price (as
defined below and subject to adjustment as described herein), the
Warrant Shares (as defined below and subject to adjustment as
described herein) upon exercise of this Warrant pursuant to
Section 5 hereof or conversion of this Warrant pursuant to
Section 6 hereof.
This Warrant is issued pursuant to the
Securities Purchase Agreement, dated as of August 4, 2008 (the
“ Purchase Agreement ”), by and between the
Company and Perseus Partners VII, L.P.
2. Definitions . As used in this
Warrant, the following terms shall have the definitions ascribed to
them below:
1 The Termination date will be the eighth
anniversary of the First Tranche Closing Date.
“ Warrant Price ” means,
initially, [ ] 2 , as adjusted from time to time pursuant to the
terms of this Warrant.
“ Warrant Shares ” means,
initially, [ ] 3 shares of common stock, par value $0.01 per
share, of the Company, as adjusted from time to time pursuant to
the terms of this Warrant.
3. Adjustments and Notices . The Warrant Price and
the number of Warrant Shares upon exercise or conversion, as
applicable, of this Warrant shall be subject to adjustment from
time to time in accordance with this Section 3 .
(a) Adjustments for Splits and
Combinations . If the
Company shall at any time or from time to time on or after the
First Tranche Closing Date effect a stock split of the outstanding
shares of Common Stock, the Warrant Price in effect immediately
before that stock split shall be proportionately decreased and the
number of Warrant Shares issuable upon exercise of this Warrant
shall be proportionately increased. Conversely, if the Company
shall at any time or from time to time on or after the First
Tranche Closing Date combine the outstanding shares of Common Stock
into a smaller number of shares, the Warrant Price in effect
immediately before the combination shall be proportionately
increased and the number of Warrant Shares issuable upon exercise
of this Warrant shall be proportionately decreased. In each such
case, (i) the Warrant Price shall be adjusted by multiplying the
Warrant Price that is then in effect by a fraction, (A) the
numerator of which is the total number of shares of Common Stock
issued and outstanding immediately prior to such subdivision or
combination, and (B) the denominator of which shall be the total
number of shares of Common Stock issued and outstanding immediately
after giving effect to such subdivision or combination; and (ii)
the number of Warrant Shares issuable upon exercise of this Warrant
shall be adjusted by multiplying such number of Warrant Shares by a
fraction, (X) the numerator of which equals the Warrant Price in
effect as of immediately prior to the adjustment in clause (i) of
this Section 3(a) and (Y) the denominator of which equals
the Warrant Price in effect as of immediately after such
adjustment. Any adjustment under this Section 3(a) shall
become effective immediately after the opening of business on the
date the stock split or combination becomes effective.
(b) Adjustment for Common Share Dividends and
Distributions . If the
Company at any time or from time to time on or after the First
Tranche Closing Date issues, or fixes a record date for the
determination of holders of shares of Common Stock entitled to
receive, a dividend or other distribution payable solely in
additional shares of Common Stock, in each such event (i) the
Warrant Price that is then in effect shall be decreased (but in no
event increased) as of the time of such issuance or, in the event
such record date is fixed, as of the close of business on such
record date, by multiplying the Warrant Price then in effect by a
fraction (A) the numerator of which is the total number of shares
of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date,
and (B) the denominator of which is the sum of the total number of
shares of Common Stock issued and outstanding immediately prior to
the time of such issuance or the close of business on such record
date plus the number of shares of Common Stock issuable in payment
of such dividend or distribution; and (ii) the number of Warrant
Shares issuable upon exercise of this Warrant shall be increased
(but in no event decreased) as of the time of such issuance or, in
the event such record date is fixed, as of the close of business on
such record date, by multiplying such number of Warrant Shares by a
fraction, (X) the numerator of which equals the Warrant Price in
effect as of immediately prior to the adjustment in clause (i) of
this Section 3(b) and (Y) the denominator of which equals
the Warrant Price in effect as of immediately after such
adjustment; provided , however , that if such
record date is fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the
Warrant Price and the number of Warrant Shares issuable upon
exercise of this Warrant shall be recomputed accordingly as of the
close of business on such record date and thereafter the Warrant
Price and the number of Warrant Shares issuable upon exercise of
this Warrant shall be adjusted pursuant to this Section 3(b)
to reflect the actual payment of such dividend or
distribution.
2 The initial Warrant Price will be equal to
$0.73736 for the First Tranche Warrant (and shall be
proportionately adjusted for any subdivision or combination of the
Common Stock (by stock split, reverse stock split, dividend,
reorganization, recapitalization or otherwise) that may occur on or
after the date hereof and prior to the First Tranche Closing) and
will be equal to the Second Tranche Conversion Price (as defined in
the Purchase Agreement) for the Second Tranche Warrant.
3 The initial number of Warrant Shares for the
First Tranche Warrant will be equal to 7,323,425 (and shall be
proportionately adjusted for any subdivision or combination of the
Common Stock (by stock split, reverse stock split, dividend,
reorganization, recapitalization or otherwise) that may occur on or
after the date hereof and prior to the First Tranche Closing). The
initial number of Warrant Shares for the Second Tranche Warrant
will be equal to the quotient obtained by dividing (i) 0.3 * the
Second Tranche Note Amount by (ii) the Second Tranche Conversion
Price, rounded to the nearest whole number.
(c) Adjustments for Other Dividends and
Distributions . If the
Company at any time or from time to time on or after the First
Tranche Closing Date issues, or fixes a record date for the
determination of holders of shares of Common Stock entitled to
receive, a dividend or other distribution payable in any securities
of the Company (other than shares of Common Stock) or in other
property, in each such event provision shall be made so that the
Holder of this Warrant shall receive upon exercise of this Warrant,
in addition to the number of Warrant Shares receivable hereupon,
the amount of securities of the Company or other property that such
Holder would have received had this Warrant been exercised into
Warrant Shares immediately prior to the date of such event and had
such Holder thereafter, during the period from the date of such
event to and including the exercise date retained such securities
or other property receivable by them as aforesaid during such
period, subject to all other adjustments called for during such
period under this Section 3 with respect to the rights of
the Holder or with respect to such other securities or other
property by their terms.
(d) Adjustment upon Issuances for Consideration
Below Warrant Price . If
the Company at any time or from time to time on or after the First
Tranche Closing Date issues or sells, or in accordance with this
Section is deemed to have issued or sold, any shares of Common
Stock (including the issuance or sale of shares of Common Stock
owned or held by or for the account of the Company) for a
consideration per share less than the Warrant Price in effect as of
immediately prior to such issuance or sale (such an issuance, a
“ Dilutive Issuance ”), then immediately after
such Dilutive Issuance, (i) the Warrant Price then in effect shall
be reduced (but in no event increased) to an amount equal to a
fraction, (A) the numerator of which equals the sum of (1) the
product derived by multiplying the Warrant Price in effect as of
immediately prior to such Dilutive Issuance by the number of shares
of Common Stock outstanding on a fully diluted basis (accounting
for Convertible Securities and Options using the treasury stock
method) immediately prior to such Dilutive Issuance plus (2) the
consideration, if any, received by the Company in such Dilutive
Issuance, and (B) the denominator of which equals the number of
shares of Common Stock outstanding on a fully diluted basis
(accounting for Convertible Securities and Options using the
treasury stock method) immediately after such Dilutive Issuance;
and (ii) the number of Warrant Shares issuable upon exercise of
this Warrant shall be increased (but in no event decreased) by
multiplying such number of Warrant Shares by a fraction, (X) the
numerator of which equals the Warrant Price in effect as of
immediately prior to the adjustment in clause (i) of this
Section 3(d) and (Y) the denominator of which equals the
Warrant Price in effect as of immediately after such adjustment.
For purposes of this Section 3(d) :
(i) If any Convertible Securities are issued by the
Company after the First Tranche Closing Date, the shares of Common
Stock into which such Convertible Securities are convertible shall
be deemed to be issued and sold by the Company as of the date the
Convertible Securities are issued, for consideration per share
equal to the sum of the lowest amounts of consideration (if any)
received or receivable by the Company with respect to any one share
of Common Stock (A) upon the issuance or sale of the Convertible
Security, and (B) upon the conversion or exchange or exercise of
such Convertible Security.
(ii) If any Options are issued by the Company after
the First Tranche Closing Date, the shares of Common Stock issuable
upon exercise of such Option (or upon conversion of the Convertible
Securities issuable upon exercise of such Option) shall be deemed
to be issued and sold by the Company as of the date the Options are
issued for consideration per share equal to the sum of the of the
lowest amounts of consideration (if any) received or receivable by
the Company with respect to any one share of Common Stock (A) upon
granting or sale of the Option, (B) upon exercise of the Option and
(C) in the case of an Option to acquire a Convertible Security,
upon conversion or exchange or exercise of such Convertible
Security.
(iii) If the purchase price provided for in any
Option is reduced after the First Tranche Closing Date, the
additional consideration, if any, payable upon the issue,
conversion, exchange or exercise of any Convertible Security is
reduced after the First Tranche Closing Date, or the rate at which
any Convertible Security is convertible into or exchangeable or
exercisable for shares of Common Stock is increased at any time on
or after the First Tranche Closing Date, the shares of Common Stock
issuable upon exercise of such Option (or upon conversion of the
Convertible Securities issuable upon exercise of such Option) or
issuable upon conversion of such Convertible Security shall be
deemed to be issued and sold by the Company as of the date of such
modification.
(iv) If any Options are issued in connection with
the issuance of other securities of the Company, together
comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties to such
transaction, such Options will be deemed to have been issued for
the difference between (A) the aggregate fair market value of such
Options and other securities of the Company issued in such
integrated transaction, less, (B) the fair market value of the
securities other than such Option, issued in such transaction, and
the other securities issued or sold in such integrated transaction
will be deemed to have been issued for the balance of the
consideration received by the Company. If any Common Stock, Options
or Convertible Securities are issued or sold for a consideration
consisting as a whole or in part of consideration other than cash,
the amount of the consideration other than cash received by the
Company will be the fair market value of such consideration, except
where such consideration consists of securities, in which case the
amount of consideration received by the Company will be the closing
price of such securities on the date of receipt by the
Company.
(v) For purposes of this Section 3(d) , the
fair market value of any non-cash consideration received by the
Company upon the issuance of any shares of Common Stock, Options or
Convertible Securities will be as determined in good faith by the
Board.
(e) Adjustment for Reclassification, Exchange and
Substitution . If at any
time or from time to
