Registration Rights Agreement, dated as of [ ] (this “Agreement”), by and among PhotoMedex, Inc., a Delaware corporation (the “Company”) and Perseus Partners VII, L.P., a Delaware limited partnership (the “Purchaser”). Introduction
EXHIBIT
4.4
Registration
Rights Agreement,
dated
as of [ ] (this
“Agreement”),
by
and
among PhotoMedex, Inc., a Delaware corporation (the “Company”)
and
Perseus Partners VII, L.P., a Delaware limited partnership (the
“Purchaser”).
Introduction
The
Company and the Purchaser are parties to a Securities Purchase Agreement dated
as of August 4, 2008 (the “Purchase
Agreement”).
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Purchase Agreement. Upon the terms and subject to the
conditions set forth in the Purchase Agreement, the Purchaser has (i) made
an
investment in the Company at the First Tranche Closing by acquiring the First
Tranche Note, the First Tranche Warrant and the First Tranche Common Shares;
and
(ii) agreed to make a further investment in the Company at the Second Tranche
Closing by acquiring the Second Tranche Warrant and, unless a Company Option
Event occurs, the Second Tranche Note.
In
connection with the purchase of such Securities, and to induce the Purchaser
to
consummate the purchase of such securities, the Company has agreed to enter
into
this Agreement and to grant to the Purchaser the rights set forth in this
Agreement.
Agreement
NOW,
THEREFORE, in consideration of the foregoing and of the mutual promises and
covenants contained in this Agreement, the Purchaser and the Company agree
as
follows:
1. Definitions.
For
purposes of this Agreement:
“Eligible
Market”
means
(i) The Nasdaq Global Market Select, (ii) The Nasdaq Global Market. (iii) The
Nasdaq Capital Market, (iv) The New York Stock Exchange, Inc., (v) the American
Stock Exchange or (vi) the OTC Bulletin Board.
“Holder”
means
(i) the Purchaser, and (ii) any person to whom the rights or obligations
under this Agreement with respect to all or a portion of the Registrable
Securities have been transferred or assigned in accordance with Section
10(b).
“prospectus”
means
any preliminary prospectus, final prospectus or summary prospectus prepared
in
connection with an offering of any Registrable Securities.
“register,”
“registered,”
and
“registration”
refer
to a registration effected by preparing and filing with the SEC a registration
statement or similar document in compliance with the Securities Act, and the
declaration or ordering by the Commission of effectiveness of such registration
statement or document.
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“Registration
Expenses”
means
all expenses in connection with the Company’s performance of or compliance with
its obligations under this Agreement, including, without limitation, all
(i) registration, qualification and filing fees; (ii) fees, costs and
expenses of compliance with securities or blue sky laws (including reasonable
fees, expenses and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities under the laws of such
jurisdictions as the managing underwriter or underwriters in a registration
may
designate); (iii) printing expenses; (iv) messenger, telephone and
delivery (including delivery by mail or courier services) expenses;
(v) fees, expenses and disbursements of counsel for the Company and of all
independent certified public accountants retained by the Company (including
the
expenses of any special audit and “cold comfort” letters required by or incident
to such performance); (vi) Securities Act liability insurance if the
Company so desires; (vii) fees, expenses and disbursements of any other
individuals or entities retained by the Company in connection with the
registration of the Registrable Securities; (viii) fees, costs and expenses
incurred in connection with the listing of the Registrable Securities on each
national securities exchange on which the Company has made application for
the
listing of its Common Stock; (ix) internal expenses of the Company
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties and expenses of any annual
audit) and (x) fees and expenses of one counsel selected by Holders of a
majority of the Registrable Securities. Registration Expenses shall not include
selling commissions, discounts or other compensation paid to underwriters or
other agents or brokers to effect the sale of Registrable Securities, or counsel
fees in addition to those provided for in clause (x) above and any other
expenses incurred by Holders in connection with any registration that are not
specified in the immediately preceding sentence.
“Registrable
Securities”
means
any shares of Common Stock of the Company owned by any Holder or that may be
acquired by any Holder upon the conversion of any convertible security or the
exercise of any warrant or option owned by any Holder, but only to the extent
such shares constitute “restricted securities” under Rule 144 under the
Securities Act or the Holder thereof is deemed to be an “affiliate” of the
Company under Rule 144.
“Requestor”
means
Perseus, until such time as neither Perseus nor any partner of, or direct or
indirect investor in, Perseus to which Perseus directly or indirectly
distributes Registrable Securities in accordance with the terms of its governing
documents and the governing documents of its direct or indirect investors,
holds
any Registrable Securities, and thereafter any Holder or Holders who, in the
aggregate, beneficially own at least 50% of the Securities that constitute
Registrable Securities.
2. Demand
Registrations.
(a) Request
for Registration.
At any
time and from time to time after the first anniversary of the date of this
Agreement, a Requestor may submit a written request (a “Demand
Notice”)
to the
Company that the Company register Registrable Securities under and in accordance
with the Securities Act (a “Demand
Registration”).
Such
Demand Notice shall specify the number and description of Registrable Securities
to be sold. Upon receipt of the Demand Notice, the Company shall:
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(i) within
five Business Days after receipt of such Demand Notice, give written notice
of
the proposed registration to all other Holders; and
(ii) as
soon
as practicable, use all commercially reasonable efforts to effect such
registration as may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holders joining in such request as are specified in written
requests received by the Company within 20 Business Days after the date the
Company mails the written notice referred to in clause (i) above.
Notwithstanding
the foregoing, if the Company shall furnish to the Holders a certificate signed
by the chief executive officer of the Company stating that in the good faith
judgment of the board of directors of the Company, it would be materially and
adversely detrimental to the Company and its stockholders for a registration
statement to be filed on or before the date filing would be required in
connection with any Demand Registration, the Company shall have the right to
defer such filing or delay its effectiveness for a reasonable period not to
exceed 45 calendar days; provided,
that
such right shall not be exercised more than twice with respect to a request
for
registration hereunder during any period of twelve consecutive months. The
Company will pay all Registration Expenses in connection with such withdrawn
request for registration.
(b) Shelf
Registration.
If at
the time the Company registers Registrable Securities under the Securities
Act
pursuant to this Section 2, the sale or other disposition of such
Registrable Securities by the Holders may be made on a delayed or continuous
basis pursuant to a registration statement on Form S-3 (or any successor
form that permits the incorporation by reference of future filings by the
Company under the Exchange Act), or if Form S-3 is not available for use by
the
Company, Form S-1 (or any successor form that permits the incorporation by
reference of future filings by the Company under the Exchange Act), then such
registration statement, unless otherwise directed by the Requestor, shall be
filed as a “shelf” registration statement pursuant to Rule 415 under the
Securities Act (or any successor rule). Any such shelf registration shall cover
the disposition of all Registrable Securities in one or more underwritten
offerings, block transactions, broker transactions, at-market transactions
and
in such other manner or manners as may be specified by the Requestor. Except
as
provided in Section 5(b) hereof, the Company shall use all commercially
reasonable efforts to keep such “shelf” registration continuously effective as
long as the delivery of a prospectus is required under the Securities Act in
connection with the disposition of the Registrable Securities registered thereby
and in furtherance of such obligation, shall supplement or amend such
registration statement if, as and when required by the rules, regulations and
instructions applicable to the form used by the Company for such registration
or
by the Securities Act or by any other rules and regulations thereunder
applicable to shelf registrations. Upon their receipt of a certificate signed
by
the chief executive officer of the Company stating that, in the judgment of
the
Company, it is advisable to suspend use of a prospectus included in a
registration statement due to pending material developments or other events
that
have not yet been publicly disclosed and as to which the Company believes public
disclosure would be detrimental to the Company, in accordance with the procedure
set forth in the last paragraph of Section 2(a) hereof, the Holders will
refrain from making any sales of Registrable Securities under the shelf
registration
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statement
for a period of up to 45 calendar days; provided,
that
this right to cause the Holders to refrain from making sales shall not be
exercised by the Company more than twice in any twelve-month period (counting
as
a permitted exercise any exercise by the Company of its right to defer the
filing or delay its effectiveness of a registration statement under the last
paragraph of Section 2(a)).
(c) Underwriting.
In
connection with any registration under this Section 2, if the Requestor
intends to distribute the Registrable Securities covered by any registration
under this Section 2 by means of an underwriting, they shall so advise the
Company in writing. In such event, the right of any Holder to include its
Registrable Securities in such distribution shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion of such Holder’s
Registrable Securities in the underwriting to the extent provided in this
Agreement. The Holders proposing to distribute their securities through such
underwriting shall (together with the Company) enter into an underwriting
agreement with one or more underwriters selected by the Requestor having terms
and conditions customary for such agreements (which underwriter or underwriters
shall be reasonably acceptable to the Company). Notwithstanding any other
provision of this Section 2, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the number of Registrable
Securities to be included in such distribution. The Company shall so advise
all
Holders distributing Registrable Securities through such underwriting, and
the
number of Registrable Securities that may be included in such underwriting
shall
be allocated among the Holders in such manner as may be determined by the
Requestor.
(d) Limitations.
(i) The
Company shall not be obligated to (A) effect more than two registrations
under Section 2 in any twelve month period or (B) effect any
registration where the aggregate estimated sales price for the Registrable
Securities to be included therein is less than $2,000,000; provided,
that a
registration pursuant to this Section 2 shall not be counted (X) unless the
registration statement pursuant to which such Registrable Securities are being
registered is declared effective by the SEC, and (Y) if following such
effectiveness, the Company delivers a certificate pursuant to the last sentence
of Section 2(b) suspending the use of the related prospectus prior to the sale
of at least a majority of the Registrable Securities by the Holders covered
by
such registration statement.
(ii) The
Company shall be permitted to exclude such Holder’s Registrable Securities from
a registration statement if such Holder fails to timely comply with the
Company’s request for information pursuant to Section 9; provided,
if such
Holder provides such information prior to the filing of such registration
statement (or prior to the final amendment thereto prior to such registration
statement being declared effective) the Company shall use all commercially
reasonable efforts to include such Registrable Securities on such registration
statement.
3. Piggy-back
Registration.
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(a) Notice
of Registration.
If at
any time or from time to time, the Company shall determine to register any
of
its capital stock, whether or not for its own account, other than any
registration relating to employee benefit plans or a registration effected
on
Form S-4 with respect to the issuance of shares of Common Stock to the
holders of capital stock of an acquisition target, the Company shall:
(i) provide
to each Holder written notice thereof at least 15 Business Days prior to the
filing of the registration statement by the Company in connection with such
registration; and
(ii) include
in such registration, and in any underwriting involved therein, all those
Registrable Securities specified in a written request by each Holder received
by
the Company within ten Business Days after the Company mails the written notice
referred to above, subject to the provisions of Section 3(b) below.
(b) Underwriting.
The
right of any Holder to registration pursuant to this Section 3 shall be
conditioned upon the participation by such Holder in the underwriting
arrangements specified by the Company in connection with such registration
and
the inclusion of the Registrable Securities of such Holder in such underwriting
to the extent provided in this Agreement. All Holders proposing to distribute
their Registrable Securities through such underwriting shall (together with
the
Company) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Company and take
all
other actions, and deliver such opinions and certifications, as may be
reasonably requested by such managing underwriter. Notwithstanding any other
provision of this Section 3, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the number of Registrable
Securities to be included in such registration. The Company shall so advise
all
Holders distributing Registrable Securities through such underwriting, and
in
the event that Registrable Securities in a registration would exceed 20% of
all
shares included in such registration, the Company may limit the number of
Registrable Securities included in such registration to not less than 20% of
the
number of shares included in such registration.
(c) Right
to Terminate Registration.
The
Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 3 whether or not any Holder has elected to include
Registrable Securities in such registration.
(d) Limitations.
(i) Notwithstanding
anything to the contrary set forth in this Agreement, in the event that
following the exercise of the piggyback right pursuant to this Section 3 and
the
inclusion in such registration statement of all or part of the Registrable
Securities then held by such Holder, the Commission informs the Company that
such registration statement cannot be filed as a secondary offering on Form
S-3
due to the aggregate number of securities to be registered thereunder, the
Company, in its sole discretion, shall be permitted to exclude such portion
of
such Holder’s Registrable Securities from such registration statement to the
extent necessary to permit the filing of such registration statement on Form
S-3.
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(ii) The
Company shall be permitted to exclude such Holder’s Registrable Securities from
a registration statement if such Holder fails to timely comply with the
Company’s request for information pursuant to Section 9; provided,
if such
Holder provides such information prior to the filing of such registration
statement (or prior to the final amendment thereto prior to such registration
statement being declared effective) the Company shall use commercially
reasonable efforts to include such Registrable Securities on such registration
statement.
4. Expense
of Registration.
All
Registration Expenses incurred in connection with the registration and other
obligations of the Company pursuant to Sections 2, 3 and 5 shall be borne by
the
Company, and all underwriting discounts and selling commissions incurred in
connection with any such registrations shall be borne by the Holders of the
securities so registered pro rata on the basis of the number of shares so
registered. The Company shall not, however, be required to pay for expenses
of
any registration proceeding begun pursuant to Sections 2, 3 or 5, the
request of which has been subsequently withdrawn by the Holders unless
(i) the withdrawal is based upon material adverse information concerning
the Company of which the Holders were not aware at the time of such request
or
(ii) the Holders of a majority of the Registrable Securities agree to
forfeit their right to one registration pursuant to Section 2(a) or
Section 2(b), as the case may be.
5. Registration
Procedures.
If and
whenever the Company is required by the provisions of this Agreement to effect
the registration of Registrable Securities, the Company shall:
(a) promptly
prepare and file with the Commission a registration statement with respect
to
such Registrable Securities on any form that may be utilized by the Company
and
that shall permit the disposition of the Registrable Securities in accordance
with the intended method or methods of disposition thereof, and use all
commercially reasonable efforts to cause such registration statement to become
effective as promptly as practicable and remain effective thereafter as provided
in this Agreement, provided,
that if
the Holder’s Registrable Securities are covered by such registration statement,
then prior to filing a registration statement or prospectus or any amendments
or
supplements thereto, including documents incorporated by reference after the
initial filing of any registration statement, the Company will furnish to the
Holder, its counsel and the underwriters copies of all such documents proposed
to be filed sufficiently in advance of filing to provide them with a reasonable
opportunity to review such documents and comment thereon;
(b) prepare
and file with the Commission such amendments (including post-effective
amendments) and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
keep
such registration statement effective and current and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of all Registrable Securities covered by such registration statement, including
such amendments (including post-effective amendments) and supplements as may
be
necessary to reflect the intended method of disposition by the prospective
seller or sellers of such Registrable Securities, provided,
that,
except in the case of a shelf registration
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under
Section 2(b), such registration statement need not be kept effective and
current for longer than 120 days subsequent to the effective date of such
registration statement;
(c) subject
to receiving reasonable assurances of confidentiality and subject to limitations
reasonably imposed by the Company to preserve attorney client privilege, for
a
reasonable period after the filing of such registration statement, and
throughout each period during which the Company is required to keep a
registration effective, make available for inspection by the Holders of
Registrable Securities being offered, and any underwriters, and their respective
counsel, such financial and other information and books and records of the
Company, and cause the officers, directors, employees, counsel and independent
certified public accountants (subject to such reasonable procedures and
limitations as such parties may require) of the Company to respond to such
inquiries as shall be reasonably necessary, in the judgment of such counsel,
to
conduct a reasonable investigation within the meaning of Section 11 of the
Securities Act;
(d) promptly
notify the Holders of Registrable Securities being offered and any underwriters
and confirm such advice in writing, (i) when such registration statement or
the prospectus included in such registration statement or any prospectus
amendment or supplement or post-effective amendment has been filed, and, with
respect to such registration statement or any post-effective amendment, when
the
same has become effective, (ii) of any comments by the Commission, by the
Financial Industry Regulatory Authority (“FINRA”),
and
by the blue sky or securities commissioner or regulator of any state with
respect thereto or any request by any such entity for amendments or supplements
to such registration statement or prospectus or for additional information,
(iii) of the issuance by the SEC of any stop order suspending the
effectiveness of such registration statement or the initiation or threatening
of
any proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, or (v) at any time when a
prospectus is required to be delivered under the Securities Act, that such
registration statement, prospectus, prospectus amendment or supplement or
post-effective amendment, or any document incorporated by reference in any
of
the foregoing, contains an untrue statement of a material fact or omits to
state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made,
not
misleading, and at the request of any Holder, the Company will prepare a
supplement or amendment to such prospectus, so that, as thereafter delivered
to
purchasers of such shares, such prospectus will not contain any untrue
statements of a material fact or omit to state any fact necessary to make the
statements therein not misleading;
(e) furnish
to each Holder of Registrable Securities being offered, a signed counterpart,
addressed to such Holder (and, if applicable, any of its Affiliates), of
(i) any opinion of counsel to the Company delivered to any underwriter and
(ii) any comfort letter from the Company’s independent public accountants
delivered to any underwriter;
(f) furnish
to each Holder of Registrable Securities being offered, and any underwriters,
prospectuses or amendments or supplements thereto, in such quantities as they
may
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reasonably
request and as soon as practicable, that update previous prospectuses or
amendments or supplements thereto;
(g) use
all
commercially reasonable efforts to (i) register or qualify the Registrable
Securities to be included in a registration statement under this Agreement
under
such other securities laws or blue sky laws of such jurisdictions within the
United States of America as any Holder of such Registrable Securities being
offered or any underwriter of the securities being sold shall reasonably
request, (ii) keep such registrations or qualifications in effect for so
long as the registration statement remains in effect and (iii) take any and
all such actions as may be reasonably necessary or advisable to enable such
Holder or underwriter to consummate the disposition in such jurisdictions of
such Registrable Securities owned by such Holder; provided,
however,
that
the Company shall not be required for any such purpose to (x) qualify
generally to do business as a foreign corporation in any jurisdiction wherein
it
would not otherwise be required to qualify but for the requirements of this
Section 5(g) or (y) consent to general service of process in any such
jurisdiction;
(h) cause
all
such Registrable Securities to be listed or accepted for quotation on an
Eligible Market (provided,
that
the Company shall use all commercially reasonable efforts to cause such Eligible
Market to be one of the stock exchanges identified in clauses (i) through (v)
of
the definition of “Eligible Market”);
(i) provide
a
transfer agent and registrar for all such Registrable Securities not later
than
the effective date of such registration statement;
(j) upon
the
sale of any Registrable Securities pursuant to such registration statement,
remove all restrictive legends from all certificates or other instruments
evidencing the Registrable Securities; and
(k) otherwise
use all commercially reasonable efforts to comply with all applicable provisions
of the Securities Act, and rules and regulations of the Commission, and make
available to the Holders, as soon as reasonably practicable, an earnings
statement covering a period of at least twelve months beginning not later than
the first day of the Company’s fiscal quarter next following the effective date
of the related registration statement, which shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder.
6. Indemnification.
In the
event any of the Registrable Securities are included in a registration statement
under this Agreement:
(a) To
the
extent permitted by law, the Company agrees to indemnify and hold harmless
each
Holder, and each of its respective officers, employees, affiliates, directors,
partners, members, attorneys and agents, and each person, if any, who controls
the Holder within the meaning of the Securities Act (each, a “Holder
Indemnified Party”),from
and against any expenses, losses, judgments, claims, damages, liabilities,
charges, actions, proceedings, demands, settlement costs and expenses of any
nature whatsoever (including, without limitation, attorneys’ fees and expenses)
(collectively, “Losses”),
whether joint or several, arising out of or based upon (i) any untrue
statement (or allegedly untrue statement) of a material fact
contained
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in
any
registration statement under which the sale of such Registrable Securities
was
registered under the Securities Act, any prospectus contained in the
registration statement, or any amendment or supplement to such registration
statement, offering circular or other document incident to any such registration
or compliance, (ii) any omission (or alleged omission) to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, or
(iii) any violation by the Company of the Securities Act or any rule or
regulation promulgated thereunder applicable to the Company, or of any blue
sky
or other state securities law or any rule or regulation promulgated thereunder
applicable to the Company, in each case, relating to action or inaction required
of the Company in connection with any such registration; and the Company shall
promptly reimburse any Holder Indemnified Party for any legal and any other
expenses reasonably incurred by such Holder Indemnified Party in connection
with
investigating and defending any such Losses; provided,
however,
that
the Company will not be liable in any such case to the extent that any such
Losses arises out of or are based upon any untrue statement or allegedly untrue
statement or omission or alleged omission made in such registration statement,
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing, by such Holder
expressly for use therein. If requested by any underwriter (as defined in the
Securities Act) of the Registrable Securities, the Company also shall indemnify
such underwriter and any of its officers, affiliates, directors, partners,
members and agents and each person who controls such underwriter on
substantially the same basis as that of the indemnification provided above
in
this Section 6(a).
(b) Each
Holder of Registrable Securities being offered will, in the event that any
registration is being effected under the Securities Act pursuant to this
Agreement of any Registrable Securities held by such Holder, indemnify and
hold
harmless the Company, each of its directors and officers and each underwriter
(if any), and each other selling Holder and each other person, if any, who
controls the Company, another selling Holder or such underwriter within the
meaning of the Securities Act, against any Losses, whether joint or several,
insofar as such Losses (or actions in respect thereof) arise out of or are
based
upon (i) any untrue statement or allegedly untrue statement of a material
fact contained in any registration statement under which the sale of such
Registrable Securities was registered under the Securities Act, any prospectus
contained in the registration statement, or any amendment or supplement to
the
registration statement, offering circular or other document incident to any
such
registration or compliance or (ii) any omission or the alleged omission to
state a material fact required to be stated therein or necessary to make the
statement therein, in light of the circumstances under which they were made,
not
misleading, if the statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company by such selling
Holder expressly for use therein, and shall reimburse the Company, its directors
and officers, and each other selling Holder or controlling person for any legal
or other expenses reasonably incurred by any of them in connection with
investigation or defending any such Losses. The indemnification obligations
hereunder of each Holder of Registrable Securities being offered shall be
several and not joint and shall be limited to the amount of any net proceeds
actually received by such Holder from the sale of Registrable Securities giving
rise to the applicable claim, less all other amounts paid as damages in respect
thereof.
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(c) In
order
for a person (the “Indemnified
Party”)
to be
entitled to any indemnification provided for under Section 6(a) or (b) in
respect of, arising out of or involving a claim made by any person against
the
Indemnified Party (a “Third
Party Claim”),
such
Indemnified Party must notify the party required to provide the indemnification
(the “Indemnifying
Party”)
in
writing of the Third Party Claim promptly following receipt by such Indemnified
Party of written notice of the Third Party Claim; provided,
however,
that
failure to give such notification shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure. Thereafter, the Indemnified Party shall
deliver to the Indemnifying Party, promptly following the Indemnified Party’s
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnified Party relating to the Third Party Claim.
(d) If
a
Third Party Claim is made against an Indemnified Party, the Indemnifying Party
shall be entitled to participate in the defense thereof and, if it so chooses,
to assume the defense thereof by notifying the Indemnified Party in writing
to
such effect within 30 days of receipt of the Indemnified Party’s notice of such
Third Party Claim; provided,
however,
such
Indemnified Party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses
of
such counsel shall be that of such Indemnified Party unless (i) the Indemnifying
Party has agreed to pay such fees and expenses, (ii) the Indemnifying Party
shall have failed to assume the defense of such action or proceeding and employ
counsel reasonably satisfactory to such Indemnified Party in any such action
or
proceeding or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party and such Indemnified Party shall have been advised by counsel
that there may be one or more legal defenses available to such Indemnified
Party
which are different from or additional to those available to the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing of an election 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 action or proceeding on behalf of such Indemnified Party,
it
being understood, however, that the Indemnifying Party then shall have the
right
to employ separate counsel at its own expense and to participate in the defense
thereof, and shall not, in connection with any one such action or proceeding
or
separate but substantially similar or related actions or proceedings in the
same
jurisdiction arising out of the same general allegations or circumstances,
be
liable for the reasonable fees and expenses of more than one separate firm
of
attorneys at any time for all Indemnified Parties, which firm shall be
designated in writing by a majority of the Indemnified Parties who are eligible
to select such counsel); provided,
further,
that
the Indemnifying Party shall not have the right to assume the defense of such
Third Party Claim unless (i) the Indemnifying Party acknowledges fully the
rights of the Indemnified Party (and does not contest, as a whole or in part)
the Indemnified Party’s indemnification rights for the Third Party Claim, (ii)
the counsel selected by the Indemnifying Party is reasonably satisfactory to
the
Indemnified Party, (iii) the Indemnified Party is kept informed of all material
developments and is furnished copies of all material papers filed or sent to
or
from the opposing party or parties and (iv) the Indemnifying Party prosecutes
the defense of such Third Party Claim with commercially reasonable diligence
in
a manner which does not materially prejudice the defense of such Third Party
Claim. If the Indemnifying Party does not give timely notice in accordance
with
the preceding sentence, the Indemnifying Party shall be deemed to have given
notice that it does not wish to control the handling of such
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Third
Party Claim. In the event the Indemnifying Party elects (by notice in writing
within such 30 day period) to assume the defense of or otherwise control the
handling of any such Third Party Claim for which indemnity is sought, the
Indemnifying Party shall indemnify and hold harmless the Indemnified Party
from
and against any and all reasonable professional fees (including attorneys’ fees,
accountants, consultants and engineering fees) and investigation expenses
incurred by the Indemnified Party prior to such election, notwithstanding the
fact that the Indemnifying Party may not have been so liable to the Indemnified
Party had the Indemnifying Party not elected to assume the defense of or to
otherwise control the handling of such Third Party Claim. If the Indemnifying
Party assumes such defense in accordance with this Section 6(d), the Indemnified
Party shall have the right to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by the
Indemnifying Party, it being understood that the Indemnifying Party shall
control such defense. Notwithstanding the foregoing, the Indemnifying Party
shall not be entitled to assume the defense of any Third Party Claim (and shall
be liable for the fees and expenses of counsel incurred by the Indemnified
Party
in defending such Third Party Claim) if the Third Party Claim seeks an order,
injunction or other equitable relief or relief for other than money damages
against the Indemnified Party that the Indemnified Party reasonably determines,
after conferring with its outside counsel, cannot be separated from any related
claim for money damages. If such equitable relief or other relief portion of
the
Third Party Claim can be so separated from that for money damages, the
Indemnifying Party shall be entitled to assume the defense of the portion
relating to money damages. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. No Indemnified Party may consent to entry of any judgment
or enter into any settlement without the prior written consent of the
Indemnifying Party.
(e) If
the
Indemnifying Party chooses to defend or prosecute a Third Party Claim, all
the
Indemnified Parties shall cooperate in the defense or prosecution thereof.
Such
cooperation shall include the retention and (upon the Indemnifying Party’s
request) the provision to the indemnifying party of records and information
that
are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information
and
explanation of any material provided hereunder.
(f) If
the
indemnification provided for in this Section 6 is held by a court of
competent jurisdiction to be unavailable to an Indemnified Party with respect
to
any loss, liability, claim, damage or expense referred to in this Agreement,
then the Indemnifying Party, in lieu of indemnifying the Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party with
respect to such loss, liability, claim, damage or expenses in the proportion
that is appropriate to reflect the relative fault of the Indemnifying Party
and
the Indemnified Party in connection with the statements or omissions that
resulted in such loss, liability, claim, damage, or expense, as well as any
other relevant equitable considerations. The relative fault of the Indemnifying
Party and the Indemnified Party shall be determined by reference to, among
other
things, whether the untrue or alleged untrue statement of material fact or
the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party, and the parties’ relative
intent, knowledge, access to information
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and
opportunity to correct or prevent such statement or omission. The contribution
obligation of a Holder hereunder, if any, shall be limited to the amount of
any
net proceeds actually received by such Holder from the sale of Registrable
Securities giving rise to the applicable claim, less all other amounts paid
as
damages in respect thereof
7. Rule 144
Reporting.
With a
view to making available the benefits of certain rules and regulations of the
Commission which may at any time permit the sale of the Registrable Securities
to the public without registration, after such time as a public market exists
for the Common Stock, the Company shall use all commercially reasonable efforts
to:
(a) make
and
keep public information available, as those terms are understood and defined
in
Rule 144 under the Securities Act;
(b) file
with
the Commission in a timely manner all reports and other documents required
of
the Company under the Securities Act and the Exchange Act (at any time after
it
has become subject to such reporting requirements); and
(c) furnish
to any Holder promptly upon request a written statement as to its compliance
with the reporting requirements of Rule 144, and of the Securities Act and
the Exchange Act, and a copy of the most recent annual or quarterly report
of
the Company.
The
provisions of this Section 7 shall terminate on the date on which there are
no Holders of Registrable Securities
8. Termination
of Registration Rights.
With
the exception of Section 7, no Holder shall be entitled to exercise any
right provided for in this Agreement after the earlier to occur of (a) the
date
on which all Registrable Securities held by such Holder may be sold in a single
three-month period under Rule 144 under the Securities Act and (b) the
tenth anniversary of the date of this Agreement.
9. Information
To Be Provided by the Holders.
Each
Holder whose Registrable Securities are included in any registration pursuant
to
this Agreement shall furnish the Company, upon at least three Business Days
request, such information regarding such Holder and the distribution proposed
by
such Holder as may be reasonably requested in writing by the Company and as
shall be required in connection with such registration or the registration
or
qualification of such securities under any applicable state securities law
(including, without limitation, a certification of the number of shares of
Common Stock beneficially owned by such Holder and the name of the natural
person(s) that have voting and dispositive control over such shares). The
Company may exclude from such registration the Registrable Securities of any
such Holder who unreasonably fails to furnish such information.
10. Miscellaneous.
(a) No
Inconsistent Agreements.
The
Company represents and warrants to the Holders that it has not entered into,
and
covenants with the Holder that it will not enter into, any
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agreement
with respect to its Common Stock which is inconsistent with or violates the
rights granted to the Holder under this Agreement.
(b) Transfer
of Rights.
Each
Holder shall be entitled to transfer or assign at any time any of its rights
or
obligations under this Agreement, in connection with the transfer of all or
a
portion of its Registrable Securities, to any of the following: (i) any
partner (including a general or limited partner) or retired partner of any
Holder that is a partnership, (ii) any stockholder of any Holder that is a
corporation, (iii) any member of any Holder that is a limited liability
company and (iv) any transferee that acquires at least 10% of the total
Registrable Securities (assuming full conversion and exercise of all Notes
and
Warrants); provided,
that in
each such case, the Company receives written notice of any transfer and the
transferee agrees to be bound by the terms of this Agreement.
(c) Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (a) the date of transmission, if such notice or communication
is delivered via facsimile or email at the facsimile number or email address
specified below prior to 6:30 p.m. (Eastern time) on a Business Day, (b) the
next Business Day after the date of transmission, if such notice or
communication is delivered via facsimile or email at the facsimile number or
email address specified below on a day that is not a Business Day or later
than
6:30 p.m. (Eastern time) on any Business Day, (c) the Business Day following
the
date of deposit with a nationally recognized overnight courier service, or
(d)
upon actual receipt by the party to whom such notice is required to be given.
(d) Severability.
If any
provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and
the
parties will attempt to agree upon a valid and enforceable provision that is
a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
(e) Amendments
and Waivers.
No
provision of this Agreement may be waived or amended except in a written
instrument signed by the Company and the Requestor. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof,
nor
shall any delay or omission of either party to exercise any right hereunder
in
any manner impair the exercise of any such right.
(f) Governing
Law; Jurisdiction; Waiver of Trial by Jury.
ALL
QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
OF THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF
THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF
SUCH
STATE. THE COMPANY AND THE PURCHASER HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK,
BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF
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ANY
DISPUTE BROUGHT BY THE COMPANY OR ANY PURCHASER HEREUNDER, IN CONNECTION
HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN, AND
HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR
PROCEEDING BROUGHT BY THE COMPANY OR THE
PURCHASER,
ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH
COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY
IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING
SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA
REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY)
TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT
AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF
PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT
IN
ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY
AND THE PURCHASER HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.
(g) Attorneys’
Fees.
In the
event of any dispute involving the terms hereof, the prevailing parties shall
be
entitled to collect legal fees and expenses from the other party to the dispute.
(h) Further
Assurances.
Each
party will do and perform, or cause to be done and performed, all such further
acts and things, and will execute and deliver all other agreements,
certificates, instruments and documents, as another party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement
and the consummation of the transactions contemplated hereby.
(i) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Holders of a majority of the Registrable Securities.
[signatures
appear on following pages]
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14 -
IN
WITNESS WHEREOF, the undersigned party has executed this Agreement as of the
day
and year first above written.
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PHOTOMEDEX,
INC.
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By:
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Name:
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Title:
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Address
for Notice:
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PhotoMedex,
Inc.
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▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇, ▇▇▇▇▇
Attention:
President and CEO
Facsimile:
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with
a copy to:
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▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
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▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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[Company
Signature Page to Registration Rights
Agreement]
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IN
WITNESS WHEREOF, the undersigned Purchaser has executed this Agreement as of
the
day and year first above written.
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PERSEUS
PARTNERS VII, L.P.
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By:
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Perseus
Partners VII GP, L.P.,
its
general partner
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By:
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Perseus
Partners VII GP, L.L.C.,
its
general partner
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By:
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ADDRESS
FOR NOTICE:
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c/o
Perseus, L.L.C.
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▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
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and
to:
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▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
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Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
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Email:
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
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with
a copy to:
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▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLP
The
New York Times Building
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▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇
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Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇@▇▇▇.▇▇▇
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