Common use of Make-Whole Shares Clause in Contracts

Make-Whole Shares. (a) Subject at all times to the provisions of Section 2.7(b) below, in the event that on the Anniversary Date, the product of multiplying (i) the total number of DSKX Reference Make-Whole Shares issued to PHMD under this Agreement, by (ii) the Anniversary Market Price, shall be less than $20,000,000, then and in such event, DSKX shall issue to PHMD or its PHMD Transferees, by a date which shall be not later than ten (10) Business Days following the Anniversary Date, that aggregate number of additional shares of DSKX Common Stock, based on the Anniversary Market Price, which, when added to the aggregate number of Reference Make-Whole Shares issued on the Closing Date to PHMD under this Agreement would equal $20,000,000 (such additional shares, the “Make-Whole Shares”). To the extent that PHMD has transferred any DSKX Closing Photo-Tech Merger Shares to one or more PHMD Transferee on or prior to the Anniversary Date, each such PHMD Transferee shall receive his or its pro-rata portion of the Make-Whole Shares determined by the amount by which the number of DSKX Closing Photo-Tech Merger Shares issued by PHMD to such PHMD Transferee bears to all DSKX Closing Photo-Tech Merger Shares issued under this Agreement. (b) Notwithstanding the provisions of Section 2.7(a) above, in the event that at any time on or before the Anniversary Date (i) PHMD and/or its PHMD Transferees shall have received, on any one or more occasions, aggregate cash net proceeds from the sale of any or all of the Merger Securities issued under this Agreement and the Radiancy Merger Agreement, including payments on the DSKX Note, aggregating $50,000,000, or (ii) PHMD or any PHMD Transferee shall have rejected a bona fide offer from DSKX or its designee to purchase from PHMD or such PHMD Transferee “Offered Shares” (as that term is defined in Section 4.5 of the Stockholders Agreement) at a cash price per share which, when coupled with all cash net proceeds actually received by such Persons from prior sales or collections of Merger Securities, would aggregate $50,000,000, then, and in either event, the “Make-Whole” provisions of Section 2.7(a) of this Agreement would not be applicable and DSKX shall not be obligated to issue any Make-Whole Shares.

Make-Whole Shares. If on the one-year anniversary of the Closing Date, if such day is a Trading Day, if not then the next Trading Day, the closing price of the Common Stock is less than $14.06 (a) Subject at all times subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and the like after the Closing Date), then the Company shall issue to each Purchaser, without any further consideration, a number of shares of Common Stock equal to the provisions of Section 2.7(bquotient obtained by dividing (I) below, in the event that on the Anniversary Date, (A) the product of multiplying (i1) the total number of DSKX Reference Make-Whole Shares issued to PHMD under this Agreement, owned by (ii) the Anniversary Market Price, shall be less than $20,000,000, then and in such event, DSKX shall issue to PHMD or its PHMD Transferees, by a date which shall be not later than ten (10) Business Days following the Anniversary Date, that aggregate number of additional shares of DSKX Common Stock, based Purchaser on the Anniversary Market Price, which, when added to the aggregate number one-year anniversary of Reference Make-Whole Shares issued on the Closing Date multiplied by (2) $14.06 (subject to PHMD under this Agreement would equal $20,000,000 adjustment for forward and reverse stock splits, recapitalizations, stock dividends and the like after the Closing Date) minus (B) the product of (1) the number of Shares owned by such additional shares, Purchaser on the one-year anniversary of the Closing Date multiplied by (2) the average VWAP of the Common Stock for the five Trading Days immediately following the one-year anniversary of the Closing Date by (II) the average VWAP of the Common Stock for the five Trading Days immediately following the one-year anniversary of the Closing Date (the “Make-Whole Shares”); provided, however, that the aggregate number of Make-Whole Shares shall in no event exceed 193,865 shares of Common Stock (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and the like after the Closing Date). To the extent Such Purchaser shall only receive that PHMD has transferred any DSKX Closing Photo-Tech Merger Shares to one or more PHMD Transferee on or prior to the Anniversary Date, each such PHMD Transferee shall receive his or its pro-rata portion of Make-Whole Shares as corresponds to the number of Shares such Purchaser continues to hold on the one-year anniversary of the Closing Date, relative to the number of Shares issued to such Purchaser at Closing. In the event a Purchaser does not receive their full allotment of Make-Whole Shares on account of having sold or transferred Shares prior to the one-year anniversary of the Closing Date, then the Make-Whole Shares which such Purchaser is thereby ineligible to receive shall be allocated amongst the remaining Purchasers on a pro-rata basis based upon such Purchasers’ Subscription Amounts at Closing, until the full amount of Make-Whole Shares due to Purchasers has been allocated. On the one-year anniversary of the Closing Date, each Purchaser shall certify to the Company the number of Shares such Purchaser continues to beneficially own as of such date. The Company shall cause the Make-Whole Shares to be transmitted by the Transfer Agent to the Purchasers no later than the third (3rd) Trading Day following the sixth day subsequent to the one-year anniversary of the Closing Date (the “Make-Whole Shares Delivery Date”) by crediting the account of the Purchaser’s prime broker with The Depository Trust Company through its Deposit or Withdrawal at Custodian system if the Company is then a participant in such system permitting the issuance of the Make-Whole Shares determined to the Purchasers. The Make-Whole Shares shall be deemed to have been issued, and the Purchasers or any other person so designated shall be deemed to have become a holder of record of such shares for all purposes, on the Make-Whole Shares Delivery Date. If the Company fails for any reason to deliver to any Purchaser the Make-Whole Shares by the amount by which Make-Whole Shares Delivery Date, the number of DSKX Closing Photo-Tech Merger Shares issued by PHMD Company shall pay to such PHMD Transferee bears Purchaser, in cash, as liquidated damages and not as a penalty, for each $1,000 of Make-Whole Shares due to all DSKX Closing Photosuch Purchaser, $10 per Trading Day for each Trading Day after the Make-Tech Merger Whole Shares Delivery Date until such Make-Whole Shares are delivered. Notwithstanding anything to the contrary contained herein, in no event will any Make-Whole Shares be issued under this Agreement. (b) Notwithstanding with any restrictive legends or any restrictions or limitations on resale by the provisions Purchasers. If the Company and/or its transfer agent requires any legal opinions with respect to the issuance of Section 2.7(a) aboveany Make-Whole Shares without restrictive legends, the Company agrees to cause its legal counsel to issue any such legal opinions provided that, in the event that at any time on or before a registration statement covering the Anniversary Date (i) PHMD and/or its PHMD Transferees shall have received, on any one or more occasions, aggregate cash net proceeds from the sale of any or all of the Merger Securities issued under this Agreement and the Radiancy Merger Agreement, including payments on the DSKX Note, aggregating $50,000,000, or (ii) PHMD or any PHMD Transferee shall have rejected a bona fide offer from DSKX or its designee to purchase from PHMD or such PHMD Transferee “Offered Shares” (as that term is defined in Section 4.5 of the Stockholders Agreement) at a cash price per share which, when coupled with all cash net proceeds actually received by such Persons from prior sales or collections of Merger Securities, would aggregate $50,000,000, then, and in either event, the “Make-Whole” provisions Whole Shares is not effective at the date of Section 2.7(a) issuance, Purchaser shall provide a customary representation letter with respect to the Make-Whole Shares to the Company and its legal counsel. The Company hereby acknowledges and agrees that the holding period of this Agreement would not be applicable and DSKX shall not be obligated to issue any Make-Whole SharesShares issued hereunder for purposes of Rule 144 shall be deemed to have commenced on the Closing Date.

Make-Whole Shares. (a) Subject at all times to the provisions of Section 2.7(b) below7.3(b), in the event that the average closing price of the Buyer Common Stock on the NASD OTC Bulletin Board, or other public securities market (the “Measurement Price”) for the Trading Days during the two (2) month period immediately preceding the two (2) year anniversary of the Closing Date (the “Second Anniversary Date, the product of multiplying (i”) the total number of DSKX Reference Make-Whole Shares issued to PHMD under this Agreement, by (ii) the Anniversary Market Price, shall be is less than $20,000,0003.25 per share, then Buyer shall, immediately and in such event, DSKX shall issue to PHMD or its PHMD Transferees, by a date which shall be not no case later than ten (10) Business Days following days after the Second Anniversary Date, that issue to the Shareholders (on a pro-rata basis, based on the number of shares of Buyer Common Stock issued to such Shareholder pursuant to Section 1.8(b) and the aggregate number of shares of Buyer Common Stock issued to the Shareholders pursuant to Section 1.8(b)) a number of additional shares of DSKX unregistered Buyer Common StockStock (the “Make Whole Shares”) such that the sum of (i) the value of the Buyer Common Stock issued pursuant to Section 1.8(b) and (ii) the value of the Make Whole Shares, which value shall be calculated in each case based on the Anniversary Market Measurement Price, which, when added to the aggregate number of Reference Make-shall equal $19,500,000. The Make Whole Shares issued on shall be considered and reported by the Closing Date to PHMD under this Agreement would equal $20,000,000 (such additional shares, the “Make-Whole Shares”). To the extent that PHMD has transferred any DSKX Closing Photo-Tech Merger Shares to one or more PHMD Transferee on or prior to the Anniversary Date, each such PHMD Transferee shall receive his or its pro-rata portion Parties as part of the Make-Whole Shares determined consideration paid by the amount by which the number of DSKX Closing Photo-Tech Merger Shares issued by PHMD Buyer pursuant to such PHMD Transferee bears to all DSKX Closing Photo-Tech Merger Shares issued under this AgreementSection 1.8 hereof. (b) Notwithstanding Section 7.3(a), the provisions of Shareholders shall have no right to receive from Buyer, and Buyer shall have no obligation to issue to the Shareholders, any Make Whole Shares pursuant to Section 2.7(a7.3(a) above, in the event that at any time on or before the Anniversary Date either: (i) PHMD and/or its PHMD Transferees shall have received, on any one or more occasions, aggregate cash net proceeds from the sale of any or all gross revenues of the Merger Securities issued under this Agreement and Surviving Entity for the Radiancy Merger Agreementfiscal year ending December 31, including payments 2005, together with the gross revenues of the Company for the fiscal year ending December 31, 2005 prior to the Effective Time, based on Buyer’s audited financial statements for the DSKX Note2005 ending December 31, aggregating 2005 fiscal year as filed in Buyer’s Annual Report on Form 10-K filed with the SEC for such fiscal year, is less than $50,000,000, or 75,000,000 (such amount being referred to herein as the “2005 Gross Revenues Threshold”); or (ii) PHMD or any PHMD Transferee shall have rejected a bona fide offer from DSKX or its designee to purchase from PHMD or such PHMD Transferee “Offered Shares” the EBITDA (as that term is defined in Section 4.5 below) of the Stockholders Surviving Entity for the fiscal year ending December 31, 2005, together with the EBITDA of the Company for the fiscal year ending December 31, 2005 prior to the Effective Time, based on Buyer’s audited financial statements for the fiscal year ending December 31, 2005 as filed in Buyer’s Annual Report on Form 10-K filed with the SEC for such fiscal year, is less than $3,250,000 (such amount being referred to herein as the “2005 EBITDA Threshold”); or (iii) the EBITDA of the Surviving Entity for the fiscal year ending December 31, 2006, based on Buyer’s audited financial statements for the fiscal year ending December 31, 2006 as filed in Buyer’s Annual Report on Form 10-K filed with the SEC for such fiscal year, is less than $3,250,000. (c) For purposes of this Agreement) at a cash price per share which, when coupled “EBITDA” shall mean, for any period of determination, for the Surviving Entity and/or the Company, determined in accordance with all cash net proceeds actually received by such Persons from prior sales or collections of Merger Securities, would aggregate $50,000,000, then, and in either eventGAAP consistently applied, the “Make-Whole” provisions net income (or loss) for such period, plus, to the extent reflected in the statement of Section 2.7(anet income for such period, the sum of: (a) of this Agreement would not be applicable income tax; (b) interest expense; (c) depreciation expense; and DSKX shall not be obligated to issue any Make-Whole Shares(d) amortization.

Make-Whole Shares. If the Issuer makes the election set forth in Section 8(b)(i)(B), then the Dealer or its affiliate may sell (awhich sale shall be made in a commercially reasonable manner) Subject at such Shares or Share Termination Delivery Units, as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Shares or Share Termination Delivery Units, as the case may be, and ending on the Exchange Business Day on which the Dealer completes the sale of all times such Shares or Share Termination Delivery Units, as the case may be, or a sufficient number of Shares or Share Termination Delivery Units, as the case may be, so that the realized net proceeds of such sales exceed the amount of the Payment Obligation or the Freely Tradeable Value (such amount of the Payment Obligation or Freely Tradeable Value, as the case may be, the “Required Proceeds”). If any of such delivered Shares or Share Termination Delivery Units remain unsold after such realized net proceeds exceed the Required Proceeds, then the Dealer shall return such remaining Shares or Share Termination Delivery Units to the provisions of Section 2.7(b) belowIssuer. If the Required Proceeds exceed the realized net proceeds from such resale, in the event that on the Anniversary Date, the product of multiplying then (i) the total Issuer shall transfer to the Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the last day of the Resale Period the amount of such excess (such excess, the “Additional Amount”) in cash or in a number of DSKX Reference additional Shares (the “Make-Whole Shares issued whole Shares”) in an amount that, based on the Relevant Price on the last day of the Resale Period (as if such day were the “Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to PHMD under this Agreement, by the Additional Amount; (ii) the Anniversary Market Price, Resale Period shall be less than $20,000,000, then and in such event, DSKX shall issue continue to PHMD or its PHMD Transferees, by a date which shall be not later than ten (10) Business Days following enable the Anniversary Date, that aggregate number of additional shares of DSKX Common Stock, based on the Anniversary Market Price, which, when added to the aggregate number of Reference Make-Whole Shares issued on the Closing Date to PHMD under this Agreement would equal $20,000,000 (such additional shares, the “Make-Whole Shares”). To the extent that PHMD has transferred any DSKX Closing Photo-Tech Merger Shares to one or more PHMD Transferee on or prior to the Anniversary Date, each such PHMD Transferee shall receive his or its pro-rata portion resale of the Make-Whole whole Shares determined in the manner contemplated by this Section 8(c); and (iii) this provision shall be applied successively until the amount by which Additional Amount is equal to zero, subject to Section 8(e). Without limiting any of the number obligations of DSKX Closing Photo-Tech Merger Shares issued by PHMD to such PHMD Transferee bears to all DSKX Closing Photo-Tech Merger Shares issued the Issuer under this Agreement. (b) Notwithstanding the provisions of Section 2.7(a) above, in the event that at any time on or before the Anniversary Date (i) PHMD and/or its PHMD Transferees shall have received, on any one or more occasions, aggregate cash net proceeds from the sale of any or all of the Merger Securities issued under this Agreement and the Radiancy Merger Agreement, including payments on the DSKX Note, aggregating $50,000,000, or (ii) PHMD or any PHMD Transferee shall have rejected a bona fide offer from DSKX or its designee to purchase from PHMD or such PHMD Transferee “Offered Shares” (as that term is defined in Section 4.5 of the Stockholders Agreement) at a cash price per share which, when coupled with all cash net proceeds actually received by such Persons from prior sales or collections of Merger Securities, would aggregate $50,000,000, then, and in either event8(c), the “Make-Whole” provisions of Section 2.7(a) of this Agreement would not Buyer may from time to time demand that the Issuer use its reasonable best efforts to cause a registration statement covering all Shares or Share Termination Delivery Units to have become effective, whether such Shares or Share Termination Delivery Units have been or are yet to be applicable and DSKX shall not be obligated delivered to issue any Make-Whole Sharesthe Buyer.