Contract
Exhibit
99.1
Amendment
No. 1,
dated as of February 27, 2009 (this "Amendment”) to the Securities
Purchase Agreement referred to below by and between 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 (as amended, modified and supplemented from time to time,
the "Securities Purchase
Agreement"). Capitalized terms used in this Amendment without
definition shall have the meanings assigned thereto in the Securities Purchase
Agreement.
The
Company and the Purchaser desire, on the terms and conditions set forth in this
Amendment, to amend and/or waive certain provisions of the Securities Purchase
Agreement.
In
consideration of the foregoing and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Purchaser hereby agree as
follows:
Section
1.1 Amendments to
Definitions. Section 1.1 of the Securities Purchase Agreement
is hereby amended as follows:
(a) The
definition of “Aggregate Perseus Ownership” is hereby amended and restated to
read in its entirety as follows:
“Aggregate Perseus Ownership” means, at
any time from and after the First Tranche Closing, the sum of (i) the aggregate
number of Conversion Shares that are issuable (as of the date of issuance of the
relevant Notes) upon conversion in full of all Notes that have been or should
have been issued to the Purchaser at or prior to such time, and (ii) the
aggregate number of Warrant Shares that are issuable (as of the date of issuance
of the relevant Warrants) upon exercise in full of all Warrants that have been
or should have been issued to the Purchaser at or prior to such time, in each
case as 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 First Tranche Closing Date, and, in
the case of the Notes and the Warrants and without duplication, any adjustments
to the conversion ratio of the Notes or exercise ratio of the Warrants provided
for by the terms thereof.
(b) The
definitions of “First Tranche Common Shares”, “Transfer Agent” and “Transfer
Agent Instructions” are hereby deleted in their entirety.
(c) The
following definition of “Pledge Agreement” is hereby inserted in appropriate
alphabetical order as follows:
“Pledge Agreement” means the
Pledge and Security Agreement to be entered into between the Company and the
Purchaser at the First Tranche Closing, substantially in the form attached
hereto as Exhibit
E.
(d) The
definition of “Securities” is hereby amended and restated to read in its
entirety as follows:
"Securities" means the Notes,
the Warrants, the Conversion Shares and the Warrant Shares.
(e) The
definition of “Transaction Documents” is hereby amended and restated to read in
its entirety as follows:
"Transaction Documents" means
collectively this Agreement, the Notes, the Warrants, the Registration Rights
Agreement, the Management Rights Letter, the Pledge Agreement and such other
documents, instruments and agreements executed in connection with the
consummation of the transactions contemplated hereby.
Section
1.2 Amendments to Article II of
Securities Purchase Agreement.
(a) Section
2.1(a) of the Securities Purchase Agreement is hereby amended and restated in
its entirety as follows:
(a) at
the First Tranche Closing, the Company shall issue and sell to the Purchaser,
and the Purchaser shall purchase from the Company, (i) the First Tranche Note
and (ii) the First Tranche Warrant, for an aggregate purchase price equal to the
First Tranche Note Amount (the transactions described in this Section 2.1(a),
the "First Tranche
Issuance"); and
(b) Section
2.3 of the Securities Purchase Agreement is hereby amended and restated in its
entirety as follows:
Section 2.3 Transactions to be Effected
at the First Tranche Closing. At the First Tranche
Closing:
(a) The
Purchaser shall pay to the Company cash in an amount equal to the First Tranche
Note Amount, by wire transfer of immediately available funds in accordance with
wire instructions provided by the Company not less than two Business Days prior
to the First Tranche Closing Date.
(b) The
Company shall pay to Perseus a transaction fee of $210,000.00 in cash by wire
transfer of immediately available funds in accordance with wire instructions
provided to the Company prior to the First Tranche Closing Date.
(c) The
Company shall deliver to the Purchaser: (i) the First Tranche Note; and (ii) the
First Tranche Warrant.
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(d) The
Company shall deliver to the Purchaser duly executed counterparts of the
Registration Rights Agreement, the Management Rights Letter and the Pledge
Agreement.
(e) The
Purchaser shall deliver to the Company duly executed counterparts of the
Registration Rights Agreement, the Management Rights Letter and the Pledge
Agreement.
(f) The
Company shall pay all Transaction Expenses then owed to the Purchaser pursuant
to Section 5.22, as directed by the Purchaser not less than one Business Day
prior to the First Tranche Closing Date.
(g) The
Company shall deliver to the Purchaser releases of the Purchaser and its
affiliates from any claims arising from the delay in the First Tranche Closing,
in form and substance satisfactory to the Purchaser and duly executed by each of
Photo Therapeutics and the Company.
(c) Section
2.6 of the Securities Purchase Agreement is hereby amended by deleting therefrom
each reference to “the First Tranche Common Shares”.
Section
1.3 Amendments to Article V of
Securities Purchase Agreement.
(a) Section
5.19 of the Securities Purchase Agreement is hereby amended by:
(i)
inserting therein a new clause (o) as set forth below and redesignating existing
clause (o) as clause (p):
(o) amend, modify, supplement or waive
any material provision of, or provide any consideration to obtain the waiver of
any provision of, the Master Term Loan and Security Agreement, dated as of
December 31, 2007 (the “CIT
Loan Agreement”), by and among the Company, CIT Healthcare LLC, as agent
and lender, and Life Sciences Capital LLC, as lender, as the CIT Loan Agreement
has been amended through the date hereof, or amend, modify, supplement or waive
any repayment schedule to or other material provision of, or provide any
consideration to obtain the waiver of any repayment schedule to or provision of,
any Term Note (as defined in the CIT Loan Agreement) issued pursuant to the CIT
Loan Agreement; or
(ii) changing
the reference to “clauses (a)-(c) or (e)-(n)” in redesignated clause (p) to
refer to “clauses (a)-(c) or (e)-(o)”.
(b) A
new Section 5.30 is added to the Securities Purchase Agreement as set forth
below:
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Section 5.30. Extended
Financing. The Company shall take, or cause to be taken, all
commercially reasonable actions and do, or cause to be done, all things
necessary, proper or advisable to arrange the Extended Financing. The Company
shall form a financing committee of the Board to monitor the progress of
arranging the Extended Financing, which committee shall include the director
designated by the Purchaser and one of the independent directors of the
Company. The Company shall cause its management to keep the financing
committee of the Board informed on the status of the Company’s efforts to
arrange the Extended Financing. For the purposes of clarity and
notwithstanding anything contained herein to the contrary, the decision to enter
into any Extended Financing, and the approval of the terms and conditions
thereof, shall be subject in all respects to the sole and absolute discretion of
the Board, and shall be subject to the consent rights of the Purchaser pursuant
to Section 5.19. For purposes of this Agreement, “Extended Financing” means a
new credit facility of the Company pursuant to which the Company shall have the
right, over a period of at least 18 months, to obtain additional financing in an
amount of not less than $10,000,000.00, on then-prevailing market terms and
conditions.
Section
1.4 Amendment to Article VI of
the Securities Purchase Agreement. Section 6.2(e) of the
Securities Purchase Agreement is hereby amended and restated in its entirety as
follows:
(e) Notes;
Warrants. The Company shall have delivered to the Purchaser
(i) the First Tranche Note and (ii) the First Tranche Warrant.
Section
1.5 Amendments to Exhibits to
Securities Purchase Agreement.
(a) Exhibit
A to the Securities Purchase Agreement is hereby amended and restated in its
entirety to be in the form of Exhibit 1 hereto.
(b) Exhibit
E to the Securities Purchase Agreement is hereby amended and restated in its
entirety to be in the form of Exhibit 2 hereto.
Section
1.6 Representations and
Warranties.
(a) The
Company hereby represents and warrants to the Purchaser as follows:
(i) The
Company has all requisite corporate power and authority to enter into and
consummate the transactions contemplated by this Amendment. The
execution, delivery and performance by the Company of this Amendment and the
consummation by the Company of the transactions contemplated hereby have been
duly authorized by the Board and no further consent or authorization of the
Company, its Board of Directors, or its stockholders is required.
(ii) This
Amendment has been duly executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforceability may be limited by
(x) applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors rights
generally, and (y) the effect of rules of Law governing the availability of
specific performance and other equitable remedies.
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(iii) The
execution, delivery and performance by the Company of this Amendment and the
consummation by the Company of the transactions expressly effected by the
provisions of this Amendment do not and will not: (x) conflict with or violate
any provision of the Company's or any Subsidiary's certificate or articles of
incorporation, bylaws or other organizational or charter documents; (y) conflict
with, violate or result in a breach of any provision of, or constitute a default
under (or an event that with notice or lapse of time or both would become a
default under), or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound, or affected; or (z) result in a violation of any Law or
Order of any Governmental Entity to which the Company or a Subsidiary is
subject, except in the case of clauses (x) and (y) above, for such conflicts or
violations that, individually or in the aggregate, are not material and do not
otherwise affect the ability of the Company to consummate the transactions
contemplated by this Amendment.
(b) The
Purchaser hereby represents and warrants to the Company as follows:
(i) The
Purchaser has all requisite limited partnership power and authority to enter
into and to consummate the transactions contemplated by this
Amendment. The execution, delivery and performance by the Purchaser
of this Amendment and the consummation by the Purchaser of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Purchaser.
(ii) This
Amendment has been duly executed and delivered by the Purchaser and constitutes
a legal, valid and binding obligation of the Purchaser enforceable against the
Purchaser in accordance with its terms, except as enforceability may be limited
by (x) applicable bankruptcy, insolvency, reorganization or other laws of
general application relating to or affecting the enforcement of creditors rights
generally, and (y) the effect of rules of Law governing the availability of
specific performance and other equitable remedies.
(iii) The
execution, delivery and performance by the Purchaser of this Amendment and the
consummation by the Purchaser of the transactions contemplated hereby do not and
will not: (x) result in a violation of the organizational documents of the
Purchaser or; (y) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Purchaser is a party; or (z)
result in a violation of any Law (including federal and state securities laws)
or Order applicable to the Purchaser, except in the case of clauses (x) and (y)
above, for such conflicts or violations that, individually or in the aggregate
are not material and do not otherwise affect the ability of the Purchaser to
consummate the transactions contemplated by this Amendment.
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Section
1.7 Fees and Expenses Incurred
by Purchaser. The Company hereby acknowledges that all fees
and expenses incurred by the Purchaser (including, but not limited to the fees
and expenses of counsel) in connection with (a) the investigation and evaluation
of the matters arising out of the amendments and modifications to the CIT Loan
Agreement; and (b) the preparation and negotiation of this Amendment and the
documents contemplated hereby.
Section
1.8 Effectiveness of
Amendments. This Amendment shall become effective upon the
execution and delivery of a counterpart hereto by each of the Company and the
Purchaser.
Section
1.9 Effect of
Amendment. Except as expressly set forth herein: (i) the
Securities Purchase Agreement shall remain in full force and effect and is
hereby ratified and confirmed; and (ii) this Amendment shall not by implication
or otherwise limit, impair, constitute a waiver or amendment of, or otherwise
affect the rights and remedies of the parties hereto under the Securities
Purchase Agreement.
Section
1.10 Miscellaneous
Items. The provisions of Sections 9.1, 9.2, 9.3, 9.6, 9.7 and
9.8 (first sentence only) of the Securities Purchase Agreement shall apply to
this Amendment as if set forth herein.
[Signature Page
Follows]
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In
Witness Whereof, the
Purchaser and the Company have caused this Amendment to be duly executed as of
the date first above written.
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PhotoMedex,
Inc.
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By:
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/s/ Xxxxxxx X. X'Xxxxxxx |
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Name: Xxxxxxx
X. X'Xxxxxxx
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Title: President
& Chief Executive Officer
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Perseus
Partners VII, L.P.
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By:
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Perseus
Partners VII GP, L.P.,
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its
general partner
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By:
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Perseus
Partners VII GP, L.L.C.,
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its
general partner
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By:
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/s/ Xxxxxx X
Xxxxxxxxx
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Name:
Xxxxxx X Xxxxxxxxx
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Title:
Secretary
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Exhibit
1
to
Amendment No. 1
Amended and Restated Exhibit
A to Securities Purchase Agreement
[See
attached form of Secured Convertible Note]
Exhibit
2
to
Amendment No. 1
Amended and Restated Exhibit
E to Securities Purchase Agreement
[See
attached form of Pledge and Security Agreement]
