EXHIBIT
      4.2

    


    [Form
      of]

    CONVERTIBLE
      PROMISSORY NOTE

    


    THE
      SECURITIES REPRESENTED BY THIS CONVERTIBLE NOTE 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
      CONVERTIBLE NOTE NOR THE SECURITIES THAT ARE ISSUABLE UPON CONVERSION OF THIS
      CONVERTIBLE NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED (THE "SECURITIES ACT"), OR 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
      AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY
      THAT SUCH REGISTRATION AND/OR COMPLIANCE IS NOT REQUIRED.

    


    FOR
      PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE
      CODE OF 1986, AS AMENDED (THE "CODE"), THIS CONVERTIBLE NOTE IS ISSUED WITH
      ORIGINAL ISSUE DISCOUNT. THE ISSUE PRICE OF THIS CONVERTIBLE NOTE IS $_________,
      THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $____________, THE ISSUE DATE IS
      _____________, 200__ AND THE YIELD TO MATURITY IS ____%.

    


    PHOTOMEDEX,
      INC.

    CONVERTIBLE
      PROMISSORY NOTE


    
      	 	 
	$[                           ]
              (the "Principal
              Amount")1	
               [                           ]

            


    

    


    FOR
      VALUE
      RECEIVED, PHOTOMEDEX, INC., a Delaware corporation (the "Company"),
      promises to pay to the order of Perseus Partners VII, L.P., or its registered
      assigns (the "Holder"),
      the
      Principal Amount, or such lesser amount as shall then equal the outstanding
      Principal Amount, together with interest thereon at a rate equal to
      8.0% per annum, and computed on the basis of a year consisting of 360 days
      in accordance with the terms set forth in Section 2
      of this
      Convertible Promissory Note (this "Convertible
      Note").

     

    This
      Convertible Note 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.

     

    
      
        

      

    

    1
      The
      Principal Amount will be equal to the First Tranche Note Amount (as defined
      in
      the Purchase Agreement) for the First Tranche Note and will be equal to the
      Second Tranche Note Amount (as defined in the Purchase Agreement) for the Second
      Tranche Note.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    The
      following is a statement of the rights of the Holder and the conditions to
      which
      this Convertible Note is subject, and to which the Holder hereof, by the
      acceptance of this Convertible Note, agrees:

     

    1. Definitions.
      Capitalized terms defined in the Purchase Agreement and used herein without
      definition have the same meaning herein as in the Purchase Agreement. In
      addition, as used in this Convertible Note, the following capitalized terms
      have
      the following meanings:

     

    "Additional
      Note"
      shall
      have the meaning set forth in Section
      2(a)
      of this
      Convertible Note.

     

    "Conversion
      Price"
      means,
      initially, [                           ]2 ,
      as
      adjusted from time to time pursuant to the terms of this Convertible
      Note.

     

    "Date
      of Issuance"
      means
      the date of issuance of this Convertible Note by the Company under the Purchase
      Agreement.

     

    "Default
      Interest Rate"
      means
      the lesser of 16% or the maximum rate allowed by applicable Law.

     

    "Event
      of Default"
      shall
      have the meaning set forth in Section
      3
      of this
      Convertible Note.

     

    "Maturity
      Date"
      means
      [                           ]3 
      (or, if
      such day is not a Business Day, on the next succeeding Business
      Day).

     

    "Obligations"
      means
      the principal, interest and other amounts payable under this Convertible
      Note.

     

    2. Maturity
      Date; Interest.

     

    (a) All
      unpaid principal, together with any accrued but unpaid interest and other
      amounts payable under this Convertible Note, shall be due and payable on (i)
      the
      Maturity Date, or (ii) when such amounts are declared due and payable by the
      Holder or made automatically due and payable upon or after (A) the occurrence
      of
      an Event of Default, (B) the liquidation or dissolution of the Company, or
      (C)
      any Change of Control. Interest on this Convertible Note shall be payable (and
      if not paid when due, shall be compounded) semi-annually in arrears on each
      [                           ]
      and
      [                           ]4 
      (or, if
      any such day is not a Business Day, on the next succeeding Business Day) after
      the Date of Issuance and shall be payable at the option of the Company either
      (i) in lawful money of the United States of America, or (ii) by the issuance
      of
      an additional Note (an "Additional
      Note")
      identical in all respects to this Convertible Note except that it shall have
      (x)
      a principal amount equal to such interest payment, (y) an initial Conversion
      Price equal to the conversion price in effect under this Convertible Note at
      the
      date of issuance of such Additional Note and (z) a different date of
      issuance.

    
      
        
          
            

          

        

        2
          The
          initial Conversion Price will be equal to $0.73736 for the First Tranche
          Note
(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
          be
          equal to the Second Tranche Conversion Price (as defined in the Securities
          Purchase Agreement) for the Second Tranche Note.

      

      
        3
          The
          Maturity Date will be the fifth anniversary of the First Tranche Closing
          Date.

      

      
        4
          The
          first and second interest payment dates will occur on the 1st or 15th day
          of a
          calendar month, closest to the six and 12 month anniversaries of the day
          and
          calendar month of the Date of Issuance.

      

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b) If
      the
      Company elects to pay interest by issuing an Additional Note, it shall give
      notice to the Holder two Business Days prior to the day such payment is due
      and
      deliver such Additional Note to the Holder within three Business Days after
      such
      date.

     

    (c) Interest
      shall be calculated based on the average principal outstanding under this
      Convertible Note for such period. The first payment of interest shall be on
      [                           ]5 
      (or, if
      such day is not a Business Day, on the next succeeding Business Day), and shall
      be calculated from the Date of Issuance to such date.

     

    (d) Notwithstanding
      anything to the contrary contained in this Convertible Note, in addition to
      the
      rights of the Holder specified in Section
      4
      of this
      Convertible Note, for any period during which an Event of Default has occurred
      and is continuing, the interest rate on this Convertible Note shall increase
      to
      the Default Interest Rate and interest on this Convertible Note shall be payable
      solely in lawful money of the United States of America.

     

    3. Events
      of Default.
      The
      occurrence of any of the following shall constitute an "Event
      of Default"
      under
      this Convertible Note:

     

    (a) Failure
      to Pay this Convertible Note or other Notes.
      

     

    (i) The
      Company shall fail to pay when due any principal payment on this Convertible
      Note or any other Note, and such failure continues for three
      Business Days thereafter;
      or

     

    (ii) The
      Company shall fail to pay when due any or any interest or other payment (other
      than principal) required under the terms of this Convertible Note or any other
      Note, and such failure continues for ten Business Days thereafter;

     

    (b) Breaches
      of Representations and Warranties.
      Any
      representation or warranty made by the Company in this Convertible Note or
      in
      any other Transaction Document shall not have been true and correct in any
      material respect when made; provided,
      that if
      the facts or events making such representation or warranty untrue are capable
      of
      correction or cure, then the Company shall have ten Business Days after notice
      of the breach is delivered to the Company to correct or cure such breach. For
      purposes of this Section 3(b) only, (i) breaches of the representations and
      warranties contained in the Purchase Agreement and made as of the First Tranche
      Closing Date shall be disregarded unless such breaches would, individually
      or in
      the aggregate, have given rise to a failure of the condition precedent set
      forth
      in Section 6.2(a) of the Purchase Agreement and the Company delivers the
      certificates required by Section 6.2(e) of the Purchase Agreement, and (ii)
      breaches of the representations and warranties contained in the Purchase
      Agreement and made as of the Second Tranche Closing Date shall be disregarded
      unless such breaches would have, individually or in the aggregate, given rise
      to
      a failure of the condition precedent set forth in Section 6.4(a) of the Purchase
      Agreement and the Company delivers the certificates required by Section 6.4(d)
      of the Purchase Agreement.

    
      
      

      
        
          

        

      

      5
        Insert
        the interest payment date occurring closest to six months after the Date
        of
        Issuance.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (c) Breaches
      of Other Covenants.
      The
      Company shall fail to observe or to perform any covenant, obligation, condition
      or agreement contained in this Convertible Note or any other Transaction
      Document (other than those specified in Section
      3(a)
      of this
      Convertible Note) in any material respect; provided,
      that if
      such breach is capable of correction or cure, then the Company shall have ten
      Business Days after notice of the breach is delivered to the Company to correct
      or cure such breach;

     

    (d) Cross-Defaults.
      The
      Company or any of its Subsidiaries shall default under any other agreement,
      bond, debenture, note or other evidence of indebtedness for money borrowed
      (other than a Note), under any guaranty or under any mortgage, or indenture
      pursuant to which there shall be issued or by which there shall be secured
      or
      evidenced any indebtedness for money borrowed by the Company or any of its
      Subsidiaries, whether such indebtedness now exists or shall hereafter be
      created, which default shall have resulted in indebtedness of at least $250,000
      being due and payable prior to the date on which it would otherwise become
      due
      and payable;

     

    (e) Undischarged
      Judgment.
      One or
      more judgments for the payment of money in an amount in excess of $250,000
      in
      the aggregate shall be rendered against the Company or any of its Subsidiaries
      (or any combination thereof) and shall remain undischarged for a period of
      ten
      consecutive Business Days during which execution shall not be effectively
      stayed, or any action is legally taken by a judgment creditor to levy upon
      any
      such judgment;

     

    (f) Voluntary
      Bankruptcy or Insolvency Proceedings.
      The
      Company or any of its Subsidiaries shall: (i) apply for or consent to the
      appointment of a receiver, trustee, liquidator or custodian of itself or of
      all
      or a substantial part of its property; (ii) be unable, or admit in writing
      its
      inability, to pay its debts generally as they mature; (iii) make a general
      assignment for the benefit of its or any of its creditors; (iv) be dissolved
      or
      liquidated in full or in part; (v) become insolvent (as such term may be defined
      or interpreted under any applicable statute); (vi) commence a voluntary case
      or
      other Proceeding seeking liquidation, reorganization or other relief with
      respect to itself or its debts under any bankruptcy, insolvency or other similar
      Law now or hereafter in effect or consent to any such relief or to the
      appointment of or taking possession of its property by any official in an
      involuntary case or other Proceeding commenced against it; or (vii) take any
      action for the purpose of effecting any of the foregoing; or

     

    (g) Involuntary
      Bankruptcy or Insolvency Proceedings.
      Any
      Proceeding for the appointment of a receiver, trustee, liquidator or custodian
      of the Company or any of its Subsidiaries or of all or a substantial part of
      the
      property thereof, or an involuntary case or other Proceeding seeking
      liquidation, reorganization or other relief with respect to the Company or
      any
      of its Subsidiaries or the debts thereof under any bankruptcy, insolvency or
      other similar Law now or hereafter in effect shall be commenced and an order
      for
      relief entered, or such case or Proceeding shall not be dismissed or discharged
      within 30 days of commencement.

     

    4. Rights
      of Holder upon Default.
      Upon
      the occurrence or existence of any Event of Default (other than an Event of
      Default referred to in Section
      3(f)
      or
Section
      3(g)
      of this
      Convertible Note) and at any time thereafter during the continuance of such
      Event of Default, holders of a majority of the outstanding principal amount
      of
      the Note(s) may declare all outstanding Obligations payable by the Company
      under
      this Convertible Note to be immediately due and payable without presentment,
      demand, protest or any other notice of any kind, all of which are hereby
      expressly waived, anything contained in this Convertible Note or in any other
      Transaction Document to the contrary notwithstanding. Upon the occurrence or
      existence of any Event of Default described in Sections
      3(f)
      or
Section
      3(g)
      of this
      Convertible Note, immediately and without notice, all outstanding Obligations
      payable by the Company hereunder shall automatically become immediately due
      and
      payable, without presentment, demand, protest or any other notice of any kind,
      all of which are hereby expressly waived, anything contained in this Convertible
      Note or in any other Transaction Document to the contrary notwithstanding.
      In
      addition to the foregoing remedies, upon the occurrence or existence of any
      Event of Default, the Holder may exercise any other right, power or remedy
      granted to it pursuant to any Transaction Document or otherwise permitted to
      it
      by Law, either by suit in equity or by action at Law, or both.

     

    
      
        
          
            
              
              

            

            
              4

              
                

              

            

            
              
              

            

          

        

      

    

     

    5. Covenants.
      The
      Company hereby covenants and agrees for the benefit of the Holder as
      follows:

     

    (a) Additional
      Notes.
      Any
      Additional Notes issued pursuant to Section 2(a)
      of this
      Convertible Note will be, when issued, duly authorized, validly issued, fully
      paid and nonassessable, free and clear of all Liens other than restrictions
      on
      transfer provided for in the Transaction Documents and applicable federal and
      state securities laws.

     

    (b) Conversion
      Shares.
      All
      Conversion Shares that may be issued upon the conversion of this Convertible
      Note and any Additional Notes will be, when issued, duly authorized, validly
      issued, fully paid and nonassessable, and free from all preemptive rights and
      Liens other than restrictions on transfer provided for in the Transaction
      Documents and applicable federal and state securities laws and charges with
      respect to the issuance thereof. The Company will at all times have authorized
      and reserved and kept available out of its authorized but unissued shares of
      Common Stock, solely for the purpose of effecting the conversion of this
      Convertible Note and any Additional Notes, such number of its shares of Common
      Stock as shall from time to time be sufficient to effect the conversion of
      this
      Convertible Note and all Additional Notes. If at any time the number of
      authorized but unissued shares of Common Stock shall not be sufficient to effect
      the conversion of this Convertible Note and all Additional Notes, the Company
      will take all such corporate actions as may be necessary to increase its
      authorized but unissued shares of Common Stock to such number of shares as
      shall
      be sufficient for such purposes.

     

    (c) Charges,
      Taxes and Expenses.
      Issuance and delivery of the Conversion Shares shall be made without charge
      to
      the Holder for any issue or transfer tax, withholding tax (other than related
      to
      the income of the Holder), transfer agent fee or other incidental tax or expense
      in respect of the issuance of such certificates, all of which taxes and expenses
      shall be paid by the Company; provided, however, that the Company shall not
      be
      required to pay any tax which may be payable in respect of any transfer involved
      in the registration of any certificates for Conversion Shares in a name other
      than that of the Holder. The Holder shall be responsible for all other tax
      liability that may arise as a result of holding or transferring this Convertible
      Note or receiving Conversion Shares.


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    6. Prepayment.
      

     

    (a) Except
      as
      provided in this Section
      6,
      the
      Company shall have no right to prepay the principal amount of this Convertible
      Note prior to the Maturity Date, or any interest accruing under this Convertible
      Note prior to the scheduled date for payment of such interest.

     

    (b) If
      the
      Market Price as of the fourth anniversary of the First Tranche Closing Date
      shall be no less than 200% of the conversion price then in effect under the
      First Tranche Note, then the Company shall have the one-time option to prepay
      up
      to one half of the aggregate outstanding principal amount of the Notes, together
      with accrued but unpaid interest thereon, on the terms and subject to the
      conditions set forth in Section 5.25 of the Purchase Agreement.

     

    7. Conversion.

     

    (a) Optional
      Conversion.
      At any
      time, or from time to time, prior to the Maturity Date, the Holder shall have
      the option to convert up to the entire amount outstanding under this Convertible
      Note (including accrued but unpaid interest) into a number of shares of Common
      Stock equal to the quotient obtained by dividing (i) the amount to be converted
      by (ii) the Conversion Price then in effect.

     

    (b) Mandatory
      Conversion.
      If on
      any date occurring at least 31 Trading Days following the Date of Issuance,
      the
      Market Price as of such date exceeds 300% of the then-effective Conversion
      Price, then the entire amount outstanding under this Convertible Note (including
      accrued but unpaid interest) shall be automatically converted into a number
      of
      shares of Common Stock equal to the quotient obtained by dividing (i) the amount
      outstanding under this Convertible Note (including accrued but unpaid interest)
      by (ii) the Conversion Price then in effect. The Company shall notify the Holder
      promptly (and in any event not later than three Business Days) following any
      mandatory conversion of this Convertible Note pursuant to this Section
      7(b).

     

    (c) Mechanics
      and Effect of Conversion.
      No
      fractional shares of Common Stock shall be issued upon conversion of this
      Convertible Note. Upon the conversion of all of the principal and accrued
      interest outstanding under this Convertible Note, in lieu of the Company issuing
      any fractional shares to the Holder, the Company shall pay to the Holder the
      amount of outstanding principal and accrued interest that is not so converted.
      Upon any partial conversion of this Convertible Note, the Company shall issue
      to
      the Holder (i) the shares of Common Stock into which the applicable portion
      of
      the principal and accrued interest under this Convertible Note is converted
      and
      (ii) a new Note identical in all respects to this Convertible Note except that
      it shall have a principal amount equal to the difference between (1) the
      outstanding principal amount of this Convertible Note immediately prior to
      such
      conversion minus (2) the portion of such outstanding principal amount converted
      into shares of Common Stock. Upon any conversion of this Convertible Note
      pursuant to this Section
      7,
      the
      Holder shall surrender this Convertible Note, duly endorsed, at the principal
      office of the Company. At the Company’s expense, the Company shall, as soon as
      practicable thereafter, and in any event within three (3) Business Days of
      such
      surrender, issue and deliver to the Holder at such principal office a
      certificate or certificates for the number of shares of Common Stock to which
      the Holder shall be entitled upon such conversion (bearing such legends as
      are
      required by the Purchase Agreement and applicable securities Laws), together
      with any other securities and property to which the Holder is entitled upon
      such
      conversion under the terms of this Convertible Note. Issuance of this
      Convertible Note shall constitute full authority to the Company's officers
      who
      are charged with the duty of executing stock certificates to execute and issue
      the necessary certificates for shares of Common Stock issuable upon the
      conversion of this Convertible Note.


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    (d) Payment
      of Taxes.
      The
      Company will pay all transfer taxes or charges that may be imposed with respect
      to the issue or delivery of shares of Common Stock upon conversion of this
      Convertible Note, except for any tax or other charge imposed in connection
      with
      any transfer involved in the issue and delivery of Conversion Shares in a name
      other than that in which this Convertible Note was registered.

     

    (e) Withholding
      Taxes.
      Notwithstanding any other provision of this Convertible Note, the Company shall:
      (i) not be obliged to reimburse, indemnify, make whole or otherwise pay to
      the
      Holder, and (ii) be entitled to deduct and withhold from all amounts payable
      pursuant to this Convertible Note, any amounts required by applicable Law to
      be
      deducted or withheld for any and all taxes, so long as the Company promptly
      pays
      the full amount deducted or withheld to the applicable Governmental Entity
      in
      accordance with applicable Law. Any such amounts deducted and not owed or paid
      to the applicable Governmental Entity in accordance with applicable Law shall
      be
      returned to the Holder promptly. The Holder shall provide any information
      reasonably requested by the Company to enable it to determine whether taxes
      must
      be withheld or deducted and the amount of such withholding or
      deduction.

     

    8. Conversion
      Price Adjustments.

     

    (a) Adjustments
      for Splits and Combinations.
      If the
      Company shall at any time or from time to time after the Date of Issuance effect
      a stock split of the outstanding shares of Common Stock, the Conversion Price
      in
      effect immediately before that stock split shall be proportionately decreased,
      and, conversely, if the Company shall at any time or from time to time after
      the
      Date of Issuance combine the outstanding shares of Common Stock into a smaller
      number of shares, the Conversion Price in effect immediately before the
      combination shall be proportionately increased. In each such case, the
      Conversion Price shall be adjusted by multiplying such Conversion Price by
      a
      fraction, the numerator of which shall be the number of shares of Common Stock
      outstanding immediately prior to such subdivision, combination or
      reclassification and the denominator of which shall be the number of shares
      of
      Common Stock outstanding immediately after giving effect to such subdivision
      or
      combination. Any adjustment under this Section
      8(a)
      shall
      become effective immediately after the opening of business on the date the
      stock
      split or combination becomes effective.

     

    (b) Adjustment
      for Dividends and Distributions of Common Stock.
      If the
      Company at any time or from time to time after the Date of Issuance 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 the Conversion Price
      that
      is then in effect shall be 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 the Conversion Price then in effect by a fraction (i)
      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 (ii) 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; 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 Conversion Price
      shall be recomputed accordingly as of the close of business on such record
      date
      and thereafter the Conversion Price shall be adjusted pursuant to this
Section
      8(b)
      to
      reflect the actual payment of such dividend or distribution. 

     

    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    


    (c) Adjustments
      for Other Dividends and Distributions.
      If the
      Company at any time or from time to time after the Date of Issuance 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 Convertible Note
      shall receive upon conversion of this Convertible Note, in addition to the
      number of shares of Common Stock receivable hereupon, the amount of securities
      of the Company or other property that such Holder would have received had this
      Convertible Note been converted into shares of Common Stock 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 conversion 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
      8
      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 Conversion Price.
      If at
      any time or from time to time, on or after the Date of Issuance the Company
      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 Conversion Price in effect as of
      immediately prior to such issuance or sale (the "Former
      Conversion Price")
      (such
      an issuance, a "Dilutive
      Issuance"),
      then
      immediately after such Dilutive Issuance, the Conversion Price then in effect
      shall be reduced (but in no event increased) to an amount equal to a fraction,
      the numerator of which equals (A) the sum of (1) the product derived by
      multiplying the Former Conversion Price 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 the denominator of which equals (B) 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. For purposes of this Section 8(d):

     

    (i) If
      any
      Convertible Securities are issued by the Company after the Date of Issuance,
      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.


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    (ii) If
      any
      Options are issued by the Company after the Date of Issuance, 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 date of issuance,
      the additional consideration, if any, payable upon the issue, conversion,
      exchange or exercise of any Convertible Security is reduced after the date
      of
      issuance, 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 Date of Issuance, 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 exercise 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
      8(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.


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    (e) Adjustment
      for Reclassification, Exchange and Substitution.
      If at
      any time or from time to time after the Date of Issuance, the shares of Common
      Stock issuable upon the conversion of this Convertible Note are changed into
      the
      same or a different number of shares of any class or series of stock of the
      Company, whether by recapitalization, reclassification or otherwise (other
      than
      a subdivision or combination of shares or stock dividend or a reorganization,
      merger, consolidation or sale of assets provided for elsewhere in this
Section
      8),
      then
      in any such event the Holder shall have the right thereafter to convert this
      Convertible Note into the kind and amount of stock and other securities and
      property receivable upon such recapitalization, reclassification or other change
      by the holder of the number of shares of Common Stock into which this
      Convertible Note could have been converted immediately prior to such
      recapitalization, reclassification or change, all subject to further adjustment
      as provided in this Convertible Note or with respect to such other securities
      or
      property by the terms thereof.

     

    (f) Fundamental
      Transactions.
      If at
      any time or from time to time after the Date of Issuance (i) the Company effects
      any merger or consolidation of the Company with or into (whether or not the
      Company is the surviving corporation) another Person, (ii) the Company effects
      any sale, assignment, transfer, conveyance or other disposition of all or
      substantially all its assets in one or a series of related transactions, (iii)
      any tender offer or exchange offer (whether by the Company or another Person)
      is
      completed pursuant to which holders of more than 50% of the outstanding shares
      of Common Stock are permitted to tender or exchange their shares of Common
      Stock
      for other securities, cash or property, (iv) the Company consummates a stock
      purchase agreement or other business combination (including, without limitation,
      a reorganization, recapitalization, spin-off or scheme of arrangement) with
      another Person or other Persons or (v) the Company effects a capital
      reorganization of the shares of Common Stock (other than a recapitalization,
      subdivision, combination, reclassification, exchange or substitution of shares
      provided for elsewhere in this Section
      8)
      pursuant to which the Common Stock is effectively converted into or exchanged
      for other securities, cash or property (each of the foregoing, a “Fundamental
      Transaction”),
      then
      as a part of such Fundamental Transaction provision shall be made so that the
      Holder shall thereafter be entitled to receive upon conversion of this
      Convertible Note the same amount and kind of securities, cash or other property
      as it would have been entitled to receive if it had been, immediately prior
      to
      such Fundamental Transaction, the holder of the number of shares of Common
      Stock
      then deliverable upon the conversion in full of this Convertible Note, subject
      to adjustment in respect of such securities by their terms (the “Alternate
      Consideration”).
      In
      any such case, (i) the aggregate Conversion Price under this Convertible Note
      will not be affected, but the Company shall apportion the Conversion Price
      among
      the Alternate Consideration in a reasonable manner reflecting the relative
      value
      of any different components of the Alternate Consideration, (ii) if holders
      of
      Common Stock are given any choice as to the securities, cash or property to
      be
      received in a Fundamental Transaction, then the Holder shall be given the same
      choice as to the Alternate Consideration it receives upon any conversion of
      this
      Convertible Note following such Fundamental Transaction, and (iii) appropriate
      adjustment shall be made in the application of the provisions of this
Section
      8
      with
      respect to the rights of the Holder after such Fundamental Transaction to the
      end that the provisions of this Section 8
      (including adjustment of the Conversion Price then in effect and the number
      of
      shares of common stock, securities or other property issuable upon conversion
      of
      this Convertible Note) shall be applicable after that event and be as nearly
      equivalent as practicable. At the Holder’s request, any successor to the Company
      or surviving entity in such Fundamental Transaction shall issue to the Holder
      a
      new convertible note consistent with the foregoing provisions and evidencing
      the
      Holder’s right to convert such convertible note into Alternate Consideration.
      The terms of any agreement pursuant to which a Fundamental Transaction is
      effected shall include terms requiring any such successor or surviving entity
      to
      comply with the provisions of this Section 8(f) and insuring that this
      Convertible Note (or any such replacement security) will be similarly adjusted
      upon any subsequent transaction analogous to a Fundamental
      Transaction.


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    


    (g) Certificate
      of Adjustment.
      In each
      case of an adjustment or readjustment of the Conversion Price for the number
      of
      shares of Common Stock or other securities or property issuable upon conversion
      of this Convertible Note, the Company, at its own expense, shall cause its
      Chief
      Financial Officer to compute such adjustment or readjustment in accordance
      with
      the provisions of this Convertible Note and prepare a certificate showing such
      adjustment or readjustment, and shall mail such certificate, by first class
      mail, postage prepaid, to the Holder at the Holder's address as shown in the
      Company's books. The certificate shall set forth such adjustment or
      readjustment, showing in detail the facts upon which such adjustment or
      readjustment is based. No adjustment in the Conversion Price shall be required
      to be made unless it would result in an increase or decrease of at least one
      cent, but any adjustments not made because of this sentence shall be carried
      forward and taken into account in any subsequent adjustment otherwise required
      hereunder.

     

    (h) Notices
      of Record Date.
      Upon
      (i) the establishment by the Company of a record of the holders of any class
      of
      securities for the purpose of determining the holders of such securities who
      are
      entitled to receive any dividend or other distribution, or (ii) any capital
      reorganization of the Company, any reclassification or recapitalization of
      the
      shares of the Company, any merger or consolidation of the Company with or into
      any other Company, or any transfer of all or substantially all the assets of
      the
      Company to any other Person or any voluntary or involuntary dissolution,
      liquidation or winding up of the Company, the Company shall mail to the Holder
      at least 20 Business Days prior to the record date specified therein a notice
      specifying (A) the date on which any such record is to be taken for the purpose
      of such dividend or distribution and a description of such dividend or
      distribution, (B) the date on which any such reorganization, reclassification,
      transfer, consolidation, merger, dissolution, liquidation or winding up is
      expected to become effective, and (C) the date, if any, that is to be fixed
      as
      to when the holders of record of shares of Common Stock (or other securities)
      shall be entitled to exchange their shares of Common Stock (or other securities)
      for securities or other property deliverable upon such reorganization,
      reclassification, transfer, consolidation, merger, dissolution, liquidation
      or
      winding up.

     

    (i) Certain
      Issues Excepted.
      Notwithstanding anything herein to the contrary set forth herein, the following
      issuances of securities will not trigger an adjustment to the Conversion Price:
      (i) securities issued pursuant to the conversion or exercise of convertible
      or
      exercisable securities issued or outstanding on or prior to the First Tranche
      Closing Date, and (ii) Common Stock issued or options to purchase Common Stock
      granted or issued pursuant to the Company’s equity compensation plans and
      employee stock purchase plans as they now exist or are hereafter approved by
      the
      Company’s Board of Directors.

     

    (j) No
      Impairment.
      The
      Company shall not amend its Certificate of Incorporation or Bylaws or
      participate in any reorganization, transfer of assets, consolidation, merger,
      dissolution, issue or sale of securities or any other voluntary action for
      the
      purpose of avoiding or seeking to avoid the observance or performance of any
      of
      the terms to be observed or performed hereunder by the Company, but shall at
      all
      times in good faith assist in carrying out all such action as may be reasonably
      necessary or appropriate in order to protect the conversion rights of the Holder
      of this Convertible Note against dilution or other impairment as provided
      herein. If the Company takes any action in breach of this Convertible Note,
      the
      Holder shall be entitled to any and all remedies available at Law or in
      equity.


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    (k) Fractional
      Share.
      No
      fractional share of Common Stock shall be issuable upon conversion of this
      Convertible Note and the number of Conversion Shares to be issued shall be
      rounded down to the nearest whole share. If the conversion of this Convertible
      Note shall result in the issuance of any fractional Conversion share, the
      Company shall eliminate such fractional share by paying the Holder an amount
      computed by multiplying such fraction by the fair market value of a full
      share.

     

    (l) Other
      Adjustments.
      If and
      whenever the Company shall take any action affecting or relating to the shares
      of Common Stock, other than any action described in this Section
      8,
      which
      in the opinion of the Board would prejudicially affect the rights of the Holder,
      the Conversion Price and, if required, the number of shares of Common Stock
      or
      other securities or property to be issued upon conversion of this Convertible
      Note will be adjusted by the Board in such manner, and at such time, as the
      Board may, subject to the approval of any stock exchange(s) on which the shares
      of Common Stock are listed and posted for trading, reasonably determine to
      be
      equitable in the circumstances to such Holder.

     

    9. Priority
      of Obligations.
      The
      Obligations shall not be junior or subordinate to any other Indebtedness of
      the
      Company. The Company shall not issue any Indebtedness that by its terms is
      subordinate or junior in any respect to any other Indebtedness of the Company,
      unless such Indebtedness provides that it is subordinate and junior on the
      same
      terms to the Obligations.

     

    10. Waiver
      and Amendment.
      Any
      provision of this Convertible Note may be amended, waived or modified upon
      the
      written consent of both the Company and the holders of a majority of the
      outstanding principal amount of the Note(s).

     

    11. Transfer
      of this Convertible Note or Securities Issuable on Conversion or Payment
      Hereunder.
      This
      Convertible Note may not be transferred in violation of any restrictive legend
      set forth hereon. Each new Note issued upon transfer of this Convertible Note
      or
      securities issuable on conversion of this Convertible Note shall bear a legend
      as to the applicable restrictions on transferability in order to ensure
      compliance with the Securities Act, unless in the opinion of counsel for the
      Company such legend is not required in order to ensure compliance with the
      Securities Act. The Company may issue stop transfer instructions to its transfer
      agent in connection with such restrictions. Subject to the foregoing, transfers
      of this Convertible Note shall be registered upon registration books maintained
      for such purpose by or on behalf of the Company. Prior to presentation of this
      Convertible Note for registration of transfer, the Company shall treat the
      registered holder hereof as the owner and holder of this Convertible Note for
      the purpose of receiving all payments of principal and interest hereon and
      for
      all other purposes whatsoever, whether or not this Convertible Note shall be
      overdue and the Company shall not be affected by notice to the
      contrary.

     

    12. Assignment.
      Neither
      this Convertible Note nor any of the rights, interests or obligations hereunder
      may be assigned, by operation of law or otherwise, as a whole or in part, by
      the
      Company without the prior written consent of the Holder. The Holder may assign
      the rights, interests or obligations under this Convertible Note, as a whole
      or
      in part, at any time, subject to compliance with Section
      11
      of this
      Convertible Note, upon written notice to the Company of such assignment. Upon
      request, the Company shall, as soon as practicable (and in any event within
      three Business Days) following such request, provide any assignee of all or
      a
      portion of this Convertible Note a new Note having terms and conditions
      identical in all respects to this Convertible Note except that it shall identify
      the assignee as the payee, and it shall have (x) a principal amount equal to
      principal amount of this Convertible Note that was assigned, (y) an initial
      Conversion Price equal to the conversion price in effect under this Convertible
      Note as of the date of assignment and (z) a different date of issuance.
      Notwithstanding the foregoing, until the Company receives notice in accordance
      with Section
      13,
      the
      Company shall treat the registered holder hereof as the owner and holder of
      this
      Convertible Note for the purpose of receiving all payments of principal and
      interest on this Convertible Note and for all other purposes whatsoever, whether
      or not this Convertible Note shall be overdue.


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    13. Notices.
      Any
      notice, request or other communication required or permitted hereunder shall
      be
      in writing and shall be deemed to have been duly given if personally delivered
      or mailed by registered or certified mail, postage prepaid, or by recognized
      overnight courier, personal delivery or facsimile transmission at the respective
      addresses or facsimile number of the parties as set forth in or otherwise
      designated by either party pursuant to the Purchase Agreement or on the register
      maintained by the Company. Any party hereto may by notice so given change its
      address or facsimile number for future notice hereunder. 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 in this Section prior to 6:30 p.m. (Eastern time) on a Trading Day,
      (b) the next Trading 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 in this Section on a day that is not a Trading Day
      or
      later than 6:30 p.m. (Eastern time) on any Trading Day, (c) the Trading 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.

     

    14. Successors
      and Assigns.
      Subject
      to the restrictions on transfer described in Section
      11
      of this
      Convertible Note, the rights and obligations of the Company and the Holder
      of
      this Convertible Note shall be binding upon and benefit the successors, assigns,
      heirs, administrators and transferees of the parties.

     

    15. Expenses;
      Waivers.
      If
      action is instituted to collect this Convertible Note, the Company shall pay
      all
      costs and expenses, including, without limitation, reasonable attorneys' fees
      and costs, incurred in connection with such action. The Company hereby waives
      notice of default, presentment or demand for payment, protest or notice of
      nonpayment or dishonor and all other notices or demands relative to this
      instrument.

     

    16. Governing
      Law; Venue; Waiver of Jury Trial.
      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 ANY DISPUTE BROUGHT BY THE COMPANY
      OR ANY PURCHASER HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION
      CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE
      ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVE,
      AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY
      OR ANY 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 PURCHASERS HEREBY WAIVE ALL RIGHTS TO A TRIAL
      BY JURY.


     

    * 
      *  *  *  *


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    ISSUED
      as
      of the date first above written.

    


    
      	
              PHOTOMEDEX,
                INC.

            
	 	 
	
              By:

            	
                 


            
	
              Name:

            	 
	
              Title:

            	 


    


    [Signature
      Page to Convertible Note]