Document:

exv4w25

 

Exhibit
4.25

THIS WARRANT AND ANY SECURITIES THAT MAY BE ISSUED UPON EXERCISE THEREOF) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS,
AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION (OTHER THAN PURSUANT TO RULE 144(k),
PROVIDED THAT THE COMPANY HAS RECEIVED CUSTOMARY REPRESENTATIONS CERTIFYING AS TO THE AVAILABILITY
OF SUCH RULE 144(k)), UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER
APPLICABLE LAWS.

			
	 	 	 
	Warrant no. 4
	 	Number of Shares: 7,083,333
	December 5, 2006
	 	(subject to adjustment)

 

WARRANT TO PURCHASE ORDINARY SHARES

OF

LUMENIS LTD.

 

     FOR VALUE RECEIVED, Ofer Hi-Tech Investments Ltd. (together with its successors,
transferees and assigns, the “Holder”) is entitled to purchase subject to the provisions of this
Warrant (this “Warrant”) from Lumenis Ltd., an Israeli company (“Company”), during the term of this
Warrant, at a purchase price per share equal to $1.1794 (as adjusted from time to time pursuant to
the terms of this Warrant), 7,083,333 Ordinary Shares, par value NIS 0.1 per share, of the Company
(the “Company Shares”) (as adjusted from time to time pursuant to the terms of this Warrant). The
shares purchasable upon exercise of this Warrant and the purchase price per share, as adjusted from
time to time pursuant to the terms of this Warrant, shall be referred to herein as the “Warrant
Shares” and the “Exercise Price”, respectively.

	1.	 	Exercise.

	 	1.1.	 	Manner of Exercise. This Warrant may be exercised, in whole or in part,
on one or more occasions during its term. The Warrant may be exercised by the
surrender of this Warrant, together with the Notice of Exercise in the form attached
hereto, duly completed and executed by the Holder, at the principal office of the
Company or at such other office or agency as the Company may designate, accompanied by
payment in full of the aggregate Exercise Price payable in respect of the Warrant
Shares purchasable upon such exercise. The Exercise Price may be paid by cash, check,
wire transfer or by the cancellation of debt owed by the Company to the Holder.
	 
	 	1.2.	 	Effective Time of Exercise. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the day on
which this Warrant shall have been

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	 	 	 	surrendered to the Company as provided in Section
1.1 above. At such time, the person(s) in whose name(s) any certificates representing
the Warrant Shares shall be issuable upon exercise as provided in Section 1.4 below
shall be deemed to have become the holder of record of such Warrant Shares
represented by such certificates.
	 
	 	1.3.	 	Net Issue Exercise.

	 	   1.3.1. 	 	In lieu of exercising this Warrant in the manner provided in Section 1.1
above, the Holder may elect to receive shares equal to the value of this
Warrant (or the portion thereof being canceled) by surrender of this Warrant
at the principal office of the Company or at such other office or agency as
the Company may designate, together with the Notice of Exercise in the form
attached hereto, duly completed and executed by the Holder, in which event
the Company shall issue to the Holder the number of Warrant Shares computed
using the following formula:

X = Y* (A — B)

A

					
	 	   Where:
	 	 	X = the number of Warrant Shares to be issued to the Holder.
	 
	 	 	 	 	Y = the number
of Warrant Shares, as adjusted to the date of such
calculation, underlying the portion of the Warrant
being exercised.

	 
	 	 	 	 	A= the Fair
Market Value (as defined below) of one Warrant Share.
	 
	 	 	 	 	B = the
Exercise Price, as adjusted to the date of such
calculation.

	 	   1.3.2. 	 	For purposes of this Section 1.3, the “Fair Market Value” of a Warrant
Share on the date of calculation shall mean:

	 	 1.3.2.1.	 	If the Company Shares are listed on a national securities
exchange or are quoted on the National Association of Securities
Dealers, Inc. Automated Quotation/National Market System

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	 	 	 	(NASDAQ/NMS), then the Fair Market Value shall be the average
closing or last sale price, respectively, reported for the five
(5) trading days prior to the exercise date.
	 
	 	1.3.2.2.	 	If the Company Shares are not listed on a national securities
exchange or quoted on NASDAQ/NMS, but are traded in any
over-the-counter market, then the Fair Market Value shall be the
last sale price of the Company Shares reported for the five (5)
trading days immediately preceding the exercise date, and if no
such sale price is reported, the average of the closing bid and
asked prices as reported for the five (5) trading days prior to
the exercise date. If the Company Shares are not publicly traded,
then the Fair Market Value shall be the fair market value of a
Company Share as determined by an Appointed Expert (as defined in
that certain Purchase Agreement, dated September 30, 2006 among
the Company, the Holder and the other parties named therein (the
“Purchase Agreement”)), unless the Company is at such time subject
to a Liquidity Event (as defined below), in

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	 	 	 	which case the Fair Market
Value shall be deemed to be the value of the consideration
per share received by the holders of such shares pursuant to
such event. In the event that the Special Committee (as
defined in the Purchase Agreement) or the Holder object to
the determination of the Appointed Expert, within 15 days
after receipt of the Appointed Expert’s determination, the
matter shall be referred to arbitration to be conducted in
accordance with Section 19 hereof.
	 
	 	1.3.2.3.	 	If the exercise is in connection with a public offering of the
Company Shares pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the “Securities
Act”), or the equivalent actions under the laws of another
jurisdiction, then the fair market value shall be the initial
“Price to Public” per share specified in the final prospectus with
respect to the offering, before deduction of discounts,
commissions or expenses.

	 	1.4.	 	Delivery to Holder. As soon as practicable after the exercise of this
Warrant in whole or in part, and in any event within ten (10) days

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	 	 	 	thereafter, the
Company at its expense will cause to be issued in the name of, and delivered to, the
Holder, or as such Holder may direct:

	 	1.4.1.	 	a certificate(s) for the number of Warrant Shares to which such Holder
shall be entitled, and
	 
	 	1.4.2.	 	in case such exercise is in part only, a new warrant(s) (dated the date
hereof) of like tenor, calling in the aggregate on the face(s) thereof for
the number of Warrant Shares equal to the number of such shares called for on
the face of this Warrant minus the number of such shares purchased by the
Holder upon such exercise as provided in Sections 1.1 or 1.3 above.

	 	1.5.	 	Conditional Exercise. In case of an exercise made in connection with a
public offering of the Company Shares pursuant to an effective registration statement
under the Securities Act or the equivalent actions under the laws of another
jurisdiction, or a Liquidity Event (as defined below), such exercise may be made
conditional upon the closing of such offering or event.
	 
	 	 	 	For purposes of this Warrant, the term “Liquidity Event” shall mean: (i) a sale of
all or substantially all of the Company’s assets; (ii) a sale of all or
substantially all of the Company’s issued and outstanding shares, such that
following the transaction more than fifty percent (50%) of the Company’s issued
shares are held by persons who, prior to the said transaction, held less than
fifty percent (50%) of the Company’s issued shares; or (iii) a merger or
consolidation of the Company with or into another corporation, such that following
the transaction more than fifty percent (50%) of the surviving entity’s issued
shares are held by persons who, prior to the said transaction, held less than
fifty percent (50%) of the Company’s issued shares.

	2.	 	Adjustments
	 
	 	 	The number and kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:

	 	2.1.	 	Purchase Agreement Adjustments.

	 	2.1.1.	 	At any time following the date hereof, if and whenever additional Company
Shares are to be issued to the Original Holder (as define below) pursuant to
Article X of the Purchase Agreement, (each such event, the “Trigger
Issuance”), then in each such case the then-existing Exercise Price shall
automatically be reduced, as of the close of business on the effective date
of the Trigger Issuance, to a price, rounded to 4 decimal points, calculated
as follows:

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	 	 	 	(capitalized terms used but not otherwise defined herein shall have the
meaning ascribed to them in the Purchase Agreement)
	 
	 	 	 	110% multiplied by a fraction: (i) the numerator of which equals to the
aggregate amount of the purchase price paid by the Original Holder at
the Closing; and (ii) the denominator of which equals to the number of
Purchased Shares actually issued to the Original Holder at the Closing
plus any and all additional Company Shares that were or should have
been previously issued to the Original Holder pursuant to Article X of
the Purchase Agreement less any Redeemable A Shares, Redeemable
B Shares and/or Redeemable C Shares that were initially issued to the
Original Holder and were actually redeemed by the Company in accordance
with the provisions of the Purchase Agreement.
	 
	 	 	 	provided, however, that in no event shall the Exercise Price after
giving effect to such Trigger Issuance be greater than the Exercise
Price in effect prior to such Trigger Issuance.
	 
	 	2.1.2.	 	At any time following the date hereof, if and whenever any Additional
Warrants (as defined in the Purchase Agreement) are exercised, in whole or in
part, by the Original Holder thereof pursuant to their terms (each such
event, the “Exercise Event”), then in each such case the following adjustment
shall occur:
	 
	 	 	 	The number of Warrant Shares shall automatically be increased, as of
the close of business on the effective date of the Exercise Event, by
an additional number of Warrant Shares, rounded to the nearest whole
number, calculated as follows:
	 
	 	 	 	The product of: (i) the number of Warrant Shares (as adjusted from time
to time) purchasable upon exercise of this Warrant immediately prior to
the Exercise Event; multiplied by (ii) the aggregate exercise price
paid for the exercise of the Additional Warrants by the Original Holder
in such exercise divided by the aggregate amount of the purchase price
paid at the Closing by the Original Holder.
	 
	 	 	 	provided, however, that in no event shall the number of Warrant Shares
after giving effect to such Trigger Issuance be less than the number of
Warrant Shares in effect prior to such Trigger Issuance.
	 
	 	2.1.3.	 	The “Original Holder” shall mean the Holder, and if the Holder is a
successor, transferee, assignee or designee, then the Investor to which this
Warrant was issued at Closing and any of its successors, transferees,
assignees or designees (including the Holder).

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	 	2.2.	 	Stock Splits, Dividends and Combinations. If the outstanding Company
Shares shall be subdivided into a greater number of shares or a dividend or other
distribution payable in additional shares shall be paid in respect of Common Shares,
the Exercise Price in effect immediately prior to such subdivision or at the record
date of such dividend shall simultaneously with the effectiveness of such subdivision
or immediately after the record date of such dividend be proportionately reduced. If
outstanding Company Shares shall be combined into a smaller number of shares, the
Exercise Price in effect immediately prior to such combination shall, simultaneously
with the effectiveness of such combination be proportionately increased. When any
adjustment is required to be made in the Exercise Price, the number of Warrant Shares
purchasable upon the exercise of this Warrant shall be changed to the number determined
by dividing (i) an amount equal to the number of shares issuable upon the exercise of
this Warrant immediately prior to such adjustment, multiplied by the Exercise Price in
effect immediately prior to such adjustment, by (ii) the Exercise Price in effect
immediately after such adjustment.
	 
	 	2.3.	 	Reclassification, Etc. In case of any reclassification or change of the
outstanding securities of the Company or of any reorganization of the Company (or any
other corporation the stock or securities of which are at the time receivable upon the
exercise of this Warrant) or any similar corporate reorganization on or after the date
hereof, then and in each such case the holder of this Warrant, upon the exercise hereof
at any time after the consummation of such reclassification, change, reorganization,
merger or conveyance, shall be entitled to receive, in lieu of the stock or other
securities and property receivable upon the exercise hereof prior to such consummation,
the stock or other securities or property to which such holder would have been entitled
upon such consummation if such holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in Section 2; and in each such
case, the terms of this Section 2 shall be applicable to the shares of stock or other
securities properly receivable upon the exercise of this Warrant after such
consummation.
	 
	 	2.4.	 	Other Transactions. In the event that the Company shall issue shares
to its shareholders as a result of a split-off, spin-off or the like, then the Company
shall only complete such issuance or other action if, as part thereof, allowance is
made to protect the economic interest of the Holder either by increasing the number of
Warrant Shares or by procuring that the Holder shall be entitled, on economically
proportionate terms, to acquire additional shares of the spun-off or split-off
entities. Upon each adjustment in the number or kind of Warrant Shares purchasable
hereunder, the Exercise Price shall be proportionately increased or decreased, as the
case may be, in a manner that is the inverse of the manner in which the number of
Warrant Shares purchasable hereunder shall be adjusted.
	 
	 	2.5.	 	Notice of Adjustments. Whenever the Exercise Price or the number of
Warrant Shares purchasable hereunder shall be adjusted pursuant to this Section 2, the
Company shall prepare a certificate

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	 	 	 	signed by an executive officer of the Company
setting forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated, the Exercise Price
and the number of Warrant Shares purchasable hereunder after giving effect to such
adjustment, and shall cause copies of such certificate to be delivered to the Holder.
	 
	 	2.6.	 	Subsequent Issuances and Rights. Other than Company Shares issued
pursuant to the Purchase Agreement, the Company shall not issue or grant any shares,
securities or rights of any kind conferring upon or granting to the holder thereof any
rights that are derived, arising from or triggered by, or whose terms shall be
modified, accelerated or give rise to any benefits or privileges as a result of, the
implementation of the adjustment provision contained in Section 2.1 hereof.

	3.	 	Investment Representations.

	 	3.1.	 	The Holder is knowledgeable, sophisticated and experienced in making, and is
qualified to make, decisions with respect to investments in shares representing an
investment decision like that involved in the purchase of this Warrant and the Warrant
Shares (the “Purchased Securities”), without limitation of the representations and
warranties included herein and in the Purchase Agreement.
	 
	 	3.2.	 	The Holder is acquiring the Purchased Securities in the ordinary course of its
business and for its own account for investment only and with no present intention of
distributing any of such Purchased Securities and does not have any current arrangement
or understanding with any other persons regarding the distribution of such securities
(this representation and warranty not limiting the Holder’s right to sell or distribute
in compliance with the Securities Act and the rules and regulations thereunder);
nothing contained herein shall be deemed a representation or warranty by the Holder to
hold the Purchased Securities for any period of time;
	 
	 	3.3.	 	The Holder will not, directly or indirectly, offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or
take a pledge of) any of the Purchased Securities, nor will the Holder engage in any
short sale that results in a disposition of any of the Purchased Securities by the
Holder, except in compliance with the Securities Act and the rules and regulations
thereunder and any applicable state securities laws; and
	 
	 	3.4.	 	The Holder is an “accredited investor” within the meaning of Rule 501(a)
promulgated under the Securities Act. Neither such inquiries nor any other due
diligence investigation conducted by the Holder shall modify, limit or otherwise affect
the Holder’s right to rely on the Company’s representations and warranties contained
herein or in the Purchase Agreement.
	 
	 	3.5.	 	The Holder understands that its investment in the Purchased Securities involves
a significant degree of risk, including a risk of

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	 	 	 	total loss of Holder’s investment.
The Holder understands that no representation is being made as to the future value or
market price of the Company Shares. The Holder has the knowledge and experience in
financial and business matters as to be capable of evaluating the merits and risks of
an investment in the Purchased Securities and has the ability to bear the economic
risks of an investment in the Purchased Securities.
	 
	 	3.6.	 	The Holder understands that, until all of the applicable provisions of Section
3.7 hereof are satisfied, any certificates representing the Purchased Securities will
bear a restrictive legend in substantially the following form:
	 
	 	 	 	“THE SECURITIES EVIDENCED BY THIS CERTIFICATE (AND ANY SECURITIES THAT MAY BE
ISSUED UPON EXERCISE OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE
SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS, AND IN THE CASE
OF A TRANSACTION EXEMPT FROM REGISTRATION (OTHER THAN PURSUANT TO RULE 144(k),
PROVIDED THAT THE COMPANY HAS RECEIVED CUSTOMARY REPRESENTATIONS CERTIFYING AS TO
THE AVAILABILITY OF SUCH RULE 144(k)), UNLESS THE COMPANY HAS RECEIVED AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE
REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”
	 
	 	3.7.	 	Promptly following the earlier of (i) effectiveness of a registration statement
under the Securities Act with respect to the sale of Purchased Securities or (ii) Rule
144(k) becoming available, the Company shall (A) deliver to the transfer agent for the
Company Shares (the “Transfer Agent”) irrevocable instructions that the Transfer Agent
shall reissue a certificate representing the Warrant Shares without legends upon
receipt by such Transfer Agent of: (a) the legended certificates for such Warrant
Shares; and (b) either (1) a customary written representation by the Holder that Rule
144(k) applies to the Warrant Shares represented thereby or (2) a written statement by
the Company that the Holder may sell the Warrant Shares represented thereby in
accordance with the Plan of Distribution contained in a registration statement that was
declared effective under the Securities Act (the date on which the Transfer Agent
receives all of the items listed in clauses (a), and (b) above, the “Legend Removal
Date”), and (B) if required by the Transfer Agent, cause its counsel to deliver to the
Transfer Agent one or more opinions to the effect that the removal of such legends in
such circumstances may be effected under the Securities Act. From and after the Legend
Removal Date, upon the Holder’s

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	 	 	 	written request, the Company shall promptly cause
certificates evidencing the Holder’s Warrant Shares referred to in such written request
to be replaced with certificates which do not bear such restrictive legends, and
Warrant Shares subsequently issued upon due exercise of the Warrants shall not bear
such restrictive legends, provided the provisions of clauses (a) and (b) above, as
applicable, are satisfied with respect to such Warrant Shares.

	4.	 	Exemption from Registration. The Holder understands that the Purchased Securities are being
offered and sold to it in reliance upon specific exemptions from the registration requirements
of the Securities Act, the rules and regulations thereunder and state securities laws and that
the Company is relying upon the truth and accuracy of, and the Holder’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of the Holder set
forth herein in order to determine the availability of such exemptions and the eligibility of
the Holder to acquire the Purchased Securities.
	 
	5.	 	Transfer

	 	5.1.	 	Subject to the restrictions on transfer provided herein and subject to Sections
3.6 and 3.7, this Warrant shall be transferable, in whole or in part, at the discretion
of the Holder and the Company shall transfer this Warrant, in whole or in part, from
time to time upon the books to be maintained by the Company for that purpose, upon
surrender thereof for transfer accompanied by appropriate instructions for transfer and
such other documents as may be reasonably required by the Company, including, if
required by the Company, an opinion of its counsel to the effect that such transfer is
exempt from the registration requirements of the Securities Act, to establish that such
transfer is being made in accordance with the terms hereof, and a new Warrant(s) shall
be issued to the transferee(s) and the surrendered Warrant shall be canceled by the
Company.
	 
	 	5.2.	 	The Company will maintain a register containing the names and addresses of the
Holder(s) of this Warrant. Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Holder of this Warrant as the absolute owner hereof
for all purposes. Any Holder may change such Holder’s address as shown on the warrant
register by written notice to the Company requesting such change.

	6.	 	No Impairment. The Company will not, by amendment of its charter documents or through any
reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, sale
of assets, issue or sale of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms to be observed or performed hereunder, or
impair the economic interest of the Holder, but will at all times in good faith assist in the
carrying out of all the provisions hereof and in taking of all such actions and making all
such adjustments as may be necessary or appropriate in order to protect the rights and the
economic interests of the Holder against impairment.

	7.	 	Termination. This Warrant and the right to purchase securities upon exercise hereof shall
terminate on 5:00 P.M. Eastern Time on fifth anniversary of the Closing Date of the Purchase
Agreement.

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	8.	 	Notices of Certain Transactions. In case:

	 	8.1.	 	the Company shall take a record of the holders of its Company Shares (or other
shares or securities at the time deliverable upon the exercise of this Warrant) for the
purpose of entitling or enabling them to receive any dividend or other distribution, or
to receive any right to subscribe for or purchase any shares of any class or any other
securities, or to receive any other right, to subscribe for or purchase any shares of
any class or any other securities, or to receive any other right, or
	 
	 	8.2.	 	of any capital reorganization of the Company, any reclassification of the share
capital of the Company, any Liquidity Event, or
	 
	 	8.3.	 	of the voluntary or involuntary dissolution, liquidation or winding-up of the
Company, or
	 
	 	8.4.	 	of a public offering of the Company Shares pursuant to an effective
registration statement under the Securities Act or the equivalent actions under the
laws of another jurisdiction,

then, and in each such case, the Company will deliver to the Holder a notice
specifying, as the case may be, (i) the date on which a record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right, or (ii) the estimated effective date on which such
reorganization, reclassification, Liquidity Event, dissolution, liquidation or winding up is
to take place, and the time, if any is to be fixed, as of which the holders of record of
Company Shares (or such other shares or securities at the time deliverable upon such
reorganization, reclassification, Liquidity Event, dissolution, liquidation or winding up)
are to be determined. Such notice shall be delivered ten (10) days prior to the record date
or estimated effective date for the event specified in such notice.

	9.	 	Reservation of Shares. The Company will at all times reserve and keep available, solely for
the issuance and delivery upon the exercise of this Warrant, such Warrant Shares and other
shares, securities and property, as from time to time shall be issuable upon the exercise of
this Warrant.

	10.	 Registration Rights.

	 	  10.1.	 	The Company covenants and agrees that the Holder shall be entitled to
registration rights pursuant to the Registration Rights Agreement of even date hereof,
in respect of the Warrant Shares purchasable hereunder (and any shares issued as (or
issuable upon the conversion or exercise of any warrant, right or other security that
is issued as) a dividend or other distribution with respect to, or in exchange for or
in replacement of, such Warrant Shares), and the Warrant Shares shall be deemed to be
Registrable Securities and Original Registrable Securities thereunder.
	 
	 	  10.2.	 	The Holder undertakes to be bound by the provisions of Section 9 (Lock-Up
Agreement) of the Registration Rights Agreement of even date hereof, with respect to
prohibitions to offer or sale any Warrant Shares (or any other shares exchanged
therefor), if and to the extent that this Warrant has been exercised. For the purpose
of this sub-section 10.2 the Holder shall be considered a “Holder””

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	 	 	 	and the Warrant
Shares shall be considered “Registrable Securities”, all as defined in the Registration
Rights Agreement.

	11.	 	Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or
destruction) upon delivery of an indemnity agreement reasonably satisfactory to the Company,
or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company
will issue, in lieu thereof, a new Warrant of like tenor, dated as of the date hereof. This
Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and
surrender hereof to the Company or at the office of its stock transfer agent, if any, for
other warrants of different denominations entitling the holders thereof to purchase in the
aggregate the same number of Warrant Shares purchasable hereunder.

	12.	 	Notices. Any notice required or permitted by this Warrant shall be in writing and shall be
deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery
service or confirmed facsimile, or forty-eight (48) hours after being deposited in the regular
mail as certified or registered mail (airmail if sent internationally) with postage prepaid,
addressed (a) if to the Holder, to the address of the Holder most recently furnished in
writing to the Company and (b) if to the Company, to the address set forth below or
subsequently modified by written notice to the Holder.

	 	 	 	 	 	 	 
	        12.1.	 	If to Holder:	 	to the address set forth on the signature page
	        12.2.	 	If to Company:	 	Lumenis Ltd.
	 

	 	 	 	POB 240	 	 
	 	 	 	 	Yokneam, Industrial Park Israel
	 	 	 	 	Attention: Chief Executive Officer
	 

	 	 	 	Telephone No.:
	 	(972)-(4)-9599356
	 

	 	 	 	Facsimile No.:
	 	(972)-(4)- 9599360

	 	 	Each of the above addressees may change its address for purposes of this Section by giving to
the other addressees notice of such new address in conformance with this paragraph.
	 
	13.	 	No Rights as Shareholder. The Holder shall not have any rights as a shareholder of the
Company with regard to the Warrant Shares prior to the exercise of this Warrant, and then with
respect to such Warrant Shares purchasable upon such exercise.

	14.	 	No Fractional Interest. No fractional shares will be issued in connection with any exercise
hereunder, but in lieu of such fractional shares which would otherwise be issuable the number
of shares shall rounded to the nearest whole number.

	15.	 	Entire Agreement. This Warrant constitutes the entire agreement between the parties hereto
with regard to the subject matters hereof, and supercedes any prior communications, agreements
and/or understandings between the parties hereto with regard to the subject matters hereof.

	16.	 	Amendment or Waiver. This Warrant may be amended only by a written instrument signed by the
Company and the Holder. Any term of this Warrant may be waived only

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	 	 	by an instrument in
writing signed by the party against which enforcement of the waiver is sought.

	17.	 	Successors. All the covenants and provisions hereof by or for the benefit of the Holder shall
bind and inure to the benefit of its respective successors and assigns hereunder.

	18.	 	Governing Law; Jurisdiction. This Warrant shall be governed by and construed in accordance
with the laws of the State of Israel, without giving effect to principles of conflicts of law.
The parties hereby submit any dispute arising under or in relation to this Warrant to the
exclusive jurisdiction of the competent court for the District of Tel Aviv-Jaffa, other than
with respect to the matters set forth in Section 1.3.2.2 which, in accordance with such
Section, are to be referred to arbitration.
	 
	19.	 	Arbitration Pursuant to
Section 1.3.2.2.

	 	19.1.	 	In the event a matter is referred to arbitration pursuant to Section 1.3.2.2
hereof, then such arbitration shall be conducted and all decisions and awards shall be
rendered by a single arbitrator (the “Arbitrator”) in accordance with the rules of the
Israeli Arbitration Law — 1968 (the “Arbitration Law”), which rules and procedures are
deemed to be incorporated by reference into this Section. The arbitration proceedings
shall be conducted in Hebrew in Tel-Aviv, Israel. Any arbitration proceeding hereunder
shall be conducted on a confidential basis.
	 
	 	19.2.	 	The Arbitrator shall be jointly selected by the Special Committee and the
Holder, or, if such parties do not select the Arbitrator within the ten (10) Business
Days of the delivery of a notice by either party to the other requesting such
selection, then the Arbitrator shall be appointed by the Chairman of the Israeli Bar
Association.
	 
	 	19.3.	 	All aspects of the arbitration proceedings, including all preliminary and
post-ruling matters, shall be conducted in accordance with Israeli substantive laws
then in force. The Arbitrator shall be authorized to determine the procedural and
evidentiary rules applicable to the arbitration and shall not be bound by the rules of
procedure or evidence under law. The Arbitrator shall specify in writing the basis for
his decision and the basis of any other remedy authorized under this Section. The
discretion of the Arbitrator to fashion remedies hereunder shall be no broader than the
legal and equitable remedies available to a court in Israel.
	 
	 	19.4.	 	Each of the parties to the arbitration proceedings shall pay its own expenses.
The Company and the Holder will share equally the expenses of the arbitration
proceeding, unless otherwise determined by the Arbitrator in his award.
	 
	 	19.5.	 	The arbitration proceedings shall not exceed 30 Business Days from the
commencement of the proceedings. The Arbitrator shall provide its decision within 15
days after the completion of the arbitration proceedings. Any award rendered by the
Arbitrator shall be final, binding and un-appealable, except as provided in the
Arbitration Law and judgment may be entered on any such award by Israeli court
having competent jurisdiction.

Execution Copy

 

- 14 -

	 	19.6.	 	For the purpose of this Section “Business Day” shall mean each day that is not
a Friday, Saturday or holiday on which banking institutions located in Tel Aviv, Israel
are authorized or obligated by law or executive order to close.

	20.	 	Headings. The headings in this Warrant are for purposes of reference only and shall not
limit or otherwise affect the meaning of any provision of this Warrant.

	21.	 	Counterparts. This Warrant may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other party, it
being understood that all parties need not sign the same counterpart and that signatures may
be provided by facsimile transmission.

- Signature page follows -

Execution Copy

 

- 15 -

This WARRANT TO PURCHASE ORDINARY SHARES OF LUMENIS LTD. is executed as of the date first set forth
above.

	 	 	 	 	 	 	 
	 	 	LUMENIS LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

Acknowledged and Agreed to:

Ofer Hi-Tech Investments Ltd.

	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 

	 	 	 
	Address:
	 	Ramat Aviv Tower
	 
	 	6th Floor
	 
	 	40 Einstein Street
	 
	 	Tel Aviv , Israel  69102
	Telephone No:
	 	+972-(0)3-745-6000
	Facsimile No.:
	 	+972-(0)3-760-4354

Acknowledged and Agreed to:

With a mandatory copy to:

Meitar Liquornik Geva & Leshem Brandwein

16 Abba Hillel Road Ramat Gan 52506 Israel

Attention:           Dan Shamgar, Advocate

Telephone No.: (972)-(3)-610-3100

Facsimile No.:     (972)-(3)-6103-111

Herzog, Fox & Neeman

Asia House, 4 Weizmann Street

Tel-Aviv 64239 Israel

Attention:           Alon Sahar, Advocate

Telephone No.: (972)-(3)-692-2861

Facsimile No.:     (972)-(3)-696-6464

Execution Copy

 

- 16 -

NOTICE OF EXERCISE

			
	 	 	 
	To: Lumenis Ltd.
	 	Date: [ ]

The undersigned, pursuant to the provisions set forth in the attached WARRANT TO PURCHASE ORDINARY
SHARES OF LUMENIS LTD. hereby irrevocably elects to:

o purchase Company Shares covered by such Warrant and herewith makes payment of $ ,
representing the full purchase price for such shares at the price per share provided for in such
Warrant (as adjusted from time to time pursuant to the terms of this Warrant), or

o exercise such Warrant for shares purchasable under the Warrant pursuant to the Net Issue
Exercise provisions of Section 1.3 of such Warrant and tenders the Warrant accordingly.

Please issue a certificate representing the Warrant Shares in the name of the undersigned or as
otherwise indicated below, and if the number of Warrant Shares shall not be all the Warrant Shares
purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares
purchasable upon exercise of this Warrant be registered in the name of the undersigned or as
otherwise indicated below and delivered to the address stated below:

Name:

Address:

ID or Social Security No.:

	 	 	 	 	 	 	 
	 

(Date)

	 	 
	 	 

(Print Name)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 

	 	 
	 

	 	 	 	(Signature)	 	 

Execution Copyexv4w26

 

 

Exhibit
4.26

 

THIS WARRANT AND ANY SECURITIES THAT MAY BE ISSUED UPON EXERCISE THEREOF) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS,
AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION (OTHER THAN PURSUANT TO RULE 144(k),
PROVIDED THAT THE COMPANY HAS RECEIVED CUSTOMARY REPRESENTATIONS CERTIFYING AS TO THE AVAILABILITY
OF SUCH RULE 144(k)), UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER
APPLICABLE LAWS.

	 	 	 
	Warrant no. 5

	 	Number of Shares: 8,000,000
	December 5, 2006

	 	(subject to adjustment)

 

WARRANT TO PURCHASE ORDINARY SHARES

OF

LUMENIS LTD.

 

     For VALUE RECEIVED Bank Hapoalim B.M. (together with its successors, transferees and assigns,
the “Holder”) is entitled to purchase subject to the provisions of this Warrant (this “Warrant”)
from Lumenis Ltd., an Israeli company (“Company”), during the term of this Warrant, at a purchase
price per share equal to $1.1794 (as adjusted from time to time pursuant to the terms of this
Warrant), 8,000,000 (eight million) Ordinary Shares, par value NIS 0.1 per share, of the Company
(the “Company Shares”) (as adjusted from time to time pursuant to the terms of this Warrant). The
shares purchasable upon exercise of this Warrant and the purchase price per share, as adjusted from
time to time pursuant to the terms of this Warrant, shall be referred to herein as the “Warrant
Shares” and the “Exercise Price”, respectively.

	1.	 	Exercise.

	 	1.1.	 	Manner of Exercise. This Warrant may be exercised, in whole or in part,
on one or more occasions during its term. The Warrant may be exercised by the
surrender of this Warrant, together with the Notice of Exercise in the form attached
hereto, duly completed and executed by the Holder, at the principal office of the
Company or at such other office or agency as the Company may designate, accompanied by
payment in full of the aggregate Exercise Price payable in respect of the Warrant
Shares purchasable upon such exercise. The Exercise Price may be paid by cash, check,
wire transfer or by the cancellation of debt owed by the Company to the Holder.
	 
	 	1.2.	 	Effective Time of Exercise. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of

 

 - 2 - 

 

	 	 	 	business on the day on
which this
Warrant shall have been surrendered to the Company as provided in Section 1.1
above. At such time, the person(s) in whose name(s) any certificates representing
the Warrant Shares shall be issuable upon exercise as provided in Section 1.4
below shall be deemed to have become the holder of record of such Warrant Shares
represented by such certificates.

	 	1.3.	 	Net Issue Exercise.

	 	1.3.1.	 	In lieu of exercising this Warrant in the manner provided in Section 1.1
above, the Holder may elect to receive shares equal to the value of this
Warrant (or the portion thereof being canceled) by surrender of this Warrant
at the principal office of the Company or at such other office or agency as
the Company may designate, together with the Notice of Exercise in the form
attached hereto, duly completed and executed by the Holder, in which event
the Company shall issue to the Holder the number of Warrant Shares computed
using the following formula:

X = Y * (A — B)

 A

	 	 	 	 	 	 	 
	 

	 	Where:
	 	X =
	 	the number of Warrant Shares to be issued to the Holder.
	 
	 	 	 	 	 	 
	 

	 	 	 	Y =
	 	the number
of Warrant Shares, as adjusted to the date of such
calculation, underlying the portion of the Warrant
being exercised.
	 
	 	 	 	 	 	 
	 

	 	 	 	A =
	 	the Fair
Market Value (as defined below) of one Warrant Share.
	 
	 	 	 	 	 	 
	 

	 	 	 	B =
	 	the
Exercise Price, as adjusted to the date of such
calculation.

	 	1.3.2.	 	For purposes of this Section 1.3, the “Fair Market Value” of a Warrant
Share on the date of calculation shall mean:

	 	1.3.2.1.	 	If the Company Shares are listed on a national securities
exchange or are quoted on the National Association of Securities
Dealers,

 

 - 3 - 

 

	 	 	 	Inc. Automated Quotation/National Market System
(NASDAQ/NMS), then the Fair Market Value shall be the average
closing or last sale price, respectively, reported for the five
(5) trading days prior to the exercise date.
	 
	 	1.3.2.2.	 	If the Company Shares are not listed on a national securities
exchange or quoted on NASDAQ/NMS, but are traded in any
over-the-counter market, then the Fair Market Value shall be the
last sale price of the Company Shares reported for the five (5)
trading days immediately preceding the exercise date, and if no
such sale price is reported, the average of the closing bid and
asked prices as reported for the five (5) trading days prior to
the exercise date. If the Company Shares are not publicly
traded, then the Fair Market Value shall be the fair market
value of a Company Share as determined by the Board of
Directors, unless the Company is at such time subject to a
Liquidity Event (as defined below), in which case the Fair
Market Value shall be deemed to be the

 

 - 4 - 

 

	 	 	 	value of the
consideration per share received by the holders of such
 shares pursuant to such event. In the event that the
Holder objects to the determination of the Board of
Directors of the Company, within 15 days after receipt of
such determination, the matter shall be referred to
arbitration to be conducted in accordance with Section 19
hereof.
	 
	 	1.3.2.3.	 	If the exercise is in connection with a public offering of the
Company Shares pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the “Securities
Act”), or the equivalent actions under the laws of another
jurisdiction, then the fair market value shall be the initial
“Price to Public” per share specified in the final prospectus with
respect to the offering, before deduction of discounts,
commissions or expenses.

	 	1.4.	 	Delivery to Holder. As soon as practicable after the exercise of this
Warrant in whole or in part, and in any event within ten (10) days thereafter, the
Company at its expense will cause to be issued in the name of, and delivered to, the
Holder, or as such Holder may direct:

 

 - 5 - 

 

	 	1.4.1.	 	a certificate(s) for the number of Warrant Shares to which such Holder
shall be entitled, and
	 
	 	1.4.2.	 	in case such exercise is in part only, a new warrant(s) (dated the date
hereof) of like tenor, calling in the aggregate on the face(s) thereof for
the number of Warrant Shares equal to the number of such shares called for on
the face of this Warrant minus the number of such shares purchased by the
Holder upon such exercise as provided in Sections 1.1 or 1.3 above.

	 	1.5.	 	Conditional Exercise. In case of an exercise made in connection with a
public offering of the Company Shares pursuant to an effective registration statement
under the Securities Act or the equivalent actions under the laws of another
jurisdiction, or a Liquidity Event (as defined below), such exercise may be made
conditional upon the closing of such offering or event.
	 
	 	 	 	For purposes of this Warrant, the term “Liquidity Event” shall mean: (i) a sale of
all or substantially all of the Company’s assets; (ii) a sale of all or
substantially all of the Company’s issued and outstanding shares, such that
following the transaction more than fifty percent (50%) of the Company’s issued
 shares are held by persons who, prior to the said transaction, held less than
fifty percent (50%) of the Company’s issued shares; or (iii) a merger or
consolidation of the Company with or into another corporation, such that following
the transaction more than fifty percent (50%) of the surviving entity’s issued
 shares are held by persons who, prior to the said transaction, held less than
fifty percent (50%) of the Company’s issued shares.

	2.	 	Adjustments

	 	 	The number and kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:

	 	2.1.	 	Stock Splits, Dividends and Combinations. If the outstanding Company
Shares shall be subdivided into a greater number of shares or a dividend or other
distribution payable in additional shares shall be paid in respect of Company Shares,
the Exercise Price in effect immediately prior to such subdivision or at the record
date of such dividend shall simultaneously with the effectiveness of such subdivision
or immediately after the record date of such dividend be proportionately reduced. If
outstanding Company Shares shall be combined into a smaller number of shares, the
Exercise Price in effect immediately prior to such combination shall, simultaneously
with the effectiveness of such combination be proportionately increased. When any
adjustment is required to be made in the Exercise Price, the number of Warrant Shares
purchasable upon the exercise of this Warrant shall be changed to the number determined
by dividing (i) an amount equal to the number of shares issuable upon the exercise of
this Warrant

 

 - 6 - 

 

	 	 	 	immediately prior to such adjustment, multiplied by the Exercise Price in
effect immediately prior to such adjustment, by (ii) the Exercise Price in effect
immediately after such adjustment.
	 
	 	2.2.	 	Reclassification, Etc. In case of any reclassification or change of the
outstanding securities of the Company or of any reorganization of the Company (or any
other corporation the stock or securities of which are at the time receivable upon the
exercise of this Warrant) or any similar corporate reorganization on or after the date
hereof, then and in each such case the holder of this Warrant, upon the exercise hereof
at any time after the consummation of such reclassification, change, reorganization,
merger or conveyance, shall be entitled to receive, in lieu of the stock or other
securities and property receivable upon the exercise hereof prior to such consummation,
the stock or other securities or property to which such holder would have been entitled
upon such consummation if such holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in Section 2; and in each such
case, the terms of this Section 2 shall be applicable to the shares of stock or other
securities properly receivable upon the exercise of this Warrant after such
consummation.
	 
	 	2.3.	 	Other Transactions. In the event that the Company shall issue shares
to its shareholders as a result of a split-off, spin-off or the like, then the Company
shall only complete such issuance or other action if, as part thereof, allowance is
made to protect the economic interest of the Holder either by increasing the number of
Warrant Shares or by procuring that the Holder shall be entitled, on economically
proportionate terms, to acquire additional shares of the spun-off or split-off
entities. Upon each adjustment in the number or kind of Warrant Shares purchasable
hereunder, the Exercise Price shall be proportionately increased or decreased, as the
case may be, in a manner that is the inverse of the manner in which the number of
Warrant Shares purchasable hereunder shall be adjusted.
	 
	 	2.4.	 	Notice of Adjustments. Whenever the Exercise Price or the number of
Warrant Shares purchasable hereunder shall be adjusted pursuant to this Section 2, the
Company shall prepare a certificate signed by an executive officer of the Company
setting forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated, the Exercise
Price and the number of Warrant Shares purchasable hereunder after giving effect
to such adjustment, and shall cause copies of such certificate to be delivered to
the Holder.

	3.	 	Investment Representations.

	 	3.1.	 	The Holder is knowledgeable, sophisticated and experienced in making, and is
qualified to make, decisions with respect to investments in shares representing an
investment decision like that involved in the purchase of this Warrant and the Warrant
Shares (the “Purchased Securities”), without limitation of the

 

 - 7 - 

 

	 	 	 	representations and
warranties included herein and in the Agreement dated September 30, 2006 between the
Holder and the Company (the “Agreement”).
	 
	 	3.2.	 	The Holder is acquiring the Purchased Securities in the ordinary course of its
business and for its own account for investment only and with no present intention of
distributing any of such Purchased Securities and does not have any current arrangement
or understanding with any other persons regarding the distribution of such securities
(this representation and warranty not limiting the Holder’s right to sell or distribute
in compliance with the Securities Act and the rules and regulations thereunder);
nothing contained herein shall be deemed a representation or warranty by the Holder to
hold the Purchased Securities for any period of time;
	 
	 	3.3.	 	The Holder will not, directly or indirectly, offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or
take a pledge of) any of the Purchased Securities, nor will the Holder engage in any
short sale that results in a disposition of any of the Purchased Securities by the
Holder, except in compliance with the Securities Act and the rules and regulations
thereunder and any applicable state securities laws; and
	 
	 	3.4.	 	The Holder is an “accredited investor” within the meaning of Rule 501(a)
promulgated under the Securities Act. Neither such inquiries nor any other due
diligence investigation conducted by the Holder shall modify, limit or otherwise affect
the Holder’s right to rely on the Company’s representations and warranties contained
herein or in the Agreement.
	 
	 	3.5.	 	The Holder understands that its investment in the Purchased Securities involves
a significant degree of risk, including a risk of total loss of Holder’s investment.
The Holder understands that no representation is being made as to the future value or
market price of the Company Shares. The Holder has the knowledge and experience in
financial and business matters as to be capable of evaluating the merits and risks of
an investment in the Purchased Securities and has the ability to bear the economic
risks of an investment in the Purchased Securities.
	 
	 	3.6.	 	The Holder understands that, until all of the applicable provisions of Section
3.7 hereof are satisfied, any certificates representing the Purchased Securities will
bear a restrictive legend in substantially the following form:
	 
	 	 	 	“THE SECURITIES EVIDENCED BY THIS CERTIFICATE (AND ANY SECURITIES THAT MAY BE
ISSUED UPON EXERCISE OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE

 

 - 8 - 

 

	 	 	 	TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES AND OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM
REGISTRATION (OTHER THAN PURSUANT TO RULE 144(k), PROVIDED THAT THE COMPANY HAS
RECEIVED CUSTOMARY REPRESENTATIONS CERTIFYING AS TO THE AVAILABILITY OF SUCH RULE
144(k)), UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE
SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”
	 
	 	3.7.	 	Promptly following the earlier of (i) effectiveness of a registration statement
under the Securities Act with respect to the sale of Purchased Securities or (ii) Rule
144(k) becoming available, the Company shall (A) deliver to the transfer agent for the
Company Shares (the “Transfer Agent”) irrevocable instructions that the Transfer Agent
shall reissue a certificate representing the Warrant Shares without legends upon
receipt by such Transfer Agent of: (a) the legended certificates for such Warrant
Shares; and (b) either (1) a customary written representation by the Holder that Rule
144(k) applies to the Warrant Shares represented thereby or (2) a written statement by
the Company that the Holder may sell the Warrant Shares represented thereby in
accordance with the Plan of Distribution contained in a registration statement that was
declared effective under the Securities Act (the date on which the Transfer Agent
receives all of the items listed in clauses (a), and (b) above, the “Legend Removal
Date”), and (B) if required by the Transfer Agent, cause its counsel to deliver to the
Transfer Agent one or more opinions to the effect that the removal of such legends in
such circumstances may be effected under the Securities Act. From and after the Legend
Removal Date, upon the Holder’s written request, the Company shall promptly cause
certificates evidencing the Holder’s Warrant Shares referred to in such written request
to be replaced with certificates which do not bear such restrictive legends, and
Warrant Shares subsequently issued upon due exercise of the Warrants shall not bear
such restrictive legends, provided the provisions of clauses (a) and (b) above, as
applicable, are satisfied with respect to such Warrant Shares.

	4.	 	Exemption from Registration. The Holder understands that the Purchased Securities are being
offered and sold to it in reliance upon specific exemptions from the registration requirements
of the Securities Act, the rules and regulations thereunder and state securities laws and that
the Company is relying upon the truth and accuracy of, and the Holder’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of the Holder set
forth herein in order to determine the availability of such exemptions and the eligibility of
the Holder to acquire the Purchased Securities.

 

 - 9 - 

 

	5.	 	Transfer

	 	5.1.	 	Subject to the restrictions on transfer provided herein and subject to Sections
3.6 and 3.7, this Warrant shall be transferable, in whole or in part, at the discretion
of the
Holder and the Company shall transfer this Warrant, in whole or in part, from time
to time upon the books to be maintained by the Company for that purpose, upon
surrender thereof for transfer accompanied by appropriate instructions for
transfer and such other documents as may be reasonably required by the Company,
including, if required by the Company, an opinion of its counsel to the effect
that such transfer is exempt from the registration requirements of the Securities
Act, to establish that such transfer is being made in accordance with the terms
hereof, and a new Warrant(s) shall be issued to the transferee(s) and the
surrendered Warrant shall be canceled by the Company.
	 
	 	5.2.	 	The Company will maintain a register containing the names and addresses of the
Holder(s) of this Warrant. Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Holder of this Warrant as the absolute owner hereof
for all purposes. Any Holder may change such Holder’s address as shown on the warrant
register by written notice to the Company requesting such change.

	6.	 	No Impairment. The Company will not, by amendment of its charter documents or through any
reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, sale
of assets, issue or sale of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms to be observed or performed hereunder, or
impair the economic interest of the Holder, but will at all times in good faith assist in the
carrying out of all the provisions hereof and in taking of all such actions and making all
such adjustments as may be necessary or appropriate in order to protect the rights and the
economic interests of the Holder against impairment.

	7.	 	Termination. This Warrant and the right to purchase securities upon exercise hereof shall
terminate on 5:00 P.M. Eastern Time on November 19, 2013.

	8.	 	Notices of Certain Transactions. In case:

	 	8.1.	 	the Company shall take a record of the holders of its Company Shares (or other
 shares or securities at the time deliverable upon the exercise of this Warrant) for the
purpose of entitling or enabling them to receive any dividend or other distribution, or
to receive any right to subscribe for or purchase any shares of any class or any other
securities, or to receive any other right, to subscribe for or purchase any shares of
any class or any other securities, or to receive any other right, or
	 
	 	8.2.	 	of any capital reorganization of the Company, any reclassification of the share
capital of the Company, any Liquidity Event, or

 

 - 10 - 

 

	 	8.3.	 	of the voluntary or involuntary dissolution, liquidation or winding-up of the
Company, or
	 
	 	8.4.	 	of a public offering of the Company Shares pursuant to an effective
registration statement under the Securities Act or the equivalent actions under the
laws of another jurisdiction,

	 	 	then, and in each such case, the Company will deliver to the Holder a notice
specifying, as the case may be, (i) the date on which a record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right, or (ii) the estimated effective date on which such
reorganization, reclassification, Liquidity Event, dissolution, liquidation or winding up is
to take place, and the time, if any is to
be fixed, as of which the holders of record of Company Shares (or such other shares or
securities at the time deliverable upon such reorganization, reclassification, Liquidity
Event, dissolution, liquidation or winding up) are to be determined. Such notice shall be
delivered ten (10) days prior to the record date or estimated effective date for the event
specified in such notice.

	9.	 	Reservation of Shares. The Company will at all times reserve and keep available, solely for
the issuance and delivery upon the exercise of this Warrant, such Warrant Shares and other
 shares, securities and property, as from time to time shall be issuable upon the exercise of
this Warrant.

	10.	 	Registration Rights.

	 	10.1.	 	The Company covenants and agrees that the Holder shall be entitled to
registration rights pursuant to the Registration Rights Agreement of even date hereof,
in respect of the Warrant Shares purchasable hereunder (and any shares issued as (or
issuable upon the conversion or exercise of any warrant, right or other security that
is issued as) a dividend or other distribution with respect to, or in exchange for or
in replacement of, such Warrant Shares), and the Warrant Shares shall be deemed to be
Registrable Securities and Original Registrable Securities thereunder.
	 
	 	10.2.	 	The Holder undertakes to be bound by the provisions of Section 9 (Lock-Up
Agreement) of the Registration Rights Agreement of even date hereof, with respect to
prohibitions to offer or sale any Warrant Shares (or any other shares exchanged
therefor), if and to the extent that this Warrant has been exercised. For the purpose
of this sub-section 10.2 the Holder shall be considered a “Holder” and the Warrant
Shares shall be considered “Registrable Securities”, all as defined in the Registration
Rights Agreement.

	11.	 	Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or
destruction) upon delivery of an indemnity agreement reasonably satisfactory to the Company,
or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company
will issue, in lieu thereof, a new Warrant of like tenor, dated as of the date hereof. This
Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and
surrender hereof to the Company or at the office of its stock transfer agent, if any, for
other warrants of

 

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	 	 	different denominations entitling the holders thereof to purchase in the
aggregate the same number of Warrant Shares purchasable hereunder.

	12.	 	Notices. Any notice required or permitted by this Warrant shall be in writing and shall be
deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery
service or confirmed facsimile, or forty-eight (48) hours after being deposited in the regular
mail as certified or registered mail (airmail if sent internationally) with postage prepaid,
addressed (a) if to the Holder, to the address of the Holder most recently furnished in
writing to the Company and (b) if to the Company, to the address set forth below or
subsequently modified by written notice to the Holder.

	 	 	 	 	 	 	 	 	 
	 

	 	 	12.1.	 	 	If to Holder:
	 	to the address set forth on the signature page
	 
	 	 	 	 	 	 	 	 
	 

	 	 	12.2.	 	 	If to Company:
	 	Lumenis Ltd.
	 

	 	 	 	 	 	 	 	POB 240
	 

	 	 	 	 	 	 	 	Yokneam, Industrial Park Israel
	 

	 	 	 	 	 	 	 	Attention:      Chief Executive Officer
	 

	 	 	 	 	 	 	 	Telephone No.: (972)-(4)-9599356
	 

	 	 	 	 	 	 	 	Facsimile No.: (972)-(4)- 9599360

	 	 	Each of the above addressees may change its address for purposes of this Section by giving to
the other addressees notice of such new address in conformance with this paragraph.

	13.	 	No Rights as Shareholder. The Holder shall not have any rights as a shareholder of the
Company with regard to the Warrant Shares prior to the exercise of this Warrant, and then with
respect to such Warrant Shares purchasable upon such exercise.

	14.	 	No Fractional Interest. No fractional shares will be issued in connection with any exercise
hereunder, but in lieu of such fractional shares which would otherwise be issuable the number
of shares shall rounded to the nearest whole number.

	15.	 	Entire Agreement. This Warrant constitutes the entire agreement between the parties hereto
with regard to the subject matters hereof, and supercedes any prior communications, agreements
and/or understandings between the parties hereto with regard to the subject matters hereof,
including the Option Agreement dated November 19, 2003, which is terminated.

	16.	 	Amendment or Waiver. This Warrant may be amended only by a written instrument signed by the
Company and the Holder. Any term of this Warrant may be waived only by an instrument in
writing signed by the party against which enforcement of the waiver is sought.

	17.	 	Successors. All the covenants and provisions hereof by or for the benefit of the Holder shall
bind and inure to the benefit of its respective successors and assigns hereunder.

	18.	 	Governing Law; Jurisdiction. This Warrant shall be governed by and construed in accordance
with the laws of the State of Israel, without giving effect to principles of

 

 - 12 - 

 

	 	 	conflicts of law.
The parties hereby submit any dispute arising under or in relation to this Warrant to the
exclusive jurisdiction of the competent court for the District of Tel Aviv-Jaffa, other than
with respect to the matters set forth in Section 1.3.2.2 which, in accordance with such
Section, are to be referred to arbitration.

	19.	 	Arbitration Pursuant to Section 1.3.2.2.

	 	19.1.	 	In the event a matter is referred to arbitration pursuant to Section 1.3.2.2
hereof, then such arbitration shall be conducted and all decisions and awards shall be
rendered by a single arbitrator (the “Arbitrator”) in accordance with the rules of the
Israeli Arbitration Law — 1968 (the “Arbitration Law”), which rules and procedures are
deemed to be incorporated by reference into this Section. The arbitration proceedings
shall be conducted in Hebrew in Tel-Aviv, Israel. Any arbitration proceeding hereunder
shall be conducted on a confidential basis.
	 
	 	19.2.	 	The Arbitrator shall be jointly selected by the Company and the Holder, or, if
such parties do not select the Arbitrator within the ten (10) Business Days of the
delivery of a notice by either party to the other requesting such selection, then the
Arbitrator shall be appointed by the Chairman of the Israeli Bar Association.
	 
	 	19.3.	 	All aspects of the arbitration proceedings, including all preliminary and
post-ruling matters, shall be conducted in accordance with Israeli substantive laws
then in force. The Arbitrator shall be authorized to determine the procedural and
evidentiary rules applicable to the arbitration and shall not be bound by the rules of
procedure or evidence under law. The Arbitrator shall specify in writing the basis for
his decision and the basis of any other remedy authorized under this Section. The
discretion of the Arbitrator to fashion remedies hereunder shall be no broader than the
legal and equitable remedies available to a court in Israel.
	 
	 	19.4.	 	Each of the parties to the arbitration proceedings shall pay its own expenses.
The Company and the Holder will share equally the expenses of the arbitration
proceeding, unless otherwise determined by the Arbitrator in his award.
	 
	 	19.5.	 	The arbitration proceedings shall not exceed 30 Business Days from the
commencement of the proceedings. The Arbitrator shall provide its decision within 15
days after the completion of the arbitration proceedings. Any award rendered by the
Arbitrator shall be final, binding and un-appealable, except as provided in the
Arbitration Law and judgment may be entered on any such award by Israeli court having
competent jurisdiction.
	 
	 	19.6.	 	For the purpose of this Section “Business Day” shall mean each day that is not
a Friday, Saturday or holiday on which banking institutions located in Tel Aviv, Israel
are authorized or obligated by law or executive order to close.

 

 - 13 - 

 

	20.	 	Headings. The headings in this Warrant are for purposes of reference only and shall not
limit or otherwise affect the meaning of any provision of this Warrant.

	21.	 	Counterparts. This Warrant may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other party, it
being understood that all parties need not sign the same counterpart and that signatures may
be provided by facsimile transmission.

- Signature page follows -

 

 - 14 - 

 

This WARRANT TO PURCHASE ORDINARY SHARES OF LUMENIS LTD. is executed as of the date first set forth
above.

	 	 	 	 	 
	 	LUMENIS LTD.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

Acknowledged and Agreed to:

	 	 	 	 	 
	BANK HAPOALIM B.M.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 

Address: Menachem Begin 23, Migdal

                    Levinstein, Tel Aviv

Telephone No: (972)-(3)-567-4757

Facsimile No.: (972)-(3)- 5675699

With a mandatory copy to:

Yigal Arnon & Co.

1 Azrieli Center

Tel-Aviv, 67021

Telephone No.:   (972)-(3)-608-7856

Facsimile:             (972)-(3)-608-7727

Attention:            David H. Schapiro, Advocate

 

 - 15 - 

 

NOTICE OF EXERCISE

	 	 	 
	To: Lumenis Ltd.

	 	Date: [ ]

The undersigned, pursuant to the provisions set forth in the attached WARRANT TO PURCHASE ORDINARY
SHARES OF LUMENIS LTD. hereby irrevocably elects to:

o
purchase _____Company Shares covered by such Warrant and herewith makes
payment of $_____ ,
representing the full purchase price for such shares at the price per share provided for in such
Warrant (as adjusted from time to time pursuant to the terms of this Warrant), or

o exercise such Warrant for _____shares purchasable under the Warrant pursuant to the Net Issue
Exercise provisions of Section 1.3 of such Warrant and tenders the Warrant accordingly.

Please issue a certificate representing the Warrant Shares in the name of the undersigned or as
otherwise indicated below, and if the number of Warrant Shares shall not be all the Warrant Shares
purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares
purchasable upon exercise of this Warrant be registered in the name of the undersigned or as
otherwise indicated below and delivered to the address stated below:

Name:

Address:

ID or Social Security No.:

	 	 	 	 	 	 	 
	 

(Date)

	 	 
	 	 

(Print Name)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(Signature)

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