Special meetings of stockholders or shareholders		Under Delaware law, a special meeting of the stockholders may be called by the board of directors of the corporation or by any other person authorized to do so in the certificate of incorporation or bylaws. The PhotoMedex bylaws provide that a special meeting may be convened at any time by the chairman of the board, the president of PhotoMedex or by resolution adopted by holders of at least two-thirds of the voting power of all outstanding shares of voting stock.		Under Washington law, a special meeting of the shareholders may be called by a corporation's board of directors, the persons authorized to do so in the corporation's articles of incorporation or bylaws or, unless limited or denied by a corporation's articles of incorporation, by the holders of at least 10% of all the votes entitled to be cast on any issue proposed to be considered at the special meeting. The ProCyte bylaws provide that the chairman of the board, the president or the board of directors of ProCyte may convene a special meeting at any time, or, under certain conditions, holders of not less than 10% of the votes entitled to be cast on any issue proposed to be considered at a special meeting can make written demand for such a special meeting.
Notice of stockholder or shareholder meetings		In accordance with Delaware law, PhotoMedex's bylaws provide that written notice of any stockholders meeting must be given to each stockholder entitled to vote not less than 10 or more than 60 days before the date of the meeting.		In accordance with Washington law, the ProCyte bylaws provide that written notice of any shareholders meeting must be given to each shareholder entitled to vote not less than 10 nor more than 60 days before the meeting, except that notice of not less than 20 or more than 60 days before the meeting must be given in the case of a meeting to act on an amendment to the articles of incorporation, a plan of merger or share exchange, the sale, lease, exchange or other disposition of all or substantially all of the corporation's assets or the dissolution of the corporation.

Action by written consent of stockholders without a meeting

As permitted by Delaware law, the PhotoMedex bylaws provide that any action which is required by statute to be taken or may be taken at a meeting must be effected at such a meeting.

Under Washington law and the ProCyte bylaws, action by the shareholders may be taken without a meeting only if written consents approving the action are signed by all shareholders entitled to vote on the action and delivered to the corporation.


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PhotoMedex Stockholder Rights

ProCyte Shareholder Rights

Removal of directors	Delaware law provides that stockholders holding a majority of shares entitled to vote may remove any director or the entire board of directors; provided, however, that in the case of a Delaware corporation with a classified board, unless otherwise provided in the certificate of incorporation, stockholders may only remove a director for cause. PhotoMedex does not have a classified board of directors. PhotoMedex's bylaws provide that at a special meeting called for such purpose, the board of directors, or an individual director, may be removed, with or without cause, by a vote of the stockholders holding a majority of the shares entitled to vote at an election of directors.		Under Washington law, a director may be removed with or without cause unless a corporation's articles of incorporation provide that directors may be removed only for cause. The articles of incorporation of ProCyte do not so provide. Under Washington law, a director may be removed by the shareholders only at a special meeting called for the purpose of removing such director, and such director will be removed if the number of votes cast to remove the director exceeds the number of votes cast not to remove the director.
Vacancies on the board of directors	Delaware law provides that, unless the governing documents of a Delaware corporation provide otherwise, vacancies and newly created directorships resulting from a resignation or an increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum. PhotoMedex's certificate of incorporation and bylaws provide that vacancies and newly created directorships may only be filled by a majority of the remaining directors then in office, even if less than a quorum. Any vacancy created by an increase in the number of directors may be filled by the PhotoMedex board of directors for a term of office continuing only until the next election of directors by the stockholders.		Under Washington law, unless a corporation's articles of incorporation provide otherwise, a vacancy on the board of directors, including a vacancy resulting from an increase in the number of directors, may be filled by the shareholders, by the board of directors, or if the directors in office constitute fewer than a quorum, by the affirmative vote of a majority of all the directors in office. The articles of incorporation and bylaws of ProCyte provide that a vacancy may be filled by the affirmative vote of a majority of the remaining directors, even if less than a quorum. Any vacancy created by an increase in the number of directors may be filled by the ProCyte board of directors for a term of office continuing only until the next election of directors by the shareholders.


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PhotoMedex Stockholder Rights

ProCyte Shareholder Rights

Amendment of articles of incorporation or certificate of incorporation	Under Delaware law, PhotoMedex's certificate of incorporation may be amended only if the proposed amendment is approved by the board of directors and thereafter approved by holders of a majority of the outstanding stock entitled to vote thereon.		Under Washington law, a board of directors may adopt one or more amendments to the articles of incorporation to make certain ministerial changes without shareholder action, including changes to the corporate name and, if the corporation has only one class of shares outstanding, changes to the number of outstanding shares in order to effectuate a stock split or stock dividend, or changes to, or the elimination of, provisions with respect to the par value of a corporation's stock. Other amendments to the articles of incorporation must be recommended to the shareholders by the board of directors and the holders of a majority of the outstanding shares of stock entitled to vote on the amendment must approve the amendment unless another percentage is specified: in the articles of incorporation, by the board of directors as a condition to its recommendation or by the provisions of the WBCA.
Amendment of bylaws	In accordance with Delaware law, PhotoMedex's bylaws may be repealed, altered or amended or new bylaws adopted by (i) the affirmative vote of not less than two-thirds of the outstanding shares of stock entitled to vote upon the election of directors or (ii) the board of directors; provided, however, that any bylaws made by the directors may be amended, altered or repealed by the stockholders.		Under Washington law, a corporation's board of directors can amend or repeal the bylaws, or adopt new bylaws, unless the articles of incorporation or the WBCA reserves this power exclusively to the shareholders in whole or in part (the articles of incorporation of ProCyte do not do so) or if the shareholders, in amending or repealing a particular bylaw, provide expressly that the board of directors may not amend or repeal that bylaw. A corporation's shareholders may amend or repeal the bylaws, or adopt new bylaws.


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PhotoMedex Stockholder Rights

ProCyte Shareholder Rights

Delivery and notice requirements of shareholder or stockholder nominations and proposals	PhotoMedex's bylaws provide that for business to be properly brought before a meeting of stockholders, PhotoMedex must deliver notice, not fewer than 10 days nor more than 60 days in advance of the date of that meeting.	The bylaws of ProCyte provide that any written notice required to be delivered by a shareholder to ProCyte must be given, either by personal delivery or by registered or certified mail, postage prepaid to the Secretary at ProCyte's executive offices. ProCyte's bylaws also include advance notice provisions that require shareholders desiring to bring nominations or other business before an annual shareholders' meeting to do so in accordance with the terms of such provisions. These advance notice provisions require that, among other things, shareholders give timely written notice, in proper form, to the Secretary of ProCyte regarding such nominations or other business. To be timely, a notice must be delivered to the Secretary at ProCyte's principal executive offices not more than 90, but not fewer than 60, days prior to the date of the ProCyte's annual meeting, as determined under the bylaws.
Proxies	Under Delaware law, each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may grant a proxy, but no such proxy may be voted or acted upon after 3 years from its date, unless the proxy provides for a longer period. A duly executed proxy will be irrevocable if it states that it is irrevocable and if, and only as long as, the appointment is coupled with an interest.	Under Washington law, a proxy is valid for eleven months after receipt of the appointment form, unless the form provides for a longer period. The proxy is revocable unless it states that it is irrevocable and the appointment is coupled with an interest.
Preemptive rights	Delaware law provides that no stockholder will have any preemptive rights to purchase additional securities of the corporation unless the certificate of incorporation expressly grants these rights. PhotoMedex's certificate of incorporation does not grant any preemptive rights.	Under Washington law, shareholders have preemptive rights unless the corporation's articles of incorporation provide otherwise. The articles of incorporation of ProCyte provide that no statutory preemptive rights will exist with respect to the shares of capital stock of ProCyte.
Stockholder and shareholder rights plans	PhotoMedex does not have a stockholder rights plan.	ProCyte does not have a shareholder rights plan. Rights issued under ProCyte's 1994 shareholder rights plan expired, by their terms, on December 7, 2004.


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PhotoMedex Stockholder Rights

ProCyte Shareholder Rights

Dividends	Under Delaware law, the board of directors may declare and pay dividends out of its surplus or, if it has no surplus, out of any net profits for the fiscal year in which the dividend was declared or for the fiscal year preceding the fiscal year in which the dividend was declared, provided that the payment will not reduce capital below the amount of capital represented by all classes of shares having a preference upon the distribution of assets.		Under Washington law, a board of directors may approve, and a corporation may make, a distribution to shareholders only to the extent that: such distribution does not leave the corporation unable to pay its debts as they become due in the usual course of business, and after the distribution, the corporation's total assets would not be less than the sum of its total liabilities plus, unless the articles of incorporation provide otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.
Limitation of personal liability of directors	In accordance with Delaware law, PhotoMedex's certificate of incorporation provides that a director of PhotoMedex will not be personally liable to PhotoMedex or PhotoMedex's stockholders for monetary damages for breach of fiduciary duties, except for liability for: any breach of the director's duty of loyalty to PhotoMedex or PhotoMedex's stockholders; acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; payment of a dividend or the repurchase or redemption of stock in violation of Delaware law; or any transaction from which the director derived an improper personal benefit.		The ProCyte articles of incorporation provide that, to the full extent permitted by Washington law, a director of ProCyte will not be liable to ProCyte or the ProCyte shareholders for monetary damages for conduct as a director. Washington law provides that liability cannot be limited or eliminated for: intentional misconduct; knowing violations of law; actions that result in a personal benefit in money, property or services to which the director was not legally entitled; or unlawful distributions.


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PhotoMedex Stockholder Rights

ProCyte Shareholder Rights

Indemnification of directors and officers

In accordance with Delaware law, PhotoMedex's certificate of incorporation provides that director of PhotoMedex will not be person liable to PhotoMedex or PhotoMedex's stockholders for monetary damages for breach of fiduciary duties, except for liability for:

any breach of the director's duty of loyalty to PhotoMedex or PhotoMedex's stockholders;
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
payment of a dividend or the repurchase or redemption of stock in violation of Delaware law; or
any transaction from which the director derived an improper personal benefit.

PhotoMedex's bylaws require PhotoMedex to indemnify its directors and officers to the full extent permitted by the DGCL. In addition, PhotoMedex must advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding because he is or was a director or officer of PhotoMedex, or is or was serving at the request of PhotoMedex as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of any such proceeding, promptly following a request for advance, all expenses incurred by any director or officer in connection with such proceeding if the individual provides an undertaking to repay all amounts if it is ultimately determined that that the person is not entitled to be indemnified under the bylaws or otherwise.

Notwithstanding the foregoing, PhotoMedex is not required to indemnify a director or officer in connection with any proceeding initiated by that person or any proceedings by that person against PhotoMedex or PhotoMedex's directors, officers or other agents unless:

the indemnification is expressly required by law;

Under Washington law, the standards for allowing indemnification of officers and directors are substantially the same as those under Delaware law. The ProCyte articles of incorporation require ProCyte to indemnify its directors and officers to the fullest extent permitted by Washington law against liability arising out of a proceeding to which such individual was made a party because the individual is or was a director or an officer of ProCyte. The ProCyte bylaws provide that each person who was, is or is threatened to be made a named party to or is otherwise involved (including, without limitation, as a witness) in any threatened, pending or completed action, suit or proceeding, by reason of the fact that he or she is or was a director or officer of ProCyte or, that being or having been a director or officer of ProCyte, he or she is or was serving at the request of ProCyte as a director, officer, partner, trustee, employee or agent of another corporation or of a partnership, joint venture, trust, employee benefit plan or other enterprise, whether the basis of a proceeding is alleged action (or inaction) in an official capacity as a director, officer, partner, trustee, employee or agent or in any other capacity while serving as a director, officer, partner, trustee, employee or agent, will be indemnified and held harmless by ProCyte against all losses, claims, damages, liabilities or expenses actually and reasonably incurred or suffered by the individual in connection therewith, and the indemnification will continue as to an individual who has ceased to be a director, officer, partner, trustee, employee or agent and will inure to the benefit of the individual's heirs, executors and administrators.

Notwithstanding the foregoing, ProCyte is only required to indemnify an individual in connection with a proceeding initiated by that individual if the proceeding was authorized or ratified by the board of directors. ProCyte must advance expenses incurred by an individual in defending any proceeding in advance of its final disposition, except


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PhotoMedex Stockholder Rights

ProCyte Shareholder Rights

the proceeding was authorized by the board of directors;
the indemnification is provided by PhotoMedex in its sole discretion; or
a court of competent jurisdiction holds that PhotoMedex is required to provide the indemnification.

The right to indemnification is not exclusive of any other right which that individual may have or hereafter acquire under any statute, provision of PhotoMedex's certificate of incorporation or bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

PhotoMedex is authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, and purchase insurance on behalf of any person required or permitted to be indemnified.

where the board of directors has adopted a resolution expressly disapproving such advancement of expenses, if the individual undertakes to repay all amounts so advanced if it is ultimately determined by final judicial decision from which there is no further right to appeal that the individual is not entitled to be indemnified under the bylaws or otherwise. An individual's right to advancement of expenses is conditioned upon the individual:

delivering the undertaking; and
providing to ProCyte a written affirmation of the individual's good faith belief that any applicable standards of conduct have been met by the individual.

Washington law provides that a corporation may not indemnify a director or officer in connection with:

a proceeding by or in the right of the corporation in which the director or officer did not meet the standards of conduct described in the WBCA; or
any other proceeding charging improper personal benefit to the director or officer, whether or not involving action in such individual's official capacity, in which the director or officer is adjudged liable on the basis that personal benefit was improperly received.

ProCyte is authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, and purchase insurance on behalf of any person required or permitted to be indemnified.


	I-110

PhotoMedex Stockholder Rights

ProCyte Shareholder Rights

Dissenters' rights	Delaware law provides stockholders of a Delaware corporation involved in a merger the right to demand and receive payment of the fair value of their stock in specific mergers. However, except in limited circumstances, appraisal rights are not available to holders of shares: listed on a national securities exchange; designated as a national market system security on an interdealer quotation system operated by the National Association of Securities Dealers, Inc.; or held of record by more than 2,000 stockholders. Dissenters' appraisal rights are not available to PhotoMedex stockholders with respect to the merger.	Under Washington law, a shareholder is entitled to dissent from, and obtain the fair value in cash of his or her shares in connection with, certain corporate actions, including certain mergers, share exchanges, and sales or exchanges of all or substantially all of the corporation's property other than in the usual and regular course of business, and any amendment of the articles of incorporation that materially reduces shares owned to a fraction of a share if the fractional share so created is to be acquired for cash. In order to exercise dissenters' rights, a ProCyte shareholder must comply with the procedures set forth in Chapter 23B.13 of the WBCA, a copy of which is attached to this joint proxy statement/prospectus as Annex D. A summary of Chapter 23B.13 is set forth in the section entitled "Dissenters' or Appraisal Rights."

Certain business combination restrictions	The DGCL contains a business combination statute that protects publicly-traded Delaware corporations, such as PhotoMedex, from hostile takeovers, and from actions following the takeover, by prohibiting some transactions once an acquiror has gained a significant holding in the corporation. Section 203 of the DGCL prohibits business combinations, including mergers, sales and leases of assets, issuances of securities and similar transactions by a corporation or a subsidiary with an interested stockholder that beneficially owns 15% or more of a corporation's voting stock, within three years after the person becomes an interested stockholder, unless: prior to the time the person becomes an interested stockholder, the board of directors of the target corporation approved either the business combination or the transaction which will result in the person becoming an interested stockholder; after the completion of the transaction in which the person becomes an interested stockholder, the interested stockholder holds at least 85% of the voting stock of the corporation excluding for purposes of	Under Washington law, public companies based in Washington (or that have significant business contacts with the state) are prohibited, with specific exceptions, from engaging in significant business transactions with any person or group of persons who beneficially own 10% or more of the voting shares of the target corporation for a period of five years after such share acquisition, unless the transaction or acquisition of shares is approved by a majority of the members of the board of directors of the target corporation prior to the time of the initial acquisition of shares by the acquiring person. These significant business transactions include: a merger, share exchange or consolidation with, a disposition of assets with an aggregate market value over 5% of the total market value of all of the target's assets or all of the target's outstanding shares to, or the issuance or redemption of shares to or from, the acquiring person or its affiliates or associates;


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PhotoMedex Stockholder Rights

ProCyte Shareholder Rights

determining the number of shares outstanding, those shares owned by (i) persons who are both officers and directors, and (ii) specific employee benefit plans; or

after the person becomes an interested stockholder, the business combination is approved by the target corporation's board of directors and holders of at least 66 2/3% of the outstanding voting stock, excluding shares held by the interested stockholder.

A corporation can elect not to be governed by Section 203, however, PhotoMedex has not made this election and is therefore governed by Section 203.

termination of 5% or more of the Washington-based employees of the target corporation over the course of the five-year period following the acquiring person's acquisition of 10% or more of the shares of the target corporation, if such termination is the result of the acquiring person's acquisition;
the liquidation or dissolution of the target corporation pursuant to an arrangement with an acquiring person;
a reclassification of securities of the target corporation pursuant to an arrangement with the acquiring person that has the effect of increasing the proportionate share of voting securities owned by the acquiring person; or
an issuance to the acquiring person, or a transfer or redemption in favor of the acquiring person, by the target corporation of shares, options, warrants or other rights to acquire shares of the target corporation if the issuance, transfer or redemption is not made to all shareholders of the target corporation on the same proportional basis.

After the five-year period, certain significant business transactions still may not occur unless they comply with certain fair price provisions of the statute or are approved by the disinterested shareholders.

The ProCyte board of directors has expressly approved the merger agreement and the stockholder agreements so that the restrictions set forth above with respect to business combinations do not apply to the merger agreement or the stockholder agreements or the transactions contemplated thereby.


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PhotoMedex Stockholder Rights

ProCyte Shareholder Rights

Vote on certain fundamental issues

Delaware law permits a corporation to include supermajority provisions in its certificate of incorporation and bylaws with respect to the approval of various issues. However, other than the effect of Section 203 of the DGCL (as described above) and the amendment of PhotoMedex's bylaws, the articles of incorporation and bylaws of PhotoMedex do not contain any supermajority voting requirement provisions related to matters upon which the stockholders of PhotoMedex may vote.

Under Washington law, the following must be approved by two-thirds of all votes entitled to be cast by each voting group entitled to vote as a separate group:

a merger,
a share exchange,
a sale of all, or substantially all, of a corporation's assets, other than in the ordinary course of business; and
a dissolution.

A corporation may provide for lower voting requirements for these fundamental actions, provided that the minimum vote requirement may not be below a majority of all votes entitled to be cast. The articles of incorporation of ProCyte do not contain such a provision.


	I-113

ANNEX C

[LETTERHEAD OF CIBC WORLD MARKETS CORP.]

November 30, 2004

The Board of Directors
PhotoMedex, Inc.
147 Keystone Drive
Montgomeryville, Pennsylvania 18936

Members of the Board:

You have asked CIBC World Markets Corp. (“CIBC World Markets”) to render a written opinion (“Opinion”) to the Board of Directors of PhotoMedex, Inc. (“PhotoMedex”) as to the fairness, from a financial point of view, to PhotoMedex of the Exchange Ratio (as defined below) provided for in an Agreement and Plan of Merger (the “Merger Agreement”) to be entered into among PhotoMedex, Gold Acquisition Corp., a wholly owned subsidiary of PhotoMedex (“Merger Sub”), and ProCyte Corporation (“ProCyte”). The Merger Agreement provides for, among other things, the merger of Merger Sub with and into ProCyte (the “Merger”) pursuant to which each outstanding share of the common stock, par value $0.01 per share, of ProCyte (“ProCyte Common Stock”) will be converted into the right to receive 0.6622 of a share (the “Exchange Ratio”) of the common stock, par value $0.01 per share, of PhotoMedex (“PhotoMedex Common Stock”).

In arriving at our Opinion, we:

(a)	reviewed drafts dated November 30, 2004 of the Merger Agreement and certain related documents;

(b)	reviewed audited financial statements of PhotoMedex and ProCyte for the fiscal years ended December 31, 2001, December 31, 2002 and December 31, 2003;

(c)	reviewed unaudited financial statements of PhotoMedex and ProCyte for the nine months ended September 30, 2004;

(d)	reviewed financial forecasts and estimates relating to PhotoMedex and ProCyte which were provided to or discussed with us by the managements of PhotoMedex and ProCyte;

(e)	reviewed historical market prices and trading volumes for PhotoMedex Common Stock and ProCyte Common Stock;

(f)	held discussions with the senior managements of PhotoMedex and ProCyte with respect to the businesses and prospects of PhotoMedex and ProCyte;

(g)	reviewed and analyzed certain publicly available financial data for companies that we deemed generally comparable to PhotoMedex and ProCyte;


	C-1

The Board of Directors
PhotoMedex, Inc.
November 30, 2004
Page 2

(h)	reviewed and analyzed certain publicly available information for transactions that we deemed relevant in evaluating the Merger;

(i)	analyzed the estimated net present value of the projected future cash flows of PhotoMedex and ProCyte based on certain estimates and assumptions of future performance provided to or discussed with us by the managements of PhotoMedex and ProCyte;

(j)	reviewed and analyzed the relative contributions of PhotoMedex and ProCyte to selected operational metrics of the combined company based on financial forecasts and estimates provided to or discussed with us by the managements of PhotoMedex and ProCyte;

(k)	reviewed certain potential pro forma financial effects of the Merger on PhotoMedex based on financial forecasts and estimates provided to or discussed with us by the managements of PhotoMedex and ProCyte;

(l)	reviewed public information concerning PhotoMedex and ProCyte; and

(m)	performed such other analyses and reviewed such other information as we deemed appropriate.

In rendering our Opinion, we relied upon and assumed, without independent verification or investigation, the accuracy and completeness of all of the financial and other information provided to or discussed with us by PhotoMedex, ProCyte and their respective employees, representatives and affiliates. With respect to financial forecasts and estimates relating to PhotoMedex and ProCyte referred to above, we have assumed, at the direction of the managements of PhotoMedex and ProCyte, without independent verification or investigation, that such forecasts and estimates were reasonably prepared on bases reflecting the best available information, estimates and judgments of the managements of PhotoMedex and ProCyte as to the future financial condition and operating results of PhotoMedex and ProCyte and the other matters covered thereby. We have relied, at the direction of PhotoMedex, without independent verification or investigation, on (i) the assessments of the managements of PhotoMedex and ProCyte as to the existing and future technology and products of PhotoMedex and ProCyte and the risks associated with such technology and products and (ii) the assessment of the management of PhotoMedex as to PhotoMedex’s ability to retain key employees of ProCyte. We have assumed, with the consent of PhotoMedex, that the Merger will be treated as a reorganization for U.S. federal income tax purposes. We also have assumed, with the consent of PhotoMedex, that the Merger will be consummated in accordance with its terms without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary regulatory or third party approvals, consents and releases for the Merger, no delay, limitation, restriction or condition will be imposed that would have an adverse effect on PhotoMedex, ProCyte or the contemplated benefits of the Merger. In addition, representatives of PhotoMedex have advised us, and we therefore have assumed, that the final terms of the Merger Agreement and related documents will not vary materially from those set forth in the drafts reviewed by us. We have neither made nor obtained any independent evaluations or appraisals of the assets or liabilities, contingent or otherwise, of PhotoMedex or ProCyte. We are not expressing any opinion as to the underlying valuation, future performance or long-term viability of PhotoMedex or ProCyte, or the price at which PhotoMedex Common Stock will trade at any time. We express no view as to, and our Opinion does not address, the underlying business decision of PhotoMedex to effect the Merger nor does our Opinion address the relative merits of the Merger as compared to any alternative business strategies that might exist for PhotoMedex or the effect of any other transaction in which PhotoMedex might engage. Our Opinion is necessarily based on the information available to us and general economic, financial and stock market conditions and circumstances as they exist and can be evaluated by us on the date hereof. It should be understood that, although subsequent developments may affect this Opinion, we do not have any obligation to update, revise or reaffirm the Opinion.


	C-2

The Board of Directors
PhotoMedex, Inc.
November 30, 2004
Page 3

As part of our investment banking business, we are regularly engaged in valuations of businesses and securities in connection with acquisitions and mergers, underwritings, secondary distributions of securities, private placements and valuations for other purposes.

We have acted as financial advisor to PhotoMedex in connection with the Merger and will receive a fee for our services, a significant portion of which is payable upon delivery of this Opinion and a portion of which is contingent upon consummation of the Merger. We and our affiliates currently are providing services to PhotoMedex unrelated to the proposed Merger, for which services we expect to receive compensation. In the ordinary course of business, CIBC World Markets and its affiliates may actively trade the securities of PhotoMedex and ProCyte for our and their own accounts and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities.

Based upon and subject to the foregoing, and such other factors as we deemed relevant, it is our opinion that, as of the date hereof, the Exchange Ratio is fair, from a financial point of view, to PhotoMedex. This Opinion is for the use of the Board of Directors of PhotoMedex in its evaluation of the Merger and does not constitute a recommendation as to how any stockholder should vote or act with respect to any matters relating to the Merger.

Very truly yours,

/s/ CIBC World Markets Corp.

CIBC WORLD MARKETS CORP.


	C-3

ANNEX D

Chapter 23B.13 RCW

DISSENTERS' RIGHTS

Sections

23B.13.010	Definitions.
23B.13.020	Right to dissent.
23B.13.030	Dissent by nominees and beneficial owners.
23B.13.200	Notice of dissenters' rights.
23B.13.210	Notice of intent to demand payment.
23B.13.220	Dissenters' rights—Notice.
23B.13.230	Duty to demand payment.
23B.13.240	Share restrictions.
23B.13.250	Payment.
23B.13.260	Failure to take action.
23B.13.270	After-acquired shares.
23B.13.280	Procedure if shareholder dissatisfied with payment or offer.
23B.13.300	Court action.
23B.13.310	Court costs and counsel fees.


	D-1

23B.13.010 Definitions. As used in this chapter:

(1) "Corporation" means the issuer of the shares held by a dissenter before the corporate action, or the surviving or acquiring corporation by merger or share exchange of that issuer.

(2) "Dissenter" means a shareholder who is entitled to dissent from corporate action under RCW 23B.13.020 and who exercises that right when and in the manner required by RCW 23B.13.200 through 23B.13.280.

(3) "Fair value," with respect to a dissenter's shares, means the value of the shares immediately before the effective date of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable.

(4) "Interest" means interest from the effective date of the corporate action until the date of payment, at the average rate currently paid by the corporation on its principal bank loans or, if none, at a rate that is fair and equitable under all the circumstances.

(5) "Record shareholder" means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.

(6) "Beneficial shareholder" means the person who is a beneficial owner of shares held in a voting trust or by a nominee as the record shareholder.

(7) "Shareholder" means the record shareholder or the beneficial shareholder. [1989 c 165 § 140.]

23B.13.020 Right to dissent. (1) A shareholder is entitled to dissent from, and obtain payment of the fair value of the shareholder's shares in the event of, any of the following corporate actions:

(a) Consummation of a plan of merger to which the corporation is a party (i) if shareholder approval is required for the merger by RCW 23B.11.030, 23B.11.080, or the articles of incorporation and the shareholder is entitled to vote on the merger, or (ii) if the corporation is a subsidiary that is merged with its parent under RCW 23B.11.040;

(b) Consummation of a plan of share exchange to which the corporation is a party as the corporation whose shares will be acquired, if the shareholder is entitled to vote on the plan;

(c) Consummation of a sale or exchange of all, or substantially all, of the property of the corporation other than in the usual and regular course of business, if the shareholder is entitled to vote on the sale or exchange, including a sale in dissolution, but not including a sale pursuant to court order or a sale for cash pursuant to a plan by which all or substantially all of the net proceeds of the sale will be distributed to the shareholders within one year after the date of sale;

(d) An amendment of the articles of incorporation, whether or not the shareholder was entitled to vote on the amendment, if the amendment effects a redemption or cancellation of all of the shareholder's shares in exchange for cash or other consideration other than shares of the corporation; or

(e) Any corporate action taken pursuant to a shareholder vote to the extent the articles of incorporation, bylaws, or a resolution of the board of directors provides that voting or nonvoting shareholders are entitled to dissent and obtain payment for their shares.


	D-2

(2) A shareholder entitled to dissent and obtain payment for the shareholder's shares under this chapter may not challenge the corporate action creating the shareholder's entitlement unless the action fails to comply with the procedural requirements imposed by this title, RCW 25.10.900 through 25.10.955, the articles of incorporation, or the bylaws, or is fraudulent with respect to the shareholder or the corporation.

(3) The right of a dissenting shareholder to obtain payment of the fair value of the shareholder's shares shall terminate upon the occurrence of any one of the following events:

(a) The proposed corporate action is abandoned or rescinded;

(b) A court having jurisdiction permanently enjoins or sets aside the corporate action; or

(c) The shareholder's demand for payment is withdrawn with the written consent of the corporation. [2003 c 35 § 9; 1991 c 269 § 37; 1989 c 165 § 141.]

23B.13.030 Dissent by nominees and beneficial owners. (1) A record shareholder may assert dissenters' rights as to fewer than all the shares registered in the shareholder's name only if the shareholder dissents with respect to all shares beneficially owned by any one person and delivers to the corporation a notice of the name and address of each person on whose behalf the shareholder asserts dissenters' rights. The rights of a partial dissenter under this subsection are determined as if the shares as to which the dissenter dissents and the dissenter's other shares were registered in the names of different shareholders.

(2) A beneficial shareholder may assert dissenters' rights as to shares held on the beneficial shareholder's behalf only if:

(a) The beneficial shareholder submits to the corporation the record shareholder's consent to the dissent not later than the time the beneficial shareholder asserts dissenters' rights, which consent shall be set forth either (i) in a record or (ii) if the corporation has designated an address, location, or system to which the consent may be electronically transmitted and the consent is electronically transmitted to the designated address, location, or system, in an electronically transmitted record; and

(b) The beneficial shareholder does so with respect to all shares of which such shareholder is the beneficial shareholder or over which such shareholder has power to direct the vote. [2002 c 297 § 35; 1989 c 165 § 142.]

23B.13.200 Notice of dissenters' rights. (1) If proposed corporate action creating dissenters' rights under RCW 23B.13.020 is submitted to a vote at a shareholders' meeting, the meeting notice must state that shareholders are or may be entitled to assert dissenters' rights under this chapter and be accompanied by a copy of this chapter.

(2) If corporate action creating dissenters' rights under RCW 23B.13.020 is taken without a vote of shareholders, the corporation, within ten days after the effective date of such corporate action, shall deliver a notice to all shareholders entitled to assert dissenters' rights that the action was taken and send them the notice described in RCW 23B.13.220. [2002 c 297 § 36; 1989 c 165 § 143.]

23B.13.210 Notice of intent to demand payment. (1) If proposed corporate action creating dissenters' rights under RCW 23B.13.020 is submitted to a vote at a shareholders' meeting, a shareholder who wishes to assert dissenters' rights must (a) deliver to the corporation before the vote is taken notice of the shareholder's intent to demand payment for the shareholder's shares if the proposed action is effected, and (b) not vote such shares in favor of the proposed action.

(2) A shareholder who does not satisfy the requirements of subsection (1) of this section is not entitled to payment for the shareholder's shares under this chapter. [2002 c 297 § 37; 1989 c 165 § 144.]

23B.13.220 Dissenters' rights—Notice. (1) If proposed corporate action creating dissenters' rights under RCW 23B.13.020 is authorized at a shareholders' meeting, the corporation shall deliver a notice to all shareholders who satisfied the requirements of RCW 23B.13.210.


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(2) The notice must be sent within ten days after the effective date of the corporate action, and must:

(a) State where the payment demand must be sent and where and when certificates for certificated shares must be deposited;

(b) Inform holders of uncertificated shares to what extent transfer of the shares will be restricted after the payment demand is received;

(c) Supply a form for demanding payment that includes the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action and requires that the person asserting dissenters' rights certify whether or not the person acquired beneficial ownership of the shares before that date;

(d) Set a date by which the corporation must receive the payment demand, which date may not be fewer than thirty nor more than sixty days after the date the notice in subsection (1) of this section is delivered; and

(e) Be accompanied by a copy of this chapter. [2002 c 297 § 38; 1989 c 165 § 145.]

23B.13.230 Duty to demand payment. (1) A shareholder sent a notice described in RCW 23B.13.220 must demand payment, certify whether the shareholder acquired beneficial ownership of the shares before the date required to be set forth in the notice pursuant to RCW 23B.13.220(2)(c), and deposit the shareholder's certificates, all in accordance with the terms of the notice.

(2) The shareholder who demands payment and deposits the shareholder's share certificates under subsection (1) of this section retains all other rights of a shareholder until the proposed corporate action is effected.

(3) A shareholder who does not demand payment or deposit the shareholder's share certificates where required, each by the date set in the notice, is not entitled to payment for the shareholder's shares under this chapter. [2002 c 297 § 39; 1989 c 165 § 146.]

23B.13.240 Share restrictions. (1) The corporation may restrict the transfer of uncertificated shares from the date the demand for their payment is received until the proposed corporate action is effected or the restriction is released under RCW 23B.13.260.

(2) The person for whom dissenters' rights are asserted as to uncertificated shares retains all other rights of a shareholder until the effective date of the proposed corporate action. [1989 c 165 § 147.]

23B.13.250 Payment. (1) Except as provided in RCW 23B.13.270, within thirty days of the later of the effective date of the proposed corporate action, or the date the payment demand is received, the corporation shall pay each dissenter who complied with RCW 23B.13.230 the amount the corporation estimates to be the fair value of the shareholder's shares, plus accrued interest.

(2) The payment must be accompanied by:


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(a) The corporation's balance sheet as of the end of a fiscal year ending not more than sixteen months before the date of payment, an income statement for that year, a statement of changes in shareholders' equity for that year, and the latest available interim financial statements, if any;

(b) An explanation of how the corporation estimated the fair value of the shares;

(d) A statement of the dissenter's right to demand payment under RCW 23B.13.280; and

(e) A copy of this chapter. [1989 c 165 § 148.]

23B.13.260 Failure to take action. (1) If the corporation does not effect the proposed action within sixty days after the date set for demanding payment and depositing share certificates, the corporation shall return the deposited certificates and release any transfer restrictions imposed on uncertificated shares.

(2) If after returning deposited certificates and releasing transfer restrictions, the corporation wishes to undertake the proposed action, it must send a new dissenters' notice under RCW 23B.13.220 and repeat the payment demand procedure. [1989 c 165 § 149.]

23B.13.270 After-acquired shares. (1) A corporation may elect to withhold payment required by RCW 23B.13.250 from a dissenter unless the dissenter was the beneficial owner of the shares before the date set forth in the dissenters' notice as the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action.

(2) To the extent the corporation elects to withhold payment under subsection (1) of this section, after taking the proposed corporate action, it shall estimate the fair value of the shares, plus accrued interest, and shall pay this amount to each dissenter who agrees to accept it in full satisfaction of the dissenter's demand. The corporation shall send with its offer an explanation of how it estimated the fair value of the shares, an explanation of how the interest was calculated, and a statement of the dissenter's right to demand payment under RCW 23B.13.280. [1989 c 165 § 150.]

23B.13.280 Procedure if shareholder dissatisfied with payment or offer. (1) A dissenter may deliver a notice to the corporation informing the corporation of the dissenter's own estimate of the fair value of the dissenter's shares and amount of interest due, and demand payment of the dissenter's estimate, less any payment under RCW 23B.13.250, or reject the corporation's offer under RCW 23B.13.270 and demand payment of the dissenter's estimate of the fair value of the dissenter's shares and interest due, if:

(a) The dissenter believes that the amount paid under RCW 23B.13.250 or offered under RCW 23B.13.270 is less than the fair value of the dissenter's shares or that the interest due is incorrectly calculated;

(b) The corporation fails to make payment under RCW 23B.13.250 within sixty days after the date set for demanding payment; or

(c) The corporation does not effect the proposed action and does not return the deposited certificates or release the transfer restrictions imposed on uncertificated shares within sixty days after the date set for demanding payment.

(2) A dissenter waives the right to demand payment under this section unless the dissenter notifies the corporation of the dissenter's demand under subsection (1) of this section within thirty days after the corporation made or offered payment for the dissenter's shares. [2002 c 297 § 40; 1989 c 165 § 151.]


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23B.13.300 Court action. (1) If a demand for payment under RCW 23B.13.280 remains unsettled, the corporation shall commence a proceeding within sixty days after receiving the payment demand and petition the court to determine the fair value of the shares and accrued interest. If the corporation does not commence the proceeding within the sixty-day period, it shall pay each dissenter whose demand remains unsettled the amount demanded.

(2) The corporation shall commence the proceeding in the superior court of the county where a corporation's principal office, or, if none in this state, its registered office, is located. If the corporation is a foreign corporation without a registered office in this state, it shall commence the proceeding in the county in this state where the registered office of the domestic corporation merged with or whose shares were acquired by the foreign corporation was located.

(3) The corporation shall make all dissenters, whether or not residents of this state, whose demands remain unsettled, parties to the proceeding as in an action against their shares and all parties must be served with a copy of the petition. Nonresidents may be served by registered or certified mail or by publication as provided by law.

(4) The corporation may join as a party to the proceeding any shareholder who claims to be a dissenter but who has not, in the opinion of the corporation, complied with the provisions of this chapter. If the court determines that such shareholder has not complied with the provisions of this chapter, the shareholder shall be dismissed as a party.

(5) The jurisdiction of the court in which the proceeding is commenced under subsection (2) of this section is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend decision on the question of fair value. The appraisers have the powers described in the order appointing them, or in any amendment to it. The dissenters are entitled to the same discovery rights as parties in other civil proceedings.

(6) Each dissenter made a party to the proceeding is entitled to judgment (a) for the amount, if any, by which the court finds the fair value of the dissenter's shares, plus interest, exceeds the amount paid by the corporation, or (b) for the fair value, plus accrued interest, of the dissenter's after-acquired shares for which the corporation elected to withhold payment under RCW 23B.13.270. [1989 c 165 § 152.]

23B.13.310 Court costs and counsel fees. (1) The court in a proceeding commenced under RCW 23B.13.300 shall determine all costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court. The court shall assess the costs against the corporation, except that the court may assess the costs against all or some of the dissenters, in amounts the court finds equitable, to the extent the court finds the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding payment under RCW 23B.13.280.

(2) The court may also assess the fees and expenses of counsel and experts for the respective parties, in amounts the court finds equitable:

(a) Against the corporation and in favor of any or all dissenters if the court finds the corporation did not substantially comply with the requirements of RCW 23B.13.200 through 23B.13.280; or

(b) Against either the corporation or a dissenter, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by chapter 23B.13 RCW.

(3) If the court finds that the services of counsel for any dissenter were of substantial benefit to other dissenters similarly situated, and that the fees for those services should not be assessed against the corporation, the court may award to these counsel reasonable fees to be paid out of the amounts awarded the dissenters who were benefited. [1989 c 165 § 153.]


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	F- 2

ANNEX G

EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is entered into and made effective as of _______________, 2005 (the “Effective Date”), by and between PhotoMedex, Inc. ("Employer") and John F. Clifford ("Employee").

RECITALS

WHEREAS, Employee currently serves as Chairman and Chief Executive Officer of ProCyte Corporation. ("ProCyte");

WHEREAS, the Employer and ProCyte have entered into an agreement and plan of merger (the "Merger") (the “Merger Agreement”), under which ProCyte shall become, on the effective date of which (the "Effective Date"), a wholly-owned subsidiary of Employer;

WHEREAS, Employer wishes to employ Employee as Executive Vice-President, PhotoMedex Dermatology, and Employee wishes to accept such employment, all on the condition of closing of the Merger and on the terms and conditions set forth in this Agreement; and

WHEREAS, in connection with and as a condition of Employer entering into this Agreement, Employee shall terminate certain existing agreements with ProCyte (as set forth in Section 6.7(a)) and any affiliate thereof related to employment, compensation, severance, payments upon change of control and equity participation; and

WHEREAS, ProCyte, which, upon the Effective Date, will be a wholly-owned subsidiary of the Company, is a party to this Agreement solely for the purpose of acknowledging and agreeing to the termination of the agreements referenced in subsection 6.7(a) hereof;

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and obligations herein contained, the parties hereto agree as follows:

AGREEMENT

1. Employment. Employer hereby employs Employee, and Employee hereby accepts employment with Employer, upon the terms and conditions set forth in this Agreement.

2. Term of Employment. The employment of Employee pursuant to the terms of this Agreement shall commence as of the Effective Date, and shall continue for three years unless extended or sooner terminated pursuant to this Agreement (the "Term").

3. Duties.

3.1. Basic Duties. Subject to the direction and control of the President and Chief Executive Officer of Employer, Employee shall serve as the Executive Vice-President, PhotoMedex Dermatology and shall fulfill all duties and obligations of such office. These duties will include but are not limited to oversight of sales, marketing, licensing and distribution; contracting and manufacturing (responsibility for the XTRAC and ProCyte product lines). The Employee shall have the authority and power to perform all his duties.

3.2. Other Duties of Employee. In addition to the foregoing, Employee shall perform such other or different duties related to those set forth in Paragraph 3.1 as may be assigned to him from time to time by Employer; provided, however, that any such additional assignment shall be at a level of responsibility commensurate with that set forth in Paragraph 3.1.

3.3. Time Devoted to Employment. Employee shall devote his full time to the business of Employer during the term of this Agreement and shall perform his duties and responsibilities faithfully, diligently and to the best of his ability, consistent with the highest and best standards of the industry and in compliance with all applicable laws and the Employer's policies and procedures.


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3.4. No Conflicting Agreements. Employee represents and warrants that his performance of all the terms and conditions of this Agreement does not and shall not breach any other agreement, including any confidentiality and non-disclosure agreements with prior employers or other persons. Employee represents and warrants that he has not entered into, and shall not enter into, any agreement, either written or oral in conflict with this Agreement.

3.5. Business Ethics. Employee understands that it is the Employer’s policy to conduct its business according to the highest moral, ethical and legal standards and agrees, as a condition of employment, to uphold those standards of business conduct and ethical principles, and comply with all applicable laws and regulations.

3.6. Place of Performance of Duties. The services of Employee shall be performed at Redmond, Washington or, at the election of Employee, Montgomeryville, Pennsylvania (or wherever Employer is headquartered at the time that approval to move is granted by Employer’s Board of Directors). If Employee elects to relocate to Pennsylvania, and such relocation is approved by the Employer’s Board of Directors, the Employer shall pay or reimburse Employee for the following expenses (to the extent actually incurred or paid by Employee): (a) real estate broker’s commissions up to 6% of the selling price of one single family residence owned by Employee in the state of Washington; (b) reasonable and customary closing costs (excluding the amount of unpaid property taxes, points on a mortgage loan) incurred in connection with Employee purchasing a home in or around Montgomeryville, Pennsylvania; (c) travel and shipping costs for goods and vehicles from Washington to Pennsylvania; and (d) reasonable temporary housing expenses in Pennsylvania for up to two weeks. Employer will also pay to Employee an additional amount representing a gross-up of any state or Federal taxes payable by Employee as a result of any reimbursements made pursuant to this Section.

4. Compensation and Method of Payment.

4.1. Total Compensation. As compensation under this Agreement, Employer shall pay and Employee shall accept the following:

(a) For each year of this Agreement, measured from the Effective Date, base compensation ("Base Salary") of Three Hundred Thousand Dollars ($300,000); provided, however, that Employer will review Employee’s Base Salary annually and may increase (but not decrease) the Employee’s base salary, subject to the approval of the Compensation Committee.

(b) For each year of this Agreement, Employer shall pay Employee a bonus up to 50% of Base Salary or as otherwise established by the Compensation Committee and subject to criteria to be established at the discretion of the Board of Directors (“Bonus”).

(c) Employer shall reimburse Employee for all reasonable travel, entertainment and other expenses incurred or paid by Employee in connection with, or related to, the performance of Employee's duties, responsibilities or services under this Agreement, upon presentation by the Employee of documentation, expense statements, vouchers and/or such other supporting information as Employer may request.

(d) Employee shall be entitled to participate in Employer's employee fringe benefit, health insurance, life insurance, key man insurance and other programs in effect from time to time for employees of Employer and its affiliates at comparable levels of responsibility. Participation will be in accordance with any applicable policies adopted by Employer. Employee shall be entitled to vacations of not less than 4 weeks per year, absences for illness, and to similar benefits of employment, and shall be subject to such policies and procedures as may be adopted by Employer.

(e) Employee shall be entitled to an automobile allowance of One Thousand Dollars ($1,000) per month.


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(f) Subject to the approval of the Board of Directors of Employer, Employee shall be granted incentive stock options (as such term is defined in Section 422(b) of the Internal Revenue Code of 1986, as amended) to purchase up to 250,000 shares of Employer's Common Stock ("Employer Stock Options"), with an exercise price equal to the average closing trading price for the ten business days following the Effective Date. Of these Employer Stock Options, thirty-four percent (34%) shall be fully vested as of the day preceding the first anniversary of the Effective Date, and thirty-three percent (33%) shall vest on the day preceding each of the next two subsequent anniversaries of the Effective Date.

(g) Notwithstanding any other provision of this Agreement, the Employer reserves the right to modify, suspend or discontinue any and all benefit plans, practices, policies and programs at any time whether before or after termination of employment without advance notice to or recourse by Employee.

4.2. Payment of Compensation. Employer shall pay the compensation provided for in Section 4 hereof as follows:

(a) Employer shall pay the Base Salary, semi-monthly in twenty-four equal installments or in accordance with Employer's payroll practices for all its employees, but in no event less frequently than monthly.

(b) All compensation to the Employee shall be subject to applicable taxes, withholding and other required, normal or elected employee deductions.

5. Termination of Agreement.

This Agreement and all obligations under this Agreement (except the obligations contained in Section 6 below which shall survive any termination of this Agreement) shall terminate upon the earliest to occur of any of the following:

5.1. By Expiration or Notice. This Agreement and the employment of Employee will terminate at the expiration of the Term and may otherwise be terminated by Employee or Employer upon thirty (30) days written notice of termination.

5.2. Other Termination by Employer. Employer may terminate Employee immediately for any of the reasons set forth below:

(a) For "Cause." Employee’s employment will terminate immediately following written notice from Employer to the Employee which identifies the termination provision relied upon and outlines in reasonable detail the circumstances claimed to provide the basis for termination. With respect to Section 5.2(a)(iv) only, the notice of termination shall be issued after Employee has been provided a reasonable opportunity to correct the circumstances leading to termination, not to exceed 10 business days. For the purpose of this Section 5.2, "Cause" for termination shall be deemed to include only (i) the direct or indirect competition by Employee with Employer (as defined in Section 6); (ii) the conviction of Employee of a felony or an act involving moral turpitude; (iii) the drug or alcohol abuse by Employee, but only if Employee fails to seek appropriate counseling or fails to complete a prescribed counseling program; and (iv) the failure of Employee to comply with any material term of this Agreement.

(b) Upon the Disability of the Employee. As used in this Agreement, the term "Disability" shall mean the inability of the Employee, due to a physical or mental disability with or without accommodation, for a period of thirty (30) days, whether or not consecutive, during any sixty (60) day period to perform the normal and customary services required of Employee pursuant to this


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Agreement. A determination of disability shall be made by a physician satisfactory to both Employee and the Employer, provided that, if Employee and the Employer do not agree on a physician, Employee and Employer shall each select a physician and such two physicians together shall select a third physician, whose determination as to disability shall be binding on the parties. For purposes of this section and the laws affecting disability and leaves of absence for medical reasons, Employee acknowledges that he is a key employee of Employer.

5.3. Other Termination by Employee. Employee may terminate this Agreement for "Good Reason." For purposes of this Section 5.3, "Good Reason" shall mean the following unless such circumstances are fully corrected within ten (10) days after Employee notifies Employer in writing that he intends to terminate his employment for Good Reason:

(a) the assignment, without Employee's prior written consent to another person, of the primary duties that the Employee was responsible for during the term of this Agreement, or a significant adverse alteration in the nature or status of the Employee's employment from those in effect during the term of this Agreement; or

(b) any reduction by Employer in Employee's Base Salary (other than as agreed to by Employee) in effect on the date hereof or as the same may be increased after such date.

5.4. Effect of Termination.

(a) Termination due to Expiration of Employment Period. If Employee's employment is terminated due to the expiration of the Term, Employer shall pay Employee the compensation (including Base Salary and accrued Bonus, if any) and benefits due to Employee under Section 4 through the last day of Employee's actual employment hereunder. In addition, Employer shall pay Employee Three Hundred Thousand Dollars ($300,000) in twelve (12) monthly installments.

(b) Termination for Cause. In the event that Employee's employment is terminated for "Cause" pursuant to Section 5(a), Employer shall pay Employee the Base Salary (but not any accrue Bonuses, if any) and benefits due to Employee under Section 4 through the last day of Employee's actual employment hereunder.

(c) Other Termination by Employer. In the event that Employee's employment is terminated by Employer other than pursuant to Section 5.2 or Section 7, Employer shall pay Employee the greater of the amount of two year’s of Base Salary at the date of termination or the remaining amount of unpaid Base Salary that Employee would have received if this Agreement did not terminate before the end of the Term (payments to be made in equal monthly installments). Further, Employee will be paid the amount of Bonus that would have been due pursuant to Section 4.1(b) during the year of his termination, payable at the usual time such Bonus payments are made by Employer. In addition, Employer shall pay or reimburse Employee for the costs of health care benefits that Employee would have received if this Agreement did not terminate before the end of the Term (“Continued Benefits”). Finally, the vesting schedule for all incentive stock options granted to the Employee pursuant to Section 4.1(f) shall accelerate and shall fully vest effective immediately prior to Termination.

(d) Termination for Death or Disability. If Employee's employment is terminated by reason of death or disability pursuant to Section 5.2(b) or (c), Employer shall pay the representatives of Employee or Employee, as the case may be, the compensation and benefits under Section 4 which would otherwise be payable to Employee up to the end of the month in which the termination of this Agreement for such death or disability occurred. Notwithstanding anything to the contrary herein, in the event that Employee shall be terminated for an occurrence described in Section 5.2(b) which shall be the subject of an effective Disability Policy, Employee shall not be entitled to receive any further payment from Employer other than Employer's obligation to pay regular premiums to maintain the effectiveness of


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such Disability Policy following the date from which Employee shall be entitled to receive payment under such Disability Policy.

(e) Termination for Good Reason. In the event the Employee's employment is terminated by him for "Good Reason" pursuant to Section 5.3, Employer shall pay Employee the greater of the amount of two year’s of Base Salary at the date of termination or the remaining amount of unpaid Base Salary that Employee would have received if this Agreement did not terminate before the end of the Term (payments to be made in equal monthly installments). Further, Employee will be paid the amount of Bonus that would have been due pursuant to Section 4.1(b) during the year of his termination, payable at the usual time such Bonus payments are made by Employer. In addition, Employer shall pay or reimburse Employee for the costs of the Continued Benefits. Finally, the vesting schedule for all incentive stock options granted to the Employee pursuant to Section 4.1(f) shall accelerate and shall fully vest effective immediately prior to Termination.

(f) Termination by Employee Not for Good Reason. In the event Employee's employment is terminated by him not for “Good Reason”, as defined in Section 5.3, Employer shall pay Employee the Base Salary (but not accrued bonus, if any) and benefits due Employee under Section 4 through the last day of Employee's actual employment.

(g) Resignation as Board Member or Officer. Immediately upon the termination of Employee’s employment with Employer, Employee shall, and hereby agrees to, tender a written notice of Employee’s resignation from any and all offices of the Employer and all subsidiaries, affiliates or clients in which the Employee represents the Employer in the capacity of an officer or director. Notwithstanding any failure by the Employee to provide the Employer with such written notice of resignation within three days after the date of the termination of Employee’s employment with Employer, Employee hereby authorizes and directs the Board of Directors to accept the Employee’s resignation from all said positions effective as of the date of termination of the Employee’s employment.

(h) Subsequent Offer of Benefits. Employee shall not have the duty to mitigate the costs to Employer under this Section 5.4, except that the Continued Benefits provided under Sections 5.4(c). In the event of Other Termination and 5.4(e). In the event of Termination for Good Reason shall be cancelled to the extent of any comparable benefit coverage offered to Employee by any subsequent employer or other person.

6. Property Rights and Obligations of Employee.

6.1. Trade Secrets. For purposes of this Agreement, "trade secrets" shall include without limitation any and all financial, cost and pricing information and any and all information contained in any drawings, designs, plans, proposals, customer lists, records of any kind, data, formulas, specifications, concepts or ideas, where such information is reasonably related to the business of Employer, has been divulged to or learned by Employee during the term of his employment by Employer, and has not previously been publicly released by duly authorized representatives of Employer or otherwise lawfully entered the public domain.

6.2. Preservation of Trade Secrets. Employee will preserve as confidential all trade secrets pertaining to Employer's business that have been obtained or learned by him by reason of his employment. Employee will not, without the prior written consent of Employer, either use for his own benefit or purposes or disclose or permit disclosure to any third parties, either during the term of his employment hereunder or thereafter (except as required in fulfilling the duties of his employment), any trade secret connected with the business of Employer.

6.3. Trade Secrets of Others. Employee agrees that he will not disclose to Employer or induce Employer to use any trade secrets belonging to any third party.


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customer lists, computer software or hardware, and similar materials that are made by him or come into his possession by reason of and during the term of his employment with Employer are the property of Employer and shall not be used by him in any way adverse to Employer's interests. Employee will not allow any such documents or things, or any copies, reproductions or summaries thereof to be delivered to or used by any third party without the specific consent of Employer. Employee agrees to deliver to the Board of Directors of Employer or its designee, upon demand, and in any event upon the termination of Employee's employment, all of such documents and things which are in Employee's possession or under his control.

6.5. Non-Competition by Employee.

6.5.1. General. Employee agrees during the Term and for two years following the termination of his Employment, not to recruit, engage in passive hiring efforts, solicit or induce any person or entity who, during such two-year period, or within one (1) year prior to the termination of Employee's employment with Employer, was an employee, agent, representative or sales person of Employer or any of its affiliates ("Employer Group") to leave or cease his employment or other relationship with Employer Group for any reason whatsoever or hire or engage the services of such person for Employee in any business substantially similar to or competitive with that in which Employer Group was engaged during Employee's employment.

6.5.2. Non-Solicitation of Customers. Employee acknowledges that in the course of his employment, he will learn about Employer Group's business, services, materials, programs and products and the manner in which they are developed, marketed, served and provided. Employee knows and acknowledges that Employer Group has invested considerable time and money in developing its programs, agreements, offices, representatives, services, products and marketing techniques and that they are unique and original. Employee further acknowledges that Employer Group must keep secret all pertinent information divulged to Employee about Employer Group business concepts, ideas, programs, plans and processes, so as not to aid Employer Group's competitors. Accordingly, Employer Group is entitled to the following protection, which Employee agrees is reasonable:

Employee agrees that for a period of two (2) years following the termination of his employment, he will not, on his own behalf or on behalf of any person, firm, partnership, association, corporation, or other business organization, entity or enterprise, knowingly solicit, call upon, or initiate communication or contact with any person or entity or any representative of any person or entity, with whom Employee had contact during his employment, with a view to the sale or the providing of any product, equipment or service sold or provided or under development by Employer Group during the period of two (2) years immediately preceding the date of Employee's termination. The restrictions set forth in this section shall apply only to persons or entities with whom Employee had actual contact during the two (2) years prior to termination of his employment with a view toward the sale or providing of any product, equipment or service sold or provided or under development by Employer Group.

6.5.3. Non-Competition. Employee acknowledges that he will be a "high impact" person in Employer Group's business who is in possession of selective and specialized skills, learning abilities, customer contacts, and customer information as a result of his relationship with Employer Group and prior experience, and agrees that Employer Group has a substantial business interest in the covenant described below. Employee, therefore, agrees that during the Term and for a period of two (2) years from the termination of his employment, not to, either directly, whether as an employee, sole proprietor, partner shareholder, joint venture or the like, in the same or similar capacity in which he worked for Employer Group, compete with Employer Group in the manufacture, marketing or sales of excimer laser technology in connection with interventional cardiology, psoriasis or any other field in which Employer enters or considers entering into, provided Employee has actual knowledge of such field. The territory in which this non-competition covenant shall apply will be limited to the area commensurate with the territory in which Employee marketed, sold or provided products or services for Employer Group during the two years preceding termination of Employment.


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judicially unenforceable, it shall not affect the enforcement of any other covenant. In the event Employee breaches any of the provisions of this Section 6, Employee agrees that Employer shall be entitled to injunctive relief in addition to any other remedy to which Employer may be entitled.

6.7. Additional Conditions of Employment.

(a) Termination of Certain PROCYTE Agreements. By entering into this Agreement, Employee represents that he has terminated all existing agreements with ProCyte and any affiliate of ProCyte relating to his employment, compensation, severance, payments upon change of control, equity participation (including stock option agreements), additional benefits or otherwise, including, but not limited to, Employee’s Change of Control Agreement dated as of July 1, 2004, Indemnity Agreement dated as of May 21, 2002, Severance Agreement dated as of July 1, 2004, and any other severance program maintained by PROCYTE or its affiliates, but excluding the Assumed Company Options (as such term is defined in the Merger Agreement) granted in the name of Employee and assumed by Employer pursuant to Section 1.7(e) of the Merger Agreement. To the extent not already terminated, Employee hereby terminates and waives any rights he may have in all such existing agreements with ProCyte and any affiliate of ProCyte. By executing this Agreement, ProCyte acknowledges and agrees to the termination of the agreements referenced in this Section 6.7(a).

(b) (i) Assignment of Invention Rights. The Employee promises and agrees that the Employee will promptly and fully disclose to Employer all inventions, designs, improvements, discoveries, ideas, concepts or themes that relate in any way or are similar to Employer’s business, products or services (“Intellectual Property”) that the Employee conceives, makes, formulates, develops, writes or prepares during his employment with Employer, whether on or off the job, and whether individually or jointly in collaboration with others.

(ii) The Employee hereby assigns to Employer any rights which Employee may have in any Intellectual Properties conceived, made, formulated, developed, written or prepared by Employee, including but not limited to any patent rights and copyrights applicable to any of the Intellectual Properties. The Employee further agrees to cooperate, both during and after his or her employment with Employer, in obtaining patents or copyrights on all such Intellectual Properties that are patentable or copyrightable, and shall execute any document necessary to obtain patent or copyright registration, to vest Employer with full and exclusive title, and to protect against infringement by others, where out-of-pocket costs in such endeavors shall be borne by Employer. The Employee will make every reasonable attempt to ensure that any work performed by the Employee for Employer does not infringe upon any patent, trademark, copyrights or any intellectual property interest of any third party.

7. Change of Control.

(a) For the purpose of this Agreement, a "Change of Control" shall mean:

(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) or the Securities Exchange Act of 1934, and as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (i) the then outstanding shares of common stock of Employer (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of Employer entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"), which acquisition is effected without the consent of at least a majority in interest of the Board of Directors of Employer as of the date hereof. Specifically excluded from this definition is the sale of shares by Employer in any offering of its securities effectuated through any resolution of a majority of the Board of Directors as constituted from time to time.

(ii) approval by the shareholders of Employer of (i) a complete liquidation or dissolution of Employer or (ii) the sale of other disposition of all or substantially all of the assets of Employer.


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(b) Employer and Employee hereby agree that, if Employee is in the employ of Employer on the date on which a Change of Control occurs (the "Change of Control Date"), Employer will cause or require that any successor continue to employ Employee and Employee will remain in the employ of Employer for the period commencing on the Change of Control Date and ending on the expiration of the Term, to exercise such authority and perform such duties as are commensurate with the authority being exercised and duties being performed by Employee immediately prior to the Change of Control Date. If after a Change of Control, Employee is requested and, in his sole and absolute discretion consents to change his principal business location, Employer will cause or require that any successor to reimburse Employee for his relocation expenses, including without limitation, moving expenses, temporary living and travel expenses, temporary living and travel expenses for a time while arranging to move his residence to the changed location, closing costs, if any, associated with the sale of his existing residence and the purchase of a replacement residence at the changed location, plus an additional amount representing a gross-up of any state or federal taxes payable by Employee as a result of any such reimbursements. If Employee shall not consent to change his business location, Employee may continue to provide services required of him hereunder in Montgomeryville, Pennsylvania and Employer or its successor shall continue to maintain an office for Employee at that location.

(c) During the remaining Term after the Change of Control Date, Employer will cause or require any successor to continue to honor the terms of this Agreement, including payment of the compensation set forth in Section 4 herein.

(d) If during the remaining Term on or after the Change of Control Date (i) Employee's employment is terminated by Employer or its successor other than for "Cause" (as defined in Section 5.2(a) hereof), or (ii) there shall have occurred a material reduction in Employee's compensation or employment related benefits, or a material change in Employee's status, working conditions or management responsibilities, or a material change in the business objectives or policies of Employer or its successor and Employee voluntarily terminates employment within sixty (60) days of any such occurrence, or the last in a series of occurrences, the Employee shall be entitled to receive as a severance payment, subject to the provisions of Section 7(e) below, a payment over twelve months equal to Two Hundred Percent (200%) of Employee's current compensation under Sections 4.1 (a), (c), (d) (f), and (g) (the "Compensation Amount").

(e) The amounts payable to Employee under any other compensation arrangement maintained by Employer which became payable, after payment of the Compensation Amount provided for in paragraph (d), upon or as a result of the exercise by Employee of rights which are contingent on a Change of Control (and would be considered a "parachute payment" under Internal Revenue Code 280G of the Internal Revenue Code of 1986, as amended (the "Code"), shall be reduced to the extent necessary so that such amounts, when added to such lump-sum, do not exceed 100% of the Employee's "base amount" as defined in Code Section 280G(b)(3)(A). Any such excess amount shall be deferred and paid in the next tax year.

8. General Provisions.

8.1. Notices. Any notices or other communications required or permitted to be given hereunder shall be given sufficiently only if in writing and served personally or sent by certified mail, postage prepaid and return receipt requested, addressed as follows:

If to Employer: PhotoMedex, Inc.

147 Keystone Drive

Montgomeryville, PA 18936

Fax: 215.619.3209

If to Employee: John F. Clifford

3126 211^th Avenue N.E.

Sammamish, Washington 98074

Fax: 425.869.8801


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However, either party may change his/its address for purposes of this Agreement by giving written notice of such change to the other party in accordance with this Section. Notices delivered personally shall be deemed effective as of the day delivered and notices delivered by mail shall be deemed effective as of three days after mailing (excluding weekends and federal holidays).

8.2. Choice of Law and Forum. Except as expressly provided otherwise in this Agreement, this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, and both parties consent to the jurisdiction of the courts of the State of Delaware with respect thereto.

8.3. Entire Agreement; Modification and Waiver. This Agreement supersedes any and all other agreements, whether oral or in writing, between the parties hereto with respect to the employment of Employee by Employer and contains all covenants and agreements between the parties relating to such employment in any manner whatsoever. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, oral or written, have been made by any party, or anyone acting on behalf of any party, that are not embodied herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding. Any modification of this Agreement shall be effective only if it is in writing signed by the party to be charged. No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver.

8.4. Assignment. Because of the personal nature of the services to be rendered hereunder, this Agreement may not be assigned in whole or in part by Employee without the prior written consent of Employer. However, subject to the foregoing limitation, this Agreement shall be binding on, and shall inure to the benefit of, the parties hereto and their respective heirs, legatees, executors, administrators, legal representatives, successors and assigns.

8.5. Severability. If for any reason whatsoever, any one or more of the provisions of this Agreement shall be held or deemed to be inoperative, unenforceable, or invalid as applied to any particular case or in all cases, such circumstances shall not have the effect of rendering any such provision inoperative, unenforceable, or invalid in any other case or of rendering any of the other provisions of this Agreement inoperative, unenforceable or invalid.

8.6. Representation by Counsel; Interpretation. Employer and Employee each acknowledge that each party to this agreement has had the opportunity to be represented by counsel in connection with this Agreement and the matters contemplated by this Agreement. Accordingly, any rule of law or decision which would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to affect the intent of the parties.

8.7. Corporate Authority. Employer represents and warrants as of the date hereof that Employer's execution and delivery of this Agreement to Employee and the carrying out of the provisions hereof have been duly authorized by Employer's Board of Directors and authorized by Employer's shareholders as appropriate.

8.8. Indemnification. Employer hereby agrees that it shall indemnify and hold harmless Employee to the fullest extent permitted by Delaware law from and against any and all liabilities, costs, claims and expenses, including all costs and expenses incurred in defense of litigation (including attorneys’ fees), arising out of the employment of Employee, except to the extent arising out of or based upon the gross negligence or willful misconduct of Employee. Costs and expenses incurred by Employee in defense of such litigation (including attorneys’ fees) shall be paid by Employer upon receiving from Employee (a) a written request for payment, (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought, and (c) an undertaking adequate under Delaware law made by or on behalf of Employee to repay the amounts so paid if it shall ultimately be determined that Employee is not entitled to be indemnified by Employer under this Agreement, including but not limited to as a result of such exception.


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8.9. Attorneys' Fees. In any action at law or in equity to enforce or construe any provisions or rights under this Agreement, the unsuccessful party or parties to such litigation, as determined by the courts pursuant to a final judgment or decree, shall pay the successful party or parties all costs, expenses, and reasonable attorneys' fees incurred by such successful party or parties (including, without limitation, such costs, expenses, and fees on any appeals), and if such successful party or parties shall recover judgment in any such action or proceedings, such costs, expenses, and attorneys' fees shall be included as part of such judgment.

8.10. Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of, which shall be deemed an original, but all of which together shall constitute one and the same instrument. Fax signatures shall be valid and binding.

8.11. Headings and Captions. Headings and captions are included for purposes of convenience only and are not a part hereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first written above at _________________________________.

"Employer"

PHOTOMEDEX, INC.

By: _____________________

"Employee"

_________________________

John F. Clifford

PROCYTE hereby acknowledges and agrees that as of the closing date of the Merger, all of the agreements referenced in Section 6.7(a) hereof are terminated.

PROCYTE CORPORATION

By : ___________________


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ANNEX H

EMPLOYMENT AGREEMENT

RECITALS

WHEREAS, Employee currently serves as Vice President of Marketing of ProCyte Corporation. ("ProCyte");

WHEREAS, Employer wishes to employ Employee as Vice-President of Marketing, and Employee wishes to accept such employment, all on the condition of closing of the Merger and on the terms and conditions set forth in this Agreement; and

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and obligations herein contained, the parties hereto agree as follows:

AGREEMENT

1. Employment. Employer hereby employs Employee, and Employee hereby accepts employment with Employer, upon the terms and conditions set forth in this Agreement.

3. Duties.

3.1. Basic Duties. Subject to the direction and control of the President and Chief Executive Officer of Employer, Employee shall serve as the Vice-President of Marketing and shall fulfill all duties and obligations of such office. These duties will include but are not limited to oversight of all marketing activities, both International and Domestic; product sales for both the medical and spa business; providing assistance in all business development activities and negotiations of licensing agreements. The Employee shall have the authority and power to perform all her duties.

3.2. Other Duties of Employee. In addition to the foregoing, Employee shall perform such other or different duties related to those set forth in Paragraph 3.1 as may be assigned to her from time to time by Employer; provided, however, that any such additional assignment shall be at a level of responsibility commensurate with that set forth in Paragraph 3.1.


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3.3. Time Devoted to Employment. Employee shall devote her full time to the business of Employer during the term of this Agreement and shall perform her duties and responsibilities faithfully, diligently and to the best of her ability, consistent with the highest and best standards of the industry and in compliance with all applicable laws and the Employer's policies and procedures.

3.4. No Conflicting Agreements. Employee represents and warrants that her performance of all the terms and conditions of this Agreement does not and shall not breach any other agreement, including any confidentiality and non-disclosure agreements with prior employers or other persons. Employee represents and warrants that she has not entered into, and shall not enter into, any agreement, either written or oral in conflict with this Agreement.

3.6. Place of Performance of Duties. The services of Employee shall be performed at Redmond, Washington or, at the election of Employer, Montgomeryville, Pennsylvania (or wherever Employer is headquartered at the time that relocation is sought). If Employer desires Employee to relocate to Pennsylvania, the Employer shall, pay or reimburse Employee for the following expenses (to the extent actually incurred or paid by Employee): (a) real estate broker’s commissions up to 6% of the selling price of one single family residence owned by Employee in the state of Washington; (b) reasonable and customary closing costs (excluding the amount of unpaid property taxes, point on a mortgage loan) incurred in connection with Employee purchasing a home in or around Montgomeryville, Pennsylvania; (c) travel and shipping costs for goods and vehicles from Washington to Pennsylvania; and (d) reasonable temporary housing expenses in Pennsylvania for up to two weeks. Employer will also pay to Employee an additional amount representing a gross-up of any state or federal taxes payable by Employee as a result of any reimbursements made pursuant to this Section.

4. Compensation and Method of Payment.

4.1. Total Compensation. As compensation under this Agreement, Employer shall pay and Employee shall accept the following:

(a) For each year of this Agreement, measured from the Effective Date, base compensation ("Base Salary") of One Hundred Eighty Five Thousand Dollars ($185,000); provided, however, that Employer will review Employee’s Base Salary annually and may increase (but not decrease) the Employee’s base salary, subject to the approval of the Compensation Committee.

(b) For each year of this Agreement, Employer shall pay Employee a bonus up to 30% of Base Salary or as otherwise established by the Compensation Committee and subject to criteria to be established at the discretion of the Board of Directors (“Bonus”).


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(e) Employee shall be entitled to an automobile allowance of Seven Hundred and Fifty Dollars ($750) per month.

(f) Subject to the approval of the Board of Directors of Employer, Employee shall be granted incentive stock options (as such term is defined in Section 422(b) of the Internal Revenue Code of 1986, as amended) to purchase up to 75,000 shares of Employer's Common Stock ("Employer Stock Options"), with an exercise price equal to the average closing trading price for the ten business days following the Effective Date. Of these Employer Stock Options, thirty-four percent (34%) shall be fully vested as of the day preceding the first anniversary of the Effective Date, and thirty-three percent (33%) shall vest on the day preceding each of the next two subsequent anniversaries of the Effective Date.

(g) Notwithstanding any other provision of this Agreement, Employer reserves the right to modify, suspend or discontinue any and all benefit plans, practices, policies and programs at any time whether before or after termination of employment without advance notice to or recourse by Employee.

4.2. Payment of Compensation. Employer shall pay the compensation provided for in Section 4 hereof as follows:

(a) All compensation to the Employee shall be subject to applicable taxes, withholding and other required, normal or elected employee deductions.

(b) Employer shall pay in cash the reimbursement of such discretionary expenses provided in Section 4.1(c).

5. Termination of Agreement.

5.2. Other Termination by Employer. Employer may terminate Employee immediately for any of the reasons set forth below:


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the Employer, provided that, if Employee and the Employer do not agree on a physician, Employee and Employer shall each select a physician and such two physicians together shall select a third physician, whose determination as to disability shall be binding on the parties. For purposes of this section and the laws affecting disability and leaves of absence for medical reasons, Employee acknowledges that she is a key employee of Employer.

5.3. Other Termination by Employee. Employee may terminate this Agreement for "Good Reason." For purposes of this Section 5.3, "Good Reason" shall mean the following unless such circumstances are fully corrected within ten (10) days after Employee notifies Employer in writing that she intends to terminate her employment for Good Reason:

(b) any reduction by Employer in Employee's Base Salary (other than as agreed to by Employee) in effect on the date hereof or as the same may be increased after such date.

5.4. Effect of Termination.

(c) Other Termination by Employer. In the event that Employee's employment is terminated by Employer other than pursuant to Section 5.2 or Section 7, Employer shall pay Employee the greater of the amount of two year’s of Base Salary at the date of termination or the remaining amount of unpaid Base Salary that Employee would have received if this Agreement did not terminate before the end of the Term (payments to be made in equal monthly installments). Further, Employee will be paid the amount of Bonus that would have been due pursuant to Section 4.1(b) during the year of her termination, payable at the usual time such Bonus payments are made by Employer. In addition, Employer shall pay or reimburse Employee for the costs of health care benefits that Employee would have received if this Agreement did not terminate before the end of the Term (“Continued Benefits”). Finally, the vesting schedule for all incentive stock options granted to the Employee pursuant to Section 4.1(f) shall accelerate and shall fully vest effective immediately prior to Termination.


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(e) Termination for Good Reason. In the event the Employee's employment is terminated by her for "Good Reason" pursuant to Section 5.3, Employer shall pay Employee the greater of the amount of two year’s of Base Salary at the date of termination or the remaining amount of unpaid Base Salary that Employee would have received if this Agreement did not terminate before the end of the Term (payments to be made in equal monthly installments). Further, Employee will be paid the amount of Bonus that would have been due pursuant to Section 4.1(b) during the year of her termination, payable at the usual time such Bonus payments are made by Employer. In addition, Employer shall pay or reimburse Employee for the costs of the Continued Benefits. Finally, the vesting schedule for all incentive stock options granted to the Employee pursuant to Section 4.1(f) shall accelerate and shall fully vest effective immediately prior to Termination.

(f) Termination by Employee Not for Good Reason. In the event Employee's employment is terminated by her not for “Good Reason”, as defined in Section 5.3, Employer shall pay Employee the Base Salary (but not accrued bonus, if any) and benefits due Employee under Section 4 through the last day of Employee's actual employment.

6. Property Rights and Obligations of Employee.

6.1. Trade Secrets. For purposes of this Agreement, "trade secrets" shall include without limitation any and all financial, cost and pricing information and any and all information contained in any drawings, designs, plans, proposals, customer lists, records of any kind, data, formulas, specifications, concepts or ideas, where such information is reasonably related to the business of Employer, has been divulged to or learned by Employee during the term of her employment by Employer, and has not previously been publicly released by duly authorized representatives of Employer or otherwise lawfully entered the public domain.

6.2. Preservation of Trade Secrets. Employee will preserve as confidential all trade secrets pertaining to Employer's business that have been obtained or learned by her by reason of her employment. Employee will not, without the prior written consent of Employer, either use for her own benefit or purposes or disclose or permit disclosure to any third parties, either during the term of her employment hereunder or thereafter (except as required in fulfilling the duties of her employment), any trade secret connected with the business of Employer.

6.3. Trade Secrets of Others. Employee agrees that she will not disclose to Employer or induce Employer to use any trade secrets belonging to any third party.

6.4. Property of Employer. Employee agrees that all documents, reports, files, analyses, drawings, designs, tools, equipment, plans (including, without limitation, marketing and sales plans), proposals, customer lists, computer software or hardware, and similar materials that are made by her or come into her possession by reason of and during the term of her employment with Employer are the property of Employer and shall not be used by her in any way adverse to Employer's interests. Employee will not allow any such documents or things, or any copies, reproductions or summaries thereof to be delivered to or used by any third party without the


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specific consent of Employer. Employee agrees to deliver to the Board of Directors of Employer or its designee, upon demand, and in any event upon the termination of Employee's employment, all of such documents and things which are in Employee's possession or under her control.

6.5. Non-Competition by Employee.

6.5.1. General. Employee agrees during the Term and for two years following the termination of her Employment, not to recruit, engage in passive hiring efforts, solicit or induce any person or entity who, during such two-year period, or within one (1) year prior to the termination of Employee's employment with Employer, was an employee, agent, representative or sales person of Employer or any of its affiliates ("Employer Group") to leave or cease her employment or other relationship with Employer Group for any reason whatsoever or hire or engage the services of such person for Employee in any business substantially similar to or competitive with that in which Employer Group was engaged during Employee's employment.

6.5.2. Non-Solicitation of Customers. Employee acknowledges that in the course of her employment, she will learn about Employer Group's business, services, materials, programs and products and the manner in which they are developed, marketed, served and provided. Employee knows and acknowledges that Employer Group has invested considerable time and money in developing its programs, agreements, offices, representatives, services, products and marketing techniques and that they are unique and original. Employee further acknowledges that Employer Group must keep secret all pertinent information divulged to Employee about Employer Group business concepts, ideas, programs, plans and processes, so as not to aid Employer Group's competitors. Accordingly, Employer Group is entitled to the following protection, which Employee agrees is reasonable:

Employee agrees that for a period of two (2) years following the termination of her employment, she will not, on her own behalf or on behalf of any person, firm, partnership, association, corporation, or other business organization, entity or enterprise, knowingly solicit, call upon, or initiate communication or contact with any person or entity or any representative of any person or entity, with whom Employee had contact during her employment, with a view to the sale or the providing of any product, equipment or service sold or provided or under development by Employer Group during the period of two (2) years immediately preceding the date of Employee's termination. The restrictions set forth in this section shall apply only to persons or entities with whom Employee had actual contact during the two (2) years prior to termination of her employment with a view toward the sale or providing of any product, equipment or service sold or provided or under development by Employer Group.

6.5.3. Non-Competition. Employee acknowledges that she will be a "high impact" person in Employer Group's business who is in possession of selective and specialized skills, learning abilities, customer contacts, and customer information as a result of her relationship with Employer Group and prior experience, and agrees that Employer Group has a substantial business interest in the covenant described below. Employee, therefore, agrees that during the Term and for a period of two (2) years from the termination of her employment, not to, either directly, whether as an employee, sole proprietor, partner shareholder, joint venture or the like, in the same or similar capacity in which she worked for Employer Group, compete with Employer Group in the manufacture, marketing or sales of excimer laser technology in connection with interventional cardiology, psoriasis or any other field in which Employer enters or considers entering into, provided Employee has actual knowledge of such field. The territory in which this non-competition covenant shall apply will be limited to the area commensurate with the territory in which Employee marketed, sold or provided products or services for Employer Group during the two years preceding termination of Employment.

6.6. Survival Provisions and Certain Remedies. Unless otherwise agreed to in writing between the parties hereto, the provisions of this Section 6 shall survive the termination of this Agreement. The covenants in this Section 6 shall be construed as separate covenants and to the extent any covenant shall be judicially unenforceable, it shall not affect the enforcement of any other covenant. In the event Employee breaches any of the provisions of this Section 6, Employee agrees that Employer shall be entitled to injunctive relief in addition to any other remedy to which Employer may be entitled.


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6.7. Additional Conditions of Employment.

(a) Termination of All PROCYTE Agreements. By entering into this Agreement, Employee represents that she has terminated all existing agreements with ProCyte and any affiliate of ProCyte relating to her employment, compensation, severance, payments upon change of control, equity participation (including stock option agreements), additional benefits or otherwise, including, but not limited to, Employee’s Change of Control Agreement dated as of April 24, 1998 and amended on March 21, 2002 to extend the term to April 30, 2004 and Indemnity Agreement dated as of May 21, 2002, and any other severance program maintained by PROCYTE or its affiliates, but excluding the Assumed Company Options (as such term is defined in the Merger Agreement) granted in the name of Employee and assumed by Employer pursuant to Section 1.7(e) of the Merger Agreement. To the extent not already terminated, Employee hereby terminates and waives any rights she may have in all such existing agreements with ProCyte and any affiliate of ProCyte. By executing this Agreement, ProCyte acknowledges and agrees to the termination of the agreements referenced in this Section 6.7(a).

(ii) The Employee hereby assigns Employer any rights which Employee may have in any Intellectual Properties conceived, made, formulated, developed, written or prepared by Employee, including but not limited to any patent rights and copyrights applicable to any of the Intellectual Properties. The Employee further agrees to cooperate, both during and after his or her employment with Employer, in obtaining patents or copyrights on all such Intellectual Properties that are patentable or copyrightable, and shall execute any document necessary to obtain patent or copyright registration, to vest Employer with full and exclusive title, and to protect against infringement by others, where out-of-pocket costs in such endeavors shall be borne by Employer. The Employee will make every reasonable attempt to ensure that any work performed by the Employee for Employer does not infringe upon any patent, trademark, copyrights or any intellectual property interest of any third party.

7. Change of Control.

(a) For the purpose of this Agreement, a "Change of Control" shall mean:

(ii) approval by the shareholders of Employer of (i) a complete liquidation or dissolution of Employer or (ii) the sale of other disposition of all or substantially all of the assets of Employer.


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expiration of the Term, to exercise such authority and perform such duties as are commensurate with the authority being exercised and duties being performed by Employee immediately prior to the Change of Control Date. If after a Change of Control, Employee is requested and, in her sole and absolute discretion consents to change her principal business location, Employer will cause or require that any successor to reimburse Employee for her relocation expenses, including without limitation, moving expenses, temporary living and travel expenses, temporary living and travel expenses for a time while arranging to move her residence to the changed location, closing costs, if any, associated with the sale of her existing residence and the purchase of a replacement residence at the changed location, plus an additional amount representing a gross-up of any state or federal taxes payable by Employee as a result of any such reimbursements. If Employee shall not consent to change her business location, Employee may continue to provide services required of her hereunder in Montgomeryville, Pennsylvania and Employer or its successor shall continue to maintain an office for Employee at that location.

(d) If during the remaining Term on or after the Change of Control Date (i) Employee's employment is terminated by Employer or its successor other than for "Cause" (as defined in Section 5.2(a) hereof), or (ii) there shall have occurred a material reduction in Employee's compensation or employment related benefits, or a material change in Employee's status, working conditions or management responsibilities, or a material change in the business objectives or policies of Employer or its successor and Employee voluntarily terminates employment within sixty (60) days of any such occurrence, or the last in a series of occurrences, the Employee shall be entitled to receive as a severance payment, subject to the provisions of Section 7(e) below, a payment over twelve months equal to One Hundred Percent (100%) of Employee's current compensation under Sections 4.1 (a), (c), (d) (f), and (g) (the "Compensation Amount").

8. General Provisions.

If to Employer: PhotoMedex, Inc.

147 Keystone Drive

Montgomeryville, PA 18936

Fax: 215.619.3209

If to Employee: Robin L. Carmichael

13113 - 180^th Ave. NE

Redmond, WA 98052


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8.11. Headings and Captions. Headings and captions are included for purposes of convenience only and are not a part hereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first written above at _________________________________.

"Employer"

PHOTOMEDEX, INC.

By: __________________

"Employee"

______________________

Robin L. Carmichael

PROCYTE hereby acknowledges and agrees that as of the closing date of the Merger, all of the agreements referenced in Section 6.7(a) hereof are terminated.

PROCYTE CORPORATION

By : __________________


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PART II

Information Not Required In Prospectus

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 102 of the Delaware General Corporation Law, or the DGCL, as amended, allows a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit.

Section 145 of the DGCL provides, among other things, that the Registrant may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of Registrant) by reason of the fact that the person is or was a director, officer, agent or employee of Registrant or is or was serving at Registrant's request as a director, officer, agent, or employee of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgment, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding. The power to indemnify applies (i) if the person is successful on the merits or otherwise in defense of any action, suit or proceeding, or (ii) if the person acted in good faith and in a manner he or she reasonably believes to be in the best interest, or not opposed to the best interest, of Registrant, and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The power to indemnify applies to actions brought by or in the right of Registrant as well, but only to the extent of defense expenses (including attorneys' fees but excluding amounts paid in settlement) actually and reasonably incurred and not to any satisfaction of judgment or settlement of the claim itself, and with the further limitation that in these actions no indemnification shall be made in the event of any adjudication of negligence or misconduct in the performance of his or her duties to Registrant, unless the court believes that in light of all the circumstances indemnification should apply.

Section 174 of the DGCL provides, among other things, that a director who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption may be held liable for these actions. A director who was either absent when the unlawful actions were approved or dissented at the time may avoid liability by causing his or her dissent to these actions to be entered in the books containing the minutes of the meetings of the board of directors at the time the action occurred or immediately after the absent director receives notice of the unlawful acts.

Registrant's amended and restated certificate of incorporation includes a provision that eliminates the personal liability of its directors to the Registrant or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. Registrant's bylaws provide that it must indemnify its directors to the fullest extent not prohibited by the DGCL; provided, however, that the Registrant may limit the extent of such indemnification by individual contracts with its directors and officers; and, provided, further, that the Registrant is not required to indemnify any director or executive officer in connection with any proceeding initiated by such person or any proceeding by such person against the Registrant or its directors, officers, employees or other agents unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the board of directors of the Registrant, or (iii) such indemnification is provided by the Registrant, in its sole discretion, pursuant to the powers vested in the Registrant under the DGCL.

Registrant's Bylaws also provide that the Registrant has the power to indemnify its other officers, employees and other agents as set forth in the DGCL. Additionally, the Registrant must advance, prior to final disposition, all expenses incurred by any director or executive officer in connection with any proceeding upon receipt of an undertaking by or on behalf of such director or executive officer to repay said amounts if it is ultimately determined that such person is not entitled to be indemnified under the Registrant's bylaws or otherwise.


	Part II-1

The indemnification provisions contained in Registrant's bylaws are not exclusive of any other rights to which a person may be entitled under any statute, provision of the amended and restated certificate of incorporation, bylaws, agreement, vote of stockholders or disinterested directors or otherwise. In addition, Registrant may maintain insurance on behalf of its directors and officers. The rights conferred to any person under the bylaws with respect to indemnification continue as to a person who has ceased to be a director, officer, employee or other agent and inures to the benefit of such person's heirs, executors and administrators.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits.

See Exhibit Index below.

ITEM 22. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

That for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

That every prospectus: (i) that is filed pursuant to the paragraph immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as part of an amendment to this registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of this Registration Statement through the date of responding to the request.


	Part II-2

To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in this registration statement when it became effective.


	Part II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Montgomeryville, Pennsylvania on January 21, 2005.


	PHOTOMEDEX, INC.

	By:	/s/ Jeffrey F. O'Donnell
		Jeffrey F. O'Donnell
		President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature		Capacity in Which Signed	Date

* Richard J. DePiano		Chairman of the Board of Directors	January 21, 2005

/s/ Jeffrey F. O'Donnell Jeffrey F. O'Donnell		President, Chief Executive Officer and Director	January 21, 2005

/s/ Dennis M. McGrath Dennis M. McGrath		Chief Financial Officer (Principal Accounting Officer)	January 21, 2005

* Alan R. Novak		Director	January 21, 2005

* David W. Anderson		Director	January 21, 2005

* Anthony J. Dimun		Director	January 21, 2005

* Warwick Alex Charlton		Director	January 21, 2005

*By:	/s/ Dennis M. McGrath Dennis M. McGrath Attorney-in-Fact		January 21, 2005


	Part II-4

EXHIBIT INDEX

The following is a complete list of exhibits filed as part of the Registration Statement, some of which are incorporated herein by reference from the reports, registration statements and other filings of the Registrant with the Securities and Exchange Commission, as referenced below:

Exhibit Number		Description

2.1		Agreement and Plan of Merger, dated December 1, 2004, between the Registrant, Gold Acquisition Merger Corp. and ProCyte Corporation, (included as Annex A to the joint proxy statement/prospectus, which constitutes part of this registration statement)
4.1		Specimen Common Stock Certificate ⁽¹⁾
5.1		Opinion of Jenkens & Gilchrist, LLP re legality of shares being registered *
8.1		Opinion of Jenkens & Gilchrist, LLP re tax matters *
8.2		Opinion of Perkins Coie LLP re tax matters *
23.1		Consent of KPMG LLP
23.2		Consent of Deloitte & Touche LLP
23.3		Consent of Jenkens & Gilchrist, LLP (included in Exhibits 5.1 and 8.1 hereof) *
23.4		Consent of Perkins Coie LLP (included in Exhibit 8.1 hereof) *
24.1		Power of Attorney (included on signature page of this registration statement) *
99.1		Form of Proxy of PhotoMedex, Inc.
99.2		Consent of Wells Fargo Securities, LLC *
99.3		Form of Proxy of ProCyte Corporation
99.4		Consent of CIBC World Markets Corp. *
99.5		Letter re Arthur Andersen LLP representation ⁽²⁾
99.6		Form of Stockholder Agreement (included as Annex E to the joint proxy statement/prospectus, which constitutes part of this registration statement)
99.7		Form of Affiliate Agreement (included as Annex F to the joint proxy statement/prospectus, which constitutes part of this registration statement)
99.8		Form of Employment Agreement with John F. Clifford (included as Annex G to the joint proxy statement/prospectus, which constitutes part of this registration statement)
99.9		Form of Employment Agreement with Robin L. Carmichael (included as Annex H to the joint proxy statement/prospectus, which constitutes part of this registration statement)

___________________

*	Previously filed with the initial registration statement on January 6, 2005.

(1)	Incorporated by reference to the Registrant's Registration Statement on Form S-1 (Registration No. 333-44937), which became effective on May 12, 2000, and for which a Post-Effective Amendment on Form S-3 became effective on April 9, 2002.

(2)	Incorporated by reference to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001.


	Part II-5

Delaware	3845	59-2058100
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

For PhotoMedex Stockholders:	For ProCyte Shareholders:
Thursday, March 3, 2005	Thursday, March 3, 2005
at 9:00 a.m., Eastern time	at 9:00 a.m., Pacific time
147 Keystone Drive	Hyatt Regency Bellevue
Montgomeryville, Pennsylvania 18936	900 Bellevue Way NE
tel. no. (215) 619-3600	Bellevue, Washington 98004
	tel. no. (425) 462-1234

CHAPTER I - THE MERGER			I-1

Questions and Answers about the Merger			I-1

Summary of the Joint Proxy Statement/Prospectus			I-5
The Companies			I-5
The Merger			I-6
What You Will Receive in the Merger			I-6
Tax Free Transaction			I-6
Differences in Rights of Stockholders			I-6
Reasons for the Merger			I-7
Recommendation of the ProCyte Board			I-7
Recommendation of the PhotoMedex Board			I-7
Quotation on The Nasdaq National Market			I-7
Ownership of PhotoMedex After the Merger			I-7
Dissenters' or Appraisal Rights			I-7
The Special Meetings			I-8
Record Dates for Voting; Required Votes for the Merger Proposal			I-8
Conditions to the Consummation of the Merger			I-9
No Solicitation by ProCyte			I-9
Termination of the Merger Agreement			I-10
Termination Fees and Expenses			I-10
Opinion of ProCyte's Financial Advisor			I-11
Opinion of PhotoMedex's Financial Advisor			I-11
Interests of ProCyte Directors and Executive Officers in the Merger			I-11
Risks of the Merger			I-12
Accounting Treatment			I-12
PhotoMedex Selected Historical Consolidated Financial Data			I-12
ProCyte Selected Historical Consolidated Financial Data			I-14
Selected Unaudited Pro Forma Condensed Consolidated Financial Data			I-15
Comparative Per Share Data			I-16
Comparative Market Price and Dividend Information			I-17

Cautionary Statement Regarding Forward-Looking Statements			I-18

Risk Factors			I-20
Risks Relating to the Proposed Merger			I-20
Risks Relating to the Business and Operations of PhotoMedex Following the Merger			I-26
Risks Relating to the Business and Operations of ProCyte			I-37

The Merger			I-37
General			I-37
Background of the Merger			I-37
ProCyte's Reasons for the Merger			I-43
Recommendation of the ProCyte Board			I-46
PhotoMedex's Reasons for the Merger			I-46
Recommendation of the PhotoMedex Board			I-48
Opinion of ProCyte's Financial Advisor - Wells Fargo Securities, LLC			I-49
Opinion of PhotoMedex's Financial Advisor - CIBC World Markets Corp.			I-61
Payment of Finder's Fee by PhotoMedex			I-67
Material United States Federal Income Tax Consequences			I-67
Accounting Treatment			I-69

Interests of ProCyte Directors and Executive Officers in the Merger			I-70
Dissenters' or Appraisal Rights			I-71
Quotation on The Nasdaq National Market			I-74
Delisting and Deregistration of ProCyte Common Stock			I-74
Federal Securities Laws Consequences			I-75

The Merger Agreement			I-75
The Merger			I-75
The Exchange Ratio and Treatment of Securities			I-75
Exchange of Certificates			I-76
Transfer of Shares			I-77
Representations and Warranties of ProCyte and PhotoMedex			I-77
Conduct of PhotoMedex's and ProCyte's Business Prior to the Merger			I-78
Stockholder Meetings			I-79
Access to Information			I-80
Commercially Reasonable Efforts			I-80
No Solicitation			I-80
Fees and Expenses			I-82
Directors and Officers Indemnification and Insurance			I-83
Nasdaq National Market Listing			I-83
Affiliates			I-83
Conditions to the Consummation of the Merger			I-83
Termination			I-84
Termination Fees and Expenses			I-86
Amendment; Extension and Waiver			I-87
Related Agreements			I-87

Information about PhotoMedex			I-90
Security Ownership of Certain Beneficial Owners and Management of PhotoMedex			I-90
Description of PhotoMedex Common Stock			I-93

Information about ProCyte			I-93
Security Ownership of Certain Beneficial Owners and Management of ProCyte			I-93
Description of ProCyte Common Stock			I-94

Unaudited Pro Forma Condensed Consolidated Financial Statements			I-95

Comparison of Rights of Holders of PhotoMedex Common Stock and ProCyte
Common Stock			I-102

CHAPTER II - THE PHOTOMEDEX SPECIAL MEETING			II-1
Time and Place of the PhotoMedex Special Meeting			II-1
Purpose of the PhotoMedex Special Meeting			II-1
Record Date; Stock Entitled to Vote; Quorum			II-1
Required Vote			II-2
Proxies; Voting and Revocation			II-2
Solicitation of Proxies			II-3
PhotoMedex Board of Directors Recommendation			II-3

CHAPTER III - THE PROCYTE SPECIAL MEETING			III-1
Time and Place of the ProCyte Special Meeting			III-1
Purpose of the ProCyte Special Meeting			III-1
Record Date; Stock Entitled to Vote; Quorum			III-1
Required Vote			III-2
Proxies; Voting and Revocation			III-2

Solicitation of Proxies			III-3
ProCyte Board of Directors Recommendation			III-3

CHAPTER IV - OTHER PHOTOMEDEX SPECIAL MEETING PROPOSAL			IV-1

Proposal 3 - Amendment of Amended And Restated 2000 Stock Option Plan			IV-1

CHAPTER V - OTHER INFORMATION			V-1

Legal Matters			V-1

Experts			V-1
About PhotoMedex			V-1
About ProCyte			V-2

Where You Can Find More Information			V-2

Very truly yours,

/s/ John F. Clifford	/s/ Jeffrey F. O'Donnell
John F. Clifford	Jeffrey F. O'Donnell
President and Chief Executive Officer	President and Chief Executive Officer
ProCyte Corporation	PhotoMedex, Inc.

ANNEX A	Agreement and Plan of Merger
ANNEX B	Opinion of ProCyte's Financial Advisor
ANNEX C	Opinion of PhotoMedex's Financial Advisor
ANNEX D	Dissenters' Rights Under Chapter 23B.13 of the Washington Business Corporation Law
ANNEX E	Form of Stockholder Agreement
ANNEX F	Form of Affiliate Agreement
ANNEX G	Form of Employment Agreement with John F. Clifford
ANNEX H	Form of Employment Agreement with Robin L. Carmichael

	(In thousands, except per share data)
	Year ended December 31,															Nine months ended September 30, (unaudited)
	1999			2000			2001			2002			2003			2003			2004
STATEMENT OF OPERATIONS DATA:
Revenues	$	99		$	969		$	4,730		$	3,274		$	14,319		$	10,615		$	12,803
Costs and expenses
Costs of revenues		4			543			4,952			4,425			10,488			7,564			7,627
Selling, general and administrative		4,342			10,365			10,519			6,191			9,451			6,985			7,511
Research and development		2,061			3,015			3,329			1,757			1,776			1,295			1,325
Depreciation and amortization		1,017			721			-			-			-			-			-
Asset impairment charge		-			-			1,958			-			-			-			-
Loss from continuing operations before interest and other income, net and income taxes		(7,325	)		(13,675	)		(16,028	)		(9,099	)		(7,397	)		(5,229	)		(3,660	)
Interest income		-			580			238			42			50			50			33
Interest expense		(1,849	)		(13	)		(25	)		(16	)		(96	)		(94	)		(99	)
Other income (expense), net		111			362			77			1			-			-			-
Loss from continuing operations before income taxes		(9,063	)		(12,746	)		(15,738	)		(9,072	)		(7,443	)		(5,273	)		(3,726	)
Income taxes		5			-			-			-			-			-			-
Loss from continuing operations		(9,068	)		(12,746	)		(15,738	)		(9,072	)		(7,443	)		(5,273	)		(3,726	)
Discontinued operations
Loss from discontinued operations(including loss on disposal of $277 realized in 2001)		(852	)		(646	)		-			-			-			-			-
Net loss		($9,920	)		($13,392	)		($15,738	)		($9,072	)		($7,443	)		($5,273	)		($3,726	)
Basic and diluted net loss per share
Continuing operations		($0.81	)		($0.81	)		($0.80	)		($0.34	)		($0.21	)		($0.15	)		($0.10	)
Discontinued operations		(0.08	)		(0.04	)		-			-			-			-			-
Basic and diluted net loss per share		($0.89	)		($0.85	)		($0.80	)		($0.34	)		($0.21	)		($0.15	)		($0.10	)
Shares used in computing basic and diluted net loss per share ⁽¹⁾		11,208			15,755			19,771			26,566			35,134			34,258			38,429
BALANCE SHEET DATA (AT PERIOD END):
Cash and short-term investments	$	4,536		$	9,561		$	4,067		$	4,008		$	6,633		$	6,633		$	5,212
Working capital		1,529			9,273			5,546			6,578			8,678			8,656			8,022
Total assets		9,706			19,871			15,585			21,513			22,753			22,753			23,413
Long-term debt (net of current portion) .		44			20			_			900			480			406			1,436
Stockholders' equity	$	5,274		$	17,768		$	12,710		$	13,309		$	15,978		$	15,978		$	15,803

Net sales	$	4,695		$	6,615		$	9,712		$	12,737		$	11,538		$	8,701		$	10,140
Gross profit		3,319			5,116			6,128			8,031			8,337			6,224			7,366
Percentage of sales		70.7	%		77.3	%		63.1	%		63.1	%		72.2	%		71.5	%		72.6	%
Selling, general and administrative expenses	$	5,239		$	6,206		$	6,249		$	6,435		$	7,444		$	5,862		$	6,653
Product development expenses		1,744			1,275			745			126			191			106			99
Non-recurring charges (income) ⁽¹⁾		1,900			-			194			-			637			-			319
Operating income (loss)		(5,564	)		(2,365	)		(1,060	)		1,470			65			256			295
Net income (loss) ⁽²⁾		(5,315	)		(2,143	)		(907	)		1,669			7,341			397			222
Basic earnings (loss) per share		(0.35	)		(0.14	)		(0.06	)		0.11			0.47			0.03			0.01
Diluted earnings (loss) per share		(0.35	)		(0.14	)		(0.06	)		0.10			0.46			0.02			0.01
Shares used in calculation of basic earnings (loss) per share		14,999			15,481			15,610			15,710			15,767			15,761			15,799
Shares used in calculation of diluted earnings (loss) per share		14,999			15,481			15,610			16,179			15,997			15,973			16,000

BALANCE SHEET DATA (AT PERIOD END):
Cash, cash equivalents and short-term investments	$	3,883		$	2,773		$	3,003		$	4,556		$	3,796		$	4,556		$	5,321
Current assets		5,454			6,451			6,506			7,931			8,363			8,479			10,724
Total assets		13,447			12,185			12,811			14,089			20,003			14,365			20,972
Current liabilities		416			1,179			1,147			963			692			991			1,416
Long-term liabilities		142			145			1,596			1,308			93			1,109			75
Shareholders' equity	$	12,889		$	10,861		$	10,068		$	11,818		$	19,218		$	12,265		$	19,481

	(In thousands, except share and per share data)
Condensed statement of operations data:	Year ended December 31, 2003 (unaudited)			Nine months ended September 30, 2004 (unaudited)
Revenues	$	25,857		$	22,944
Costs and expenses		33,330			26,536
Loss from operations		(7,473	)		(3,592	)
Interest income (expense), net		(98	)		(2	)
Other income (expense), net		(50	)		-
Net loss	$	(7,325	)	$	(3,594	)
Net loss per common share - Basic and diluted	$	(0.16	)	$	(0.07	)
Shares used in computing basic and diluted net loss per common share		45,608			48,903
Balance sheet data:					September 30, 2004
Current assets				$	24,885
Working capital					15,419
Total assets					52,803
Long-term debt (net of current portion)					1,436
Stockholders' equity				$	41,791

	Historical
	PhotoMedex	ProCyte	Consolidated pro forma
Basic earnings (loss) per share
Nine months ended September 30, 2004	$(0.10)	$0.01	$(0.07)
Year ended December 31, 2003	(0.21)	0.47	(0.16)

Diluted earnings (loss) per share
Nine months ended September 30, 2004	(0.10)	0.01	(0.07)
Year ended December 31, 2003	(0.21)	0.46	(0.16)

Book value per common share at September 30, 2004	0.39	1.23	0.83

	High		Low
Year Ended December 31, 2004:
Fourth Quarter		$1.63		$0.89
Third Quarter		1.07		0.90
Second Quarter		1.24		1.02
First Quarter		1.33		1.03
Year Ended December 31, 2003:
Fourth Quarter		$1.23		$0.99
Third Quarter		1.51		1.00
Second Quarter		1.34		0.96
First Quarter		1.35		1.07
Year Ended December 31, 2002:
Fourth Quarter		$1.47		$1.10
Third Quarter		1.64		1.25
Second Quarter		2.12		1.38
First Quarter		2.00		1.29

	PhotoMedex Common Stock		ProCyte Common Stock
Closing price on December 1, 2004		$2.25		$1.12
Closing price on January 20, 2005		$2.25		$1.46

	Total Enterprise Value as a Multiple of
	LTM		2004 Estimated		2005 Projected
	Revenue	EBIT	Revenue	EBIT	Revenue	EBIT
High	1.70x	36.0x	1.74x	23.5x	1.73x	16.4x
Mean	1.37x	14.8x	1.34x	12.9x	1.33x	12.0x
Median	1.40x	12.3x	1.38x	11.7x	1.23x	12.2x
Low	0.48x	8.0x	0.46x	7.9x	1.06x	8.9x

	Equity Value as a Multiple of Net Income
	LTM	2004 Estimated	2005 Projected
High	21.9x	21.8x	19.2x
Mean	18.9x	18.9x	16.0x
Median	18.4x	18.5x	17.2x
Low	13.8x	13.9x	10.9x


	iii


	I-2


	I-3


	I-4

*Management Case*	Relevant Range		Implied Exchange Ratio
	Low	High	Low	High
Revenue Multiples
LTM Actual Revenue	1.40x	1.41x	0.6483x	0.6515x
2004 Estimated Revenue	1.38x	1.39x	0.6596x	0.6644x
2005 Projected Revenue	1.22x	1.23x	0.7508x	0.7566x

EBIT Multiples
LTM Actual EBIT	10.3x	12.3x	0.4229x	0.4739x
2004 Estimated EBIT	10.3x	11.7x	0.4040x	0.4362x
2005 Projected EBIT	10.7x	12.2x	0.8505x	0.9461x

Net Income Multiples
LTM Actual Net Income	17.8x	18.4x	0.3831x	0.3923x
2004 Estimated Net Income	18.1x	18.5x	0.3157x	0.3234x
2005 Projected Net Income	15.8x	17.2x	0.7048x	0.7629x

Exchange Ratio in the Proposed Merger			0.6622x

*Conservative Case*	Relevant Range		Implied Exchange Ratio
	Low	High	Low	High
Revenue Multiples
LTM Actual Revenue	1.40x	1.41x	0.6483x	0.6515x
2004 Estimated Revenue	1.38x	1.39x	0.6596x	0.6644x
2005 Projected Revenue	1.22x	1.23x	0.6719x	0.6768x

EBIT Multiples
LTM Actual EBIT	10.3x	12.3x	0.4229x	0.4739x
2004 Estimated EBIT	10.3x	11.7x	0.4040x	0.4362x
2005 Projected EBIT	10.7x	12.2x	0.5783x	0.6364x

Net Income Multiples
LTM Actual Net Income	17.8x	18.4x	0.3831x	0.3923x
2004 Estimated Net Income	18.1x	18.5x	0.3157x	0.3234x
2005 Projected Net Income	15.8x	17.2x	0.4353x	0.4727x

Exchange Ratio in the Proposed Merger			0.6622x

	Total Enterprise Value as a Multiple of		Premiums Paid to Market
	LTM Revenue	LTM EBIT	One Day Prior	One Week Prior	One Month Prior
Mean	1.59x	12.1x	34.8%	46.8%	64.2%
Stripped Mean	1.58x	10.8x	29.9%	44.7%	62.4%
Median	1.37x	10.0x	33.4%	38.3%	55.0%
High	3.13x	33.7x	86.7%	97.6%	133.3%
Low	0.42x	5.6x	2.9%	4.2%	2.3%

	Implied Exchange Ratio
Revenue		Management Case	Conservative Case
2004 Estimated Revenue		1.8175x	1.8175x
2005 Projected Revenue		1.7035x	1.6113x
2006 Projected Revenue		1.3180x	1.2891x
2007 Projected Revenue		1.0659x	1.0362x
2008 Projected Revenue		0.8949x	0.8892x

EBIT
2005 Projected EBIT		1.7354x	2.0992x
2006 Projected EBIT		0.8454x	1.0504x
2007 Projected EBIT		0.6815x	0.7101x
2008 Projected EBIT		0.5585x	0.5289x


Net Income
2005 Projected Net Income	1.8902x	2.7481x
2006 Projected Net Income	0.7846x	1.1170x
2007 Projected Net Income	0.5984x	0.6713x
2008 Projected Net Income	0.4524x	0.4402x


Exchange Ratio in the Proposed Merger	0.6622x	0.6622x

	Projected for Calendar Year
	2005			2006
EPS Impact Analysis (GAAP)
Accretion / (Dilution) - $	$	0.02		$	0.01
Accretion / (Dilution) - %		37.3	%		2.9	%

EPS Impact Analysis (Excluding Amortization of Intangible Assets)
Accretion / (Dilution) - $	$	0.02		$	0.01
Accretion / (Dilution) - %		42.9	%		3.9	%

	Total Enterprise Value as a Multiple of Revenue
	2004 Estimated		2005 Projected
High		6.36x		6.91x
Mean		5.17x		3.92x
Median		4.72x		3.42x
Low		4.54x		2.88x

Exchange Ratio Reference Range		Merger Exchange Ratio
0.8388x - 1.1349x		0.6622x

Acquiror	Target

· Perrigo Company	· Agis Industries (1983) Ltd.

· DLJ Merchant Banking III, Inc./J.P. Morgan Partners, LLC	· Warner Chilcott PLC

· Bradley Pharmaceuticals, Inc.	· Bioglan Pharmaceuticals Company

· Novartis AG	· Sabex Holdings Ltd.

· Teva Pharmaceutical Industries Limited	· SICOR Inc.

· Novartis AG	· Lek Pharmaceuticals D.D.

· Alpharma Inc.	· FH Faulding (Generic Oral Dose Businesses)

· Barr Laboratories, Inc.	· Duramed Pharmaceuticals, Inc.

· Biovail Corporation	· DJ Pharma, Inc.

· Elan Corporation, plc	· Dura Pharmaceuticals, Inc.

· King Pharmaceuticals, Inc.	· Jones Pharma Incorporated

· Watson Pharmaceuticals, Inc.	· Schein Pharmaceutical, Inc.

· Galen Holdings PLC	· Warner Chilcott PLC

Exchange Ratio Reference Range		Merger Exchange Ratio
0.9430x - 1.2759x		0.6622x

Exchange Ratio Reference Range		Merger Exchange Ratio
0.5283x - 0.7269x		0.6622x

Exchange Ratio Reference Range		Merger Exchange Ratio
0.5338x - 0.7222x		0.6622x

Exchange Ratio Reference Range		Merger Exchange Ratio
0.8766x - 1.3537x		0.6622x

Name	Number of vested option shares		Maximum number of ProCyte option shares that could vest on an accelerated basis upon the closing of the merger or (in the case of executive officers) upon termination of employment		Weighted average exercise price of outstanding unvested options		Weighted average exercise price of outstanding vested options
John F. Clifford		816,667		33,333		$1.09		$1.70
John M. Hammer		36,000		12,000		1.11		1.26
Matt L. Leavitt		48,000		12,000		1.11		1.27
Robert E. Patterson		42,000		12,000		1.11		1.21
Robin L. Carmichael		290,001		24,999		1.22		1.10
Robert W. Benson		75,001		49,999		1.34		1.43

Name and Address of Beneficial Owner ⁽¹⁾	Number of Shares Beneficially Owned		Percentage Shares Beneficially Owned ⁽¹⁾
Richard J. DePiano⁽²⁾		156,800		*
Jeffrey F. O'Donnell ⁽³⁾		856,167		2.09
Dennis M. McGrath ⁽⁴⁾		657,542		1.61
Michael R. Stewart ⁽⁵⁾		188,940		*
Alan R. Novak ⁽⁶⁾		158,601		*
John J. McAtee, Jr. ⁽⁷⁾		475,000		1.18
David W. Anderson ⁽⁸⁾		17,500		*
Warwick Alex Charlton ⁽⁹⁾		300,000		*
Anthony J. Dimun ⁽¹⁰⁾		88,750		*
Cooper Hill Reporting Persons ⁽¹¹⁾		2,050,883		5.06
Corsair Reporting Persons⁽¹²⁾		2,103,013		5.21
JLF Reporting Persons⁽¹³⁾		2,506,998		6.26
Valor Capital Management, L.P.⁽¹⁴⁾		3,148,512		7.84
Joseph E. Gallo⁽¹⁵⁾		2,069,943		5.17
All directors and officers as a group (9 persons)⁽¹⁶⁾		2,899,300		6.85

Name and Address of Beneficial Owner ⁽¹⁾	Number of Shares Beneficially Owned		Percentage Shares Beneficially Owned ⁽²⁾
John F. Clifford⁽³⁾		1,160,667		6.98
Robin L. Carmichael ⁽⁴⁾		325,901		2.02
Matt L. Leavitt⁽⁵⁾		152,888		*
Robert E. Patterson ⁽⁶⁾		124,388		*
John M. Hammer ⁽⁷⁾		95,076		*
Robert W. Benson ⁽⁸⁾		75,001		*
All directors and executive officers as a group (6 persons)⁽⁹⁾		1,933,921		10.89

	PhotoMedex Historical			ProCyte Historical			Pro Forma Adjustments				Pro Forma
ASSETS
Current assets
Cash	$	5,322		$	5,321		$	-			$	10,643
Accounts receivable, net		3,898			1,317			-				5,215
Inventories		4,298			2,977			-				7,275
Assets held for sale		-			814			-				814
Prepaid and other		643			295			-				938
Total current assets		14,161			10,724			-				24,885

Property, plant and equipment
Equipment		10,435			325			-				10,760
Leasehold improvements		110			3,141			(3,141	)	(1)		110
Less accumulated depreciation and amortization		(5,463	)		(3,392	)		3,392		(1)		(5,463	)
Property, plant and equipment, net		5,082			74			251				5,407

Goodwill		2,944			3,114			12,417		(1)		18,475
Intangible assets		939			84			2,689		(1)		3,712
Deferred tax asset		-			6,938			(6,938	)	(1)		-
Other assets		286			38			-				324
Total assets	$	23,412		$	20,972		$	8,419			$	52,803

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion, long term debt and notes payable	$	1,020		$	-		$	-			$	1,020
Other current liabilities		5,118			1,416			1,912		(2)		8,446
Total current liabilities		6,138			1,416			1,912				9,466

Other liabilities		35			75			-				110
Long-term debt		1,436			-			-				1,436
Total liabilities		7,609			1,491			1,912				11,011

Stockholders' equity		15,803			19,481			6,507		(2)		41,791
Total liabilities and stockholders' equity	$	23,412		$	20,972		$	8,419			$	52,803

Fair value of common stock to be issued ⁽¹⁾	$	24,027
Fair value of options to be assumed, net of deferred compensation ⁽²⁾		2,231
Transaction costs ⁽³⁾		1,641
Total estimated purchase price	$	27,899

Current assets	$	10,724
Property plant and equipment		325
Identifiable intangible assets		2,773
Goodwill		15,531
Other assets		38
Current liabilities excluding accrued transaction costs		(1,416	)
Other liabilities		(75	)
Total purchase price	$	27,899


	Property, plant and equipment		Intangibles, deferred tax			Goodwill
Fair value adjustment to property, plant and equipment	$	251	$	-		$	-
Fair value of intangibles acquired		-		2,689			-
Fair value adjustment of deferred tax asset				(6,938	)
Eliminate ProCyte historical goodwill		-		-			(3,114	)
Record new goodwill		-		-			15,531
	$	251	$	(4,249	)	$	12,417