INVO Fertility, Inc 8-K, filed May 30, 2025
INVO Fertility, Inc. (IVF)
About this 8-K
INVO Fertility, Inc filed this 8-K on May 30, 2025, reporting on events of May 23, 2025.
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 3.03: Change to shareholders' rights
- Item 5.02: Director or officer change, or executive pay
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 8.01: Other events
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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INTRODUCTORY NOTE
INVO Fertility, Inc., a Nevada corporation (the “Company”) is filing this Current Report on Form 8-K (this “Form 8-K”) to disclose (a) the filing with the Nevada Secretary of State of the Certificate of Amendment to the Series C-1 Certificate of Designation (as defined below) and the Certificate of Amendment to the Series C-2 Certificate of Designation (as defined below) and (b) the the Company’s entry into definitive agreements to divest a majority of its holdings in NAYA Therapeutics Inc., a Delaware Corporation and wholly-owned subsidiary of the Company (“NTI”)
Item 1.01 Entry into a Material Definitive Agreement.
NTI Exchange Agreement
Effective as of May 28, 2025, the Company and NTI entered into an agreement (the “NTI Exchange Agreement”) pursuant to which the parties agreed to exchange 801,196 shares of Class A Common Stock of NTI held by the Company, representing 19.9% of the outstanding common shares of NTI, for 6,300 shares of Series A Preferred Stock of NTI. Immediately prior to the execution of the NTI Exchange Agreement, the Company was the holder of 4,029,729 shares of Class A Common Stock of NTI.
Each share of NTI Series A Preferred Stock has a stated value of $1,000, which, along with any additional amounts accrued thereon (collectively, the “Conversion Amount”) is convertible into shares of NTI’s Class A Common Stock at any time after the earlier of (a) the Class A Common Stock being listed for trading on the Nasdaq Stock Market or the New York Stock Exchange (a “Qualified Exchange”), and (b) the seventh (7th) anniversary of the issuance of the NTI Series A Preferred Stock. The initial conversion price of the NTI Series A Preferred Stock is equal to $7.86 per share, subject to adjustments, including customary adjustments for stock dividends or other distributions payable in securities, stock splits, reclassifications, mergers, reorganizations and the like.
Each share of NTI Series A Preferred Stock will automatically convert into shares of NTI’s Class A Common Stock upon the earlier of (a) the closing of the sale of shares of Class A Common Stock to the public at a price of at least $10.00 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Class A Common Stock), in a best efforts or firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $10,000,000 of gross proceeds to NTI and in connection with such offering the shares of Class A Common Stock are listed for trading on a Qualified Exchange (a “Qualified IPO”) at a conversion price equal to the price per share at which NTI issues shares of Class A Common Stock to the public in the Qualified IPO, if, and only if, the offer, sale, and resale of Class A Common Stock issuable to a holder of NTI Series A Preferred Stock upon conversion of such NTI Series A Preferred Stock are covered by an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”) and (b) immediately prior to the closing of either a transaction or series of related transactions in which a person, or a group of related persons, acquires from stockholders of NTI shares representing more than fifty percent (50%) of the outstanding voting power of NTI or a transaction that qualifies as a “deemed liquidation event” under the terms of the NTI Series A Preferred Stock (a “Sale of the Company”), and the Common Stock of the Corporation is converted into, exchanged for, or acquired for securities that are listed for trading on a Qualified Exchange (“Qualified Securities”) at a conversion price equal to the closing sale price per Qualified Security on the date of the closing of the Sale of the Company, so long as the offer, sale, and resale of the Qualified Securities issuable to a holder of NTI Series A Preferred Stock upon conversion of such NTI Series A Preferred Stock and closing of a Sale of the Company are covered by an effective registration statement under the the Securities Act.
No conversion of NTI Series A Preferred Stock may be effected if, after giving effect to the conversion or issuance, the Company, together with its affiliates, would beneficially own in excess of 19.99% of NTI’s outstanding common stock. Shares of Series A Preferred Stock of NTI have no dividend preference, but NTI cannot issue a dividend to holders of its common stock unless the holders of the NTI Series A Preferred Stock receive a pro rata portion, on an as-if converted basis, of any dividends payable on NTI common stock.
The NTI Series A Preferred Stock ranks senior to NTI common stock. Other than those rights provided by law, the holders of NTI Series Preferred A Stock have no voting rights. The NTI Series A Preferred Stock is redeemable at the option of NTI.
The foregoing summary of the NTI Exchange Agreement is not complete and is qualified in its entirety by reference to the NTI Exchange Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
NTI Secured Convertible Promissory Note
On May 28 2025, NTI issued a secured convertible promissory note in the principal amount of $4,803,175 (the “Note”) to the Company. The Note carries an interest rate of seven percent (7%) per annum. The maturity date of the Note is November 28, 2026 (the “Maturity Date”), at which point the outstanding principal amount, together with any accrued and unpaid interest and other fees, will become due and payable to the holder of the Note.
The Note shall automatically be converted upon the occurrence of a Qualified IPO or a Sale Transaction, whichever occurs earliest. The Note cannot be converted, and shares of NTI’s Class A Common Stock cannot be issued upon conversion of the Note, if, after giving effect to the conversion or issuance, the Company, together with its affiliates, would beneficially own in excess of 19.99% of the outstanding common stock of NTI.
NTI has the right to prepay the Note, provided NTI gives the Company not less than five (5) nor more than ninety (90) days prior written notice.
The Note contains events representations, warranties, covenants, and events of default that are customary for similar transactions. Upon an event of default, the Note becomes immediately due and payable, and NTI is subject to a default rate of the lesser of (i) of 12% per annum and (ii) the maximum rate permitted by applicable law.
The foregoing description of the Note does not purport to be complete and is qualified in its entirety by reference to the Note, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.
The Security Agreement
Effective as of May 28, 2025, the Company and NTI entered into a security agreement (the “Security Agreement”) pursuant to which, among other things, NTI agreed to grant a Security Interest (as defined in the Security Agreement) to the Company as an inducement to purchase the Note from NTI.
The Security Agreement contains representations, warranties, covenants, and agreements that are customary for similar transactions.
The foregoing description of the Security Agreement does not purport to be complete and is qualified in its entirety by reference to the Security Agreement, which is attached hereto as Exhibit 10.3 and is incorporated herein by reference.
The Side Letter Agreement
Effective as of May 28, 2025, the Company and NTI entered into an agreement (the “Side Letter Agreement”) pursuant to which the parties agreed that (i) if NTI reasonably determines that the existence of the Security Agreement or the Security Interest (as defined therein) will materially impede or prevent the completion of a Qualified IPO or Qualified Financing (as such terms are defined in the Third Amended and Restated Certificate of Incorporation of NTI), NTI shall provide written notice to the Company and (ii) if NTI has given notice of such Qualified IPO or Qualified Financing and such Qualified IPO or Qualified Financing is consummated, NTI will provide the Company with written notice of such consummation and the Security Agreement and Security Interest (as defined therein) will automatically terminate without any further action of NTI or the Company.
The foregoing description of the Side Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the Side Letter Agreement, a copy of which is attached hereto as Exhibit 10.4 and is incorporated herein by reference.
GreenBlock Exchange Agreement
Effective as of May 28, 2025, the Company and GreenBlock Capital, LLC, a Florida limited liability company (“GreenBlock”) entered into an agreement (the “GreenBlock Exchange Agreement”) pursuant to which the Company and GreenBlock agreed to exchange all outstanding shares of the Company’s Series C-1 Non-Voting Convertible Preferred Stock (the “Series C-1 Preferred”) owned by GreenBlock in exchange for such number of shares of the Company’s Series C-2 Non-Voting Convertible Preferred Stock (the “Series C-2 Preferred”) with the aggregate Stated Value (as defined in the Certificate of Designation of the Series C-2 Preferred (the “Series C-2 Certificate of Designation”), which sets forth the rights, preferences, and privileges of the Series C-2 Preferred) equal to the aggregate Stated Value (as defined in the Certificate of Designation of the Series C-1 Preferred (the “Series C-1 Certificate of Designation”), which sets forth the rights, preferences, and privileges of the Series C-1 Preferred) of all outstanding shares of the Series C-1 Preferred owned by GreenBlock.
The foregoing summary of the GreenBlock Exchange Agreement is not complete and is qualified in its entirety by reference to the GreenBlock Exchange Agreement, a copy of which is attached hereto as Exhibit 10.5 and is incorporated herein by reference.
Decathlon Consent and Release Agreement
Effective as of May 28, 2025, the Company, NTI and Decathlon Alpha V L.P., a Delaware limited partnership (“Decathlon”), entered into an agreement (the “Decathlon Consent and Release Agreement”) pursuant to which, among other things, (i) Decathlon agreed to release any security interests relating to the assets of and any claims against NTI and (ii) NTI agreed to issue the Note to the Company.
The foregoing summary of the Decathlon Consent and Release Agreement is not complete and is qualified in its entirety by reference to the Decathlon Consent and Release Agreement, a copy of which is attached hereto as Exhibit 10.6 and is incorporated herein by reference.
FNL Consent and Release Agreement
Effective as of May 28, 2025, the Company, NTI and Five Narrow Lane LP, a Delaware limited partnership (“FNL”) entered into an agreement (the “FNL Consent and Release Agreement”) pursuant to which, among other things, (i) FNL agreed to release any security interests relating to the assets of and any claims against NTI and (ii) NTI agreed to issue the Note to the Company.
The foregoing summary of the FNL Consent and Release Agreement is not complete and is qualified in its entirety by reference to the FNL Consent and Release Agreement, a copy of which is attached hereto as Exhibit 10.7 and is incorporated herein by reference.
FNL Amendment and Exchange Agreement
Effective as of May 23, 2025, the Company and FNL entered into an agreement (the “FNL Amendment and Exchange Agreement”) pursuant to which the parties agreed concurrently to (a) exchange outstanding shares of Series C-1 Preferred held by FNL for shares of Series C-2 Preferred, (b) amend the Series C-2 Certificate of Designation pursuant to a certificate of amendment (the “Certificate of Amendment to the Series C-2 Certificate of Designation”), (c) exchange a 7.0% Senior Secured Convertible Debenture in the principal balance of $3,934,146 due December 11, 2025 issued to FNL (the “Debenture”) for an Amended and Restated Senior Secured Convertible Debenture Due February 11, 2026 (the “Amended and Restated Debenture”) and (d), amend that certain Securities Purchase Agreement, dated as of January 3, 2024, between FNL and NTI (the “Securities Purchase Agreement”) to provide that, for so long as the Amended and Restated Debenture or shares of Series C-2 Preferred are outstanding, FNL shall have the right (the “Additional Investment Right”), exercisable at any time and from time to time, beginning on or after May 23, 2025, to purchase up to $10,000,000 of aggregate stated value of additional shares of Series C-2 Preferred (the “AIR Preferred Shares”), provided that any Additional Investment Right may only be exercised in a minimum amount of $500,000 of AIR Preferred Shares. The AIR Preferred Shares shall have the same terms as the Series C-2 Preferred then outstanding, provided that, upon issuance of AIR Preferred Shares, the conversion price in the AIR Preferred Shares and Series C-2 Preferred shall be deemed to be the lowest of (i) the conversion price as in effect on the date that the Holder exercises such Additional Investment Right, and (ii) the greater of (x) the Floor Price (as defined in the Certificate of Amendment to the Series C-2 Certificate of Designation) and (y) 85% of the arithmetic average of the three (3) lowest VWAPs during the ten (10) trading days prior to the date FNL Purchaser exercises its Additional Investment Right. In consideration of the foregoing, the Company agreed to issue an additional 1,029 shares of Series C-2 Preferred to FNL.
The foregoing summary of the FNL Amendment and Exchange Agreement is not complete and is qualified in its entirety by reference to the FNL Amendment and Exchange Agreement, a copy of which is attached hereto as Exhibit 10.8 and is incorporated herein by reference.
Item 3.02 Unregistered Sale of Equity Securities.
The information set forth in Item 1.01 and in Item 3.03 is incorporated herein by reference. The offer and sale of the Series C-2 Preferred and the Amended and Restated Debenture has been made pursuant to exemptions from registration under Sections 3(a)(9) and 4(a)(2) of the Securities Act of 1933, as amended.
Item 3.03 Material Modification to Rights of Security Holders.
Certificate of Amendment to the Series C-1 Certificate of Designation
Series C-1 Preferred
On October 14, 2024, we filed with the Nevada Secretary of State the Series C-1 Certificate of Designation. Thirty thousand three hundred seventy five (30,375) shares of Series C-1 Preferred with a stated value of $1,000.00 per share were authorized under the Series C-1 Certificate of Designation.
Each share of Series C-1 Preferred has a stated value of $1,000.00, which is convertible into shares of our common stock at a conversion price equal to $12.345 (after giving to 1-for-12 reverse stock split effected by the Company on March 18, 2025 (the “Reverse Stock Split”)), subject to adjustments set forth in the Series C-1 Certificate of Designation. The Series C-1 Preferred may not be converted into shares of our common stock unless and until our stockholders approve the issuance of common stock upon conversion of the Series C-1 Preferred. Each share of Series C-1 Preferred shall automatically convert into our common stock if our stockholders provide such approval, except that we may not effect such conversion for a holder of Series C-1 Preferred if, after giving effect to the conversion or issuance, such holder, together with its affiliates, would beneficially own in excess of 19.99% of our outstanding common stock.
Commencing on the ninety-first (91st) day after the first issuance of any Series C-1 Preferred, the holders of Series C-1 Preferred are entitled to receive dividends on the stated value at the rate of two percent (2%) per annum, payable in shares of our common stock at the conversion price. Such dividends shall continue to accrue until paid. Such dividends will not be paid in shares of our common stock unless and until our stockholders approve the issuance of common stock upon conversion of the Series C-1 Preferred. The holders of Series C-1 Preferred shall also be entitled to receive a pro-rata portion, on an as-if convertible basis, of any dividends payable on our common stock.
The Series C-1 Preferred ranks senior to our common stock and junior to the Series C-2 Preferred. Subject to the rights of the holders of any senior securities, in the event of any voluntary or involuntary liquidation, dissolution, or winding up, or sale of our company, each holder of Series C-1 Preferred shall be entitled to receive its pro rata portion of an aggregate payment equal to the amount as would be paid on our common stock issuable upon conversion of the Series C-1 Preferred, determined on an as-converted basis, without regard to any beneficial ownership limitation.
Other than those rights provided by law, the Series C-1 Preferred shares have no voting rights. Prior to the filing of the Certificate of Amendment to the Series C-1 Certificate of Designation (as defined below), the Series C-1 Preferred were not redeemable.
The foregoing summary of the Series C-1 Certificate of Designation is not complete and is qualified in its entirety by reference to the Series C-1 Certificate of Designation, a copy of which was filed as Exhibit 3.2 to a Current Report on Form 8-K filed on October 15, 2024 and is incorporated herein by reference.
Amended Series C-1 Certificate of Designation
On May 28, 2025, we filed with the Nevada Secretary of State a certificate of amendment to the Series C-1 Certificate of Designation (the “Certificate of Amendment to the Series C-1 Certificate of Designation”) pursuant to which, the Company is entitled to redeem at the Company’s option (the “Corporation Optional Redemption”) at any time or from time to time upon not less than 2 calendar days written notice to the holders prior to the date fixed for redemption thereof, at a redemption price of 113.855837742504 shares of Class A Common Stock of NTI for each share of Series C-1 Preferred being redeemed.
The foregoing summary of the Certificate of Amendment to the Series C-1 Certificate of Designation is not complete and is qualified in its entirety by reference to the Certificate of Amendment to the Series C-2 Certificate of Designation, which is attached hereto as Exhibit 4.1 and is incorporated herein by reference.
Certificate of Amendment to the Series C-2 Certificate of Designation
Series C-2 Preferred
On October 14, 2024, we filed with the Nevada Secretary of State the Series C-2 Certificate of Designation, which sets forth the rights, preferences, and privileges of the Series C-2 Preferred. Eight thousand five hundred seventy six (8,576) shares of Series C-2 Preferred with a stated value of $1,000.00 per share were authorized under the Series C-2 Certificate of Designation.
Each share of Series C-2 Preferred has a stated value of $1,000.00, which, along with any additional amounts accrued thereon pursuant to the terms of the Series C-2 Certificate of Designation (collectively, the “Conversion Amount”) is convertible into shares of our common stock. The initial conversion price of the Series C-2 Preferred was equal to $8.2716 per share (as adjusted for the Reverse Stock Split), subject to adjustments set forth in the Series C-2 Certificate of Designation, including customary adjustments for stock dividends, stock splits, reclassifications and the like, and price-based adjustment in the event of any issuances of Common Shares, or securities convertible, exercisable or exchangeable for Common Shares, at a price below the then applicable conversion price (subject to certain exceptions). Pursuant to the foregoing adjustment provisions in the Series C-2 Certificate of Designation, the conversion price of the Series C-2 Preferred was adjusted to $1.61 per share on May 1, 2025.
The Series C-2 Preferred may not be converted into shares of our common stock unless and until our stockholders approve the issuance of common stock upon conversion of the Series C-2 Preferred. Each share of Series C-2 Preferred shall become convertible into our common stock at the option of the holder of such Series C-2 Preferred shares if the our stockholders approve the issuance of common stock upon conversion of the Series C-2 Preferred, except that we may not effect such conversion for any holder of Series C-2 Preferred if, after giving effect to the conversion or issuance, such holder, together with its affiliates, would beneficially own in excess of 9.99% of our outstanding common stock.
Pursuant to the Series C-2 Certificate of Designation, commencing on the ninety-first (91st) day after the first issuance of any Series C-2 Preferred, the holders of Series C-2 Preferred were entitled to receive dividends on the stated value at the rate of ten percent (10%) per annum, payable in shares of our common stock, with each payment of a dividend payable in shares of our common stock at a conversion price of eighty-five percent (85%) of the average of the volume weighted average price of our common stock for the five (5) trading days before the applicable dividend date. Such dividends continue to accrue until paid. Such dividends will not be paid in shares of our common stock unless and until our stockholders approved the issuance of common stock upon conversion of the Series C-2 Preferred. The holders of Series C-2 Preferred are also entitled to receive a pro-rata portion, on an as-if convertible basis, of any dividends payable on our common stock.
The Series C-2 Preferred ranks senior to our common stock and to our Series C-1 Preferred. Subject to the rights of the holders of any senior securities, in the event of any voluntary or involuntary liquidation, dissolution, or winding up, or sale of our company, each holder of Series C-2 Preferred shall be entitled to receive its pro rata portion of an aggregate payment equal to the greater of (a) 125% of the Conversion Amount with respect to such shares, and (b) the amount as would be paid on our common stock issuable upon conversion of the Series C-2 Preferred, determined on an as-converted basis, without regard to any beneficial ownership limitation.
Other than those rights provided by law, the Series C-2 Preferred has no voting rights. The Series C-2 Preferred is only redeemable upon a “Bankruptcy Triggering Event” or a “Change of Control” that occurs after May 9, 2025.
The foregoing summary of the Series C-2 Certificate of Designation is not complete and is qualified in its entirety by reference to the Series C-2 Certificate of Designation, a copy of which was filed as Exhibit 3.3 to the Current Report on Form 8-K filed on October 15, 2024 and is incorporated herein by reference.
Amended Series C-2 Certificate of Designation
On May 23, 2025, we filed with the Nevada Secretary of State the Certificate of Amendment to the Series C-2 Certificate of Designation pursuant to which, among other things, holders of Series C-2 Preferred are be entitled to receive dividends payable in Series C-2 Preferred, subject to meeting certain conditions (the “Equity Conditions”).
In addition, upon issuance of AIR Preferred Shares (as defined above), the conversion price of the Series C-2 Preferred shall be deemed to be the lowest of (i) the conversion price as in effect on the date that the Holder exercises its Additional Investment Right (as defined above), and (ii) the greater of (x) the Floor Price (as defined in the Certificate of Amendment to the Series C-2 Certificate of Designations) and (y) 85% of the arithmetic average of the three (3) lowest VWAPs during the ten (10) trading days prior to the date of the exercise of the Additional Investment Right.
The foregoing summary of the Certificate of Amendment to the Series C-2 Certificate of Designation is not complete and is qualified in its entirety by reference to the Certificate of Amendment to the Series C-2 Certificate of Designation, which is attached hereto as Exhibit 4.2 and is incorporated herein by reference.
Amended and Restated Debenture
The Debenture
On October 11, 2024, the Company issued the Debenture to FNL. The Debenture carried an interest rate of seven percent (7%) per annum, payable on the first business day of each calendar month commencing November 1, 2024. The maturity date of the Debenture was December 11, 2025 (the “Maturity Date”), at which point the outstanding principal amount, together with any accrued and unpaid interest and other fees, would have became due and payable to FNL.
At any time after the Company’s stockholders approved the issuance of any Company common stock upon conversion of the Debenture, FNL would have been entitled to convert any portion of the outstanding and unpaid principal amount and accrued interest into shares of Company common stock at a conversion price of $11.1666 per share, subject to adjustment as described therein. The Debenture could not be converted and shares of Company common stock could not be issued upon conversion of the Debenture if, after giving effect to the conversion or issuance, FNL, together with its affiliates, would beneficially own in excess of 4.99% of the outstanding common stock of the Company. Pursuant to the adjustment provisions in the Debenture, the conversion price of the Debenture was reset to $1.61 per share.
The Company could not prepay the Debenture without the prior written consent of FNL.
Commencing March 14, 2025 and on the 14th of each month thereafter until the Maturity Date, the Company was required to redeem $437,127.24, plus accrued but unpaid interest and other fees, of the principal amount of the Debenture.
While any portion of the Debenture was outstanding, if the Company received gross proceeds of more than $3,000,000 from any equity or debt financings (other than a public offering as described herein), the Company was required to, at the option of the holder, apply one-third (1/3) of such gross proceeds to the redemption of the principal amount of the Debenture, except that if such equity or debt financing was a public offering of the Company’s securities pursuant to a registration statement on Form S-1, the Company was required to, at the option of the holder, apply one hundred percent (100%) of such gross proceeds, not to exceed $500,000, to the redemption of the principal amount of the Debenture. The Company also agreed that, if it received gross proceeds of more than $2,000,000 from any equity or debt financing, it would, at the option of the holder, apply $500,000 of such gross proceeds to the redemption of the principal amount of the Debenture.
The Debenture contained events representations, warranties, covenants, and events of default that are customary for similar transactions. Upon an event of default, the Debenture became immediately due and payable, and the borrower was subject to a default rate of interest of 15% per annum and a default sum as stipulated.
The foregoing description of the Debenture does not purport to be complete and is qualified in its entirety by reference to the Debenture, a copy of which was filed as Exhibit 4.1 to the Current Report on Form 8-K filed on October 15, 2024 and is incorporated herein by reference.
Amended and Restated Debenture
On May 23, 2025, we agreed to exchange the Debenture for the Amended and Restated Debenture. The Amended and Restated Debenture carries an interest rate of seven percent (7%) per annum, payable on the fifteenth (15th) day of each calendar month commencing August 15, 2025, and the principal sum is $4,803,175. The maturity date of the Amended and Restated Debenture is February 11, 2026 (the “Maturity Date”), at which point the outstanding principal amount, together with any accrued and unpaid interest and other fees, shall be due and payable to the holder of the Amended and Restated Debenture.
At any time after the Company’s stockholders approve the issuance of any Company common stock upon conversion of the Amended and Restated Debenture, the holder of the Amended and Restated Debenture will be entitled to convert any portion of the outstanding and unpaid principal amount and accrued interest into shares of Company common stock at a conversion price of $1.61 per share, subject to adjustment as described therein. The Amended and Restated Debenture may not be converted and shares of Company common stock may not be issued upon conversion of the Amended and Restated Debenture if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 4.99% of the outstanding common stock of the Company.
The Company may not prepay the Amended and Restated Debenture without the prior written consent of FNL.
Commencing August 15, 2025 and on the 15th of each month thereafter until the Maturity Date, the Company will be required to redeem $686,167.91, plus accrued but unpaid interest and other fees, of the principal amount of the Amended and Restated Debenture.
While any portion of the Amended and Restated Debenture is outstanding, if the Company receives gross proceeds of more than $3,000,000 from any equity or debt financings (other than a public offering as described herein), the Company shall, at the option of the holder, apply one-third (1/3) of such gross proceeds to the redemption of the principal amount of the Amended and Restated Debenture.
The Amended and Restated Debenture contains events representations, warranties, covenants, and events of default that are customary for similar transactions. Upon an event of default, the Amended and Restated Debenture becomes immediately due and payable, and the Company is subject to a default rate of interest of 15% per annum and a default sum as stipulated.
The foregoing description of the Amended and Restated Debenture does not purport to be complete and is qualified in its entirety by reference to the Amended and Restated Debenture, which is attached hereto as Exhibit 4.3 and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 28, 2025, Dr. Daniel Teper resigned as President of the Company.
Item 5.03 Amendments to Articles of Incorporation or Bylaws, Change in Fiscal Year.
The information set forth in Item 1.01 and in Item 3.03 is incorporated herein by reference.
Item 8.01 Other Events.
On May 28, 2025, the Company gave notice to the holders of the Series C-1 Preferred that the Company elected to redeem, and will redeem, on May 31, 2025, all of the issued and outstanding shares of its Series C-1 Preferred (including any accrued but unpaid dividends) at a redemption price of 113.855837742504 shares of Class A Common Stock of NTI for each share of C-1 Preferred being redeemed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: May 30, 2025 | INVO FERTILITY, INC. |
| /s/ Steven Shum | |
| Steven Shum | |
| Chief Executive Officer |
Exhibit 4.1
EXHIBIT A
TO
TO CERTIFICATE, AMENDMENT OR WITHDRAWAL OF DESIGNATION
OF
SERIES C-1 CONVERTIBLE PREFERRED STOCK
OF
INVO FERTILITY, INC.
I, Steven Shum, hereby certify that I am the Chief Executive Officer of INVO Fertility, Inc. (the “Corporation”), a corporation organized and existing under the Nevada Revised Statutes (the “NRS”), and further do hereby certify the following:
1. The Certificate of Designation of Series C-1 Convertible Preferred Stock of the Corporation (the “Certificate of Designation”) is hereby amended by striking out Section 8 thereof and by substituting in its place the following new Section:
Section 8. Redemption. Subject to the restrictions described herein and unless prohibited by Nevada law governing distributions to stockholders of a corporation or the terms hereof, a share of Series C-1 Convertible Preferred Stock may be redeemed at the Corporation’s option (the “Corporation Optional Redemption”) at any time or from time to time upon not less than 2 calendar days written notice to the holders prior to the date fixed for redemption thereof, at a redemption price of 113.855837742504 shares of Class A Common Stock of Naya Therapeutics, Inc., a Delaware corporation and wholly-owned subsidiary of the Corporation, for each share of Series C-1 Convertible Preferred Stock being redeemed. If the Corporation exercises the Corporation Optional Redemption, it must exercise the Corporation Optional Redemption for all of the outstanding shares of Series C-1 Convertible Preferred Stock.
2. The foregoing amendment of the Certificate of Designation has been duly approved by the Board of Directors of this Corporation.
3. The foregoing amendment of the Certificate of Designation has been duly approved by stockholders holding shares in the corporation entitling them to exercise a majority of the voting power of the Series C-1 Convertible Preferred Stock and the Series C-2 Convertible Preferred Stock.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment to Designation this 28th day of May, 2025.
| By: | Steven Shum | |
| Title: | CEO | |
Exhibit 4.2
Execution Version
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF DESIGNATIONS OF
SERIES C-2 CONVERTIBLE PREFERRED STOCK OF
INVO FERTILITY, INC.
This Certificate of Amendment to the Certificate of Designations of Series C-2 Convertible Preferred Stock (the “Amendment”) is dated as of May 23, 2025.
WHEREAS, the board of directors (the “Board”) of INVO Fertility, Inc., a Nevada corporation (the “Company”), pursuant to the authority granted to it by the Company’s Amended and Restated Articles of Incorporation (as amended, the “Articles of Incorporation”) and Section 78.1955 of the Nevada Revised Statutes (the “NRS”) has previously fixed the rights, preferences, restrictions and other matters relating to a series of the Company’s preferred stock, consisting of 8,576 authorized shares of preferred stock, classified as Series C-2 Convertible Preferred Stock (the “Preferred Stock”), and the Certificate of Designations of the Preferred Stock (as amended, the “Certificate of Designations”) was initially filed with the Secretary of State of the State of Nevada on October 14, 2024, evidencing such terms;
WHEREAS, pursuant to Section 30(b) of the Certificate of Designations, the Certificate of Designations or any provision thereof may be amended by obtaining the affirmative vote at a meeting duly called for such purpose, or written consent without a meeting in accordance with the NRS, of the holders of at least a majority of the outstanding shares of Preferred Stock (the “Required Holders”), voting separately as a single class, and with such other stockholder approval, if any, as may then be required pursuant to the NRS and the Certificate of Incorporation;
WHEREAS, the Required Holders pursuant to the Certificate of Designations have consented, in accordance with the NRS, on May 23, 2025, to this Amendment on the terms set forth herein; and
WHEREAS, the Board has duly adopted resolutions proposing to adopt this Amendment and declaring this Amendment to be advisable and in the best interest of the Company and its stockholders.
NOW, THEREFORE, this Amendment has been duly adopted in accordance with the NRS and has been executed by a duly authorized officer of the Company as of the date first set forth above to amend the terms of the Certificate of Designations as follows:
| 1. | Section 1 of the Certificate of Designations is hereby amended and restated to read as follows (emphasis added): |
Designation and Number of Shares. There shall hereby be created and established a series of preferred stock of the Company designated as “Series C-2 Convertible Preferred Stock” (the “Preferred Shares”). The authorized number of Preferred Shares shall be Twenty Thousand (20,000) shares. Each Preferred Share shall have a par value of $0.0001. Capitalized terms not defined herein shall have the meanings as set forth in Section 31 below.
| 2. | Section 3(a)(i) of the Certificate of Designations is hereby amended to read as follows: |
| Dividends and Payments. From and after the ninety-first (91st) date after the first date of issuance of any Preferred Shares (the “Initial Issuance Date”), each holder of a Preferred Share (each, a “Holder” and collectively, the “Holders”) shall be entitled to receive dividends (“Dividends”) payable, subject to the conditions and other terms hereof, (i) in cash or (ii) subject to the satisfaction of Equity Conditions (as defined below), in Preferred Shares (“Dividend Shares”) on the Stated Value (as defined below) at the Dividend Rate of such Preferred Shares with each payment of a Dividend payable in the number of Preferred Shares as shall equal the quotient of the (A) Dividend payable on such Dividend Date (as defined herein) and (B) the Stated Value or (iii) in combination of the foregoing. Such payment of Dividends shall be cumulative and shall continue to accrue whether or not declared and whether or not in any fiscal year there shall be net profits or surplus available for the payment of Dividends in such fiscal year, so that if in any fiscal year or years, unpaid Dividends shall accumulate as against the holders of Common Stock or any other Junior Stock. Dividends on the Preferred Shares shall commence accruing on the Initial Issuance Date and shall be computed on the basis of a 360-day year and twelve 30-day months. Dividends shall be payable in arrears for each quarter on the first Trading Day of each quarter (each, a “Dividend Date”) with the first Dividend Date being January 2, 2025. For purposes of the foregoing, “Equity Conditions” means, with respect to a given date of determination: (i) on each day during the period beginning thirty Trading Days prior to such applicable date of determination and ending on and including such applicable date of determination all shares of Common Stock issuable upon conversion of the Preferred Shares shall be eligible to be resold by the Holders without restriction or any legend under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of the Preferred Shares, other issuance of securities with respect to the Preferred Shares); provided that the Company shall cause its counsel to issue a legal opinion to the Transfer Agent or the Holder, if required by the Transfer Agent, or requested by the Holder, respective, to effect the removal of any restrictive legend hereunder; (ii) on each day during the period beginning thirty Trading Days prior to the applicable date of determination and ending on and including the applicable date of determination (the “Equity Conditions Measuring Period”), the Common Stock (including all shares of Common Stock issued or issuable upon conversion of the Preferred Shares) is listed or designated for quotation (as applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible Market (other than suspensions of not more than two (2) days and occurring prior to the applicable date of determination due to business announcements by the Company) nor shall delisting or suspension by an Eligible Market have been threatened (with a reasonable prospect of delisting occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or reasonably likely to occur or pending as evidenced by (A) a writing by such Eligible Market or (B) the Company falling below the minimum listing maintenance requirements of the Eligible Market on which the Common Stock is then listed or designated for quotation, as applicable; (iii) during the Equity Conditions Measuring Period, the Company shall have delivered all shares of Common Stock issuable upon conversion of the Preferred Shares on a timely basis as set forth herein and all other shares of capital stock required to be delivered by the Company on a timely basis as set forth in the other Transaction Documents as may be amended from time to time; (iv) any shares of Common Stock to be issued in connection with the event requiring determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination) may be issued in full without violating Section 4(d) hereof; (v) any shares of Common Stock to be issued in connection with the event requiring determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination (without regards to any limitations on conversion set forth herein)) may be issued in full without violating the rules or regulations of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (vi) on each day during the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental Transaction shall have occurred which has not been abandoned, terminated or consummated; (vii) none of the Holders shall be in possession of any material, non-public information provided to any of them by the Company, any of its Subsidiaries or any of their respective affiliates, employees, officers, representatives, agents or the like; (viii) on each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance with each, and shall not have breached any representation or warranty in any material respect (other than representations or warranties subject to material adverse effect or materiality, which may not be breached in any respect) or any covenant or other term or condition of any Transaction Document in any material respect, including, without limitation, the Company shall not have failed to timely make any payment pursuant to any Transaction Document; (ix) on each Trading Day during the Equity Conditions Measuring Period, (A) the aggregate daily dollar trading volume (as reported on Bloomberg) of the Common Stock on the Principal Market on any Trading Day during the twenty (20) Trading Day period ending on the Trading Day immediately preceding such date of determination shall be equal to or greater than $200,000 and (ii) the VWAP of the Common Stock on any Trading Day during the twenty (20) Trading Day period ending on the Trading Day immediately preceding such date of determination shall exceed the Floor Price (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after the Initial Issuance Date). |
| 3. | Section 4 of the Certificate of Designations is hereby amended to add a new subsection (f) as follows: |
(f) Subject to Section 4(d), at any time after the later of (A) the Stockholder Approval Date and (B) the date the Holder exercises an Additional Investment Right, the Conversion Price shall be the lowest of (i) the Conversion Price as in effect on the date that the Holder exercises such Additional Investment Right, and (ii) the greater of (x) the Floor Price and (y) 85% of the arithmetic average of the three (3) lowest VWAPs during the ten (10) Trading Days prior to the date the Holder exercises such Additional Investment Right.
| 4. | Section 4 of the Certificate of Designations is hereby amended to add a new subsection (f) as follows: |
(g) Notwithstanding anything in this Certificate of Designations to the contrary (but, subject to the reservation requirements set forth in Section 10(a) hereof), the Holder may not convert any portion of the outstanding Preferred Shares to the extent such conversion would require the Company to issue shares of Common Stock in excess of one hundred percent (100%) of the Company’s then sufficient authorized and unissued shares of Common Stock.
| 5. | Section 5(a) of the Certificate of Designations is hereby amended to add a new subsection (xviii) as follows: |
(xviii) The Company enters into any agreement to factor its accounts receivable or obtains a “merchant cash advance”, “revenue-based financing”, or similar mechanism whereby the Company receives funds from any third party against future product or service sales.
| 6. | Section 31 of the Certificate of Designations is hereby amended to amend and restate subsection (y) as follows (emphasis added): |
“Floor Price” means (i) prior to the Stockholder Approval Date, 20% of the “Minimum Price” (as defined in Rule 5635 of the Rule of the Nasdaq Stock Market) on the closing date of the Merger (the “Initial Floor Price”) and (ii) following the Stockholder Approval Date, the lower of (A) the Initial Floor Price and (B) 20% of the “Minimum Price” on such Stockholder Approval Date, in each case, subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events or, in any case, such lower amount as permitted, from time to time, by the Principal Market.
| 7. | Section 31 of the Certificate of Designations is hereby amended to add a new subsection (eee) as follows: |
“Additional Investment Right” means the right of the Holder to purchase up to $10,000,000 of aggregate Stated Value of additional Preferred Shares pursuant to Section 4.16 of the Securities Purchase Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company has caused this Amendment to be signed by its duly authorized officer this 23rd day of May, 2025.
| INVO Fertility, Inc. | ||
| By: | ||
| Name: | Steven Shum | |
| Title: | CEO | |
[Signature page to the Amendment]
Exhibit 4.3
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
Original Issue Date: October 11, 2024
$4,803,175
Amended and restated
SENIOR SECURED CONVERTIBLE DEBENTURE
DUE FEBRUARY 11, 2026
THIS AMENDED AND RESTATED SENIOR SECURED CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly issued Senior Secured Convertible Debentures of INVO Fertility, Inc., a Nevada corporation (the “Company”), having its principal place of business at 5582 Broadcast Court, Sarasota, FL 34240, designated as its Senior Secured Convertible Debenture due February 11, 2026 (this debenture, the “Debenture” and, collectively with the other debentures of such series, the “Debentures”).
FOR VALUE RECEIVED, the Company promises to pay to FIVE NARROW LANE LP or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, the principal sum of $4,803,175 (or, if lower, the outstanding principal amount of this Debenture as such amount may be modified pursuant to the terms hereof) on February 11, 2026 (the “Maturity Date”) or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance with the provisions hereof. This Debenture is subject to the following additional provisions:
Section 1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Debenture, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:
“Alternate Consideration” shall have the meaning set forth in Section 5(e).
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“Bankruptcy Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Company or any Significant Subsidiary thereof admits in writing that it is generally unable to pay its debts as they become due, (h) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
“Base Conversion Price” shall have the meaning set forth in Section 5(b).
“Beneficial Ownership Limitation” shall have the meaning set forth in Section 4(d).
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally are open for use by customers on such day.
“Buy-In” shall have the meaning set forth in Section 4(c)(v).
“Change of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 33% of the voting securities of the Company (other than by means of conversion or exercise of the Debentures and the Securities issued together with the Debentures), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company (and all of its Subsidiaries, taken as a whole) sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.
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“Conversion” shall have the meaning ascribed to such term in Section 4.
“Conversion Date” shall have the meaning set forth in Section 4(a).
“Conversion Price” shall have the meaning set forth in Section 4(b).
“Conversion Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.
“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Debenture in accordance with the terms hereof.
“Debenture Register” shall have the meaning set forth in Section 2(b).
“Dilutive Issuance” shall have the meaning set forth in Section 5(b).
“Dilutive Issuance Notice” shall have the meaning set forth in Section 5(b).
“Event of Default” shall have the meaning set forth in Section 9(a).
“Fundamental Transaction” shall have the meaning set forth in Section 5(e).
“Interest Payment Date” shall have the meaning set forth in Section 2(a).
“Late Fees” shall have the meaning set forth in Section 2(c).
“Mandatory Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Debenture, plus all accrued and unpaid interest hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either (A) demanded (if demand or notice is required to create an Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion Price, multiplied by the VWAP on the date the Mandatory Default Amount is either (x) demanded or otherwise due or (y) paid in full, whichever has a higher VWAP, or (ii) 130% of the outstanding principal amount of this Debenture, plus 100% of accrued and unpaid interest hereon, and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Debenture.
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations, liabilities (actual or contingent), or financial condition of the Company or any of its Subsidiaries, (b) the ability of the Company or any of its Subsidiaries to perform any of its obligations under this Debenture or any other Transaction Document; (c) Holder’s Liens on the assets of the Company and its Subsidiaries or the priority of such Liens or (d) the rights of, remedies of or benefits available to the Holder under the Transaction Documents; provided, however, that none of the following shall constitute, or shall be considered in determining whether there has occurred, and no event, circumstance, change or effect resulting from or arising out of any of the following shall constitute, a Material Adverse Effect: (A) the announcement of the execution of the Merger Agreement or the pendency of consummation of the Merger (including the threatened or actual impact on relationships of the Company and its Subsidiaries with customers, vendors, suppliers, distributors, landlords or employees (including the threatened or actual termination, suspension, modification or reduction of such relationships)); (B) changes in the national or world economy or financial markets as a whole or changes in general economic conditions that affect the industries in which the Company and its Subsidiaries conduct their business, so long as such changes or conditions do not adversely affect the Company and the Company Subsidiaries, taken as a whole, in a materially disproportionate manner relative to other similarly situated participants in the industries or markets in which they operate; (C) any change in applicable Law, rule or regulation or GAAP or interpretation thereof after the date hereof, so long as such changes do not adversely affect the Company and the Company Subsidiaries, taken as a whole, in a materially disproportionate manner relative to other similarly situated participants in the industries or markets in which they operate; (D) the failure, in and of itself, of the Company to meet any published or internally prepared estimates of revenues, earnings, or other financial projections, performance measures or operating statistics; provided, however, that the facts and circumstances underlying any such failure may, except as may be provided in subsections (A), (B), (C), (E), (F) and (G) of this definition, be considered in determining whether a Material Adverse Effect has occurred; (E) a decline in the price, or a change in the trading volume, of the Common Stock; (F) compliance with the terms of, and taking any action required by, any Transaction Document, or taking or not taking any actions at the request of, or with the consent of, the Holder; and (G) the incurrence of losses, the existence of working capital deficits, or going concern opinions, so long as such losses, deficits, and opinions are not, taken as a whole, materially disproportionate to the performance of the Company or NAYA Biosciences, Inc., a Delaware corporation, respectively.
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“Merger” means the merger of INVO Merger Sub Inc., a Delaware corporation and a wholly owned Subsidiary of the Company, into NAYA pursuant to the Merger Agreement.
“Merger Agreement” means the Amended and Restated Merger Agreement, dated October 11, 2024, by and among the Company, NAYA, and INVO Merger Sub Inc., a Delaware corporation and a wholly owned Subsidiary of the Company.
“Monthly Redemption” means the redemption of this Debenture pursuant to Section 6(b) hereof.
“Monthly Redemption Amount” means, as to a Monthly Redemption, $ $686,167.91, plus accrued but unpaid interest, liquidated damages and any other amounts then owing to the Holder in respect of this Debenture.
“Monthly Redemption Date” means the 15th day of each calendar month, commencing on August 15, 2025, and terminating upon the full redemption of this Debenture.
“NAYA” means NAYA Therapeutics, Inc., a Delaware corporation formerly known as NAYA Biosciences, Inc.
“NAYA Debenture” means the Senior Secured Convertible Debenture due the Earlier of the Trigger Date (as defined therein) and October 14, 2024 of NAYA in the original principal amount of $11,734,979.48, issued as of September 12, 2024, together with any other “Debentures” as defined therein, in each case, as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, which amended, restated and consolidated, collectively.
“New York Courts” shall have the meaning set forth in Section 10(d).
“Notice of Conversion” shall have the meaning set forth in Section 4(a).
“Original Issue Date” means the date of the first issuance of the Debentures, regardless of any transfers of any Debenture and regardless of the number of instruments which may be issued to evidence such Debentures.
“Permitted Indebtedness” means (a) the indebtedness evidenced by the Debentures and (b) the Indebtedness existing on the Original Issue Date and set forth on Schedule 3.1(bb) attached to the Purchase Agreement.
“Permitted Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien and (c) Liens incurred in connection with Permitted Indebtedness under clauses (a) and (b).
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“Purchase Agreement” means the Securities Purchase Agreement, dated as of January 3, 2024, among NAYA and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.
“Registration Rights Agreement” means the Registration Rights Agreement, dated as of September 12, 2024, by and between the Holder and NAYA.
“Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale of the Conversion Shares by each Holder as provided for in the Registration Rights Agreement.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share Delivery Date” shall have the meaning set forth in Section 4(c)(ii).
“Stockholder Approval Date” means the date on which the Company’s stockholders approve the conversion of the Debenture into shares of Common Stock in accordance with the listing rules of the Principal Market (or any other Eligible Market on which the Common Stock is then traded), as set forth in the Section 6.6 of the Merger Agreement, which date shall not, in any event, be later than June 30, 2025.
“Successor Entity” shall have the meaning set forth in Section 5(e).
“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
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Section 2. Interest.
a) Payment of Interest. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture at the rate of seven percent (7.00%) per annum, payable on each Monthly Redemption Date (as to that principal amount then being redeemed), on each Conversion Date (as to that principal amount then being converted), and on the Maturity Date (each such date, an “Interest Payment Date”) (if any Interest Payment Date is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day), in cash.
b) Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date (or, with respect to the principal amount of any loan under this Debenture, the date such loan is funded) until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest shall cease to accrue with respect to any principal amount converted, provided that, the Company actually delivers the Conversion Shares within the time period required by Section 4(c)(ii) herein. Interest hereunder will be paid to the Person in whose name this Debenture is registered on the records of the Company regarding registration and transfers of this Debenture (the “Debenture Register”).
c) Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of 15% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full.
d) Prepayment. Except as otherwise set forth in this Debenture, the Company may not prepay any portion of the principal amount of this Debenture without the prior written consent of the Holder.
Section 3. Registration of Transfers and Exchanges.
a) Different Denominations. This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.
b) Investment Representations. This Debenture has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.
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c) Reliance on Debenture Register. Prior to due presentment for transfer to the Company of this Debenture, the Company and any agent of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.
Section 4. Conversion.
a) Voluntary Conversion. At any time after the Stockholder Approval Date until this Debenture is no longer outstanding, this Debenture shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 4(d). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the principal amount, plus any accrued and unpaid interest thereon, of this Debenture to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. Except for the rescission of any Mandatory Default Amount in accordance with Section 9(b), any principal amount of this Debenture converted pursuant to this Section 4(a) shall be applied against the last principal amount of this Debenture scheduled to be redeemed hereunder, in reverse time order from the Maturity Date. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the Company unless the entire principal amount of this Debenture, plus all accrued and unpaid interest thereon, has been so converted in which case the Holder shall surrender this Debenture as promptly as is reasonably practicable after such conversion without delaying the Company’s obligation to deliver the shares on the Share Delivery Date. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the face hereof.
b) Conversion Price. The conversion price in effect on any Conversion Date shall be equal to $1.61, subject to adjustment herein (the “Conversion Price”).
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c) Mechanics of Conversion.
i. Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted by (y) the Conversion Price.
ii. Delivery of Conversion Shares Upon Conversion. Not later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) the Conversion Shares which, on or after the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective Date (as defined in the Registration Rights Agreement), shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Debenture and (B) a bank check in the amount of accrued and unpaid interest (if the Company has elected or is required to pay accrued interest in cash). On or after the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective Date, the Company shall deliver any Conversion Shares required to be delivered by the Company under this Section 4(c) electronically through the Depository Trust Company or another established clearing corporation performing similar functions. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Conversion.
iii. Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Debenture delivered to the Company and the Holder shall promptly return to the Company the Conversion Shares issued to such Holder pursuant to the rescinded Conversion Notice.
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iv. Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Debenture in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder of this Debenture shall elect to convert any or all of the outstanding principal amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Debenture shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Debenture, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such Conversion Shares pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Share Delivery Date until such Conversion Shares are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 9 hereof for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
v. Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such Conversion Shares by the Share Delivery Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Debenture in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Debenture with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Conversion Shares upon conversion of this Debenture as required pursuant to the terms hereof.
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vi. Reservation of Shares Issuable Upon Conversion; Insufficient Authorized Shares. The Company covenants that it will, at all times after the Stockholder Approval Date, reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Debenture and payment of interest on this Debenture, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Debentures), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Debenture and payment of interest hereunder (the “Required Reserve Amount”). The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if the Registration Statement is then effective under the Securities Act, shall be registered for public resale in accordance with such Registration Statement (subject to such Holder’s compliance with its obligations under the Registration Rights Agreement). If, notwithstanding the reservation requirements set forth in this Section and not in limitation thereof, at any time after the Stockholder Approval Date and while this Debenture remains outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of this Debenture at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing, if at any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C. After the Stockholder Approval Date, in the event that the Company is prohibited from issuing shares of Common Stock to a Holder upon any conversion due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorized Failure Shares”), the interest rate on this Debenture shall automatically increase to twenty percent (20.00%) per annum until such time as the Company cures the Authorized Share Failure, subject to compliance with the rules of Nasdaq Capital Market.
vii. Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Debenture. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.
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viii. Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Debenture shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of this Debenture so converted and the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.
d) Holder’s Conversion Limitations. The Company shall not effect any conversion of this Debenture, and a Holder shall not have the right to convert any portion of this Debenture, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of this Debenture with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) conversion of the remaining, unconverted principal amount of this Debenture beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Debentures) beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(d) applies, the determination of whether this Debenture is convertible (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which principal amount of this Debenture is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Debenture may be converted (in relation to other securities owned by the Holder together with any Affiliates or Attribution Parties) and which principal amount of this Debenture is convertible, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company, or (C) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Debenture, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Debenture. The Holder, upon notice to the Company, may increase or decrease, as applicable, the Beneficial Ownership Limitation provisions of this Section 4(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Debenture held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(d) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. Moreover, and notwithstanding anything in this Debenture to the contrary (but, subject to the reservation requirements set forth in Section 4(c)(vi) hereof), the Holder may not convert any portion of this Debenture (whether principal amount, accrued interest, or any other amount that may become payable hereunder) to the extent such conversion would require the Company to issue shares of Common Stock in excess of one hundred percent (100%) of the Company’s then sufficient authorized and unissued shares of Common Stock. The limitations contained in this paragraph shall apply to a successor holder of this Debenture.
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Section 5. Certain Adjustments.
a) Stock Dividends and Stock Splits. If the Company, at any time while this Debenture is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest on, the Debentures), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent Equity Sales. If, at any time while this Debenture is outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Conversion Price shall be reduced to equal the Base Conversion Price. (subject to adjustment for reverse and forward stock splits, recapitalizations and similar transactions following the date of the Purchase Agreement). Notwithstanding the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. If the Company enters into a Variable Rate Transaction, despite the prohibition set forth in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such securities may be converted or exercised. The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion. For purposes hereof, “Exempt Issuance” shall mean the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the board of directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued and outstanding on the Original Issue Date and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the Original Issue Date, provided that such securities have not been amended since the date of the Original Issue Date to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 2(i) of the Purchase Agreement, and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.
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c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Debenture (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Pro Rata Distributions. During such time as this Debenture is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Debenture, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Debenture (without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
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e) Fundamental Transaction. If, at any time while this Debenture is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(d), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Debenture is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of this Debenture). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Debenture and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Debenture, deliver to the Holder in exchange for this Debenture a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Debenture which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Debenture (without regard to any limitations on the conversion of this Debenture) prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Debenture immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Debenture and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Debenture and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
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f) Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.
g) Notice to the Holder.
i. Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company(and all of its Subsidiaries, taken as a whole) is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Debenture, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Debenture Register, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert this Debenture during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section 6. Redemption.
a) Mandatory Redemption.
| i. | In the event the Company or any of its Subsidiaries obtains one or more equity or debt financings (including any Subsequent Financings (as defined in the Purchase Agreement)) with gross proceeds in excess of $3,000,000, the Company shall, at the option of the Holder, concurrently with the receipt of such gross proceeds, apply one-third (1/3) of such gross proceeds towards the redemption (each, a “Mandatory Redemption”) of the principal amount of this Debenture. | |
| ii. | Any principal amount of this Debenture redeemed pursuant to a Mandatory Redemption shall be applied against the last principal amount of this Debenture scheduled to be redeemed hereunder, in reverse time order from the Maturity Date. |
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b) Monthly Redemption. On each Monthly Redemption Date, the Company shall redeem the Monthly Redemption Amount (the “Monthly Redemption”). The Monthly Redemption Amount payable on each Monthly Redemption Date shall be paid in cash. The Holder may convert, pursuant to Section 4(a), any principal amount of this Debenture subject to a Monthly Redemption at any time prior to the date that the Monthly Redemption Amount, plus accrued but unpaid interest, liquidated damages and any other amounts then owing to the Holder are due and paid in full. The Company covenants and agrees that it will honor all Notices of Conversion tendered up until such amounts are paid in full.
c) Redemption Procedure. The payment of cash pursuant to a Monthly Redemption shall be payable on the Monthly Redemption Date. If any portion of the payment pursuant to a Monthly Redemption shall not be paid by the Company by the applicable due date, interest shall accrue thereon at an interest rate equal to the lesser of 15% per annum or the maximum rate permitted by applicable law until such amount is paid in full. The Holder may elect to convert the outstanding principal amount of the Debenture pursuant to Section 4 prior to actual payment in cash for any redemption under this Section 6 by the delivery of a Notice of Conversion to the Company.
d) Voluntary Redemption. The Company may voluntarily redeem the outstanding principal amount of this Debenture, in whole or in part, in cash upon irrevocable notice to the Holder at least one (1) Business Day prior to the date of such redemption. Any such redemption of the principal amount of this Debenture (in whole or in part) shall be accompanied by the sum, in cash, of (i) accrued and unpaid interest on the principal amount being so redeemed as of the date of such redemption and any other amounts then due hereunder and (ii) an amount equal to the product of (A) the principal amount of this Debenture being redeemed, (b) the per annum rate of seven percent (7.00%) and (c) the number of calendar days from, and including, the date of such prepayment to, and including, the Maturity Date divided by 360. Any principal amount of this Debenture redeemed pursuant this Section 6(d) shall be applied against the last principal amount of this Debenture scheduled to be redeemed hereunder, in reverse time order from the Maturity Date.
Section 7. Affirmative Covenants. As long as any portion of this Debenture remains outstanding, the Company shall, and shall cause each of its Subsidiaries to:
a) preserve and maintain its legal existence, rights, franchises, and privileges in the jurisdiction of its organization, and qualify and remain qualified as a foreign business entity in each jurisdiction in which qualification is necessary in view of its business and operations or the ownership of its properties;
b) provide to the Holder, promptly upon becoming aware thereof (and in any event within three (3) days after the occurrence thereof), a notice of each Event of Default known to an executive officer of the Company, together with a statement of such executive officer setting forth the details of such Event of Default and the actions which the Company has taken and proposes to take with respect thereto;
c) pay and discharge as the same shall become due and payable: (x) all tax liabilities, assessments, and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted (which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien) and adequate reserves in accordance with GAAP are being maintained by the Company or such Subsidiary, as applicable; (y) all lawful claims which, if unpaid, would by law become a Lien upon its property, unless the same are being contested in good faith by appropriate proceedings diligently conducted (which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien) and adequate reserves in accordance with GAAP are being maintained by the Company or such Subsidiary, as applicable; and (z) all Indebtedness, as and when due and payable, but subject to the terms of this Debenture; and (2) timely file all tax returns required to be filed (subject to any valid extension);
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d) (1) maintain, preserve and protect all of its properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; and (2) make all necessary repairs thereto and renewals and replacements thereof;
e) take all action necessary or advisable to maintain all of the intellectual property rights of the Company and/or any of its Subsidiaries that are necessary or material to the conduct of its business in full force and effect;
f) comply with the requirements of all applicable laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, in each case; and
g) maintain (1) insurance with financially sound and reputable insurance companies in at least the amounts (and with only those deductibles) customarily maintained, and against such risks as are typically insured against, by persons of comparable size engaged in the same or similar business as the Company and its Subsidiaries; and (2) all worker’s compensation, employer’s liability insurance or similar insurance as may be required under the laws of any state or jurisdiction in which it may be engaged in business;
Section 8. Negative Covenants. As long as any portion of this Debenture remains outstanding, the Company shall not, and shall not permit any of the Subsidiaries to, except with the prior written consent of the Agent (as defined in the Security Agreement), directly or indirectly:
| a) | other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom; | |
| b) | other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom; | |
| c) | amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that adversely affects any rights of the Holder, except as contemplated by the Merger Agreement; | |
| d) | repay, repurchase or offer to repay, repurchase, or otherwise acquire more than a de minimis number of shares of its Common Stock or Common Stock Equivalents other than as to (i) the Conversion Shares as permitted or required under the Transaction Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of departing officers and directors of the Company, provided that such repurchases shall not exceed an aggregate of $100,000 for all officers and directors during the term of this Debenture; |
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| e) | redeem, defease, repurchase, repay, or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (other than (i) the Debentures if on a pro-rata basis and (ii) Permitted Indebtedness) whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness; | |
| f) | pay cash dividends or distributions on any equity securities of the Company; | |
| g) | sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any assets or rights of the Company or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of related transactions, other than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by the Company and its Subsidiaries in the ordinary course of business consistent with its past practice, or (ii) sales of inventory and product in the ordinary course of business; | |
| h) | engage in any material line of business substantially different from those lines of business conducted by or publicly contemplated to be conducted by the Company and/or its Subsidiaries as of the date hereof or any business reasonably related or incidental thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, modify its or their corporate structure or purpose in any material respect; | |
| i) | insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law (wherever or whenever enacted or in force) that may affect the covenants or the performance of this Debenture; and (B) expressly waives all benefits or advantages of any such law and agrees that it will not, by resort to any such law, hinder, delay or impede the execution of any power granted to the Holders by this Debenture, but will suffer and permit the execution of every such power as though no such law has been enacted; | |
| j) | enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); | |
| k) | enter into any factoring agreement, merchant cash advance agreement, revenue-based financing or similar arrangement whereby the Company receives funds from any third party against future product or services sales; or | |
| l) | enter into any agreement with respect to any of the foregoing. |
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Section 9. Events of Default.
a) “Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):
i. any default in the payment of (A) the principal amount of any Debenture or (B) interest, liquidated damages, and other amounts owing to a Holder on any Debenture, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise);
ii. the Company shall fail to observe or perform any other covenant or agreement contained in the Debentures (other than (A) a breach of Section 12 hereof, which breach is addressed in clause (xvii) below or (B) a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (xi) below) or in any Transaction Document, which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after the earlier of (x) notice of such failure sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after the Company has become or should have become aware of such failure;
iii. a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is obligated (and not covered by clause (vi) below);
iv. any representation or warranty made in this Debenture, any other Transaction Documents, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made;
v. the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;
vi. the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $500,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;
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vii. the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume listing or quotation for trading thereon within five Trading Days;
viii. At any time commencing on the earlier of (i) ten (10) Trading Days after the Stockholder Approval Date and (ii) 210 days from the Original Issue Date, the Company (and all of its Subsidiaries, taken as a whole) shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all or in excess of 33% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control Transaction);
ix. the initial Registration Statement required to be filed pursuant to Section 2(a) of the Registration Rights Agreement shall not have been declared effective by the Commission by the Effectiveness Deadline (as defined in the Registration Rights Agreement, as amended) (unless, and only to the extent, there is a reduction pursuant to Section 2(f) thereof) (an “Effectiveness Failure”) or the Company does not meet the current public information requirements under Rule 144 in respect of the Registrable Securities (as defined in the Registration Rights Agreement);
x. an Effectiveness Failure (as defined above) or a Maintenance Failure (as defined in the Registration Rights Agreement) shall occur (unless, and only to the extent, there is a reduction pursuant to Section 2(f) thereof);
xi. the Company shall fail for any reason to deliver Conversion Shares to a Holder prior to the fifth Trading Day after a Conversion Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for conversions of any Debentures in accordance with the terms hereof;
xii. any Person shall breach any agreement delivered to the initial Holders pursuant to Section 2.2 of the Purchase Agreement;
xiii. the electronic transfer by the Company of shares of Common Stock through the Depository Trust Company or another established clearing corporation is no longer available or is subject to a “chill”;
xiv. any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective property or other assets for more than $500,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days;
xv. the Security Agreement shall for any reason fail or cease to create a valid Lien on the collateral described therein in favor of the Agent, or any material provision of the Security Agreement or any Guarantee shall at any time for any reason cease to be valid and binding on or enforceable against the Company or the applicable Subsidiary, the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by the Company, any Subsidiary or any governmental authority having jurisdiction over the Company or any such Subsidiary, seeking to establish the invalidity or unenforceability thereof;
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xvi. a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company as to whether any Event of Default has occurred; or
xvii. any other development not described above that results in, or could reasonably be expected to result in, a Material Adverse Effect.
b) Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Debenture, plus accrued but unpaid interest, the Mandatory Default Amount, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash. Upon the occurrence of an Event of Default, the interest rate on this Debenture shall accrue at an interest rate equal to the lesser of 15% per annum or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Debenture to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Debenture until such time, if any, as the Holder receives full payment pursuant to this Section 9(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
Section 10. Miscellaneous.
a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by email attachment, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other email address, or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 10(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by email attachment, or sent by a nationally recognized overnight courier service addressed to each Holder at the email address or address of the Holder appearing on the books of the Company, or if no such email attachment or address appears on the books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via email attachment to the email address set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via email attachment to the email address set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.
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b) Absolute Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt obligation of the Company. This Debenture ranks pari passu with all other Debentures now or hereafter issued under the terms set forth herein.
c) Lost or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, reasonably satisfactory to the Company.
d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Debenture and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Debenture or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Debenture, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
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e) Amendment; Waiver. This Agreement nor any provision hereof may not be waived, amended or modified except pursuant to an agreement in writing entered into by the Company and the Holder. Any waiver by the Company or the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Company or the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture on any other occasion. Any waiver by the Company or the Holder must be in writing.
f) Severability. If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Debenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.
g) Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Debenture shall be cumulative and in addition to all other remedies available under this Debenture and any of the other Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Debenture. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Debenture.
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h) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
i) Headings. The headings contained herein are for convenience only, do not constitute a part of this Debenture and shall not be deemed to limit or affect any of the provisions hereof.
j) Secured Obligation; Guaranty. The obligations of the Company under this Debenture are secured by all assets of the Company and each Subsidiary pursuant to the Security Agreement, dated as of January 3, 2024 (as amended from time to time, the “Security Agreement”) between NAYA, Company, the Subsidiaries of the Company and the Secured Parties (as defined therein) (other than any assets expressly identified therein to be excluded from such security) and are guaranteed by each Subsidiary pursuant to one or more Subsidiary Guarantees (each, as amended from time to time, a “Guarantee”) in favor of the Holder.
Section 11. Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Debenture, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries, the Company shall within two (2) Business Days after such receipt or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company or its Subsidiaries, the Company so shall indicate to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.
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(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a duly authorized officer as of the date first above indicated.
| INVO FERTILITY, INC. | ||
| By: | ||
Name: |
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Title: |
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[Signature page to Debenture]
ANNEX A
NOTICE OF CONVERSION
The undersigned hereby elects to convert principal (plus, as applicable, any accrued and unpaid interest thereon) under Senior Secured Convertible Debenture due February 11, 2026, of INVO Fertility, Inc., a Nevada corporation (the “Company”), into shares of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.
By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 4 of this Debenture, as determined in accordance with Section 13(d) of the Exchange Act.
The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.
| Conversion calculations: | ||
| Date to Effect Conversion: | ||
| Principal Amount of Debenture to be Converted: | ||
| Accrued and Unpaid Interest to be Converted: | ||
| Number of shares of Common Stock to be issued: | ||
| Signature: | ||
| Name: | ||
| Address for Delivery of Common Stock Certificates: | ||
| Or | ||
| DWAC Instructions: | ||
| Broker No:_____________________ | ||
| Account No:___________________ |
Schedule 1
CONVERSION SCHEDULE
The Senior Secured Convertible Debentures due on [●], in the aggregate principal amount of $[●] are issued by INVO Fertility, Inc., a Nevada corporation. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Debenture.
Dated:
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Amount of Conversion |
Aggregate Principal Amount Remaining Subsequent to Conversion (or original Principal Amount) |
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Exhibit 10.1
EXCHANGE AGREEMENT
This Exchange Agreement (“Agreement”) is made as of May 28, 2025 by and between Naya Therapeutics, Inc., a Delaware corporation (the “Company”) and INVO Fertility, Inc., a Nevada corporation (the “Parent”).
R E C I T A L S
A. The Parent is the holder of 4,029,729 shares of Class A Common Stock of the Company.
B. The Company and the Parent desire to exchange 801,196 of the Class A Common Stock held by the Parent (the “Class A Common Shares”) for 6,300 shares of Series A Preferred Stock (the “Preferred Shares”) from the Company, on the terms and subject to the conditions set forth herein.
A G R E E M E N T
It is agreed as follows:
1. EXCHANGE OF SECURITIES.
1.1 Exchange of Securities. In reliance upon the representations and warranties of the Company and the Parent contained herein, and subject to the terms and conditions set forth herein, the Parent agrees to sell, assign, transfer, and deliver to the Company, and the Company agrees to acquire from the Parent, the Class A Common Shares in exchange for the issuance of the Preferred Shares by the Company to the Parent.
1.2 Deliveries by Company. Concurrently with the execution of this Agreement, or as soon thereafter as practicable, the Company will deliver the Preferred Shares to the Parent.
1.3 Deliveries by Parent. The Parent shall deliver to the Company the Class A Common Shares, duly endorsed or accompanied by a stock assignment separate from certificate, in either case with medallion signature guarantee, for purposes of assigning and transferring all of the Parent’s right, title, and interest in and to the Class A Common Shares to the Company. From time to time after the effective date of this Agreement, and without further consideration, Parent will execute and deliver such other instruments of transfer and take such other actions as the Company may reasonably request in order to facilitate the transfer to the Company of the securities intended to be transferred hereunder.
2. COVENANTS.
2.1 Holding Period. The Company agrees and stipulates that, for purposes of Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”), the Preferred Shares are deemed to have been acquired by Parent on October 11, 2024, pursuant to Rule 144(d)(3)(i) and Rule 144(d)(3)(ii) of the Securities Act.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants that the following statements are true and correct in all material respects as of the date hereof, except as expressly qualified or modified herein.
3.1 Organization and Good Standing. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada and has full corporate power and authority to enter into and perform its obligations under this Agreement, and to own its properties and to carry on its business as presently conducted and as proposed to be conducted.
3.2 Validity of Transactions. This Agreement, and each document executed and delivered by the Company in connection with the transactions contemplated by this Agreement, including this Agreement, have been duly authorized, executed and delivered by the Company and is each the valid and legally binding obligation of the Company, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency reorganization and moratorium laws and other laws affecting enforcement of creditor’s rights generally and by general principles of equity.
3.3 Purpose of Investment. The Company’s purpose in issuing the note was to provide additional working capital for the general use of the Company’s business, including payment of accrued and ongoing expenses of the Company.
3.4 No Violation. The execution, delivery, and performance of this Agreement has been duly authorized by the Company’s Board of Directors and will not violate any law or any order of any court or government agency applicable to the Company, as the case may be, or the Articles of Incorporation or Bylaws of the Company, and will not result in any breach of or default under, or, except as expressly provided herein, result in the creation of any encumbrance upon any of the assets of the Company pursuant to the terms of any agreement or instrument by which the Company or any of its assets may be bound. No approval of or filing with any governmental authority is required for the Company to enter into, execute or perform this Agreement.
3.5 Securities Law Compliance. The offer, issue, sale, and delivery of the Preferred Shares constitute an exempted transaction under the Securities Act pursuant to Section 3(a)(9) of the Securities Act, and registration of the Preferred Shares under the Securities Act is not required. The Company shall make such filings as may be necessary to comply with the Federal securities laws, which filings will be made in a timely manner.
3.6 Valid Issuance of Conversion Shares. The Preferred Shares, and the shares of the Company’s Common Stock that may be issued upon conversion of the Preferred Shares (the “Conversion Shares”), when issued and delivered in accordance with the terms thereof for the consideration expressed therein, will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer, other than restrictions on transfer under this Agreement, the Preferred Shares, and under applicable federal and state securities laws, will be free of all other liens and adverse claims.
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4. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.
The Parent hereby represents, warrants, and covenants with the Company as follows:
4.1 Legal Power. The Parent has the requisite power and is authorized to enter into this Agreement and to carry out and perform its obligations under the terms of this Agreement.
4.2 Due Execution. This Agreement has been duly authorized, executed and delivered by the Parent, and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of the Parent.
4.3 Restricted Securities.
4.3.1 The Parent has been advised that neither the Preferred Shares nor the Conversion Shares have been registered under the Securities Act or any other applicable securities laws. The Parent acknowledges that the Preferred Shares and the Conversion Shares may be issued as “restricted securities” as defined by Rule 144 promulgated pursuant to the Securities Act. Neither the Preferred Shares nor the Conversion Shares may be resold in the absence of an effective registration thereof under the Securities Act and applicable state securities laws unless, in the opinion of the Company’s counsel, an applicable exemption from registration is available.
4.3.2 The Parent represents that it is acquiring the Preferred Shares and the Conversion Shares for Parent’s own account, and not as nominee or agent, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act, in a manner which would require registration under the Securities Act or any state securities laws.
4.3.3 The Parent understands and acknowledges that the Preferred Shares and the Conversion Shares, when issued, may bear the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREOF UNDER THE SECURITIES ACT OF 1933 AND/OR THE SECURITIES ACT OF ANY STATE HAVING JURISDICTION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
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4.3.4 Parent acknowledges that the Preferred Shares and the Conversion Shares are not liquid and are transferable only under limited conditions. Parent acknowledges that such securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Parent is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of restricted securities subject to the satisfaction of certain conditions and that, in the future, such Rule may not be available for resale of either the Preferred Shares or any Conversion Shares.
4.3.5 Parent is an “accredited investor” as defined under Rule 501 under the Securities Act.
4.4 Access to Information. The Parent represents that the Parent has been given full and complete access to the Company for the purpose of obtaining such information as the Parent or its qualified representative has reasonably requested in connection with the decision to exchange for the Preferred Shares.
4.5 Parent Sophistication and Ability to Bear Risk of Loss. Parent acknowledges that it is able to protect its interests in connection with the acquisition of the Preferred Shares and the Conversion Shares and can bear the economic risk of investment in such securities without producing a material adverse change in such Parent’s financial condition. Parent, either alone or with such Parent’s representative(s), otherwise has such knowledge and experience in financial or business matters that the Parent is capable of evaluating the merits and risks of the investment in the Preferred Shares and the Conversion Shares.
5. MISCELLANEOUS.
5.1 Governing Law. This Agreement shall be governed by and construed under the laws of the State of Nevada.
5.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto.
5.3 Entire Agreement. This Agreement and the Exhibits hereto and thereto, and the other documents delivered pursuant hereto and thereto, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants, or agreements except as specifically set forth herein or therein. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.
5.4 Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
5.5 Amendment and Waiver. Except as otherwise provided herein, any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a specified period of time or indefinitely), with the written consent of the Company and the Parent. Any amendment or waiver effected in accordance with this Section shall be binding upon each future holder of any security purchased under this Agreement (including securities into which such securities have been converted) and the Company.
5.6 Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
| COMPANY | ||
| NAYA THERAPEUTICS, INC. | ||
| By: | ||
| Daniel Teper | ||
| CEO | ||
| PARENT | ||
| INVO FERTILITY, INC. | ||
| By: | ||
| Steve Shum | ||
| CEO | ||
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Exhibit 10.2
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
SECURED CONVERTIBLE PROMISSORY NOTE
| $4,803,175.00 | May 28, 2025 | |
| Aventura, Florida |
1. Agreement to Pay. For value received, Naya Therapeutics, Inc., a Delaware corporation (the “Maker”) promises to pay to the order of INVO Fertility, Inc., a Nevada corporation (the “Holder”), or its assigns, at its principal office and mailing address or at such other location designated by the Holder, the principal sum of Four Million Eight Hundred Three Thousand One Hundred Seventy-Five Dollars ($4,803,175.00), together with interest thereon at the rate provided for herein from the date of this Secured Promissory Note (the “Note”) and in accordance with the terms of this Note until said amounts shall have been paid in full.
2. Interest Rate. Subject to Section 4 hereof, the outstanding principal balance hereof shall bear and accrue interest at seven percent (7.00%) per annum, computed on the basis of the actual days elapsed on the assumption that each month contains thirty (30) days and each year contains three hundred sixty (360) days (“Interest Rate”).
3. Payment Terms. Subject to the terms of this Note, the entire principal amount and all interest accrued upon this Note shall be due and payable in full on November 28, 2026 (the “Maturity Date”), or on such earlier date as such principal amount may earlier become due and payable pursuant to the terms hereof.
4. Default Interest Rate. Upon and during the continuance of an Event of Default, all sums owing on this Note (including interest), shall bear interest at the lesser of (i) the Interest Rate, plus five percent (5%) or (ii) the maximum rate permitted by applicable law (“Default Rate”). This provision shall not be deemed to excuse a default and shall not be deemed a waiver of any other rights Holder may have, including the right to declare the entire unpaid principal balance and accrued interest immediately due and payable.
5. Late Charge. In addition to the provisions in Section 4 above, if any payment required to be made by Maker under this Note has not been made when due (whether the overdue payment is an interest only payment or a principal and interest payment), then, on the date ten (10) Business Days after the date the payment was due, a late charge by way of damages will be immediately due. Maker agrees that if for any reason Maker fails to pay when due any amount due under this Note, Holder will be entitled to damages for the detriment caused, but that it is extremely difficult and impractical to ascertain the extent of the damages. Maker therefore agrees that an amount equal to three percent (3%) of the payment Maker fails to pay within ten (10) Business Days after the date it is due is a reasonable estimate of the damages to Holder, and Maker agrees to pay that on demand for each failure to so pay within ten (10) Business Days. Acceptance of any late charge will not constitute a waiver of default with respect to the overdue payment and will not prevent Holder from exercising any other rights available under this Note. Maker will pay this late charge only once on any late payment.
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6. Mandatory Conversion.
6.1 Subject to the limitations set forth in Section 6.2 below, this Note shall automatically be converted as set forth in this Section 6, upon the earliest to occur of the following (the time of such conversion is referred to herein as the “Mandatory Conversion Time”):
(a) At the closing of the sale of shares of Class A Common Stock to the public at a price of at least $10.00 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Class A Common Stock), in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), resulting in at least $10,000,000 of gross proceeds to the Maker and in connection with such offering the shares of Class A Common Stock are listed for trading on the Nasdaq Stock Market or the New York Stock Exchange (a “Qualified IPO”), this Note (including all unpaid principal and interest accrued thereon) shall automatically convert into shares of Class A Common Stock at a conversion price equal to the price per share at which the Maker issues shares of Class A Common Stock to the public in the Qualified IPO, if, and only if, the offer, sale, and resale of Class A Common Stock issuable to a holder of this Note upon conversion of this Note are covered by an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”).
(b) At the closing of either (i) a transaction or series of related transactions in which a person, or a group of related persons, acquires from stockholders of the Maker shares representing more than fifty percent (50%) of the outstanding voting power of the Maker; (ii) a merger, consolidation, statutory conversion, transfer, domestication, or continuance in which (A) the Maker is a constituent party or (B) a subsidiary of the Maker is a constituent party and the Maker issues shares of its capital stock pursuant to such merger, consolidation, statutory conversion, transfer, domestication, or continuance, except any such merger, consolidation, statutory conversion, transfer, domestication, or continuance involving the Maker or a subsidiary in which the shares of capital stock of the Maker outstanding immediately prior to such merger, consolidation, statutory conversion, transfer, domestication, or continuance continue to represent, or are converted into or exchanged for shares of capital stock or other equity interests that represent, immediately following such merger, consolidation, statutory conversion, transfer, domestication, or continuance, a majority of the capital stock or other equity interests of (1) the surviving or resulting corporation or entity, or (2) if the surviving or resulting corporation or entity is a wholly owned subsidiary of another corporation or entity immediately following such merger, consolidation, statutory conversion, transfer, domestication, or continuance, the parent corporation or entity of such surviving or resulting corporation or entity; (iii) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Maker or any subsidiary of the Maker of all or substantially all the business or assets of the Maker and its subsidiaries taken as a whole; or (iv) the sale, lease, transfer, exclusive license or other disposition (whether by merger, consolidation, statutory conversion, domestication, continuance, or otherwise, and whether in a single transaction or a series of related transactions) of one or more subsidiaries of the Maker if substantially all of the assets of the Maker and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license, or other disposition is to a wholly owned subsidiary of the Maker (items (i) through (iv) being collectively defined herein as a “Sale Transaction”), and the Common Stock of the Maker is converted into, exchanged for, or acquired for securities that are listed for trading on the Nasdaq Stock Market or the New York Stock Exchange (“Qualified Securities”), this Note (including all unpaid principal and interest accrued thereon) shall automatically convert into shares of Class A Common Stock at a Conversion Price equal to the closing sale price per Qualified Security on the date of the closing of the Sale Transaction, so long as the offer, sale, and resale of the Qualified Securities issuable to a holder of this Note upon conversion of this Note and closing of a Sale Transaction are covered by an effective registration statement under the the Securities Act of 1933, as amended.
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6.2 Beneficial Ownership Limitation. The Maker shall not effect any conversion of this Note held by any holder of this Note (a “Holder”), and such Holder shall not have the right to convert any portion of this Note held by such Holder pursuant to the terms and conditions of this Note, and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to such conversion, such Holder, together with any other person that directly or indirectly controls, is controlled by, or is under common control with, such Holder (it being understood for purposes hereof that “control” of a person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such person or direct or cause the direction of the management and policies of such person whether by contract or otherwise (each such person, an “Affiliate”) collectively would beneficially own in excess of 19.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Holder and its Affiliates shall include (A) the number of shares of Common Stock held by such Holder and all other Affiliates plus the number of shares of Common Stock issuable upon conversion of this Note with respect to which the determination of such sentence is being made, and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Maker (including, without limitation, any convertible notes, convertible preferred stock or warrants) beneficially owned by such Holder or any Affiliate subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 6.2, but shall exclude shares of Common Stock which would be issuable upon conversion of the remaining, nonconverted portion of this Note beneficially owned by such Holder or any of the other Affiliates. For purposes of this Section 6.x, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”). For any reason at any time, upon the written or oral request of any Holder, the Maker shall within one (1) Business Day confirm orally and in writing or by electronic mail to such Holder the number of shares of each class of Common Stock then outstanding. If the issuance of shares of Common Stock to a Holder upon conversion of this Note results in such Holder and the other Affiliates being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which such Holder’s and the other Affiliates’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and such Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Maker, any Holder may from time to time increase (with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage of such Holder to any other percentage not in excess of 19.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Maker, and (ii) any such increase or decrease will apply only to such Holder and the other Affiliates and not to any other Holder that is not an Affiliate of such Holder. For purposes of clarity, the shares of Common Stock issuable to a Holder pursuant to the terms of this Note in excess of the Maximum Percentage shall not be deemed to be beneficially owned by such Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to convert this Note pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of convertibility. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6.x to the extent necessary to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 4.11 or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Note.
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6.3 Procedural Requirements. All holders of record of this Note (or an applicable portion thereof) shall be sent written notice of the Mandatory Conversion Time and the place designated for mandatory conversion of this Note pursuant to this Section 6. Such notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of such notice, each holder of this Note being converted that holds this Note in certificated form shall surrender his, her, or its Note (or, if such holder alleges that such Note has been lost, stolen or destroyed, a lost note affidavit and agreement reasonably acceptable to the Maker to indemnify the Maker against any claim that may be made against the Maker on account of the alleged loss, theft or destruction of such Note) to the Maker at the place designated in such notice. If so required by the Maker, any certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Maker, duly executed by the registered holder or by his, her or its attorney duly authorized in writing. All rights with respect to the Note converted pursuant to Section 6.1, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender any certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of any certificate or certificates of such holders (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Section 6.3. As soon as practicable after the Mandatory Conversion Time and, if applicable, the surrender of any Note (or lost certificate affidavit and agreement), the Maker shall (a) issue and deliver to such holder, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof or issue and deliver to such holder, or to his, her or its nominees, a notice of issuance of uncertificated shares and may, upon written request, issue and deliver a certificate for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof; and (b) pay any accrued but unpaid interest on the Note converted.
6.4 Adjustment for Stock Splits and Combinations. If the Maker shall at any time or from time to time after the date of the issuance of this Note effect a subdivision of the outstanding Common Stock, the Conversion Price of this Note in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Maker shall at any time or from time to time after the date of the issuance of this Note combine the outstanding shares of Common Stock, the Conversion Price of this Note in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Section 6.4 shall become effective at the close of business on the date the subdivision or combination becomes effective.
6.5 Adjustment for Certain Dividends and Distributions. If, at any time or from time to time after the date of the issuance of this Note, the Maker shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price of this Note in effect immediately before such event shall be decreased as of the time of such issuance or, if such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Conversion Price of this Note Stock then in effect by a fraction:
(a) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and
(b) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.
Notwithstanding the foregoing, (a) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price of this Note shall be recomputed accordingly as of the close of business on such record date and thereafter the Conversion Price of this Note shall be adjusted pursuant to this Section 6.5 as of the time of actual payment of such dividends or distributions; and (b) no such adjustment shall be made if the holders of this Note simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all of the principal amount due under this Note had been converted into Common Stock on the date of such event.
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6.6 Adjustments for Other Dividends and Distributions. If, at any time or from time to time after the date of the issuance of this Note, the Maker shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Maker (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock) or in other property, then and in each such event the holders of this Note shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as they would have received if all of the principal amount due under this Note had been converted into Common Stock on the date of such event.
6.7 Adjustment for Merger or Reorganization, etc. Subject to the provisions of Section 6.1, if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Maker in which the Common Stock (but not the Note) is converted into or exchanged for securities, cash, or other property (other than a transaction covered by Sections 6.4, 6.5 or 6.6), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, this Note shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Maker issuable upon conversion of this Note immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors) shall be made in the application of the provisions in this Section 6 with respect to the rights and interests thereafter of the holders of this Note, to the end that the provisions set forth in this Section 6 (including provisions with respect to changes in and other adjustments of the Conversion Price of this Note) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of this Note.
6.8 Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price of this Note pursuant to this Section 6, the Maker at its expense shall, as promptly as reasonably practicable but in any event not later than ten days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of this Note a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which this Note is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Maker shall, as promptly as reasonably practicable after the written request at any time of any holder of this Note (but in any event not later than 10 days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) the Conversion Price then in effect for this Note held by such holder, and (ii) the number of shares of Common Stock and the amount, if any, of other securities, cash, or property which then would be received upon the conversion of this Note.
6.9 Notice of Record Date. In the event:
(a) the Maker shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of this Note) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or series or any other securities, or to receive any other security; or
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(b) of any capital reorganization of the Maker, any reclassification of the Common Stock of the Maker, or any Sale Transaction; or
(c) of the voluntary or involuntary dissolution, liquidation or winding-up of the Maker,
then, and in each such case, the Maker will send or cause to be sent to the holders of this Note a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of this Note) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to this Note and the Common Stock. Such notice shall be sent at least 10 days prior to the record date or effective date for the event specified in such notice.
7. Default, Acceleration and Remedies.
7.1. Event of Default. Each of the following events shall constitute an “Event of Default”. An Event of Default shall be deemed to continue until waived by written notice by Holder to Maker or remedied by action of Maker.
(a) Payment Failure. The failure by Maker to make any payment of principal, interest, or any other sum or charge when due in accordance with the terms and conditions of this Note and such payment is not remedied within fourteen (14) calendar days after written notice of such default by Holder or Maker;
(b) Note Covenant Failure. If there is a default in, or nonperformance of, any term or obligation in this Note other than those described in Section 7.1(a) above and, with respect to a default that can be remedied within thirty (30) days, such default is not remedied within thirty (30) calendar days after written notice of such default by Holder or Maker;
(c) Dissolution. The dissolution, liquidation, winding up, or cessation of Maker’s business;
(d) Insolvency Default. Maker: (i) makes a transfer in fraud of creditors, or makes an assignment for the benefit of creditors; (ii) has a receiver, trustee or custodian appointed for, or take possession of, all or substantially all of the assets of such party, either in a proceeding brought by such party or in a proceeding brought against such party and such appointment is not discharged or such possession is not terminated within sixty (60) calendar days after the effective date thereof or such party consents to or acquiesces in such appointment or possession; (iv) files a petition for relief under any Insolvency Law or an involuntary petition for relief is filed against such party under any Insolvency Law and such involuntary petition is not dismissed within sixty (60) calendar days after the filing thereof, or an order for relief naming such party is entered under any Insolvency Law, or any composition, rearrangement, extension, reorganization or other relief of debtors now or hereafter existing is requested or consented to by such party; (v) fails to have discharged within a period of thirty (30) calendar days any attachment, sequestration or similar writ levied upon any property of such party in an amount exceeding $250,000; or (vi) fails to pay within thirty (30) calendar days any final money judgment against such party in an amount exceeding $250,000.
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(e) Fraudulent Conveyance Default. Maker: (i) conceals, removes or permits to be concealed or removed all or any part of its property with the intent to hinder, delay or defraud any of its creditors; (ii) makes or permits any conveyance of its material properties that would be deemed fraudulent to creditors under any Insolvency Law or other applicable law; or (iii) caused or permitted any of its creditors to obtain a Lien in excess of $250,000 on any of its property by legal proceedings or otherwise which is not vacated within thirty (30) calendar days.
(f) Judgments; Levies. A final, nonappealable or uncontested judgment or judgments, levy or levies, assessment or assessments, is or are entered against Maker or a Subsidiary in the aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000) or more on a claim or claims not covered by insurance.
(g) Failure of Enforceability. This Note shall be declared invalid, void, or unenforceable, or the validity or enforceability thereof shall be contested or challenged by Maker.
7.2. Acceleration; Other Remedies. Upon the occurrence of any Event of Default, the entire unpaid principal balance, together with all unpaid accrued interest thereon, and any other amounts owing under or evidenced by this Note shall, at the option of Holder and without notice or demand to Maker from Holder, become immediately due and payable in full; and Holder shall have and may exercise any and all rights and remedies available at law or in equity, and also any other rights and remedies as may otherwise be available to Holder. Maker expressly waives notice of the exercise of this option. Maker shall immediately deliver to Holder written notice of the occurrence of any Event of Default.
8. Prepayment. Maker shall have the right at any time to prepay this Note in full or in part during the entire term hereof without penalty or premium on the date of any prepayment with respect to the principal amount so paid. Maker must give Holder not less than five (5) nor more than ninety (90) days prior written notice of Maker’s intention to make the prepayment, specifying the date and amount of the prepayment. Such notice shall not suspend regular payments as they become due. All prepayments will be applied first to the payment of any costs, fees, late charges or other charges due under this Note, then to accrued but unpaid interest and then to the payment of principal due under this Note then unpaid.
9. Costs of Collection. Maker agrees that if, and as often as, this Note is placed in the hands of an attorney for collection or to defend or enforce any of Holder’s rights hereunder, Maker will pay to Holder its reasonable attorneys’ and paralegals’ fees and costs, including, without limitation, all fees and costs incurred in litigation, mediation, arbitration, bankruptcy and administrative proceedings, and appeals therefrom, and all court costs and other expenses, including, without limitation, appraisal fees and costs of environmental review, incurred in connection therewith.
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10. Time. Time is of the essence of this Note and each of the provisions hereof.
11. Interest Limitation. All agreements between Maker and Holder are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of maturity of the indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to be paid to Holder for the use, forbearance, loaning or detention of the indebtedness evidenced hereby exceed the maximum permissible under applicable law. If from any circumstance whatsoever, fulfillment of any provision hereof at any time given the amount paid or agreed to be paid shall exceed the maximum permissible under applicable law, then, the obligation to be fulfilled shall automatically be reduced to the limit permitted by applicable law, and if from any circumstance Holder should ever receive as interest an amount which would exceed the highest lawful rate of interest, such amount which would be in excess of such highest lawful rate of interest shall be applied to the reduction of the principal balance evidenced hereby and not to the payment of interest. This provision shall control every other provision of all agreements between Maker and Holder and shall be binding upon and available to any subsequent holder of this Note.
12. Waiver by Maker. Maker and all sureties, endorsers, guarantors and all persons liable or to become liable on this Note: (i) waive diligence, presentment, protest and demand, notice of protest, notice of intent to accelerate, notice of acceleration, and demand and dishonor and non-payment of this Note and any and all other notices; (ii) consent to any and all renewals and extensions of the time of payment of this Note or after maturity; (iii) waive (to the fullest extent permitted by law) the right to plead any statute of limitations as a defense to any demand under this Note; and (iv) agree further that at any time and from time to time without notice, the terms of payment in this Note may be extended without in any way affecting the liability of any party under this Note or any person liable or to become liable with respect to any indebtedness evidenced by this Note.
13. No Waiver by Holder.
13.1 The remedies of Holder as provided herein shall be cumulative and concurrent, and may be pursued singularly, successively or together, at the sole discretion of Holder, and may be exercised as often as occasion therefore shall arise. No delay or omission by Holder in exercising, or failure by Holder on any one or more occasions to exercise any right, remedy or recourse hereunder, or at law or in equity, including without limitation Holder’s right, after the occurrence of any Event of Default by Maker, to declare the entire indebtedness evidenced hereby immediately due and payable, shall be construed as a novation of this Note or shall operate as a waiver or release or prevent the subsequent exercise of any or all such rights, such waiver or release to be effected only through a written document executed by Holder, and then only to the extent specifically recited therein. A waiver or release with reference to any one event shall not be construed as continuing, as a bar to, or as a waiver or release of any subsequent right, remedy, or recourse as to a subsequent event.
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13.2 Acceptance by Holder of any portion or all of any sum payable hereunder, whether before, on, or after the due date of such payment shall not be a waiver of Holder’s right either to require prompt payment when due of all other sums payable hereunder or to exercise any of Holder’s rights, powers, and remedies hereunder. A waiver of any right in writing on one occasion shall not be construed as a waiver of Holder’s rights to insist thereafter upon strict compliance with the terms hereof without previous notice of such intention being given to Maker, and no exercise of any right by Holder shall constitute or be deemed to constitute an election of remedies by Holder precluding the subsequent exercise by Holder of any or all of the rights, powers and remedies available to it hereunder, or at law or in equity.
14. Cumulative Rights and Remedies. The remedies of Holder as provided in this Note, or in law or in equity, shall be cumulative and concurrent, and may be pursued singularly, successively, or together at the sole discretion of the holder of this Note, and may be exercised as often as occasion therefor shall occur. The failure to exercise any such right or remedy shall in no event be construed as a waiver or a release of this Note.
15. Secured Obligation. The obligations of the Maker under this Note are secured by all assets of the Maker and each Subsidiary pursuant to the Security Agreement, dated as of May 28, 2025 (as amended from time to time, the “Security Agreement”) between the Maker, the Subsidiaries of the Maker, and the Secured Parties (as defined therein).
16. Miscellaneous.
16.1. Notices. Unless otherwise specifically provided herein, any notice or other communication required or permitted to be given shall be in writing and addressed to the respective party as set forth below. Notices shall be effective when actually delivered by any commercially reasonable means, provided that if such delivery occurs on any day other than a Business Day or after the close of business on any Business Day, the same shall be effective on the next Business Day. Further, notices sent by certified or registered mail, return receipt requested, or by nationally recognized express courier service, shall be effective on the earlier of (i) actual delivery or (ii) refusal to accept delivery or on failure of delivery because the recipient address is not open to receive deliveries between 9:00 a.m. and 5:00 p.m. on any Business Day. Notices sent by telecopy or other electronic means shall be effective only if also sent by nationally recognized express courier service for delivery on the next Business Day.
| TO MAKER: | Naya Therapeutics, Inc. | |
| 1200 Biscayne Blvd, Suite 1960 | ||
| Miami, FL 33132 | ||
| Attention: Daniel Teper, CEO | ||
| Email: daniel@nayabiosciences.com |
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| TO HOLDER: | INVO Fertility, Inc. | |
| 5582 Broadcast Court | ||
| Sarasota, FL 34240 | ||
| Attention: Steven Shum, CEO | ||
| Email: sshum@invobio.com |
Any party may change the address at which it is to receive notices to another address in the United States at which business is conducted (and not a post office box or other similar receptacle), by giving notice of such change of address in accordance with the foregoing. This provision shall not invalidate or impose additional requirements for the delivery or effectiveness of any notice (i) given in accordance with applicable statutes or rules of court, or (ii) by service of process in accordance with applicable law. “Business Day” means any day other than a Saturday, Sunday or a day upon which banking institutions are authorized or required by law or executive order to be closed in the County of Clark, State of Nevada. Maker hereby requests that any notice of default or notice of sale in any judicial or non-judicial foreclosure proceeding be mailed to Maker at any address of Maker specified herein.
16.2. Governing Law. The validity, interpretation, and enforcement of this Note shall be governed by and construed in accordance with the laws of the State of Nevada without giving effect to the conflict of law principles thereof.
16.3. Entire Agreement. This Note contains the entire agreement among the parties to this Note and supersede all prior oral or written agreements, promises, representations, commitments or understandings with respect to the matters provided for in this Note. The Recitals to this Note are incorporated into this Note as contractual terms.
16.4. Amendments. The terms and provisions of this document shall not be amended, modified or waived, nor shall any consent of any departure by Maker from any provision be effective, except in a writing executed by Maker and a duly authorized officer of Holder.
16.5. Waiver. No delay in exercising any right or power hereunder shall operate as a waiver, and no waiver of any right or power or consent by Holder shall be valid unless in writing. The failure of Holder to insist upon strict compliance with any of the terms of this Note shall not be considered to be a waiver of any such terms, nor shall it prevent Holder from insisting upon strict compliance with this Note at any time thereafter. If Holder delays in exercising or fails to exercise any right or remedy against Maker, that alone shall not be construed as a waiver of such right or remedy. All remedies of Holder against Maker are cumulative.
16.6. Severability. If any provision of this Note is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law: (i) the other provisions of this Note shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of Holder in order to carry out the intentions of the parties to this Note as nearly as may be possible; and (ii) the invalidity or unenforceability of any provision of this Note in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction.
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16.7. Interpretation. In this Note, the word “person” includes any individual, company, trust, or other legal entity of any kind. If this Agreement is executed by more than one (1) person, the word “Maker” includes all such persons. The word “include(s) means “include(s), without limitation,” and the word “including” means “including, but not limited to.” When the context and construction so require, all words used in the singular shall be deemed to have been used in the plural and vice versa.
16.8. Assignments. Maker shall not have the right to assign this Note or any interest therein or obligation thereunder unless Holder shall have given Maker prior written consent and Maker and Maker’s assignee shall have delivered assignment documentation in form and substance satisfactory to Holder in its sole discretion. Holder may assign its rights and delegate its obligations under this Note; provided the assignment (i) includes the entire Note (and not merely a part thereof); (ii) is to a single Holder; and (iii) is to an assignee who agrees to be bound by the then applicable terms and conditions of the Note.
16.9 Successors and Assigns. All rights, benefits and privileges under this Note shall inure to the benefit of and be enforceable by Holder and the successors and assigns of Holder and shall be binding upon Maker and the heirs, representatives, successors and assigns of Maker.
16.10. Survival of Provisions. All representations, warranties, and covenants of Maker contained herein shall survive the execution and delivery of this Agreement and shall terminate only upon the full and final payment and performance by Maker of the obligations evidenced hereunder.
16.11. Attorney’s Fees. In the event of any action or proceeding at law or in equity between any or all of the undersigned and any party who is entitled to enforce any of the provisions of this Note (including, without limitation, an action or proceeding between any party who is entitled to enforce any of the provisions of this Note and the trustee or debtor in possession while any such undersigned party is a debtor in a proceeding under the Bankruptcy Code (Title 11 of the United States Code or any successor statute to such Code)), to enforce or interpret any provision of this Note or to protect or establish any right or remedy hereunder, the unsuccessful party to such action or proceeding shall pay to the prevailing party all costs and expenses, including, without limitation, reasonable attorneys’ and paralegals’ fees and expenses and court costs incurred in such action or proceeding and in any post-judgment motion, contempt proceeding, discovery, bankruptcy action or appeal in connection therewith, whether or not such action, proceeding, motion or appeal is prosecuted to judgment or other final determination, together with all costs of enforcement and/or collection of any judgment or other relief. The term “prevailing party, shall include, without limitation, a party who obtains legal counsel or brings an action against the other by reason of the other’s breach or default and obtains substantially the relief sought, whether by compromise, settlement or judgment. If such prevailing party shall obtain a judgment in any such action, motion, proceeding or appeal, such costs, expenses and attorneys’ and paralegals’ fees and expenses and court costs shall be included in and shall be a part of such judgment, and any judgment or order entered in any such action, proceeding, motion or appeal shall contain a specific provision for the recovery of such fees, costs and expenses incurred in enforcing such judgment or order.
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16.12. Venue; Service of Process. Any legal action or proceeding with respect to this Note shall be brought exclusively in the courts of the State of Nevada situated in Clark County, or of the United States of America for the District of Nevada, and, by execution and delivery of this Note, Maker hereby accepts for itself and in respect of Maker’s property, generally and unconditionally, the jurisdiction of the aforesaid courts. Maker hereby irrevocably waives, in connection with any such action or proceeding, (a) any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens, that it may now or hereafter have to the bringing of any such action or proceeding in such respective jurisdictions and (b) the right to interpose any noncompulsory setoff, counterclaim, or cross-claim. Maker irrevocably consents to the service of process of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to Maker at the address for it specified above. Nothing herein shall affect the right of Holder to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against Maker in any other jurisdiction, subject in each instance to the provisions hereof with respect to rights and remedies.
16.13. Counterparts. This Note may be executed in counterparts, each of which when so executed and delivered shall be an original, but both of which shall together constitute one and the same instrument.
16.14. Definitions. For purposes of this Note, the following terms shall have the following meanings:
(a) “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto;
(b) “Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance with generally accepted accounting principles) other than trade payables entered into in the ordinary course of business, (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person that owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above.
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(c) “Insolvency Law” means Title 11 of the United States Code (or any successor law) or any similar applicable law providing for bankruptcy, insolvency, conservatorship, receivership or other similar debtor’s relief.
(d) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first above written.
| MAKER: | ||
| Naya Therapeutics, Inc., a Delaware corporation | ||
| By: | ||
| Name: | Daniel Teper | |
| Title: | CEO | |
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Exhibit 10.3
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of May 28, 2025 (this “Agreement”) is entered into by and between Naya Therapeutics, Inc., a Delaware corporation (“Obligor”), and INVO Fertility, Inc., a Nevada corporation (the “Secured Party”).
WITNESSETH
WHEREAS, concurrently herewith, the Obligor has issued a $4,803,175 Secured Convertible Promissory Note to the Secured Party (the “Note”); and
WHEREAS, the parties hereto acknowledge that the Note shall be entitled to the benefits of the security interest provided for the benefits of the holders of the Note.
WHEREAS, in order to induce the Secured Party to acquire the Note, the Obligor has agreed to execute and deliver to the Secured Party this Agreement for the benefit of the Secured Party and to grant to it a first priority security interest in the Collateral (as defined in Section 1 below) of the Obligor to secure the prompt payment, performance, and discharge in full of the Obligor’s obligations under the Note (as defined below).
NOW, THEREFORE, in consideration of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1. Terms used but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as “general intangibles” and “proceeds”) shall have the respective meanings given such terms in Article 9 of the UCC.
(a) “Collateral” means the collateral in which the Secured Party is granted a security interest by this Agreement and which shall include the following personal property of the Obligor, whether presently owned or existing or hereafter acquired or coming into existence, wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance covering the same and of any tort claims in connection therewith, and all dividends, interest, cash, notes, securities, equity interest or other property at any time and from time to time acquired:
(i) All goods, including, without limitation, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and wherever situated, together with all documents of title and documents representing the same, all additions and accessions thereto, replacements therefor, all parts therefor, and all substitutes for any of the foregoing and all other items used and useful in connection with Obligor’s businesses and all improvements thereto; and (B) all inventory;
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(ii) All contract rights and other general intangibles, including, without limitation, all partnership interests, membership interests, stock or other securities, rights under any of the Organizational Documents, licenses, distribution and other agreements, computer software (whether “off-the-shelf”, licensed from any third party or developed by Obligor), computer software development rights, leases, franchises, customer lists, quality control procedures, grants and rights, goodwill, Intellectual Property and income tax refunds;
(iii) All accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising, goods, equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties with respect to each account, including any right of stoppage in transit;
(iv) All documents, letter-of-credit rights, instruments and chattel paper;
(v) All commercial tort claims;
(vi) All deposit accounts and all cash (whether or not deposited in such deposit accounts);
(vii) All investment property;
(viii) All supporting obligations;
(ix) All files, records, books of account, business papers, and computer programs; and
(x) the products and proceeds of all of the foregoing Collateral set forth in clauses (i)-(ix) above.
Without limiting the generality of the foregoing, the “Collateral” shall include all investment property and general intangibles respecting ownership and/or other equity interests in any subsidiary of Obligor, and any other shares of capital stock and/or other equity interests of any other direct or indirect subsidiary of Obligor obtained in the future, and, in each case, all certificates representing such shares and/or equity interests and, in each case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter be received, receivable or distributed in respect of, or exchanged for, any of the foregoing.
Notwithstanding the foregoing: (a) nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes void by operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the extent that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided, however, that to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset and, to the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of such asset; and (b) nothing herein shall be deemed to constitute an assignment of any permit, agreement, assignment, contract, franchise or other general intangible set forth on Schedule C, if and to the extent that Obligor’s assignment thereof is prohibited by or in violation of a term, provision or condition of any such permit, agreement, assignment, contract, franchise or other general intangible (in each case to the extent such term, provision or condition is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided, however, that the Collateral shall include (and Obligor’s assignment shall attach) immediately at such time as the contractual prohibition shall no longer be applicable and to the extent severable, shall attach immediately to any portion of such lease permit, agreement, assignment, contract, franchise or other general intangible is not subject to the prohibitions specified in above in this clause (b).
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(b) “Intellectual Property” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, and all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, including without limitation those set forth on Schedule E, (iii) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress, service marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common law rights related thereto, (iv) all trade secrets arising under the laws of the United States, any other country or any political subdivision thereof, (v) all rights to obtain any reissues, renewals or extensions of the foregoing, (vi) all licenses for any of the foregoing, and (vii) all causes of action for infringement of the foregoing.
(c) “Obligations” means all of the Obligor’s obligations under this Agreement and the Note in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from the Secured Party as a preference, fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time.
(d) “Obligor” shall have the meaning set forth in the preamble of this Agreement.
(e) “Organizational Documents” means with respect to Obligor, the documents by which Obligor was organized (such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of Obligor (such as bylaws, a partnership agreement or an operating, limited liability or members agreement).
(f) “UCC” means the Uniform Commercial Code, as currently in effect in the State of Nevada.
2. Grant of Security Interest. As an inducement for the Secured Party to purchase the Note from Obligor and to advance funds to Obligor and to secure the complete and timely payment, performance, and discharge in full, as the case may be, of all of the Obligations, Obligor hereby, unconditionally and irrevocably, pledges, grants, and hypothecates to the Secured Party a continuing security interest in, a first lien upon, and a right of set-off against all of the Obligor’s right, title, and interest of whatsoever kind and nature in and to the Collateral (the “Security Interest”).
3. Representations, Warranties, Covenants, and Agreements of the Obligor. Obligor represents and warrants to, and covenants and agrees with, the Secured Party as follows:
(a) Obligor has the requisite corporate power and authority to enter into this Agreement and otherwise to carry out its obligations thereunder. The execution, delivery, and performance by Obligor of this Agreement and the filings contemplated therein have been duly authorized by all necessary action on the part of Obligor and no further action is required by the Obligor.
(b) Obligor represents and warrants that it has no place of business or offices where its respective books of account and records are kept (other than temporarily at the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule A attached hereto;
(c) Except as set forth on Schedule D, Obligor is the sole owner of the Collateral (except for non-exclusive licenses granted by Obligor in the ordinary course of business), free and clear of any liens, security interests, encumbrances, rights or claims, and is fully authorized to grant the Security Interest in and to pledge the Collateral. Except as set forth on Schedule D, there is not on file in any governmental or regulatory authority, agency or recording office an effective financing statement, security agreement, license, or transfer or any notice of any of the foregoing (other than those that have been filed in favor of the Secured Party pursuant to this Agreement) covering or affecting any of the Collateral. Except as set forth on Schedule D, so long as this Agreement shall be in effect, the Obligor shall not execute and shall not knowingly permit to be on file in any such office or agency any such financing statement or other document or instrument (except to the extent filed or recorded in favor of the Secured Party pursuant to the terms of this Agreement).
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(d) No part of the Collateral has been judged invalid or unenforceable. No written claim has been received that any Collateral or Obligor’s use of any Collateral violates the rights of any third parties. There has been no adverse decision to Obligor’s claim of ownership rights in or exclusive rights to use the Collateral in any jurisdiction or to the Obligor’s right to keep and maintain such Collateral in full force and effect, and there is no proceeding involving said rights pending or, to the best knowledge of any Obligor, threatened before any court, judicial body, administrative or regulatory agency, arbitrator, or other governmental authority.
(e) Obligor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business and its Collateral at the locations set forth on Schedule A attached hereto and may not relocate such books of account and records or tangible Collateral unless it delivers to the Secured Party at least 30 days prior to such relocation (i) written notice of such relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate financing statements and other necessary documents have been filed and recorded and other steps have been taken to perfect the Security Interest to create in favor of the Secured Party valid, perfected and continuing first priority liens in the Collateral.
(f) This Agreement creates in favor of the Secured Party a valid security interest in the Collateral securing the payment and performance of the Obligations and, upon making the filings described in the immediately following sentence, a perfected security interest in such Collateral. Except for the filing of financing statements on Form UCC-I under the UCC with the jurisdictions indicated on Schedule B, attached hereto, no authorization or approval of or filing with or notice to any governmental authority or regulatory body is required either (i) for the grant by the Obligor of, or the effectiveness of, the Security Interest granted hereby or for the execution, delivery and performance of this Agreement by the Obligor or (ii) for the perfection of or exercise by the Secured Party of its rights and remedies hereunder.
(g) On the date of execution of this Agreement, Obligor will deliver to the Secured Party one or more executed UCC financing statements on Form UCC-1 under the UCC with respect to the Security Interest for filing with the jurisdictions indicated on Schedule B, attached hereto and in such other jurisdictions as may be requested by the Secured Party.
(h) The execution, delivery, and performance of this Agreement does not conflict with or cause a breach or default, or an event that with or without the passage of time or notice, shall constitute a breach or default, under any agreement to which the Obligor is a party or by which the Obligor is bound. Except as set forth on Schedule 3(h), no consent (including, without limitation, from stockholders or creditors of the Obligor) is required for the Obligor to enter into and perform its obligations hereunder.
(i) Obligor shall at all times maintain the liens and Security Interest provided for hereunder as valid and perfected liens and security interests in the Collateral in favor of the Secured Party until this Agreement and the Security Interest hereunder shall be terminated pursuant to Section 11 hereof. Obligor hereby agrees to defend the same against any and all persons. The Obligor shall safeguard and protect all Collateral for the account of the Secured Party. At the request of the Secured Party, the Obligor will sign and deliver to the Secured Party at any time or from time to time one or more financing statements pursuant to the UCC (or any other applicable statute) in form reasonably satisfactory to the Secured Party and will pay the cost of filing the same in all public offices wherever filing is, or is deemed by the Secured Party to be, necessary or desirable to effect the rights and obligations provided for herein. Without limiting the generality of the foregoing, the Obligor shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the Security Interest hereunder, and the Obligor shall obtain and furnish to the Secured Party from time to time, upon demand, such releases and/or subordinations of claims and liens which may be required to maintain the priority of the Security Interest hereunder.
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(j) Obligor will not transfer, pledge, hypothecate, encumber, license (except for sales of inventory and non-exclusive licenses granted by such Obligor in the ordinary course of business), sell, or otherwise dispose of any of the Collateral without the prior written consent of the Secured Party.
(k) Obligor shall, within ten (10) days of obtaining knowledge thereof, advise the Secured Party promptly in writing, in sufficient detail, of any substantial change in the Collateral, and of the occurrence of any event which would have a material adverse effect on the value of the Collateral or on the Secured Party’s Security Interest therein.
(l) Obligor shall promptly execute and deliver to the Secured Party such further deeds, mortgages, assignments, security agreements, financing statements, or other instruments, documents, certificates, and assurances and take such further action as the Secured Party may from time to time request and may in its sole discretion deem necessary to perfect, protect, or enforce its Security Interest in the Collateral.
(m) Obligor shall permit the Secured Party and its representatives and agents to inspect the Collateral at any time, and to make copies of records pertaining to the Collateral as may be requested by the Secured Party from time to time.
(n) Obligor will take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims, causes of action, and accounts receivable in respect of the Collateral.
(o) Obligor shall promptly notify the Secured Party in writing and in sufficient detail upon becoming aware of any attachment, garnishment, execution, or other legal process levied against any Collateral and of any other information received by the Obligor that may materially affect the value of the Collateral, the Security Interest or the rights and remedies of the Secured Party hereunder.
(p) Schedule E attached hereto lists all of the patents, patent applications, trademarks, trademark applications, registered copyrights, and domain names owned by any of the Debtors as of the date hereof. Schedule E lists all material licenses in favor of Obligor for the use of any patents, trademarks, copyrights and domain names as of the date hereof. All material patents and trademarks of Obligor have been duly recorded at the United States Patent and Trademark Office and all material copyrights of Obligor have been duly recorded at the United States Copyright Office.
(q) All information heretofore, herein or hereafter supplied to the Secured Party by or on behalf of the Obligor with respect to the Collateral is accurate and complete in all material respects as of the date furnished.
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4. Defaults. The following events shall be “Events of Default”:
(a) The occurrence of a Triggering Event (as defined in the Note) under the Note;
(b) Any representation or warranty of the Obligor in this Agreement shall prove to have been incorrect in any material respect when made; and
(c) The failure by Obligor to observe or perform any of its obligations hereunder or the Note, for five (5) days after receipt by Obligor of notice of such failure from the Secured Party.
5. Duty To Hold In Trust. Upon the occurrence of any Event of Default and at any time thereafter, Obligor shall, upon receipt by it of any revenue, income or other sums subject to the Security Interest, whether payable pursuant to the Note or otherwise, or of any check, draft, note, trade acceptance, or other instrument evidencing an obligation to pay any such sum, hold the same in trust for the Secured Party, such funds to be segregated from other funds of the Obligor in the deposit account to be opened pursuant to Section 3(q) herein, and shall forthwith endorse and transfer any such sums or instruments, or both, to the Secured Party for application to the satisfaction of the Obligations.
6. Rights and Remedies Upon Default. Upon the occurrence of any Event of Default and at any time thereafter, the Secured Party shall have the right to exercise all of the remedies conferred hereunder and under the Note, and the Secured Party shall have all the rights and remedies of a secured party under the UCC and/or any other applicable law (including the Uniform Commercial Code of any jurisdiction in which any Collateral is then located). Without limitation, the Secured Party shall have the following rights and powers:
(a) The Secured Party shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance of any person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and the Obligor shall assemble the Collateral and make it available to the Secured Party at places which the Secured Party shall reasonably select, whether at the Obligor’s premises or elsewhere, and make available to the Secured Party, without rent, all of the Obligor’s respective premises and facilities for the purpose of the Secured Party taking possession of, removing, or putting the Collateral in saleable or disposable form.
(b) The Secured Party shall have the right to operate the business of the Obligor using the Collateral and shall have the right to assign, sell, lease, or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such time or times and at such place or places, and upon such terms and conditions as the Secured Party may deem commercially reasonable, all without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to the Obligor or right of redemption of the Obligor, which are hereby expressly waived. Upon each such sale, lease, assignment or other transfer of Collateral, the Secured Party may, unless prohibited by applicable law which cannot be waived, purchase all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right of redemption and equities of the Obligor, which are hereby waived and released.
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7. Applications of Proceeds. The proceeds of any such sale, lease, or other disposition of the Collateral hereunder shall be applied first, to the expenses of retaking, holding, storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs incurred in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses incurred by the Secured Party in enforcing their rights hereunder and in connection with collecting, storing and disposing of the Collateral, and then to satisfaction of the Obligations, and to the payment of any other amounts required by applicable law, after which the Secured Party shall pay to the Obligor any surplus proceeds. If, upon the sale, license, or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Party are legally entitled, the Obligor will be liable for the deficiency, together with interest thereon, at the rate of 18% per annum or such lesser amount permitted by applicable law (the “Default Rate”), and the reasonable fees of any attorneys employed by the Secured Party to collect such deficiency. To the extent permitted by applicable law, the Obligor waives all claims, damages, and demands against the Secured Party arising out of the repossession, removal, retention, or sale of the Collateral, unless due to the gross negligence or willful misconduct of the Secured Party.
8. Costs and Expenses. The Obligor agrees to pay all out-of-pocket fees, costs, and expenses incurred in connection with any filing required hereunder, including without limitation, any financing statements, continuation statements, partial releases, and/or termination statements related thereto or any expenses of any searches reasonably required by the Secured Party. The Obligor shall also pay all other claims and charges which in the reasonable opinion of the Secured Party might prejudice, imperil, or otherwise affect the Collateral or the Security Interest therein. The Obligor will also, upon demand, pay to the Secured Party the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Secured Party may incur in connection with (i) the enforcement of this Agreement, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, or (iii) the exercise or enforcement of any of the rights of the Secured Party under the Note. Until so paid, any fees payable hereunder shall be added to the principal amount of the Note and shall bear interest at the Default Rate.
9. Responsibility for Collateral. Obligor assumes all liabilities and responsibility in connection with all Collateral, and the obligations of the Obligor hereunder or under the Note shall in no way be affected or diminished by reason of the loss, destruction, damage, or theft of any of the Collateral or its unavailability for any reason.
10. Security Interest Absolute. All rights of the Secured Party and all Obligations of the Obligor hereunder, shall be absolute and unconditional, irrespective of (a) any lack of validity or enforceability of this Agreement, the Note, or any agreement entered into in connection with the foregoing, or any portion hereof or thereof, (b) any change in the time, manner, or place of payment or performance of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Note or any other agreement entered into in connection therewith, (c) any exchange, release, or nonperfection, of any of the Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any guaranty, or any other security, for all or any of the Obligations, (d) any action by the Secured Party to obtain, adjust, settle, and cancel in their sole discretion any insurance claims or matters made or arising in connection with the Collateral, or (e) any other circumstance which might otherwise constitute any legal or equitable defense available to the Obligor, or a discharge of all or any part of the Security Interest granted hereby. Until the Obligations shall have been paid and performed in full, the rights of the Secured Party shall continue even if the Obligations are barred for any reason, including, without limitation, the running of the statute of limitations or bankruptcy. The Obligor expressly waives presentment, protest, notice of protest, demand, notice of nonpayment, and demand for performance. If any time any transfer of any Collateral or any payment received by the Secured Party hereunder shall be deemed by final order of a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws of the United States, or shall be deemed to be otherwise due to any parties other than the Secured Party, then, in any such event, the Obligor’s obligations hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof. The Obligor waives all right to require the Secured Party to proceed against any other person or to apply any Collateral which the Secured Party may hold at any time, or to marshal assets, or to pursue any other remedy. The Obligor waives any defense arising by reason of the application of the statute of limitations to any Obligation secured hereby.
11. Term of Agreement.
(a) This Agreement and the Security Interest shall terminate on the date on which all payments under the Note have been made in full and all other Obligations have been paid or discharged, unless earlier terminated by written agreement of the Obligor and the Secured Party. Upon such termination, the Secured Party, at the request and at the expense of the Obligor, will join in executing any termination statement with respect to any financing statement executed and filed pursuant to this Agreement.
12. Power of Attorney; Further Assurances.
(a) The Obligor authorizes the Secured Party, and does hereby make, constitute and appoint it, and its respective officers, agents, successors or assigns with full power of substitution, as the Obligor’s true and lawful attorney-in-fact, with power, in its own name or in the name of the Obligor, to, after the occurrence and during the continuance of an Event of Default, (i) endorse any notes, checks, drafts, money orders, or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of such Secured Party; (ii) to sign and endorse any UCC financing statement or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with accounts, and other documents relating to the Collateral; (iii) to pay or discharge taxes, liens, security interests, or other encumbrances at any time levied or placed on or threatened against the Collateral; (iv) to demand, collect, receipt for, compromise, settle, and sue for monies due in respect of the Collateral; and (v) generally, to do, at the option of such Secured Party, and at the Obligor’s expense, at any time, or from time to time, all acts and things which such Secured Party deems necessary to protect, preserve, and realize upon the Collateral and the Security Interest granted therein in order to effect the intent of this Agreement, the Note, and the Transaction Documents all as fully and effectually as the Obligor might or could do; and the Obligor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding.
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(b) On a continuing basis, Obligor will make, execute, acknowledge, deliver, file and record, as the case may be, in the proper filing and recording places in any jurisdiction, including, without limitation, the jurisdictions indicated on Schedule B, attached hereto, all such instruments, and take all such action as may reasonably be deemed necessary or advisable, or as reasonably requested by the Secured Party, to perfect the Security Interest granted hereunder and otherwise to carry out the intent and purposes of this Agreement, or for assuring and confirming to the Secured Party the grant or perfection of a security interest in all the Collateral.
(c) Obligor hereby irrevocably appoints the Secured Party as its attorney-in-fact, with full authority in the place and stead of the Obligor and in the name of the Obligor, from time to time in such Secured Party’s discretion, to take any action and to execute any instrument which such Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement, including the filing, in its sole discretion, of one or more financing or continuation statements and amendments thereto, relative to any of the Collateral without the signature of the Obligor where permitted by law.
13. Notices. All notices, requests, demands and other communications hereunder shall be in writing, with copies to all the other parties hereto, and shall be deemed to have been duly given when (i) if delivered by hand, upon receipt, (ii) upon transmission if sent by electronic mail, (iii) if sent by nationally recognized overnight delivery service (receipt requested), the next business day or (iv) if mailed by first-class registered or certified mail, return receipt requested, postage prepaid, four days after posting in the U.S. mails, in each case if delivered to the following addresses:
| If to Obligor: | Naya Therapeutics, Inc. | ||
| 1200 Biscayne Blvd, Suite 1960 | |||
| Miami, FL 33132 | |||
| Attention: Daniel Teper, CEO | |||
| Email: daniel@nayabiosciences.com | |||
| If to Secured Party: | INVO Fertility, Inc. | ||
| 5582 Broadcast Court | |||
| Sarasota, FL 34240 | |||
| Attention: Steven Shum, CEO | |||
| Email: sshum@invobio.com |
14. Other Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement, or property of any other person, firm, corporation, or other entity, then the Secured Party shall have the right, in its sole discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Party’s rights and remedies hereunder.
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15. Miscellaneous.
(a) No course of dealing between the Obligor and the Secured Party, nor any failure to exercise, nor any delay in exercising, on the part of the Secured Party, any right, power, or privilege hereunder or under the Note shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power, or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.
(b) All of the rights and remedies of the Secured Party with respect to the Collateral, whether established hereby or by the Note or by any other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently.
(c) This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and is intended to supersede all prior negotiations, understandings, and agreements with respect thereto. Except as specifically set forth in this Agreement, no provision of this Agreement may be modified or amended except by a written agreement specifically referring to this Agreement and signed by the parties hereto.
(d) If any provision of this Agreement is held to be invalid, prohibited, or unenforceable in any jurisdiction for any reason, unless such provision is narrowed by judicial construction, this Agreement shall, as to such jurisdiction, be construed as if such invalid, prohibited or unenforceable provision had been more narrowly drawn so as not to be invalid, prohibited or unenforceable. If, notwithstanding the foregoing, any provision of this Agreement is held to be invalid, prohibited, or unenforceable in any jurisdiction, such provision, as to such jurisdiction, shall be ineffective to the extent of such invalidity, prohibition, or unenforceability without invalidating the remaining portion of such provision or the other provisions of this Agreement and without affecting the validity or enforceability of such provision or the other provisions of this Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right under this Agreement shall be considered valid unless in writing and signed by the parties giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default or right, whether of the same or similar nature or otherwise.
(f) This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and its successors and assigns.
(g) Each of the parties hereto shall take such further action and execute and deliver such further documents as may be necessary or appropriate to carry out the provisions and purposes of this Agreement.
(h) This Agreement shall be construed in accordance with the laws of the State of Nevada except to the extent the validity, perfection, or enforcement of a security interest hereunder in respect of any particular Collateral which are governed by a jurisdiction other than the State of Nevada in which case such law shall govern. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of any Nevada State or United States Federal court over any action or proceeding arising out of or relating to this Agreement, and the parties hereto hereby irrevocably agree that all claims in respect of such action or proceeding may be heard and determined in such Nevada State or Federal court. The parties hereto agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other inner provided by law. The parties hereto further waive any objection to venue in the State of Nevada and any objection to an action or proceeding in the State of Nevada, on the basis of forum non conveniens.
(i) This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement in the event that any signature is delivered by electronic mail transmission, such signature shall create a valid binding obligation of the parties executing (or on whose behalf such signature is executed) the same with the same force and effect as if such electronic signature were the original thereof.
************
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IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed and delivered as of the date first above written.
| OBLIGOR: | ||
| NAYA THERAPEUTICS, INC. | ||
| By: | ||
| Name: | Daniel Teper | |
| Title: | CEO | |
| SECURED PARTY: | ||
| INVO FERTILITY, INC. | ||
| By: | ||
| Name: | Steven Shum | |
| Title: | CEO | |
| 10 |
SCHEDULE A
Principal Place of Business of the Obligor:
19505 Biscayne Blvd, Suite 2350 3rd Floor, Aventura, FL 33180. This property is rented by the Debtor and not owned by them.
Locations Where Collateral is Located or Stored:
19505 Biscayne Blvd, Suite 2350 3rd Floor, Aventura, FL 33180
| 11 |
SCHEDULE B
Jurisdictions:
Delaware
| 12 |
SCHEDULE C
Technology has been licensed into Obligor pursuant to each of the attached licenses. These assets constitute part of the Collateral hereunder solely to the extent of Obligor’s rights, titles and interest thereto:
| ● | License Agreement by and between Obligor and Inserm Transfert SA, dated December 19, 2023. |
| ● | Assignment and Assumption of Material Transfer and License Agreement and Consent, by and between Obligor, Cytovia Therapeutics, LLC, and ProteoNic B.V., dated December 5, 2023. |
| ● | Second Amendment and Supplemental Agreement, by and between Obligor, Cytovia Therapeutics, LLC, Yissum Research Development Company of the Hebrew University of Jerusalem, Ltd. (“Yissum”), and University of Rijeka Faculty of Medicine (“Rijeka”). |
| ● | Assignment and Assumption Agreement by and between Obligor, Cytovia, and STC Biologics, Inc. |
| ● | Novation Agreement by and between Obligor, Cytovia, and Shin Nippon Biomedical Laboratories, Ltd. |
| ● | Assignment and Assumption of License and Consent by and between Obligor, Cytovia, and CytoLynx Therapeutics Hong Kong Limited. |
| ● | Sublicense Agreement and Consent by and between Obligor, Cytovia, and Dr. Jean Kadouche. |
| 13 |
SCHEDULE D
None.
| 14 |
SCHEDULE E
PCT/US2022/023538
WO 2022/216744
(P-626965-PC) |
Apr. 5, 2022
Oct. 13, 2022
(Apr. 5, 2021) |
Bispecific Antibodies Targeting NKp46 And GPC3 And Methods of Use Thereof |
PCT/US2022/023501
WO 2022/216723
(P-626967-PC) |
Apr. 5, 2022
Oct. 13, 2022
(Apr. 5, 2021) |
Bispecific Antibodies Targeting NKp46 And CD38 And Methods of Use Thereof |
| File Number | Application num. | Title | Country | |||
| P-626965-PC | PCT/US2022/023538 | |||||
| P-626965-BR | BR 112023020572-7 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND GPC3 AND METHODS OF USE THEREOF | Brazil | |||
| P-626965-CA | 3216059 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND GPC3 AND METHODS OF USE THEREOF | Canada | |||
| P-626965-CN | 202280036626 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND GPC3 AND METHODS OF USE THEREOF | China | |||
| P-626965-EP | EP22785323.1 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND GPC3 AND METHODS OF USE THEREOF | Europe | |||
| P-626965-IL | 307466 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND GPC3 AND METHODS OF USE THEREOF | Israel | |||
| P-626965-IN | 202317073811 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND GPC3 AND METHODS OF USE THEREOF | India | |||
| P-626965-JP | TBD | BISPECIFIC ANTIBODIES TARGETING NKP46 AND GPC3 AND METHODS OF USE THEREOF | Japan | |||
| P-626965-KR | 10-2023-7038061 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND GPC3 AND METHODS OF USE THEREOF | South Korea | |||
| P-626965-MX | MX/a/2023/011775 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND GPC3 AND METHODS OF USE THEREOF | Mexico | |||
| P-626965-SG | 11202307554Q | BISPECIFIC ANTIBODIES TARGETING NKP46 AND GPC3 AND METHODS OF USE THEREOF | Singapore | |||
| P-626965-US | 18/285,628 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND GPC3 AND METHODS OF USE THEREOF | USA | |||
| P-626967-PC | PCT/US2022/023501 | |||||
| P-626967-BR | BR 112023020574-3 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND CD38 AND METHODS OF USE THEREOF | Brazil | |||
| P-626967-CA | 3,216,053 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND CD38 AND METHODS OF USE THEREOF | Canada | |||
| P-626967-CN | TBD | BISPECIFIC ANTIBODIES TARGETING NKP46 AND CD38 AND METHODS OF USE THEREOF | China | |||
| P-626967-IL | 307468 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND CD38 AND METHODS OF USE THEREOF | Israel | |||
| P-626967-IN | 202317073782 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND CD38 AND METHODS OF USE THEREOF | India | |||
| P-626967-JP | TBD | BISPECIFIC ANTIBODIES TARGETING NKP46 AND CD38 AND METHODS OF USE THEREOF | Japan | |||
| P-626967-KR | 10-2023-7038026 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND CD38 AND METHODS OF USE THEREOF | South Korea | |||
| P-626967-MX | MX/a/2023/011776 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND CD38 AND METHODS OF USE THEREOF | Mexico | |||
| P-626967-SG | 11202307547Q | BISPECIFIC ANTIBODIES TARGETING NKP46 AND CD38 AND METHODS OF USE THEREOF | Singapore | |||
| P-626967-US | 18/285,633 | BISPECIFIC ANTIBODIES TARGETING NKP46 AND CD38 AND METHODS OF USE THEREOF | USA |
| 15 |
Exhibit 10.4
SIDE LETTER AGREEMENT
May 28, 2025
Reference is made to that certain Security (the “Agreement”) dated as of May 28, 2025, by and between Naya Therapeutics, Inc., a Delaware corporation (“Obligor”), and INVO Fertility, Inc., a Nevada corporation (the “Secured Party”). Capitalized terms used but not defined herein shall have the definitions ascribed to them by the Agreement.
1. Notification of Qualified Financing or Qualified IPO. If the Obligor, upon consultation with its legal and financial advisors, reasonably determines that the existence of the Agreement or the Security Interest will materially impede or prevent the completion of a Qualified Financing or Qualified IPO (as such terms are defined in the Obligor’s Third Amended and Restated Certificate of Incorporation) of the Obligor, the Obligor shall provide written notice to the Secured Party. This notice shall include (a) a statement that the Obligor, upon consultation with its legal and financial advisors, reasonably determines that the existence of the Agreement or the Security Interest will materially impede or prevent the completion of a Qualified Financing or Qualified IPO, and (b) a brief description of the proposed Qualified Financing or Qualified IPO.
2. Effectiveness of Termination. If the Obligor has given notice as set forth in Section 1 and either the Qualified Financing or Qualified IPO is consummated, the Obligor shall provide written notice to the Secured Party of the consummation of such Qualified Financing or Qualified IPO, as applicable, and the Agreement and the Security Agreement will automatically terminate without any further action of the Obligor or the Secured Party.
3. Post-Termination Obligations. Upon termination of the Agreement, , the Secured Party, at the request and at the expense of the Obligor, will join in executing any termination statement with respect to any financing statement executed and filed pursuant to the Agreement.
4. Counterparts. This Side Letter Agreement may be executed in one or more counterparts (including by electronic mail, in PDF or by DocuSign or similar electronic signature), all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
5. Governing Law. THIS SIDE LETTER AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING GOVERNING LAW SET FORTH IN SECTION 15(h) OF THE AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.
6. Terms and Conditions of the Agreement. Except as modified and amended herein, all of the terms and conditions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the undersigned have executed and delivered this Side Letter Agreement as of the date first above written.
| OBLIGOR: | ||
| NAYA THERAPEUTICS, INC. | ||
| By: | ||
| Name: | Daniel Teper | |
| Title: | CEO | |
|
||
| SECURED PARTY: | ||
INVO FERTILITY, INC. |
||
| By: | ||
| Name: | Steven Shum | |
| Title: | CEO | |
EXHIBIT 10.5
Exchange AGREEMENT
This Exchange Agreement (this “Agreement”) is dated effective as of May 28, 2025, by and between INVO FERTILITY, INC. (the “Company”), and GREENBLOCK CAPITAL, LLC (the “Holder”, and together with the Company, the “Parties”).
W I T N E S S E T H:
WHEREAS, on October 11, 2024, the Company issued to the Holder (i) shares of Series C-1 Convertible Preferred Stock (the “Series C-1 Preferred Stock”), pursuant to that certain Certificate of Designations for the Series C-1 Convertible Preferred Stock (the “Series C-1 Certificate of Designations”), and (ii) shares of Series C-2 Convertible Preferred Stock (the “Series C-2 Preferred Stock”), pursuant to that certain Certificate of Designations for the Series C-2 Convertible Preferred Stock (the “Series C-2 Certificate of Designations”), in each case, pursuant to the terms and conditions of the Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company (formerly known as INVO Bioscience, Inc.), NAYA Therapeutics Inc. (formerly known as NAYA Biosciences, Inc.), a Delaware corporation (“Private NAYA”), and INVO Merger Sub, Inc. (“Merger Sub”), a Delaware corporation, pursuant to which Merger Sub merged with and into Private NAYA, with Private NAYA continuing as the surviving corporation and a wholly owned subsidiary of the Company (the “Merger”);
WHEREAS, on October 11, 2024, the Company entered into an Assignment and Assumption Agreement (the “A&A Agreement”) to assume the rights and obligations of Private NAYA in connection with that certain Registration Rights Agreement, dated September 12, 2024 (the “Registration Rights Agreement”) between the Company and the holder party thereto;
WHEREAS, pursuant to the terms of the Registration Rights Agreement, the Company is obligated to file a resale registration statement (the “Resale Registration Statement”) with respect to Registrable Securities (as defined in the Registration Rights Agreement) on or before the Filing Deadline (as defined in the Registration Rights Agreement) and cause such registration statement to be declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on or before the Effectiveness Deadline (as defined in the Registration Rights Agreement and amended by that certain Amendment and Agreement, dated as of January 6, 2025, between the Company and the holder party thereto);
WHEREAS, the Company has not filed the Resale Registration Statement by the Filing Deadline and has not caused such Resale Registration Statement to be declared effective by the SEC by the Effectiveness Deadline which failures constitute a Filing Failure and Effectiveness Failure, respectively, under the Registration Rights Agreement and entitle the Holder to Registration Delay Payments pursuant to Section 2(e) of the Registration Rights Agreement;
WHEREAS, the Effectiveness Failure constitutes a Triggering Event under Section 5(a)(xiii) of the Series C-2 Certificate of Designations;
WHEREAS, on May 7, 2025, Dr. Elizabeth Pritts (“Dr. Pritts”) and the Elizabeth Pritts Revocable Living Trust (the “Pritts Trust”) filed a complaint (the “Pritts Complaint”) in the Circuit Court of the State of Wisconsin, Dane County, against the Company and its subsidiaries INVO Centers LLC, Wisconsin Fertility and Reproductive Surgery Associates, S.C. (“WFRSA”), and Wood Violet Fertility LLC (“Wood Violet”), asserting causes of action arising out of (i) the Membership Interest Purchase Agreement, dated March 16, 2023, between Dr. Pritts, Wood Violet, and Fertility Labs of Wisconsin, LLC (the “MIPA”), (ii) the Asset Purchase Agreement, dated Mach 16, 2023, between Dr. Pritts, Wood Violet, and WFRSA (the “APA”), (iii) the Consulting Agreement – Medical Advisory Services, dated August 10, 2023, between the Company and Dr. Pritts (“Consulting Agreement”), (iv) the Physician Employment Agreement, dated August 10, 2023, between Dr. Pritts and WFRSA (the “Employment Agreement”) and (v) the Physician Liaison Agreement, dated August 10, 2023, between Wood Violet and Dr. Pritts (the “PLA”) (collectively, the “WFI Documents”) for breach of contract, breach of the implied covenant of good faith and fair dealing, tortious interference with contract (or, in the alternative, veil piercing), and unjust enrichment;
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WHEREAS, on May 14, 2025, the Company, Dr. Pritts, the Pritts Trust, and certain of their respective affiliates entered into binding term sheet (the “Term Sheet”) to settle all disputes between the parties pursuant to the terms set forth in the Term Sheet (the “Terms”);
WHEREAS, the Pritts Complaint and the Term Sheet may constitute a Triggering Event under Section 5(a)(vii) and 5(a)(xiii) of the Series C-2 Certificate of Designations;
WHEREAS, the Series C-2 Certificate of Designation or any provision thereof may be amended by obtaining the affirmative vote at a meeting duly called for such purpose, or written consent without a meeting in accordance with the Nevada Revised Statutes (the “NRS”), of the Required Holders, voting separately as a single class, and with such other stockholder approval, if any, as may then be required pursuant to the NRS and the Articles of Incorporation of the Company;
WHEREAS, the Holder constitutes the Required Holders and the Holder and the Company desire to amend the Series C-2 Certificate of Designations to, among other things, (i) increase the number of authorized shares of Series C-2 Preferred Stock and (ii) make certain other modifications thereto;
WHEREAS, the Holder and the Company desire to exchange the Holder’s shares of Series C-1 Preferred Stock for shares of Series C-2 Preferred Stock, as described below.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Holder hereby agree as follows:
Article I
EXCHANGE
Section 1.01. Recitals. The Parties agree that the Recitals set forth above are true and correct and are incorporated into this Agreement by this reference.
Section 1.02. Exchange. Promptly following the date hereof, the Holder will deliver to the Company all outstanding shares of Series C-1 Preferred Stock owned by such Holder (the “Holder C-1 Preferred Stock”), in exchange for such number of shares of Series C-2 Preferred Stock with the aggregate Stated Value (as defined in the Series C-2 Certificate of Designations) equal to the aggregate Stated Value (as defined in Series C-1 Certificate of Designations) of the Holder C-1 Preferred Stock, plus any accrued and unpaid dividends thereon (such transaction, the “Exchange”).
Section 1.03. Closing of the Exchange. The Exchange shall take place promptly following execution and delivery of this Agreement by each Party hereto to each other Party (the “Effective Date”).
Section 1.04. Waiver. The Holder hereby irrevocably waives its right to exercise any rights under the Series C-2 Certificate of Designations resulting from a Triggering Event resulting from the Effectiveness Failure, the Pritts Complaint, or the Term Sheet.
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Section 1.05. Company Representations. The Company represents, warrants and covenants to the Holder that the following statements are true and correct as of the date of this Agreement and the Effective Date:
(a) The Company has the entity power and authority to enter into and perform its obligations under this Agreement and the Exchange. The execution and delivery by the Company of this Agreement and the consummation by the Company of the Exchange have been duly authorized and approved by the Board of Directors of the Company and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement and the Exchange. When executed and delivered, this Agreement will be a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws and equity principles related to or limiting creditors’ rights generally and by general principals of equity.
(b) The execution and delivery of this Agreement, and the consummation of the transactions contemplated herein, will not constitute a violation or breach of any term or provision of, or result in the creation of any encumbrance, lien, charge or other restriction under any agreement to which the Company is a party or by which the Company is bound.
(c) (i) The Company has no knowledge of any facts or circumstances which lead the Company to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within 90 days after the date hereof, (ii) other than as described on Schedule I hereto, the Company is not currently engaged in any discussions with third parties regarding a sale of the business and assets of the Company or any subsidiary and the Company is not a party to any letter of intent, term sheet, purchase agreement or other binding or non-binding agreement or document relating to a sale of the assets and business (including by merger, share exchange or a sale of shares) of the Company or any subsidiary, and (ii) no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that a reasonable investor would consider important in making a decision to buy or sell securities of the Company which has not been disclosed to the Holder.
(d) Other than the Interest Default, the Redemption Default, the Filing Failure, the Effectiveness Failure, the Debenture Effectiveness Default, and the Pritts Default, there has not been any Event of Default under the Debenture.
(e) Upon issuance pursuant to the terms of the Series C-2 Certificate of Designations, the shares of Series C-2 Preferred Stock and the shares of common stock of the Company issuable upon conversion of such shares of Series C-2 Preferred Stock will, in each case, be duly authorized, validly issued, fully paid, and non-assessable, and not subject to any pre-emptive rights.
Section 1.06. Holder’s Representations. The Holder represents and warrants to the Company that the following statements are true and correct as of the date of this Agreement and the Effective Date:
(a) The Holder hereby confirms and acknowledges that the shares of Series C-1 Preferred Stock are owned beneficially and of record by the Holder.
(b) The Holder owns the shares of Series C-1 Preferred Stock free and clear of any and all liens, claims, encumbrances, preemptive rights, right of first refusal and adverse interests of any kind. The shares of Series C-1 Preferred Stock are in book-entry form and are not certificated and the Holder is not in possession of any stock certificates evidencing the shares of Series C-1 Preferred Stock.
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(c) The Holder has the requisite entity power and authority to enter into this Agreement and to consummate the transactions contemplated hereby and otherwise to carry out Holder’s obligations hereunder. The Holder has duly executed and delivered this Agreement, and this Agreement constitutes a legal, valid and binding agreement of the Holder, enforceable in accordance with its terms.
Section 1.07. Amendment to the Series C-2 Certificate of Designations. The parties hereto hereby agree to amend the terms of the Series C-2 Preferred Stock set forth in the Amendment to Series C-2 Certificate of Designations substantially in the form attached hereto as Exhibit A (the “Series C-2 Amendment”). The Company shall promptly file the Series C-2 Amendment with the Secretary of State of the State of Nevada and provide a copy thereof to each Investor promptly after such filing.
Section 1.08. Further Assurances. The Parties agree to sign and deliver such other agreements and instruments, and to do such other acts, as may be reasonably required to carry out the intent and purposes of this Agreement.
Article II
GENERAL PROVISIONS
Section 2.01. Binding Agreement. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, representatives, successors and assigns.
Section 2.02. Severability. The Company and Holder intend and believe that each provision in this Agreement comports with all applicable local, state or federal laws and judicial decisions. However, if any provision or provisions, or if any portion of any provision or provisions, in this Agreement is found by a court of law to be in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial decision or public policy, and if such court should declare such portion, provision or provisions of this Agreement to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of the Company and Holder that such portion, provision or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder of this Agreement shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained herein and that the rights, obligations and interests of the Company and Holder under the remainder of this Agreement shall continue in full force and effect.
Section 2.03. Counterparts. For the convenience of the parties, this Agreement may be executed in multiple counterparts, each of which for all purposes shall be deemed to be an original, and all such counterparts shall together constitute but one and the same agreement. Delivery of an executed counterpart of a signature page of this Agreement by telecopy, e-mail, facsimile or other electronic means shall be effective as a delivery of a manually executed counterpart of this Agreement.
Section 2.04. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE UNITED STATES FEDERAL LAW.
[Signature page follows.]
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IN WITNESS WHEREOF, this Agreement is executed effective as of the date first written above.
| COMPANY: | ||
| INVO FERTILITY, INC., | ||
| a Nevada corporation | ||
| By: | ||
| Steven Shum | ||
| Chief Executive Officer | ||
| HOLDER: | ||
| GREENBLOCK CAPITAL, LLC | ||
| a Florida limited liability company | ||
| By: | ||
| Chris Spencer | ||
| Managing Member | ||
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EXHIBIT A
FORM OF SERIES C-2 AMENDMENT
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Schedule I
The Company intends to amend the certificate of designation of its Series C-1 Convertible Preferred Stock (the “C-1 Preferred”) to provide that the Company may redeem the outstanding shares C-1 Preferred Stock at a redemption price of 113.855837742504 shares of Class A Common Stock of Naya Therapeutics, Inc., a Delaware corporation and wholly-owned subsidiary of the Corporation (“NTI”), for each share of C-1 Preferred being redeemed. Upon effectiveness of this amendment, the Company intends to redeem all outstanding shares of C-1 Preferred (the “Redemption”).
In connection therewith, the Company intends to enter into a Consent and Release Agreement substantially in the form attached hereto as Exhibit I-A.
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EXHIBIT I-A
CONSENT AND RELEASE AGREEMENT
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Exhibit 10.6
Execution Version
CONSENT AND RELEASE AGREEMENT
THIS CONSENT AND RELEASE AGREEMENT (“Agreement”) is made and entered into as of May 28, 2025 by and between Decathlon Alpha V L.P., a Delaware limited partnership (“Decathlon”), Naya Therapeutics, Inc., a Delaware corporation formerly known as NAYA Biosciences, Inc. (“NTI”), and INVO Fertility, Inc., a Nevada corporation formerly known as NAYA Biosciences, Inc. and INVO Bioscience, Inc. (the “Parent”) (each a “Party” and, collectively, the “Parties”).
RECITALS
WHEREAS, on October 11, 2024, NTI, the Parent, and INVO Merger Sub Inc. (“Merger Sub”), entered into that certain Amended and Restated Agreement and Plan of Merger (as amended, the “Merger Agreement”) dated as of October 11, 2024, pursuant to which Merger Sub merged with and into NTI, with NTI continuing as the surviving corporation and a wholly owned subsidiary of the Company (the “Merger”).
WHEREAS, pursuant to the Merger, the Parent issued shares of Parent’s newly-designated Series C-1 Convertible Preferred Stock (the “Series C-1 Preferred”) to the former shareholders of NTI.
WHEREAS, the Parent desires to redeem the Series C-1 Preferred for shares of Class A Common Stock of NTI (the “NTI Shares”) pursuant to its redemption rights set forth in the Series C-1 Preferred Certificate of Designation, as amended (the “Redemption”).
WHEREAS, Parent, Decathlon, and the other persons party thereto have entered into that certain Revenue Loan and Security Agreement, dated as of September 29, 2023 (as amended, restated, amended and restated, supplemented, otherwise modified, refinanced or replaced from time to time, the “INVO Credit Agreement”).
WHEREAS, Parent, NTI, Decathlon, and the other persons party thereto have entered into that certain Second Amendment to Revenue Loan and Security Agreement, dated as of October 11, 2024 (the “Second Amendment”), pursuant to which, among other things, NTI (a) guaranteed performance of the Obligations in accordance with the terms of the INVO Credit Agreement (the “Guaranty”), and (b) granted to Decathlon a continuing security interest in and to the assets of NTI to secure performance of the guarantee.
WHEREAS, pursuant to the INVO Credit Agreement and the Second Amendment, the Parent requires Decathlon’s consent to the Redemption.
WHEREAS, as a condition to the Redemption, the Parent requires (a) NTI to issue a promissory note in the principal balance of $4,803,175 to the Parent in the form attached hereto as Exhibit A (the “New Note”), and (b) a release of claims as set forth in this Agreement.
WHEREAS, as a condition to the Redemption, NTI requires (a) Decathlon to release its security interest in the assets of NTI created under the Second Amendment, and (b) a release of claims as set forth in this Agreement.
WHEREAS, to provide the consent and release required by Parent and NTI pursuant to this Agreement, Decathlon is requiring (i) NTI to issue the New Note to Parent, and (ii) a release of claims as set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. New Note. Concurrently herewith, NTI shall issue the New Note to the Parent.
Section 2. Consent and Release.
2.1 Consent. Decathlon agrees and consents to the Redemption and the transactions contemplated thereby and consents to the transfer by the Parent of the NTI Shares pursuant to the Redemption.
2.2 Release of Security Interest. Upon consummation of the consummation of the Redemption, Decathlon hereby releases any and all security interests, liens, rights, claims, or demands of any kinds whatsoever relating to the NTI Shares created under the INVO Credit Agreement and the assets of NTI created under the Second Amendment. In addition, Decathlon agrees to promptly file, but in no event later than 5 days from the date hereof, as applicable, (i) a UCC amendment to remove NTI as a debtor and/or to remove the assets of NTI, together with the NTI Shares, from any UCC-1 financing statements filed by Decathlon with respect to such assets and (ii) a UCC termination statement terminating any UCC-1 financing statement filed by Decathlon which designates NTI as the sole debtor thereunder.
Section 3. Release of Claims and Waiver of Damages.
3.1 NTI’s Release. NTI, on behalf of itself and its respective agents, attorneys, affiliates, former and current shareholders (including the recipients of the NTI Shares but excluding the Parent), directors, officers, employees, insurers, heirs, assigns, beneficiaries, executors, trustees, conservators, representatives, predecessors-in-interest, successors-in-interest, and whomsoever may claim by, under or through it, and all persons acting by, through, under or in concert with any of them (the “NTI Releasing Parties”) hereby irrevocably and unconditionally forever release, remise, acquit, and discharge the Parent, Decathlon, and each of their present, former or future agents, representatives, employees, independent contractors, officers, directors, stockholders, managers, members, partners, attorneys, accountants, insurers, investors, advisors, subsidiaries, divisions, parents, assigns, affiliates, predecessors, and successors (collectively, the “NTI Releasees”) from and against any and all debts, obligations, losses, costs, promises, covenants, agreements, contracts, endorsements, bonds, controversies, suits, actions, causes of action, misrepresentations, defamatory statements, tortuous conduct, acts or omissions, rights, obligations, liabilities, judgments, damages, expenses, claims, counterclaims, cross-claims, or demands, in law or equity, asserted or unasserted, express or implied, foreseen or unforeseen, real or imaginary, alleged or actual, suspected or unsuspected, known or unknown, liquidated or non-liquidated, of any kind or nature or description whatsoever, arising from the beginning of the world through the date of this Agreement, which each of the NTI Releasing Parties has ever had, presently has, may have, or claim or assert to have against any of the NTI Releasees (the “NTI Released Claims”). The NTI Released Claims include, but are not limited to, claims arising out of, based upon, relating to, or in connection with (i) NTI’s prior business relationships with any NTI Releasee, (ii) the cessation and termination of NTI’s prior business relationships with any NTI Releasee, and/or (iii) any act or omission by any NTI Releasee, whether or not such act or omission was committed on behalf of any NTI Releasee or during the course of performing pursuant to a business relationship with any NTI Releasee. The NTI Releasing Parties further agree that they shall not encourage any other person in making any claim, charge, grievance or other action against any NTI Releasee. The NTI Releasing Parties are not releasing claims related to enforcement of this Agreement or any security agreement in connection therewith.
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3.2 Parent’s Release. Parent, on behalf of itself and its respective agents, attorneys, affiliates, current shareholders, directors, officers, employees, insurers, heirs, assigns, beneficiaries, executors, trustees, conservators, representatives, predecessors-in-interest, successors-in-interest, and whomsoever may claim by, under or through it, and all persons acting by, through, under or in concert with any of them (the “Parent Releasing Parties”) hereby irrevocably and unconditionally forever release, remise, acquit, and discharge NTI, and each of its present, former or future agents, representatives, employees, independent contractors, officers, directors, stockholders, managers, members, partners, attorneys, accountants, insurers, investors, advisors, subsidiaries, divisions, parents, assigns, affiliates, predecessors, and successors (collectively, the “Parent Releasees”) from and against any and all debts, obligations, losses, costs, promises, covenants, agreements, contracts, endorsements, bonds, controversies, suits, actions, causes of action, misrepresentations, defamatory statements, tortuous conduct, acts or omissions, rights, obligations, liabilities, judgments, damages, expenses, claims, counterclaims, cross-claims, or demands, in law or equity, asserted or unasserted, express or implied, foreseen or unforeseen, real or imaginary, alleged or actual, suspected or unsuspected, known or unknown, liquidated or non-liquidated, of any kind or nature or description whatsoever, arising from the beginning of the world through the date of this Agreement, which each of the Parent Releasing Parties has ever had, presently has, may have, or claim or assert to have against any of the Parent Releasees (the “Parent Released Claims”). The Parent Released Claims include, but are not limited to, claims arising out of, based upon, relating to, or in connection with (i) the Parent’s prior business relationships with any Parent Releasee, (ii) the cessation and termination of Parent’s prior business relationships with any Parent Releasee, and/or (iii) any act or omission by any Parent Releasee, whether or not such act or omission was committed on behalf of any Parent Releasee or during the course of performing pursuant to a business relationship with any Parent Releasee. The Parent Releasing Parties further agree that they shall not encourage any other person in making any claim, charge, grievance or other action against any Parent Releasee. The Parent Releasing Parties are not releasing claims related to enforcement of this Agreement or any claims related to enforcement of the New Note or any security agreement in connection therewith.
3.3 Decathlon’s Release. Decathlon, on behalf of itself and its respective agents, attorneys, affiliates, managers, members, partners, directors, officers, employees, insurers, heirs, assigns, beneficiaries, executors, trustees, conservators, representatives, predecessors-in-interest, successors-in-interest, and whomsoever may claim by, under or through it, and all persons acting by, through, under or in concert with any of them (the “Decathlon Releasing Parties”) hereby irrevocably and unconditionally forever release, remise, acquit, and discharge NTI, and each of its present, former or future agents, representatives, employees, independent contractors, officers, directors, stockholders, managers, members, partners, attorneys, accountants, insurers, investors, advisors, subsidiaries, divisions, parents, assigns, affiliates, predecessors, and successors (but in all cases excluding the Parent) (collectively, the “Decathlon Releasees”) from and against any and all debts, obligations, losses, costs, promises, covenants, agreements, contracts, endorsements, bonds, controversies, suits, actions, causes of action, misrepresentations, defamatory statements, tortuous conduct, acts or omissions, rights, obligations, liabilities, judgments, damages, expenses, claims, counterclaims, cross-claims, or demands, in law or equity, asserted or unasserted, express or implied, foreseen or unforeseen, real or imaginary, alleged or actual, suspected or unsuspected, known or unknown, liquidated or non-liquidated, of any kind or nature or description whatsoever, arising from the beginning of the world through the date of this Agreement, which each of the Decathlon Releasing Parties has ever had, presently has, may have, or claim or assert to have against any of the Decathlon Releasees (the “Decathlon Released Claims”). The Decathlon Released Claims include, but are not limited to, claims arising out of, based upon, relating to, or in connection with (i) Decathlon’s ’s prior business relationships with any Decathlon Releasee, (ii) the cessation and termination of Decathlon’s prior business relationships with any Decathlon Releasee, and/or (iii) any act or omission by any Decathlon Releasee, whether or not such act or omission was committed on behalf of any Decathlon Releasee or during the course of performing pursuant to a business relationship with any Decathlon Releasee. The Decathlon Releasing Parties further agree that they shall not encourage any other person in making any claim, charge, grievance or other action against any Decathlon Releasee. The Decathlon Releasing Parties are not releasing claims related to enforcement of this Agreement or any claims related to enforcement of the New Note or any security agreement in connection therewith.
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3.4 Release of Unknown Claims. The Parties acknowledge that they may hereafter discover facts in addition to or different from those which they presently know or believe to be true regarding the subject matter of the dispute and the other matters herein released, but agree that they have taken that possibility into account and that it is their intention hereby to fully, finally and forever settle and release the matters, disputes and differences, now known or unknown, suspected or unsuspected, arising out of or in any way relating to the matters released pursuant to this Agreement.
3.5 No Admission of Wrongdoing or Liability. The Parties agree that this Agreement shall not in any way be construed as an admission by any Party, any NTI Releasee, any Parent Releasee, or any Decathlon Releasee, as the case may be, has acted wrongfully with respect to any other Party, any NTI Releasee, any Parent Releasee, or any Decathlon Releasee, or Defendant Releasee or any other person, or that any Party, any NTI Releasee, any Parent Releasee, or any Decathlon Releasee has violated any federal, state, or local law (statutory or decisional), ordinance, or regulation, breached any contract, or committed any wrongdoing whatsoever against any other Party, NTI Releasee, any Parent Releasee, any Decathlon Releasee, or otherwise, which is expressly denied, or that any Party, any NTI Releasee, any Parent Releasee, or any Decathlon Releasee has any rights whatsoever against any other Party, any NTI Releasee, any Parent Releasee, or any Decathlon Releasee. Each Party, NTI Releasee, Parent Releasee, and Decathlon Releasee further agrees that each other Party, NTI Releasee, Parent Releasee, and Decathlon Releasee specifically disclaims any liability to or alleged wrongful acts against any Party, NTI Releasee, Parent Releasee, or Decathlon Releasee or any other person related to or affiliated with such Party, NTI Releasee, Parent Releasee, or Decathlon Releasee, as the case may be.
Section 4. Covenant Not to Sue. Each Party represents that such Party has not filed any complaints, claims, actions, or charges against any other Party or any NTI Releasee, Parent Releasee, or Decathlon Releasee, as applicable, with any state, federal, or local agency or court; that such Party knows of no facts which may lead to any complaints, claims, actions, or charges against any other Party or any NTI Releasee, Parent Releasee, or Decathlon Releasee, as applicable, in or through any state, federal, or local agency or court; and that such Party has not made any other Party or any NTI Releasee, Parent Releasee, or Decathlon Releasee, as applicable, aware of any facts which may lead to any complaints, claims, actions, or charges against any other Party or any NTI Releasee, Parent Releasee, or Decathlon Releasee, as applicable, in or through any state, federal, or local agency or court. Each Party further agrees that such Party will not in any way commence any claim or suit to seek recovery on his behalf against any other Party or any NTI Releasee, Parent Releasee, or Decathlon Releasee, as applicable, for any claim released in this Agreement. Each Party agrees that if such Party commences, joins in, or in any other manner attempts to assert any claim against any other Party or any NTI Releasee, Parent Releasee, or Decathlon Releasee, as applicable, in breach of this covenant not to sue, this covenant shall constitute a complete defense to any such suit.
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Section 5. Confidential Information.
5.1 Each of NTI and Parent acknowledges and agrees that, as a result of their relationship with each other, they came into possession of proprietary, sensitive, privileged, and/or confidential information relating to such other Parties not generally known or available outside of such other Parties or their affiliates, as well as information and physical material entrusted to each such Party in confidence by third parties (together, “Confidential Information”). Each of NTI and Parent agrees that it shall not, directly or indirectly, individually or in combination or association with any other person or entity, make use of, divulge, disclose, or otherwise make accessible to any third party any of the Confidential Information without, in each instance, the prior written consent of holder of the Confidential Information. Each of NTI and Parent further agrees that it shall destroy any and all copies of the Confidential Information of another Party that such Party may have in any form (electronic, written or otherwise) in their possession prior to the date hereof.
5.2 This Section 5 is intended to be for the benefit of each of NTI and Parent and its affiliates and any third party that has entrusted information or physical material to such Party in confidence. Each of NTI and Parent agrees that they will hold all such information in the strictest confidence and will not use or disclose it to anyone (except as otherwise expressly permitted under this Agreement).
5.3 This Agreement is intended to supplement, and not to supersede, any rights such Party may have in law or equity with respect to the protection of trade secrets or confidential or proprietary information.
5.4 Notwithstanding the foregoing, federal law provides certain protections to individuals who disclose a trade secret to their attorney, a court, or a government official in certain, confidential circumstances. Specifically, pursuant to the federal Defend Trade Secrets Act of 2016, no Party shall be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret under any of the following conditions: (1) where the disclosure is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made to a Party in relation to a lawsuit for retaliation against such Party for reporting a suspected violation of law, or (3) where the disclosure is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
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Section 6. Breach. Any breach of Section 5 of this Agreement shall be considered a material breach of this Agreement. In the event of any material breach by a Party, the aggrieved Party shall be entitled to recover from the breaching Party, in addition to all other relief available under the law or at equity, all costs and expenses, including reasonable attorneys’ fees incurred in bringing an action for enforcement of this Agreement.
Section 7. Miscellaneous.
7.1 Representation by Counsel. The Parties acknowledge that they are executing and delivering this Agreement with full knowledge of any and all rights that they may have with respect to the claims and causes of action herein settled and released, except as expressly not released as set forth above. The Parties acknowledge that they are represented by and have consulted with attorneys of their own choosing to the extent desired before executing and delivering this Agreement in order to review this document and the claims and causes of action being settled and released hereby and thereby, and that they have had a reasonable and sufficient opportunity to do so.
7.2 Binding Effect of Agreement. This Agreement shall inure to the benefit of and shall be binding upon the Parties and their respective heirs, administrators, executors, representatives, attorneys, agents, predecessors in interest (if any), successors, affiliates, assigns, and beneficiaries.
7.3 Expenses and Fees. Each Party shall bear its own attorneys’ fees, costs, and expenses, and consultants, advisors, and experts’ fees, costs, and expenses, arising or relating to the Action and the negotiation, execution, and delivery of this Agreement.
7.4 Governing Law. The Parties agree that the validity, effect, and construction of this Agreement, as well as any rights, duties and obligations thereunder, and any disputes concerning any of the provisions of this Agreement or over the negotiation or execution thereof, shall be interpreted under, governed by and construed in accordance with the laws of the State of Nevada without regard to conflict of laws provisions.
7.5 Dispute Resolution. Any and all disputes between any of the Parties concerning any of the provisions of this Agreement or the rights, duties and obligations hereunder shall be exclusively resolved in an action or proceeding brought in the state or federal courts located in Clark County, Nevada. The prevailing party in any proceeding instituted to resolve any dispute between any of the Parties arising out of or relating to this Agreement shall be entitled, in addition to any award rendered, to all reasonable attorneys’ fees, costs, and expenses incurred in connection with any such proceeding.
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7.6 Entire Agreement; Amendments. This Agreement, any exhibits hereto, any documents referenced herein, and any exhibits thereto, constitute the entire understanding and agreement of the Parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto and thereto. This Agreement may be amended, altered, modified or waived, in whole or in part, only in a writing executed by all the Parties to this Agreement. This Agreement may not be amended, altered, modified or waived, in whole or in part, orally.
7.7 Execution in Counterparts. This Agreement may be executed (including by facsimile, .pdf, or any electronic signature) in one or more counterparts, with the same effect as if the Parties had signed the same document. Each counterpart so executed will be deemed to be an original, and all such counterparts will be construed together and will constitute one Agreement. The Agreement shall become effective only upon its execution by all Parties hereto. Counterparts may be delivered via facsimile, electronic mail or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. The Parties agree where practicable to use DocuSign or Adobe Sign, electronic signature technologies, to expedite the execution of this Agreement. Electronic signatures shall be deemed originals.
7.8 Non-Waiver. The failure of any Party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
7.9 Titles. The titles of the Sections of this Agreement are inserted for convenience only and shall not affect the meaning or construction of any of the terms of this Agreement.
7.10 Acknowledgment. The Parties acknowledge that they have read this Agreement, that they fully know, understand, and appreciate its contents, and that they have executed the same and make the settlement and release provided for herein voluntarily and of their own free will.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound, have each executed this Agreement on the dates set forth below.
| INVO Fertility, INC. | ||
| By: | Steven Shum | |
| Title: | CEO | |
| naya therapeutics, INC. | ||
| By: | Daniel Teper | |
| Title: | CEO | |
| DECATHLON ALPHA V LP | ||
| By: | Decathlon Alpha GP V, LLC | |
| Its: | General Partner | |
| By: | Wayne Cantwell | |
| Title: | Managing Director |
[Consent and Release Agreement]
| 8 |
Exhibit 10.7
CONSENT AND RELEASE AGREEMENT
THIS CONSENT AND RELEASE AGREEMENT (“Agreement”) is made and entered into as of May 28, 2025 by and between Five Narrow Lane LP, a Delaware limited partnership (“FNL”), Naya Therapeutics, Inc., a Delaware corporation (“NTI”), and INVO Fertility, Inc., a Nevada corporation formerly known as NAYA Biosciences, Inc. and INVO Bioscience, Inc. (the “Parent”) (each a “Party” and, collectively, the “Parties”).
RECITALS
WHEREAS, on October 11, 2024, NTI, the Parent, and INVO Merger Sub Inc. (“Merger Sub”), entered into that certain Amended and Restated Agreement and Plan of Merger (as amended, the “Merger Agreement”) dated as of October 11, 2024, pursuant to which Merger Sub merged with and into NTI, with NTI continuing as the surviving corporation and a wholly owned subsidiary of the Company (the “Merger”).
WHEREAS, pursuant to the Merger, the Parent issued shares of the Company’s newly-designated Series C-1 Convertible Preferred Stock (the “Series C-1 Preferred”) to the former shareholders of NTI.
WHEREAS, the Parent desires to redeem the Series C-1 Preferred for shares of Class A Common Stock of NTI (the “NTI Shares”) pursuant to its redemption rights set forth in the Series C-1 Preferred Certificate of Designation, as amended (the “Redemption”).
WHEREAS, pursuant to the Merger, the Parent issued a 7.0% Senior Secured Convertible Debenture in the principal balance of $3,934,146 due December 11, 2025 (the “Debenture”) to FNL.
WHEREAS, the Parent and NTI are parties to that certain Securities Agreement dated as of January 3, 2024 made by NTI and its subsidiaries party thereto from time to time, as Debtors to and in favor of FNL (the “Security Agreement”).
WHEREAS, pursuant to the Debenture and the Security Agreement, the Parent requires FNL’s consent to the Redemption.
WHEREAS, as a condition to the Redemption, the Parent requires (a) NTI to issue a secured promissory note in the principal balance of $4,803,175 to the Parent in the form attached hereto as Exhibit A (the “New Note”), and (b) a release of claims as set forth in this Agreement.
WHEREAS, as a condition to the Redemption, NTI requires (a) FNL to release its security interest in the assets of NTI created under the Security Agreement, and (b) a release of claims as set forth in this Agreement.
WHEREAS, to provide the consent and release required by Parent and NTI pursuant to this Agreement, FNL is requiring (i) NTI to issue the New Note to Parent, and (ii) a release of claims as set forth in this Agreement.
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AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. New Note. Concurrently herewith, NTI shall issue the New Note to the Parent.
Section 2. Consent and Release.
2.1 Consent. FNL agrees and consents to the Redemption and the transactions contemplated thereby and consents to the transfer by the Parent of the NTI Shares pursuant to the Redemption.
2.2 Release of Security Interest. Upon consummation of the consummation of the Redemption, FNL hereby releases any and all security interests, liens, rights, claims, or demands of any kinds whatsoever relating to the NTI Shares, the assets of NTI and created under the Security Agreement. In addition, FNL agrees to promptly file, but in no event later than 5 days from the date hereof, a UCC termination statement relating to the assets of NTI and the release of the security interest and lien on such assets created under the Security Agreement and perfected by the filing of any UCC-1 financing statements filed by FNL with respect to such assets.
Section 3. Release of Claims and Waiver of Damages.
3.1 NTI’s Release. NTI, on behalf of itself and its respective agents, attorneys, affiliates, former and current shareholders (including the recipients of the NTI Shares but excluding the Parent), directors, officers, employees, insurers, heirs, assigns, beneficiaries, executors, trustees, conservators, representatives, predecessors-in-interest, successors-in-interest, and whomsoever may claim by, under or through it, and all persons acting by, through, under or in concert with any of them (the “NTI Releasing Parties”) hereby irrevocably and unconditionally forever release, remise, acquit, and discharge the Parent, FNL, and each of their present, former or future agents, representatives, employees, independent contractors, officers, directors, stockholders, managers, members, partners, attorneys, accountants, insurers, investors, advisors, subsidiaries, divisions, parents, assigns, affiliates, predecessors, and successors (collectively, the “NTI Releasees”) from and against any and all debts, obligations, losses, costs, promises, covenants, agreements, contracts, endorsements, bonds, controversies, suits, actions, causes of action, misrepresentations, defamatory statements, tortuous conduct, acts or omissions, rights, obligations, liabilities, judgments, damages, expenses, claims, counterclaims, cross-claims, or demands, in law or equity, asserted or unasserted, express or implied, foreseen or unforeseen, real or imaginary, alleged or actual, suspected or unsuspected, known or unknown, liquidated or non-liquidated, of any kind or nature or description whatsoever, arising from the beginning of the world through the date of this Agreement, which each of the NTI Releasing Parties has ever had, presently has, may have, or claim or assert to have against any of the NTI Releasees (the “NTI Released Claims”). The NTI Released Claims include, but are not limited to, claims arising out of, based upon, relating to, or in connection with (i) NTI’s prior business relationships with any NTI Releasee, (ii) the cessation and termination of NTI’s prior business relationships with any NTI Releasee, and/or (iii) any act or omission by any NTI Releasee, whether or not such act or omission was committed on behalf of any NTI Releasee or during the course of performing pursuant to a business relationship with any NTI Releasee. The NTI Releasing Parties further agree that they shall not encourage any other person in making any claim, charge, grievance or other action against any NTI Releasee. The NTI Releasing Parties are not releasing claims related to enforcement of this Agreement or any security agreement in connection therewith.
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3.2 Parent’s Release. Parent, on behalf of itself and its respective agents, attorneys, affiliates, current shareholders, directors, officers, employees, insurers, heirs, assigns, beneficiaries, executors, trustees, conservators, representatives, predecessors-in-interest, successors-in-interest, and whomsoever may claim by, under or through it, and all persons acting by, through, under or in concert with any of them (the “Parent Releasing Parties”) hereby irrevocably and unconditionally forever release, remise, acquit, and discharge NTI, and each of its present, former or future agents, representatives, employees, independent contractors, officers, directors, stockholders, managers, members, partners, attorneys, accountants, insurers, investors, advisors, subsidiaries, divisions, parents, assigns, affiliates, predecessors, and successors (collectively, the “Parent Releasees”) from and against any and all debts, obligations, losses, costs, promises, covenants, agreements, contracts, endorsements, bonds, controversies, suits, actions, causes of action, misrepresentations, defamatory statements, tortuous conduct, acts or omissions, rights, obligations, liabilities, judgments, damages, expenses, claims, counterclaims, cross-claims, or demands, in law or equity, asserted or unasserted, express or implied, foreseen or unforeseen, real or imaginary, alleged or actual, suspected or unsuspected, known or unknown, liquidated or non-liquidated, of any kind or nature or description whatsoever, arising from the beginning of the world through the date of this Agreement, which each of the Parent Releasing Parties has ever had, presently has, may have, or claim or assert to have against any of the Parent Releasees (the “Parent Released Claims”). The Parent Released Claims include, but are not limited to, claims arising out of, based upon, relating to, or in connection with (i) the Parent’s prior business relationships with any Parent Releasee, (ii) the cessation and termination of Parent’s prior business relationships with any Parent Releasee, and/or (iii) any act or omission by any Parent Releasee, whether or not such act or omission was committed on behalf of any Parent Releasee or during the course of performing pursuant to a business relationship with any Parent Releasee. The Parent Releasing Parties further agree that they shall not encourage any other person in making any claim, charge, grievance or other action against any Parent Releasee. The Parent Releasing Parties are not releasing claims related to enforcement of this Agreement, or any claims related to enforcement of the New Note or any security agreement in connection therewith.
3.3 FNL’s Release. FNL, on behalf of itself and its respective agents, attorneys, affiliates, managers, members, partners, directors, officers, employees, insurers, heirs, assigns, beneficiaries, executors, trustees, conservators, representatives, predecessors-in-interest, successors-in-interest, and whomsoever may claim by, under or through it, and all persons acting by, through, under or in concert with any of them (the “FNL Releasing Parties”) hereby irrevocably and unconditionally forever release, remise, acquit, and discharge NTI, and each of its present, former or future agents, representatives, employees, independent contractors, officers, directors, stockholders, managers, members, partners, attorneys, accountants, insurers, investors, advisors, subsidiaries, divisions, parents, assigns, affiliates, predecessors, and successors (but in all cases excluding the Parent) (collectively, the “FNL Releasees”) from and against any and all debts, obligations, losses, costs, promises, covenants, agreements, contracts, endorsements, bonds, controversies, suits, actions, causes of action, misrepresentations, defamatory statements, tortuous conduct, acts or omissions, rights, obligations, liabilities, judgments, damages, expenses, claims, counterclaims, cross-claims, or demands, in law or equity, asserted or unasserted, express or implied, foreseen or unforeseen, real or imaginary, alleged or actual, suspected or unsuspected, known or unknown, liquidated or non-liquidated, of any kind or nature or description whatsoever, arising from the beginning of the world through the date of this Agreement, which each of the FNL Releasing Parties has ever had, presently has, may have, or claim or assert to have against any of the FNL Releasees (the “FNL Released Claims”). The FNL Released Claims include, but are not limited to, claims arising out of, based upon, relating to, or in connection with (i) FNL’s prior business relationships with any FNL Releasee, (ii) the cessation and termination of FNL’s prior business relationships with any FNL Releasee, and/or (iii) any act or omission by any FNL Releasee, whether or not such act or omission was committed on behalf of any FNL Releasee or during the course of performing pursuant to a business relationship with any FNL Releasee. The FNL Releasing Parties further agree that they shall not encourage any other person in making any claim, charge, grievance or other action against any FNL Releasee. The FNL Releasing Parties are not releasing claims related to enforcement of this Agreement or any claims related to enforcement of the New Note or any security agreement in connection therewith or the Certificate of Designations of the Series C-2 Preferred Stock.
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3.4 Release of Unknown Claims. The Parties acknowledge that they may hereafter discover facts in addition to or different from those which they presently know or believe to be true regarding the subject matter of the dispute and the other matters herein released, but agree that they have taken that possibility into account and that it is their intention hereby to fully, finally and forever settle and release the matters, disputes and differences, now known or unknown, suspected or unsuspected, arising out of or in any way relating to the matters released pursuant to this Agreement.
3.5 No Admission of Wrongdoing or Liability. The Parties agree that this Agreement shall not in any way be construed as an admission by any Party, any NTI Releasee, any Parent Releasee, or any FNL Releasee, as the case may be, has acted wrongfully with respect to any other Party, any NTI Releasee, any Parent Releasee, or any FNL Releasee, or any other person, or that any Party, any NTI Releasee, any Parent Releasee, or any FNL Releasee has violated any federal, state, or local law (statutory or decisional), ordinance, or regulation, breached any contract, or committed any wrongdoing whatsoever against any other Party, NTI Releasee, any Parent Releasee, any FNL Releasee, or otherwise, which is expressly denied, or that any Party, any NTI Releasee, any Parent Releasee, or any FNL Releasee has any rights whatsoever against any other Party, any NTI Releasee, any Parent Releasee, or any FNL Releasee. Each Party, NTI Releasee, Parent Releasee, and FNL Releasee further agrees that each other Party, NTI Releasee, Parent Releasee, and FNL Releasee specifically disclaims any liability to or alleged wrongful acts against any Party, NTI Releasee, Parent Releasee, or FNL Releasee or any other person related to or affiliated with such Party, NTI Releasee, Parent Releasee, or FNL Releasee, as the case may be.
Section 4. Covenant Not to Sue. Each Party represents that such Party has not filed any complaints, claims, actions, or charges against any other Party or any NTI Releasee, Parent Releasee, or FNL Releasee, as applicable, with any state, federal, or local agency or court; that such Party knows of no facts which may lead to any complaints, claims, actions, or charges against any other Party or any NTI Releasee, Parent Releasee, or FNL Releasee, as applicable, in or through any state, federal, or local agency or court; and that such Party has not made any other Party or any NTI Releasee, Parent Releasee, or FNL Releasee, as applicable, aware of any facts which may lead to any complaints, claims, actions, or charges against any other Party or any NTI Releasee, Parent Releasee, or FNL Releasee, as applicable, in or through any state, federal, or local agency or court. Each Party further agrees that such Party will not in any way commence any claim or suit to seek recovery on his behalf against any other Party or any NTI Releasee, Parent Releasee, or FNL Releasee, as applicable, for any claim released in this Agreement. Each Party agrees that if such Party commences, joins in, or in any other manner attempts to assert any claim against any other Party or any NTI Releasee, Parent Releasee, or FNL Releasee, as applicable, in breach of this covenant not to sue, this covenant shall constitute a complete defense to any such suit.
Section 5. Confidential Information.
5.1 Each Party acknowledges and agrees that, as a result of their relationship with the other Parties, they came into possession of proprietary, sensitive, privileged, and/or confidential information relating to such other Parties not generally known or available outside of such other Parties or their affiliates, as well as information and physical material entrusted to each such Party in confidence by third parties (together, “Confidential Information”). Each Party agrees that it shall not, directly or indirectly, individually or in combination or association with any other person or entity, make use of, divulge, disclose, or otherwise make accessible to any third party any of the Confidential Information without, in each instance, the prior written consent of holder of the Confidential Information. Each Party further agrees that it shall destroy any and all copies of the Confidential Information of another Party that such Party may have in any form (electronic, written or otherwise) in their possession prior to the date hereof.
5.2 This Section 5 is intended to be for the benefit of each Party and its affiliates and any third party that has entrusted information or physical material to such Party in confidence. Each Party agrees that they will hold all such information in the strictest confidence and will not use or disclose it to anyone (except as otherwise expressly permitted under this Agreement).
5.3 This Agreement is intended to supplement, and not to supersede, any rights such Party may have in law or equity with respect to the protection of trade secrets or confidential or proprietary information.
5.4 Notwithstanding the foregoing, federal law provides certain protections to individuals who disclose a trade secret to their attorney, a court, or a government official in certain, confidential circumstances. Specifically, pursuant to the federal Defend Trade Secrets Act of 2016, no Party shall be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret under any of the following conditions: (1) where the disclosure is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made to a Party in relation to a lawsuit for retaliation against such Party for reporting a suspected violation of law, or (3) where the disclosure is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
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Section 6. Breach. Any breach of Section 5 of this Agreement shall be considered a material breach of this Agreement. In the event of any material breach by a Party, the aggrieved Party shall be entitled to recover from the breaching Party, in addition to all other relief available under the law or at equity, all costs and expenses, including reasonable attorneys’ fees incurred in bringing an action for enforcement of this Agreement.
Section 7. Miscellaneous.
7.1 Representation by Counsel. The Parties acknowledge that they are executing and delivering this Agreement with full knowledge of any and all rights that they may have with respect to the claims and causes of action herein settled and released, except as expressly not released as set forth above. The Parties acknowledge that they are represented by and have consulted with attorneys of their own choosing to the extent desired before executing and delivering this Agreement in order to review this document and the claims and causes of action being settled and released hereby and thereby, and that they have had a reasonable and sufficient opportunity to do so.
7.2 Binding Effect of Agreement. This Agreement shall inure to the benefit of and shall be binding upon the Parties and their respective heirs, administrators, executors, representatives, attorneys, agents, predecessors in interest (if any), successors, affiliates, assigns, and beneficiaries.
7.3 Expenses and Fees. Each Party shall bear its own attorneys’ fees, costs, and expenses, and consultants, advisors, and experts’ fees, costs, and expenses, arising or relating to the Action and the negotiation, execution, and delivery of this Agreement.
7.4 Governing Law. The Parties agree that the validity, effect, and construction of this Agreement, as well as any rights, duties and obligations thereunder, and any disputes concerning any of the provisions of this Agreement or over the negotiation or execution thereof, shall be interpreted under, governed by and construed in accordance with the laws of the State of Nevada without regard to conflict of laws provisions.
7.5 Dispute Resolution. Any and all disputes between any of the Parties concerning any of the provisions of this Agreement or the rights, duties and obligations hereunder shall be exclusively resolved in an action or proceeding brought in the state or federal courts located in Clark County, Nevada. The prevailing party in any proceeding instituted to resolve any dispute between any of the Parties arising out of or relating to this Agreement shall be entitled, in addition to any award rendered, to all reasonable attorneys’ fees, costs, and expenses incurred in connection with any such proceeding.
7.6 Entire Agreement; Amendments. This Agreement, any exhibits hereto, any documents referenced herein, and any exhibits thereto, constitute the entire understanding and agreement of the Parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto and thereto. This Agreement may be amended, altered, modified or waived, in whole or in part, only in a writing executed by all the Parties to this Agreement. This Agreement may not be amended, altered, modified or waived, in whole or in part, orally.
7.7 Execution in Counterparts. This Agreement may be executed (including by facsimile, .pdf, or any electronic signature) in one or more counterparts, with the same effect as if the Parties had signed the same document. Each counterpart so executed will be deemed to be an original, and all such counterparts will be construed together and will constitute one Agreement. The Agreement shall become effective only upon its execution by all Parties hereto. Counterparts may be delivered via facsimile, electronic mail or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. The Parties agree where practicable to use DocuSign or Adobe Sign, electronic signature technologies, to expedite the execution of this Agreement. Electronic signatures shall be deemed originals.
7.8 Non-Waiver. The failure of any Party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
7.9 Titles. The titles of the Sections of this Agreement are inserted for convenience only and shall not affect the meaning or construction of any of the terms of this Agreement.
7.10 Acknowledgment. The Parties acknowledge that they have read this Agreement, that they fully know, understand, and appreciate its contents, and that they have executed the same and make the settlement and release provided for herein voluntarily and of their own free will.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound, have each executed this Agreement on the dates set forth below.
| INVO FERTILITY, INC. | ||
| By: | Steven Shum | |
| Title: | CEO | |
| naya therapeutics, INC. | ||
| By: | Daniel Teper | |
| Title: | CEO | |
| FIVE NARROW LANE LP | ||
| By: | Joseph Hammer | |
| Title: | General Partner | |
[Consent and Release Agreement]
| 6 |
Exhibit 10.8
Execution Version
AMENDMENT AND Exchange AGREEMENT
This Amendment and Agreement (this “Agreement”) is dated effective as of May 23, 2025, by and between INVO FERTILITY, INC. (the “Company”), and FIVE NARROW LANE LP (the “Holder”, and together with the Company, the “Parties”).
W I T N E S S E T H:
WHEREAS, on October 11, 2024, the Company issued to the Holder (i) a senior secured convertible promissory debenture due December 11, 2025, bearing interest at 7% per annum in the principal amount of $3,934,146 (the “Debenture”), (ii) shares of Series C-1 Convertible Preferred Stock (the “Series C-1 Preferred Stock”), pursuant to that certain Certificate of Designations for the Series C-1 Convertible Preferred Stock (the “Series C-1 Certificate of Designations”), and (iii) shares of Series C-2 Convertible Preferred Stock (the “Series C-2 Preferred Stock”), pursuant to that certain Certificate of Designations for the Series C-2 Convertible Preferred Stock (the “Series C-2 Certificate of Designations”), in each case, pursuant to the terms and conditions of (i) the Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company (formerly known as INVO Bioscience, Inc.), NAYA Therapeutics Inc. (formerly known as NAYA Biosciences, Inc.), a Delaware corporation (“Private NAYA”), and INVO Merger Sub, Inc. (“Merger Sub”), a Delaware corporation, pursuant to which Merger Sub merged with and into Private NAYA, with Private NAYA continuing as the surviving corporation and a wholly owned subsidiary of the Company (the “Merger”) and (ii) the Joinder Agreement of even date therewith, between the Company and the Holder, pursuant to that certain Securities Purchase Agreement, dated as of January 3, 2024, between the Holder and Private NAYA (the “Securities Purchase Agreement”);
WHEREAS, on October 11, 2024, the Company entered into an Assignment and Assumption Agreement (the “A&A Agreement”) to assume the rights and obligations of Private NAYA in connection with that certain Registration Rights Agreement, dated September 12, 2024, between the Holder and Private NAYA (the “Registration Rights Agreement”);
WHEREAS, pursuant to the terms of the Registration Rights Agreement, the Company is obligated to file a resale registration statement (the “Resale Registration Statement”) with respect to Registrable Securities (as defined in the Registration Rights Agreement) on or before the Filing Deadline (as defined in the Registration Rights Agreement) and cause such registration statement to be declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on or before the Effectiveness Deadline (as defined in the Registration Rights Agreement and amended by that certain Amendment and Agreement, dated as of January 6, 2025, between the Company and the Holder);
WHEREAS, the Company has not filed the Resale Registration Statement by the Filing Deadline and has not caused such Resale Registration Statement to be declared effective by the SEC by the Effectiveness Deadline which failures constitute a Filing Failure and Effectiveness Failure, respectively, under the Registration Rights Agreement and entitle the Holder to Registration Delay Payments pursuant to Section 2(e) of the Registration Rights Agreement;
WHEREAS, the Effectiveness Failure constitutes an Event of Default under Section 9(a)(x) of the Debenture (“Debenture Effectiveness Default”) and a Triggering Event under Section 5(a)(xiii) of the Series C-2 Certificate of Designations;
WHEREAS, pursuant to the terms of the Debenture, on the 14th day of each calendar month, commencing on March 11, 2025, and terminating upon the full redemption of the Debenture (each, a “Monthly Redemption Date”), the Company shall redeem the Monthly Redemption Amount (as defined in the Debenture);
WHEREAS, the Company has failed to redeem the Monthly Redemption Amounts due on March 11, 2025, April 14, 2025, and May 14, 2025 (the “Redemption Default”);
WHEREAS, pursuant to the terms of the Debenture, the Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of the Debenture at the rate of seven percent (7.00%) per annum, payable monthly on the first Business Day (as defined in the Debenture) of each calendar month, beginning on November 1, 2024, on each Monthly Redemption Date (as to that principal amount then being redeemed), on each Conversion Date (as defined in the Debenture) (as to that principal amount then being converted), and on the Maturity Date (as defined in the Debenture), in cash.
WHEREAS, the Company has failed to pay interest to the Holder in accordance with the Debenture (the “Interest Default”);
WHEREAS, on May 7, 2025, Dr. Elizabeth Pritts (“Dr. Pritts”) and the Elizabeth Pritts Revocable Living Trust (the “Pritts Trust”) filed a complaint (the “Pritts Complaint”) in the Circuit Court of the State of Wisconsin, Dane County, against the Company and its subsidiaries INVO Centers LLC, Wisconsin Fertility and Reproductive Surgery Associates, S.C. (“WFRSA”), and Wood Violet Fertility LLC (“Wood Violet”), asserting causes of action arising out of (i) the Membership Interest Purchase Agreement, dated March 16, 2023, between Dr. Pritts, Wood Violet, and Fertility Labs of Wisconsin, LLC (the “MIPA”), (ii) the Asset Purchase Agreement, dated Mach 16, 2023, between Dr. Pritts, Wood Violet, and WFRSA (the “APA”), (iii) the Consulting Agreement – Medical Advisory Services, dated August 10, 2023, between the Company and Dr. Pritts (“Consulting Agreement”), (iv) the Physician Employment Agreement, dated August 10, 2023, between Dr. Pritts and WFRSA (the “Employment Agreement”) and (v) the Physician Liaison Agreement, dated August 10, 2023, between Wood Violet and Dr. Pritts (the “PLA”) (collectively, the “WFI Documents”) for breach of contract, breach of the implied covenant of good faith and fair dealing, tortious interference with contract (or, in the alternative, veil piercing), and unjust enrichment;
WHEREAS, on May 14, 2025, the Company, Dr. Pritts, the Pritts Trust, and certain of their respective affiliates entered into binding term sheet (the “Term Sheet”) to settle all disputes between the parties pursuant to the terms set forth in the Term Sheet (the “Terms”);
WHEREAS, the Pritts Complaint and the Term Sheet may constitute an Event of Default under Sections 9(a)(ii),(iii), and (xviii) of the Debenture (“Pritts Default”) and a Triggering Event under Section 5(a)(vii) and 5(a)(xiii) of the Series C-2 Certificate of Designations;
WHEREAS, provisions of the Registration Rights Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and all of the Required Holders (as defined in Series C-2 Certificate of Designations);
WHEREAS, the Holder constitutes the Required Holders and the Holder and the Company desire to amend the Registration Rights Agreement as described below;
WHEREAS, pursuant to Section 10(e) of the Debenture, the Debenture may be amended or modified pursuant to an agreement in writing entered into by and between the Company and the Holder;
WHEREAS, the Securities Purchase Agreement may be amended by the Company and Purchasers which purchased at least 50.1% the Debentures based on the initial subscription amounts thereunder;
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WHEREAS, the Holder purchased 100.0% of the Debentures based on the initial subscription amount;
WHEREAS, the Holder and the Company desire to amend the Securities Purchase Agreement as described below;
WHEREAS, the Series C-2 Certificate of Designation or any provision thereof may be amended by obtaining the affirmative vote at a meeting duly called for such purpose, or written consent without a meeting in accordance with the Nevada Revised Statutes (the “NRS”), of the Required Holders, voting separately as a single class, and with such other stockholder approval, if any, as may then be required pursuant to the NRS and the Articles of Incorporation of the Company;
WHEREAS, the Holder constitutes the Required Holders and the Holder and the Company desire to amend the Series C-2 Certificate of Designations to, among other things, (i) increase the number of authorized shares of Series C-2 Preferred Stock and (ii) make certain other modifications thereto;
WHEREAS, in connection with the foregoing, the Company and the Holder agree to exchange the Debenture for an Amended and Restated Senior Secured Convertible Debenture Due February 11, 2026 (the “Amended and Restated Debenture”) in the form attached hereto as Exhibit A to (i) increase the outstanding principal amount of the Debenture to $4,803,175, (ii) reset the Monthly Redemption Dates, (iii) reset the Interest Payment Dates, and (iii) make other changes mutually agreed to between the parties;
WHEREAS, the Holder and the Company desire to exchange the Holder’s shares of Series C-1 Preferred Stock for shares of Series C-2 Preferred Stock, as described below.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Holder hereby agree as follows:
Article I
AMENDMENT AND EXCHANGE
Section 1.01. Recitals. The Parties agree that the Recitals set forth above are true and correct and are incorporated into this Agreement by this reference.
Section 1.02. Amended and Restated Debenture. Subject to the terms and conditions set forth herein, on the Effective Date, the Parties agree to exchange the Debenture for the Amended and Restated Debenture in the form attached hereto as Exhibit A.
Section 1.03. Exchange. Promptly following the date hereof, the Holder will deliver to the Company all outstanding shares of Series C-1 Preferred Stock owned by such Holder (the “Holder C-1 Preferred Stock”), in exchange for such number of shares of Series C-2 Preferred Stock with the aggregate Stated Value (as defined in the Series C-2 Certificate of Designations) equal to (i) the aggregate Stated Value (as defined in Series C-1 Certificate of Designations) of the Holder C-1 Preferred Stock, plus any accrued and unpaid dividends thereon, multiplied by (ii) 1.15 (such transaction, the “Exchange”).
Section 1.04. Closing of the Exchange. The Exchange shall take place promptly following execution and delivery of this Agreement by each Party hereto to each other Party (the “Effective Date”).
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Section 1.05. Consideration. In consideration of the foregoing, the Company hereby agrees to issue 1,029 shares of additional Series C-2 Preferred Stock (in addition to any shares of Series C-2 Preferred Stock issued pursuant to Section 1.03 hereof) to the Holder promptly following the date hereof.
Section 1.06. Company Representations. The Company represents, warrants and covenants to the Holder that the following statements are true and correct as of the date of this Agreement and the Effective Date:
(a) The Company has the entity power and authority to enter into and perform its obligations under this Agreement and the Exchange. The execution and delivery by the Company of this Agreement and the consummation by the Company of the Exchange have been duly authorized and approved by the Board of Directors of the Company and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement and the Exchange. When executed and delivered, this Agreement will be a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws and equity principles related to or limiting creditors’ rights generally and by general principals of equity.
(b) The execution and delivery of this Agreement, and the consummation of the transactions contemplated herein, will not constitute a violation or breach of any term or provision of, or result in the creation of any encumbrance, lien, charge or other restriction under any agreement to which the Company is a party or by which the Company is bound.
(c) (i) The Company has no knowledge of any facts or circumstances which lead the Company to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within 90 days after the date hereof, (ii) other than as described on Schedule I hereto, the Company is not currently engaged in any discussions with third parties regarding a sale of the business and assets of the Company or any subsidiary and the Company is not a party to any letter of intent, term sheet, purchase agreement or other binding or non-binding agreement or document relating to a sale of the assets and business (including by merger, share exchange or a sale of shares) of the Company or any subsidiary, and (ii) no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that a reasonable investor would consider important in making a decision to buy or sell securities of the Company which has not been disclosed to the Holder.
(d) Other than the Interest Default, the Redemption Default, the Filing Failure, the Effectiveness Failure, the Debenture Effectiveness Default, and the Pritts Default, there has not been any Event of Default under the Debenture.
(e) Upon issuance pursuant to the terms of the Series C-2 Certificate of Designations, the shares of Series C-2 Preferred Stock and the shares of common stock of the Company issuable upon conversion of such shares of Series C-2 Preferred Stock will, in each case, be duly authorized, validly issued, fully paid, and non-assessable, and not subject to any pre-emptive rights.
(f) The Company acknowledges and agrees that this Agreement shall constitute a Transaction Document pursuant to the Debenture and the Amended and Restated Debenture, including, in each case, without limitation, Section 9(a) thereof.
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Section 1.07. Holder’s Representations. The Holder represents and warrants to the Company that the following statements are true and correct as of the date of this Agreement and the Effective Date:
(a) The Holder hereby confirms and acknowledges that the shares of Series C-1 Preferred Stock are owned beneficially and of record by the Holder.
(b) The Holder owns the shares of Series C-1 Preferred Stock free and clear of any and all liens, claims, encumbrances, preemptive rights, right of first refusal and adverse interests of any kind. The shares of Series C-1 Preferred Stock are in book-entry form and are not certificated and the Holder is not in possession of any stock certificates evidencing the shares of Series C-1 Preferred Stock.
Section 1.08. The Holder has the requisite entity power and authority to enter into this Agreement and to consummate the transactions contemplated hereby and otherwise to carry out Holder’s obligations hereunder. The Holder has duly executed and delivered this Agreement, and this Agreement constitutes a legal, valid and binding agreement of the Holder, enforceable in accordance with its terms. Amendments to the Registration Rights Agreement.
(a) The parties hereby agree that Section 1(d) of the Registration Right Agreement shall be amended and restated in its entirety to read as follows:
“Effectiveness Deadline” means (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the earlier of (A) 45 days following the Stockholder Approval Date (as defined in the Debenture), and (B) the 2nd Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed or will not be subject to further review, and (ii) with respect to any additional Registration Statements which may be required hereunder, the earlier of the (A) 30th calendar day following the date on which an additional Registration Statement is required to be filed hereunder (or, in the event of a “full review” by the SEC, the 60th calendar day following the date such additional Registration Statement is required to be filed hereunder) and (B) 2nd Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed or will not be subject to further review, provided, further, if such Effectiveness Deadline falls on a day that is not a Trading Day, then the Effectiveness Deadline shall be the next succeeding Trading Day.
(b) The parties hereby agree that Section 1(e) of the Registration Right Agreement shall be amended and restated in its entirety to read as follows:
“Filing Deadline” means (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), 15 days following the Stockholder Approval Date (as defined in the Debenture) and (ii) with respect to any additional Registration Statements that may be required to be filed by the Company pursuant to this Agreement, the date on which the Company was required to file such additional Registration Statement pursuant to the terms of this Agreement; provided that, if such Filing Deadline falls on a day that is not a Trading Day, then the Filing Deadline shall be the next succeeding Trading Day.
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Section 1.09. Amendment to the Securities Purchase Agreement. The parties herby agree to amend the Securities Purchase Agreement to add new Section 4.16 as follows:.
“4.16 Additional Investment Right. For so long as that certain Amended and Restated Senior Secured Convertible Debenture of the Company due February 11, 2026 (as may be amended, restated, amended and restated, or otherwise modified or exchanged from time to time) or shares of Series C-2 Convertible Preferred Stock of the Company (as may be amended, restated, amended and restated, or otherwise modified or exchanged from time to time) are outstanding, the Purchaser shall have the right (the “Additional Investment Right”), exercisable at any time and from time to time, beginning on or after May 23, 2025, to purchase up to $10,000,000 of aggregate stated value of additional shares of Series C-2 Preferred Stock (the “AIR Preferred Shares”), provided that any Additional Investment Right may only be exercised in a minimum amount of $500,000 of AIR Preferred Shares. The AIR Preferred Shares shall have the same terms as the Series C-2 Preferred Stock then outstanding, provided that, upon the later of (i) Stockholder Approval Date and (ii) the issuance of AIR Preferred Shares, the conversion price in the AIR Preferred Shares and Series C-2 Preferred Stock shall be deemed to be the lowest of (i) the Conversion Price as in effect on the date that the Holder exercises such Additional Investment Right, and (ii) the greater of (x) the Floor Price (as defined in the Series C-2 Certificate of Designations) and (y) 85% of the arithmetic average of the three (3) lowest VWAPs during the ten (10) Trading Days prior to the date the Purchaser exercises its Additional Investment Right. For a Purchaser to exercise such Additional Investment Right, Purchaser shall deliver written notice to the Company (“AIR Exercise Notice”), stating its election to exercise the Additional Investment Right, and the specific dollar amount with respect to the AIR Preferred Shares to be purchased by such Purchaser (“Subsequent Amount”). Within two (2) business days of its receipt of the AIR Exercise Notice, the Company shall notify the Purchaser of the date on which such purchase and sale shall occur (each such closing, the “AIR Subsequent Closing”). The AIR Subsequent Closing shall occur no later than two (2) business days (each such date, the “AIR Subsequent Closing Date”) following receipt by the Company of the AIR Exercise Notice unless otherwise mutually agreed upon by the Purchaser and Company.
On or prior to the AIR Subsequent Closing Date:
(i) the Company shall deliver or cause to be delivered to each such exercising Purchaser:
(A) a legal opinion of Company Counsel, in a form reasonably acceptable to the Purchaser,
(B) a copy of the Irrevocable Transfer Agent Instructions to issue the AIR Preferred Shares, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent;
(C) A certificate, duly executed by the Chief Executive Officer or Chief Financial Officer of the Company, dated as of the Closing Date, certifying that each and every representation and warranty of the Company shall be true and correct as of the date when made and as of the AIR Subsequent Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the AIR Subsequent Closing Date;
(D) Wire transfer instructions of the Company;
(E) Such other documents, instruments or certificates relating to the transactions contemplated by this Agreement as such Purchaser or its counsel may reasonably request; and
(ii) each Purchaser shall deliver to the Company the subscription amount for the applicable Subsequent Amount by wire transfer to the account specified in writing by the Company..”
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Section 1.10. Amendment to the Series C-2 Certificate of Designations. The parties hereto hereby agree to amend the terms of the Series C-2 Preferred Stock set forth in the Amendment to Series C-2 Certificate of Designations substantially in the form attached hereto as Exhibit B (the “Series C-2 Amendment”). The Company shall promptly file the Series C-2 Amendment with the Secretary of State of the State of Nevada and provide a copy thereof to each Investor promptly after such filing.
Section 1.11. Further Assurances. The Parties agree to sign and deliver such other agreements and instruments, and to do such other acts, as may be reasonably required to carry out the intent and purposes of this Agreement.
Article
II
GENERAL PROVISIONS
Section 2.01. Binding Agreement. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, representatives, successors and assigns.
Section 2.02. Severability. The Company and Holder intend and believe that each provision in this Agreement comports with all applicable local, state or federal laws and judicial decisions. However, if any provision or provisions, or if any portion of any provision or provisions, in this Agreement is found by a court of law to be in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial decision or public policy, and if such court should declare such portion, provision or provisions of this Agreement to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of the Company and Holder that such portion, provision or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder of this Agreement shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained herein and that the rights, obligations and interests of the Company and Holder under the remainder of this Agreement shall continue in full force and effect.
Section 2.03. Counterparts. For the convenience of the parties, this Agreement may be executed in multiple counterparts, each of which for all purposes shall be deemed to be an original, and all such counterparts shall together constitute but one and the same agreement. Delivery of an executed counterpart of a signature page of this Agreement by telecopy, e-mail, facsimile or other electronic means shall be effective as a delivery of a manually executed counterpart of this Agreement.
Section 2.04. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE UNITED STATES FEDERAL LAW.
[Signature page follows.]
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IN WITNESS WHEREOF, this Agreement is executed effective as of the date first written above.
| COMPANY: | ||
| INVO FERTILITY, INC., | ||
| a Nevada corporation | ||
| By: | ||
| Steven Shum | ||
| Chief Executive Officer | ||
| HOLDER: | |
| FIVE NARROW LANE LP | |
| a Delaware York limited partnership |
| By: | ||
| Joseph Hammer | ||
| General Partner |
[Signature page to Amendment and Exchange Agreement]
EXHIBIT A
[FORM OF AMENDED AND RESTATED DEBENTURE]
EXHIBIT B
[FORM OF SERIES C-2 AMENDMENT]
Schedule I
The Company intends to amend the certificate of designation of its Series C-1 Convertible Preferred Stock (the “C-1 Preferred”) to provide that the Company may redeem the outstanding shares C-1 Preferred Stock at a redemption price of 113.855837742504 shares of Class A Common Stock of Naya Therapeutics, Inc., a Delaware corporation and wholly-owned subsidiary of the Corporation (“NTI”), for each share of C-1 Preferred being redeemed. Upon effectiveness of this amendment, the Company intends to redeem all outstanding shares of C-1 Preferred (the “Redemption”).
In connection therewith, the Company intends to enter into a Consent and Release Agreement by and among the Holder, NTI, and the Company substantially in the form attached hereto as Exhibit I-A.
EXHIBIT I-A
CONSENT AND RELEASE AGREEMENT