8-K
Venus Concept Inc. (VERO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 30, 2025
VENUS CONCEPT INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-38238 | 06-1681204 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
235 Yorkland Blvd, Suite 900
Toronto, Ontario M2J 4Y8
(Address of principal executive offices, including Zip Code)
Registrant’s telephone number, including area code: (877) 848-8430
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br> <br>Symbol(s) | Name of each exchange<br><br> <br>on which registered |
|---|---|---|
| Common Stock, $0.0001 par value per share | VERO | The Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01. | Entry into a Material Definitive Agreement. |
|---|
Exchange Agreement
On September 30, 2025, Venus Concept Inc. (the “Company”) entered into an Exchange Agreement (the “Exchange Agreement”) with Madryn Health Partners, LP (“Madryn”) and Madryn Health Partners (Cayman Master), LP (“Madryn Cayman,” and
together with Madryn, the “Holders”\), pursuant to which the Holders agreed to exchange \(the “Exchange”\):
| (i) | that certain Secured Subordinated Convertible Note issued by the Company in favor of Madryn, dated June 30, 2025, in the original principal amount of $4,105,696.60 (the “Existing<br><br><br><br> Madryn Note”), for 201,774 shares of the Company’s convertible preferred stock, par value $0.0001 per share, designated as “Series Y Convertible Preferred Stock” (the “Series Y Preferred Stock”),<br><br><br><br> to be issued by the Company to Madryn (the “Madryn Shares”); and |
|---|---|
| (ii) | that certain Secured Subordinated Convertible Note issued by the Company in favor of Madryn Cayman, dated June 30, 2025 (the “Existing Madryn Cayman Note,” and together<br> with the Existing Madryn Note, the “Existing Notes”), in the original principal amount of $6,990,782.23, for 343,561 shares of Series Y Preferred Stock to be issued by the Company to Madryn Cayman<br> (the “Madryn Cayman Shares,” and together with the Madryn Shares, the “Preferred Shares”). |
| --- | --- |
The Exchange closed on September 30, 2025.
The Preferred Shares were priced at $21.05 per share, being equal to the product of (i) the average closing price (as reflected on Nasdaq.com) of the Company’s common stock, par value $0.0001 per share (“Common Stock”), for the five trading days immediately preceding the date of the Exchange Agreement, multiplied
by \(ii\) 9.0909 \(being the number of shares of Common Stock into which each Preferred Share converts\). At the next annual or special meeting of shareholders of the Company, or such later date as agreed by the parties, the Company is
required to include in the proxy materials for such meeting a proposal for the purpose of eliminating any limitations on the convertibility of the Series Y Preferred Stock under the rules and regulations of the Nasdaq Stock Market LLC.
The Exchange Agreement contains customary representations, warranties and agreements by the Company, indemnification obligations of the Company,
including for liabilities under the Securities Act of 1933, as amended \(the “Securities Act”\), and other obligations of the parties. The representations, warranties, and covenants contained in the Exchange
Agreement were made only for purposes of such agreement and are made as of specific dates; are solely for the benefit of the parties \(except as specifically set forth therein\); may be subject to qualifications and limitations agreed upon by the
parties in connection with negotiating the terms of the Exchange Agreement, including being qualified by confidential disclosures made for the purpose of allocating contractual risk between the parties, instead of establishing matters as facts; and
may be subject to standards of materiality and knowledge applicable to the contracting parties that differ from those applicable to the investors generally. Investors should not rely on the representations, warranties, and covenants or any
description thereof as characterizations of the actual state of facts or condition of the Company.
The Preferred Shares, as well as the shares of Common Stock issuable upon conversion thereof, have not been registered under the Securities Act and may
not be offered or sold in the United States absent registration or an exemption therefrom. To consummate the Exchange, the Company relied the registration exemption provided by Section 3\(a\)\(9\) of the Securities Act. To effectuate conversions of the
shares of Series Y Preferred Stock, the Company will rely on the private placement provided by Section 4\(a\)\(2\) of the Securities Act and by Rule 506 of Regulation D, promulgated by the U.S. Securities and Exchange Commission \(the “SEC”\).
The foregoing description of the Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Exchange Agreement, a copy of which is filed hereto as Exhibit 10.1.
Fourth Amended and Restated Registration Rights Agreement
On September 30, 2025, as required by the Exchange Agreement, the Company and the Holders entered into a fourth amendment and restatement of the
Amended and Restated Resale Registration Rights Agreement, as previously entered into among the parties on September 26, 2024 \(the “Fourth Amended and Restated Registration
Rights Agreement”\). Under the Fourth Amended and Restated Registration Rights Agreement, the Company is required, among other things, to file a shelf resale registration statement with respect to the shares of Common Stock issuable upon
conversion of the shares of Series Y Preferred Stock with the SEC within 60 days following the conversion of all of the issued and outstanding Series Y Preferred Stock into Common Stock. The Company also granted customary demand and piggyback
registration right to the Holders. The Fourth Amended and Restated Registration Rights Agreement contains other terms and conditions customary for a transaction of this type.
The foregoing description of the Fourth Amended and Restated Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Fourth Amended and Restated Registration Rights Agreement, a copy of which is filed hereto as Exhibit 10.2.
MSLP Consent Agreement
On September 30, 2025, the Company, Venus Concept USA, Inc., a wholly owned subsidiary of the Company (“Venus USA”), Venus
Concept Canada Corp., a wholly owned Canadian subsidiary of the Company \(“Venus Canada”\), and Venus Concept Ltd., a wholly owned Israeli subsidiary of the Company \(“Venus
Israel” and together with the Company, Venus USA and Venus Canada, the “Loan Parties”\), entered into a Consent Agreement with the Holders \(the “MSLP Consent Agreement”\).
The MSLP Consent Agreement granted relief under the Loan and Security Agreement (Main Street Priority Loan), dated December 8, 2020, among the Holders, as lenders, and
Venus USA, as borrower \(the “MSLP Loan Agreement”\), such that \(i\) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through October 31, 2025, and \(ii\) Venus USA is permitted to
apply the October 8, 2025 cash interest payment due under each Note \(as defined in the MSLP Consent Agreement\) to the respective outstanding principal balance of each Note.
The foregoing description of the MSLP Consent Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the MSLP Consent Agreement, a copy of which is filed hereto as Exhibit 10.3.
Twentieth Bridge Loan Amendment
On September 30, 2025, the Loan Parties entered into a Twentieth Bridge Loan Amendment Agreement with the Holders (the “Twentieth Bridge Loan Amendment”). The Twentieth Bridge Loan Amendment amended that certain Loan and Security Agreement, dated as of April 23, 2024, among Venus USA, as
borrower; the Company, Venus Canada and Venus Israel, as guarantors; and the Holders, as lenders \(as amended from time to time, the “Bridge Loan”\), to extend the maturity date of the Bridge Loan from
September 30, 2025 to October 31, 2025 and increase the delayed draw commitment from $21,000,000 to $26,000,000.
The foregoing description of the Twentieth Bridge Loan Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Twentieth Bridge Loan Amendment, a copy of which is filed hereto as Exhibit 10.4.
| Item 3.02. | Unregistered Sales of Equity Securities. |
|---|
The information contained in Item 1.01 of this Current Report on Form 8-K pertaining to the issuance of the Preferred Shares is incorporated by reference into this Item 3.02.
| Item 5.03. | Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
|---|
Amendment to Certificate of Designations of Series Y Preferred Stock
On September 30, 2025, as required by the Exchange Agreement, the Company filed a Certificate of Amendment with the Secretary of State of the State of
Delaware \(the “Series Y Amendment”\), thereby amending the Certificate of Designations with respect to the Series Y Preferred Stock, as previously filed with the Secretary of State of the State of Delaware on
May 24, 2024 and as previously amended on September 26, 2024, March 31, 2025, June 30, 2025 and August 6, 2025 \(the “Series Y COD”\). The Series Y Amendment amended the Series Y COD to, among other things,
increase the authorized shares of Series Y Preferred Stock from 1,500,000 to 2,100,000. The Series Y Amendment became effective with the Secretary of State of the State of Delaware upon filing.
| Item 7.01. | Regulation FD Disclosure. |
|---|
On October 2, 2025, the Company issued a press release regarding the Exchange and related transactions. A copy of the press release is furnished hereto as Exhibit 99.1 and is incorporated herein by reference.
The information contained in this Item 7.01, including Exhibit 99.1 incorporated by reference herein, shall not be deemed “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended \(the “Exchange Act”\), or otherwise subject to the liabilities of that Section, nor incorporated by reference in any filing under the Securities or
the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K contains “forward-looking” statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Any statements contained herein that are not of historical facts may be deemed to be forward-looking statements. In some cases, readers can identify these statements by words such as such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current expectations, estimates, forecasts, and projections about the Company’s business and the industry in which the Company operates and management's beliefs and assumptions and are not guarantees of future performance or developments and involve known and unknown risks, uncertainties, and other factors that are in some cases beyond the Company’s control. As a result, any or all of the Company’s forward-looking statements in this Current Report on Form 8-K may turn out to be inaccurate. Factors that could materially affect the Company’s business operations and financial performance and condition include, but are not limited to, general economic conditions and involve risks and uncertainties that may cause results to differ materially from those set forth in the statements and those risks and uncertainties described under Part I Item 1A—“Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and under Part II Item 1A—“Risk Factors” in the Company’s subsequently-filed Quarterly Reports on Form 10-Q. Readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. The forward-looking statements are based on information available to the Company as of the date of this Current Report on Form 8-K. Unless required by law, the Company does not intend to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise.
| Item 9.01. | Financial Statements and Exhibits. |
|---|---|
| Exhibit<br><br> <br>No. | Description |
| --- | --- |
| 3.1 | Certificate of Amendment of Series Y Convertible Preferred Stock, dated September 30, 2025 |
| 10.1 | Exchange Agreement, dated September 30, 2025, by and among Venus Concept Inc., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP |
| 10.2 | Fourth Amended and Restated Registration Rights Agreement, dated September 30, 2025, by and among Venus Concept Inc., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master),<br> LP |
| 10.3 | Consent Agreement, dated September 30, 2025, by and among Venus Concept Inc., Venus Concept Canada Corp., Venus Concept USA Inc., Venus Concept Ltd., Madryn Health Partners, LP and Madryn<br> Health Partners (Cayman Master), LP |
| 10.4 | Twentieth Bridge Loan Amendment Agreement dated September 30, 2025, by and among Venus Concept Inc., Madryn Health Partners, LP and Madryn Health<br> Partners (Cayman Master), LP |
| 99.1 | Press release, dated October 2, 2025 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VENUS CONCEPT INC. | ||
|---|---|---|
| Date: October 2, 2025 | By: | /s/ Domenic Della Penna |
| Domenic Della Penna | ||
| Chief Financial Officer |
Exhibit 3.1
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF DESIGNATIONS OF
SERIES Y CONVERTIBLE PREFERRED STOCK OF
VENUS CONCEPT INC.
Venus Concept Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
FIRST: The Corporation’s Certificate of Designations of Series Y Convertible Preferred Stock (the “Certificate of Designations”) was (i) filed with the Secretary of State of the State of Delaware on May 24, 2024, (ii) amended by that certain Certificate of Amendment to Certificate of Designations of Series Y Convertible Preferred Stock filed with the Secretary of State of the State of Delaware on September 26, 2024, (iii) further amended by that certain Certificate of Amendment to Certificate of Designations of Series Y Convertible Preferred Stock filed with the Secretary of State of the State of Delaware on March 31, 2025, (iv) further amended by that certain Certificate of Amendment to Certificate of Designations of Series Y Convertible Preferred Stock filed with the Secretary of State of the State of Delaware on June 30, 2025 and (v) further amended by that certain Certificate of Amendment to Certificate of Designations of Series Y Convertible Preferred Stock filed with the Secretary of State of the State of Delaware on August 6, 2025.
SECOND: The Board of Directors of the Corporation, acting in accordance with the provisions of Sections 141(f) of the DGCL and the Corporation’s bylaws, as currently in effect, adopted resolutions to amend the Certificate of Designations as follows (collectively, the “Amendment”):
The following definitions as set forth in Article I of the Certificate of Designations are amended and restated as follows:
“Exchange Agreement” means, with respect to any share of Series Y Preferred, (a) that certain Exchange Agreement, dated as of May 24, 2024, by and between the Corporation and the parties identified on the signature pages thereto, (b) that certain Exchange Agreement, dated as of September 26, 2024, by and between the Corporation and the parties identified on the signature pages thereto, (c) that certain Exchange Agreement, dated as of March 31, 2025, by and between the Corporation and the parties identified on the signature pages thereto, (d) that certain Exchange Agreement, dated as of June 30, 2025, by and between the Corporation and the parties identified on the signature pages thereto and (e) that certain Exchange Agreement, dated as of September 30, 2025, by and between the Corporation and the parties identified on the signature pages thereto, as applicable.
“Issuance Price” means, with respect to any share of Series Y Preferred, the purchase price for such share as set forth in the applicable Exchange Agreement, being $60.66, $73.68, $29.00, $19.96 or $21.05, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock.
Article II, Section 1 of the Certificate of Designations is amended and restated in its entirety as follows:
Designation and Number of Shares. There shall be a series of preferred stock designated “Series Y Convertible Preferred Stock.” The number of authorized shares of Series Y Preferred shall be 2,100,000. The Series Y Preferred will initially be issued in book entry form.
THIRD: The Amendment was duly adopted in accordance with the applicable provisions of Section 242 of the DGCL.
FOURTH: This Certificate of Amendment shall become effective immediately upon filing.
FIFTH: Except as amended pursuant to this Certificate of Amendment, the Certificate of Designations shall remain in full force and effect.
IN WITNESS WHEREOF, Venus Concept Inc. has caused this Certificate of Amendment to be executed by its duly authorized officer on and as of this 30th day of September, 2025.
| VENUS CONCEPT INC. | |
|---|---|
| By: | /s/ Domenic Della Penna |
| Name: | Domenic Della Penna |
| --- | --- |
| Title: | Chief Financial Officer |
Exhibit 10.1
Execution Version
EXCHANGE AGREEMENT
This EXCHANGE AGREEMENT (this “Agreement”), dated as of September 30, 2025, is entered into by and among Venus Concept Inc. (the “Company”), Madryn Health Partners, LP (“Madryn”) and Madryn Health Partners (Cayman Master), LP (“Madryn Cayman,”
and together with Madryn, the “Holders”\). The Company and the Holders are referred to collectively as the “Parties.”
WHEREAS, the Company previously issued to the Holders:
| • | that certain Secured Subordinated Convertible Note in favor of Madryn, dated June 30, 2025, in the original principal amount of $4,105,696.60 (the “Madryn Note”); and |
|---|---|
| • | that certain Secured Subordinated Convertible Note in favor of Madryn Cayman, dated June 30, 2025, in the original principal amount of $6,990,782.23 (the “Madryn Cayman Note,” and together with the<br> Madryn Note, the “Notes”); |
| --- | --- |
WHEREAS, the Company has authorized a series of convertible preferred stock, par value $0.0001 per share, designated as “Series Y Convertible Preferred Stock” (the “Series Y Preferred”), the terms of which are set forth in a Certificate of Designations filed with the Secretary of State of the State of Delaware on May 24, 2024, as amended by (a) that certain Certificate of Amendment to Certificate of Designations filed with the Secretary of State of the State of Delaware on September 26, 2024, (b) that certain Certificate of Amendment to Certificate of Designations filed with the Secretary of State of the State of Delaware on March 31, 2025, (c) that certain Certificate of Amendment to Certificate of Designations filed with the Secretary of State of the State of Delaware on June 30, 2025, (d) that certain Certificate of Amendment to Certificate of Designations filed with the Secretary of State of the State of Delaware on August 6, 2025 and (e) that certain Certificate of Amendment to Certificate of Designations filed with the Secretary of State of the State of Delaware on or prior to the date hereof, in the form of Exhibit A attached hereto (such Certificate of Amendment, the “COD Amendment,” and such Certificate of Designations as amended through the COD Amendment, the “Certificate of Designations”);
WHEREAS, subject to the terms and conditions set forth in this Agreement, the Parties wish to exchange (collectively, the “Exchange”):
| • | the Madryn Note for 201,774 shares of Series Y Preferred to be issued by the Company to Madryn (the “Madryn Shares”); and |
|---|---|
| • | the Madryn Cayman Note for 343,561 shares of Series Y Preferred to be issued by the Company to Madryn Cayman (the “Madryn Cayman Shares,” and together with the Madryn Shares, the “Shares”); and |
| --- | --- |
WHEREAS, the Exchange is being made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”);
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I.
DEFINITIONS
1.1. Definitions. In addition to the terms defined elsewhere in this Agreement, (a) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Certificate of Designations (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1:
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“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Agreement” shall have the meaning given to such term in the Preamble.
“Anti-Terrorism Laws” means any laws, rules, regulations or orders relating to terrorism, sanctions or money laundering, including without limitation Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.
“Board of Directors” means the board of directors of the Company.
“Bridge Loan Agreement” means that certain Loan and Security Agreement, dated as of April 23, 2024 (as amended, restated, supplemented, waived or otherwise modified from time to time), by and between the Company, Venus Concept USA Inc., a Delaware corporation, Venus Concept Canada Corp., a corporation incorporated under the laws of the Province of Ontario, Venus Concept Ltd., a company formed under the Companies Law of Israel, the Holders, and Madryn Health Partners, LP, a Delaware limited partnership, as Administrative Agent.
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Canadian AML Acts” means applicable Canadian law regarding anti-money laundering, anti-terrorist financing, government sanction and “know your client” matters, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada).
“Capped Shares” means, as of any date, the shares of Common Stock, if any, which cannot be issued upon conversion of the Holder Preferred Shares as of such date due to the Exchange Cap.
“Certificate of Designations” shall have the meaning given to such term in the Recitals.
“Closing” shall have the meaning given to such term in Section 2.1(a).
“Closing Date” shall have the meaning given to such term in Section 2.1(b).
“COD Amendment” shall have the meaning given to such term in the Recitals.
“Code” shall have the meaning given to such term in Section 2.3(b)(v).
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company” shall have the meaning given to such term in the Preamble.
“Company Counsel” means Dorsey & Whitney LLP, with offices located at TD Bank Tower, 66 Wellington Street West, Suite 3400 Toronto, ON M5K 1E6, or such other outside legal counsel reasonably acceptable to the Holders.
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“Company Legal Opinion” means a legal opinion of Company Counsel, dated as of the Closing Date, in a form acceptable to the Holders.
“Covered Person” shall have the meaning given to such term in Section 3.1(v).
“Designated Jurisdiction” means any country or territory to the extent that such country or territory is the subject of any Sanction.
“Disqualification Event” shall have the meaning given to such term in Section 3.1(v).
“Effective Date” means, with respect to any Underlying Shares, the earliest of the date that (a) the initial Registration Statement covering such Underlying Shares has been declared effective by the Commission, (b) all of such Underlying Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions, (c) falls on the one year anniversary of the Closing Date, provided that a holder of Underlying Shares is not an Affiliate of the Company, or (d) all of such Underlying Shares may be sold pursuant to an exemption from registration under Section 4(1) of the Securities Act without volume or manner-of-sale restrictions and Company Counsel has delivered to such holders a standing written unqualified opinion that resales may then be made by such holders of such Underlying Shares pursuant to such exemption, which opinion shall be in form and substance reasonably acceptable to such holders.
“Exchange” shall have the meaning given to such term in the Recitals.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange Act Reports” shall have the meaning given to such term in Section 3.1(p).
“Exchange Cap” means any limitation on the convertibility of the Holder Preferred Shares pursuant to the rules and regulations of the Nasdaq Capital Market, as set forth in the Certificate of Designations.
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
“FDA” means the Food and Drug Administration.
“Financial Statements” shall have the meaning given to such term in Section 3.1(g).
“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession in the United States, which are applicable to the circumstances as of the date of determination.
“Governmental Approval” means any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body (including, without limitation, the FDA), court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.
“HMT” has the meaning set forth in the definition of “Sanctions.”
“Holder Party” shall have the meaning given to such term in Section 4.8.
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“Holder Preferred Shares” means the Holder Series X Shares and the Holder Series Y Shares.
“Holder Series X Shares” means the shares of the Company’s Series X Convertible Preferred Stock, par value $0.0001 per share, held by the Holders.
“Holder Series Y Shares” means the shares of Series Y Preferred held by the Holders (which includes, for the avoidance of doubt, (a) the Shares, (b) the 379,311 shares of Series Y Preferred issued to the Holders on March 31, 2025, (c) the 203,583 shares of Series Y Preferred issued to the Holders on September 26, 2024, (d) the 576,986 shares of Series Y Preferred issued to the Holders on May 24, 2024 and (e) the 325,651 shares of Series Y Preferred issued to the Holders on June 30, 2025).
“Holders” shall have the meaning given to such term in the Preamble.
“Intellectual Property” means any and all U.S. or foreign patents, patent applications, copyrights and copyright registrations and applications, inventions, invention disclosures, protected formulae, formulations or processes, trade secrets and other similar intellectual property rights.
“Israeli Penal Law” means the Israeli Penal Law, 5737-1977.
“Israeli PMLL” means the Israeli Prohibition on Money-Laundering Law, 5760-2000.
“Israeli Trading with the Enemy Ordinance” means the Israeli Trading with the Enemy Ordinance, 1939.
“Intended Tax Treatment” shall have the meaning given to such term in Section 4.15(a).
“Knowledge” means, in reference to the Company or its Subsidiaries, the actual knowledge, or the actual knowledge that would be obtained following reasonable investigation, of any of Rajiv De Silva, Domenic Della Penna, William McGrail, and Michael Mandarello.
“Liens” means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other similar restriction.
“Madryn” shall have the meaning given to such term in the Preamble.
“Madryn Cayman” shall have the meaning given to such term in the Preamble.
“Madryn Cayman Note” shall have the meaning given to such term in the Recitals.
“Madryn Cayman Shares” shall have the meaning given to such term in the Recitals.
“Madryn Note” shall have the meaning given to such term in the Recitals.
“Madryn Shares” shall have the meaning given to such term in the Recitals.
“Material Adverse Effect” means a material adverse change in (a) the business, operations or condition (financial or otherwise) of the Company and its Subsidiaries, when taken as a whole, (b) the validity or enforceability of this Agreement or any of the other Transaction Documents, (c) the rights or remedies of the Holders hereunder or thereunder or any other agreements or instruments to be entered into in connection herewith or therewith, or (d) the ability of the Company or its Subsidiaries to perform their obligations under any Transaction Document.
“Material Agreement” means any license, agreement or other contractual arrangement required to be disclosed (including amendments thereto) under regulations promulgated under the Securities Act or the Exchange Act, as may be amended; provided, however, that “Material Agreements” shall exclude all real estate leases and all employee or director compensation agreements, arrangements or plans, or any amendments thereto.
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“Notes” shall have the meaning given to such term in the Recitals.
“Notice of Conversion” shall have the meaning given to such term in Section 4.11.
“OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control.
“Open Source Licenses” shall have the meaning given to such term in Section 3.1(i).
“Parties” shall have the meaning given to such term in the Preamble.
“Permitted Liens” means any Lien in favor of (a) Madryn, Madryn Cayman or any of their respective Affiliates or (b) EW Healthcare Partners, L.P., EW Healthcare Partners-A, L.P. or any of their respective Affiliates, in the case of clause (b) to the extent in existence as of the date hereof.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Preferred Securities” means the Shares and the Underlying Shares.
“Preferred Shareholder Consents” means the requisite consents and waivers with respect the transactions contemplated by this Agreement by holders of the Company’s Senior Convertible Preferred Stock, par value $0.0001 per share, and Voting Convertible Preferred Stock, par value $0.0001 per share.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Registration Rights Agreement” means the Fourth Amended and Restated Registration Rights Agreement, dated as of the Closing Date, among the Company and the Holders, in the form of Exhibit B attached hereto.
“Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Holders of the Underlying Shares.
“Required Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock issuable upon conversion in full of all Holder Preferred Shares outstanding as of such date, ignoring any conversion limits set forth therein.
“Requirement of Law” means as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Sanction(s)” means any sanction administered or enforced by the United States government (including, without limitation, OFAC), the Canadian government, the United Nations Security Council, the European Union, Her Majesty’s Treasury (“HMT”), the State of Israel or its government or other relevant sanctions authority.
“Securities” means the Shares and the Underlying Shares.
“Securities Act” shall have the meaning given to such term in the Recitals.
“Series Y Preferred” shall have the meaning given to such term in the Recitals.
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“Shareholder Approval” shall have the meaning given to such term in Section 4.14.
“Shareholder Meeting” shall have the meaning given to such term in Section 4.14.
“Shareholder Resolutions” shall have the meaning given to such term in Section 4.14.
“Shares” shall have the meaning given to such term in the Recitals.
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location or reservation of borrowable shares of Common Stock).
“Subsidiary” means any wholly owned subsidiary of the Company.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges, in each case in the nature of taxes, imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“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, or the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction Documents” means this Agreement, the COD Amendment and the Registration Rights Agreement.
“Transfer Agent” means Computershare Inc., the current transfer agent of the Company, with a mailing address of 250 Royall Street, Canton, Massachusetts 02021, and any successor transfer agent of the Company.
“Treasury Regulations” means the regulations promulgated under the Code by the Internal Revenue Service and United States Department of Treasury.
“Underlying Shares” means the shares of Common Stock issuable upon conversion of the Shares.
ARTICLE II.
PURCHASE AND SALE
2.1. Closing.
(a) Upon the terms and subject to the conditions set forth herein, and pursuant to Section 3(a)(9) of the Securities Act, the Parties shall consummate the Exchange (the “Closing”), pursuant to which:
(i) Madryn shall convey, assign and transfer to the Company the Madryn Note, in exchange for which the Company shall issue to Madryn the Madryn Shares; and
(ii) Madryn Cayman shall convey, assign and transfer to the Company the Madryn Cayman Note, in exchange for which the Company shall issue to Madryn Cayman the Madryn Cayman Shares.
(b) The Closing shall occur remotely on the date hereof (the “Closing Date”) immediately following satisfaction of the conditions set forth in Section 2.4. Upon the delivery of the Shares to the Holders, the Holders shall relinquish all rights, title and interest in the Notes, including any claims the Holders may have against the Company related thereto, and the Notes shall be deemed cancelled.
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2.2. Calculation of Consideration. For greater clarity, the Parties have calculated (a) the price per share of the Shares to be equal to the product of (i) the average closing price of the Common Stock (as reflected on Nasdaq.com) for the five Trading Days immediately preceding the date hereof, multiplied by (ii) 9.0909 (the “Per Share Price”),
and \(b\) the aggregate number of Shares to be equal to the quotient of \(i\) the aggregate balance of the Notes as of the date hereof, divided by \(ii\) the Per Share Price.
2.3. Closing Deliveries.
(a) Company Deliveries. On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Holder the following:
(i) this Agreement, duly executed by the Company;
(ii) for each Holder, evidence of a book entry transfer evidencing such Holder’s Shares, registered in the name of such Holder;
(iii) evidence of the filing of the COD Amendment with the Secretary of State of the State of Delaware;
(iv) the Registration Rights Agreement, duly executed by the Company;
(v) the Company Legal Opinion, duly executed by Company Counsel; and
(vi) an amendment to the Bridge Loan Agreement, in a form acceptable to the Holders, duly executed by the Company, Venus Concept USA Inc., Venus Concept Canada Corp. and Venus Concept Ltd. (including any documentation required thereunder to be delivered on or prior to the Closing Date, the “Bridge Loan Agreement Amendment”).
(b) Holder Deliveries. On or prior to the Closing Date, each Holder shall deliver or cause to be delivered to the Company the following:
(i) this Agreement, duly executed by such Holder;
(ii) if issued in physical form, such Holder’s Note, to be marked cancelled by the Company, or an affidavit of lost note with respect to such Note, as applicable, in a form acceptable to the Company;
(iii) the Registration Rights Agreement, duly executed by such Holder;
(iv) an “accredited investor” questionnaire, in a form acceptable to the Company in its reasonable discretion, duly executed by such Holder (or written confirmation that the questionnaire provided as of May 24, 2024 remains accurate);
(v) if such Holder is a “United States person” within the meaning of Section 7701(a)(30) of the United States Internal Revenue Code of 1986, as amended (the “Code”), a properly completed and executed IRS Form W-9 (or written confirmation that the IRS Form W-9 provided as of May 24, 2024 remains accurate);
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(vi) if such Holder is not a “United States person” within the meaning of Section 7701(a)(30) of the Code, all of the following that are applicable: (A) a properly completed and executed IRS Form W-8BEN, IRS Form W-8BEN-E or other applicable IRS Form claiming, to the extent applicable, a reduction or exemption from withholding of Taxes under an income Tax treaty to which the United States is a party; (B) a properly completed and executed IRS Form W-8ECI; (C) a certificate in form and substance satisfactory to the Company claiming entitlement to the portfolio interest exemption under Section 881(c) of the Code and certifying that such Holder is not a conduit entity participating in a conduit financing arrangement as defined in Treasury Regulations section 1.881-3, a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Company within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Sections 881(c)(3)(C) and 864(d)(4) of the Code, and (D) if the Holder is not the beneficial owner of amounts paid to it, a properly completed and executed IRS Form W-8IMY accompanied by a withholding statement and an IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, IRS Form W-9 or a certificate described in clause (C) above from each beneficial owner of such amounts claiming entitlement to exemption from withholding or backup withholding of Taxes (or written confirmation that the foregoing items provided as of May 24, 2024 remain accurate); and
(vii) the Bridge Loan Amendment Agreement, duly executed by such Holders.
2.4. Closing Conditions.
(a) Company Closing Conditions. The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) of the representations and warranties of each Holder contained herein as of the Closing Date (unless a different date is specified herein, in which case such representations and warranties shall be accurate as of such specified date);
(ii) the performance of all obligations, covenants and agreements of each Holder required to be performed as of or prior to the Closing Date; and
(iii) the delivery by each Holder of the items required to be delivered by such Holder as set forth in Section 2.3(b) of this Agreement.
(b) Holder Closing Conditions. The respective obligations of the Holders hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) of the representations and warranties of the Company and its Subsidiaries, as applicable, contained herein as of the Closing Date (unless a different date is specified herein, in which case such representations and warranties shall be accurate as of such specified date);
(ii) the performance of all obligations, covenants and agreements of the Company and its Subsidiaries required to be performed as of or prior to the Closing Date;
(iii) the delivery by the Company of the items required to be delivered by the Company as set forth in Section 2.3(a) of this Agreement; and
(iv) the receipt by the Company of any and all consents, waivers or authorizations of any Governmental Authority or other Person necessary for the issuance of the Shares, including the Preferred Shareholder Consents.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Company. The Company, including on behalf of its Subsidiaries, as applicable, hereby represents and warrants to the Holders as of the Closing Date (unless a different date is specified herein, in which case such representations and warranties shall be made as of such specified date) as follows:
(a) Due Organization, Authorization, Power and Authority.
(i) The Company and each of its Subsidiaries is duly existing and in good standing in its jurisdictions of organization or formation and the Company and each of its Subsidiaries is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its businesses or its ownership of property requires that it be so qualified except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
(ii) The execution, delivery and performance by the Company and its Subsidiaries, as applicable, of the Transaction Documents to which it is a party do not and will not (A) conflict with the Company’s or any of its Subsidiaries’ organizational documents, including their respective certificate of incorporation and bylaws, (B) contravene, conflict with, constitute a default under or violate any material Requirement of Law applicable thereto, (C) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which the Company, or any of its property or assets may be bound or affected, (D) require any action by, filing, registration, notice to or qualification with, or Governmental Approval from, any Governmental Authority or any other Person (except for such Governmental Approvals which have already been obtained and are in full force and effect), or (E) constitute an event of default or material breach under any Material Agreement by which the Company, any of its Subsidiaries or any of their respective properties, is bound. Neither the Company nor any of its Subsidiaries is in default or material breach under any Material Agreement to which it is a party or by which it or any of its assets is bound in which such default could reasonably be expected to have a Material Adverse Effect.
(iii) Each of the Company and its Subsidiaries, as applicable, has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of this Agreement and the other Transaction Documents by the Company and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and, except for the Shareholder Approval, no further action is required by the Company, the Board of Directors or the Company’s shareholders in connection herewith or therewith.
(b) Enforceability. The Transaction Documents have been duly executed by the Company and its Subsidiaries, as applicable, and, upon the consummation of the transactions contemplated by the Transaction Documents, shall constitute the legal, valid, and binding obligations of the Company and its Subsidiaries, as applicable, enforceable against the Company in accordance with their terms, except as such enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, transfer, moratorium, and other laws relating to or affecting creditors’ rights generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(c) Valid Issuance.
(i) The Shares (A) have been duly authorized by the Company and, upon their issuance pursuant to this Agreement in accordance with Section 2.1, will be validly issued, fully paid and non-assessable, (B) except as set forth in Schedule 3.1(c)(i)(B) hereto, are not subject to any preemptive, participation, rights of first refusal, antidilution or other similar rights, and (C) assuming the accuracy of each Holder’s representations and warranties hereunder, (I) will be issued exempt from the registration requirements of the Securities Act pursuant to Section 3(a)(9) of the Securities Act and (II) will be issued in compliance with all applicable state and federal laws concerning the issuance of the Shares.
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(ii) The Underlying Shares have been duly and validly authorized and reserved by the Company and, when issued upon conversion in accordance with this Agreement and the Certificate of Designations, will be validly issued, fully paid and non-assessable shares of Common Stock, and the issuance of such shares of Common Stock shall not be subject to any preemptive or similar rights.
(d) Capitalization. The Company’s capitalization as disclosed in its filings with the Commission is true and complete, in all material respects, as of the date of such filings.
(e) Material Adverse Effect. Since December 31, 2024, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.
(f) Subsidiaries’ Equity Interests. Except for Venus Concept (HK) Limited, which is owned 49% by minority investors, all of the issued ownership interests of each of the Subsidiaries of the Company are duly authorized and validly issued, fully paid, nonassessable, and directly owned by the Company or its applicable Subsidiary and are free and clear of all Liens, other than Permitted Liens, and not subject to any preemptive rights, rights of first refusal, option, warrant, call, subscription, and similar rights, other than as required by law.
(g) Financial Statements. The financial statements of the Company included in the Company’s filings with the Commission following December 31, 2024 (the “Financial Statements”) have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved, subject, in the case of the interim Financial Statements, to normal and recurring year-end adjustments (the effect of which will not be materially adverse) and the absence of notes (that, if presented, would not differ materially from those presented in the audited Financial Statements). The Financial Statements are based on the books and records of the Company, and fairly present in all material respects the financial condition of the Company as of the respective dates they were prepared and the results of the operations of the Company for the periods indicated.
(h) Operations in the Ordinary Course. Except as set forth in or contemplated by the Company’s filings with the Commission since December 31, 2024, since December 31, 2024 the Company and its Subsidiaries have conducted their respective businesses in the ordinary course, consistent with past practice in all material respects, and there has been no (i) acquisition or disposition of any material asset by the Company or any of its Subsidiaries, or any contract or arrangement therefor, other than acquisitions or dispositions for fair value in the ordinary course of business or acquisitions or dispositions as disclosed in the Company’s filings with the Commission or (ii) material change in the Company’s accounting principles, practices or methods.
(i) Intellectual Property.
(i) The Company and each of its Subsidiaries is the sole owner of the Intellectual Property each respectively purports to own, free and clear of all Liens, other than Permitted Liens, and non-exclusive licenses for off-the-shelf software that is commercially available to the public.
(ii) None of the Company or any of its Subsidiaries has used any software or other materials that are subject to an open-source or similar license (including the General Public License, Lesser General Public License, Mozilla Public License, or Affero License) (collectively, “Open Source Licenses”) in a manner that would cause any software or other materials owned by the Company or used in any Company products to have to be (A) distributed to third parties at no charge or a minimal charge, (B) licensed to third parties for the purpose of creating modifications or derivative works, or (C) subject to the terms of such Open Source License.
(iii) Each employee and contractor of the Company and its Subsidiaries involved in development or creation of any material Intellectual Property has assigned any and all inventions and ideas of such Person in and to such Intellectual Property to the Company or such Subsidiary, except where failure to do so could not reasonably be expected to have a Material Adverse Effect, in each case individually or in the aggregate.
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(iv) No settlement or consents, covenants not to sue, non-assertion assurances, or releases have been entered into by the Company or any of its Subsidiaries or exist to which the Company or such Subsidiary is bound that adversely affect its rights to own or use any Intellectual Property except as could not be reasonably expected to result in a Material Adverse Effect, in each case individually or in the aggregate.
(j) Litigation. Except as set forth in or contemplated by the Company’s filings with the Commission since December 31, 2024 or in Schedule 3.1(j) hereto, are no actions, suits, investigations, or proceedings pending or, to the Company’s Knowledge, threatened in writing by or against the Company or any of its Subsidiaries reasonably expected to result in the payment or award of damages of more than $500,000.
(k) Insurance. The Company and its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged. The Company does not have any reason to believe that it or any Subsidiary will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business in all material respects.
(l) Tax Returns and Payments; Pension Contributions. The Company and each of its Subsidiaries have timely filed all material tax returns and reports (or extensions thereof) required to be filed by them, and the Company and each of its Subsidiaries, have timely paid all foreign, federal, state, and local Taxes owed by the Company and such Subsidiaries in a cumulative amount greater than $100,000, in all jurisdictions in which the Company or any such Subsidiary is subject to Taxes, including the United States, unless such Taxes are being contested in accordance with the next sentence. The Company and each of its Subsidiaries may defer payment of any contested Taxes; provided, however, that the Company or such Subsidiary (a) in good faith contests its obligation to pay the Taxes by appropriate proceedings promptly and diligently instituted and conducted; and (b) maintains adequate reserves or other appropriate provisions on its books in accordance with GAAP. Neither the Company nor any of its Subsidiaries is aware of any claims or adjustments proposed by any Governmental Authority in writing for any of the Company’s or such Subsidiary’s, prior Tax years which could result in additional taxes in a cumulative amount greater than $100,000 becoming due and payable by the Company or its Subsidiaries. The Company and each of its Subsidiaries have paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and neither the Company nor any of its Subsidiaries has, withdrawn from participation in, has permitted partial or complete termination of, or has permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of the Company or its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority.
(m) Regulatory Compliance.
(i) Neither the Company nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended. Neither the Company nor any of its Subsidiaries is engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors). The Company and each of its Subsidiaries complies in all material respects with the Federal Fair Labor Standards Act. Neither the Company nor any of its Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and used in the Public Utility Holding Company Act of 2005. Neither the Company nor any of its Subsidiaries has violated any laws, order, ordinances or rules, the violation of which could reasonably be expected to have a Material Adverse Effect. Neither the Company’s nor any of its Subsidiaries’ properties or assets has been used by the Company or such Subsidiary or, to the Company’s Knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than in material compliance with material applicable laws. The Company and each of its Subsidiaries has obtained all material consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted.
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(ii) Neither the Company, nor any Subsidiary, nor, to the Knowledge of the Company, any director, officer, employee, agent, representative or Affiliate thereof, is an individual or entity that is, or is owned or controlled by, any individual or entity that is (A) the subject or target of any Sanctions, (B) included on OFAC’s List of Specially Designated Nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority or (C) located, organized or resident in a Designated Jurisdiction.
(iii) The Company and its Subsidiaries have conducted their business in material compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, the Corruption of Foreign Public Officials Act (Canada), the Israeli Penal Law, Chapter 9, Part 5 and other similar anti-corruption legislation in such or other jurisdictions, and have instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.
(iv) To the extent applicable, the Company and each Subsidiary is in compliance, in all material respects, with (A) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, (B) the Act, (C) the Canadian AML Acts and (D) the Israeli Trading with the Enemy Ordinance and the Israeli PMLL and other similar legislation in such or other jurisdictions. Notwithstanding the foregoing, the representations in this Section 3.1(m) shall not be made by nor apply to any Person organized under the laws of Canada insofar as such representations would result in a violation of or conflict with the Foreign Extraterritorial Measures Act (Canada) or any similar law.
(n) Listing Rules. Except for the Shareholder Approval, the Company is not required to obtain any consent or approval from its shareholders in connection with the consummation of the transactions contemplated by this Agreement or any of the Transaction Documents pursuant to the rules of any Trading Market on which any of the securities of the Company are listed or designated.
(o) Compliance with Securities Laws. The Company is a reporting issuer in the United States. The Company is not in default under applicable U.S. federal securities laws, and is in compliance with its timely disclosure obligations under such laws and the requirements of each Trading Market on which the Common Stock is currently listed. No order, ruling or determination having the effect of suspending the sale or ceasing the trading of any securities of the Company has been issued or made by the Commission, any other securities commission, stock exchange or other regulatory authority and no proceedings for that purpose have been instituted or are pending or, to the Company’s Knowledge, are contemplated by any such authority. The Company is in material compliance with all applicable requirements of each applicable Trading Market. None of the applicable U.S. securities regulatory authorities or similar regulatory authority, any applicable Trading Market or any other competent authority has issued any order to cease or suspend trading of any securities of the Company, and the Company has not taken any action that is reasonably likely to result in the delisting of any securities of the Company that are listed or designated on any Trading Market (it being understood and agreed that the Company’s movement of its securities from one Trading Market to another Trading Market shall not constitute a delisting for purposes of this Section 3.1(o)).
(p) Exchange Act Compliance. All documents filed with the Commission by the Company under the Exchange Act are hereinafter referred to herein as the “Exchange Act Reports.” The Exchange Act Reports, when they were or are filed with the Commission, conformed or will conform in all material respects to the applicable requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder. The Exchange Act Reports did not, when filed with the Commission, contain an untrue statement of material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
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(q) No Integrated Offering. Assuming the accuracy of the Holders’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offering of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
(r) No Broker’s Fees. Except as provided for the Company’s engagement letter with Canaccord Genuity LLC, dated April 6, 2023, as amended from time to time, none of the Company nor any of its Subsidiaries are party to any contract, agreement or understanding with any Person that would give rise to a valid claim against them or the Holders for a brokerage commission, finder’s fee or like payment in connection with the Transaction Documents and the transactions contemplated thereby.
(s) No Registration. Assuming the accuracy of the Holders’ representations and warranties set forth in Section 3.2 and their compliance with their agreements contained in the Transaction Documents, no registration under the Securities Act is required for the offer and sale of the Securities to the Holders pursuant to the terms of this Agreement. Subject to limitations contained in the Certificate of Designations, the issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.
(t) Registration Rights. Other than as provided for in the Registration Rights Agreement and as disclosed in the Company’s filings with the Commission, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company or its Subsidiaries.
(u) No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered, and may offer, the Securities for sale only to the Holders and other “accredited investors” within the meaning of Rule 501 under the Securities Act.
(v) Disqualification Events. None of the Company, any Subsidiary, any of their respective predecessors, any director, executive officer, other officer of the Company or any Subsidiary participating in the offering contemplated hereby, any beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, any “promoter” (as that term is defined in Rule 405 under the Securities Act) connected with the Company or any of the Subsidiaries in any capacity at the time of the Closing, any placement agent or dealer participating in the offering of the Shares, any of such agents’ or dealer’s directors, executive officers, other officers participating in the offering of the Shares (the “Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”). The Company has exercised reasonable care to determine (i) the identity of each person that is a Covered Person; and (ii) whether any Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e). The Company is not for any other reason disqualified from reliance upon Rule 506 of Regulation D under the Securities Act for purposes of the offer and sale of the Securities.
(w) Acknowledgement Regarding Holders’ Purchase of Securities. The Company acknowledges and agrees that each Holder is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that none of the Holders are acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by any Holder or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Holder’s purchase of the Securities.
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(x) Acknowledgement Regarding Holders’ Trading Activity. It is understood and acknowledged by the Company that, except as otherwise specifically set forth in any written agreement between the Company and the applicable Holder (including Section 4.2 of this Agreement, which shall control to the extent in conflict with this Section 3.1(x)), (i) following the public disclosure of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the Holders has been asked by the Company or any of its Subsidiaries to agree, nor has any Holder agreed with the Company or any of its Subsidiaries, to refrain from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long or short) any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold any of the Securities for any specified term; (ii) no Holder shall be deemed to have any affiliation with or control over any arm’s length counterparty in any “derivative” transaction; and (iii) each Holder may rely on the Company’s obligation to timely deliver Shares upon conversion, exercise or exchange, as applicable, of the Securities as and when required pursuant to the Transaction Documents for purposes of effecting trading in the Common Stock of the Company, subject to the limitations set forth herein. The Company further understands and acknowledges that, except as otherwise specifically set forth in any written agreement between the Company and the applicable Holder, following the public disclosure of the transactions contemplated by the Transaction Documents one or more Holders may engage in hedging or trading activities (including, without limitation, the location or reservation of borrowable shares of Common Stock) at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value or number of the Underlying Shares deliverable with respect to the Securities are being determined and such hedging or trading activities (including, without limitation, the location or reservation of borrowable shares of Common Stock), if any, can reduce the value of the existing stockholders’ equity interest in the Company both at and after the time the hedging or trading activities are being conducted. The Company acknowledges that, except as otherwise specifically set forth in any written agreement between the Company and the applicable Holder, such aforementioned hedging or trading activities do not constitute a breach of this Agreement, the Securities or any other Transaction Document or any of the documents executed in connection herewith or therewith.
(y) Full Disclosure. No written representation, warranty or other statement of the Company or any of its Subsidiaries in any certificate or written statement, when taken as a whole, given to any Holder, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to any Holder, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized that projections and forecasts provided by the Company in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).
3.2. Representations and Warranties of the Holders. Each Holder, for itself and for no other Holder, hereby represents and warrants to the Company as of the Closing Date (unless a different date is specified herein, in which case such representations and warranties shall be made as of such specified date) as follows:
(a) Organization; Authority. Such Holder is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Holder of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Holder. Each Transaction Document to which it is a party has been duly executed by such Holder, and when delivered by such Holder in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Holder, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
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(b) No Conflicts. The execution, delivery and performance by such Holder of this Agreement and the consummation by such Holder of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Holder or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Holder is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Holder, except in the case of clauses (ii) and (iii) above, for such that are not material and do not otherwise affect the ability of such Holder to consummate the transactions contemplated hereby.
(c) Own Account. Such Holder understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other Persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Holder’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Holder is acquiring the Securities hereunder in the ordinary course of its business.
(d) Holder Status. At the time such Holder was offered the Shares, it was, and as of the date hereof it is, and on each date on which it converts any Shares, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
(e) Experience of Such Holder. Such Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Holder is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. Such Holder and its advisors, if any, have been furnished with all materials relating to the business, financial condition and results of operations of the Company, and materials relating to the offer and sale of the Securities, that have been requested by such Holder or its advisors, if any. Such Holder acknowledges and understands that its investment in the Securities involves a significant degree of risk.
(f) General Solicitation. Such Holder is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to such Holder’s knowledge, any other general solicitation or general advertisement.
(g) Access to Information. Such Holder acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the Exchange Act Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.
(h) Short Sales and Confidentiality. Other than consummating the transactions contemplated hereunder, such Holder has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Holder, executed any Short Sale with respect to securities of the Company prior to the date hereof. Notwithstanding the foregoing, in the case of a Holder that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Holder’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Holder’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Holder’s representatives (including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates), bound by a duty of confidentiality to such Holder and whom such Holder has taken reasonable actions to cause them to maintain such confidentiality, such Holder has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).
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(i) No Governmental Review. Such Holder understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(j) No Legal, Tax or Investment Advice. Such Holder understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Holders in connection with the purchase of the Securities constitutes legal, tax or investment advice. Such Holder has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Securities.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1. Transfer Restrictions.
(a) The Preferred Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Holder or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and the Registration Rights Agreement and shall have the rights and obligations of a Holder under this Agreement and the Registration Rights Agreement.
(b) The Holders agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Preferred Securities in the following form:
“THE SECURITIES REPRESENTED HEREBY HAVE 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, AND, ACCORDINGLY, MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.”
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(c) The Company acknowledges and agrees that a Holder may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Preferred Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Holder may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Holder’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Preferred Securities, including, if the Preferred Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Securityholders (as defined in the Registration Rights Agreement) thereunder.
(d) Instruments, whether certificated or uncertificated, evidencing the Preferred Securities shall not contain any legend (including the legend set forth in Section 4.1(b) hereof), (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Securities pursuant to Rule 144, (iii) if such Securities are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Securities and without volume or manner-of-sale restrictions, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). Promptly after the Effective Date, the Company shall cause its counsel to issue a legal opinion to the Transfer Agent if required by the Transfer Agent to effect the removal of the legend hereunder. If all or any Shares are converted at a time when there is an effective registration statement to cover the resale of the Preferred Securities, or if such Securities may be sold under Rule 144 and the Company is then in compliance with the current public information required under Rule 144, or if the Preferred Securities may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Securities or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Securities shall be issued free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(d), it will, as soon as practicable and no later than five Trading Days following the delivery by a Holder to the Company or the Transfer Agent of a certificate or book entry (at the election of such Holder, provided that, absent instructions to the contrary, the default shall be book-entry) representing Securities, as the case may be, issued with a restrictive legend, deliver or cause to be delivered to such Holder an unrestricted book entry representing such shares that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1. Instruments, whether certificated or uncertificated, for Securities subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company System as directed by such Holder.
4.2. Short Sales. Notwithstanding any provision of this Agreement to the contrary, each Holder hereby agrees that, without the prior written consent of the Company, such Holder will not, directly or indirectly (including by entering into agreement or understand with any other Person), execute any Short Sale with respect to securities of the Company from and after the date hereof.
4.3. Furnishing of Information; Public Information. Until no Holder owns Securities, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act. As long as any Holder owns the Shares, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to such Holder and make publicly available in accordance with Rule 144(c) such information as is required for such Holder to sell the Shares, including without limitation, under Rule 144. The Company further covenants that it will take such further action as such Holder may reasonably request, to the extent required from time to time to enable such Holder to sell such Shares without registration under the Securities Act, including without limitation, within the requirements of the exemption provided by Rule 144.
4.4. Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
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4.5. Securities Laws Disclosure; Publicity. The Company shall (a) by 9:30 a.m. (New York City time) on the Trading Day immediately following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) within the time required by the Exchange Act, file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission. From and after the issuance of such press release, the Company represents to the Holders that it shall have publicly disclosed all material, non-public information delivered to any of the Holders by the Company, or any of its officers, directors, employees or agents. The Company and each Holder shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Holder shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Holder, or without the prior consent of each Holder, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing Party shall promptly provide the other Party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not, without the prior written consent of the Holders, or to the extent consistent with past practice, use the name of a Holder or any of its Affiliates (or any other derivative name of a Holder or its Affiliates) in any press releases or other public disclosures (including in any filing with the Commission or any regulatory agency or Trading Market), offering documents, sales materials, brochures or similar publicity or promotional materials, or for promotional purposes, whether orally or in writing, except (i) as required by federal securities law in connection with the filing of final Transaction Documents with the Commission and (ii) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide Holder with prior notice of such disclosure permitted under this clause (ii).
4.6. Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Holder is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Holder could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Holders.
4.7. Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.5, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Holder or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Holder shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that each Holder shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public information to a Holder without such Holder’s consent, the Company hereby covenants and agrees that such Holder shall not have any duty of confidentiality to Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, and of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Holder shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Holder shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
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4.8. Indemnification of Holders. Subject to the provisions of this Section 4.8, the Company will defend, indemnify and hold each Holder and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Holder (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling Persons (each, a “Holder Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Holder Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Holder Parties in any capacity, or any of them or their respective Affiliates, by any shareholder of the Company who is not an Affiliate of such Holder Parties, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Holder Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Holder Parties may have with any such shareholder or any violations by such Holder Parties of state or federal securities laws or any conduct by such Holder Parties which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Holder Party in respect of which indemnity may be sought pursuant to this Agreement, such Holder Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Holder Party. Any Holder Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Holder Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Holder Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Holder Party under this Agreement (A) for any settlement by a Holder Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (B) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to (I) any Holder Party’s breach of any of the representations, warranties, covenants or agreements made by such Holder Party in this Agreement or in the other Transaction Documents, or (II) any conduct by such Holder Party which constitutes gross negligence or willful misconduct. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Holder Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.9. Reservation and Listing of Securities. The Company shall maintain and keep available at all times, free of preemptive rights, a reserve of the Required Minimum from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.
4.10. Listing of Common Stock. The Company hereby agrees to use reasonable best efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the applicable Underlying Shares on such Trading Market and promptly secure the listing of all of such Underlying Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Underlying Shares, and will take such other action as is necessary to cause all of the Underlying Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all reasonable best efforts necessary to continue the listing or quotation and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.
4.11. Conversion Procedures. The form of notice of conversion included in the Certificate of Designations (the “Notice
of Conversion”\) sets forth the totality of the procedures required of the Holders in order to convert the Shares. Without limiting the preceding sentences, 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 in order to convert the Shares, unless required by the Transfer Agent. No additional legal opinion, other information or instructions shall be
required of the Holders to convert their Shares. The Company shall honor conversions of the Shares and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents. Notwithstanding
the foregoing, the Parties acknowledge and agree that conversion of the Shares shall be subject to any limitations on convertibility as set forth in the Certificate of Designations.
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4.12. Certain Transactions and Confidentiality. Each Holder, severally and not jointly with the other Holders, covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.5. Each Holder, severally and not jointly with the other Holders, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.5, such Holder will maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents. Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Holder makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.5, (ii) no Holder shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.5 and (iii) no Holder shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company after the issuance of the initial press release as described in Section 4.5. Notwithstanding the foregoing, in the case of a Holder that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Holder’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Holder’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.
4.13. Form D; Blue Sky Filings. If required under Regulation D under the Securities Act, the Company agrees to timely file a Form D with respect to the Securities and to provide a copy thereof, promptly upon request of any Holder. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Holders at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Holder.
4.14. Shareholder Approval. At the next annual or special meeting of shareholders of the Company, or such later meeting of shareholders of the Company as agreed in writing by the Parties (the “Shareholder Meeting”), the Company will include in the proxy materials for the Shareholder Meeting, in a form reasonably acceptable to the Holders, a proposal soliciting the affirmative vote of the Company’s shareholders in favor of resolutions (“Shareholder Resolutions”) to approve the issuance of any and all Capped Shares (the “Shareholder
Approval”\). The Board of Directors shall recommend that the Company’s shareholders vote in favor of the Shareholder Resolutions at the Shareholder Meeting and the Company shall use commercially reasonable efforts to obtain the Shareholder
Approval.
4.15. Intended Tax Treatment.
(a) The Parties intend that, for U.S. federal (and applicable state and local) income tax purposes, (i) the exchange of the Shares for the Notes be treated as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code, and (ii) the Company be treated as not recognizing any income from discharge of indebtedness as a result of the Exchange pursuant to Sections 61(a)(11), 108(e)(8), and 108(e)(10) of the Code, or otherwise (the “Intended Tax Treatment”).
(b) Each Party shall, and shall cause its Affiliates to, unless otherwise required by a final “determination” (within the meaning of Section 1313(a) of the Code (or any analogous or similar provision under applicable state or local income tax law)), (i) prepare and file all applicable tax returns in a manner consistent with the Intended Tax Treatment, and (ii) take no position in any applicable tax return, tax proceeding, or otherwise for applicable tax purposes that is inconsistent with the Intended Tax Treatment.
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ARTICLE V.
MISCELLANEOUS
5.1. Termination. This Agreement shall terminate upon the earlier to occur of (a) the mutual written agreement of the Parties to terminate this Agreement and (b) the date following the Closing upon which no Holder holds any Shares (the date of such termination, the “Termination Date”); provided, however, that the termination of this Agreement will not affect the right of any Party to sue for any breach by any other Party or Parties to the extent such breach occurred prior to the Termination Date.
5.2. Fees and Expenses. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any Notice of Conversion delivered by a Holder), stamp taxes and other similar taxes and duties levied in connection with the delivery of any Securities to the Holders. The Company shall pay (a) all reasonable and documented out-of-pocket expenses incurred by the Holders (including the fees, charges and disbursements of one counsel in the aggregate for all Holders and one local counsel if needed), in connection with (i) the preparation, negotiation, execution and delivery of this Agreement and the other Transaction Documents and (ii) any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) or the administration of this Agreement and the other Transaction Documents and (b) all reasonable and documented out-of-pocket expenses incurred by the Holders (including the fees, charges and disbursements of one counsel in the aggregate for all Holders other than local counsel), in connection with the enforcement or protection of their rights in connection with this Agreement and the other Transaction Documents, including their rights under this Section
5.2.
5.3. Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the Parties acknowledge have been merged into such documents, exhibits and schedules.
5.4. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment as 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, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the Party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.
5.5. Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Holders holding a majority of the Shares then outstanding, or in the case of a waiver, by the Party against whom enforcement of any such waived provision is sought; provided, however, that if any amendment, modification or waiver disproportionately and adversely impacts a Holder (or group of Holders), the consent of such disproportionately impacted Holder (or group of Holders) shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any Party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Holder relative to the comparable rights and obligations of the other Holders shall require the prior written consent of such adversely affected Holder. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Holder and holder of Securities and the Company.
5.6. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Holder (other than by merger). Any Holder may assign any or all of its rights under this Agreement to any Person to whom such Holder assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Holders.”
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5.7. No Third-Party Beneficiaries. This Agreement is intended for the benefit of the Parties and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8.
5.8. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents 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 conflicts of law thereof. Each Party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a Party or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each Party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute 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 Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Proceeding is improper or is an inconvenient venue for such Proceeding. Each Party hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such Party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any Party hereto shall commence a Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing Party in such Proceeding shall be reimbursed by the non-prevailing Party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.
5.9. Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.10. Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each Party and delivered to each other Party, it being understood that the Parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
5.11. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the Parties shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the Parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.12. Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Holder exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Holder may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of a conversion of Shares, the applicable Holder shall be required to return any Underlying Shares subject to any such rescinded Notice of Conversion concurrently therewith.
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5.13. Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.14. Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Holders and the Company will be entitled to specific performance under the Transaction Documents. The Parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would be adequate.
5.15. Payment Set Aside. To the extent that the Company makes a payment or payments to any Holder pursuant to any Transaction Document or a Holder enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
5.16. Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder under any Transaction Document are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance or non-performance of the obligations of any other Holder under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Holder pursuant hereof or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. Each Holder has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. The Company has elected to provide all Holders with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Holders. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Holder, solely, and not between the Company and the Holders collectively and not between and among the Holders.
5.17. Stock Splits, Etc. Each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to equitable adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date hereof.
5.18. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.19. Construction. The Parties agree that each of them or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. As used in this Agreement, the words “including” or “includes” shall be deemed followed by “without limitation,” the word “or” shall be deemed to mean “and / or,” and “$” shall refer to United States dollars.
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5.20. WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
[no further text on this page]
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IN WITNESS WHEREOF, the Parties have caused this Exchange Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
| VENUS CONCEPT INC.<br><br> <br><br><br> <br><br><br> <br><br><br> <br>By: /s/ Domenic Della Penna<br><br> <br>Name: Domenic Della Penna<br><br> <br>Title: Chief Financial Officer | Address for Notice:<br><br> <br><br><br> <br>Venus Concept Inc.<br><br> <br>235 Yorkland Blvd., Suite 900<br><br> <br>Toronto, Ontario, Canada<br><br> <br>M2J 4Y8<br><br> <br>Attn: Chief Legal Officer & Head of Strategy & Operations<br><br> <br>Email:<br><br> <br><br><br> <br>With a copy to (which shall not constitute notice):<br><br> <br><br><br> <br>Dorsey & Whitney LLP<br><br> <br>TD Bank Tower<br><br> <br>66 Wellington Street West, Suite 3400<br><br> <br>Toronto, ON M5K 1E6<br><br> <br>Attn: Richard Raymer<br><br> <br>Email: |
|---|
[Exchange Agreement]
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IN WITNESS WHEREOF, the Parties have caused this Exchange Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
| MADRYN HEALTH PARTNERS, LP<br><br> <br><br><br> <br>By: Madryn Health Advisors, LP,<br><br> <br>its General Partner<br><br> <br><br><br> <br>By: Madryn Health Advisors GP, LLC,<br><br> <br>its General Partner<br><br> <br><br><br> <br><br><br> <br><br><br> <br>By: /s/ Avinash Amin<br><br> <br>Name: Avinash Amin<br><br> <br>Title: Member | Address for Notice:<br><br> <br><br><br> <br>Madryn Asset Management, LP<br><br> <br>330 Madison Avenue, 33rd Floor<br><br> <br>New York, NY 10017<br><br> <br>Attn: Avinash Amin<br><br> <br>Email:<br><br> <br><br><br> <br>With a copy to (which shall not constitute notice):<br><br> <br><br><br> <br>Moore & Van Allen PLLC<br><br> <br>100 North Tyron Street, Suite 4700<br><br> <br>Charlotte, NC 28202<br><br> <br>Attn: Tripp Monroe<br><br> <br>Email: |
|---|---|
| MADRYN HEALTH PARTNERS<br><br> <br>(CAYMAN MASTER), LP<br><br> <br><br><br> <br>By: Madryn Health Advisors, LP,<br><br> <br>its General Partner<br><br> <br><br><br> <br>By: Madryn Health Advisors GP, LLC,<br><br> <br>its General Partner<br><br> <br><br><br> <br><br><br> <br><br><br> <br>By: /s/ Avinash Amin<br><br> <br>Name: Avinash Amin<br><br> <br>Title: Member | Address for Notice:<br><br> <br><br><br> <br>Madryn Asset Management, LP<br><br> <br>330 Madison Avenue, 33rd Floor<br><br> <br>New York, NY 10017<br><br> <br>Attn: Avinash Amin<br><br> <br>Email:<br><br> <br><br><br> <br>With a copy to (which shall not constitute notice):<br><br> <br><br><br> <br>Moore & Van Allen PLLC<br><br> <br>100 North Tyron Street, Suite 4700<br><br> <br>Charlotte, NC 28202<br><br> <br>Attn: Tripp Monroe<br><br> <br>Email: |
[Exchange Agreement]
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Exhibit 10.2
Execution Agreement
FOURTH AMENDED AND RESTATED RESALE REGISTRATION RIGHTS AGREEMENT
THIS FOURTH AMENDED AND RESTATED RESALE REGISTRATION RIGHTS AGREEMENT, dated as of September 30, 2025 (this “Agreement”),
has been entered into by and among Venus Concept Inc., a Delaware corporation \(the “Company”\), Madryn Health Partners, LP \(“Madryn”\) and Madryn Health Partners \(Cayman
Master\), LP \(“Madryn Cayman,” and together with Madryn, the “Madryn Parties”\).
BACKGROUND
Pursuant to the Exchange Agreement, dated as of May 24, 2024 (the “May 2024 Exchange Agreement”), by and among the Company, Venus Concept USA Inc., a wholly-owned subsidiary of the Company (“Venus USA”), and the Madryn Parties, (i) the Madryn Parties exchanged promissory notes issued by Venus USA for new promissory notes issued by Venus USA and an aggregate of 576,986 shares of Series Y Preferred Stock of the Company (the “May 2024 Preferred Stock”), and (ii) the Company agreed to provide to the Madryn Parties certain resale registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder (together, the “Securities Act”), and applicable state securities laws with respect to the May 2024 Shares (as defined below).
Pursuant to the Exchange Agreement, dated as of September 26, 2024 (the “September 2024 Exchange Agreement”), by and among the Company, Venus USA and the Madryn Parties, (i) the Madryn Parties exchanged promissory notes issued by Venus USA for new promissory notes issued by Venus USA and an aggregate of 203,583 shares of Series Y Preferred Stock of the Company (the “September
2024 Preferred Stock”\), and \(ii\) the Company agreed to provide to the Madryn Parties certain resale registration rights under the Securities Act and applicable state securities laws with respect to the September 2024 Shares \(as defined
below\).
Pursuant to the Exchange Agreement, dated as of March 31, 2025 (the “March 2025 Exchange Agreement”), by and among the Company and the Madryn Parties, (i) the Madryn Parties exchanged promissory notes issued by the Company for new promissory notes issued by the Company and an aggregate of 379,311 shares of Series Y Preferred Stock of the Company (the “March 2025 Preferred Stock”), and (ii) the Company agreed to provide to the Madryn Parties certain resale registration rights under the Securities Act and applicable state securities laws with respect to the March 2025 Shares (as defined below).
Pursuant to the Exchange Agreement, dated as of June 30, 2025 (the “June 2025 Exchange Agreement”), by and among the Company and the Madryn Parties, (i) the Madryn Parties exchanged promissory notes issued by the Company for new promissory notes issued by the Company and an aggregate of 325,651 shares of Series Y Preferred Stock of the Company (the “June 2025 Preferred Stock”), and (ii) the Company agreed to provide to the Madryn Parties certain resale registration rights under the Securities Act and applicable state securities laws with respect to the June 2025 Shares (as defined below).
Pursuant to the Exchange Agreement, dated as of the date hereof (the “September 2025 Exchange Agreement”), by and among the Company and the Madryn Parties, (i) the Madryn Parties have agreed to exchange promissory notes issued by the Company for an aggregate of 545,335 shares of Series Y Preferred Stock of the Company (the “September 2025 Preferred Stock”), and (ii) the Company has agreed to provide to the Madryn Parties certain resale registration rights under the Securities Act and applicable state securities laws with respect to the September 2025 Shares (as defined below).
To effectuate the resale registration rights granted by the Company to the Madryn Parties under the May 2024 Exchange Agreement, the September 2024 Exchange Agreement, the March 2025 Exchange Agreement and the June 2025 Exchange Agreement, the Company and the Madryn Parties entered into a Third Amended and Restated Resale Registration Rights Agreement, dated as of June 30, 2025 (the “Prior Agreement”),
and the Company and the Madryn Parties wish to amend and restate the Prior Agreement to incorporate the resale registration rights granted by the Company to the Madryn Parties under the September 2025 Exchange Agreement, on the terms and conditions
set forth in this Agreement.
1
AGREEMENT
In light of the above, the Prior Agreement is amended and restated as follows:
| 1. | Definitions. |
|---|
As used in this Agreement, the following terms will have the respective meanings set forth in this Section 1:
“Agreement” has the meaning set forth in the preamble.
“Advice” has the meaning set forth in Section 2(d)(iv).
“Blue Sky” has the meaning set forth in Section 3(l).
“Business Day” means (i) a day on which the Common Stock is traded on a Trading Market, (ii) if the Common Stock is not listed on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding to its functions of reporting prices) or (iii) in the event that the Common Stock is not listed or quoted as set forth in (i) and (ii) hereof, any day other than a Saturday, a Sunday or a day on which banking institutions in The City of New York are authorized or required by law, regulation or executive order to remain closed.
“Claim” has the meaning set forth in Section 5(b).
“Commission” means the Securities and Exchange Commission or any successor agency.
“Commission Guidance” means (i) any publicly available written or oral guidance of the staff of the Commission staff, or any comments, requirements or requests of the Commission staff whether formally or informally or publicly or privately, and (ii) the Securities Act.
“Common Stock” means the Company’s common stock, par value $0.0001 per share.
“Company” has the meaning set forth in the preamble.
“Demand Registration Notice” has the meaning set forth in Section 2(e)(i).
“Demand Registration Statement” means each registration statement under the Securities Act that is designated by the Company for the registration, under the Securities Act, of any Demand Offering pursuant to Section 2(e).
“Demand Offering” has the meaning set forth in Section 2(e)(i).
“Demand Offering Holders” has the meaning set forth in Section 2(e)(iv)(1).
“Demanding Notice Holders” has the meaning set forth in Section 2(e)(i).
“Discontinuance Notice” has the meaning set forth in Section 3(d).
“Effective Date” means, with respect to any Registration Statement, the date on which the Commission first declares effective such Registration Statement.
“Effectiveness Deadline” means, with respect to a Registration Statement filed pursuant to Section 2(a), ninety (90) calendar days after the Filing Deadline in the case of a filing on Form S-3 and one hundred twenty (120) calendar days after the Filing Deadline in the case of a filing on Form S-1.
“Effectiveness Period” has the meaning set forth in Section 2(a).
2
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Filing Deadline” means the date that is 60 days following the conversion of (a) all of the issued and outstanding May 2024 Preferred Stock into May 2024 Shares, (b) all of the issued and outstanding September 2024 Preferred Stock into September 2024 Shares, (c) all of the issued and outstanding March 2025 Preferred Stock into March 2025 Shares, (d) all of the issued and outstanding June 2025 Preferred Stock into June 2025 Shares and (e) all of the issued and outstanding September 2025 Preferred Stock into September 2025 Shares.
“FINRA” means the Financial Industry Regulatory Authority, Inc. or any successor organization performing similar functions.
“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.
“Indemnified Party” has the meaning set forth in Section 5(c).
“Indemnifying Party” has the meaning set forth in Section 5(c).
“Initial Registration Statement” has the meaning set forth in the definition of “Registration Statement.”
“June 2025 Exchange Agreement” has the meaning set forth in the preamble.
“June 2025 Preferred Stock” has the meaning set forth in the preamble.
“June 2025 Registrable Securities” means the June 2025 Shares and any shares of capital stock issued or issuable with respect to the June 2025 Shares as a result of any stock split, reverse stock split, stock dividend, recapitalization, exchange or similar event or otherwise.
“June 2025 Shares” means any shares of Common Stock issued or issuable upon conversion of the June 2025 Preferred Stock.
“Losses” has the meaning set forth in Section 5(a).
“Madryn” has the meaning set forth in the preamble.
“Madryn Cayman” has the meaning set forth in the preamble.
“Madryn Parties” has the meaning set forth in the preamble.
“Majority Holders” means any one or more Holders holding more than 50% of the Registrable Securities.
“Maximum Successful Underwritten Offering Size” means, with respect to any Underwritten Offering, the maximum number of securities that, in the managing underwriter’s or underwriters’ reasonable good faith opinion, which is provided in writing, may be sold in such Underwritten Offering without adversely affecting the success of such offering.
“March 2025 Exchange Agreement” has the meaning set forth in the preamble.
“March 2025 Preferred Stock” has the meaning set forth in the preamble.
“March 2025 Registrable Securities” means the March 2025 Shares and any shares of capital stock issued or issuable with respect to the March 2025 Shares as a result of any stock split, reverse stock split, stock dividend, recapitalization, exchange or similar event or otherwise.
“March 2025 Shares” means any shares of Common Stock issued or issuable upon conversion of the March 2025 Preferred Stock.
3
“May 2024 Exchange Agreement” has the meaning set forth in the preamble.
“May 2024 Preferred Stock” has the meaning set forth in the preamble.
“May 2024 Registrable Securities” means the May 2024 Shares and any shares of capital stock issued or issuable with respect to the May 2024 Shares as a result of any stock split, reverse stock split, stock dividend, recapitalization, exchange or similar event or otherwise.
“May 2024 Shares” means any shares of Common Stock issued or issuable upon conversion of the May 2024 Preferred Stock.
“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof. Any division or series of a limited liability company, limited partnership or trust will constitute a separate “Person” under this Agreement.
“Plan of Distribution” has the meaning set forth in Section 2(a).
“Prior Agreement” has the meaning set forth in the preamble.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, any preliminary prospectus, any free-writing prospectus and any prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to such prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such prospectus.
“Registrable Securities” means the May 2024 Registrable Securities, the September 2024 Registrable Securities, the March 2025 Registrable Securities, the June 2025 Registrable Securities and/or the September 2025 Registrable Securities, as the context requires. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) the Commission has declared a Registration Statement covering such securities effective and such securities have been disposed of pursuant to such effective Registration Statement; (ii) such securities are sold under circumstances in which all of the applicable conditions of Rule 144 under the Securities Act are met and the legend restricting further transfer has been removed from the certificate for such securities; or (iii) such securities are no longer outstanding. For the avoidance of doubt, “Registrable Securities” shall not include any May 2024 Shares, September 2024 Shares, March 2025 Shares, June 2025 Shares or September 2025 Shares, or any shares of capital stock issued or issuable with respect to any May 2024 Shares, September 2024 Shares, March 2025 Shares, June 2025 Shares or September 2025 Shares, which cannot be registered for resale on a Registration Statement as of the Filing Deadline under applicable Commission Guidance.
“Registration Default” has the meaning set forth in Section 2(c)(iv).
“Registration Statement” means a registration statement filed pursuant to the terms hereof and which covers the resale of Registrable Securities by the Holders, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference (or deemed to be incorporated by reference) therein. For the avoidance of doubt, “Registration Statement” means the initial registration statement described above in this paragraph (the “Initial Registration Statement”) and any additional registration statement or registration statement, if any, that the Company is obligated to file under this Agreement with respect to the Registrable Securities, with the effect that the obligations of the Company under this Agreement also extend to such additional registration statement or registration statements, in all cases, as specified in this Agreement.
4
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“Securities Act” has the meaning set forth in the preamble.
“Selling Holder Questionnaire” has the meaning set forth in Section 2(d)(i).
“Selling Securityholders” has the meaning set forth in Section 3(b).
“September 2024 Exchange Agreement” has the meaning set forth in the preamble.
“September 2024 Preferred Stock” has the meaning set forth in the preamble.
“September 2024 Registrable Securities” means the September 2024 Shares and any shares of capital stock issued or issuable with respect to the September 2024 Shares as a result of any stock split, reverse stock split, stock dividend, recapitalization, exchange or similar event or otherwise.
“September 2024 Shares” means any shares of Common Stock issued or issuable upon conversion of the September 2024 Preferred Stock.
“September 2025 Exchange Agreement” has the meaning set forth in the preamble.
“September 2025 Preferred Stock” has the meaning set forth in the preamble.
“September 2025 Registrable Securities” means the September 2025 Shares and any shares of capital stock issued or issuable with respect to the September 2025 Shares as a result of any stock split, reverse stock split, stock dividend, recapitalization, exchange or similar event or otherwise.
“September 2025 Shares” means any shares of Common Stock issued or issuable upon conversion of the September 2025 Preferred Stock.
“Subsequent Form S-3” has the meaning set forth in Section 3(m).
“Suspension Notice” has the meaning set forth in Section 2(b).
“Suspension Period” has the meaning set forth in Section 2(b).
“Trading Market” means whichever of the NYSE American, New York Stock Exchange, the Nasdaq Global Market, the Nasdaq Capital Market, Nasdaq Global Select Market or such other United States registered national securities exchange on which the Common Stock is listed or quoted for trading on the date in question.
“Underwritten Offering” shall mean a registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Venus USA” has the meaning set forth in the preamble.
5
| 2. | Registration. |
|---|
(a) Mandatory Registration.
(i) On or prior to the Filing Deadline, the Company will prepare and file with the Commission a Registration Statement covering the resale of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement will be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration will be on Form S-1, and if for any reason the Company is not then eligible to register for resale the Registrable Securities on Form S-1, then another appropriate form for such purpose) and will contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) a “Plan of Distribution” section, substantially in the form attached hereto as Annex A, as the same may be amended in accordance with the provisions of this Agreement. The Company will use its reasonable best efforts to cause the Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, no later than the Effectiveness Deadline, and will use its reasonable best efforts to keep the Registration Statement (or a Subsequent Form S-3) continuously effective under the Securities Act until such date when the Registrable Securities covered by the Registration Statement cease to be Registrable Securities as determined by the counsel to the Company (the “Effectiveness Period”).
(ii) Notwithstanding the registration obligations set forth in this Section 2(a), if the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly inform each of the Holders thereof and use its reasonable best efforts to file amendments to the Initial Registration Statement as required by the Commission, covering the maximum number of Registrable Securities permitted to be registered by the Commission, on Form S-3 (or Form S-1, if Form S-3 is not available) or such other form available to register for resale the Registrable Securities as a secondary offering; provided, however, that prior to filing such amendment, the Company shall be obligated to use its reasonable best efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the Commission Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09.
(iii) Notwithstanding any other provision of this Agreement, if the Commission or any Commission Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used its reasonable best efforts to advocate with the Commission for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced by reducing or eliminating any securities to be included other than Registrable Securities. In the event of a cutback under this Section 2(a)(iii), the Company shall give each Holder at least five (5) Trading Days prior written notice along with the calculations as to such Holder’s allotment. In the event the Company amends the Registration Statement in accordance with the foregoing, the Company will use its reasonable best efforts to file with the Commission, as promptly as allowed by Commission or Commission Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 (or Form S-1, if Form S-3 is not available) or such other form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended.
(b) Suspension Periods. Notwithstanding Section 2(a), the Company may, at any time, delay the filing or delay or suspend the effectiveness of a Registration Statement or, without suspending such effectiveness, deliver a notice (a “Suspension Notice”) that instructs any selling Holders not to sell any securities included in the Registration Statement or delay the filing of any amendment or supplement pursuant to Section 3, if the board of directors of the Company has determined and promptly notifies the selling Holders in writing that in its reasonable good faith judgment (i) pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it materially detrimental to the Company to allow continued availability of a Registration Statement or Prospectus or (ii) such registration could reasonably be expected to materially interfere with any material financing, acquisition, corporate reorganization, merger, tender offer or other significant transaction involving the Company (a “Suspension Period”), by providing the selling Holders with written notice of such Suspension Period and the reasons therefor. The Company will use its reasonable best efforts to provide such notice at least ten (10) Business Days prior to the commencement of such a Suspension Period; provided, however, that in any event the Company will provide such notice no later than the commencement of such Suspension Period; provided, further, that in no event will a Suspension Period exceed 30 days and in no event shall the total number of days subject to a Suspension Period during any consecutive 12-month period exceed 45 days. Any Suspension Period will not be deemed to end until the Holders have received a notice from the Company stating that such Suspension Period has ended.
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(c) Damages. The parties hereto agree that, subject to Section 2(d), the Holders will suffer damages if the Company fails to fulfill its obligations under this Section 2 and that, in such case, it would not be feasible to ascertain the extent of such damages with precision. Accordingly, if:
(i) the Company does not file a Registration Statement by the Filing Deadline;
(ii) a Registration Statement is not declared effective by the Commission on or before the applicable Effectiveness Deadline;
(iii) the Company extends any Suspension Period beyond 45 days during any consecutive 12-month period; or
(iv) a Registration Statement is filed and declared effective but, during the applicable Effectiveness Period, a Registration Statement is not effective for any reason or the Prospectus contained therein is not available for use for any reason, or, other than by reason of a Suspension Period as provided in Section 2(b), will fail to be usable for its intended purpose without such disability being cured within ten (10) Business Days by an effective post-effective amendment to such Registration Statement, a supplement to the Prospectus, a report filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act that cures such failure or the effectiveness of a Subsequent Form S-3, and either (x) the Company fails for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the failure to satisfy the current public information requirement under Rule 144(c); or (y) the Company fails to satisfy any condition set forth in Rule 144(i)(2) as a result of which any of the Holders are unable to sell Registrable Securities without restriction under Rule 144 (including, without limitation, volume restrictions) (each such event referred to in foregoing clauses (i) through (iv), a “Registration Default”), then in such event as partial relief for the damages to any Holder by reason of any such delay in or reduction of its ability to sell the Registrable Securities and not as a penalty (which remedy will not be exclusive of any other remedies available at law or equity), the Company hereby agrees to make pro rata payments to each Holder, subject to Section 2(d), as liquidated damages and not as a penalty, an additional amount equal to 0.5% of the aggregate amount invested by such Holder and sought to be included on the Registration Statement for each 90-day period (or pro rata for any portion thereof) following the occurrence of any Registration Default and shall be increased by 0.5% during each subsequent 90-day period (or pro rata for any portion thereof), provided that in no event shall the additional amount per 90-day period exceed 2.0% and in no event shall the aggregate additional amount due pursuant to this Section 2(c)(iv) exceed 5.0% of the aggregate amount invested by such Holder and sought to be included on the Registration Statement. Such payments shall constitute the Holder’s exclusive monetary remedy for such events, but shall not affect the right of the Holders to seek injunctive relief. The amounts payable as liquidated damages pursuant to this paragraph shall be paid monthly within three (3) Business Days of the last day of each month following the commencement of the payments. Such payments shall be made to each Holder in cash. Interest shall accrue at the rate of 1% per month on any such liquidated damages payments that shall not be paid by the due date until such amount is paid in full. Notwithstanding the foregoing, if the Commission informs the Company that all or any portion of the Registrable Securities cannot, as a result of the application of Rule 415 or applicable Commission Guidance, be registered for resale as a secondary offering on a single registration statement, such notice shall not, in and of itself, constitute or serve as the basis for a Registration Default.
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(d) Holders’ Agreements. It will be a condition of each Holder’s rights under this Agreement, and each Holder agrees, as follows:
(i) Cooperation & Selling Holder Questionnaire. Such Holder will cooperate with the Company by, with reasonable promptness, supplying information and executing documents relating to such selling Holder or the securities of the Company owned by such selling Holder in connection with such registration which are customary for offerings of this type or is required by applicable laws or regulations, including but not limited to furnishing to the Company (to the extent not already furnished to the Company) a completed questionnaire in the form attached to this Agreement as Annex B (a “Selling Holder Questionnaire”). The Company will not be required to include the Registrable Securities of a Holder in a Registration Statement and will not be required to pay any damages under Section 2(c) to any Holder who fails to furnish to the Company a fully completed Selling Holder Questionnaire at least five (5) Business Days prior to the applicable Filing Deadline.
(ii) Undertakings. Such selling Holder will enter into any undertakings and take such other action relating to the conduct of the proposed offering which the Company may reasonably request as being necessary to insure compliance with federal and state securities laws and the rules or other requirements of FINRA.
(iii) Shelf Sales. In connection with and as a condition to the Company’s obligations with respect to any shelf Registration Statement, each Holder covenants and agrees that it will not offer or sell any such Registrable Securities under the Registration Statement until the Registration Statement has been declared effective by the Commission and such Holder has provided a written notice to the Company of such proposed sale. The Company and the Holders acknowledge and agree that in no way shall this clause limit Holder’s ability to sell securities without using the Registration Statement.
(iv) Discontinuance of Sales. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a Suspension Notice or a Discontinuance Notice from the Company, such Holder will forthwith discontinue any offers and sales of such Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company and the Holders acknowledge and agree that in no way shall this clause limit Holder’s ability to sell securities without using the Registration Statement.
(e) Demand Registration.
(i) Right to Demand Registration. Subject to the other provisions of this Section (2)(e), Holders will have the right, exercisable no more than two times, upon written notice satisfying the requirements of Section (2)(e)(ii) (a “Demand Registration Notice”) to the Company by the Majority Holders (such notifying Majority Holders, the “Demanding
Notice Holders”\), to require the Company to register, under the Securities Act, an offering \(a “Demand Offering”\) of Registrable Securities in accordance with this Section 2\(e\).
(ii) Contents of Demand Registration Notice. Each Demand Registration Notice sent by any Demanding Notice Holder(s) must include the below information. Each Holder agrees to treat as confidential information, its delivery or receipt of any Demand Registration Notice and the information contained therein, including the related Demand Offering.
(1) the name of, and contact information for, each such Demanding Notice Holder(s) and the number of Registrable Securities held by each such Demanding Notice Holder;
(2) the number of Registrable Securities that are proposed to be sold by each such Demanding Notice Holder; and
(3) the desired structure of the Demand Offering, which may include an Underwritten Offering.
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(iii) Participation by Holders Other Than the Demanding Notice Holder(s). If the Company receives a Demand Registration Notice sent by one or more Demanding Notice Holders but not by all Holders, then:
(1) the Company will, within one (1) Business Day, send a copy of such Demand Registration Notice to each Holder other than such Demanding Notice Holders; and
(2) subject to Section 2(e)(vi), the Company will use its commercially reasonable efforts to include, in the related Demand Offering, Registrable Securities of any such Holder that has requested such Registrable Securities to be included in such Demand Offering pursuant to a joinder notice, delivered no later than the first (1st) Business Day after the date on which Company sent a copy of such Demand Registration Notice pursuant to Section (1) above.
(iv) Certain Procedures Relating to Demand Offering.
(1) Obligations and Rights of the Company. Subject to the other terms of this Agreement, upon its receipt of a Demand Registration Notice, the Company will (A) designate a Demand Registration Statement, in accordance with the definition of such term and this Section 2(e), for the Demand Offering; and (B) use its reasonable best efforts to effect such Demand Offering promptly and in accordance with the reasonable requests set forth in such Demand Registration Notice or the reasonable requests of the Holder(s) of a majority of the Registrable Securities included in such Demand Offering (the “Demand Offering Holders”),
and cooperate in good faith with the Demand Offering Holders in connection therewith. Notwithstanding anything to the contrary in this Agreement, the Company will not be obligated to effect, or take any actions in respect of, any Demand Offering
\(i\) during a Suspension Period or at any time when the securities proposed to be sold pursuant to such Demand Offering are subject to any lock-up agreement \(including pursuant to a prior Demand Offering\) that has not been waived or released or \(ii\)
after the Company has already effected one \(1\) Demand Offering pursuant to this Agreement. The Company will be entitled to rely on the authority of the Demand Offering Holders of any Demand Offering to act on behalf of all Holders that have
requested any securities to be included in such Demand Offering.
(2) Authority of the Demand Offering Holders. The Demand Offering Holders for any Demand Offering will have the following rights with respect to such Demand Offering, which rights, if exercised, will be deemed to have been exercised on behalf of all Holders that have requested any securities to be included in such Demand Offering:
(A) to determine the structure of the offering, provided such structure is be reasonably acceptable to the Company;
(B) with respect to any Demand Offering that is structured as an Underwritten Offering, to select the managing underwriters, and any other underwriter, subject to the approval of the Company, which will not be unreasonably withheld or delayed;
(C) with respect to any Demand Offering that is structured as an Underwritten Offering, to negotiate any related underwriting agreement, including the amount of securities to be sold by the applicable Holders pursuant thereto and the offering price of, and underwriting discount for, such securities; provided, however, that the Company will have the right to negotiate in good faith all of its representations, warranties and covenants, and indemnification and contribution obligations, set forth in any such underwriting agreement; and
(D) withdraw such Demand Offering by providing notice thereof to the Company.
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(v) Conditions Precedent to Inclusion of a Holder’s Registrable Securities. Notwithstanding anything to the contrary in this Section 2(e), the right of Holder to include any of its Registrable Securities in a Demand Offering will be subject to the following conditions:
(1) with respect to any Demand Offering that is structured as an Underwritten Offering, the execution and delivery, by such Holder or it is duly authorized representative or power of attorney, of any related underwriting agreement and such other agreements or instruments (including customary “lock-up” agreements, custody agreements and powers of attorney), if any, as may be reasonably requested by the managing underwriters; and
(2) the provision, by such Holder no later than one (1) Business Day immediately after the request therefor, of any information reasonably requested by the Company or, with respect to any Demand Offering that is structured as an Underwritten Offering, the managing underwriters.
(vi) Priority of Securities in Demand Offering Structured as Underwritten Offering. If the total number of securities requested to be included in a Demand Offering structured as an Underwritten Offering pursuant to this Section 2(e) exceeds the Maximum Successful Underwritten Offering Size, then:
(1) the number of securities to be included in such Demand Offering will be reduced to an amount that does not exceed the Maximum Successful Underwritten Offering Size; and
(2) to effect such reduction, if the number of Registrable Securities of Holders and other Persons that have duly requested such Registrable Securities to be included in such Demand Offering in accordance with this Section 2(e) (or in the case of other Persons, pursuant to “piggyback rights” evidenced by another agreement) exceeds such Maximum Successful Underwritten Offering Size, then the number of Registrable Securities to be included in such Demand Offering will be allocated first to the Holders pro rata based on the total number of Registrable Securities so requested by each such Holder to be included in such Demand Offering and, thereafter to such other Persons.
(vii) Rule 415. The provisions of Sections 2(a)(ii)-(iii) shall apply to this Section 2(e), mutatis mutandis.
(f) Piggyback Registrations.
(i) Right to Piggyback Registration. Without limiting any obligation of the Company, if (i) there is not an effective Registration Statement covering all of the Registrable Securities, if the Prospectus contained therein is not available for use, and if Rule 144 is not available with respect to the Registrable Securities, and (ii) the Company shall determine to prepare and file with the Commission a registration statement or offering statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity or equity-linked securities (other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity or equity-linked securities to be issued solely in connection with any acquisition of any entity or business (or a business combination subject to Rule 145 under the Securities Act) or equity or equity-linked securities issuable in connection with the Company’s stock option or other employee benefit plans), or a dividend reinvestment or similar plan or rights offering, then the Company shall deliver to each Holder a written notice of such determination and, if within fifteen (15) calendar days after the date of the delivery of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement or offering statement all or any part of such Registrable Securities that such Holder requests to be registered (a “Piggyback Registration”). The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use its reasonable best efforts to cause the managing underwriter or underwriters of a proposed Underwritten Offering in connection with such Piggyback Registration to permit the Registrable Securities requested by the Holders pursuant to this Section 2(f) to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this Section 2(f) shall enter into an underwriting agreement in customary form with the underwriter(s) selected for such Underwritten Offering by the Company. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole discretion. The Company shall not grant piggyback registration rights to any holders of its Common Stock or securities that are convertible into its Common Stock that are senior to the rights of the Holders set forth in this Section 2(f).
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(ii) Priority of Securities in Underwritten Offerings. Notwithstanding the foregoing, if the total number of securities requested to be included in an Underwritten Offering pursuant to this Section 2(f) exceeds the Maximum Successful Underwritten Offering Size, then: (1) the number of securities to be included in such Underwritten Offering will be reduced to an amount that does not exceed the Maximum Successful Underwritten Offering Size; and (2) to effect such reduction, if the number of Registrable Securities of Holders and other Persons that have duly requested such Registrable Securities to be included in such Underwritten Offering in accordance with this Section 2(f) (or in the case of other Persons, pursuant to “piggyback rights” evidenced by another agreement) exceeds such Maximum Successful Underwritten Offering Size, then the number of Registrable Securities to be included in such Underwritten Offering will be allocated first to such other Persons and thereafter to the Holders pro rata based on the total number of Registrable Securities so requested by each such Holder to be included in such Underwritten Offering.
3. Registration Procedures. In connection with the Company’s obligations to effect a registration pursuant to Section 2(a), the Company and, as applicable, the Holders, will do the following:
(a) FINRA Cooperation. The Company and the Holders will cooperate and assist in any filings required to be made with FINRA.
(b) Right to Review Prior Drafts. Not less than ten (10) Business Days prior to the filing of a Registration Statement or any related Prospectus or any amendment or supplement thereto, the Company will furnish to each Holder copies of the “Selling Securityholders” and “Plan of Distribution” sections of such documents (together with drafts of the Registration Statement or any related Prospectus or any amendment or supplement thereto) in the form in which the Company proposes to file them, which sections and documents will be subject to the review of each such Holder. Each Holder will provide comments, if any, within five (5) Business Days after the date such materials are provided. The Company will not file a Registration Statement, any Prospectus or any amendments or supplements thereto in which the “Selling Securityholders” or the “Plan of Distribution” sections thereof differ in any material respect from the disclosure received from a Holder in its Selling Holder Questionnaire (as amended or supplemented) or otherwise differ in any material respect from the drafts previously received by such Holder. Each Holder whose Registrable Securities are to be sold pursuant to a Demand Offering in accordance with Section 2(e) will be afforded the same rights set forth in this Section 3(b) with respect to any Registration Statement or Prospectus or any amendment or supplement thereto which names such Holder.
(c) Right to Copies. The Company will furnish to each Holder and the managing underwriters, if any, without charge, (i) at least one (1) conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent requested by such Holder (excluding those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission, except if such documents are available on EDGAR; and (ii) as many copies of each Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Holder may reasonably request. The Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders or managing underwriters, as applicable, in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.
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(d) Notices. The Company will notify each Holder covered by the Registration Statement as promptly as reasonably practicable: (A) when the Prospectus or any prospectus supplement or post-effective amendment has been filed, and with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (B) of any request by the Commission for any amendments or supplements to the Registration Statement or the Prospectus or for additional information; (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (D) if, at any time prior to the closing contemplated by the May 2024 Exchange Agreement, the September 2024 Exchange Agreement, the March 2025 Exchange Agreement, the June 2025 Exchange Agreement or the September 2025 Exchange Agreement, as applicable, it becomes aware that the representations and warranties of the Company contained in such agreement cease to be true and correct; (E) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (F) of the happening of any event which it believes may make any statement made in the Registration Statement, the Prospectus or any document incorporated therein by reference untrue, or of any material misstatement or omission, and which requires the making of any changes in the Registration Statement, the Prospectus or any document incorporated therein by reference in order to make the statements therein not misleading; (G) upon the occurrence of a Suspension Period (items (C) through and including (G) being a “Discontinuance Notice”); and (H) upon the conclusion of a Suspension Period. In addition, during the pendency of any Demand Offering pursuant to Section 2(e), but other than during a Suspension Period, the Company will provide notice to each Holder whose Registrable Securities are to be sold in such offering pursuant to the Registration Statement used in connection with the Demand Offering, which Holders will be afforded the same notice set forth in clauses (A) through (H) of this Section 3(d) relating to such Registration Statement.
(e) Withdrawal of Suspension Orders. The Company will use its reasonable best efforts to respond as promptly as reasonably possible to any comments received from the Commission with respect to any Registration Statement or any amendment thereto and to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement or the suspension of the qualification of the Registrable Securities for sale in any jurisdiction, or to prevent any such suspension.
(f) Supplements & Amendments. Subject to Sections 2(a) and 2(e), if required by applicable federal securities laws, based on the advice of the Company’s counsel, the Company will prepare a supplement or post-effective amendment to a Registration Statement, the related Prospectus or any document incorporated therein by reference or file any other required document or, if necessary, renew or refile a Registration Statement prior to its expiration, so that, as thereafter delivered to the purchasers of the Registrable Securities, (A) the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading; (B) such Registration Statement remains continuously effective as to the applicable Registrable Securities for its applicable Effectiveness Period; (C) the related Prospectus may be supplemented by any required prospectus supplement, and as so supplemented may be filed pursuant to Rule 424 and (D) the Prospectus will be supplemented, if necessary, to update the disclosure of the number of shares that each Holder intends to sell, reflecting prior resales in accordance with guidance of the staff of the Commission (as such guidance may be substituted for, amended or supplemented by the staff of the Commission after the date of this Agreement). Furthermore, subject to a Holder’s compliance with its obligations under Section 2(d)(i), the Company will take such actions as are required to name such Holder as a selling Holder in a Registration Statement or any supplement thereto and to include (to the extent not theretofore included) in such Registration Statement the Registrable Securities identified in such Holder’s Selling Holder Questionnaire.
(g) Listing. The Company will use its best efforts to cause all May 2024 Shares, September 2024 Shares, March 2025 Shares, June 2025 Shares and September 2025 Shares that constitute Registrable Securities covered by the Registration Statement to be listed on each securities exchange on which identical securities issued by the Company are then listed if requested by the Holder thereof and, if not so listed, to be approved for listing on the national securities exchange on which the Common Stock is then listed.
(h) Transfer Agent & Registrar. The Company will provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such Registration Statement from and after a date not later than the Effective Date of such Registration Statement.
(i) Certificates. The Company will cooperate with the Holders to facilitate the timely preparation and delivery of any certificates representing Registrable Securities to be delivered to a transferee pursuant to any Registration Statement, which certificates will be free of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may reasonably request.
(j) CUSIPs. The Company, if necessary, will use its reasonable best efforts to provide a CUSIP number for the Registrable Securities, not later than the Effective Date of the Registration Statement.
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(k) Legal Counsel. Holders will have the right to select one legal counsel, at the Company’s reasonable expense pursuant to Section 4, to review any Registration Statement or Prospectus prepared pursuant to Section 2 or this Section 3, which will be such counsel as designated by the Majority Holders. The Company will reasonably cooperate with such legal counsel’s reasonable requests in performing their obligations under this Agreement.
(l) Blue Sky. If at any time the Registrable Securities are not “Covered Securities” within the meaning of Rule 146 of the Securities Act, the Company will, prior to any public offering of Registrable Securities, use its reasonable best efforts to register or qualify or cooperate with the selling Holders, in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or blue sky laws (“Blue Sky”) of all jurisdictions within the United States that the selling Holders request in writing be covered, to keep each such registration or qualification (or exemption therefrom) effective during the applicable Effectiveness Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by any Registration Statement; provided, that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to become subject to any material tax in any such jurisdiction where it is not then so subject.
(m) Subsequent Form S-3. If, at the time of filing of a Registration Statement, the Company is not eligible to use Form S-3 for transactions involving secondary offerings and the Company is not otherwise eligible to incorporate by reference prospectively into such Registration Statement, then at such time as the Company becomes eligible to register transactions involving secondary offerings on Form S-3, the Company may, in its sole discretion, file in accordance with the procedures outlined in this Section 3, including but not limited to all required notices to the Holders, an additional Registration Statement on Form S-3 to cover resales pursuant to Rule 415 of the Registrable Securities (a “Subsequent Form S-3”), and, when such Subsequent Form S-3 has been filed with the Commission, the Company may, concurrently with its filing of a request for acceleration of effectiveness of such Subsequent Form S-3, withdraw or terminate the original Registration Statement; provided, however, that nothing in this Section 3(m) will be interpreted to limit the Company’s obligations pursuant to Section 2(a).
| 4. | Registration Expenses. |
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All fees and expenses incident to the performance of or compliance with this Agreement by the Company will be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement including, without limitation: (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (B) related to compliance with applicable state securities or Blue Sky laws and (C) incurred in connection with the preparation or submission of any filing with FINRA); (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing Prospectuses); (iii) messenger, telephone and delivery expenses; (iv) fees and disbursements of counsel for the Company and counsel pursuant to Section 3(k); (v) Securities Act liability insurance, if the Company so desires such insurance; (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement and (vii) all of the Company’s own internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder; provided, however, that each selling Holder will pay (i) all underwriting discounts, commissions, fees and expenses and all transfer taxes with respect to the Registrable Securities sold by such selling Holder; (ii) any fees and expenses of legal counsel other than the counsel selected pursuant to Section 3(k) and (iii) all other expenses incurred by such selling Holder and incidental to the sale and delivery of the shares to be sold by such Holder.
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| 5. | Indemnification. |
|---|
(a) Indemnification by the Company. The Company will, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, partners, members and shareholders of each Holder and each Person who controls any Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the directors and officers of any such controlling Persons, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or based upon, in the case of the Registration Statement or in any amendments thereto, any untrue or alleged untrue statement of a material fact contained therein or any omission or alleged omission to state therein a material fact required to be stated therein to make the statements not misleading, or in the case of any Prospectus or form of prospectus, or in any amendment or supplement thereto, or in any preliminary prospectus, any untrue or alleged untrue statement of a material fact contained therein or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except to the extent, but only to the extent, that such untrue statements or omissions (1) are made in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Holder expressly for use in a Registration Statement, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and approved in writing by such Holder for use in the Registration Statement, such Prospectus or such form of Prospectus (it being understood and agreed that the only such information furnished to the Company by or on behalf of any Holder consists of the information described in Annex A hereto, as may be amended in accordance with the provisions of this Agreement, for this purpose) or (2) resulted from the use by any Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that such Prospectus is outdated or defective and prior to the receipt by such Holder of an Advice or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected.
(b) Indemnification by Holders. Each Holder will, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, partners, members and shareholders and each Person who controls the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the directors and officers of such controlling Person, in each case to the fullest extent permitted by applicable law from and against all Losses, as incurred, arising solely out of or based upon, in the case of the Registration Statement or in any amendments thereto, any untrue or alleged untrue statement of a material fact contained therein or any omission or alleged omission to state therein a material fact required to be stated therein to make the statements not misleading, or in the case of any Prospectus or form of prospectus, or in any amendment or supplement thereto, or in any preliminary prospectus, any untrue or alleged untrue statement of a material fact contained therein or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading to the extent, but only to the extent, that such untrue statements or omissions (1) are made in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Holder expressly for use in a Registration Statement or Prospectus, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and approved in writing by such Holder for use in the Registration Statement or Prospectus (it being understood and agreed that the only such information furnished to the Company by or on behalf of any Holder consists of the information described in Annex A hereto, as may be amended in accordance with the provisions of this Agreement, for this purpose) or (2) resulted from the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of an Advice or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected; provided, however, that the obligation to indemnify will be several and not joint and in no event will the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by any such selling Holder upon the sale of the Registrable Securities under the Registration Statement giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. In order for a Person (the “Indemnified
Party”\) to be entitled to any indemnification provided for under this Agreement in respect of, arising out of or involving a claim or demand made by any Person against the Indemnified Party \(a “Claim”\),
such Indemnified Party must notify the indemnifying party \(“Indemnifying Party”\) in writing, and in reasonable detail, of the Claim as promptly as reasonably possible after receipt by such Indemnified Party
of notice of the Claim; provided, however, that failure to give such notification on a timely basis shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been actually materially prejudiced
as a result of such failure. Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, promptly after the Indemnified Party’s receipt thereof, copies of all notices and documents \(including court filings and related papers\)
received by the Indemnified Party relating to the Claim.
14
If a Claim is made against an Indemnified Party, the Indemnifying Party shall be entitled to participate in the defense thereof and, if it so chooses and acknowledges its obligation in writing to indemnify the Indemnified Party therefor, to assume at its cost the defense thereof with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party and to settle such suit, action, claim or proceeding in its discretion with an unconditional full release of the Indemnified Party and no admission of fault, liability, culpability or a failure to act by or on behalf of the Indemnified Party. Notwithstanding any acknowledgment made pursuant to the immediately preceding sentence, the Indemnifying Party shall continue to be entitled to assert any limitation to the amount of Losses for which the Indemnifying Party is responsible pursuant to its indemnification obligations. Should the Indemnifying Party so elect to assume the defense of a Claim, the Indemnifying Party shall not be liable to the Indemnified Party for legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof unless (i) the Indemnifying Party has materially failed to defend, contest or otherwise protest in a timely manner against Claims or (ii) such Indemnified Party reasonably objects to such assumption on the grounds that there are defenses available to it which are different from or in addition to the defenses available to such Indemnifying Party and, as a result, a conflict of interest exists. Subject to the limitations in the preceding sentence, if the Indemnifying Party assumes such defense, the Indemnified Party shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnifying Party, it being understood, however, that the Indemnifying Party shall control such defense. The Indemnifying Party shall be liable for the fees and expenses of counsel employed by the Indemnified Party for any period during which the Indemnifying Party has not assumed the defense thereof. If the Indemnifying Party chooses to defend any Claim, all the parties hereto shall cooperate in the defense or prosecution of such Claim. Such cooperation shall include the retention and (upon the Indemnifying Party’s request) the provision to the Indemnifying Party of records and information which are reasonably relevant to such Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Whether or not the Indemnifying Party shall have assumed the defense of a Claim, the Indemnified Party shall not admit any liability with respect to, or settle, compromise or discharge, such Claim without the Indemnifying Party’s prior written consent (which consent shall not be unreasonably withheld).
The obligations of the Company and the Holders under this Section 5 shall survive completion of any offering of Registrable Securities pursuant to a Registration Statement and the termination of this Agreement. The Indemnifying Party’s liability to any such Indemnified Party hereunder shall not be extinguished solely because any other Indemnified Party is not entitled to indemnity hereunder.
(d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, will contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party will be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses will be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in Section 5(a) or 5(b) was available to such party in accordance with its terms. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in this Section 5. Notwithstanding the provisions of this Section 5, no Holder will be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
15
(e) Other. The indemnity and contribution agreements contained in this Section 5 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.
| 6. | Miscellaneous. |
|---|
(a) Notices. All notices or other communications hereunder will be in writing and will be given by (i) personal delivery, (ii) courier or other delivery service which obtains a receipt evidencing delivery, (iii) registered or certified mail (postage prepaid and return receipt requested) or (iv) facsimile or similar electronic device, to such address as may be designated from time to time by the relevant party, and which will initially be:
(i) in the case of the Company:
Venus Concept Inc.
235 Yorkland Blvd., Suite 900
Toronto, Ontario, Canada
M2J 4Y8
Attn: General Counsel and Corporate Secretary
Email:
With a copy to:
Dorsey & Whitney LLP
TD Bank Tower
66 Wellington Street West, Suite 3400
Toronto, ON M5K 1E6
Attn: Richard Raymer
Email:
(ii) in the case of each Madryn Party, to the address described on their respective signature page to the September 2025 Exchange Agreement.
Notices to Holders shall be provided to the address specified on such Holder’s Selling Holder Questionnaire. All notices and other communications will be deemed to have been given (i) if delivered by the United States mail, three (3) Business Days after mailing (five (5) Business Days if delivered to an address outside of the United States), (ii) if delivered by a courier or other delivery service, one (1) Business Day after dispatch (two (2) Business Days if delivered to an address outside of the United States) and (iii) if personally delivered or sent by facsimile or similar electronic device, upon receipt by the recipient or its agent or employee (which, in the case of a notice sent by facsimile or similar electronic device, will be the time and date indicated on the transmission confirmation receipt). No objection may be made by a party to the manner of delivery of any notice actually received in writing by an authorized agent of such party.
(b) Governing Law; Jurisdiction; Jury Trial; Etc.. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, 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 any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service will constitute good and sufficient service of process and notice thereof. Nothing contained herein will be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereby irrevocably waives any right it may have, and agrees not to request, a jury trial for the adjudication of any dispute hereunder or in connection with or arising out of this Agreement or any transaction contemplated hereby.
16
(c) Remedies. In the event of a breach by the Company of its obligations under this Agreement, each Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby waives the defense in any action for specific performance that a remedy at law would be adequate.
(d) Entire Agreement; Amendment and Restatement. This Agreement and any documents referred to herein or executed contemporaneously herewith constitute the parties’ entire agreement with respect to the subject matter hereof and supersede all agreements, representations, warranties, statements, promises and understandings, whether oral or written, with respect to the subject matter hereof. Without limiting the generality of the foregoing, the Prior Agreement is hereby amended in its entirety and restated as set forth herein, and all provisions of, rights granted and covenants made in the Prior Agreement are hereby superseded in their entirety.
(e) Amendments. This Agreement may be amended, altered or modified only by a writing signed by the Company and the Majority Holders.
(f) Additional Documents. Each party hereto agrees to execute any and all further documents and writings and to perform such other actions which may be or become necessary or expedient to effectuate and carry out this Agreement.
(g) Third-Party Beneficiaries. None of the provisions of this Agreement will be for the benefit of, or enforceable by, any third-party beneficiary, except with respect to the Holders.
(h) Successors and Assigns. Except as provided herein to the contrary, this Agreement will be binding upon and inure to the benefit of the parties hereto, their respective successors and permitted assigns.
(i) Waivers Strictly Construed. With regard to any power, remedy or right provided herein or otherwise available to any party hereunder (a) no waiver or extension of time will be effective unless expressly contained in a writing signed by the waiving party and (b) no alteration, modification or impairment will be implied by reason of any previous waiver, extension of time, delay or omission in exercise, or other indulgence.
(j) Severability. The validity, legality or enforceability of the remainder of this Agreement will not be affected even if one or more of the provisions of this Agreement will be held to be invalid, illegal or unenforceable in any respect.
(k) Attorneys’ Fees. Should any litigation be commenced (including any proceedings in a bankruptcy court) between the parties hereto or their representatives concerning any provision of this Agreement or the rights and duties of any Person hereunder, the party or parties prevailing in such proceeding will be entitled, in addition to such other relief as may be granted, to the attorneys’ fees and court costs incurred by reason of such litigation.
(l) Headings. The Section headings in this Agreement are inserted only as a matter of convenience, and in no way define, limit, extend or interpret the scope of this Agreement or of any particular Section.
(m) Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank, Signature Pages to Follow]
17
IN WITNESS WHEREOF, the parties have executed this Fourth Amended and Restated Resale Registration Rights Agreement as of the date first written above.
| VENUS CONCEPT INC. | |
|---|---|
| By: | /s/ Domenic Della Penna |
| Name: | Domenic Della Penna |
| --- | --- |
| Title: | Chief Financial Officer |
[Fourth Amended and Restated Resale Registration Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Fourth Amended and Restated Resale Registration Rights Agreement as of the date first written above.
| MADRYN HEALTH PARTNERS, LP | |
|---|---|
| By: | MADRYN HEALTH ADVISORS, LP, |
| its General Partner | |
| By: | MADRYN HEALTH ADVISORS GP, LLC, |
| its General Partner | |
| By: | /s/ Avinash Amin |
| Name: | Avinash Amin |
| --- | --- |
| Title: | Member |
| MADRYN HEALTH PARTNERS (CAYMAN MASTER), LP | |
| --- | --- |
| By: | MADRYN HEALTH ADVISORS, LP, |
| its General Partner | |
| By: | MADRYN HEALTH ADVISORS GP, LLC, |
| its General Partner | |
| By: | /s/ Avinash Amin |
| Name: | Avinash Amin |
| --- | --- |
| Title: | Member |
[Fourth Amended and Restated Resale Registration Rights Agreement]
PLAN OF DISTRIBUTION
We are registering the Securities covered by this prospectus on behalf of the Selling Securityholders. All costs, expenses and fees connected with the registration of these Securities will be borne by us. Any brokerage commissions and similar expenses connected with selling the Securities will be borne by the Selling Securityholders. The Selling Securityholders may offer and sell the Securities covered by this prospectus from time to time in one or more transactions. The term “Selling Securityholders” includes pledgees, donees, transferees and other successors-in-interest who may acquire Securities through a pledge, gift, partnership distribution or other non-sale related transfer from the Selling Securityholders. The Selling Securityholders will act independently of the Company in making decisions with respect to the timing, manner and size of each sale. These transactions include:
| • | in “at the market offerings” within the meaning of Rule 415(a)(4) under the Securities Act, to or through a market maker or into an existing trading market, on an exchange or otherwise; |
|---|---|
| • | directly to a limited number of purchasers or to a single purchaser; |
| --- | --- |
| • | through agents; |
| --- | --- |
| • | by delayed delivery contracts or by remarketing firms; |
| --- | --- |
| • | ordinary brokerage transactions and transactions in which the broker solicits purchasers; |
| --- | --- |
| • | purchases by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant to this prospectus; |
| --- | --- |
| • | exchange or over-the-counter distributions in accordance with the rules of the exchange or other market; |
| --- | --- |
| • | block trades in which the broker-dealer attempts to sell the Securities as agent but may position and resell a portion of the block as principal to facilitate the transaction, or in crosses, in which the same broker acts as agent on both<br> sides of the trade; |
| --- | --- |
| • | transactions in options, swaps or other derivatives that may or may not be listed on an exchange; |
| --- | --- |
| • | through distributions by a Selling Securityholder or its successors in interest to its members, general or limited partners or shareholders (or their respective members, general or limited partners or shareholders); |
| --- | --- |
| • | a combination of any such method of sale; or |
| --- | --- |
| • | any other method permitted pursuant to applicable law. |
| --- | --- |
In connection with distributions of the Securities or otherwise, the Selling Securityholders may:
| • | sell the Securities: |
|---|---|
| • | in negotiated transactions; |
| --- | --- |
| • | in one or more transactions at a fixed price or prices, which may be changed from time to time; |
| --- | --- |
| • | at market prices prevailing at the times of sale; |
| --- | --- |
| • | at prices related to such prevailing market prices; or |
| --- | --- |
| • | at negotiated prices; |
| --- | --- |
1
| • | sell the Securities: |
|---|---|
| • | on a national securities exchange; |
| --- | --- |
| • | in the over-the-counter market; or |
| --- | --- |
| • | in transactions otherwise than on an exchange or in the over-the-counter market, or in combination; |
| --- | --- |
| • | enter into option or other transactions with broker-dealers or other financial institutions which require the delivery to them of Securities covered by this prospectus, which they may in turn resell; and |
| --- | --- |
| • | pledge Securities to broker-dealers or other financial institutions, which, upon a default, they may in turn resell. |
| --- | --- |
The Selling Securityholders may also resell all or a portion of the Securities in open market transactions in reliance upon Rule 144 under the Securities Act of 1933, as amended, or the Securities Act, as permitted by that rule, Section 4(a)(1) under the Securities Act, if available, or any other exemption from the registration requirements that become available, rather than under this prospectus.
If underwriters are used in the sale of any Securities, such Securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions described above. Securities may be either offered to the public through underwriting syndicates represented by managing underwriters or directly by underwriters. We may use underwriters with whom we have a material relationship. As applicable, we will describe in each accompanying prospectus supplement the name of the underwriter(s) and the nature of any such relationship(s).
In connection with sales of Securities, the Selling Securityholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of Securities in the course of hedging in positions they assume. The Selling Securityholders may also sell Securities short and the Selling Securityholders may deliver Securities covered by this prospectus to close out short positions and to return borrowed Securities in connection with such short sales. The Selling Securityholders may also loan or pledge Securities to broker-dealers that in turn may sell such Securities, to the extent permitted by applicable law. The Selling Securityholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of Securities offered by this prospectus, which Securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Securityholders may, from time to time, pledge or grant a security interest in some or all of the Securities owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the Securities from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act, amending, if necessary, the list of Selling Securityholders to include the pledgee, transferee or other successors in interest as Selling Securityholders under this prospectus. The Selling Securityholders may also may transfer and donate Securities in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
A Selling Securityholder that is an entity may elect to make an in-kind distribution of Securities to its members, general or limited partners or shareholders pursuant to the registration statement of which this prospectus is a part by delivering a prospectus. To the extent that such members, general or limited partners or shareholders are not affiliates of ours, such members, partners or shareholders would thereby receive freely tradable Securities pursuant to the distribution through a registration statement. Additionally, to the extent that entities, members, partners or shareholders are affiliates of ours received shares in any such distribution, such affiliates will also be Selling Securityholders and will be entitled to sell Securities pursuant to this prospectus.
2
In effecting sales, the Selling Securityholders may engage broker-dealers or agents, who may in turn arrange for other broker-dealers to participate. Broker-dealers or agents may receive commissions, discounts or concessions from the Selling Securityholders and/or from the purchasers of Securities for whom the broker-dealers may act as agents or to whom they sell as principal, or both. The compensation to a particular broker-dealer may be in excess of customary commissions. To our knowledge, there is currently no plan, arrangement or understanding between any Selling Securityholders and any broker-dealer or agent regarding the sale of any Securities by the Selling Securityholders.
The Selling Securityholders, any broker-dealers or agents and any participating broker-dealers that act in connection with the sale of the Securities covered by this prospectus may be “underwriters” under the Securities Act with respect to those Securities and will be subject to the prospectus delivery requirements of that Act. Any profit that the Selling Securityholders realize, and any compensation that any broker-dealer or agent may receive in connection with any sale, including any profit realized on resale of Securities acquired as principal, may constitute underwriting discounts and commissions. If the Selling Securityholders are deemed to be underwriters, the Selling Securityholders may be subject to certain liabilities under statutes including, but not limited to, Section 11, 12 and 17 of the Securities Act and Section 10(b) and Rule 10b-5 under the Exchange Act.
The securities laws of some states may require the Selling Securityholders to sell the Securities in those states only through registered or licensed brokers or dealers. These laws may also require that we register or qualify the Securities for sale in those states unless an exemption from registration and qualification is available and the Selling Securityholders and we comply with that exemption. In addition, the anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934 may apply to sales of Securities in the market and to the activities of the Selling Securityholders and their affiliates. Regulation M may restrict the ability of any person engaged in the distribution of the Securities to engage in market-making activities with respect to the Securities. All of the foregoing may affect the marketability of the Securities and the ability of any person to engage in market-making activities with respect to the Securities.
If any Selling Securityholder notifies us that he has entered into any material arrangement with a broker-dealer for the sale of Securities through a block trade, special offering, exchange distribution, over‑the-counter distribution or secondary distribution, or a purchase by a broker or dealer, we will file any necessary supplement to this prospectus to disclose:
| • | the number of Securities involved in the arrangement; |
|---|---|
| • | the terms of the arrangement, including the names of any underwriters, dealers or agents who purchase Securities, as required; |
| --- | --- |
| • | the proposed selling price to the public; |
| --- | --- |
| • | any discount, commission or other underwriting compensation; |
| --- | --- |
| • | the place and time of delivery for the Securities being sold; |
| --- | --- |
| • | any discount, commission or concession allowed, reallowed or paid to any dealers; and |
| --- | --- |
| • | any other material terms of the distribution of Securities. |
| --- | --- |
In addition, if the Selling Securityholder notifies us that a donee, pledgee, transferee or other successor-in-interest of the Selling Securityholder intends to sell any securities, we will file an amendment to the registration statement of which this prospectus forms a part of or a supplement to this prospectus, if required.
3
VENUS CONCEPT INC.
SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial owner of common stock, $0.0001 par value per share (the “Common Stock”) of Venus Concept Inc. (the “Company”) understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a Registration Statement for the registration and resale of the Registrable Securities, in accordance with the terms of the Fourth Amended and Restated Resale Registration Rights Agreement, dated as of September 30, 2025 (the “Registration Rights Agreement”), among the Company and the Madryn Parties (as defined therein). A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms used and not otherwise defined herein will have the meanings ascribed thereto in the Registration Rights Agreement.
The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
| 1. | Name. |
|---|---|
| (a) | Full Legal Name of Selling Securityholder |
| --- | --- |
| (b) | Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held: |
| (c) | Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the questionnaire): |
| 2. | Address for Notices to Selling Securityholder: |
| --- | --- |
| Name: | |
| --- | |
| Address: | |
| Telephone: | |
| Fax: | |
| Contact Person: | |
| 3. | Beneficial Ownership of Registrable Securities: |
| --- | --- |
| (a) | Type and Amount of Registrable Securities Beneficially Owned: |
| --- | --- |
4
| 4. | Broker-Dealer Status: |
|---|---|
| (a) | Are you a broker-dealer? |
| --- | --- |
Yes ☐ No ☐
Note: If yes, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
| (b) | Are you an affiliate of a broker-dealer? |
|---|
Yes ☐ No ☐
| (c) | If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements<br> or understandings, directly or indirectly, with any person to distribute the Registrable Securities? |
|---|
Yes ☐ No ☐
Note: If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
| 5. | Beneficial Ownership of Other Securities of the Company Owned by the Selling Securityholder. |
|---|
Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed above in Item 3.
| Type and Amount of Other Securities Beneficially Owned by the Selling Securityholder: | |
|---|---|
| 6. | Relationships with the Company: |
| --- | --- |
Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.
| State any exceptions here: |
|---|
The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof and prior to the Effective Date for the Registration Statement.
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 6 and the inclusion of such information in the Registration Statement and the related prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus.
5
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
| Dated: | Beneficial Owner: |
|---|---|
| By: | |
| Name: | |
| Title: |
PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:
Venus Concept Inc.
ATTN: Michael Mandarello, Chief Legal Officer & Head of Strategy & Operations
235 Yorkland Blvd., Suite 900
Toronto, ON M2J 4Y8
6
Exhibit 10.3
CONSENT AGREEMENT
This CONSENT AGREEMENT (the “Agreement”) dated as of September 30, 2025 (the “Effective Date”) is entered into among (a) VENUS CONCEPT USA INC., a Delaware corporation (the “Borrower”), (b) VENUS CONCEPT INC., a Delaware corporation (“Venus Concept”), (c) VENUS CONCEPT CANADA CORP., a corporation incorporated under the laws of the Province of Ontario (“Venus Canada”), (d) VENUS CONCEPT LTD., a company formed under the Companies Law of Israel “Venus Israel” and, together with Venus Concept and Venus Canada, the “Guarantors”; the Borrower and the Guarantors shall be referred to herein, collectively, as the “Loan Parties”), and (e) each of (i) MADRYN HEALTH PARTNERS, LP, a Delaware limited partnership (“Madryn Health”) and (ii) MADRYN HEALTH PARTNERS (CAYMAN MASTER), LP, a Cayman Islands limited partnership (“Madryn Cayman” and, together with Madryn Health, the “Lenders”; together the Lender and the Loan Parties are hereinafter referred to as the “Parties”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Loan Agreement (as defined below).
RECITALS
WHEREAS, CITY NATIONAL BANK OF FLORIDA (“CNB”) and the Borrower were parties to that certain Loan and Security Agreement (Main Street Priority Loan), dated as of December 8, 2020 (as amended, restated, supplemented, waived or otherwise modified from time to time, the “Loan Agreement”), between CNB, as lender, and Borrower, pursuant to which CNB provided Borrower a term loan in the principal amount of Fifty Million Dollars ($50,000,000.00) (the “Loan”) issued pursuant to the Main Street Priority Loan Facility, all upon certain terms and conditions set forth in the Loan Agreement and in the other Loan Documents (as defined in the Loan Agreement), as amended by that certain Loan Amendment and Consent Agreement, dated as of May 24, 2024, made among the Loan Parties and the Lenders, that certain Loan Amendment and Consent Agreement, dated as of July 8, 2024, made among the Loan Parties and the Lenders and that certain Third Loan Amendment, First Subordination Agreement Amendment and Consent Agreement, dated as of September 26, 2024, made among the Loan Parties and the Lenders;
WHEREAS, to evidence Borrower’s repayment obligations under the Loan Agreement, Borrower executed a Promissory Note in favor of CNB dated December 8, 2020 (as amended, amended and restated, supplemented, waived, exchanged or otherwise modified from time to time, the “Original Note”), in the original principal amount of $50,000,000.00;
WHEREAS, in connection with the Loan, Venus Concept and Venus Canada have previously issued a Guaranty of Payment and Performance, originally dated as of December 8, 2020, in favor of the Lender (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Main Street Guaranty”);
WHEREAS, in connection with the Loan, (i) the Borrower, each Lender and CNB entered into that certain Subordination of Debt Agreement, dated as of December 8, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Borrower Main Street Subordination Agreement”), (ii) Venus Concept, each Lender and CNB entered into that certain Subordination of Debt Agreement, dated as of December 8, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Venus Concept. Main Street Subordination Agreement”), (iii) Venus Canada, each Lender and CNB entered into that certain Subordination of Debt Agreement, dated as of December 8, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Canada Main Street Subordination Agreement”), and (iv) the Venus Israel, each Lender and CNB entered into that certain Subordination of Debt Agreement, dated as of October 4, 2023 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Israeli Main Street Subordination Agreement” and, together with the Borrower Main Street Subordination Agreement, the Venus Concept Main Street Subordination Agreement and the Canada Main Street Subordination Agreement, the “Madryn Main Street Subordination Agreements” and each, a “Madryn Main Street Subordination Agreement”);
WHEREAS, pursuant to that certain Main Street Loan – Venus Concept – Sale and Assignment Agreement, dated as of April 23, 2024, between CNB and the Lenders, CNB assigned, transferred, and conveyed all of its rights, title, and interest in and to the Loan, Note, the Loan Agreement, the Main Street Guaranty, the Madryn Main Street Subordination Agreements, all other Loan Documents and any related documents to the Lenders;
WHEREAS, pursuant to that certain Exchange Agreement, dated as of May 24, 2024, and made among the Borrower, Venus Concept, and the Lenders, the Lenders exchanged the Original Note for (a) two new promissory notes issued by the Borrower to each of Madryn Health and Madryn Cayman (as amended, amended and restated, supplemented, waived, exchanged or otherwise modified from time to time, collectively, the “May 2024 Notes”) and (b) shares of preferred stock of Venus Concept;
WHEREAS, pursuant to that certain Exchange Agreement, dated as of September 26, 2024, and made among the Borrower, Venus Concept, and the Lenders, the Lenders exchanged the May 2024 Notes for (a) two new promissory notes issued by the Borrower to each of Madryn Health and Madryn Cayman (as amended, amended and restated, supplemented, waived, exchanged or otherwise modified from time to time, collectively, the “Notes” and each, a “Note”) and (b) shares of preferred stock of Venus Concept;
WHEREAS, the Borrower will be required to pay to the Lenders accrued interest on the Notes on October 8, 2025 (such interest, the “October 2025 Interest”);
WHEREAS, the Borrower has requested that in lieu of paying the October 2025 Interest in cash, the Lenders consent to the payment by the Borrower of the October 2025 Interest by adding such interest to the outstanding principal amount of the Loan effective as of October 8, 2025 (such payment, the “October 2025 PIK Interest Payment”);
WHEREAS, the Borrower has requested relief from the obligation to comply with the requirements of Section 7(a) of the Loan Agreement (“Liquidity”) in respect of the Borrower’s minimum liquidity amounts (“Requested Minimum Liquidity Consent”); and
WHEREAS, the Lenders are willing to consent to the October 2025 PIK Interest Payment and the Requested Minimum Liquidity Consent, subject to the terms and conditions hereof, and amend the Loan Agreement;
NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Consents.
(a) October 2025 PIK Interest Payment Consent.
(i) Subject to the other terms and conditions of this Agreement, the Lenders hereby consent to the October 2025 PIK Interest Payment. The above consent shall not otherwise modify or affect the Borrower and the other Loan Parties’ obligations to comply fully with any other duty, term, condition or covenant contained in the Loan Agreement, the Notes, or any other Loan Document in the future and is limited solely to the matters set forth in this Section 1(a). Nothing contained in this Agreement shall be deemed to constitute a waiver of any duty, term, condition or covenant contained in the Loan Agreement, the Notes or any other Loan Document in the future, or any other rights or remedies any Lender may have under the Loan Agreement, the Notes or any other Loan Documents or under applicable law.
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(ii) The Borrower and the Lenders acknowledge and agree that in lieu of making cash payment of the October 2025 Interest, the Borrower will pay such interest to the Lenders on October 8, 2025 by adding such interest to the outstanding principal amount of the Loan on such date. Any and all such paid-in-kind interest so added to the principal amount of the Loan shall constitute and increase the principal amount of the Loans for all purposes under this Agreement and shall bear interest in accordance with the provisions of the Loan Agreement and Notes.
(b) Requested Minimum Liquidity Consent. The Lenders, as of the date hereof, hereby approve the Requested Minimum Liquidity Consent and agree that until October 31, 2025, the failure of any of the Loan Parties to comply with the obligations of Section 7(a) of the Loan Agreement shall not constitute an Event of Default under the Loan Agreement or the Notes. The above consent shall not otherwise modify or affect the Borrower’s and the other Loan Parties’ obligations to comply fully with the terms of the Loan Agreement, the Notes or any other Loan Document in the future and is limited solely to the matters set forth in this Section 1(b). Nothing contained in this Agreement shall be deemed to constitute a waiver of any duty, term, condition or covenant contained in the Loan Agreement, the Notes or any other Loan Document in the future, or any other rights or remedies any Lender may have under the Loan Agreement, the Notes or any other Loan Documents or under applicable law.
2. Conditions Precedent. This Agreement shall be effective upon the date on which the Lenders shall have received counterparts of this Agreement duly executed by the Borrower, the Guarantors, and the Lenders.
3. Reaffirmation. Each of the Loan Parties acknowledges and reaffirms (a) that it is bound by all of the terms of the Loan Documents to which it is a party and (b) that it is responsible for the observance and full performance of all Obligations, including without limitation, the repayment of the Loan. Furthermore, the Loan Parties acknowledge and confirm that by entering into this Agreement, the Lenders do not, except as expressly set forth herein, waive or release any term or condition of the Loan Agreement, the Notes or any of the other Loan Documents or any of their rights or remedies under such Loan Documents or any applicable law or any of the obligations of the Loan Parties thereunder.
4. Representations and Warranties. Each Loan Party represents and warrants to the Lenders as follows:
(a) As of the Effective Date, no Event of Default has occurred and is continuing.
(b) The representations and warranties of the Borrower and each other Loan Party contained in Section 5 of the Loan Agreement, or which are contained in any document furnished at any time under or in connection therewith, are true and correct in all material respects(and in all respects if any such representation and warranty is already qualified by materiality or reference to material adverse effect) on and as of the Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (and in all respects if any such representation and warranty is already qualified by materiality or reference to material adverse effect) as of such earlier date.
(c) Each Loan Party has the full power and authority to enter into, execute and deliver this Agreement and perform its obligations hereunder, under the Loan Agreement and under each of the other Loan Documents. The execution, delivery and performance by each Loan Party of this Agreement, and the performance by each Loan Party of the Loan Agreement and each other Loan
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Document to which it is a party, in each case, are within such person’s powers and have been authorized by all necessary corporate action of such person.
(d) This Agreement has been duly executed and delivered by such person and constitutes such person’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).
(e) No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such person of this Agreement.
(f) The execution and delivery of this Agreement does not (i) violate, contravene or conflict with any provision of its organization documents or (ii) materially violate, contravene or conflict with any laws applicable to it or its subsidiaries.
(g) The Loan Parties’ obligations are not reduced or modified by this Agreement and are not subject to any offsets, defenses or counterclaims.
5. Release. As a material part of the consideration for the Lenders entering into this Agreement (this Section 5, the “Release Provision”):
(a) Each Loan Party agrees that the Lenders, each of their respective affiliates and each of the foregoing persons’ respective officers, managers, members, directors, advisors, sub- advisors, partners, agents and employees, and their respective successors and assigns (hereinafter all of the above collectively referred to as the “Lender Group”), are irrevocably and unconditionally released, discharged and acquitted from any and all actions, causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, now known or unknown, suspected or unsuspected to the extent that any of the foregoing arises from any action or failure to act under or otherwise arising in connection with the Loan Agreement, the Notes or the other Loan Documents on or prior to the date hereof.
(b) Each Loan Party hereby acknowledges, represents and warrants to the Lender Group that:
(i) it has read and understands the effect of the Release Provision. Each Loan Party has had the assistance of independent counsel of its own choice, or has had the opportunity to retain such independent counsel, in reviewing, discussing, and considering all the terms of the Release Provision; and if counsel was retained, counsel for such Loan Party has read and considered the Release Provision and advised such Loan Party with respect to the same. Before execution of this Agreement, each Loan Party has had adequate opportunity to make whatever investigation or inquiry it may deem necessary or desirable in connection with the subject matter of the Release Provision.
(ii) no Loan Party is acting in reliance on any representation, understanding, or agreement not expressly set forth herein. Each Loan Party acknowledges that the Lender Group has not made any representation with respect to the Release Provision except as expressly set forth herein.
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(iii) each Loan Party has executed this Agreement and the Release Provision thereof as its free and voluntary act, without any duress, coercion, or undue influence exerted by or on behalf of any person.
(iv) each Loan Party is the sole owner of its respective claims released by the Release Provision, and no Loan Party has heretofore conveyed or assigned any interest in any such claims to any other Person.
(c) The Loan Parties understand that the Release Provision was a material consideration in the agreement of the Lenders to enter into this Agreement. The Release Provision shall be in addition to any right, privileges and immunities granted to the Lenders under the Loan Documents.
6. Miscellaneous.
(a) The Loan Agreement and the Notes, each as may be modified hereby, and the obligations of the Loan Parties thereunder and under the other Loan Documents, are hereby ratified and confirmed and shall remain in full force and effect according to their terms. This Agreement shall constitute a Loan Document under the Loan Agreement.
(b) This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by telecopy shall be effective as an original and shall constitute a representation that an executed original shall be delivered.
(c) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
| VENUS CONCEPT USA INC., | |
|---|---|
| as Borrower and a Grantor | |
| By: | /s/ Rajiv De Silva |
| Name: | Rajiv De Silva |
| --- | --- |
| Title: | President and Assistant Secretary |
| VENUS CONCEPT INC., | |
| --- | --- |
| as a Guarantor and a Grantor | |
| By: | /s/ Rajiv De Silva |
| Name: | Rajiv De Silva |
| --- | --- |
| Title: | Chief Executive Officer |
| VENUS CONCEPT CANADA CORP., | |
| --- | --- |
| as a Guarantor and a Grantor | |
| By: | /s/ Michael Mandarello |
| Name: | Michael Mandarello |
| --- | --- |
| Title: | President and General Manager |
| VENUS CONCEPT LTD, | |
| --- | --- |
| as a Guarantor and a Grantor | |
| By: | /s/ Rajiv De Silva |
| Name: | Rajiv De Silva |
| --- | --- |
| Title: | Chief Executive Officer |
| MADRYN HEALTH PARTNERS, LP, as a Lender | |
|---|---|
| By: | MADRYN HEALTH ADVISORS, LP, |
| its General Partner | |
| By: | MADRYN HEALTH ADVISORS GP, LLC, |
| its General Partner | |
| By: | /s/ Avinash Amin |
| Name: | Avinash Amin |
| --- | --- |
| Title: | Member |
| MADRYN HEALTH PARTNERS (CAYMAN<br><br> <br>MASTER), LP, as a Lender | |
| --- | --- |
| By: | MADRYN HEALTH ADVISORS, LP, |
| its General Partner | |
| By: | MADRYN HEALTH ADVISORS GP, LLC, |
| its General Partner | |
| By: | /s/ Avinash Amin |
| Name: | Avinash Amin |
| --- | --- |
| Title: | Member |
Exhibit 10.4
TWENTIETH AMENDMENT TO BRIDGE LOAN AGREEMENT AND CONSENT
This TWENTIETH AMENDMENT TO BRIDGE LOAN AGREEMENT AND CONSENT (this “Agreement”),
dated as of September 30, 2025 \(the “Effective Date”\), is entered into among \(a\) VENUS CONCEPT USA INC., a Delaware corporation \(the “Borrower”\),
\(b\) VENUS CONCEPT INC., a Delaware corporation \(“Venus Concept”\), \(c\) VENUS CONCEPT CANADA CORP., a corporation incorporated under the laws of the Province of Ontario \(“Venus Canada”\), \(d\) VENUS CONCEPT LTD., a company formed under the Companies Law of Israel \(“Venus Israel” and, together with
Venus Concept and Venus Canada, the “Guarantors”; the Borrower and the Guarantors shall be referred to herein, collectively, as the “Loan
Parties”\), \(e\) MADRYN HEALTH PARTNERS, LP, a Delaware limited partnership, and MADRYN HEALTH PARTNERS \(CAYMAN MASTER\), LP, a Cayman Islands limited partnership, as Lenders \(the “Lenders”,
and each, a “Lender”\) and \(f\) MADRYN HEALTH PARTNERS, LP, a Delaware limited partnership, as Administrative Agent \(the “Agent”\).
Capitalized terms used but not otherwise defined herein have the meanings provided in the Loan Agreement \(as defined below\).
RECITALS
WHEREAS, the Loan Parties, the Lenders and the Agent entered into that certain Loan and Security Agreement, dated as of April 23, 2024 (as amended, restated, supplemented, waived or otherwise modified from time to time, the “Loan Agreement”), pursuant to which the Lenders agreed to make a term loan to the Borrower in the original principal amount of $2,237,906.85 and one or more delayed draw term loans of up to an additional principal amount of $21,000,000.00, in each case, subject to the terms and conditions of the Loan Agreement;
WHEREAS, the Borrower has requested relief from the obligation to comply with the requirements of Section 5.15 of the Loan Agreement (“Liquidity”) in respect of the Borrower’s minimum liquidity amounts (“Requested Minimum Liquidity Consent”);
WHEREAS, the Borrower has requested that the Loan Agreement be amended to provide for certain modifications thereto; and
WHEREAS, the Lenders are willing to consent to the Requested Minimum Liquidity Consent and amend the Loan Agreement, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Amendments to Loan Agreement.
(a) The Loan Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example:~~stricken text~~ or ~~stricken text~~) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text or double-underlined text), in each case, as set forth in a conformed copy of the Loan Agreement attached as Annex A hereto.
(b) Schedule 2.01 of the Loan Agreement is hereby amended and restated in its entirety in the form of Schedule 2.01 attached hereto.
2.
Requested Minimum Liquidity Consent. The Lenders, as of the date hereof, hereby approve the Requested
Minimum Liquidity Consent and agree that until October 31, 2025, the failure of any of the Loan Parties to comply with the obligations of Section 5.15 of the Loan Agreement shall not constitute an Event of Default under the Loan Agreement. The
above consent shall not otherwise modify or affect the Borrower’s and the other Loan Parties’ obligations to comply fully with the terms of the Loan Agreement or any other Loan Document in the future and is limited solely to the matters set
forth in this Section 2. Nothing contained in this Agreement shall be deemed to constitute a waiver of any duty, term,
condition or covenant contained in the Loan Agreement or any other Loan Document in the future, or any other rights or remedies any Lender may have under the Loan Agreement or any other Loan Documents or under applicable law
3. Conditions Precedent. This Agreement shall be effective upon the date on which the Lenders shall have received counterparts of this Agreement duly executed by the Borrower, the Guarantors, and the Lenders.
4. Reaffirmation. Each of the Loan Parties acknowledges and reaffirms (a) that it is bound by all of the terms of the Loan Documents to which it is a party and (b) that it is responsible for the observance and full performance of all Obligations, including without limitation, the repayment of the Term Loan. Furthermore, the Loan Parties acknowledge and confirm that by entering into this Agreement, the Lenders do not, except as expressly set forth herein, waive or release any term or condition of the Loan Agreement or any of the other Loan Documents or any of their rights or remedies under such Loan Documents or any applicable law or any of the obligations of the Loan Parties thereunder.
5. Representations and Warranties. Each Loan Party represents and warrants to the Lenders as follows:
(a) As of the Effective Date, no Event of Default has occurred and is continuing.
(b) The representations and warranties of the Borrower and each other Loan Party contained in Article IV of the Loan Agreement (as amended by this Agreement), or which are contained in any document furnished at any time under or in connection therewith, are true and correct in all material respects (and in all respects if any such representation and warranty is already qualified by materiality or reference to material adverse effect) on and as of the Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (and in all respects if any such representation and warranty is already qualified by materiality or reference to material adverse effect) as of such earlier date.
(c) Each Loan Party has the full power and authority to enter into, execute and deliver this Agreement and perform its obligations hereunder, under the Loan Agreement and under each of the other Loan Documents. The execution, delivery and performance by each Loan Party of this Agreement, and the performance by each Loan Party of the Loan Agreement and each other Loan Document to which it is a party, in each case, are within such person’s powers and have been authorized by all necessary corporate action of such person.
(d) This Agreement has been duly executed and delivered by such person and constitutes such person’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).
(e) No consent, approval, authorization or order of, or filing, registration or qualification with, any court or Governmental Authority or third party is required in connection with the execution, delivery or performance by such person of this Agreement.
(f) The execution and delivery of this Agreement does not (i) violate, contravene or conflict with any provision of its organization documents or (ii) materially violate, contravene or conflict with any laws applicable to it or its subsidiaries.
(g) The Loan Parties’ obligations are not reduced or modified by this Agreement and are not subject to any offsets, defenses or counterclaims.
6. Release. As a material part of the consideration for the Lenders entering into this Agreement (this Section 6, the “Release Provision”):
(a) Each Loan Party agrees that the Lenders, each of their respective affiliates and each of the foregoing persons’ respective officers, managers, members, directors, advisors, sub-advisors, partners, agents and employees, and their respective successors and assigns (hereinafter all of the above collectively referred to as the “Lender Group”), are irrevocably and unconditionally released, discharged and acquitted from any and all actions, causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, now known or unknown, suspected or unsuspected to the extent that any of the foregoing arises from any action or failure to act under or otherwise arising in connection with the Loan Agreement or the other Loan Documents on or prior to the date hereof.
(b) Each Loan Party hereby acknowledges, represents and warrants to the Lender Group that:
(i) it has read and understands the effect of the Release Provision. Each Loan Party has had the assistance of independent counsel of its own choice, or has had the opportunity to retain such independent counsel, in reviewing, discussing, and considering all the terms of the Release Provision; and if counsel was retained, counsel for such Loan Party has read and considered the Release Provision and advised such Loan Party with respect to the same. Before execution of this Agreement, each Loan Party has had adequate opportunity to make whatever investigation or inquiry it may deem necessary or desirable in connection with the subject matter of the Release Provision.
(ii) no Loan Party is acting in reliance on any representation, understanding, or agreement not expressly set forth herein. Each Loan Party acknowledges that the Lender Group has not made any representation with respect to the Release Provision except as expressly set forth herein.
(iii) each Loan Party has executed this Agreement and the Release Provision thereof as its free and voluntary act, without any duress, coercion, or undue influence exerted by or on behalf of any person.
(iv) each Loan Party is the sole owner of its respective claims released by the Release Provision, and no Loan Party has heretofore conveyed or assigned any interest in any such claims to any other Person.
(c) The Loan Parties understand that the Release Provision was a material consideration in the agreement of the Lenders to enter into this Agreement. The Release Provision shall be in addition to any right, privileges and immunities granted to the Lenders under the Loan Documents.
7. Miscellaneous.
(a) The Loan Agreement, as modified hereby, and the obligations of the Loan Parties thereunder and under the other Loan Documents, are hereby ratified and confirmed and shall remain in full force and effect according to their terms. This Agreement shall constitute a Loan Document under the Loan Agreement.
(b) This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by telecopy shall be effective as an original and shall constitute a representation that an executed original shall be delivered.
(c) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SIGNATURE PAGES FOLLOW
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
| VENUS CONCEPT USA INC., | |
|---|---|
| as Borrower | |
| By: | /s/ Rajiv De Silva |
| Name: | Rajiv De Silva |
| --- | --- |
| Title: | President and Assistant Secretary |
| VENUS CONCEPT INC., | |
| --- | --- |
| as a Guarantor | |
| By: | /s/ Rajiv De Silva |
| Name: | Rajiv De Silva |
| --- | --- |
| Title: | Chief Executive Officer |
| VENUS CONCEPT CANADA CORP., | |
| --- | --- |
| as a Guarantor | |
| By: | /s/ Michael Mandarello |
| Name: | Michael Mandarello |
| --- | --- |
| Title: | President and General Manager |
| VENUS CONCEPT LTD, | |
| --- | --- |
| as a Guarantor | |
| By: | /s/ Rajiv De Silva |
| Name: | Rajiv De Silva |
| --- | --- |
| Title: | Chief Executive Officer |
Twentieth Amendment to Bridge Loan Agreement
| MADRYN HEALTH PARTNERS, LP, as a Lender | |
|---|---|
| By: | MADRYN HEALTH ADVISORS, LP, |
| its General Partner | |
| By: | MADRYN HEALTH ADVISORS GP, LLC, |
| its General Partner | |
| By: | /s/ Avinash Amin |
| Name: | Avinash Amin |
| --- | --- |
| Title: | Member |
| MADRYN HEALTH PARTNERS (CAYMAN<br><br> <br>MASTER), LP, as a Lender | |
| --- | --- |
| By: | MADRYN HEALTH ADVISORS, LP, |
| its General Partner | |
| By: | MADRYN HEALTH ADVISORS GP, LLC, |
| its General Partner | |
| By: | /s/ Avinash Amin |
| Name: | Avinash Amin |
| --- | --- |
| Title: | Member |
| MADRYN HEALTH PARTNERS, LP, as<br><br> <br>Administrative Agent | |
| --- | --- |
| By: | MADRYN HEALTH ADVISORS, LP, |
| its General Partner | |
| By: | MADRYN HEALTH ADVISORS GP, LLC, |
| its General Partner | |
| By: | /s/ Avinash Amin |
| Name: | Avinash Amin |
| --- | --- |
| Title: | Member |
Twentieth Amendment to Bridge Loan Agreement
ANNEX A
Attached.
LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT (“Agreement”) is entered into as of April 23, 2024 (the “Effective Date”), among VENUS CONCEPT USA INC., a Delaware corporation (the “Borrower”), VENUS CONCEPT INC., a Delaware corporation (“Venus Concept”), VENUS CONCEPT CANADA CORP., a corporation incorporated under the laws of the Province of Ontario (“Venus Canada”), VENUS CONCEPT LTD, a company formed under the Companies Law of Israel (“Venus
Israel”, and together with Venus Concept, Venus Canada and any other domestic Subsidiary of the Borrower or of Venus Concept that becomes party hereto as a guarantor pursuant to Section 5.07, the “Guarantors,” and the Guarantors together with the Borrower, the “Loan Parties”\), each lender party hereto \(collectively, the “Lenders” and individually, a “Lender”\) and MADRYN HEALTH PARTNERS, LP, as Administrative Agent.
PRELIMINARY STATEMENTS
The Borrower has requested, and the Lenders have agreed to make, a term loan to the Borrower on the Effective Date in the original principal amount of $2,237,906.85 and one or more delayed draw term loans of up to an additional principal amount of $21,000,000.0026,000,000.00, in each case, subject to the terms and conditions of this Agreement.
The Lenders have indicated their willingness to lend on the terms and subject to the conditions set forth herein.
In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
Definitions and Accounting Terms
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:
“Administrative Agent” means Madryn Health Partners, LP, in its capacity as Administrative Agent under this Agreement, and shall include any successor to the Administrative Agent appointed pursuant to Section 9.08.
“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Agreement” means this Loan and Security Agreement, as amended, restated, extended, modified or supplemented from time to time in accordance with the terms hereof.
“Attorney Costs” means all reasonable, documented fees, out-of-pocket expenses and disbursements of a single external counsel for the Administrative Agent.
“Borrower” has the meaning specified in the introductory paragraph to this Agreement.
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“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the State of Delaware, and for purposes of Section 10.02 and Section 10.04 only as such provisions relate to Venus Canada or Venus Israel, Canada or Israel, respectively.
“Canadian Defined Benefit Pension Plan” means a Canadian Pension Plan that
contains a “defined benefit provision” as such term is defined in Section 147.1(1) of the Income Tax Act (Canada).
“Canadian Loan Party” means Venus Canada and each Foreign Subsidiary that is organized under the laws of Canada or any territory or province thereof.
“Canadian Pension Plan” means a pension plan or plan that is subject to applicable pension benefits legislation in any jurisdiction of Canada and that is organized and administered to provide pensions, pension benefits or retirement benefits for employees and former employees of any Loan Party or any Subsidiary thereof.
“Change of Control” means the occurrence of any of the following events:
(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 50% or more of the Equity Interests of Venus Concept entitled to vote for members of the board of directors (or equivalent governing body) of Venus Concept on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or
(b) Venus Concept shall cease to own and control, of record and beneficially, directly or indirectly, one hundred percent (100%) of the Equity Interests of (i) the Borrower, (ii) Venus Canada, (iii) Venus Israel or (iv) any other Loan Party; or
(c) any “Change of Control” (or any comparable or equivalent term) occurs under any document or agreement evidencing any Indebtedness of any Loan Party or any Subsidiary having an aggregate principal amount in excess of $1,000,000.
“Collateral” has the meaning specified in Section 8.01.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
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For purposes of this Agreement, in no event shall any Lender or the Administrative Agent constitute an Affiliate of any Loan Party.
“Copyright License” means any written agreement, naming any Loan Party as licensor, granting any right under any Copyright.
“Copyrights” means (a) all registered United States copyrights in all Works, and all Canadian copyrights, now existing or hereafter created or acquired, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Copyright Office and the Canadian Intellectual Property Office, and (b) all renewals thereof.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means an interest rate equal to the interest rate otherwise applicable to the Term Loan plus 3.00% per annum to the fullest extent permitted by applicable Laws.
“Delayed Draw Availability Period” means the period following the Effective Date through and including the date which is two (2) Business Days prior to the Maturity Date.
“Delayed Draw Commitment” means $21,000,000.0026,000,000.00.
“Delayed Draw Funding Date” has the meaning set forth in Section 2.01(b).
“Delayed Draw Term Loan” has the meaning set forth in Section 2.01(b).
“Disposition” means any transaction, or series of related transactions, pursuant to which any Person or any of its Subsidiaries sells, assigns, transfers, leases, licenses (as licensor) or otherwise disposes of any property or assets (whether now owned or hereafter acquired) to any other Person, in each case, whether or not the consideration therefor consists of cash, securities or other assets owned by the acquiring Person.
“Dollar” and “$” mean lawful money of the United States.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any state of the United States or the District of Columbia.
“Effective Date” has the meaning specified in the introductory paragraph to this Agreement.
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“ERISA” means the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time, and the rules and regulations promulgated thereunder.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions relating to Section 412 of the Internal Revenue Code).
“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“Equity Issuance” means the sale or issuance by any Loan Party or any of its Subsidiaries of any shares of its Equity Interests other than the issuance of any Equity Interests constituting incentive units in accordance with the terms of such Loan Party’s or such Subsidiaries’ organizational documents.
“Event of Default” has the meaning specified in Section 7.01.
“Excluded Property” means, with respect to any Loan Party, including any Person that becomes a Loan Party after the Effective Date, (a) any leasehold interest of such Loan Party in real property, (b) solely with respect to any U.S. Loan Party or any Canadian Loan Party, any personal property (including, without limitation, motor vehicles owned by any U.S. Loan Party) in respect of which perfection of a Lien is not either (i) governed by the Uniform Commercial Code or the PPSA or (ii) effected by appropriate evidence of the Lien being filed in the United States Copyright Office, the United States Patent and Trademark Office or the Canadian Intellectual Property Office, unless requested by the Administrative Agent, (c) any permit, lease, license, contract or other agreement if the grant of a security interest in such permit, lease, license, contract or other agreement in the manner contemplated by this Agreement, under the terms hereof or under applicable Law, is prohibited and would result in the termination thereof or give the other parties thereto the right to terminate, accelerate or otherwise alter such Loan Party’s rights, titles and interests thereunder (including upon the giving of notice or the lapse of time or both); provided, that, (i) any such limitation described in the foregoing clause (c) on the security interests granted hereunder shall only apply to the extent that any such prohibition is not rendered ineffective pursuant to the Uniform Commercial Code, the PPSA or any other applicable Law, in each case, that has the effect of permitting the grant of a security interest and preventing any termination, acceleration or alteration of such Loan Party’s rights, titles and interests thereunder as a result of such grant of a security interest and (ii) in the event of the termination or elimination of any such prohibition or the requirement for any consent contained in any applicable Law, permit, lease, license, contract or other agreement, or upon the granting of any such consent, or waiving or terminating any requirement for such consent, a security interest in such permit, lease, license, contract or other agreement shall be automatically and simultaneously granted hereunder and such permit, lease, license, contract or other agreement shall be included as Collateral, and (d) any real or personal property as to which the Administrative Agent and the Borrower agree in writing that the costs or other consequences of obtaining a security interest or perfection thereof are excessive in view of the benefits to be obtained by the Secured Parties therefrom.
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"Foreign Loan Party” means any Loan Party that is not a U.S. Loan Party.
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time.
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Guarantors” has the meaning specified in the introductory paragraph to this Agreement.
“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following: (a) all obligations of such Person for borrowed money, all obligations evidenced by bonds, debentures, notes or other similar instruments, all capital leases, and all securities issued by such Person providing for mandatory payments of money, in each case whether or not contingent; (b) all obligations of such Person to pay the deferred purchase price of property or services which would be shown on the balance sheet of such Person as a liability in accordance with GAAP; (c) all obligations (whether contingent or non-contingent) of such Person to reimburse any Person in respect of amounts paid under a letter of credit or similar instrument; (d) all monetary obligations of such Person under a so-called synthetic, off-balance sheet or tax retention lease or an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment), (e) to the extent not otherwise included within the definition of “Indebtedness” of a specified Person, all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; and (f) to the extent not otherwise included within the definition of “Indebtedness” of a specified Person, all guarantees by such Person of or with respect to the Indebtedness of another Person. Notwithstanding anything to the contrary set forth in this Agreement, Indebtedness does not include trade payables incurred in the ordinary course of business.
“Indemnified Liabilities” has the meaning specified in Section 10.05.
“Indemnitees” has the meaning specified in Section 10.05.
“Initial Term Loan” has the meaning set forth in Section 2.01(a).
“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit or all or a substantial part of the business of, such Person.
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“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority.
“Lender” has the meaning specified in the introductory paragraph to this Agreement and their respective successors and assigns as permitted hereunder, each of which is referred to herein as a “Lender.”
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).
“Loan Documents” means, collectively, this Agreement and any other document, agreement or instrument which has been or will be executed by a Loan Party or for the benefit of the Administrative Agent or the Lenders in connection with this Agreement and the transactions described herein, all as may be amended, restated, extended, modified or supplemented from time to time. For the avoidance of doubt, the organizational documents of the Borrower shall not constitute Loan Documents.
“Loan Party” has the meaning specified in the introductory paragraph to this Agreement.
“Main Street Priority Loan” means that certain Loan and Security Agreement (Main Street Priority Loan), dated as of December 8, 2020 between Borrower and City National Bank of Florida (as amended, restated, supplemented, waived or otherwise modified from time to time).
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent) or financial condition of one or more of the Loan Parties; (b) a material impairment of the rights and remedies of the Administrative Agent or the Lenders under any Loan Document, or of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.
“Maturity Date” means ~~September~~ ~~30~~October 31, 2025.
“Maximum Rate” has the meaning specified in Section 10.09.
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
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“Multiple Employer Plan” means a Plan which has two or more contributing sponsors (including the Borrower or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.
“Obligations” means all advances to, and debts, liabilities, fees, obligations, covenants and duties of, each Loan Party arising under any Loan Document to which it is a party whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against such Loan Party of any proceeding under any Debtor Relief Laws naming such Loan Party as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
“Patent License” means any agreement, whether written or oral, providing for the grant by or to a Loan Party of any right to manufacture, use or sell any invention covered by a Patent.
“Patents” means (a) all letters patent of the United States or any other country, and all patents and industrial designs of Canada, and all reissues and extensions thereof, and (b) all applications for letters patent of the United States or any other country, and all applications for patents and industrial designs of Canada, and all divisions, continuations and continuations-in-part thereof.
“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by the Borrower and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to minimum funding standards under Section 412 of the Internal Revenue Code.
“Permitted Encumbrances” means: (a) Liens imposed by law for taxes that are not yet due; (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP; (c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations; (d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (e) judgment Liens in respect of judgments that do not constitute an Event of Default; (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower; (g) all Liens, adverse claims and other encumbrances existing as of the Effective Date which are in favor of Lenders or of which Lenders have been advised in writing; and (h) leases, licenses, subleases or sublicenses granted to others in the ordinary course of business which do not (i) interfere in any material respect with the business of the Borrower, or (ii) secure any Indebtedness.
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“Permitted Investments” means (a) Investments held by the Loan Parties and their Subsidiaries in the form of cash or cash equivalents, (b) (i) Investments in any Person that is a Loan Party prior to giving effect to such Investment and (ii) Investments by any Subsidiary that is not a Loan Party in any other Subsidiary that is not a Loan Party, (c) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss, and (d) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of the Borrower or any ERISA Affiliate or any such Plan to which the Borrower or any ERISA Affiliate is required to contribute on behalf of any of its employees.
“Pledged Equity” means, with respect to each Loan Party, 100% of the issued and outstanding Equity Interests of each Subsidiary that is directly owned by such Loan Party, including without limitation those set forth on Schedule 4.11 attached hereto, together with the certificates (or other agreements or instruments), if any, representing such shares, and all options and other rights, contractual or otherwise, with respect thereto, including, but not limited to, the following:
(1) all
Equity Interests representing a dividend thereon, or representing a distribution or return of capital upon or in respect thereof, or resulting from a stock split, revision, reclassification or other exchange therefor, and any
subscriptions, warrants, rights or options issued to the holder thereof, or otherwise in respect thereof; and
(2) in
the event of any consolidation or merger involving the issuer thereof and in which such issuer is not the surviving Person, and in the event of any amalgamation involving the issuer thereof, all shares of each class of the Equity
Interests of the successor Person formed by or resulting from such consolidation, amalgamation or merger, to the extent that such successor Person is a direct Subsidiary of an Loan Party.
“PPSA” means the Personal Property Security Act (Ontario); provided, that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral granted pursuant to the Loan Documents is governed by the Personal Property Security Act as in effect in a Canadian jurisdiction other than the Province of Ontario, or the Civil Code of Quebec, “PPSA” means the Personal Property Security Act as in effect from time to time in such other jurisdiction, as applicable, for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.
“Related Persons” means the Administrative Agent, together with its respective Affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.
“Required Lenders” means, as of any date of determination, Lenders holding at least 75% of the outstanding balance of the Term Loan.
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“Restricted Payment” means (a) any dividend or other distribution (whether in cash, securities or other property or assets) with respect to any Equity Interests of any Loan Party or any Subsidiary, but excluding any intercompany dividends or distributions made to either the Borrower or Venus Concept from one or more of the other Loan Parties, (b) any purchase, redemption, retirement or acquisition by any Loan Party or any Subsidiary for value of any Equity Interests of any Loan Party or any Subsidiary or any distribution of any kind in cash or other property or assets in respect thereof, (c) any payment (whether in cash, securities or other property or assets), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests of any Loan Party or any Subsidiary or on account of any return of capital to the equityholders, partners or members (or the equivalent Person thereof) of any Loan Party or any Subsidiary, and (d) any management fees, board fees, director or manager fees or similar fees, but, for the avoidance of doubt, excluding fees paid to officers, directors and employees of the Loan Parties.
“Sanctions” means any sanction administered or enforced by the United States Government (including, without limitation, OFAC), the Canadian Government, the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority.
“Same Day Funds” means with respect to disbursements and payments, immediately available funds.
“Secured Parties” means, collectively, the Administrative Agent and the Lenders.
“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity (excluding, for the avoidance of doubt, charitable foundations) of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of Venus Concept.
“Term Loan” means the Initial Term Loan, together with the funded amount of all Delayed Draw Term Loans, if any.
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“Trademark License” means any agreement, written or oral, providing for the grant by or to a Loan Party of any right to use any Trademark.
“Trademarks” means (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and the 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, the Canadian Intellectual Property Office, or in any similar office or agency of the United States, Canada, any state, province or territory thereof or any other country or any political subdivision thereof, or otherwise and (b) all renewals thereof.
“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code or any successor provision thereof (or similar code or statute) of another jurisdiction, to the extent it may be required to apply to any item or items of Collateral.
“U.S. Loan Party” means Venus Concept, the Borrower and each Guarantor that is a Domestic Subsidiary.
“Venus Canada” has the meaning specified in the introductory paragraph to this Agreement.
“Venus Concept” has the meaning specified in the introductory paragraph to this Agreement.
“Venus Israel” has the meaning specified in the introductory paragraph to this Agreement.
“Work” means any work that is subject to copyright protection pursuant to Title 17 of the United States Code.
SECTION 1.02. Other Definitions. The following terms used herein shall have the meaning given to them in the Uniform Commercial Code (and, if defined in more than one Article of the Uniform Commercial Code, shall have the meaning given in Article IX thereof): account, adverse claim, certificated security, chattel paper, commercial tort claims, control (other than the use of such term in the definition of “Affiliate” herein), deposit account, document, equipment, electronic chattel paper, financial asset, fixtures, general intangibles, goods, health-care-insurance receivable, instrument, inventory, investment company security, investment property, letter of credit right, payment intangible, proceeds, promissory note, securities, securities intermediary, supporting obligations, tangible chattel paper and uncertificated securities.
SECTION 1.03. Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document: (a) the meanings of defined terms are equally applicable to the singular and plural forms of the defined terms; (b)(i) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding” (ii) the terms “hereof”, “hereby”, “hereto,” “hereunder,” and similar terms mean this Agreement, the term “heretofore” means before, and the term “hereafter” means after, the effective date hereof, (iii) the term “including” means “including, without limitation” and (iv) the word “or” is not exclusive and (c) section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.
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SECTION 1.04. Accounting Terms.All accounting terms not specifically or completely defined herein shall be construed in conformity with GAAP.
SECTION 1.05. Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).
ARTICLE II
Term Loans
SECTION 2.01. Term Loans.
(a) Initial Term Loan. Subject to the terms and conditions of this Agreement, on the Effective Date each Lender severally will make available to the Borrower a term loan in the amount set forth for such Lender on Schedule 2.01 (the “Initial Term Loan”), such term loans to be in an aggregate amount equal to $2,237,906.85. The Initial Term Loan shall mature on the Maturity Date.
(b) Delayed Draw Term Loans. Subject to the terms and conditions of this Agreement, each Lender may from time to time, but only during the Delayed Draw Availability Period, severally make one or more additional term loans to the Borrower (the “Delayed Draw Term Loans” and each, a “Delayed Draw Term Loan”), in the amount equal to such Lender’s pro rata share (in proportion with their respective Delayed Draw Commitments as set forth on Schedule 2.01) of the requested borrowing amount set forth in the notice of borrowing delivered pursuant to Section 3.02(a). Each request by the Borrower for Delayed Draw Term Loans shall be in a minimum aggregated amount for all Lenders of $250,000 (or, if less than $250,000, the entire undrawn Delayed Draw Commitment then outstanding at the time of such borrowing). The aggregate principal amount of such Delayed Draw Term Loans shall not exceed the Delayed Draw Commitment. Such Delayed Draw Term Loans shall mature on the Maturity Date and shall bear interest on the unpaid balance thereof from the applicable Delayed Draw Funding Date until the Maturity Date. The borrowing of a Delayed Draw Term Loan shall be subject to (i) the written consent of the Required Lenders and the satisfaction or waiver of each of the other conditions precedent set forth in Section 3.02 and (ii) each Lender shall have received an irrevocable written request from the Borrower, which written request shall specify (x) the proposed Business Day on which such requested Delayed Draw Term Loan is to be funded (the “Delayed Draw Funding Date”), (y) the aggregate principal amount of the Delayed Draw Term Loan to be borrowed and (z) the remaining availability, immediately following the applicable Delayed Draw Funding Date, for borrowings of Delayed Draw Term Loans.
SECTION 2.02. Prepayments and Repayments.
(a) Repayment. The Borrower shall repay to the Lenders on the Maturity Date (or, if earlier, on the date on which Obligations become due and payable pursuant to the terms of this Agreement) the aggregate principal amount of the Term Loan outstanding on such date, together will all accrued and unpaid interest and fees thereon and all other Obligations (without limiting the Borrower’s obligation to timely make all payments required under the terms of this Agreement). Amounts of the Term Loan repaid may not be reborrowed.
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(b)
Optional Prepayment. The Borrower may, upon notice to the Lenders, at any time or from time to time voluntarily prepay the Term
Loan in whole or in part, without premium or penalty. Optional prepayments shall be accompanied by all accrued and unpaid interest and fees thereon. Amounts of the Term Loan prepaid may not be reborrowed.
(c)
Application of Prepayments and Repayments. Unless otherwise expressly provided herein, any prepayments or repayments made
hereunder shall be applied as follows: first, to any accrued and unpaid interest or fees, second to the outstanding
principal balance of the Term Loan and third, to any other Obligations then outstanding. Any prepayments or repayments hereunder shall made to the Lenders pro rata.
SECTION 2.03. Payments Generally.
(a) All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to Lenders by wire transfer to such Lender as designated by a Lender in a written notice to the Borrower in Same Day Funds not later than 2:00 pm on the date specified therein. Any payment received by a Lender after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.
(b) Except as otherwise expressly provided herein, if any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.
SECTION 2.04. Interest.
(a) The Term Loan shall accrue and bear interest, on the outstanding daily balance thereof, at a rate of 12.0% per annum. Interest on the Term Loan shall be due and payable in arrears on the Maturity Date.
(b) The Borrower shall pay interest on past due amounts of principal or interest hereunder at a rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(c) Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.
(d) All computations of interest in respect of the Term Loan shall be made on the basis of a 360 day year and actual days elapsed. Interest shall accrue on the Term Loan for the day on and from the Effective Date, and shall not accrue on the Term Loan, or any portion thereof, for the day on which the Term Loan or such portion is paid.
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ARTICLE III
Conditions Precedent
SECTION 3.01. Conditions Precedent for the Initial Term Loan. The obligation of the Lenders to make the Initial Term Loan on the Effective Date is subject to the satisfaction of the following conditions precedent:
(a) The Lenders’ receipt of (i) executed counterparts of this Agreement and (ii) such resolutions or other actions, incumbency certificates and/or other certificates and documentation of each Loan Party as the Lenders may reasonably require;
(b) The Lenders’ receipt of proper financing statements in form appropriate for filing under the Uniform Commercial Code of all jurisdictions that the Lenders may deem necessary or desirable in order to perfect the Liens created hereunder, covering the Collateral; and
(c) All reasonable, documented fees and expenses (including Attorney Costs) required to be paid hereunder and actually incurred in connection with the preparation and negotiation of the Loan Documents, and, with respect to expenses, invoiced on or before the Effective Date shall have been paid in full in cash;
The execution of this Agreement by the Loan Parties shall be deemed to be a representation and warranty that the conditions specified in Article III have been satisfied on and as of Effective Date.
SECTION 3.02. Conditions Precedent for Delayed Draw Term Loans. The obligation of the Lenders to make any Delayed Draw Term Loan is subject to the satisfaction of the following conditions precedent:
(a) receipt by the Administrative Agent (for distribution to the Lenders) of executed counterparts of a borrowing request (which may be by electronic means) with respect to such Delayed Draw Term Loan in compliance with Section 2.01(b), in form and substance reasonably satisfactory to the Required Lenders, at least one (1) Business Day prior to the requested funding date;
(b) immediately after such funding of the Delayed Draw Term Loan and after application of the proceeds thereof, the aggregate outstanding principal amount of the Delayed Draw Term Loans will not exceed the Delayed Draw Commitment;
(c) the representations and warranties of the Loan Parties contained in Article IV shall be true and correct in all respects;
(d) no Default or Event of Default shall exist or, immediately after such funding of the Delayed Draw Term Loan and after application of the proceeds thereof, would result under the Loan Documents;
(e) the proceeds of the Delayed Draw Term Loan will be used solely for the purposes set forth in Section 5.01; and
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(f) the Required Lenders shall have received approval from each of their respective investment committees for the funding of such Delayed Draw Term Loan, such approval to be deemed received upon the funding of such Delayed Draw Term Loan.
ARTICLE IV
Representations and Warranties
Each Loan Party represents and warrants to the Administrative Agent and the Lenders that:
SECTION 4.01. Existence, Qualification and Power; Compliance with Laws. Each Loan Party and each of its Subsidiaries (a) is duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all corporate or other organizational power and authority to execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, (d) is in compliance with all applicable Laws, orders, writs, injunctions and orders and (e) has all requisite governmental licenses, authorizations, consents and approvals to operate its business as currently conducted, except in each case referred to in clause (c), (d) or (e), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.
SECTION 4.02. Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which it is a party has been duly authorized by all necessary corporate or other organizational action. The execution, delivery and performance by each Loan Party of each Loan Document to which it is a party will not (a) contravene the terms of the such Loan Party’s organizational documents, (b) result in any breach or contravention of, or the creation of any Lien upon any of the property or assets of such Loan Party under (i) any material Contractual Obligation to which such Loan Party is a party or affecting such Loan Party or the properties of such Loan Party or (ii) any material order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Loan Party or its property is subject; or (c) violate any applicable Law, except with respect to any breach, contravention or violation (but not creation of Liens) referred to in this clause (c), to the extent that such breach, contravention or violation could not reasonably be expected to have a Material Adverse Effect.
SECTION 4.03. Governmental Authorization. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with the execution, delivery or performance by any Loan Party of this Agreement or any other Loan Document to which it is a party, except for (a) filings necessary to perfect the Liens on the Collateral granted by such Loan Party in favor of the Secured Parties and (b) the approvals, consents, exemptions, authorizations, actions, notices and filings that have been duly obtained, taken, given or made and are in full force and effect.
SECTION 4.04. Binding Effect. Each Loan Party has duly executed and delivered this Agreement and each other Loan Document to which it is a party and each such Loan Document constitutes a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity and principles of good faith and fair dealing.
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SECTION 4.05. Margin Regulations; Investment Company Act. Neither any Loan Party nor any Subsidiary is engaged, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System of the United States), or extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of the Term Loan will be used for any purpose that violates Regulation U. No Loan Party is an “investment company” under the Investment Company Act of 1940.
SECTION 4.06. Ownership, Title, Perfection and Priority. Each Loan Party has good and valid rights in or the power to transfer the Collateral and title to the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens other than Liens permitted by Section 6.01. Upon the filing of an appropriate financing statement against such Loan Party with the Secretary of State of Delaware (or, with respect to any Foreign Loan Party, other equivalent action under applicable Law), the security interest granted pursuant to this Agreement shall, subject to Liens permitted by Section 6.01, constitute a valid and continuing perfected security interest in favor of the Administrative Agent in all of the Collateral to the extent the security interest in such Collateral may be perfected by filing a financing statement under the Uniform Commercial Code (or, with respect to any Foreign Loan Party, other equivalent action under applicable Law).
SECTION 4.07. Litigation. There are no material actions, suits, investigations or proceedings pending or, to the knowledge of Borrower, threatened in writing against or affecting any Loan Party before any Governmental Authority. To the Borrower’s knowledge, neither any Loan Party nor any Subsidiary is in violation of or in default under any applicable Law, order, decree, writ or injunction.
SECTION 4.08. Material Adverse Effect. Since December 31, 2024, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect
SECTION 4.09. No Default. Neither any Loan Party nor any Subsidiary is in default under or with respect to, or a party to, any contractual obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing.
SECTION 4.10. Solvency. Each Loan Party is, individually and together with its Subsidiaries on a consolidated basis, Solvent
SECTION 4.11. Subsidiaries. Set forth on Schedule 4.11 is a complete and accurate list of each Subsidiary of Venus Concept, together with (a) jurisdiction of organization, (b) number of shares of each class of Equity Interests outstanding, (c) number and percentage of outstanding shares of each class owned (directly or indirectly) by any Loan Party or any Subsidiary, and (d) the number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and all other similar rights with respect thereto. The outstanding Equity Interests of each Subsidiary are validly issued, fully paid and non-assessable.
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SECTION 4.12. Insurance. The properties of the Loan Parties and their respective Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of any Loan Party, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the applicable Loan Party or Subsidiary operates. Neither any Loan Party nor any Subsidiary thereof is party to any tax sharing agreement.
SECTION 4.13. Taxes. Each Loan Party and its respective Subsidiaries have timely filed all federal, state and other material tax returns and reports required to be filed, and have timely paid all federal, state and other material taxes (whether or not shown on a tax return), including in its capacity as a withholding agent, levied or imposed upon it or its properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against any Loan Party or any Subsidiary that would, if made, have a Material Adverse Effect.
SECTION 4.14. Equipment and Inventory. With respect to any equipment and/or inventory of a Loan Party, each such Loan Party has exclusive possession and control of such equipment and inventory of such Loan Party except for (i) equipment leased by such Loan Party as a lessee or (ii) equipment or inventory in transit with common carriers. No inventory of an obligor is held by a Person other than an obligor pursuant to consignment, sale or return, sale on approval or similar arrangement
SECTION 4.15. Authorization of Pledged Equity. All Pledged Equity is duly
authorized and validly issued, is fully paid and, to the extent applicable, nonassessable and is not subject to the preemptive rights of any Person.
SECTION 4.16. No Other Equity Interests, Instruments, Etc. (i) No Loan Party owns
any certificated Equity Interests in any Subsidiary that are required to be pledged and delivered to the Administrative Agent hereunder except as set forth on Schedule 4.11 hereto, and (ii) no Loan Party holds any instruments, documents or tangible chattel paper required to be pledged and delivered to the Administrative Agent pursuant to this Agreement. All such certificated securities, instruments, documents and tangible chattel paper have been delivered to the Administrative Agent.
SECTION 4.17. Partnership and Limited Liability Company Interests. Except as previously disclosed to the Administrative Agent, none of the Collateral consisting of an interest in a partnership or a limited liability company (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a security governed by Article 8 of the UCC, (iii) is an investment company security, (iv) is held in a securities account or (v) constitutes a security or a financial asset.
SECTION 4.18. Contracts; Agreements; Licenses. The Loan Parties have no material contracts, agreements or licenses which are non-assignable by their terms, or as a matter of law, or which prevent the granting of a security interest therein.
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SECTION 4.19. Consents; Etc. There are no restrictions in any of the organizational documents of any Loan Party governing any Pledged Equity or any other document related thereto which would limit or restrict (i) the grant of a Lien pursuant to this Agreement on such Pledged Equity, (ii) the perfection of such Lien or (iii) the exercise of remedies in respect of such perfected Lien in the Pledged Equity as contemplated by this Agreement. Except for (i) the filing or recording of UCC and PPSA financing statements, (ii) the filing of appropriate notices with the United States Patent and Trademark Office, the United States Copyright Office and the Canadian Intellectual Property Office, (iii) obtaining control to perfect the Liens created by this Agreement (to the extent required under this Agreement), (iv) such actions as may be required by Laws affecting the offering and sale of securities, (v) such actions as may be required by applicable foreign Laws affecting the pledge of the Pledged Equity of foreign Subsidiaries and (vi) consents, authorizations, filings or other actions which have been obtained or made, no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority and no consent of any other Person (including, without limitation, any stockholder, member or creditor of such Loan Party), is required for (A) the grant by such Loan Party of the security interest in the Collateral granted hereby or for the execution, delivery or performance of this Agreement by such Loan Party, (B) the perfection of such security interest (to the extent such security interest can be perfected by filing under the UCC or the PPSA, the granting of control (to the extent required under this Agreement) or by filing an appropriate notice with the United States Patent and Trademark Office, the United States Copyright Office or the Canadian Intellectual Property Office) or (C) the exercise by the Administrative Agent or the holders of the Obligations of the rights and remedies provided for in this Agreement.
SECTION 4.20. No Loan Party has any commercial tort claims seeking damages in excess of $500,000.
SECTION 4.21. Copyrights, Patents and Trademarks.
(a) To the best of each Loan Party’s knowledge, each Copyright, Patent and Trademark of such Loan Party, in each case which is (a) material to the operations, business, property or condition (financial or otherwise) of the Loan Parties or their licensee(s) or (b) the loss of which could reasonably be expected to have a Material Adverse Effect, is valid, subsisting, unexpired, enforceable and has not been abandoned.
(b) To the best of each Loan Party’s knowledge, no holding, decision or judgment has been rendered by any Governmental Authority that would limit, cancel or question the validity of any Copyright, Patent or Trademark of any Loan Party.
(c) No action or proceeding is pending seeking to limit, cancel or question the validity of any Copyright, Patent or Trademark of any Loan Party, or that, if adversely determined, could reasonably be expected to have a material adverse effect on the value of any Copyright, Patent or Trademark of any Loan Party.
(d) All applications pertaining to the Copyrights, Patents and Trademarks of each Loan Party have been duly and properly filed, and all registrations or letters pertaining to such Copyrights, Patents and Trademarks have been duly and properly filed and issued.
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(e) No Loan Party has made any assignment or agreement in conflict with the security interest in the Copyrights, Patents or Trademarks of any Loan Party hereunder.
ARTICLE V
Affirmative Covenants
So long as any amount of the Term Loan or other Obligation hereunder shall remain outstanding, unpaid or unsatisfied, the Loan Parties shall, and shall cause each Subsidiary to:
SECTION 5.01. Use of Proceeds. Use the proceeds of the Term Loan to pay the transaction costs and expenses in respect of this Agreement and the transactions thereunder and for general corporate purposes only.
SECTION 5.02. Information. Deliver to the Lenders, (a) promptly, upon becoming aware thereof, notice of any Default or Event of Default, (b) promptly, upon becoming aware thereof, notice of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, and (c) such additional information regarding the business, legal, financial or corporate affairs of the Loan Parties, or compliance with the terms of the Loan Documents, as the Administrative Agent may from time to time reasonably request. and (d) concurrently with delivery to the board of directors of any Loan Party (or any committee of such board of directors), copies of all materials (which, for the avoidance of doubt, shall include any minutes of meetings or similar records) furnished to the board of directors of such Loan Party (or any committee of such board of directors); provided, that, it is understood and agreed that such Loan Party may (x) withhold any information if access to such information may be (in the good faith determination of the board of directors of such Loan Party) subject to the attorney-client privilege between such Loan Party and its counsel, (y) withhold any information if the disclosure thereof is prohibited by any applicable law and (z) withhold any information to the extent which the Administrative Agent or the Loan Documents are the subject thereof.
~~SECTION 5.03. Maintenance of Collateral Perfection. At any~~ time ~~upon request by~~ ~~the A~~dminis~~trative Agent or the Required Lenders, promptly execute and deliver any and all further~~ ~~instruments, documents and agreements and take all such other actions as the A~~dminis~~trative Agent or~~ ~~the Required Lenders may deem necessary or desirable to create and/or maintain in favor of the~~ ~~A~~dmini~~strative Agent, for the benefit of the Secured Parties, Liens on the Collateral that are duly~~ ~~perfected and enforceable in accordance with the requirements of, or the obligations of the Loan~~ ~~Parties under, this Agreement and all applicable Laws.~~
SECTION 5.03. Maintenance of Collateral Perfection.
(a) At any time upon request by the Administrative Agent or the Required Lenders, promptly execute and deliver any and all further instruments, assignments, documents and agreements (including affidavits, notices, reaffirmations and amendments and restatements of existing documents, as the Administrative Agent may reasonably request) and take all such other actions as the Administrative Agent or the Required Lenders may deem necessary or desirable (i) to assure to the Administrative Agent its security interests hereunder, including such instruments as the Administrative Agent may from time to time reasonably request in order to perfect and maintain the security interests granted hereunder in accordance with the UCC and the PPSA, (ii) to consummate the transactions contemplated hereby and (iii) to otherwise protect and assure the Administrative Agent of its rights and interests hereunder.
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(b) Furthermore, each Loan Party also hereby irrevocably makes, constitutes and appoints the Administrative Agent, its nominee or any other person whom the Administrative Agent may designate, as such Loan Party’s attorney in fact with full power and for the limited purpose to sign in the name of such Loan Party any financing statements, or amendments and supplements to financing statements, renewal financing statements, notices or any similar documents which in the Administrative Agent's reasonable discretion would be necessary or appropriate in order to perfect and maintain perfection of the security interests granted hereunder, such power, being coupled with an interest, being and remaining irrevocable until such time as the Obligations arising under the Loan Documents have been paid in full. Each Loan Party hereby agrees that a carbon, photographic or other reproduction of this Agreement or any such financing statement is sufficient for filing as a financing statement by the Administrative Agent without notice thereof to such Loan Party wherever the Administrative Agent may in its sole discretion desire to file the same.
(c) Each Loan Party shall, and shall cause each Subsidiary to, if any Collateral is at any time in the possession or control of a warehouseman, bailee or any agent or processor of such Loan Party and the Administrative Agent so requests, (i) notify such Person in writing of the Administrative Agent’s security interest therein, (ii) instruct such Person to hold all such Collateral for the Administrative Agent’s account and subject to the Administrative Agent’s instructions and (iii) use reasonable best efforts to obtain a written acknowledgment from such Person that it is holding such Collateral for the benefit of the Administrative Agent.
(d) Each Loan Party shall promptly notify the Administrative Agent of any and all Commercial Tort Claims by or in favor of such Loan Party seeking damages in excess of $500,000 and (ii) execute and deliver such statements, documents and notices and do and cause to be done all such things as may be required by the Administrative Agent, or required by Law to create, preserve, perfect and maintain the Administrative Agent’s security interest in any Commercial Tort Claims initiated by or in favor of any Loan Party.
(e) In the event for any reason the law of any jurisdiction other than New York (or the Province of Ontario with respect to the Collateral of Venus Canada or the Equity Interests of Venus Canada) becomes or is applicable to the Collateral of any Loan Party or any part thereof, or to any of the Obligations, such Loan Party agrees to execute and deliver all such instruments and to do all such other things as the Administrative Agent in its reasonable discretion deems necessary, appropriate or convenient to preserve, protect and enforce the security interests of the Administrative Agent under the law of such other jurisdiction (and, if a Loan Party shall fail to do so promptly upon the written request of the Administrative Agent, then the Administrative Agent may execute any and all such requested documents on behalf of such Loan Party pursuant to the power of attorney granted hereinabove).
SECTION 5.04. Payment of Taxes. Timely pay, discharge or otherwise satisfy, as the same shall become due and payable, all of its obligations and liabilities in respect of taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, except, in each case, to the extent any such tax, assessment, charge or levy is being contested in good faith and by appropriate proceedings for which appropriate reserves have been established in accordance with GAAP.
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SECTION 5.05. Preservation of Existence. (a) Preserve, renew and maintain in full force and effect its legal existence under the Laws of its jurisdiction of organization and (b) take all commercially reasonable action to maintain all corporate rights and privileges (including its good standing) except, in the case of this clause (b), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.06. Compliance with Laws. Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees of any Governmental Authority applicable to it or to its business or property, except if the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.07. Additional Subsidiaries.Cause each wholly-owned Subsidiary formed or acquired after the Effective Date to execute and deliver to the Administrative Agent promptly, and in any event within 10 days after the formation or acquisition of such Subsidiary, (a) a joinder agreement in form and substance satisfactory to the Administrative Agent pursuant to which such Subsidiary shall be made a party to this Agreement as a Guarantor and (b) such other agreements, instruments, approvals or other documents as the Administrative Agent may reasonably request, unless the Administrative Agent waives such requirements for a Subsidiary that contributes a de minimis amount to the Loan Parties’ consolidated gross revenue; provided, that, until ~~September~~ ~~30~~October 31, 2025, the Loan Parties shall not be required to execute and deliver the items referenced in clauses (a) and (b) of this Section 5.07 in respect of Meta Robotics LLC, except as may be reasonably requested by the Administrative Agent.
SECTION 5.08. Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; and (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.09. Maintenance of Insurance. Maintain with financially sound and reputable insurance companies not Affiliates of any Loan Party, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.
SECTION 5.10. Pledged Assets.
(a) Equity Interests. Cause one hundred percent (100%) of the issued and outstanding Equity Interests of each Subsidiary directly owned by a Loan Party to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent, for the benefit of the Secured Parties, together with opinions of counsel and any filings and deliveries necessary in connection therewith to perfect the security interests therein, all in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders; provided, that, it is understood and agreed that, unless requested by the Administrative Agent in its sole discretion, no action by any Loan Party shall be required under the laws of any jurisdiction other than the United States (or any state thereof or the District of Columbia) and Canada (or any province or territory thereof) with respect to such Loan Party’s pledge of its Equity Interests in any Foreign Subsidiary. Each Loan Party shall, and shall cause each Subsidiary to, deliver to the Administrative Agent promptly upon the receipt there of by or on behalf of a Loan Party, all certificates and instruments constituting Pledged Equity. Prior to delivery to the Administrative Agent, all such certificates constituting Pledged Equity shall be held in trust by such Loan Party for the benefit of the Administrative Agent pursuant hereto. All such certificates representing Pledged Equity shall be delivered in suitable form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment in blank, substantially in a form reasonably acceptable to the Administrative Agent. No Loan Party shall, without executing and delivering, or causing to be executed and delivered, to the Administrative Agent such agreements, documents and instruments as the Administrative Agent may reasonably require, issue or acquire any Pledged Equity consisting of an interest in a partnership or a limited liability company that (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a security governed by Article 8 of the UCC, (iii) is an investment company security, (iv) is held in a securities account or (v) constitutes a security or a financial asset.
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(b) Other Property. Cause all property (other than Excluded Property) of each Loan Party to be subject at all times to first priority, perfected Liens in favor of the Administrative Agent to secure the Obligations or, with respect to any such property acquired subsequent to the Closing Date, such other additional security documents required to perfect the Liens of the Administrative Agent, for the benefit of the Secured Parties, granted under the Loan Documents as the Required Lenders shall reasonably request and, in connection with the foregoing, deliver to the Administrative Agent (for further distribution to the Lenders) such other documentation as the Administrative Agent may request including filings and deliveries necessary to perfect such Liens, organizational documents and favorable opinions of counsel to such Person, all in form, content and scope reasonably satisfactory to the Administrative Agent.
SECTION 5.11. ~~SECTION 5.11~~ Books and Records.
(a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of such Loan Party or such Subsidiary, as the case may be.
(b) Maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over such Loan Party or such Subsidiary, as the case may be.
SECTION 5.12. ERISA and Canadian Pension Plans.
(a) Do, and cause each of its ERISA Affiliates to do, each of the following: (i) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Internal Revenue Code and other federal or state law, (ii) cause each Plan that is qualified under Section 401(a) of the Internal Revenue Code to maintain such qualification, and (iii) make all required contributions to any Plan subject to Section 412, Section 430 or Section 431 of the Internal Revenue Code.
(b) Do each of the following: (i) maintain each Canadian Pension Plan in compliance in all material respects with the applicable provisions of applicable Law, (ii) cause each Canadian Pension Plan that has received a confirmation of registration from the Canada Revenue Agency to maintain such registration, (iii) make all required contributions to any Canadian Pension Plan and (iv) not, maintain, contribute to, or have any liability or contingent liability with respect to, a Canadian Defined Benefit Pension Plan.
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SECTION 5.13. Intellectual Property.
(a) Not do any act or omit to do any act whereby any material Copyright may become invalidated and (A) not do any act, or omit to do any act, whereby any material Copyright may become injected into the public domain; (B) notify the Administrative Agent immediately if it knows that any material Copyright may become injected into the public domain or of any materially adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any court or tribunal in the United States, Canada or any other country) regarding a Loan Party’s ownership of any such Copyright or its validity; (C) take all commercially reasonable steps as it shall deem appropriate under the circumstances, to maintain and pursue each application (and to obtain the relevant registration) of each material Copyright owned by a Loan Party and to maintain each registration of each material Copyright owned by a Loan Party including, without limitation, filing of applications for renewal where necessary; and (D) promptly notify the Administrative Agent of any material infringement of any material Copyright of a Loan Party of which it becomes aware and take such commercially reasonable actions as it shall reasonably deem appropriate under the circumstances to protect such Copyright, including, where appropriate, the bringing of suit for infringement, seeking injunctive relief and seeking to recover any and all damages for such infringement.
(b) Not make any assignment or agreement in conflict with the security interest in the Copyrights of each Loan Party hereunder (except as permitted by the Credit Agreement).
(c) (A) Continue to use each material Trademark that is necessary in the conduct of any Loan Party’s business on each and every trademark class of goods applicable to its current line as reflected in its current catalogs, brochures and price lists in order to maintain such Trademark in full force free from any claim of abandonment for non-use, (B) maintain as in the past the quality of products and services offered under such Trademark, (C) employ such Trademark with the appropriate notice of registration, if applicable, (D) not adopt or use any mark that is confusingly similar or a colorable imitation of such Trademark unless the Administrative Agent, for the ratable benefit of the holders of the Obligations, shall obtain a perfected security interest in such mark pursuant to this Agreement, and (E) not (and not permit any licensee or sublicensee thereof to) do any act or omit to do any act whereby any such Trademark may become invalidated.
(d) Not do any act, or omit to do any act, whereby any material Patent may become abandoned or dedicated.
(e) Notify the Administrative Agent immediately if it knows that any application or registration relating to any material Patent or Trademark may become abandoned or dedicated, or of any materially adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office or any court or tribunal in any country) regarding such Loan Party’s ownership of any Patent or Trademark or its right to register the same or to keep and maintain the same.
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(f) Take all commercially reasonable steps, including, without limitation, in any proceeding before the United States Patent and Trademark Office, the Canadian Intellectual Property Office, or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of each material Patent and Trademark, including, without limitation, filing of applications for renewal, affidavits of use and affidavits of incontestability, in each case as is necessary in the conduct of any Loan Party’s business.
(g) Promptly notify the Administrative Agent after it learns that any material Patent or Trademark included in the Collateral is infringed, misappropriated or diluted by a third party and promptly sue for infringement, misappropriation or dilution, to seek injunctive relief where appropriate and to recover any and all damages for such infringement, misappropriation or dilution, or to take such other actions as it shall reasonably deem appropriate under the circumstances to protect such Patent or Trademark.
(h) Not make any assignment or agreement in conflict with the security interest in the Patents or Trademarks of each Loan Party hereunder (except as permitted by the Credit Agreement).Notwithstanding
the foregoing, the Loan Parties may, in their reasonable business judgment, fail to maintain, pursue, preserve or protect any Copyright, Patent or Trademark which is not material to their businesses.
SECTION 5.14. Anti-Corruption Laws. Conduct its business in compliance with the United States Foreign Corrupt Practices Act of 1977, the Corruption of Foreign Public Officials Act (Canada), the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions and maintain policies and procedures designed to promote and achieve compliance with such laws.
SECTION 5.15. Liquidity. At all times until the Obligations are paid in full, the Borrower shall maintain a minimum average daily deposit ledger balance in all Related Accounts (as defined below) in an amount equal to or greater than $3,000,000 as of the end of each month (the “Minimum Liquidity Requirement”), to be tested on a monthly basis. The Minimum Liquidity Requirement may be satisfied by reference to the aggregate funds on deposit at any given time in all accounts of the Borrower and the Guarantors maintained with any bank or financial institution that are subject to a deposit account control agreement (or similar agreement) in favor of the Holders (collectively, the “Related Accounts”).
SECTION 5.16. Further Assurances. Promptly upon request by the Administrative Agent, or any Lender through the Administrative Agent, (a) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Loan Documents, (ii) to the fullest extent permitted by Applicable Law, subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so.
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ARTICLE VI
Negative Covenants
So long as any amount of the Term Loan or other Obligation hereunder shall remain outstanding, unpaid or unsatisfied, no Loan Party shall, nor shall it permit any Subsidiary to:
SECTION 6.01. Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than (a) Liens created under the Loan Documents or (b) Permitted Encumbrances.
SECTION 6.02. Indebtedness.Create, incur, assume or suffer to exist any Indebtedness, except (a) Indebtedness of the Loan Parties under the Loan Documents and (b) Indebtedness existing on the ~~date~~ ~~hereof~~Effective Date of which the Lenders have been informed in writing.
SECTION 6.03. Restricted Payments. Make any Restricted Payment, or incur any obligation (contingent or otherwise) to do so.
SECTION 6.04. Fundamental Changes. (a) Merge, dissolve, liquidate, amalgamate or consolidate with or into any other Person or (b) dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets.
SECTION 6.05. Transfer of Assets. Without the prior written consent of the Lenders, transfer, sell, assign, license, lease, convey or otherwise dispose of any assets or property of any Loan Party or any Subsidiary to any Person other than (w) the sale, lease, license, transfer or other disposition of inventory in the ordinary course of business and consistent with past practice, (x) the sale, lease, license, transfer or other disposition in the ordinary course of business and consistent with past practice of surplus, obsolete or worn out property no longer used or useful in the conduct of business of any Loan Party or any Subsidiary, (y) licenses, sublicenses, leases or subleases granted to third parties in the ordinary course of business and consistent with past practice and not interfering with the business of the Loan Parties and their Subsidiaries and (z) dispositions consisting of the sale, transfer, assignment or other disposition of unpaid and overdue accounts receivable in connection with the collection, compromise or settlement thereof in the ordinary course of business and consistent with past practice and not as part of a financing transaction.
SECTION 6.06. Investments. Make or hold any Investments, other than Permitted Investments.
SECTION 6.07. Changes in Nature of Business. Engage in any material line of business substantially different from those lines of business conducted by the Loan Parties and their Subsidiaries on the date hereof or any business substantially related or incidental thereto.
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SECTION 6.08. Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of any Loan Party or any Subsidiary, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to such Loan Party or such Subsidiary as would be obtainable by such Loan Party or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate; provided, that, the foregoing restriction shall not apply to transactions between Venus Concept and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries, in each case entered into in the ordinary course of business and consistent with past practice.
SECTION 6.09. Burdensome Agreements. Enter into or permit to exist any contractual obligation (other than (x) this Agreement or any other Loan Document and (y) any agreement governing the Main Street Priority Loan) that (a) limits the ability (i) of any Subsidiary to make Restricted Payments to any Loan Party or to otherwise transfer property to or invest in any Loan Party, (ii) of any Subsidiary to guarantee the Indebtedness of a Loan Party or (iii) of any Loan Party or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person; or (b) requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person.
SECTION 6.10. Organizational Documents; etc.
(a) Amend, modify or change its organizational documents in a manner materially adverse to the Administrative Agent or any Lender.
(b) Change its fiscal year.
(g) (i) Change its name, ~~jurisdiction of organization or form of organization.~~ as it appears in official filings in the jurisdiction of its organization, (ii) change its chief executive office or sole place of business, (ii) change the type of entity that it is, (iii) change its organization identification number issued by its jurisdiction of organization or its federal employer identification number, or (iv) change its jurisdiction of organization, in each case, unless it shall have provided the Administrative Agent at least ten (10) days’ prior written notice thereof (or such shorter period as may be agreed to by the Administrative Agent in its reasonable discretion) and taken any action reasonably requested by the Administrative Agent or otherwise required in connection therewith to continue the perfection following such change of any Liens in favor of the Administrative Agent in any Collateral.
(c) Unless no less than three (3) Business Days’ advance notice thereof is provided to the Administrative Agent, consummate any Equity Issuance; provided, that, if such Loan Party becomes aware of a proposed Equity Issuance later than three (3) Business Days prior to the date thereof, then notice may be provided on the date such Loan Party becomes aware thereof.
SECTION 6.11 Use of Proceeds. Use the proceeds of any Loan, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System of the United States) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.
SECTION 6.12 Prepayment of Subordinated Indebtedness. Make (or give any notice with respect thereto) any voluntary or optional payment or prepayment or redemption or acquisition for value of (including without limitation, by way of depositing money or securities with the trustee with respect thereto before due for the purpose of paying when due), refund, refinance or exchange of any Indebtedness of any Loan Party or any Subsidiary that is subordinated to the Obligations; provided, that, such payments with respect to subordinated indebtedness may made if permitted by an intercreditor agreement signed by the Administrative Agent.
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SECTION 6.13 Sanctions. Directly or indirectly, use any Term Loan or the proceeds of any Term Loan, or lend, contribute or otherwise make available such Term Loan or the proceeds of any Term Loan to any Person, to fund any activities of or business with any Person, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as Lender, Administrative Agent, or otherwise) of Sanctions.
ARTICLE VII
Events of Default and Remedies
SECTION 7.01. Events of Default. Each of the events referred to in this Section 7.01 shall constitute an “Event of Default”:
(a) Non-Payment. Any Loan Party fails to pay, when and as required to be paid herein, any amount of principal or interest in respect of the Term Loan or any fees, expenses or other amounts required to be paid pursuant to this Agreement; or
(b) Specific Covenants. Any Loan Party fails to perform or observe any term, covenant, or agreement contained in any of Section 5.02(a) or 5.05(a) or Article VI;
(c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 7.01(a) or 7.01(b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for ten (10) days after the earlier of (i) a Loan Party becoming aware of such circumstances and (ii) receipt by a Loan Party of written notice thereof from any Lender or the Administrative Agent; or
(d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by any Loan Party herein, in any other Loan Document to which it is a party, or in any document required to be delivered in connection herewith or therewith shall be untrue in any material respect when made or deemed made; or
(e) Cross-Default. (A) Any Loan Party or any Subsidiary fails to make any payment beyond the applicable grace period, if any, whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise, in respect of any Indebtedness (other than Indebtedness hereunder and, for the avoidance of doubt, including the Main Street Priority Loan), (B) any Loan Party or any Subsidiary fails to observe or perform any other agreement or condition relating to any such Indebtedness, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity or (C) Venus Concept fails to comply with Section 4.14 (Shareholder Approval) of that certain Exchange Agreement, dated as of June 30, 2025, by and among Venus Concept, Venus USA and the Lenders, as amended, restated or otherwise modified from time to time; or
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(f) Insolvency Proceedings, Etc. Any Loan Party or any Subsidiary institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or such Loan Party or Subsidiary applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer is appointed without the application or consent of such Loan Party or Subsidiary and the appointment continues undischarged or unstayed for sixty (60) calendar days; or any proceeding under any Debtor Relief Law relating to any Loan Party or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief is entered in any such proceeding; or
(g) Judgments. There is entered against any Loan Party or any Subsidiary (i) one or more final, non-appealable judgments or orders for the payment of money from a court of competent jurisdiction in an aggregate amount exceeding $250,000 (to the extent not covered by independent third-party insurance as to which the insurer has been notified of such judgments or orders and has not denied or failed to acknowledge coverage thereof) or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or
(h) Change of Control. A Change of Control shall occur; or
(i) Invalidity of Loan Documents. Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or as a result of acts or omissions by the Administrative Agent or any Lender or the satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party contests in writing the validity or enforceability of any provision of any Loan Document; or any Loan Party denies in writing that it has any or further liability or obligation under any Loan Document (other than as a result of repayment in full of the Obligations), or purports in writing to revoke or rescind any Loan Document; or
(j) Collateral. Any Lien purported to be created hereunder shall cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien on any Collateral, with the priority required hereunder, except as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents.
(h) Delisting. The shares of common stock of Venus Concept are delisted from the Nasdaq Capital Market because of failure to comply with continued listing standards thereof or due to a voluntary delisting which results in such shares not being listed on any other nationally recognized stock exchange in the United States.
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SECTION 7.02. Remedies upon Event of Default. If any Event of Default occurs and is continuing, the Required Lenders may declare the unpaid principal amount of the Term Loan, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by each Loan Party; and, at the request of the Required Lenders, the Administrative Agent shall (subject to the limitations on the Administrative Agent’s duties set forth in Articles VIII and IX) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable Law; provided that upon the occurrence of an actual or deemed entry of an order for relief with respect to a Loan Party under the Debtor Relief Laws of the United States, the unpaid principal amount of the Term Loan and all interest and other amounts as aforesaid shall automatically become due and payable without further act of the Administrative Agent or any Lender.
SECTION 7.03. Application of Funds. After the exercise of remedies provided for in Section 7.02 (or after the Term Loan has automatically become immediately due and payable), any amounts received on account of the Obligations shall be applied in the following order:
(a) First, to payment of that portion of the Obligations constituting reasonable fees, indemnities, expenses and other amounts (other than principal and interest, but including reasonable, documented Attorney Costs payable under Section 10.04) payable to the Administrative Agent in its capacity as such;
(b) Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including Attorney Costs payable under Section 10.04), ratably among them in proportion to the amounts described in this clause Second payable to them;
(c) Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Term Loan, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;
(d) Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Term Loan ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them;
(e) Fifth, to the payment of all other Obligations of the Loan Parties that are due and payable to the Administrative Agent and the Lenders on such date, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative Agent and the Lenders on such date; and
(f) Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.
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ARTICLE VIII
Grant of Security and Administrative Agent
SECTION 8.01. Grant; Collateral Description. ~~Each~~To secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Obligations, each Loan Party hereby grants to the Administrative Agent, ~~on behalf of~~ ~~itself and the Lenders, to secure the payment and performance in full of all of~~~~the~~for the benefit of the holders of the Obligations, a continuing security interest in, and ~~pledges and assigns to~~ the ~~A~~dmini~~strative Agent, on behalf of~~~~itself and the Lenders, the following properties, assets and rights~~a right to set off against, any and all right, title and interest of such Loan Party, ~~wherever located~~ in and to all of the following, whether now owned or hereafterexisting or owned, acquired, or arising, ~~and all~~ ~~proceeds and products thereof (all of the same being hereinafter called~~ hereafter (collectively, the “Collateral”): all personal property and fixtures of every kind and nature including all goods (including inventory, equipment and any accessions thereto), all equipment, all inventory, all software and computer programs, all instruments (including promissory notes), all documents (including, if applicable, electronic documents), all accounts (including health-care-insurance receivables, but excluding employee retention tax credit receivables), all chattel paper (whether tangible or electronic), all deposit accounts, all letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), all commercial tort claims, all books and records, all securities, all investment property, all supporting obligations, all contract rights, all rights to the payment of money, all insurance claims, all general intangibles (including all payment intangibles), all ~~Equity Interests in its Subsidiaries~~Pledged Equity, all Copyrights, all Copyright Licenses, all money, all Patents, all Patent Licenses, all Trademarks, all Trademark Licenses, and products and proceeds of any and all of the foregoing.
Notwithstanding anything to the contrary contained herein, the security interests granted under this Agreement shall not extend to any general intangible, permit, lease, license, contract or other instrument of a Loan Party to the extent the grant of a security interest in such general intangible, permit, lease, license, contract or other instrument in the manner contemplated by this Agreement, under the terms thereof or under applicable Law, is prohibited and would result in the termination thereof or give the other parties thereto the right to terminate, accelerate or otherwise alter such Loa Party’s rights, titles and interests thereunder (including upon the giving of notice or the lapse of time or both); provided that (a) any such limitation described in the foregoing clause (ii) on the security interests granted hereunder shall only apply to the extent that any such prohibition could not be rendered ineffective pursuant to the UCC, the PPSA or any other applicable Law (including Debtor Relief Laws) or principles of equity and (b) in the event of the termination or elimination of any such prohibition or the requirement for any consent contained in any applicable Law, general intangible, permit, lease, license, contract or other instrument, to the extent sufficient to permit any such item to become Collateral hereunder, or upon the granting of any such consent, or waiving or terminating any requirement for such consent, a security interest in such general intangible, permit, lease, license, contract or other Instrument shall be automatically and simultaneously granted hereunder and shall be included as Collateral hereunder.
The Loan Parties and the Administrative Agent, on behalf of the holders of the Obligations, hereby acknowledge and agree that the security interest created hereby in the Collateral (i) constitutes continuing collateral security for all of the Obligations, whether now existing or hereafter arising and (ii) is not to be construed as an assignment of any Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks or Trademark Licenses
SECTION 8.02. Perfection of Collateral. Each Loan Party hereby authorizes the Administrative Agent on such Loan Party’s behalf to, and upon the Administrative Agent’s reasonable request from time to time, such Loan Party will, execute (if signature is required) and deliver, and file and record in the proper filing and recording places, all such instruments, including Uniform Commercial Code and PPSA financing statements covering all assets of such Loan Party, and take all such other action, as the Administrative Agent reasonably deems necessary or appropriate for perfecting or protecting or otherwise confirming the security interest in the Collateral granted hereunder.
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~~SECTION 8.03. Right to Realize upon Collateral. Except to the extent prohibited by~~ ~~applicable law that cannot be waived, this Section 8.03 shall govern the A~~dmini~~strative Agent’s rights~~ ~~to realize upon the Collateral. The provisions of this Section 8.03 are in addition to any rights and~~ ~~remedies available at law or in equity.~~
SECTION 8.03. Advances. On failure of any Loan Party to perform any of the covenants and agreements contained herein or in any other Loan Document, the Administrative Agent may, at its sole option and in its sole discretion, perform the same and in so doing may expend such sums as the Administrative Agent may reasonably deem advisable in the performance thereof, including, without limitation, the payment of any insurance premiums, the payment of any taxes, a payment to obtain a release of a Lien or potential Lien, expenditures made in defending against any adverse claim and all other expenditures which the Administrative Agent may make for the protection of the security hereof or which may be compelled to make by operation of Law. All such sums and amounts so expended shall be repayable by the Loan Parties on a joint and several basis promptly upon timely notice thereof and demand therefor, shall constitute additional Obligations and shall bear interest from the date said amounts are expended at the Default Rate. No such performance of any covenant or agreement by the Administrative Agent on behalf of any Loan Party, and no such advance or expenditure therefor, shall relieve the Loan Parties of any Default or Event of Default. The Administrative Agent may make any payment hereby authorized in accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien, title or claim except to the extent such payment is being contested in good faith by a Loan Party in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP.
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SECTION 8.04. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default and during continuation thereof, the Administrative Agent shall have, in addition to the rights and remedies provided herein, in the Loan Documents, in any other documents relating to the Obligations, or by Law (including, but not limited to, levy of attachment, garnishment and the rights and remedies set forth in the UCC or the PPSA of the jurisdiction applicable to the affected Collateral), the rights and remedies of a secured party under the UCC or the PPSA (regardless of whether the UCC or the PPSA is the law of the jurisdiction where the rights and remedies are asserted and regardless of whether the UCC or the PPSA applies to the affected Collateral), and further, the Administrative Agent may, with or without judicial process or the aid and assistance of others, (i) enter on any premises on which any of the Collateral may be located and, without resistance or interference by the Loan Parties, take possession of the Collateral, (ii) dispose of any Collateral on any such premises, (iii) require the Loan Parties to assemble and make available to the Administrative Agent at the expense of the Loan Parties any Collateral at any place and time designated by the Administrative Agent which is reasonably convenient to both parties, (iv) remove any Collateral from any such premises for the purpose of effecting sale or other disposition thereof, and/or (v) without demand and without advertisement, notice, hearing or process of law, all of which each of the Loan Parties hereby waives to the fullest extent permitted by Law, at any place and time or times, sell and deliver any or all Collateral held by or for it at public or private sale (which in the case of a private sale of Pledged Equity, shall be to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such securities for their own account, for investment and not with a view to the distribution or resale thereof), at any exchange or broker’s board or elsewhere, by one or more contracts, in one or more parcels, for money, upon credit or otherwise, at such prices and upon such terms as the Administrative Agent deems advisable, in its sole discretion (subject to any and all mandatory legal requirements). Each Loan Party acknowledges that any such private sale may be at prices and on terms less favorable to the seller than the prices and other terms which might have been obtained at a public sale and, notwithstanding the foregoing, agrees that such private sale shall be deemed to have been made in a commercially reasonable manner and, in the case of a sale of Pledged Equity, that the Administrative Agent shall have no obligation to delay sale of any such securities for the period of time necessary to permit the issuer of such securities to register such securities for public sale under the Securities Act of 1933 or other applicable securities Laws. Neither the Administrative Agent’s compliance with applicable Law nor its disclaimer of warranties relating to the Collateral shall be considered to adversely affect the commercial reasonableness of any sale. To the extent the rights of notice cannot be legally waived hereunder, each Loan Party agrees that any requirement of reasonable notice shall be met if such notice, specifying the place of any public sale or the time after which any private sale is to be made, is personally served on or mailed, postage prepaid, to the applicable Loan Party in accordance with the notice provisions of this Agreement at least 10 days before the time of sale or other event giving rise to the requirement of such notice. The Administrative Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Loan Party further acknowledges and agrees that any offer to sell any Pledged Equity which has been (i) publicly advertised on a bona fide basis in a newspaper or other publication of general circulation in the financial community of New York, New York (to the extent that such offer may be advertised without prior registration under the Securities Act of 1933), or (ii) made privately in the manner described above shall be deemed to involve a “public sale” under the UCC or the PPSA, notwithstanding that such sale may not constitute a “public offering” under the Securities Act of 1933 or other applicable securities Laws, and the Administrative Agent may, in such event, bid for the purchase of such securities. The Administrative Agent shall not be obligated to make any sale or other disposition of the Collateral regardless of notice having been given. To the extent permitted by applicable Law, any holder of Obligations may be a purchaser at any such sale. To the extent permitted by applicable Law, each of the Loan Parties hereby waives all of its rights of redemption with respect to any such sale. Subject to the provisions of applicable Law, the Administrative Agent may postpone or cause the postponement of the sale of all or any portion of the Collateral by announcement at the time and place of such sale, and such sale may, without further notice, to the extent permitted by Law, be made at the time and place to which the sale was postponed, or the Administrative Agent may further postpone such sale by announcement made at such time and place.
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(b) Remedies relating to Accounts. During the continuation of an Event of Default, whether or not the Administrative Agent has exercised any or all of its rights and remedies hereunder, (i) each Loan Party will promptly upon request of the Administrative Agent instruct all account debtors to remit all payments in respect of accounts to a mailing location selected by the Administrative Agent and (ii) the Administrative Agent shall have the right to enforce any Loan Party’s rights against its customers and account debtors, and the Administrative Agent or its designee may notify any Loan Party’s customers and account debtors that the accounts of such Loan Party have been assigned to the Administrative Agent or of the Administrative Agent’s security interest therein, and may (either in its own name or in the name of a Loan Party or both) demand, collect (including without limitation by way of a lockbox arrangement), receive, take receipt for, sell, sue for, compound, settle, compromise and give acquittance for any and all amounts due or to become due on any account, and, in the Administrative Agent’s discretion, file any claim or take any other action or proceeding to protect and realize upon the security interest of the holders of the Obligations in the accounts. Each Loan Party acknowledges and agrees that the Proceeds of its accounts remitted to or on behalf of the Administrative Agent in accordance with the provisions hereof shall be solely for the Administrative Agent’s own convenience and that such Loan Party shall not have any right, title or interest in such accounts or in any such other amounts except as expressly provided herein. Neither the Administrative Agent nor the holders of the Obligations shall have any liability or responsibility to any Loan Party for acceptance of a check, draft or other order for payment of money bearing the legend “payment in full” or words of similar import or any other restrictive legend or endorsement or be responsible for determining the correctness of any remittance. Furthermore, during the continuation of an Event of Default, (i) the Administrative Agent shall have the right, but not the obligation, to make test verifications of the accounts in any manner and through any medium that it reasonably considers advisable, and the Loan Parties shall furnish all such assistance and information as the Administrative Agent may require in connection with such test verifications, (ii) upon the Administrative Agent’s request and at the expense of the Loan Parties, the Loan Parties shall cause independent public accountants or others satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the accounts and (iii) the Administrative Agent in its own name or in the name of others may communicate with account debtors on the accounts to verify with them to the Administrative Agent’s satisfaction the existence, amount and terms of any accounts.
(c) Access. In addition to the rights and remedies hereunder, upon the occurrence of an Event of Default and during the continuance thereof, the Administrative Agent shall have the right to enter and remain upon the various premises of the Loan Parties without cost or charge to the Administrative Agent, and use the same, together with materials, supplies, books and records of the Loan Parties for the purpose of collecting and liquidating the Collateral, or for preparing for sale and conducting the sale of the Collateral, whether by foreclosure, auction or otherwise. In addition, the Administrative Agent may remove Collateral, or any part thereof, from such premises and/or any records with respect thereto, in order to effectively collect or liquidate such Collateral.
(d) Nonexclusive Nature of Remedies. Failure by the Administrative Agent or the holders of the Obligations to exercise any right, remedy or option under this Agreement, any other Loan Document, any other document relating to the Obligations, or as provided by Law, or any delay by the Administrative Agent or the holders of the Obligations in exercising the same, shall not operate as a waiver of any such right, remedy or option. No waiver hereunder shall be effective unless it is in writing, signed by the party against whom such waiver is sought to be enforced and then only to the extent specifically stated, which in the case of the Administrative Agent or the holders of the Obligations shall only be granted as provided herein. To the extent permitted by Law, neither the Administrative Agent, the holders of the Obligations, nor any party acting as attorney for the Administrative Agent or the holders of the Obligations, shall be liable hereunder for any acts or omissions or for any error of judgment or mistake of fact or law other than their gross negligence or willful misconduct hereunder. The rights and remedies of the Administrative Agent and the holders of the Obligations under this Agreement shall be cumulative and not exclusive of any other right or remedy which the Administrative Agent or the holders of the Obligations may have.
~~( )~~ ~~(a)~~~~Assembly~~Retention of Collateral~~;~~ ~~Receiver. Each Loan Party shall, upon the~~ ~~A~~dmini~~strative Agent’s request, assemble the Collateral and otherwise make it available to the~~. In addition to the rights and remedies hereunder, the Administrative Agent. ~~The A~~dminis~~trative Agent~~ ~~may have a receiver appointed for all or any portion of a Loan Party’s assets or business which~~ ~~constitutes~~ may, in compliance with Sections 9-620 and 9-621 of the UCC or otherwise complying with the requirements of applicable Law of the relevant jurisdiction, accept or retain the Collateral in ~~order~~ ~~to manage, protect, preserve, sell and otherwise dispose~~~~of all or any portion of the~~ satisfaction of the Obligations. Unless and until the Administrative Agent shall have provided such notices, however, the Administrative Agent shall not be deemed to have retained any Collateral in satisfaction of any Obligations for any reason.
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~~(b)~~ ~~Waiver. To the extent it may lawfully do so, each Loan Party waives and~~ ~~relinquishes the benefit and advantage of, and covenants not to assert against~~ ~~the A~~dmini~~strative Agent~~ ~~or any~~~~Lender, any valuation, stay, appraisement, extension, redemption or similar laws now or~~ ~~hereafter existing~~ ~~which, but for this provision, might~~~~be applicable to the sale of any Collateral made~~ ~~under the judgment, order or decree of any court or privately under the power of sale conferred by this~~ ~~Agreement to the A~~dmini~~strative Agent.~~
~~(c)~~ ~~Foreclosure Sale. All or any part of the Collateral may be sold for cash or other v~~~~alue in any number of lots at public or private sale, and unless the Collateral to be sold threatens to~~ ~~decline speedily in value or is of a type customarily sold on a recognized market, the A~~dmini~~strative~~ ~~Agent shall give the Loan Parties not less than 10 days’ prior written notice of the~~ time ~~and place of~~ ~~any public sale, or the~~ time~~after which a private sale may be made, which notice each of the Loan~~ ~~P~~~~arties and the A~~dminis~~trative Agent agrees to be reasonable. At any sale or sales of Collateral, the~~ ~~A~~dmini~~strative Agent, the Lenders or any of their assigns may bid for and purchase all or any part of~~ ~~the property and rights so sold and may use all or any portion of the Obligations owed to the~~ ~~A~~dmini~~strative Agent or such Lender as payment for the property or rights so purchased.~~
~~(d) Additional Rights. The A~~dmini~~strative Agent shall have, for the benefit of itself~~ ~~and the Lenders, in any jurisdiction where enforcement hereof is sought, in addition to all other rights~~ ~~and remedies that the A~~dminis~~trative Agent may have under applicable law or in equity or under this~~ ~~Agreement (including, without limitation, all rights set forth in this Section 8.03), all rights and~~ ~~remedies of a secured party under the Uniform Commercial Code as enacted in any jurisdiction, the~~ ~~PPSA, or other applicable Law, and, in addition, the following rights and remedies, all of which may~~ ~~be exercised with or without notice to the Loan Parties and without affecting the Obligations of the~~ ~~Loan Parties hereunder or under any other Loan Document, or the enforceability of the Liens and~~ ~~security interests created hereby: (a) to enter any premises where any Collateral may be located for the~~ ~~purpose of securing, protecting, inventorying, appraising, inspecting, rep~~airin~~g, preserving, storing,~~ ~~preparing, processing, taking possession of or removing the same; (b) to notify obligors on the~~ ~~Collateral that the Collateral has been assigned to the A~~dminis~~trative Agent and that all payments~~ ~~thereon are to be made directly and exclusively to the A~~dmini~~strative Agent for the benefit of the~~ ~~A~~dmini~~strative Agent and the Lenders; (c) to collect by legal proceedings or otherwise all dividends,~~ ~~distributions, interest, principal or other sums now or hereafter payable upon or on account of the~~ ~~Collateral; (d) to cause the Collateral to be registered in the name of the A~~dmini~~strative Agent for the~~ ~~benefit of the A~~dmini~~strative Agent and the Lenders, as legal owner; (e) to enforce payment and~~ ~~prosecute any action or proceeding with respect to any or all of the Collateral; (f) to insure, process and~~ ~~preserve the Collateral; (g) to remove, through lawful means and without disturbing the peace or~~ ~~damaging the premises, from any premises where the same may be located, the Collateral and any and~~ ~~all documents, instruments, files and~~ ~~records, and any receptacles and cabinets containing the same,~~ ~~relating to the Collateral; (h) to exercise all other rights, powers, privileges and remedies of an owner~~ ~~of the Collateral; and (i) to take possession of the Collateral or any part thereof and to collect and~~ ~~receive the rents, issues, profits, income and proceeds thereof. The A~~dmini~~strative Agent shall further~~ ~~have the right, for the benefit of itself and the Lenders, to use any of the intellectual property Collateral~~ ~~for the sale of goods, completion of work in process or rendering of services in connection with~~ ~~enforcing any of the security interests granted to the A~~dmini~~strative Agent by the Loan Parties. Taking~~ ~~possession of the Collateral shall not cure or waive any Event of Default or notice thereof or invalidate~~ ~~any act done pursuant to such notice.~~
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(f) Deficiency. In the event that the proceeds of any sale, collection or realization are insufficient to pay all amounts to which the Administrative Agent or the holders of the Obligations are legally entitled, the Loan Parties shall be jointly and severally liable for the deficiency, together with interest thereon at the Default Rate, together with the costs of collection and the fees, charges and disbursements of counsel. Any surplus remaining after the full payment and satisfaction of the Obligations shall be returned to the Loan Parties or to whomsoever a court of competent jurisdiction shall determine to be entitled thereto.
SECTION 8.05. Additional Rights of the Administrative Agent in Respect of Collateral.
(a) Power of Attorney. In addition to other powers of attorney contained herein, each Loan Party hereby designates and appoints the Administrative Agent, on behalf of the holders of the Obligations, and each of its designees or agents, as attorney-in-fact of such Loan Party, irrevocably and with power of substitution, with authority to take any or all of the following actions upon the occurrence and during the continuance of an Event of Default:
(i) to demand, collect, settle, compromise, adjust, give discharges and releases, all as the Administrative Agent may reasonably determine;
(ii) to commence and prosecute any actions at any court for the purposes of collecting any Collateral and enforcing any other right in respect there^of^
(iii) to defend, settle or compromise any action brought and, in connection therewith, give such discharge or release as the Administrative Agent may deem reasonably appropriate;
(iv) receive, open and dispose of mail addressed to a Loan Party and endorse checks, notes, drafts, acceptances, money orders, bills of lading, warehouse receipts or other instruments or documents evidencing payment, shipment or storage of the goods giving rise to the Collateral of such Loan Party on behalf of and in the name of such Loan Party, or securing, or relating to such Collateral;
(v) sell, assign, transfer, make any agreement in respect of, or otherwise deal with or exercise rights in respect of, any Collateral or the goods or services which have given rise thereto, as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes;
(vi) adjust and settle claims under any insurance policy relating thereto;
(vii) execute and deliver all assignments, conveyances, statements, financing statements, renewal financing statements, security agreements, affidavits, notices and other agreements, instruments and documents that the Administrative Agent may determine necessary in order to perfect and maintain the security interests and liens granted in this Agreement and in order to fully consummate all of the transactions contemplated therein;
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(viii) institute any foreclosure proceedings that the Administrative Agent may deem appropriate;
(ix) to sign and endorse any drafts, assignments, proxies, stock powers, verifications, notices and other documents relating to the Collateral;
(x) to exchange any of the Pledged Equity or other property upon any merger, consolidation, reorganization, recapitalization or other readjustment of the issuer thereof and, in connection therewith, deposit any of the Pledged Equity with any committee, depository, transfer agent, registrar or other designated agency upon such terms as the Administrative Agent may reasonably deem appropriate;
(xi) to vote for a shareholder resolution, or to sign an instrument in writing, sanctioning the transfer of any or all of the Pledged Equity into the name of the Administrative Agent or one or more of the holders of the Obligations or into the name of any transferee to whom the Pledged Equity or any part thereof may be sold pursuant to this Agreement;
(xii) to pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatened against the Collateral;
(xiii) to direct any parties liable for any payment in connection with any of the Collateral to make payment of any and all monies due and to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct;
(xiv) to receive payment of and receipt for any and all monies, claims, and other amounts due and to become due at any time in respect of or arising out of any Collateral; and
(xv) do and perform all such other acts and things as the Administrative Agent may reasonably deem to be necessary, proper or convenient in connection with the Collateral. This power of attorney is a power coupled with an interest and shall be irrevocable until such time as the Obligations arising under the Loan Documents have been paid in full. The Administrative Agent shall be under no duty to exercise or withhold the exercise of any of the rights, powers, privileges and options expressly or implicitly granted to the Administrative Agent in this Agreement, and shall not be liable for any failure to do so or any delay in doing so. The Administrative Agent shall not be liable for any act or omission or for any error of judgment or any mistake of fact or law in its individual capacity or its capacity as attorney-in-fact except acts or omissions resulting from its gross negligence or willful misconduct. This power of attorney is conferred on the Administrative Agent solely to protect, preserve and realize upon its security interest in the Collateral.
(c) Assignment by the Administrative Agent. The Administrative Agent may from time to time assign the Obligations to a successor Administrative Agent appointed in accordance with this Agreement, and such successor shall be entitled to all of the rights and remedies of the Administrative Agent under this Agreement in relation thereto.
~~SECTION 8.04.~~ ~~Custody of Collateral. Except as provided by applicable law that cannot be waived, the A~~dmini~~strative Agent will have no duty as to the custody and protection of the Collateral, the~~ ~~collection of any part thereof or of any income thereon or the preservation or exercise of any rights~~ ~~pertaining thereto, including rights against prior parties, except for the use of reasonable care in the~~ ~~custody and physical preservation of any Collateral in its possession.~~
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~~SECTION 8.05. Sale of Collateral. Upon consummation of any sale of Collateral~~ hereunder, ~~the A~~dminis~~trative Agent shall have the right to~~~~assign, transfer and deliver to the purchaser~~ ~~or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the~~ ~~Collateral so sold absolutely free from any claim or right upon the part of the Loan Parties, and the~~ ~~Loan Parties hereby waive \(to the extent pe~~rmitt~~ed by applicable laws\) all rights of redemption, stay~~ ~~and appraisal which it now has or may at any~~ time ~~in the future have under any rule of law or statute~~ ~~now existing or hereafter enacted. If the sale of all or any part of the Collateral is made on credit or for~~ ~~future delivery~~, ~~the A~~dmini~~strative Agent shall not be~~~~required to apply any portion of the sale price to~~ ~~the Obligations until such amount actually is received by the A~~dminis~~trative Agent, and any Collateral~~ ~~so sold may be retained by the A~~dmini~~strative Agent until the sale price is paid in full by the purchaser~~ ~~or purchasers thereof.~~
\(d\) The Administrative Agent’s Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Collateral while being held by the Administrative Agent hereunder, the Administrative Agent shall have no duty or liability to preserve rights pertaining thereto, it being understood and
agreed that the Loan Parties shall be responsible for preservation of all rights in the Collateral, and the Administrative Agent shall be relieved of all responsibility for the Collateral upon surrendering it or tendering the surrender of it
to the Loan Parties. The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the
Administrative Agent accords its own property, which shall be no less than the treatment employed by a reasonable and prudent agent in the industry, it being understood that the Administrative Agent shall not have responsibility for taking
any necessary steps to preserve rights against any parties with respect to any of the Collateral. In the event of a public or private sale of Collateral pursuant to the terms of this
Agreement, the Administrative Agent shall have no responsibility for \(i\) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Collateral, whether or not the Administrative Agent has or is deemed to have knowledge of such matters, or \(ii\) taking any steps to clean, repair or otherwise prepare the Collateral for sale.
~~SECTION 8.06.~~ ~~Change of Name or Location. Each Loan Party shall not \(a\) change its name~~~~as it~~ ~~appears in official filings in the~~~~state of its organization, \(b\)~~~~change its chief executive office or sole~~ ~~place of business,~~ ~~\(~~c~~\)~~ ~~change the type of entity that it is,~~ ~~\(~~d~~\)~~ ~~change its organization identification number~~ ~~issued by its~~~~state~~~~of organization or its federal employer identification number, or~~ ~~\(e\) change its state of~~ ~~organization, in each case, unless it shall have provided the A~~dmini~~strative Agent at least ten \(10\) days~~’ ~~prior written notice thereof \(or such shorter period as may be agreed to by the A~~dmini~~strative Agent in its~~ ~~reasonable discretion\) and taken any action reasonably requested by the A~~dmini~~strative Agent or~~
~~otherwise required in connection therewith to continue the perfection following such change of any Liens~~ ~~in favor of the A~~dminis~~trative Agent in any Collateral.~~
(e) Liability with Respect to Accounts.Anything herein to the contrary notwithstanding, each of the Loan Parties shall remain liable under each of the accounts to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to each such account. Neither the Administrative Agent nor any holder of the Obligations shall have any obligation or liability under any account (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Administrative Agent or any holder of Obligations of any payment relating to such account pursuant hereto, nor shall the Administrative Agent or any holder of Obligations be obligated in any manner to perform any of the obligations of a Loan Party under or pursuant to any account (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party under any account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.
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(f) Voting and Payment Rights in Respect of the Pledged Equity.
(i) So long as no Event of Default shall exist, each Loan Party may (A) exercise any and all voting and other consensual rights pertaining to the Pledged Equity of such Loan Party or any part thereof for any purpose not inconsistent with the terms of this Agreement and (B) receive and retain any and all dividends (other than stock dividends and other dividends constituting Collateral which are addressed hereinabove), principal or interest paid in respect of the Pledged Equity to the extent they are allowed under this Agreement; and
(ii) During the continuance of an Event of Default, (A) all rights of a Loan Party to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to clause (i)(A) above shall cease and all such rights shall thereupon become vested in the Administrative Agent which shall then have the sole right to exercise such voting and other consensual rights, (B) all rights of a Loan Party to receive the dividends, principal and interest payments which it would otherwise be authorized to receive and retain pursuant to clause (i)(B) above shall cease and all such rights shall thereupon be vested in the Administrative Agent which shall then have the sole right to receive and hold as Collateral such dividends, principal and interest payments, and (C) all dividends, principal and interest payments which are received by a Loan Party contrary to the provisions of clause (ii)(B) above shall be received in trust for the benefit of the Administrative Agent, shall be segregated from other property or funds of such Loan Party, and shall be forthwith paid over to the Administrative Agent as Collateral in the exact form received, to be held by the Administrative Agent as Collateral and as further collateral security for the Obligations.
(g) Releases of Collateral.(i) If any Collateral shall be sold, transferred or otherwise disposed of by any Loan Party in a transaction permitted by this Agreement, then the Administrative Agent, at the request and sole expense of such Loan Party, shall promptly execute and deliver to such Loan Party all releases and other documents, and take such other action, reasonably necessary for the release of the Liens created hereby or by any other document in connection herewith on such Collateral. (ii) The Administrative Agent may release any of the Pledged Equity from this Agreement or may substitute any of the Pledged Equity for other Pledged Equity without altering, varying or diminishing in any way the force, effect, lien, pledge or security interest of this Agreement as to any Pledged Equity not expressly released or substituted, and this Agreement shall continue as a first priority lien on all Pledged Equity not expressly released or substituted.
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SECTION 8.06. ~~SECTION 8.07.~~ Guarantee.
(a) Guarantee.Each ~~of the~~ ~~Guarantors~~Guarantor hereby absolutely and unconditionally, jointly and severally, ~~absolutely and unconditionally~~ guarantees, as primary obligor and ~~not merely as surety, that the Obligations will be performed and paid in full in cash when due and~~ ~~payable, whether at the stated or accelerated maturity thereof or otherwise, this guarantee being a~~ ~~guarantee of payment and not of collectability and being absolute and in no way conditional or~~ ~~contingent. In the event any part of the Obligations shall not have been so paid in full when due and~~ ~~payable, each of the Guarantors will, immediately upon notice by the A~~dmini~~strative Agent, pay or~~ ~~cause to be paid to the A~~dmini~~strative Agent~~as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all Obligations (the “Guaranty”; and for each Guarantor, subject to the proviso in this sentence, its “Guaranteed Obligations”); provided, that, (a) the liability of each Guarantor individually with respect to this Guaranty shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Code of the United States or any comparable provisions of any applicable state law or other Applicable Law. Without limiting the generality of the foregoing, the Guaranteed Obligations shall include any such indebtedness, obligations, and liabilities, or portion thereof, which may be or hereafter become unenforceable or compromised or shall be an allowed or disallowed claim under any proceeding or case commenced by or against any debtor under any Debtor Relief Laws . The Administrative Agent’s books and records showing the amount of suchthe Obligations ~~which are then due and payable and~~ ~~unpaid. The obligations of the Guarantors hereunder~~shall be admissible in evidence in any action or proceeding, and shall be binding upon each Guarantor, and conclusive for the purpose of establishing the amount of the Obligations. This Guaranty shall not be affected by the ~~invalidity, unenforceability or~~ ~~irrecoverability of~~ ~~any~~genuineness,
validity, regularity or enforceability of the Obligations ~~as against~~ ~~the Borrower, any other guarantor thereof or any other Person. For purposes hereof, the Obligations~~ ~~shall be due and payable when and as the same shall be due and payable under~~ ~~the terms of this~~ ~~Agreement~~~~or any other Loan Document notwithstanding the fact that the collection or enforcement~~ ~~thereof may be stayed or enjoined under applicable law.~~or any instrument or agreement evidencing any Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the
Obligations which might otherwise constitute a defense to the obligations of the Guarantors, or any of them, under this Guaranty, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way
relating to any or all of the foregoing.
~~(d)~~ ~~Actions by Secured Parties. Any Secured Party may from~~ time~~to time, without~~ ~~notice or demand and without affecting the validity or enforceability of the guarantee of the~~ ~~Obligations by the Guarantors pursuant to Section 8.07(a) above or giving rise to any limitation,~~ ~~impairment or discharge of any Guarantor’s liability hereunder, (a) renew, extend, accelerate or~~ ~~otherwise change the time, place, manner or terms of payment of the Obligations, (b) settle,~~ ~~compromise, release or discharge, or accept or refuse any offer of performance with respect to, or~~ ~~substitutions for, the Obligations or any agreement relating thereto and/or subordinate the payment of~~ ~~the same to the payment of any other obligations, (c) request and accept other guaranties of the~~ ~~Obligations and take and hold security for the payment of the Obligations, (d) release, exchange,~~ ~~compromise, subordinate or modify, with or without consideration, any security for payment of the~~ ~~Obligations, any other guaranties of the Obligations, or any other obligation of any Person with respect~~ ~~to the Obligations, (e) enforce and apply any security now or hereafter held by or for the benefit of any~~ ~~Secured Party in respect of the Obligations and direct the order or manner of sale thereof, or exercise~~ ~~any other right or remedy that the Secured Parties, or any of them, may have against any such security,~~ ~~as the A~~dmini~~strative Agent in its discretion may dete~~rmin~~e consistent with this Agreement and any~~ ~~other Loan Document, including foreclosure on any such security pursuant to one or more judicial~~ ~~or~~ ~~nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable, and (f)~~ ~~exercise any other rights available to the Secured Parties, or any of them, under the Loan Documents.~~
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~~\(c\) No Discharge. The obligations of each of the Guarantors hereunder, including its~~ ~~guarantee of the Obligations pursuant to Section 8.07\(a\), above shall be valid and enforceable and shall~~ ~~n~~~~ot be subject to any limitation, impairment or discharge for any reason \(other than payment in full in~~ ~~cash of the Obligations \(other than contingent indemnification obligations to the extent no claim giving~~ ~~✔~~ ~~ise thereto has been asserted\)\), including without~~ ~~limitation the occurrence of any of the following,~~ ~~whether or not such Guarantor shall have had notice or knowledge of any of them: \(a\) any failure to~~ ~~assert or enforce or agreement not to assert or enforce, or the stay or enj~~oinin~~g, by order of court, by~~ ~~operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any right,~~ ~~power or remedy with respect to the Obligations or any agreement relating thereto, or with respect to~~ ~~any other guarantee of or security for the payment of the Obligations, \(b\) any waiver or modification~~ ~~of, or any consent to departure from, any of the terms or provisions of this Agreement, any of the other~~ ~~Loan Documents, or any agreement or instrument executed pursuant thereto, or of any~~ ~~other guarantee~~ ~~or security for the Obligations, \(c\) the Obligations, or any agreement relating thereto, at any~~ time ~~being~~ ~~found to be illegal, invalid or unenforceable in any respect, \(d\) the application of payments received~~ ~~f~~ ~~rom any source to the payment of indebtedness other than the Obligations, even though the Secured P~~ ~~arties, or any of them, might have elected to apply such payment to any part or all of the Obligations,~~ ~~\(e\) any failure to perfect or continue perfection of a security interest in any collateral which secures~~ ~~any of the Obligations, \(f\) any defenses, set offs or counterclaims which the Borrower may assert~~ ~~against any Secured Party in respect of the Obligations, including but not~~ limit~~ed to failure of~~ ~~consideration, breach of warranty, payment, statute of frauds, statute of~~ lim~~itations, accord and~~ ~~satisfaction and usury, and \(g\) any other act or~~ thin~~g or omission, or delay to do any other act or~~ thin~~g,~~ ~~which may or might in any manner or to any extent vary the risk of such Guarantor as an obligor in~~ ~~respect of the Obligations.~~
~~\(d\) Waivers. To the fullest extent pe~~rmitt~~ed by law, each of the Guarantors waives, for~~ ~~the benefit of the Secured Parties: \(a\) any right to require the Secured Parties, as a condition of~~ ~~payment or performance by such Guarantor, to \(i\) proceed against the Borrower, any other guarantor of~~ ~~the Obligations or any other Person, \(ii\) proceed against or exhaust any security held from the~~ ~~Borrower, any other guarantor of the Obligations or any other Person, \(iii\) proceed against or have~~ ~~✔~~ ~~esort to any balance of any deposit account or credit on the books of any Secured Party in favor of the~~ ~~Borrower or any other Person, or \(iv\) pursue any other remedy in the power of the Secured Parties;~~ ~~\(b\) any defense arising by reason of the incapacity, lack of authority or any disability or other defense~~ ~~of the Borrower; \(c\) any defense based upon any statute or rule of law which provides that the~~ ~~obligation of a surety must be neither larger in amount nor in other respects more burdensome than that~~ ~~of the principal; \(d\) any defense based upon any Secured Party’s errors or omissions in~~ ~~the~~ admini~~stration of the Obligations, except behavior that amounts to bad faith; \(e\) \(i\) any principles or~~ ~~provisions of law, statutory or otherwise, that are or might be in conflict with the terms of this~~ ~~Agreement and any legal or equitable discharge of such Guarantor’s obligations hereunder, \(ii\) the~~ ~~benefit of any statute of limitations affecting such Guarantor’s liability hereunder or the enforcement~~ ~~h~~ ~~ereof, \(iii\) any rights to set offs, recoupments and counterclaims, and \(iv\) promptness, diligence and~~ ~~any requirement that any Secured Party protect, secure, perfect or insure any Lien or any property~~ ~~subject thereto; \(f\) notices, demands, presentments, protests, notices of protest, notices of dishonor and~~ ~~notices of any action or inaction, notices of default under any Loan Document, or any agreement or~~ ~~instrument related thereto, notices of any renewal, extension or modification of the Obligations or any~~ ~~agreement related thereto, notices of any extension of credit to the Borrower and notices of any of the~~ ~~matters referred to in this Section 8.07 and any right to consent to any thereof; and \(g\) any defenses or~~ ~~benefits that may be derived from or afforded by law which~~ limit ~~the liability of or exonerate~~ ~~guarantors or sureties, or which may conflict with the terms of this Section 8.07.~~
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\(b\) Rights of Lenders. Each Guarantor consents and agrees that the Secured Parties may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof: \(a\) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time
for payment or the terms of the Obligations or any part thereof; \(b\) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Guaranty or any Obligations; \(c\) apply
such security and direct the order or manner of sale thereof as the Administrative Agent and the Lenders in their sole discretion may determine; and \(d\) release or substitute one or more of any endorsers or other guarantors of any of the
Obligations. Without limiting the generality of the foregoing, each Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of such Guarantor under this Guaranty
or which, but for this provision, might operate as a discharge of such Guarantor.
\(f\) Certain Waivers. Each Guarantor waives \(a\) any defense arising by reason
of any disability or other defense of the Borrower or any other guarantor, or the cessation from any cause whatsoever \(including any act or omission of any Secured Party\) of the liability of the Borrower or any other Loan Party; \(b\) any
defense based on any claim that such Guarantor’s obligations exceed or are more burdensome than those of the Borrower or any other Loan Party; \(c\) the benefit of any statute of limitations affecting any Guarantor’s liability hereunder; \(d\)
any right to proceed against the Borrower or any other Loan Party, proceed against or exhaust any security for the Obligations, or pursue any other remedy in the power of any Secured Party whatsoever; \(e\) any benefit of and any right to
participate in any security now or hereafter held by any Secured Party; and \(f\) to the fullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by Applicable Law limiting the liability of or
exonerating guarantors or sureties. Each Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of
dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Obligations.
\(g\) Obligations Independent. The obligations of each Guarantor hereunder are
those of primary obligor, and not merely as surety, and are independent of the Obligations and the obligations of any other guarantor, and a separate action may be brought against each Guarantor to enforce this Guaranty whether or not the
Borrower or any other person or entity is joined as a party.
\(h\) Subrogation. No Guarantor shall exercise any right of subrogation,
contribution, indemnity, reimbursement or similar rights with respect to any payments it makes under this Guaranty until all of the Obligations and any amounts payable under this Guaranty have been
indefeasibly paid and performed in full. If any amounts are paid to a Guarantor in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Secured Parties and shall
forthwith be paid to the Secured Parties to reduce the amount of the Obligations, whether matured or unmatured.
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\(i\) Termination; Reinstatement. This Guaranty is a continuing and irrevocable
guaranty of all Obligations now or hereafter existing and shall remain in full force and effect until all Obligations have been paid in full \(other than contingent indemnification obligations\). Notwithstanding the foregoing, this Guaranty
shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of the Borrower or a Guarantor is made, or any of the Secured Parties exercises its right of setoff, in respect of the Obligations and
such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required \(including pursuant to any settlement entered into by any of the Secured Parties in
their discretion\) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or
not the Secured Parties are in possession of or have released this Guaranty and regardless of any prior revocation, rescission, termination or reduction. The obligations of each Guarantor under this Section 8.06 shall survive termination of
this Guaranty.
\(j\) Stay of Acceleration. If acceleration of the time for payment of any of
the Obligations is stayed, in connection with any case commenced by or against a Guarantor or the Borrower under any Debtor Relief Laws, or otherwise, all such amounts shall nonetheless be payable by each Guarantor, jointly and severally,
immediately upon demand by the Secured Parties.
\(k\) Condition of Borrower. Each Guarantor acknowledges and agrees that it has
the sole responsibility for, and has adequate means of, obtaining from the Borrower and any other guarantor such information concerning the financial condition, business and operations of the Borrower and any such other guarantor as such
Guarantor requires, and that none of the Secured Parties has any duty, and such Guarantor is not relying on the Secured Parties at any time, to disclose to it any information relating to the business, operations or financial condition of the
Borrower or any other guarantor \(each Guarantor waiving any duty on the part of the Secured Parties to disclose such information and any defense relating to the failure to provide the same\). \( \)
Appointment of Borrower. Each of the Loan Parties hereby appoints the Borrower to act as its agent for all purposes of this Agreement, the other Loan Documents and all other documents and electronic platforms entered into in
connection herewith and agrees that \(a\) the Borrower may execute such documents and provide such authorizations on behalf of such Loan Parties as the Borrower deems appropriate in its sole discretion and each Loan Party shall be obligated by
all of the terms of any such document and/or authorization executed on its behalf, \(b\) any notice or communication delivered by the Administrative Agent or a Lender to the Borrower shall be deemed delivered to each Loan Party and \(c\) the
Administrative Agent or the Lenders may accept, and be permitted to rely on, any document, authorization, instrument or agreement executed by the Borrower on behalf of each of the Loan Parties.
\(l\) Right of Contribution. The Guarantors agree among themselves that, in connection with payments made
hereunder, each Guarantor shall have contribution rights against the other Guarantors as permitted under Applicable Law.
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ARTICLE IX
The Administrative Agent
SECTION 9.01. Appointment and Authorization of the Administrative Agent. Each of the Lenders hereby irrevocably appoints, designates and authorizes the Administrative
Agent to act as the administrative and collateral agent of \(and to hold any security interest created by any Loan Document for and on behalf of or on trust for\) such Lender for purposes of acquiring, holding and enforcing any and all Liens on
Collateral granted by the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto, and hereby agrees that all actions in connection with the Collateral and the enforcement or
exercise of any remedies in respect of the Obligations shall be taken solely by the Administrative Agent pursuant to this Agreement. Without limiting the generality of the foregoing, the Lenders hereby expressly authorize the Administrative Agent
to execute any and all documents \(including releases\) with respect to the Collateral and the rights of the Secured Parties with respect thereto, as contemplated by and in accordance with the provisions of this Agreement and the Loan Documents and
acknowledge and agree that any such action by the Administrative Agent shall bind the Lenders. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, the Administrative Agent shall have no duties or
responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent” herein and in the
other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied \(or express\) obligations arising under agency doctrine of any applicable Law. Instead, such term is used merely as a matter of
market custom and is intended to create or reflect only an administrative relationship between independent contracting parties.
SECTION 9.02. Actions by the Administrative Agent. The Administrative Agent shall not take any action under this Agreement, including in connection with the Collateral
and the enforcement or exercise of any remedies in respect of the Obligations, and shall not be obligated to take any such action, except to the extent expressly specified in a written notice received by the Administrative Agent signed by the
Required Lenders; provided, however, that the Administrative Agent may execute releases and other collateral termination documents with respect to assets disposed of by the Loan Parties as permitted by this Agreement. All actions
taken by the Administrative Agent in accordance with this Section 9.02, including waiving in writing compliance with any covenant in this Agreement or any other Loan Document, shall be binding upon all Lenders; provided, however,
that the foregoing shall not be deemed a waiver of any Lenders rights against any other party hereto with respect to the taking of such action. No provision of this Agreement shall require the Administrative Agent to expend or risk its own funds or
otherwise incur any financial liability or exposure in the performance of any of its duties hereunder or in any other Loan Document or in the exercise of any of its rights or powers hereunder or under any of other Loan Documents unless it is
indemnified or, if requested, advanced funds, to its satisfaction and the Administrative Agent shall have no liability to any person for any loss occasioned by any delay in taking or failure to take any such action while it is awaiting an indemnity
or advance of funds satisfactory to it.
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SECTION 9.03. Liability of Administrative Agent.
\(a\) No Related Person shall \(i\) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document
or the transactions contemplated hereby \(except for its own gross negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction, in connection with its duties expressly set forth herein\), or \(ii\) be
responsible in any manner to any Lender for any recital, statement, representation or warranty made by any Loan Party or any officer thereof, contained herein or in any other Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any
other Loan Document, or the perfection or priority of any Lien or security interest created or purported to be created under the Loan Documents, or for any failure of any Loan Party or any other party \(other than the Administrative Agent\) to any
Loan Document to perform its obligations hereunder or thereunder. No Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party or any Affiliate thereof.
\(b\) The Administrative Agent shall not be responsible for filing any financing or
continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the
Collateral.
SECTION 9.04. Reliance by the Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing,
communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel \(including counsel to the Loan Parties\), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and,
if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders \(or such greater number of Lenders as may be expressly required
hereby in any instance\) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders; provided that the Administrative Agent shall not be required to take
any action that, in its opinion or in the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law.
SECTION 9.05. Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or a Loan Party referring to
this Agreement, describing such Default and stating that such notice is a “notice of default.” The Administrative Agent shall take such action with respect to any Event of Default as may be directed by the Required Lenders in accordance with
Article VII; provided that unless and until the Administrative Agent has received any such direction, the Administrative Agent may \(but shall not be obligated to\) take such action, or refrain from taking
such action, with respect to such Event of Default as it shall deem advisable or in the best interest of the Lenders.
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SECTION 9.06. Indemnification of the Administrative Agent. To the extent not reimbursed by or on behalf of the Loan Parties and without limiting the obligation of the
Loan Parties to do so, the Lenders shall indemnify and hold harmless the Administrative Agent and each other Related Person \(solely to the extent any such Related Person was performing services on behalf of the Administrative Agent\) from and
against any and all Indemnified Liabilities incurred by it. The indemnification obligations of the Lenders under this Section shall be several and based on the amount of the Term Loan held by each such Lender. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Liabilities, this Section 9.06 applies whether any such investigation, litigation or proceeding is brought by any Lender or any other Person. Without limitation of the foregoing, each Lender
severally agrees to reimburse the Administrative Agent upon demand for its ratable share \(based on the amount of the Term Loan held by each such Lender\) of any costs or out-of-pocket expenses \(including Attorney Costs\) incurred by the
Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement \(whether through negotiations, legal proceedings or otherwise\) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Loan Parties, provided that such reimbursement by the Lenders shall not affect the Loan Parties’ continuing reimbursement obligations with respect thereto. Notwithstanding the foregoing provisions of this Section, the
indemnity provided by the Lenders in this Section shall not be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Administrative Agent or a Related Person. The undertaking in this Section 9.06 shall survive termination of the Term Loan, the payment of all other Obligations and the resignation of the Administrative Agent.
SECTION 9.07. Collateral Matters.The Lenders irrevocably authorize the Administrative Agent, and the Administrative Agent agrees, upon Borrower’s written request to
release any Lien on any property granted to or held by the Administrative Agent under any Loan Document \(i\) upon termination of the Term Loan and payment in full of all Obligations, \(ii\) at the time the property subject to such Lien is transferred
as part of or in connection with any transfer permitted hereunder or under any other Loan Document and the Loan Party provides a certificate to the Administrative Agent to such effect, or \(iii\) subject to Section 10.01, if the release of such Lien
is approved, authorized or ratified in writing by the Required Lenders. Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release in particular types or items
of property. In each case as specified in this Section 9.07, the Administrative Agent will promptly \(and each Lender irrevocably authorizes the Administrative Agent to\), at the Loan Party’s expense, execute and deliver to the Borrower such
documents as the Borrower may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Loan Documents.
SECTION 9.08. Resignation.The Administrative Agent may resign as Administrative Agent at any time upon notice to the Borrower and Lenders. Such resignation shall be
effective as of the date specified in such notice. Effective upon such resignation, \(i\) the Required Lenders may appoint a successor Administrative Agent and \(ii\) the resigning Administrative Agent shall, subject to the other provisions hereof,
take such actions as may reasonably be requested by the Required Lenders \(excluding, for this determination of Required Lenders, any principal amount of the Term Loan held by any affiliate of the Administrative Agent\) to transfer any Collateral or
security registrations or documents in respect thereof to the successor Administrative Agent.
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ARTICLE X
Miscellaneous
SECTION 10.01. Amendments, Etc. In general, except as otherwise set forth in this Section 10.01 or elsewhere in this Agreement, no amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent to any departure by a Loan Party shall be effective unless in writing signed by each of the Lenders and the Borrower, as the case may be, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given
SECTION 10.02. Notices and Other Communications; Facsimile Copies.
\(a\) General. Unless otherwise
expressly provided herein, all notices and other communications provided for hereunder or under any other Loan Document shall be in writing \(including by facsimile transmission\). All such written notices shall be mailed, faxed or delivered to the
applicable address, facsimile number or electronic mail address of such party designated by such party in a notice to the other parties. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of
\(i\) actual receipt by the relevant party hereto and \(ii\) \(A\) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; \(B\) if delivered by mail, four \(4\) Business Days after deposit in the mails, postage
prepaid; \(C\) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and \(D\) if delivered by electronic mail, when delivered and receipt is acknowledged by the recipient \(including by means of a “read-receipt” or similar
function\).
\(b\) Effectiveness of Facsimile
Documents and Signatures. Loan Documents may be transmitted and/or signed by facsimile or other electronic communication. The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and
effect as manually signed originals and shall be binding on the Loan Parties, the Administrative Agent and the Lenders.
\(c\) Reliance by the Administrative
Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices purportedly given by or on behalf of a Loan Party even if \(i\) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice specified herein, or \(ii\) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Loan Parties, jointly and severally, shall indemnify
each Related Person and each Lender from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of a Loan Party in the absence of gross negligence or willful
misconduct. All telephonic notices to the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
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SECTION 10.03. No Waiver; Cumulative Remedies. No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any
right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by Law.
SECTION 10.04. Attorney Costs and Expenses. The Loan Parties, jointly and severally, agree \(a\) to pay or reimburse the Secured Parties for all reasonable and documented
out-of-pocket costs and expenses incurred in connection with the preparation, negotiation and execution of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof \(whether or not
the transactions contemplated hereby or thereby shall be consummated\), including all Attorney Costs, and \(b\) to pay or reimburse the Secured Parties for all reasonable and documented out-of-pocket costs and expenses incurred in connection with the
administration and enforcement of any rights or remedies under this Agreement or the other Loan Documents \(including all such costs and expenses incurred during any legal proceeding, including any proceeding under any Debtor Relief Law, and
including all Attorney Costs\). The agreements in this Section 10.04 shall survive the termination of the Term Loan and repayment of all other Obligations. All amounts due under this Section 10.04 shall be paid promptly, and in any event within ten
\(10\) Business Days, following receipt by the Loan Parties of an invoice relating thereto setting forth such expenses in reasonable detail.
SECTION 10.05. Indemnification by the Borrower. The Loan Parties, jointly and severally, shall indemnify and hold harmless the Administrative Agent, the Related
Persons, each Lender and their respective Affiliates \(other than the Borrower\), directors, officers, employees, agents, trustees or advisors \(collectively the “Indemnitees”\) from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements \(including Attorney Costs\) of any kind or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or in connection with \(a\) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered
in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, \(b\) any use or proposed use of the proceeds from the Term Loan, or \(c\) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory \(including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding\) and
regardless of whether any Indemnitee is a party thereto \(all the foregoing, collectively, the “Indemnified Liabilities”\); provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements resulted from the gross negligence or willful misconduct of
such Indemnitee, as determined by a court of competent jurisdiction in a final and non-appealable judgment. No Indemnitee will have any liability for any special, punitive, indirect or consequential damages relating to this Agreement or any other
Loan Document or arising out of its activities in connection herewith or therewith. The agreements in this Section 10.05 shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Term Loan and
the repayment, satisfaction or discharge of all the other Obligations.
SECTION 10.06. Taxes. The Loan Parties will pay all taxes and fees \(including interest and penalties\) including, without limitation, all recording and filing fees,
issuance and documentary stamp and similar taxes, which may be payable in respect of the execution and delivery of this Agreement and each of the other Loan Documents.
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SECTION 10.07. Payments Set Aside. To the extent that any payment by or on behalf of a Loan Party is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required \(including pursuant
to any settlement entered into by the Administrative Agent or such Lender in its discretion\) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then \(a\) to the extent
of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and \(b\) each Lender severally agrees
to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent.
SECTION 10.08. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Required Lenders. A Lender may assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of the Borrower or any other party.
SECTION 10.09. Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan
Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law \(the “Maximum Rate”\). If the Administrative Agent or any Lender shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Term Loan or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, \(a\) characterize any payment that is not principal as an expense, fee, or premium rather than interest, \(b\) exclude voluntary
prepayments and the effects thereof, and \(c\) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
SECTION 10.10. Counterparts. This Agreement and each other Loan Document may be executed in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. Delivery by electronic mail \(or other electronic means\) of an executed counterpart of a signature page to this Agreement and each other Loan Document shall be effective as delivery of
an original executed counterpart of this Agreement and such other Loan Document.
SECTION 10.11. Integration.This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter
hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall
control.
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SECTION 10.12. Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered
pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof, and shall continue in full force and effect as long as any amount of the Term Loan or any other Obligation \(other than
Obligations that are not accrued and payable\) hereunder shall remain unpaid or unsatisfied.
SECTION 10.13. Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 10.14. GOVERNING LAW. THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 10.15. WAIVER OF RIGHT TO TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY
COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 10.15 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.
SECTION 10.16. Binding Effect. This Agreement shall become effective when it shall have been executed by the Loan Parties, the Administrative Agent and the Lenders and
thereafter shall be binding upon and inure to the benefit of the Loan Parties, the Administrative Agent and each Lender and their respective successors and assigns.
\[Signature Pages Omitted\]
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Schedule 2.01
| Lender | Initial Term Loan<br><br> Commitments | | Delayed Draw Term Loan<br><br> Commitments | |
| --- | --- | --- | --- | --- |
| MADRYN HEALTH PARTNERS, LP | $ | 828,025.53 | $ | 9,620,000.00 |
| MADRYN HEALTH PARTNERS \(CAYMAN MASTER\), LP | $ | 1,409,881.32 | $ | 16,380,000.00 |
| All Lenders | $ | 2,237,906.85 | $ | 26,000,000.00 |
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Exhibit 99.1
Venus Concept Announces $11.48 Million Debt-to-Equity Exchange Transaction
Reduction of outstanding debt by Madryn Asset Management continues to improve the Company’s financial position
TORONTO, October 2, 2025 \(GLOBE NEWSWIRE\) -- Venus Concept Inc. \(“Venus Concept” or the “Company”\) \(NASDAQ: VERO\), a global medical aesthetic technology leader,
announced today that, on September 30, 2025, the Company exchanged the full $11.48 million balance of its subordinated convertible notes held by affiliates of Madryn Asset Management, LP \(“Madryn”\) for 545,335 shares of its Series Y preferred
stock. Following the transaction, the Company had total debt obligations of approximately $30.1 million, a reduction of 24% compared to $39.7 million outstanding as of December 31, 2024.
“Madryn’s invaluable partnership has provided us with financial flexibility as we work towards sustained long-term growth, profitability, and the execution of our
strategic initiatives,” said Rajiv De Silva, Chief Executive Officer of Venus Concept. “The completion of an additional debt exchange reduces our overall debt balance and further optimizes our capital structure.”
“We support Venus’ efforts to return to growth amidst a challenging market environment,” said Avinash Amin, MD, Managing Partner at Madryn Asset Management, LP. “The
debt-to-equity exchange announced today is intended to advance Venus’ journey towards completing its transformation plan.”
Cautionary Statement Regarding Forward-Looking Statements
This communication contains “forward-looking statements” statements within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements contained herein that are not of historical facts may be deemed to be forward-looking statements. In some cases, you can identify these statements by words such as
such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “should,” “could,” “estimates,” “predicts,” “potential,” and other similar expressions that are predictions of or indicate future events and future
trends. These forward-looking statements are based on current expectations, estimates, and projections about our business and the industry in which we operate, as well as management's beliefs and assumptions, and are not guarantees of future
performance or developments and involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this communication may turn out to be
inaccurate. Factors that could materially affect our business operations and financial performance and condition include, but are not limited to, the Company’s ability to achieve its strategic goals and return to profitability, as well as those
risks and uncertainties described under Part I Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, Part II Item 1A—“Risk Factors” in our most recent Form 10-Q and in other documents we may file with
the SEC. Readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. The forward-looking statements are based on information
available to us as of the date of this communication. Unless required by law, we do not intend to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise.
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About Venus Concept
Venus Concept is an innovative global medical aesthetic technology leader with a broad product portfolio of minimally invasive and non-invasive medical aesthetic and
hair restoration technologies and reaches over 60 countries and 9 direct markets. Venus Concept's product portfolio consists of aesthetic device platforms, including Venus Versa, Venus Versa PRO, Venus Legacy, Venus Velocity, Venus Viva, Venus
Glow, Venus Bliss, Venus Bliss MAX, Venus Epileve, Venus Viva MD and AI.ME. Venus Concept's hair restoration systems include NeoGraft® and the ARTAS iX® Robotic Hair Restoration system. Venus Concept has been backed by leading healthcare industry
growth equity investors including EW Healthcare Partners \(formerly Essex Woodlands\), HealthQuest Capital, Longitude Capital Management, Aperture Venture Partners, Masters Special Situations, and Madryn Asset Management, L.P.
Investor Relations Contact:
ICR Healthcare on behalf of Venus Concept:
Mike Piccinino, CFA
VenusConceptIR@icrhealthcare.com
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