Exhibit 10.1
CONSENT AGREEMENT
THIS CONSENT AGREEMENT (this “Agreement”) dated as of August 30, 2024 (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);
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 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, 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, Original Note, the Loan Agreement, the Main Street Guaranty, all other Loan Documents and any related documents to the Lenders;
WHEREAS, pursuant to that certain Exchange Agreement, dated as of May 24, 2024, between 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 (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 September 8, 2024 (such interest, the “September 2024 Interest”);
WHEREAS, the Borrower has requested that in lieu of paying the September 2024 Interest in
cash, the Lenders consent to the payment by the Borrower of the September 2024 Interest by adding such interest to the outstanding principal amount of the Loan effective as of September 8, 2024 (such payment, the “September 2024 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 September 2024 PIK Interest Payment and the Requested Minimum Liquidity Consent, subject to the
terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises 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:
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(a) |
September 2024 PIK Interest Payment Consent.
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(i) Subject to the
other terms and conditions of this Agreement, the Lenders hereby consent to the September 2024 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 Note, 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.
(ii) The Borrower and
the Lenders acknowledge and agree that in lieu of making cash payment of the September 2024 Interest, the Borrower will pay such interest to the Lenders on September 8, 2024 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 Note.
(b) Requested Minimum Liquidity Consent. The Lenders, as of the date hereof, hereby approve the Requested Minimum Liquidity Consent and agree that until September 30, 2024, 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. 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 Loans 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 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.
(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.
(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 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.
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VENUS CONCEPT USA INC., as Borrower and a Grantor
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By:
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/s/ Rajiv De Silva
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Name: Rajiv De Silva
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Title: President and Assistant Secretary
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VENUS CONCEPT INC., as a Guarantor and a Grantor
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By:
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/s/ Rajiv De Silva
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Name: Rajiv De Silva
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Title: Chief Executive Officer
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VENUS CONCEPT CANADA CORP., as a Guarantor and a Grantor
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By:
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/s/ Hemanth Varghese
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Name: Hemanth Varghese
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Title: President and General Manager
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VENUS CONCEPT LTD, as a Guarantor and a Grantor
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By:
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/s/ Rajiv De Silva
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Name: Rajiv De Silva
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Title: Chief Executive Officer
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Signature Page to Consent Agreement
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MADRYN HEALTH PARTNERS, LP, as a Lender
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By:
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MADRYN HEALTH ADVISORS, LP, its General Partner
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By:
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MADRYN HEALTH ADVISORS GP, LLC, its General Partner
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By:
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/s/ Avinash Amin |
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Name: Avinash Amin |
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MADRYN HEALTH PARTNERS (CAYMAN MASTER), LP, as a Lender
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By:
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MADRYN HEALTH ADVISORS, LP,
its General Partner
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By:
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MADRYN HEALTH ADVISORS GP,
LLC, its General Partner
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By:
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/s/ Avinash Amin_ |
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Name: Avinash Amin |
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Signature Page to Consent Agreement