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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
November
8, 2023
Date
of Report (date of earliest event reported)
APYX
MEDICAL CORPORATION
(Exact
name of registrant as specified in its charter)
Delaware |
|
00-31885 |
|
11-2644611 |
(State
or other jurisdiction of
incorporation
or organization) |
|
(Commission
File
Number) |
|
(I.R.S.
Employer
Identification
No.) |
5115
Ulmerton Road, Clearwater, Florida 33760
(Address
of principal executive offices, zip code)
(727)
384-2323
(Issuer’s
telephone number)
(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 (see General Instruction A.2. below):
☐ |
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
Symbol(s) |
|
Name
of each exchange on which registered |
Class
A common stock |
|
APYX |
|
Nasdaq
Global Select 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. |
Credit
and Guaranty Agreement – Perceptive
On
November 8, 2023, Apyx Medical Corporation (the “Company”) entered into a Credit and Guaranty Agreement (the “Perceptive
Credit Agreement”), by and among the Company (as borrower), Apyx China Holding Corp. and Apyx Bulgaria EOOD, the Company’s
wholly-owned subsidiaries (as subsidiary guarantors), and Perceptive Credit Holdings IV, LP (“Perceptive”) (as initial lender
and administrative agent). The Credit Agreement provides for an up to $45 million senior secured term loan facility, comprised of two
tranches: (i) an initial loan of $37.5 million, and (ii) a delayed draw loan of $7.5 million, subject to the Company funding the second
tranche on or before December 31, 2024 and satisfying a minimum revenue target. The Perceptive Credit Agreement matures on November 8,
2028.
In
connection with the Company’s execution of the Perceptive Credit Agreement, the Company (i) repaid all outstanding obligations
under its prior Credit, Security and Guaranty Agreement, with MidCap Funding IV Trust and MidCap
Financial Trust (the “MidCap Credit Agreement”) and (ii) terminated the MidCap Credit Agreement.
Loans
The
initial tranche of $37.5 million was fully funded on November 8, 2023, with approximately $11 million of the proceeds used to pay off
the aforementioned obligations under the MidCap Credit Agreement, including approximately
$1.0 million of related prepayment penalties and exit fees, and $2.5 million for transaction fees and other expenses incurred in connection
with the Perceptive Credit Agreement, which includes a 3% fee of the total facility payable to Perceptive at closing. The Company intends
to use the net proceeds of these loans for working capital and general corporate purposes.
The
initial loan and delayed draw loan bear interest at a floating rate based on one-month SOFR, subject to a floor of 5.0%, plus 7.0%. The
first forty-eight (48) months of the loans constitute an interest-only period, with interest payable monthly on the last day of each
month. Subsequent to the interest-only period, the outstanding principal amount of the loans is repayable in monthly payments of 3% of
the outstanding balance on the applicable payment date. All remaining outstanding principal, together with all accrued and unpaid interest,
is due at maturity.
The
loans may be voluntarily prepaid in full, or in part, at any time, subject to terms and conditions set forth in the Perceptive Credit
Agreement. Additionally, the loans are subject to mandatory prepayment obligations, pursuant to the terms of the Perceptive Credit Agreement.
Prepayments of the loans are subject to fees of 10%, 9%, 6%, 4% and 2% of the prepayment amounts made during the first year, second year,
third year, fourth year, and thereafter, respectively.
Collateral
The
obligations of the Company under the Perceptive Credit Agreement are secured by first priority liens on substantially all of its assets.
Covenants
The
Perceptive Credit Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company
and its subsidiaries, among other things, to incur debt, grant liens, make distributions, enter certain restrictive agreements, pay or
modify subordinated debt, dispose of assets, make investments and acquisitions, enter into certain transactions with affiliates, and
undergo certain fundamental changes, in each case, subject to limitations and exceptions set forth in the Perceptive Credit Agreement.
The Perceptive Credit Agreement also requires the Company to satisfy certain financial covenants, including minimum trailing twelve (12)
month net revenue targets relating to its Advanced Energy segment (tested quarterly), with year-end targets of $41.6 million, $57.0 million,
$70.2 million, and $87.8 million for 2024, 2025, 2026, and 2027, respectively. Additionally, the Company must maintain a balance of $3
million in cash and cash equivalents during the duration of the Perceptive Credit Agreement’s term.
Events
of Default
The
Perceptive Credit Agreement also contains customary Events of Default (as defined in the Perceptive Credit Agreement) that include, among
other things, certain payment defaults, cross defaults to certain other contracts and indebtedness, covenant defaults, inaccuracy of
representations and warranties, bankruptcy and insolvency defaults, judgment defaults, change of control defaults, defaults related to
the failure to remain registered with the Securities and Exchange Commission and listed for trading on The Nasdaq Stock Market, and any
material adverse change.
Upon
the occurrence and during the continuance of an Event of Default under the Perceptive Credit Agreement, the administrative agent, if
requested by the respective lenders, may, among other things, (i) terminate commitments, as well as obligations of the administrative
agent and lenders, (ii) declare all outstanding obligations under the agreement (including principal and accrued and unpaid interest)
immediately due and payable, and (iii) exercise the other rights and remedies provided for under the agreement. The Credit Agreement
provides that, under certain circumstances, a default interest rate will apply on all obligations under such agreement during the existence
of an Event of Default, at a per annum rate equal to 2% in excess of the applicable interest rate.
Issuance
of Warrants
In
connection with the Company’s initial loan under the Perceptive Credit Agreement, the Company issued Perceptive warrants to purchase
up to 1,250,000 shares of its common stock, par value $0.001 (“Common Stock”), with an exercise price of $2.43 per share.
Upon the issuance of the delayed draw loan, if applicable, the Company will issue Perceptive warrants to purchase up to 250,000 shares
of its Common Stock, with an exercise price equal to the 10-day volume weighted average sale price from the preceding business day.
The
forgoing summary of the material terms of the Perceptive Credit Agreement is qualified in its entirety by reference to the full text
of the Perceptive Credit Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1.
On
November 9, 2023, the Company issued a press release announcing its entry into the Perceptive Credit Agreement, a copy of which
is attached to this Current Report on Form 8-K as Exhibit 99.1.
Item
1.02. |
Termination
of a Material Definitive Agreement. |
The
information in Item 1.01 of this Current Report on Form 8-K regarding the Company’s prior indebtedness under the MidCap Credit
Agreement is incorporated herein by reference into this Item 1.02.
Item
2.03. |
Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The
information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference into this Item 2.03.
Item
9.01. |
Financial
Statements and Exhibits. |
(d)
Exhibits
*Schedules
and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to supplementally furnish
copies of any omitted schedules and exhibits to the SEC upon request.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date:
November 9, 2023
|
Apyx
Medical Corporation |
|
|
|
|
By: |
/s/
Tara Semb |
|
|
Tara
Semb |
|
|
Chief
Financial Officer, Secretary and Treasurer |
Exhibit
4.1
WARRANT
CERTIFICATE
THIS
WARRANT certificate AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT certificate
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS
AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT
COVERING SUCH SHARES IS EFFECTIVE UNDER THE SECURITIES ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION
IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER
APPLICABLE STATE AND FOREIGN LAW AND, IN EACH CASE, IF THE COMPANY REQUESTS, AN OPINION REASONABLY SATISFACTORY TO THE COMPANY TO SUCH
EFFECT HAS BEEN RENDERED BY COUNSEL.
Issuer: |
Apyx Medical Corporation |
|
|
Warrant
Shares Issuable: |
1,250,000 shares of Common Stock |
|
|
Issue
Date:
|
November 8, 2023 (the “Issue Date”) |
FOR
VALUE RECEIVED, APYX MEDICAL CORPORATION, a Delaware corporation (the “Company”), hereby certifies that PERCEPTIVE
CREDIT HOLDINGS IV, LP, a Delaware limited partnership (the “Initial Holder” and, together with its successors
and permitted transferees and assigns, a “Holder”) is entitled to purchase, at the per share Exercise Price,
up to one million two hundred and fifty thousand (1,250,000) fully paid and nonassessable shares of the Company’s Common Stock,
all subject to the terms, conditions and adjustments set forth below in this Warrant Certificate.
This
Warrant Certificate has been issued as a condition precedent to, among other things, the making of loans under and pursuant to the Credit
Agreement and Guaranty, dated as of November 8, 2023 (as amended or otherwise modified from time to time, the “Credit Agreement”),
among the Company, as borrower, certain Subsidiaries of the Company from time to time party thereto, as guarantors, the lenders from
time to time party thereto, and Perceptive Credit Holdings IV, LP, in its capacity as the administrative agent for the lenders.
Section
1. Definitions. Capitalized terms used in this Warrant Certificate but not otherwise defined herein will have the meanings ascribed
thereto in the Credit Agreement as in effect on the Issue Date. The following terms when used herein have the following meanings:
“Aggregate
Exercise Price” means, with respect to any exercise of this Warrant Certificate for Warrant Shares pursuant to Section
3, an amount equal to the product of (i) the number of Warrant Shares in respect of which this Warrant Certificate is then being
exercised pursuant to Section 3, multiplied by (ii) the Exercise Price.
“Assignment”
has the meaning set forth in Section 6.
“Bloomberg”
has the meaning set forth within the definition of “VWAP”.
“Cashless
Exercise” has the meaning set forth in Section 3(b).
“Certificate
of Incorporation” means the Certificate of Incorporation of the Company, filed with the Secretary of State of the State
of Delaware on December 3, 1982, as amended or otherwise modified by way of amendments filed with the Secretary of State of Delaware.
“Common
Stock” means the Company’s common stock, par value $0.001 per share, having ordinary voting rights, as provided in
the Company’s Certificate of Incorporation.
“Company”
has the meaning set forth in the preamble.
“Convertible
Securities” means any Equity Interests that, directly or indirectly, are convertible into or exchangeable for Common Stock.
“Credit
Agreement” has the meaning set forth in the preamble.
“Determination
Date” has the meaning set forth in the definition of “VWAP”.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Exercise
Certificate” has the meaning set forth in Section 3(a)(i).
“Exercise
Date” means, for any given exercise of this Warrant Certificate, whether in whole or in part, a Business Day on which the
conditions to such exercise as set forth in Section 3 have been satisfied at or prior to 5:00 p.m., New York City time.
“Exercise
Period” means the period from (and including) the Issue Date to (and including) 5:00 p.m., New York City time, on the Expiration
Date.
“Exercise
Price” means $2.4308 per Warrant Share, as adjusted from time to time as provided herein.
“Expiration
Date” means November 8, 2033.
“Fair
Market Value” means, as of any time of determination, (i) if the Warrant Shares are traded on a Trading Market, the VWAP
for the Warrant Shares for the trading day immediately preceding the day on which such determination is being made, or (ii) if the Warrant
Shares are not listed, quoted or otherwise available for trading on a Trading Market (so that there is no such preceding day on which
the Warrant Shares are traded on a Trading Market), the “Fair Market Value” of the Warrant Shares shall be
the fair market value per Warrant Share (including, if applicable, any Common Stock or other Equity Interests issuable upon conversion
of the Warrant Shares) as reasonably determined in good faith by the Company’s Board, such determination to be subject to Section
9(a) or Section 9(b) hereof, as applicable.
“Holder”
has the meaning set forth in the preamble.
“Independent
Advisor” has the meaning set forth in Section 9(a).
“Initial
Holder” has the meaning set forth in the preamble.
“Issue
Date” means the date designated as such on the first page of this Warrant Certificate.
“Marketable
Securities” means Equity Interests meeting each of the following requirements: (i) the issuer thereof is subject to the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act, and is current in its filing of all required reports and other
information under the Securities Act and the Exchange Act; (ii) such Equity Interests are traded on a Trading Market; and (iii) if delivered
(or to be delivered) to a Holder, such Holder would not be restricted from publicly re-selling any or all of such Equity Interests delivered
to it, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations,
or (y) arises in connection with a customary market stand-off provision (or similar underwriters’ lock-up) that does not extend
beyond 180 days from the date of delivery of such Equity Interests to such Holder.
“Nasdaq”
means The Nasdaq Stock Market, Inc.
“NYSE”
means the New York Stock Exchange.
“Options”
means any warrants, options or similar rights to subscribe for or purchase Equity Interests of the Company, including its Common Stock,
Preferred Stock or Convertible Securities.
“OTC
Bulletin Board” means the National Association of Securities Dealers, Inc. OTC Bulletin Board.
“Preferred
Stock” has the meaning set forth in Certificate of Incorporation as in effect on the date hereof.
“Registration
Statement” means, with respect to any Public Offering by the Company of its Common Stock, a registration statement of the
Company that covers the offer and sale of any such Common Stock, including any prospectus, amendments or supplements to such Registration
Statement, including post-effective amendments and all exhibits and all materials incorporated by reference in such Registration Statement.
“Rule
144” means Rule 144 promulgated under the Securities Act.
“Sale
of the Company” means an event or transaction or series of related events or transactions pursuant to which, directly or
indirectly, either (x) any Person or group of Persons acting jointly or otherwise in concert (other than the Holder) acquires ownership,
directly or indirectly, beneficially or of record, of Equity Interests of the Company having more than fifty percent (50%) of the aggregate
ordinary voting power, determined on a fully-diluted, as-if-converted or exercised basis, whether such right is exercisable immediately
or only after the passage of time, or (y) (i) all or substantially all of the assets or businesses of the Company and its Subsidiaries,
taken as a whole, are transferred or sold, including by way of lease, transfer, conveyance or other disposition (including, without limitation,
by way of irrevocable, exclusive license arrangements), and (ii) as a result of, and pursuant to the terms governing, such event, transaction
or series of related events or transactions, all Obligations outstanding under the Credit Agreement are to be paid in full in cash.
“SEC”
means the Securities and Exchange Commission or any successor thereto.
“Securities
Act” means the Securities Act of 1933, as amended.
“Trading
Market” means, with respect to the Warrant Shares, the principal US exchange or market on which such Warrant Shares are
quoted or available for trading, including the Nasdaq, the NYSE, the OTC Bulletin Board or otherwise.
“Unrestricted
Conditions” has the meaning set forth in Section 10(a)(ii).
“VWAP”
means, with respect to any Equity Interest, as of any day of determination (a “Determination Date”), the volume
weighted average sale price for such Equity Interest on the trading day immediately preceding such Determination Date on the Trading
Market for such Equity Interest as reported by, or based upon data reported by, Bloomberg Financial Markets or an equivalent, reliable
reporting service reasonably acceptable to the Holder and the Company (collectively, “Bloomberg”) or, if the
volume weighted average sale price has not been reported for such Equity Interest by Bloomberg for such trading day, then the last closing
trade price of such Equity Interest as reported by Bloomberg, or, if no last closing trade price is reported for such Equity Interest
by Bloomberg, the average of the bid prices of any market makers for such Equity Interest that are listed in the over the counter market
by the Financial Industry Regulatory Authority, Inc. or on the OTC Bulletin Board (or any successor) or in the “pink sheets”
(or any successor) by the OTC Markets Group, Inc.; provided that if VWAP cannot be calculated for such Equity Interest on such
date in the manner provided above (including because the applicable Equity Interest is not listed or publicly traded), the VWAP shall
be the Fair Market Value of such Equity Interest (determined as provided in clause (ii) of the definition of Fair Market Value).
“Warrant
Certificate” means this Warrant Certificate and all subsequent warrant certificates issued upon division, combination or
transfer of, or in substitution for, this Warrant Certificate.
“Warrant
Register” has the meaning set forth in Section 5.
“Warrant
Shares” means the shares of Common Stock purchasable upon exercise of this Warrant Certificate in accordance with the terms
of this Warrant Certificate and any Equity Interests into which such Common Stock shall have been (or may be) converted, exchanged or
reclassified following the Issue Date.
“Warrant
Shares Deemed Outstanding” means, at any given time, the sum of (i) the number of Warrant Shares actually outstanding at
such time, plus (ii) the number of Warrant Shares issuable upon exercise of Options actually outstanding at such time, plus (iii) the
number of Warrant Shares issuable upon conversion or exchange of Convertible Securities actually outstanding at such time (treating as
actually outstanding any Convertible Securities issuable upon exercise of Options actually outstanding at such time), in each case, regardless
of whether the Options or Convertible Securities are actually exercisable at such time; provided that Warrant Shares Deemed Outstanding
at any given time shall not include shares owned or held by or for the account of the Company or any or its wholly owned Subsidiaries.
Section
2. Term of Warrant Certificate. Subject to the terms and conditions hereof, from time to time during the Exercise Period, the Holder
of this Warrant Certificate may exercise this Warrant Certificate for all or any part of the Warrant Shares purchasable hereunder (subject
to adjustment as provided herein).
Section
3. Exercise of Warrant Certificate.
(a)
Exercise Procedure. This Warrant Certificate may be exercised from time to time on any Business Day during the Exercise Period,
for all or any portion of the unexercised Warrant Shares, upon:
(i)
delivery to the Company of a duly completed and executed Exercise Certificate in substantially the form attached hereto as Exhibit
A (each, an “Exercise Certificate”), which certificate will specify the number of Warrant Shares to be
purchased and the Aggregate Exercise Price; and
(ii)
substantially contemporaneously with the delivery of the Exercise Certificate, payment to the Company of the Aggregate Exercise Price
in accordance with Section 3(b); provided that, notwithstanding anything to the contrary herein, in no event shall the
Exercise Price be lower than the par value of a Warrant Share.
(b)
Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made, at the option of the Holder as
expressed in the Exercise Certificate, by any of the following methods:
(i)
by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise
Price;
(ii)
by instructing the Company to withhold a number of Warrant Shares then issuable upon exercise of this Warrant Certificate with an aggregate
Fair Market Value as of the Exercise Date equal to such Aggregate Exercise Price; or
(iii)
any combination of the foregoing.
In
the event of any withholding of Warrant Shares pursuant to Section 3(b)(ii) or (iii) (solely to the extent of such withholding,
a “Cashless Exercise”) where the number of such Warrant Shares whose aggregate value is not a whole number,
the number of such shares withheld by the Company shall be rounded up to the nearest whole share and the Company shall make a cash payment
to the Holder (by wire transfer of immediately available funds to an account designated by the Holder) in an amount calculated as provided
pursuant to Section 3(e) below.
For
purposes of Rule 144, it is acknowledged and agreed that (i) the Warrant Shares issuable upon any exercise of this Warrant Certificate
in any Cashless Exercise transaction shall be deemed to have been acquired on the Issue Date, and (ii) the holding period for any Warrant
Shares issuable upon the exercise of this Warrant Certificate in any Cashless Exercise transaction shall be deemed to have commenced
on the Issue Date; provided that the Company makes no representation or warranty regarding the commencement of the holding period
of any Warrant Share.
(c)
Automatic Cashless Exercise. To the extent this Warrant Certificate has not been exercised in full by the Holder prior to the
date of any of the following events or circumstances, any portion of this Warrant Certificate that remains unexercised on such date shall
be deemed to have been exercised automatically pursuant to a Cashless Exercise, in whole (and not in part), on the Business Day immediately
preceding the earlier of (i) the occurrence of the Expiration Date; provided that, as of the Business Day immediately preceding
the Expiration Date the Fair Market Value of a Warrant Share is greater than or equal to the Exercise Price then in effect and (ii) the
consummation of a Sale of the Company; provided that (x) as a result of such Sale of the Company the consideration to be received
by the Company or its stockholders upon consummation thereof consists solely of cash, Marketable Securities or a combination thereof
and (y) as of the Business Day immediately preceding the consummation of such Sale of the Company the Fair Market Value of a Warrant
Share is greater than or equal to the Exercise Price then in effect.
(d)
Delivery of Stock Certificates. With respect to any exercise of this Warrant Certificate by the Holder, upon receipt by the Company
of an Exercise Certificate and delivery of the Aggregate Exercise Price, the Company shall promptly (but in any event within five (5)
Business Days) deliver in accordance with the terms hereof to or upon the order of the Holder that number of Warrant Shares for the portion
of this Warrant Certificate so exercised on such date, together with cash in lieu of any fraction of a share, as provided in Section
3(e) below. If such Warrant Shares are issued in certificated form, then the Company shall deliver a certificate or certificates
representing the number of Warrant Shares as the Holder shall request in the Exercise Certificate. If such Warrant Shares are issued
in uncertificated form, then the Company shall deliver upon request a confirmation evidencing the issuance and registration of such shares.
Except as otherwise provided herein, upon any exercise hereof this Warrant Certificate shall be deemed to have been exercised and such
certificate or certificates of Warrant Shares shall be deemed to have been issued, and the Holder shall be deemed to have become a holder
of record of such Warrant Shares for all purposes, as of the Exercise Date.
(e)
Fractional Shares. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant Certificate.
As to any fraction of a Warrant Share that the Holder would otherwise be entitled upon such exercise, the Company shall pay to such Holder
an amount in cash (by wire transfer of immediately available funds to an account designated by the Holder) equal to the product of (i)
such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.
(f)
Surrender of this Warrant Certificate; Delivery of New Warrant Certificate.
(i)
The Holder shall not be required to physically surrender this Warrant Certificate to the Company until this Warrant Certificate has been
exercised in full, in which event, the Holder shall, at the written request of the Company, surrender this Warrant Certificate to the
Company for cancellation within five (5) Business Days after the date the final Exercise Certificate is delivered to the Company. Partial
exercises of this Warrant Certificate resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall
have the effect of lowering the outstanding number of Warrant Shares issuable hereunder by an amount equal to the applicable number of
Warrant Shares that have been issued hereunder as a result of previous exercises and withheld in connection with Cashless Exercises,
in each case subject to adjustment as provided herein. The Holder and the Company shall maintain records showing the number of Warrant
Shares issued and purchased, the date of such issuances and purchases and the number of Warrant Shares withheld in connection with Cashless
Exercises. The Holder and any assignee, by acceptance of this Warrant Certificate, acknowledge and agree that, by reason of the provisions
of this Section 3(f), following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available
for purchase hereunder at any given time may be fewer than the amount stated on the face hereof.
(ii)
Notwithstanding the foregoing, to the extent that there are unexpired and unexercised Warrant Shares remaining under this Warrant Certificate,
the Holder may request that the Company (and the Company shall), at the time of delivery of the certificate or certificates representing
the Warrant Shares being issued in accordance with Section 3(d) and the surrender of this Warrant Certificate, deliver to the
Holder a new Warrant Certificate evidencing the rights of the Holder to subscribe for the unexpired, unexercised and not withheld (in
connection with Cashless Exercises) Warrant Shares called for by this Warrant Certificate. Unless otherwise agreed upon by the Holder
in its sole discretion, such new Warrant Certificate shall in all other respects be identical to this Warrant Certificate.
(g)
Certain Covenants With Respect to the Issuance of Warrant Certificate and Warrant Shares. With respect to the exercise of this
Warrant Certificate and the issuance of Warrant Shares hereunder, the Company hereby covenants and agrees that it will:
(i)
cause any Warrant Certificate issued in substitution for or replacement of this Warrant Certificate to be, upon issuance, duly authorized;
(ii)
cause all Warrant Shares issuable upon the exercise of this Warrant Certificate (or any substitute or replacement Warrant Certificate)
to be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares
are, validly issued, fully paid and non-assessable, issued without violation of any pre-emptive or similar rights of any stockholder
of the Company and free and clear of all Liens and similar encumbrances;
(iii)
take all such actions as may be necessary to (x) comply with Section 3(i) below and (y) ensure that all Warrant Shares issuable
upon exercise hereof are issued without violation by the Company of any applicable Law or any requirements of any U.S. or non-U.S. securities
exchanges upon which the Warrant Shares may be listed at the time of such exercise; and
(iv)
pay all reasonable expenses in connection with, and all governmental charges that may be imposed with respect to, the issuance or delivery
of Warrant Shares issuable upon exercise of their Warrant Certificate.
(h)
Conditional Exercise. Notwithstanding any other term or provision hereof, if an exercise of all or any portion of this Warrant
Certificate is to be made in connection with a Sale of the Company or other possible liquidity transaction or event, such exercise may,
at the election of the Holder, be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed
to be effective until immediately prior to the actual consummation of such transaction or event.
(i)
Reservation of Shares. The Company shall at all times during the Exercise Period reserve and keep available out of its authorized
but unissued Common Stock or (if applicable) other Equity Interests constituting Warrant Shares, solely for the purpose of issuance upon
the exercise of this Warrant Certificate, the maximum number of Warrant Shares or other Equity Interests issuable upon the exercise of
this Warrant Certificate or the conversion or exchange of Warrant Shares issuable upon such exercise. The Company shall not increase
the par value of any Warrant Shares receivable upon the exercise of this Warrant Certificate above the Exercise Price then in effect
as of the date hereof, and shall take all such actions within its power as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant Certificate.
(j)
Rule 144 Compliance. With a view to making available to the Holder the benefits of Rule 144 and any other rule or regulation of
the SEC that may at any time permit a holder to sell securities of the Company to the public without registration or pursuant to a Registration
Statement, the Company shall:
(i)
use reasonable commercial efforts to make and keep adequate public information available, as required by clause (c) of Rule 144;
(ii)
use reasonable commercial efforts to file with the SEC in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act; and
(iii)
furnish, or otherwise make available to the Holder so long as the Holder owns Warrant Shares, promptly upon request, a written statement
by the Company as to its compliance with the reporting requirements of Rule 144 and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents so filed or furnished by the Company as such Holder may reasonably
request in connection with the sale of Common Stock without registration.
(k)
Ownership Cap. To the extent that the Initial Holders (or one or more of its controlled Affiliates) is a Holder hereof, the Company
shall not knowingly effect the exercise of this Warrant Certificate, and the Initial Holder shall not have the right to exercise this
Warrant Certificate to the extent that, after giving effect to such exercise, the Initial Holder (together with its Affiliates) would
beneficially own in excess of 9.99% of the Equity Interests of the Company having ordinary voting rights outstanding immediately after
giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of such voting Equity Interests beneficially
owned by the Initial Holder and its Affiliates shall include the number of Warrant Shares issuable upon exercise of this Warrant Certificate
with respect to which the determination of such aggregate number is being made, but shall exclude Warrant Shares that do not have ordinary
voting rights or that would be issuable upon (i) exercise of the remaining, unexercised portion of this Warrant Certificate beneficially
owned by the Initial Holder and its Affiliates or (ii) exercise or conversion of the unexercised or unconverted portion of any other
Equity Interests of the Company beneficially owned by the Initial Holder and its Affiliates (including, without limitation, any Convertible
Securities) subject to a limitation on conversion or exercise analogous to the limitations contained in this Section 3(k). Except
as set forth in the preceding sentence, for purposes of this Section 3(k), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act. For purposes of this Warrant Certificate, in determining the number of outstanding Equity Interests
of the Company having ordinary voting rights the Initial Holder of this Warrant Certificate may rely on the number of such outstanding
Equity Interests as reflected in the most recent of (i) if available, the Company’s Form 10-K, Form 10-Q or other public filing
with the SEC, as the case may be, (ii) a more recent public announcement by the Company or (iii) any other notice by the Company or its
transfer agent setting forth the number of such Equity Interests outstanding. In addition, upon the written request of the Initial Holder,
the Company shall, within three (3) Business Days, confirm to the Initial Holder the number of its shares of Equity Interests having
ordinary voting rights then outstanding.
Section
4. Adjustment to Number of Warrant Shares, Exercise Price, etc. The number of Warrant Shares issuable upon exercise of this Warrant
Certificate shall be subject to adjustment from time to time as provided in this Section 4.
(a)
Adjustment to Number of Warrant Shares Upon Reorganizations, Reclassifications, etc. In the event of any changes in the number
of Warrant Shares Deemed Outstanding (or the number of outstanding Equity Interests into which Warrant Shares may be exercisable or convertible
into) by reason of redemptions, recapitalizations, reclassifications, combinations or exchanges of shares, splits or reverse splits,
separations, reorganizations, liquidations, substitutions, replacements or the like, the number and class of Warrant Shares available
upon exercise of this Warrant Certificate in the aggregate and the Exercise Price per share shall be correspondingly adjusted as may
be necessary (but only to the extent necessary) in order to give the Holder of this Warrant Certificate, upon exercise hereof, the total
number, class, and kind of shares as the Holder would have owned (or would have had the right to own upon exercise hereof) had this Warrant
Certificate been exercised immediately prior to any such event and had the Holder continued to hold such Warrant Shares until after the
event requiring adjustment. The form of this Warrant Certificate need not be changed because of any adjustment in the number of Warrant
Shares subject to this Warrant Certificate.
(b)
Adjustment to Number of Warrant Shares Upon Certain Dividends, etc. If the Company declares or pays a dividend or distribution
on the outstanding shares of its Common Stock payable in cash, Equity Interests or other property (or prior to the exercise of this Warrant
Certificate in full the holders of Common Stock become entitled to receive any such dividend or distribution), then upon exercise of
this Warrant Certificate, for each Warrant Share acquired, the Holder shall receive, without additional cost to the Holder, the total
amount, number and kind of cash, Equity Interests or other property which the Holder would have received had the Holder owned the Warrant
Shares of record as of the date such dividend or distribution occurred.
(c)
Certificate as to Adjustment.
(i)
As promptly as reasonably practicable following any change or adjustment of the type described above in this Section 4 (but in
any event within five (5) Business Days), the Company shall furnish to the Holder a certificate of a Responsible Officer setting forth
in reasonable detail such change or adjustment and the facts upon which it is based and certifying the calculation thereof.
(ii)
As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later
than three (3) Business Days thereafter, the Company shall furnish to the Holder a certificate of a Responsible Officer certifying the
number of Warrant Shares or the amount, if any, of other Equity Interests, securities or assets then issuable upon exercise of this Warrant
Certificate.
(d)
Notices. In the event that, at any time during the Exercise Period, the Company shall take a record of the holders of its outstanding
capital stock (or other Equity Interests at the time issuable upon exercise of this Warrant Certificate) for the purpose of:
(i)
entitling or enabling such holders to receive any dividend or other distribution, to receive any right to subscribe for or purchase any
shares of capital stock of any class or any other securities, or to receive any other securities;
(ii)
(x) any capital reorganization of the Company, any reclassification of any outstanding securities, any consolidation or merger of the
Company with or into another Person, any Public Offering of the Company’s Equity Interests, (y) a Sale of the Company or (z) any
Fundamental Transaction (as defined in the Certificate of Incorporation); or
(iii)
the voluntary or involuntary dissolution, liquidation or winding-up of the Company (including by way of a bankruptcy or equivalent insolvency
proceeding);
then,
and in each such case, the Company shall send or cause to be sent to the Holder at least five (5) Business Days prior to the applicable
record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying in reasonable detail,
as the case may be, (A) the record date for such dividend, distribution or other right, action or event, and a description of such dividend,
distribution or other right, action or event, or (B) the effective date on which such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding-up or other right, action or event is proposed to take place, and the date, if any
is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which the holders of record
of its capital stock (or such other Equity Interests at the time issuable upon exercise of the Warrant Certificate) shall be entitled
to exchange their shares of capital stock (or such other Equity Interests), for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, winding-up or other right, action or event and the amount per
share and character of such exchange applicable to the Warrant Certificate and the Warrant Shares.
Section
5. Warrant Register. The Company shall keep and properly maintain at its principal executive offices a register (the “Warrant
Register”) for the registration of this Warrant Certificate and any transfers thereof. The Company may deem and treat the
Person in whose name this Warrant Certificate is registered on such register as the Holder thereof for all purposes, and the Company
shall not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of this Warrant Certificate
effected in accordance with the provisions of this Warrant Certificate.
Section
6. Transfer of Warrant Certificate. Subject to Section 10, this Warrant Certificate and all rights hereunder are transferable,
in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant Certificate to the Company at its then
principal executive offices with a properly completed and duly executed instrument of assignment in substantially the form attached hereto
as Exhibit B (an “Assignment”). Upon such compliance, surrender and delivery, the Company shall execute
and deliver a new Warrant Certificate or Warrant Certificates in the name of the assignee or assignees and in the denominations specified
in such Assignment, and shall issue to the assignor a new Warrant Certificate evidencing the portion of this Warrant Certificate, if
any, not so assigned, and this Warrant Certificate shall promptly be cancelled.
Section
7. The Holder Not Deemed a Stockholder; Limitations on Liability. Except as otherwise specifically provided herein (including in
Section 4 above), (i) prior to the Exercise Date, the Holder shall not be entitled to receive dividends, nor shall anything contained
in this Warrant Certificate be construed to confer upon the Holder, solely in its capacity as such, any of the rights of a stockholder
of the Company or any right to receive dividends, subscription or other rights, and (ii) prior to the registration of the Holder in the
share register of the Company with respect to the Warrant Shares to which the Holder is then entitled to receive upon the due exercise
of this Warrant Certificate, the Holder shall not be entitled to vote, nor shall anything contained in this Warrant Certificate be construed
to confer upon the Holder, solely in its capacity as such, any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise) or receive notice of Board
or stockholder meetings. In addition, nothing contained in this Warrant Certificate shall be construed as imposing any liabilities on
the Holder to purchase any securities (upon exercise of this Warrant Certificate or otherwise) or as a stockholder of the Company, whether
such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 7, the Company shall
provide the Holder with copies of the same notices and other information given to all holders of Common Stock, contemporaneously with
the giving thereof to such holders.
Section
8. Replacement on Loss; Division and Combination.
(a)
Replacement of Warrant Certificate on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant Certificate and upon delivery of a customary indemnity reasonably satisfactory to it (it being
understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case
of mutilation, upon surrender of such Warrant Certificate for cancellation to the Company, the Company at its own expense shall execute
and deliver to the Holder, in lieu hereof, a new Warrant Certificate of like tenor and exercisable for an equivalent number of Warrant
Shares as this Warrant Certificate so lost, stolen, mutilated or destroyed; provided that, in the case of mutilation, no indemnity
shall be required if this Warrant Certificate in identifiable form is surrendered to the Company for cancellation.
(b)
Division and Combination of Warrant Certificate. Subject to compliance with the applicable provisions of this Warrant Certificate
as to any transfer or other assignment which may be involved in such division or combination, this Warrant Certificate may be divided
or, following any such division of this Warrant Certificate, subsequently combined with other Warrant Certificates, upon the surrender
of this Warrant Certificate or Warrant Certificates to the Company at its then principal executive offices, together with a written notice
specifying the names and denominations in which new Warrant Certificates are to be issued, signed by each applicable Holder or its agents
or attorneys. Subject to compliance with the applicable provisions of this Warrant Certificate as to any transfer or assignment which
may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant Certificate or
Warrant Certificates in exchange for this Warrant Certificate or Warrant Certificates so surrendered in accordance with such notice.
Such new Warrant Certificate or Warrant Certificates shall be of like tenor to the surrendered Warrant Certificate or Warrant Certificates
and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as this Warrant Certificate or Warrant Certificates
so surrendered in accordance with such notice.
Section
9. Disputes; No Impairment, etc. The parties hereto agree as follows:
(a)
Disputes. In the event of any dispute which arises between the Holder and the Company (including the Board of the Company) with
respect to any calculation or determination of the adjusted Exercise Price, the number of Warrant Shares, other Equity Interests, Fair
Market Value, cash or other property issuable upon exercise of this Warrant Certificate, the amount or type of consideration due to the
Holder in connection with any event, transaction or other matter described in Section 4 above or any other matter involving this
Warrant Certificate or the Warrant Shares that is not resolved by the parties after good faith discussions and efforts to reach resolution,
upon the request of the Holder the disputed issue(s) shall be submitted to a firm of independent investment bankers or public accountants
of recognized national standing, which (i) shall be chosen by the Company and be reasonably satisfactory to the Holder and (ii) shall
be independent of the Company (an “Independent Advisor”), for determination, and such determination by the
Independent Advisor shall be binding upon the Company and the Holder with respect to this Warrant Certificate, any Warrant Shares issued
or issuable in connection herewith, the Exercise Price therefor, or any other matter in dispute, as the case may be, absent manifest
error. Costs and expenses of the Independent Advisor shall be shared 50/50 by the Company and the Holder.
(b)
Equitable Equivalent. In case any event shall occur as to which the provisions of Section 9(a) above are not strictly applicable
but the failure to make any adjustment would not, in the reasonable, good faith opinion of the Holder, fairly protect the rights and
benefits of the Holder represented by this Warrant Certificate in accordance with the essential intent and principles of Sections
4 and 9(a), then, in any such case, at the request of the Holder, the Company shall submit the matter and issues raised by
the Holder to an Independent Advisor, which shall make a written determination, on a basis consistent with the essential intent and principles
established in Sections 4 and 9(a), as to whether and to what extent an adjustment, if any, is necessary to preserve, without
dilution or other material modification, the rights and benefits represented by this Warrant Certificate. Upon receipt of such written
determination, which shall be binding on the parties hereto, the Company will promptly mail a copy thereof to the Holder and shall make
the adjustments described therein, if any. Costs and expenses of the Independent Advisor shall be shared 50/50 by the Company and the
Holder.
(c)
No Avoidance. The Company shall not, by way of amendment of any of its Organic Documents or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities or any other voluntary action, intentionally avoid or seek
to avoid the observance, performance or intended results of any of the terms or provisions of this Warrant Certificate, but will at all
times in good faith assist in the carrying out of all such terms or provisions and in the taking of all such action as may be necessary
or appropriate in order to protect the rights of the Holder against dilution or other material modification or other impairment as if
the Holder was a stockholder of the Company entitled to the benefit of fiduciary duties afforded to stockholders under Delaware law.
Section
10. Compliance with the Securities Act; Representations and Warranties.
(a)
Agreement to Comply with the Securities Act, etc.
(i)
Legend. The Holder, by acceptance of this Warrant Certificate, agrees to comply in all respects with the provisions of this Section
10 and the restrictive legend requirements set forth on the face of this Warrant Certificate and further agrees that it shall not
offer, sell or otherwise dispose of this Warrant Certificate or any Warrant Shares to be issued upon exercise hereof except under circumstances
that will not result in a violation of the Securities Act. Subject to clause (ii) below, this Warrant Certificate and all Warrant
Shares issued upon exercise of this Warrant Certificate (unless registered under the Securities Act) shall be stamped or imprinted with
a legend in substantially the form as set forth on the face hereof.
(ii)
Removal of Restrictive Legends. Neither this Warrant Certificate nor any certificates evidencing Warrant Shares issuable or deliverable
under or in connection with this Warrant Certificate shall contain any legend restricting the transfer thereof (including the legend
required above in Section 10(a)(i) above) in any of the following circumstances: (A) following any sale of this Warrant Certificate
or any Warrant Shares issued or delivered to the Holder under or in connection herewith pursuant to Rule 144, (B) if this Warrant Certificate
or Warrant Shares are eligible for sale under clause (b)(1) of Rule 144, or (C) if such legend is not required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC) (collectively, the “Unrestricted
Conditions”). This Warrant Certificate or Warrant Shares, as the case may be, shall be issued free of all legends if the
Unrestricted Conditions are met at the time of issuance.
(iii)
Replacement Warrant Certificate. The Company agrees that at such time as the Unrestricted Conditions have been satisfied it shall
promptly (but in any event within five (5) Business Days) following written request from the Holder issue a replacement Warrant Certificate
or replacement Warrant Shares, as the case may be, free of all restrictive legends.
(iv)
Sale of Unlegended Shares. The Holder agrees that the removal of the restrictive legend from this Warrant Certificate and any
certificates representing securities as set forth in Section 10(a)(ii) above is predicated upon the Company’s reliance that
the Holder will sell this Warrant Certificate or any such securities pursuant to either an effective Registration Statement or otherwise
pursuant to the requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom,
and that if such securities are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution
set forth therein.
(b)
Representations and Warranties of the Holder. In connection with the issuance of this Warrant Certificate, the Holder hereby represents
and warrants to the Company, as of the Issue Date, as follows:
(i)
The Holder is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act. The Holder
is acquiring this Warrant Certificate and the Warrant Shares to be issued upon exercise hereof for investment for its own account and
not with a current view towards, or for resale in connection with, the public sale or distribution of this Warrant Certificate or the
Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.
(ii)
The Holder understands and acknowledges that this Warrant Certificate and the Warrant Shares to be issued upon exercise hereof are “restricted
securities” under the Securities Act inasmuch as they are being acquired from the Company in a transaction not involving a public
offering and that, under such Laws and applicable regulations, such securities may be resold without registration under the Securities
Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144, as presently in effect,
and understands the resale limitations imposed thereby and by the Securities Act.
(iii)
The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period and has such knowledge
and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in this Warrant
Certificate and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of this Warrant Certificate and the business, properties, prospects and financial condition
of the Company.
(c)
Representations and Warranties of the Company. In connection with the issuance of this Warrant Certificate, the Company hereby
represents and warrants to the Holder, as of the Issue Date, as follows:
(i)
All Warrant Shares issuable upon the exercise of this Warrant Certificate (or any substitute or replacement Warrant Certificate) shall
be, upon issuance in accordance with the terms thereof, (x) validly issued, fully paid and non-assessable, (y) issued without violation
of any pre-emptive or similar rights of any stockholder of the Company and (z) free and clear of all Liens and similar encumbrances.
(ii)
The Company has taken all actions necessary to ensure that all Warrant Shares issuable upon exercise hereof will be issued without violation
by the Company of (x) any applicable Law or any requirements of any U.S. or non-U.S. securities exchange or (y) any Organic Document
of or applicable to the Company.
(iii)
The Company is a corporation duly organized and validly existing under the Laws of the State of Delaware and has the capacity and corporate
power and authority to enter into and perform this Warrant Certificate.
(iv)
The Company has taken or caused to be taken all action required to be taken by it, its Board, any of its stockholders or any other Person
to authorize the execution, delivery, issuance and performance of this Warrant Certificate and the issuance of the Warrant Shares.
(v)
This Warrant Certificate has been duly executed and delivered by the Company.
(vi)
The obligations of the Company under this Warrant Certificate are legal, valid and binding obligations, enforceable against the Company
in accordance with the terms hereof.
(vii)
The Company has complied with all obligations set forth in Section 3(i), above.
(viii)
On September 30, 2023, the authorized capital of the Company was as follows:
(A)
75,000,000 shares of Common Stock, of which 34,643,855 shares were issued and outstanding. All of the outstanding shares of Common Stock
have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities
Laws. The Company holds no Common Stock in its treasury.
(B)
10,000,000 shares of Preferred Stock, all having a par value per share of $0.001 par value per share, none of which were issued or were
outstanding. The rights, privileges and preferences of the Preferred Stock are as stated in the Certificate of Incorporation and as provided
by the General Corporation Law of the State of Delaware. The Company holds no Preferred Stock in its treasury.
(C)
Except for (x) the rights provided pursuant to this Warrant Certificate, and (y) as set forth on Schedule A hereto, there
are no outstanding Options or other agreements (including conversion or preemptive rights or rights of first refusal or similar rights),
orally or in writing, to purchase or acquire from the Company any shares of Common Stock or Preferred Stock, or any securities convertible
into or exchangeable for shares of Common Stock or Preferred Stock.
(D)
Except as set forth on Schedule B hereto, neither the Company nor any of its Subsidiaries is subject to any Contract containing
any term or provision providing for the acceleration of vesting (or lapse of a repurchase right) or other changes in the vesting provisions
or other terms of such agreement or understanding upon the occurrence of any event or combination of events. The Company has never adjusted
or amended the exercise price of any Options or Convertible Securities previously awarded, whether through amendment, cancellation, replacement
grant, repricing or any other means. Except as set forth in the Certificate of Incorporation the Company has no obligation (contingent
or otherwise) to purchase or redeem any of its Equity Interests.
Section
11. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and
shall be deemed to have been given: (i) when delivered by hand (with written confirmation of receipt); (ii) when received by the addressee
if sent by a nationally recognized overnight courier (receipt requested); (iii) on the date sent by e-mail of a PDF document (with confirmation
of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours
of the recipient; or (iv) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage
prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a
party as shall be specified in a notice given in accordance with this Section 11).
If to the Company: |
Apyx Medical Corporation |
|
5115
Ulmerton Road |
|
Clearwater,
Florida 33760
|
|
Attention:
Charles Goodwin III |
|
E-mail:
charlie.goodwin@apyxmedical.com |
|
|
with
a copy to: |
Ruskin Moscou Faltischek, P.C. |
|
1425
RXR Plaza, 15th Floor |
|
Uniondale,
New York 11556-1421 |
|
Attention:
Adam P. Silvers, Esq. |
|
E-mail:
asilvers@rmfpc.com |
|
|
If
to the Holder:
|
Perceptive
Credit Holdings IV, LP |
|
c/o
Perceptive Advisors LLC
|
|
51
Astor Place, 10th Floor |
|
New
York, NY 10003 |
|
Attention:
Sandeep Dixit |
|
E-mail:
Sandeep@perceptivelife.com |
|
|
with
a copy to: |
Morrison & Foerster LLP |
|
250
West 55th Street |
|
New
York, NY 10019 |
|
Attention:
Mark Wojciechowski, Esq. |
|
E-mail:
mwojciechowski@mofo.com
|
Section
12. Cumulative Remedies. The rights and remedies provided in this Warrant Certificate are cumulative and are not exclusive of, and
are in addition to and not in substitution for, any other rights or remedies available at Law, in equity or otherwise.
Section
13. Entire Agreement. This Warrant Certificate constitutes the sole and entire agreement of the parties to this Warrant Certificate
with respect to the subject matter contained herein and supersedes all prior and contemporaneous understandings and agreements, both
written and oral, with respect to such subject matter.
Section
14. Successor and Assigns. This Warrant Certificate and the rights evidenced hereby shall be binding upon and shall inure to the
benefit of the parties hereto and the successors of the Company and the successors and permitted assigns of the Holder. Such successor
or permitted assign of the Holder shall be deemed to be the “Holder” for all purposes hereunder.
Section
15. No Third-Party Beneficiaries. This Warrant Certificate is for the sole benefit of the Company and the Holder and their respective
successors and, in the case of the Holder, permitted assigns, and nothing herein, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant Certificate.
Section
16. Headings. The headings in this Warrant Certificate are for reference only and shall not affect the interpretation of this Warrant
Certificate.
Section
17. Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant Certificate may only be amended, modified
or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions
hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate
or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of
a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising,
any rights, remedy, power or privilege arising from this Warrant Certificate shall operate or be construed 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.
Section
18. Severability. If any term or provision of this Warrant Certificate is invalid, illegal or unenforceable in any jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other term or provision of this Warrant Certificate or invalidate
or render unenforceable such term or provision in any other jurisdiction.
Section
19. Governing Law. This Warrant Certificate shall be governed by and construed in accordance with the internal Laws of the State
of New York without effect to any choice or conflict of Law provision or rule (whether of the State of New York or any other jurisdiction)
that would cause the application of Laws of any jurisdiction other than those of the State of New York.
Section
20. Submission to Jurisdiction. Any legal suit, action or proceeding arising out of or based on this Warrant Certificate or the transactions
contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of New York, in each case
located in the city and county of New York. Each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit,
action or proceeding. Service of process, summons, notice or other document by certified or registered mail to such party’s address
set forth in Section 11 shall be effective service of process for any suit, action or other proceeding, and the parties irrevocably
and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in such courts and irrevocably
waive and agree not to plead or claim in any such court that any such suit, action or proceeding has been brought in an inconvenient
forum.
Section
21. Counterparts. This Warrant Certificate may be executed in counterparts, each of which shall be deemed an original, but all of
which together shall be deemed to be one and the same agreement. A signed copy of this Warrant Certificate delivered by e-mail or other
means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant
Certificate.
Section
22. No Strict Construction. This Warrant Certificate shall be construed without regard to any presumption or rule requiring construction
or interpretation against the party drafting an instrument or causing any instrument to be drafted.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the Company has duly executed this Warrant Certificate on the Issue Date.
|
APYX
MEDICAL CORPORATION |
|
|
|
|
By |
/s/ Charles Goodwin |
|
Name: |
Charles
Goodwin |
|
Title: |
Chief
Executive Officer |
Accepted
and agreed, |
|
|
|
|
PERCEPTIVE
CREDIT HOLDINGS IV, LP |
|
|
|
|
By:
|
PERCEPTIVE CREDIT OPPORTUNITIES GP, LLC, its general partner |
|
|
|
By
|
/s/ Sandeep
Dixit
| |
Name:
|
Sandeep
Dixit |
|
Title:
|
Chief
Credit Officer |
|
|
|
|
By
|
/s/ Sam
Chawla |
|
Name:
|
Sam
Chawla |
|
Title:
|
Portfolio
Manager |
|
Exhibit
10.1
CREDIT
AGREEMENT AND GUARANTY
dated
as of
November
8, 2023
between
APYX
MEDICAL CORPORATION
as
the Borrower,
THE
SUBSIDIARY GUARANTORS FROM TIME TO TIME PARTY HERETO,
as
the Subsidiary Guarantors,
THE
LENDERS FROM TIME TO TIME PARTY HERETO,
as
the Lenders,
and
PERCEPTIVE
CREDIT HOLDINGS IV, LP,
as
the Initial Lender and Administrative Agent
U.S.
$45,000,000
Table
of Contents
|
|
Page |
SECTION
1 DEFINITIONS |
1 |
1.01 |
Certain
Defined Terms |
1 |
1.02 |
Accounting
Terms and Principles |
32 |
1.03 |
Interpretation |
32 |
1.04 |
Divisions |
32 |
1.05 |
Reference
Rate Replacement |
33 |
SECTION
2 THE COMMITMENT and the loans |
34 |
2.01 |
Loans |
34 |
2.02 |
Borrowing
Procedures |
34 |
2.03 |
Notes |
34 |
2.04 |
Use
of Proceeds |
35 |
SECTION
3 PAYMENTS OF PRINCIPAL AND INTEREST |
35 |
3.01 |
Repayments
and Prepayments Generally; Application |
35 |
3.02 |
Interest |
35 |
3.03 |
Prepayments;
Prepayment Fees |
36 |
3.04 |
Upfront
Fee |
38 |
SECTION
4 PAYMENTS, ETC. |
38 |
4.01 |
Payments |
38 |
4.02 |
Computations |
38 |
4.03 |
Set-Off |
38 |
SECTION
5 YIELD PROTECTION, ETC. |
39 |
5.01 |
Additional
Costs |
39 |
5.02 |
Illegality |
41 |
5.03 |
Taxes |
41 |
SECTION
6 CONDITIONS PRECEDENT |
44 |
6.01 |
Conditions
to the Borrowing of the Initial Loan |
44 |
6.02 |
Conditions
to the Borrowing of the Delayed Draw Loan |
48 |
SECTION
7 REPRESENTATIONS AND WARRANTIES |
51 |
7.01 |
Power
and Authority |
51 |
7.02 |
Authorization;
Enforceability |
51 |
7.03 |
Governmental
and Other Approvals; No Conflicts |
51 |
7.04 |
Financial
Statements; Material Adverse Change. |
52 |
7.05 |
Properties |
52 |
7.06 |
No
Actions or Proceedings |
56 |
7.07 |
Physician
Referrals |
56 |
7.08 |
Taxes |
57 |
7.09 |
Full
Disclosure |
57 |
7.10 |
Securities
Law Regulation |
57 |
7.11 |
Solvency |
57 |
7.12 |
Subsidiaries
and Other Investments |
57 |
7.13 |
Continuing
Secured Indebtedness |
58 |
7.14 |
Material
Agreements |
58 |
7.15 |
Restrictive
Agreements |
58 |
7.16 |
Real
Property |
58 |
Table
of Contents
(continued)
|
|
Page |
7.17 |
Pension
Matters |
58 |
7.18 |
Priority
of Obligations |
59 |
7.19 |
Compliance
with Laws and Agreements; Governmental Approvals, Regulatory Approvals, etc |
59 |
7.20 |
Transactions
with Affiliates |
62 |
7.21 |
Sanctions |
62 |
7.22 |
Anti-Corruption |
62 |
7.23 |
Deposit
and Disbursement Accounts |
62 |
7.24 |
Royalty
and Other Payments |
62 |
SECTION
8 AFFIRMATIVE COVENANTS |
63 |
8.01 |
Financial
Statements and Other Information |
63 |
8.02 |
Notices
of Material Events |
65 |
8.03 |
Existence;
Conduct of Business |
67 |
8.04 |
Payment
of Obligations |
67 |
8.05 |
Insurance |
68 |
8.06 |
Books
and Records; Inspection Rights |
68 |
8.07 |
Compliance
with Laws, Maintenance of Regulatory Approvals, Contracts, Intellectual Property, Etc. |
68 |
8.08 |
Maintenance
of Properties, Etc. |
69 |
8.09 |
Action
under Environmental Laws |
69 |
8.10 |
Use
of Proceeds |
70 |
8.11 |
Certain
Obligations Respecting Subsidiaries; Further Assurances |
70 |
8.12 |
Termination
of Non-Permitted Liens |
72 |
8.13 |
Intellectual
Property |
72 |
8.14 |
Litigation
Cooperation |
72 |
8.15 |
ERISA
Compliance |
73 |
8.16 |
Cash
Management |
73 |
8.17 |
Conference
Calls |
73 |
8.18 |
Post-Closing
Covenants |
73 |
SECTION
9 NEGATIVE COVENANTS |
74 |
9.01 |
Indebtedness |
74 |
9.02 |
Liens |
74 |
9.03 |
Fundamental
Changes and Acquisitions |
76 |
9.04 |
Lines
of Business |
76 |
9.05 |
Investments |
76 |
9.06 |
Restricted
Payments |
78 |
9.07 |
Payments
of Indebtedness |
78 |
9.08 |
Change
in Fiscal Year |
78 |
9.09 |
Sales
of Assets, Etc. |
78 |
9.10 |
Transactions
with Affiliates |
79 |
9.11 |
Restrictive
Agreements |
79 |
9.12 |
Modifications,
Terminations, Etc. of Material Agreements and Organic Documents |
79 |
Table
of Contents
(continued)
|
|
Page |
9.13 |
Inbound
and Outbound Licenses. |
80 |
9.14 |
Sales
and Leasebacks |
81 |
9.15 |
Hazardous
Material |
81 |
9.16 |
Off-Label
Promotion |
81 |
9.17 |
Accounting
Changes |
81 |
9.18 |
Compliance
with ERISA |
81 |
9.19 |
Inconsistent
Agreements |
81 |
9.21 |
Passive
Holding Company Status of Apyx China Holding. |
82 |
9.22 |
Restrictions
Applicable to Foreign Subsidiaries. |
82 |
SECTION
10 FINANCIAL COVENANTS |
83 |
10.01 |
Minimum
Liquidity |
83 |
10.02 |
Minimum
Advanced Energy Net Revenue |
83 |
SECTION
11 EVENTS OF DEFAULT |
84 |
11.01 |
Events
of Default |
84 |
11.02 |
Remedies |
87 |
11.03 |
Additional
Remedies. |
88 |
SECTION
12 THE ADMINISTRATIVE AGENT |
88 |
12.01 |
Appointment
and Duties |
88 |
12.02 |
Binding
Effect |
89 |
12.03 |
Use
of Discretion |
89 |
12.04 |
Delegation
of Rights and Duties |
90 |
12.05 |
Reliance
and Liability |
90 |
12.06 |
Agent
Individually |
91 |
12.07 |
Lender
Credit Decision |
91 |
12.08 |
Expenses;
Indemnities |
92 |
12.09 |
Resignation
of the Administrative Agent |
92 |
12.10 |
Release
of Collateral or Guarantors |
93 |
12.11 |
Additional
Secured Parties |
93 |
SECTION
13 THE GUARANTEE |
94 |
13.01 |
The
Guarantee |
94 |
13.02 |
Obligations
Unconditional |
94 |
13.03 |
Reinstatement |
95 |
13.04 |
Subrogation |
95 |
13.05 |
Remedies |
95 |
13.06 |
Instrument
for the Payment of Money |
96 |
13.07 |
Continuing
Guarantee |
96 |
13.08 |
General
Limitation on Guarantee Obligations |
96 |
SECTION
14 MISCELLANEOUS |
96 |
14.01 |
No
Waiver |
96 |
14.02 |
Notices |
96 |
14.03 |
Expenses,
Indemnification, Etc. |
97 |
14.04 |
Amendments,
Etc. |
98 |
14.05 |
Successors
and Assigns |
98 |
Table
of Contents
(continued)
|
|
Page |
14.06 |
Survival |
101 |
14.07 |
Captions |
101 |
14.08 |
Counterparts;
Electronic Signatures |
101 |
14.09 |
Governing
Law |
101 |
14.10 |
Jurisdiction,
Service of Process and Venue |
101 |
14.11 |
Waiver
of Jury Trial |
102 |
14.12 |
Waiver
of Immunity |
102 |
14.13 |
Entire
Agreement |
102 |
14.14 |
Severability |
103 |
14.15 |
No
Fiduciary Relationship |
103 |
14.16 |
Confidentiality |
103 |
14.17 |
Interest
Rate Limitation |
103 |
14.18 |
Early
Prepayment Fee |
104 |
14.19 |
Judgment
Currency |
104 |
14.20 |
USA
PATRIOT Act |
105 |
14.21 |
Acknowledgement
and Consent to Bail-In of Affected Financial Institutions |
105 |
Table
of Contents
SCHEDULES
AND EXHIBITS
Schedule
1 |
- |
Commitments |
Schedule
2 |
- |
Products |
Schedule
7.05(b) |
- |
Certain
Intellectual Property |
Schedule
7.06(a) |
- |
Certain
Litigation |
Schedule
7.06(c) |
- |
Labor
Matters |
Schedule
7.08 |
- |
Taxes |
Schedule
7.12(a) |
- |
Information
Regarding Subsidiaries |
Schedule
7.12(b) |
- |
Equity
Interests |
Schedule
7.13 |
- |
Continuing
Secured Indebtedness |
Schedule
7.14 |
- |
Material
Agreements of Obligors |
Schedule
7.15 |
- |
Restrictive
Agreements |
Schedule
7.16 |
- |
Real
Property Owned or Leased by any Obligor |
Schedule
7.17 |
- |
Pension
Matters |
Schedule
7.19(c) |
- |
Material
Regulatory Approvals |
Schedule
7.19(f) |
- |
Adverse
Findings |
Schedule
7.20 |
- |
Transactions
with Affiliates |
Schedule
7.23 |
- |
Deposit
and Disbursement Accounts |
Schedule
7.24 |
- |
Royalties
etc. |
Schedule
8.18 |
- |
Post-Closing
Covenants |
Schedule
9.05 |
- |
Existing
Investments |
Schedule
9.13(a) |
- |
Inbound
Licenses |
Schedule
9.14 |
- |
Permitted
Sales and Leasebacks |
|
|
|
Exhibit
A |
- |
Form
of Guarantee Assumption Agreement |
Exhibit
B |
- |
Form
of Borrowing Notice |
Exhibit
C |
- |
Form
of Note |
Exhibit
D-1 |
- |
Form
of U.S. Tax Compliance Certificate (For Foreign
Lenders
That Are Not Partnerships For U.S. Federal Income Tax Purposes) |
Exhibit
D-2 |
- |
Form
of U.S. Tax Compliance Certificate (For Foreign
Participants
That Are Not Partnerships For U.S. Federal Income Tax Purposes) |
Exhibit
D-3 |
- |
Form
of U.S. Tax Compliance Certificate (For Foreign
Participants
That Are Partnerships For U.S. Federal Income Tax Purposes) |
Exhibit
D-4 |
- |
Form
of U.S. Tax Compliance Certificate (For Foreign
Lenders
That Are Partnerships For U.S. Federal Income Tax Purposes) |
Exhibit
E |
- |
Form
of Compliance Certificate |
Table
of Contents
(continued)
Exhibit
F |
- |
Form
of Assignment and Assumption |
Exhibit
G |
- |
Form
of Information and Collateral Certificate |
Exhibit
H |
- |
Form
of Security Agreement |
Exhibit
I |
- |
Form
of Warrant Certificate |
Exhibit
J |
- |
Form
of Closing Date Certificate |
Exhibit
K |
- |
Form
of Solvency Certificate |
Exhibit
L |
- |
Form
of Intercompany Subordination Agreement |
CREDIT
AGREEMENT AND GUARANTY
Credit
Agreement and Guaranty, dated as of November 8, 2023 (this “Agreement”), among Apyx Medical Corporation, a
Delaware corporation (the “Borrower”), the Subsidiary Guarantors from time to time parties hereto, Perceptive
Credit Holdings IV, LP, a Delaware limited partnership (the “Initial Lender”), and each other lender that may
from time to time become a party hereto (each, including the Initial Lender, together with their permitted successors and assigns, a
“Lender” and collectively, the “Lenders”), and Perceptive Credit Holdings IV, LP,
a Delaware limited partnership, as administrative agent for the Lenders (in such capacity, together with its successors and assigns,
the “Administrative Agent”).
WITNESSETH:
WHEREAS,
the Borrower has requested that the Lender provide a senior, secured, delayed-draw term loan facility to Borrower in an aggregate principal
amount of $45,000,000 with (i) $37,500,000 in aggregate principal amount of Loans to be available on the Closing Date (the “Initial
Loan”), and (ii) up to an additional $7,500,000 in aggregate principal amount of Loans to be available after the Closing
Date and on or prior to December 31, 2024 (the “Delayed Draw Loan”), in each case, subject to the terms and
conditions set forth herein, including the applicable conditions precedent set forth in Section 6; and
WHEREAS,
the Lender is willing, on the terms and subject to the conditions set forth herein, to make the Loans to the Borrower.
NOW,
THEREFORE, the parties hereto agree as follows:
SECTION
1
DEFINITIONS
1.01
Certain Defined Terms. As used herein, the following terms have the following respective meanings:
“Account
Control Agreement” means a control agreement or other similar agreement with respect to one or more Controlled Accounts,
entered into by the applicable depositary bank, one of more Obligors and the Administrative Agent, in form and substance satisfactory
to the Administrative Agent, in order to give the Administrative Agent “control” (within the meaning set forth in Section
9-104 of the UCC) of such account(s).
“Acquisition”
means any transaction, or any series of related transactions, by which any Person directly or indirectly, by means of a take-over bid,
tender offer, amalgamation, consolidation, merger, purchase of Equity Interests or other assets, or similar transaction having the same
effect as any of the foregoing, (i) acquires any business or all or substantially all of the assets of any Person, (ii) acquires all
or substantially all of a business line or unit or division of any other Person, (iii) with respect to any other Person that is managed
or governed by a Board, acquires control of Equity Interests of such other Person representing more than fifty percent (50%) of the ordinary
voting power (determined on a fully-diluted basis) for the election of directors of such Person’s Board, or (iv) acquires control
of more than fifty percent (50%) of the Equity Interests in any Person (determined on a fully-diluted basis) engaged in any business
that is not managed by a Board.
“Administrative
Agent” has the meaning set forth in the preamble hereto.
“Advanced
Energy Net Revenue” means, for any period, (a) the total gross revenues of the Borrower and its Subsidiaries generated
solely through the commercial sale of Advanced Energy Products by the Borrower and its Subsidiaries to third parties in the ordinary
course of business during such period, less (b)(i) trade, quantity and cash discounts allowed in respect of such Products, (ii) discounts,
refunds, rebates, charge backs, retroactive price adjustments and any other allowances which effectively reduce the net selling price
of such Products, (iii) product returns and allowances with respect to such Products, (iv) allowances for shipping or other distribution
expenses with respect to such Products, (iv) set-offs and counterclaims with respect to such Products, and (v) without duplication, all
other similar and customary deductions used by the Borrower in determining net revenues, all, in respect of clauses (a) and (b),
as determined in accordance with GAAP (as applicable) and in the ordinary course of business.
“Advanced
Energy Products” means (a) Renuvion® generators and disposable handpieces and related accessories, (b) J-Plasma®
generators and disposable handpieces and related accessories, (c) Lipocube® products, together with, in the case of each of clauses
(a) and (b), any ancillary products, including, but not limited to, liposuction system components and accessories, and future
iterations of the foregoing using the Borrower’s helium plasma technology.
“Adverse
Regulatory Event” means the occurrence of any of the following events or circumstances:
(a)
the failure of the Borrower or any of its Subsidiaries to hold, directly or through licensees or agents, in full force and effect, all
Regulatory Approvals necessary or required for the Borrower or any Subsidiary to conduct its Product Development and Commercialization
Activities as currently conducted and as currently anticipated to be conducted;
(b)
the failure of the Borrower or any of its Subsidiaries to make or file with the FDA or any other applicable Regulatory Authority having
regulatory oversight with respect to the Product Development and Commercialization Activities of the Borrower and its Subsidiaries, in
compliance with such applicable Law, any required report, registration, listing, application, or similar document, instrument or notice;
(c)
in connection with any clinical, preclinical, safety or other studies or tests being conducted by (or on behalf of) the Borrower or any
of its Subsidiaries for purposes of obtaining any Regulatory Approval for any Product or any Product Development and Commercialization
Activities, (i) the failure of any clinical, pre-clinical, safety or other required trial, study or test to be conducted in material
compliance with any applicable Law or Regulatory Approval; (ii) the failure of any related clinical trial site to be monitored by the
Borrower or any of its Subsidiaries in material compliance with all applicable Laws and Regulatory Approvals; or (iii) the receipt by
the Borrower or any of its Subsidiaries of written notice from the FDA or any other Regulatory Authority or IRB having regulatory oversight
of the Borrower or any of its Subsidiaries, which notice requires the termination or suspension of any such clinical, preclinical, safety
or other study or test;
(d)
the Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, any agent, supplier, licensor or licensee of the Borrower
or any of its Subsidiaries, receives from the FDA or any other Regulatory Authority having regulatory oversight of the Borrower or any
of its Subsidiaries any written notice with respect to any Product or any Product Development and Commercialization Activities asserting
(i) that such Person lacks a required Regulatory Approval with respect to such Product or Product Development and Commercialization Activities,
(ii) a lack of compliance by such Person with any applicable Laws or Regulatory Approvals (or any similar order, injunction or decree)
or (iii) that the FDA or such other Regulatory Authority, as the case may be, has commenced any regulatory action, investigation or inquiry
(other than routine or periodic inspections or reviews) with respect to any Product or any Product Development and Commercialization
Activities; or
(e)
with respect to any Product or Product Development and Commercialization Activities, (i) any product recall, safety alert, correction,
withdrawal, marketing suspension or removal, or any closure or suspension of any related manufacturing facility or operation, in each
case whether voluntary or involuntary, is mandated, conducted, undertaken or issued, as the case may be, at the request, demand or order
of the FDA or any other any Regulatory Authority having regulatory oversight of the Borrower or any of its Subsidiaries, or through the
voluntary action of the Borrower or any of its Subsidiaries in response to any such request, demand or order, (ii) the FDA or any other
Regulatory Authority having regulatory oversight of the Borrower or any of its Subsidiaries commences any criminal, injunctive, seizure,
detention or civil penalty action or (iii) the Borrower or any of its Subsidiaries enters into any consent decree, plea agreement or
other settlement with the FDA or any Regulatory Authority having regulatory oversight of the Borrower or any of its Subsidiaries with
respect to any of the foregoing.
“Affected
Financial Institution” means (i) any EEA Financial Institution or (ii) any UK Financial Institution.
“Affiliate”
means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or
is Controlled by or is under common Control with such specified Person; provided that, with respect to any Lender, an “Affiliate”
shall include any Related Fund of such Lender.
“Agreement”
has the meaning set forth in the preamble hereto.
“Amortization
Payment” has the meaning set forth in Section 3.01(a).
“Applicable
Margin” means 7.00%, as potentially increased pursuant to Section 3.02(b).
“Apyx
Bulgaria” means Apyx Bulgaria EOOD, a company organized under the laws of Bulgaria.
“Apyx
China Holding” means Apyx China Holding Corp., a Delaware corporation.
“Apyx
SY” means Apyx SY Medical Devices (NINGBO) Co., LTD.
“Asset
Sale” has the meaning set forth in Section 9.09.
“Assignment
and Assumption” means an assignment and assumption entered into by a Lender and an assignee of such Lender substantially
in the form of Exhibit F.
“Bail-In
Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect
of any liability of an EEA Financial Institution.
“Bail-In
Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European
Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described
in the EU Bail-In Legislation Schedule.
“Bankruptcy
Code” means Title 11 of the United States Code entitled “Bankruptcy.”
“Beneficial
Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit
Plan” means any employee benefit plan as defined in Section 3(3) of ERISA (whether governed by the Laws of the United States
or otherwise) to which any Obligor or Subsidiary thereof incurs or otherwise has any obligation or liability, contingent or otherwise.
“Board”
means, with respect to any Person, the board of directors or equivalent management or oversight body of such Person or any committee
thereof duly authorized to act on behalf of such board (or equivalent body).
“Borrower”
has the meaning set forth in the introduction hereto.
“Borrower
Certificate of Incorporation” means the Certificate of Incorporation of the Borrower, filed with the Secretary of State
of the State of Delaware on December 3, 1982, as amended or otherwise modified by way of amendments filed with the Secretary of State
of the State of Delaware.
“Borrowing”
means, as the context may require, either the borrowing of the Initial Loan on the Closing Date or the borrowing of the Delayed Draw
Loan on the Delayed Draw Date.
“Borrowing
Date” means, with respect to the Initial Loan, the Closing Date, and with respect to the Delayed Draw Loan, the Delayed
Draw Date.
“Borrowing
Notice” means a written notice substantially in the form of Exhibit B.
“Business
Day” means a day (other than a Saturday or Sunday) on which commercial banks are not authorized or required to close in
New York City.
“Calculation
Date” has the meaning set forth in Section 10.02.
“Capital
Lease Obligation” means, as to any Person, any obligation of such Person to pay rent or other amounts under a lease of
(or other agreement conveying the right to use) real or personal property, which obligations are required to be classified and accounted
for as a capital lease on a balance sheet of such Person under GAAP and, for purposes of this Agreement, the amount of any such obligation
shall be the capitalized amount thereof, determined in accordance with GAAP.
“Casualty
Event” means the damage, destruction or condemnation, as the case may be, of property of any Person or any of its Subsidiaries.
“Change
of Control” means an event or series of events (including any Acquisition) that occurs after the Closing Date and causes
or results in any of the following:
(i)
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 more than forty percent (40%) of the Equity Interests
of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower 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);
(ii)
during any period of twelve (12) consecutive months, a majority of the members of the Board of the Borrower cease to be composed of individuals
(a) who were members of such Board on the first day of such period, (b) whose election or nomination to such Board was approved by individuals
referred to in clause (a) above constituting at the time of such election or nomination at least a majority of such Board or (c)
whose election or nomination to such Board was approved by individuals referred to in clauses (a) and (b) above constituting
at the time of such election or nomination at least a majority of such Board;
(iii)
any Obligor shall cease to own, directly, beneficially and of record or legally, one hundred percent (100%) of the issued and outstanding
Equity Interests of their respective Subsidiaries (other than minority holdings in Subsidiaries that are not U.S. Persons solely in accordance
with applicable Law and other than the Equity Interest of Apyx SY), free and clear of all Liens (other than Permitted Liens) (other than
transactions resulting from Asset Sales permitted by Section 9.09); or
(iv)
the sale of all or substantially all of the property or business of the Borrower and its Subsidiaries, taken as a whole.
“Claim”
means any claim, demand, complaint, grievance, action, application, suit, cause of action, order, charge, indictment, prosecution, judgment
or other similar process, assessment or reassessment, whether made, converted or assessed in connection with a debt, liability, dispute,
breach, failure or otherwise.
“Closing
Date” means November 8, 2023.
“Closing
Date Certificate” has the meaning set forth in Section 6.01(b).
“Code”
means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time
to time.
“Collateral”
means any asset or property in which a Lien is purported to be granted to any Secured Party under any Loan Document, including future
acquired or created assets or properties (or all such assets or properties, as the context may require).
“Collaboration
Partner” means any of the Borrower’s licensees or licensors or any third party with which the Company has entered
into a Contract that relates to the research, development, supply, manufacturing or testing of any Product.
“Commitment”
means, with respect to each Lender, the obligation of such Lender to make Loans to the Borrower on the applicable Borrowing Date in accordance
with the terms and conditions of this Agreement, which commitment is in the amount set forth opposite such Lender’s name on Schedule
1 under the caption “Commitment”, as such Schedule may be amended from time to time pursuant to an Assignment and Assumption
or otherwise. The aggregate Commitments on the date hereof equal $45,000,000.
“Commodity
Account” means any commodity account, as such term is defined in Section 9-102 of the NY UCC.
“Compliance
Certificate” has the meaning set forth in Section 8.01(d).
“Conforming
Changes” means, with respect to either the use or administration of One-Month Term SOFR, any technical, administrative
or operational changes (including changes to the definition of “Business Day,” the definition of “U.S. Government Securities
Business Day,” the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept
of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests
or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section
3.02(e) and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect
the adoption and implementation of any such rate or to permit the use and administration thereof by the Administrative Agent in a manner
substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice
is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of any such
rate exists, then in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with
the administration of this Agreement and the other Loan Documents).
“Connection
Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that
are franchise Taxes or branch profits Taxes.
“Contracts”
means contracts, licenses, leases, agreements, obligations, promises, undertakings, understandings, arrangements, documents, commitments,
entitlements or engagements pursuant to which a Person has, or will have, any actual or contingent obligations or liabilities (in each
case, whether written or oral, express or implied). “Contractual” has a meaning correlative thereto.
“Control”
means, in respect of a particular Person, the possession, directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ability to exercise voting power, by Contract or otherwise. “Controlling”
and “Controlled” (and similar derivative terms) have meanings correlative thereto.
“Controlled
Account” has the meaning set forth in Section 8.16(a).
“Copyright”
means all copyrights, copyright registrations and applications for copyright registrations, including all renewals and extensions thereof,
all rights to recover for past, present or future infringements thereof, and all other rights whatsoever accruing thereunder or pertaining
thereto throughout the world.
“Default”
means any Event of Default and any event that, upon the giving of notice, the lapse of time or both, would constitute an Event of Default.
“Default
Rate” has the meaning set forth in Section 3.02(b).
“Delayed
Draw Certificate” has the meaning set forth in Section 6.02(b).
“Delayed
Draw Date” means the date of the borrowing of the Delayed Draw Loan hereunder, which shall be no sooner than the date on
which each of the conditions precedent set forth in Section 6.02 shall have been satisfied or waived.
“Delayed
Draw Loan” has the meaning set forth in the first recital hereto.
“Deposit
Account” means any deposit account, as such term is defined in Section 9-102 of the NY UCC.
“Designated
Jurisdiction” means any country or territory to the extent that such country or territory is the subject of any Sanction.
“Device”
means any medical instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent or other similar or related item,
including any component, part or accessory, that (i) is intended for use in the diagnosis of disease or other conditions or in the cure,
mitigation, treatment or prevention of disease, in man or other animals, or is intended to affect the structure or any function of the
body of man or other animals, (ii) does not achieve its primary intended purpose or purposes through chemical action within or on the
body of man or other animals and (iii) is not dependent upon being metabolized for the achievement of its primary intended purpose or
purposes.
“Disqualified
Equity Interests” means, with respect to any Person, any Equity Interest of such Person that, by its terms (or by the terms
of any security, Contract or other Equity Interest into which it is convertible or for which it is exchangeable upon exercise or otherwise),
or upon the happening of any event or condition (i) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests),
including pursuant to a sinking fund obligation or otherwise, (ii) is redeemable at the option of the holder thereof (other than solely
for Qualified Equity Interests), in whole or in part, (iii) provides for the scheduled payments of dividends or other distributions in
cash or other securities that would constitute Disqualified Equity Interests, or (iv) is or becomes convertible into or exchangeable
for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that
is one hundred and eighty (180) days after the Maturity Date.
“Dollars”
and “$” means lawful money of the United States of America.
“Domestic
Subsidiary” means any direct or indirect Subsidiary of the Borrower that is a corporation, limited liability company, partnership
or similar business entity incorporated, formed or organized under the Laws of the United States, any State of the United States or the
District of Columbia.
“Early
Prepayment Fee” means, with respect to any prepayment, repayment or other payment of the outstanding principal amount of
the Loans made prior to the scheduled Maturity Date of all or any portion of the outstanding principal amount of the Loans, whether mandatory
or voluntary, pursuant to Section 3.03(a) or Section 3.03(b) or otherwise (including as a result of acceleration, an Insolvency
Proceeding or other Event of Default but excluding scheduled Amortization Payments):
(i)
on or prior to the first anniversary of the Closing Date, an amount equal to ten percent (10.00%) of the aggregate outstanding principal
amount of the Loans being prepaid on such Prepayment Date;
(ii)
after the first anniversary of the Closing Date and on or prior to the second anniversary of the Closing Date, an amount equal to nine
percent (9.00%) of the aggregate outstanding principal amount of the Loans being prepaid on such Prepayment Date;
(iii)
after the second anniversary of the Closing Date and on or prior to the third anniversary of the Closing Date, an amount equal to six
percent (6.00%) of the aggregate outstanding principal amount of the Loans being prepaid on such Prepayment Date;
(iv)
after the third anniversary of the Closing Date and on or prior to the fourth anniversary of the Closing Date, an amount equal to four
percent (4.00%) of the aggregate outstanding principal amount of the Loans being prepaid on such Prepayment Date; and
(v)
after the fourth anniversary of the Closing Date, an amount equal to two percent (2.00%) of the aggregate outstanding principal amount
of the Loans being prepaid on such Prepayment Date.
“EEA
Financial Institution” means (i) any credit institution or investment firm established in any EEA Member Country which
is subject to the supervision of an EEA Resolution Authority, (ii) any entity established in an EEA Member Country which is a parent
of an institution described in clause (i) of this definition, or (iii) any financial institution established in an EEA Member Country
which is a subsidiary of an institution described in clauses (i) or (ii) of this definition and is subject to consolidated supervision
with its parent.
“EEA
Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA
Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority
of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible
Transferee” means and includes (i) any commercial bank, (ii) any insurance company, (iii) any finance company, (iv) any
financial institution, (v) any Related Fund or other investment Fund that invests in loans or other obligations for borrowed money, (vi)
with respect to any Lender, any of its Affiliates, and (vii) any other “accredited investor” (as defined in Regulation D
of the Securities Act) that is principally engaged in the business of managing investments or holding assets for investment purposes.
“Environmental
Law” means any Law or Governmental Approval relating to pollution or protection of the environment or the treatment, storage,
disposal, release, threatened release or handling of hazardous materials, and all local laws and regulations, whether U.S. or non-U.S.,
related to environmental matters and any specific agreements entered into with any Governmental Authority which include commitments related
to environmental matters.
“Equity
Interests” means, with respect to any Person (for purposes of this defined term, an “issuer”),
all shares of, interests or participations in, or other equivalents in respect of such issuer’s capital stock, including all membership
interests, partnership interests or equivalent, and all debt or other securities (including warrants, options and similar rights) directly
or indirectly exchangeable, exercisable or otherwise convertible into, such issuer’s capital stock, whether now outstanding or
issued after the Closing Date, and in each case, however classified or designated and whether voting or non-voting.
“Equivalent
Amount” means, with respect to an amount denominated in one currency, the amount in another currency that could be purchased
by the amount in the first currency determined by reference to the Exchange Rate at the time of determination.
“ERISA”
means the United States Employee Retirement Income Security Act of 1974, as amended.
“ERISA
Affiliate” means, collectively, any Obligor, Subsidiary thereof, and any Person under common control, or treated as a single
employer, with any Obligor or Subsidiary thereof, within the meaning of Section 414(b), (c), (m) or (o) of the Code.
“ERISA
Event” means (i) a reportable event as defined in Section 4043 of ERISA with respect to a Title IV Plan, excluding, however,
such events as to which the PBGC by regulation has waived the requirement of Section 4043(a) of ERISA that it be notified within thirty
(30) days of the occurrence of such event; (ii) the applicability of the requirements of Section 4043(b) of ERISA with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, to any Title IV Plan where an event described in paragraph (9), (10), (11), (12)
or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such plan within the following thirty (30) days;
(iii) a withdrawal by any Obligor or any ERISA Affiliate thereof from a Title IV Plan or the termination of any Title IV Plan resulting
in liability under Sections 4063 or 4064 of ERISA; (iv) the withdrawal of any Obligor or any ERISA Affiliate thereof in a complete or
partial withdrawal (within the meaning of Section 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability
therefor, or the receipt by any Obligor or any ERISA Affiliate thereof of notice from any Multiemployer Plan that it is in reorganization
or insolvency pursuant to Section 4241 or 4245 of ERISA; (v) the filing of a notice of intent to terminate, the treatment of a plan amendment
as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Title IV Plan or
Multiemployer Plan; (vi) the imposition of liability on any Obligor or any ERISA Affiliate thereof pursuant to Sections 4062(e) or 4069
of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the failure by any Obligor or any ERISA Affiliate thereof
to make any required contribution to a Plan, or the failure to meet the minimum funding standard of Section 412 of the Code with respect
to any Title IV Plan (whether or not waived in accordance with Section 412(c) of the Code) or the failure to make by its due date a required
installment under Section 430 of the Code with respect to any Title IV Plan or the failure to make any required contribution to a Multiemployer
Plan; (viii) the determination that any Title IV Plan is considered an at-risk plan or a plan in endangered to critical status within
the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; (ix) an event or condition which might reasonably
be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer,
any Title IV Plan or Multiemployer Plan; (x) the imposition of any liability under Title I or Title IV of ERISA, other than PBGC premiums
due but not delinquent under Section 4007 of ERISA, upon any Obligor or any ERISA Affiliate thereof; (xi) an application for a funding
waiver under Section 303 of ERISA or an extension of any amortization period pursuant to Section 412 of the Code with respect to any
Title IV Plan; (xii) the occurrence of a non-exempt prohibited transaction under Sections 406 or 407 of ERISA for which any Obligor or
any Subsidiary thereof may be directly or indirectly liable; (xiii) a violation of the applicable requirements of Section 404 or 405
of ERISA or the exclusive benefit rule under Section 401(a) of the Code by any fiduciary or disqualified person for which any Obligor
or any ERISA Affiliate thereof may be directly or indirectly liable; (xiv) the occurrence of an act or omission which could give rise
to the imposition on any Obligor or any ERISA Affiliate thereof of fines, penalties, taxes or related charges under Chapter 43 of the
Code or under Sections 409, 502(c), (i) or (1) or 4071 of ERISA; (xv) the assertion of a material claim (other than routine claims for
benefits) against any Plan or the assets thereof, or against any Obligor or any Subsidiary thereof in connection with any such Plan;
(xvi) receipt from the IRS of notice of the failure of any Qualified Plan to qualify under Section 401(a) of the Code, or the failure
of any trust forming part of any Qualified Plan to fail to qualify for exemption from taxation under Section 501(a) of the Code; (xvii)
the imposition of any Lien (or the fulfillment of the conditions for the imposition of any Lien) on any of the rights, properties or
assets of any Obligor or any ERISA Affiliate thereof, in either case pursuant to Title I or IV, including Section 302(f) or 303(k) of
ERISA or to Section 401(a)(29) or 430(k) of the Code; (xviii) the establishment or amendment by any Obligor or any Subsidiary thereof
of any “welfare plan”, as such term is defined in Section 3(1) of ERISA, that provides post-employment welfare benefits in
a manner that would increase the liability of any Obligor; or (xix) any Foreign Benefit Event.
“ERISA
Funding Rules” means the rules regarding minimum required contributions (including any installment payment thereof) to
Title IV Plans, as set forth in Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
“EU
Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any
successor Person), as in effect from time to time.
“Event
of Default” has the meaning set forth in Section 11.01.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange
Rate” means, as of any date of determination, the rate at which any currency may be exchanged into another currency, as
set forth on the relevant Bloomberg screen at or about 11:00 a.m. (New York City time) on such date. In the event that such rate does
not appear on the Bloomberg screen, the “Exchange Rate” shall be determined by reference to such other publicly
available service for displaying exchange rates as may be reasonably designated by the Administrative Agent.
“Excluded
Account” means any bank or deposit account used exclusively to cover wages or payroll, including the withheld portion of
payroll taxes (or equivalent) payable by employees.
“Excluded
Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted
from a payment to a Recipient: (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes and branch profits
Taxes, in each case, (x) imposed as a result of such Recipient being organized under the laws of, or having its principal office or,
in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivisions
thereof) or (y) that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable
to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the
date on which (1) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower
under Section 5.03(i)) or (2) such Lender changes its lending office, except in each case to the extent that, pursuant to Section
5.03, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became
a party hereto or to such Lender immediately before it changed its lending office, (iii) Taxes attributable to such Recipient’s
failure to comply with Section 5.03(f), and (iv) any U.S. federal withholding Taxes imposed under FATCA.
“Exclusive
License” (and its derivatives) means and refers to any outbound license of Intellectual Property that is exclusive (whether
as to use, field, geography or otherwise) and (i) has a term that is longer than twelve (12) months from the date of the original effective
date of such license or (ii) is subject to an automatic renewal or similar right that would result in the term thereof being longer than
twelve (12) months from such original effective date.
“Exculpated
Party” has the meaning set forth in Section 14.03(b).
“Expense
Deposit” means the “Expense Deposit” as such term is defined in the Summary of Terms.
“FATCA”
means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements
entered into pursuant to Section 1471(b)(1) of the Code.
“FD&C
Act” means the U.S. Food, Drug and Cosmetic Act of 1938 (or any successor thereto), as amended from time to time, and the
rules and regulations promulgated thereunder.
“Federal
Health Care Program” means any “federal health care program” as defined in 42 U.S.C. § 1320a-7b(f),
including Medicare, state Medicaid programs, state CHIP programs, TRICARE and similar or successor programs with or for the benefit of
any Governmental Authority.
“FDA”
means the U.S. Food and Drug Administration and any successor entity.
“Federal
Funds Effective Rate” means, for any day, the greater of (i) the rate calculated by the Federal Reserve Bank of New York
based on such day’s federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve
Bank of New York sets forth on its public website from time to time) and published on the next succeeding Business Day by the Federal
Reserve Bank of New York as the federal funds effective rate and (ii) zero percent (0%).
“Foreign
Benefit Event” means, with respect to any Foreign Pension Plan, (a) the existence of unfunded liabilities in excess of
the amount permitted under any applicable Law, or in excess of the amount that would be permitted absent a waiver from a Governmental
Authority, (b) the failure to make the required contributions or payments, under any applicable Law, on or before the due date for such
contributions or payments, (c) the receipt of a notice by a Governmental Authority relating to the intention to terminate any such Foreign
Pension Plan or to appoint a trustee or similar official to administer any such Foreign Pension Plan, or alleging the insolvency of any
such Foreign Pension Plan, (d) the incurrence of any liability in excess of $500,000 by the Borrower or any of its Subsidiaries under
applicable Law on account of the complete or partial termination of such Foreign Pension Plan or the complete or partial withdrawal of
any participating employer therein, or (e) the occurrence of any transaction that is prohibited under any applicable Law and that could
reasonably be expected to result in the incurrence of any liability by the Borrower or any of its Subsidiaries, or the imposition on
the Borrower or any of its Subsidiaries of any fine, excise tax or penalty resulting from any noncompliance with any applicable Law,
in each case in excess of $500,000.
“Foreign
Pension Plan” means any benefit plan that under applicable Law, other than the Laws of the United States or any political
subdivision thereof, is required to be funded through a trust or other funding vehicle other than a trust or funding vehicle maintained
exclusively by a Governmental Authority.
“Foreign
Subsidiary” means any direct or indirect Subsidiary of the Borrower that is not a Domestic Subsidiary, including, without
limitation, Apyx Bulgaria and Apyx SY.
“Fund”
means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its business.
“GAAP”
means generally accepted accounting principles in the United States of America, as in effect from time to time, set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, in the statements and
pronouncements of the Financial Accounting Standards Board and in such other statements by such other entity as may be in general use
by significant segments of the accounting profession that are applicable to the circumstances as of the date of determination. Subject
to Section 1.02, all references to “GAAP” shall be to GAAP applied consistently with the principles used in the preparation
of the financial statements described in Section 7.04(a).
“Governmental
Approval” means any consent, authorization, approval, order, license, franchise, permit, certification, accreditation,
registration, clearance, exemption, listing, filing or notice that is issued or granted by or from (or pursuant to any act of) any Governmental
Authority, in connection with any Law or otherwise, including any application or submission related to any of the foregoing.
“Governmental
Authority” means any nation, government, branch of power (whether executive, legislative or judicial), state, province
or municipality or other political agency, department or subdivision thereof and any entity exercising executive, legislative, judicial,
monetary, regulatory or administrative functions of or pertaining to government, including without limitation regulatory authorities,
governmental departments, agencies, commissions, bureaus, officials, ministers, courts, bodies, boards, tribunals and dispute settlement
panels, and other Law-, rule- or regulation-making organizations or entities of any State, territory, county, city or other political
subdivision of any country, in each case, whether U.S. or non-U.S., including the FDA and any other agency, branch or other governmental
body that has regulatory, supervisory or administrative authority or oversight over, or is charged with the responsibility or vested
with the authority to administer or enforce, any Healthcare Laws or issue or approve any Governmental Approval under or in connection
with any such Healthcare Laws.
“Guarantee”
means, as to any Person, (a) any obligation, contingent or otherwise, of such Person (the “guarantor”) guaranteeing
or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase
(or to advance or supply funds for the purchase of) any security for the payment thereof, (ii) to purchase or lease property, securities
or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment thereof, (iii)
to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose
of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof
or to protect such obligee against Loss in respect thereof (in whole or in part), or (b) any Lien on any assets of the guarantor securing
any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by the guarantor
(or any right, contingent or otherwise, of the obligee of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall
be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect
of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guarantor in good faith. The term “Guarantee” as a verb has a corresponding meaning.
“Guarantee
Assumption Agreement” means a Guarantee Assumption Agreement substantially in the form of Exhibit A by an entity
that, pursuant to Section 8.11(a), is required to become a “Subsidiary Guarantor.”
“Guaranteed
Obligations” has the meaning set forth in Section 13.01.
“Hazardous
Material” means any substance, element, chemical, compound, product, solid, gas, liquid, waste, by-product, pollutant,
contaminant or material which is hazardous or toxic, and includes, without limitation, (i) asbestos, polychlorinated biphenyls and petroleum
(including crude oil or any fraction thereof) and (ii) any material classified or regulated as “hazardous” or “toxic”
or words of like import pursuant to an Environmental Law.
“Healthcare
Laws” means, collectively, all Laws applicable to the business of the Borrower or any other Obligor, regulating the manufacturing,
labeling, promotion and provision of and payment for healthcare products, items and services, including but not limited to HIPAA, Section
1128B(b) of the Social Security Act, as amended; 42 U.S.C. § 1320a-7b (Criminal Penalties Involving Medicare or State Health Care
Programs), commonly referred to as the “Federal Anti-Kickback Statute”; Section 1877 of the Social Security Act, as amended;
42 U.S.C. § 1395nn (Limitation on Certain Physician Referrals), commonly referred to as “Stark Statute”; U.S. Federal
Food, Drug, and Cosmetic Act, as amended from time to time (21 U.S.C. § 301 et seq.); all rules, regulations and guidance with respect
to the provision of Medicare and Medicaid programs or services (42 C.F.R. Chapter IV et seq.); the Physician Payments Sunshine Act (42
U.S.C. § 1320a-7h); and all rules, regulations and guidance promulgated under or pursuant to any of the foregoing.
“Hedging
Agreement” means any interest rate exchange agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging arrangement.
“IDE”
means an application, including an application filed with any Regulatory Authority, for authorization to commence human clinical studies
with respect to any Device, including (i) an Investigational Device Exemption as defined in the FD&C Act or any successor application
or procedure filed with the FDA, (ii) an abbreviated Investigational Device Exemption as specified in FDA regulations in 21 C.F.R. §
812.2(b), (iii) any equivalent of a United States Investigational Device Exemption in countries, jurisdictions or Governmental Authorities
outside of the United States, (iv) all amendments, variations, extensions and renewals thereof that may be filed with respect to the
foregoing and (v) all related documents and correspondence thereto, including documents and correspondence with an IRB.
“Indebtedness”
of any Person means, without duplication, (i) all obligations of such Person for borrowed money or obligations of such Person with respect
to deposits or advances of any kind by third parties, (ii) all obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or similar instruments, (iii) all obligations of such Person upon which interest charges are customarily paid, (iv) all obligations
of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (v) all obligations
of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the
ordinary course of business), (vi) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (vii) all Guarantees by such Person of Indebtedness of others, (viii) all Capital Lease Obligations
of such Person, (ix) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and
letters of guaranty, (x) obligations under any Hedging Agreement, currency swaps, forwards, futures or derivatives transactions, (xi)
all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (xii) all obligations of such Person
under license or other agreements containing a guaranteed minimum payment or purchase by such Person, (xiii) all other obligations required
to be classified as indebtedness of such Person under GAAP, excluding any of the foregoing to the extent comprised of an obligation in
respect of a trade payable, a commercial letter of credit supporting one or more trade payables or similar obligations to a trade creditor,
in each case in the ordinary course of business and (xiv) any Disqualified Equity Interests of or issued by such Person. The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner)
to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“Indemnified
Party” has the meaning set forth in Section 14.03(b).
“Indemnified
Taxes” means (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any
Obligation and (ii) to the extent not otherwise described in clause (i), Other Taxes.
“Information
and Collateral Certificate” means an Information and Collateral Certificate substantially in the form of Exhibit G.
“Initial
Lender” has the meaning set forth in the preamble hereto.
“Initial
Loan” has the meaning set forth in the first recital hereto.
“Insolvency
Proceeding” means (i) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (ii) any general assignment for
the benefit of creditors, composition, marshaling of assets for creditors, or other similar arrangement in respect of any Person’s
creditors generally or any substantial portion of such Person’s creditors, in each case undertaken under U.S. Federal or state
or foreign Law, including the Bankruptcy Code.
“Intellectual
Property” means all Patents, Trademarks, Copyright, and Technical Information, whether registered or not, U.S. or non-U.S.,
including, without limitation, all of the following:
(a)
applications, registrations, amendments and extensions relating to such Intellectual Property;
(b)
rights and privileges arising under any Law with respect to such Intellectual Property;
(c)
rights to sue for or collect any damages for any past, present or future infringements of such Intellectual Property; and
(d)
rights of the same or similar effect or nature in any jurisdiction corresponding to such Intellectual Property throughout the world.
“Intercompany
Subordination Agreement” means a subordination agreement to be executed and delivered by the Borrower and each of its Subsidiaries,
pursuant to which all obligations in respect of any Indebtedness owing to any such Person by the Borrower or any of its Subsidiaries
shall be subordinated to the prior payment in full in cash of all Obligations, such agreement to be substantially in the form attached
hereto as Exhibit L.
“Interest
Period” means, with respect to any Borrowing, (i) initially, the period commencing on (and including) the Borrowing Date
thereof and ending on (and including) the last day of the calendar month in which such Borrowing was made, and (ii) thereafter, the period
beginning on (and including) the first day of each succeeding calendar month and ending on the earlier of (and including) (x) the last
day of such calendar month and (y) the Maturity Date.
“Interest
Rate” means, for any Interest Period, the sum of (i) the Applicable Margin plus (ii) the greater of (x) the Reference Rate
as of the second Business Day immediately preceding the first day of such Interest Period and (y) five percent (5.00%).
“Invention”
means any novel, inventive or useful art, apparatus, method, process, machine (including any article or device), manufacture or composition
of matter, or any novel, inventive and useful improvement in any art, method, process, machine (including article or device), manufacture
or composition of matter.
“Investment”
means, for any Person: (i) the acquisition (whether for cash, property, services or securities or otherwise) of Equity Interests, bonds,
notes, debentures, partnership or other ownership interests or other securities of any other Person or entry into any agreement to make
any such acquisition (including any “short sale” or any sale of any securities at a time when such securities are not owned
by the Person entering into such sale); (ii) the making of any deposit with, or advance, loan, assumption of debt, or other extension
of credit to, or capital contribution in any other Person (including the purchase of property from another Person subject to an understanding
or agreement, contingent or otherwise, to resell such property to such Person), but excluding any such advance, loan or extension of
credit having a term not exceeding ninety (90) days arising in connection with the sale of inventory or supplies by such Person in the
ordinary course of business; (iii) the entering into of any Guarantee of, or other contingent obligation with respect to, Indebtedness
or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such Person;
or (iv) the entering into of any Hedging Agreement. The amount of an Investment will be determined at the time the Investment is made
without giving effect to any subsequent changes in value.
“IRB”
means an Institutional Review Board.
“IRS”
means the U.S. Internal Revenue Service or any successor agency, and to the extent relevant, the U.S. Department of the Treasury.
“Law”
means any U.S. or non-U.S. federal, state, provincial, territorial, municipal or local statute, treaty, rule, guideline, regulation,
ordinance, code or administrative or judicial precedent or authority, including any 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, in each case whether or not
having the force of law.
“Lender”
has the meaning set forth in the preamble hereto.
“Lien”
means any mortgage, lien, pledge, charge or other security interest, or any lease, title retention agreement, mortgage, restriction,
easement, right-of-way, option or adverse claim (of ownership or possession) or other encumbrance of any kind or character whatsoever
or any preferential arrangement that has the practical effect of creating a security interest.
“Loans”
means, collectively, the Initial Loan and the Delayed Draw Loan, and “Loan” means any of the foregoing.
“Loan
Documents” means, collectively, this Agreement, the Notes, the Security Documents, the Warrant Certificate, any Intercompany
Subordination Agreement, and any other guaranty, security agreement, subordination agreement, intercreditor agreement or other present
or future document, instrument, agreement, certificate or other amendment, waiver or modification of the foregoing delivered to the Administrative
Agent or any Lender in connection with this Agreement or any of the other Loan Documents (including, without limitation, in connection
with Section 8.11), in each case, as amended or otherwise modified from time to time.
“Loss”
means judgments (to the extent not covered by insurance), debts, liabilities, expenses, costs, damages or losses, contingent or otherwise,
whether liquidated or unliquidated, matured or unmatured, disputed or undisputed, contractual, legal or equitable, including loss of
value or revenue, professional fees, including fees and disbursements of legal counsel, and all costs incurred in investigating or pursuing
any Claim or any proceeding relating to any Claim.
“Majority
Lenders” means, at any time, Lenders having at such time in excess of fifty percent (50%) of the aggregate Commitments
(or, if such Commitments are terminated, the outstanding principal amount of the Loans) then in effect.
“Margin
Stock” means “margin stock” within the meaning of Regulations U and X.
“Material
Adverse Change” and “Material Adverse Effect” mean any event, occurrence, fact, development or
circumstance that has had, or could reasonably be expected to have, a material adverse change in or material adverse effect upon (i)
the business, condition (financial or otherwise), operations, performance, or property of the Borrower or the Borrower and its Subsidiaries
taken as a whole, (ii) the ability of any Obligor to perform its obligations under any Loan Document to which it is a party, or (iii)
the legality, validity, binding effect or enforceability against any Obligor of any of the Loan Documents to which it is a party or the
rights and remedies available to or conferred upon the Administrative Agent or the Lenders under any Loan Document.
“Material
Agreement” means (i) each Contract listed in Schedule 7.14, (ii) any other Contract to which the Borrower or any
of its Subsidiaries is a party from time to time and as to which the absence or termination thereof could reasonably be expected to result
in a Material Adverse Effect, and (iii) any other Contract to which the Borrower or any of its Subsidiaries is a party or a guarantor
(or equivalent) that, during any period of twelve (12) consecutive months is reasonably expected to (x) result in payments or receipts
(including royalty, licensing or similar payments) made to the Borrower or any of its Subsidiaries in an aggregate amount in excess of
$1,000,000, or (y) require payments or expenditures (including royalty, licensing or similar payments) to be made by the Borrower or
any of its Subsidiaries in an aggregate amount in excess of $1,000,000.
“Material
Inbound License” means any inbound license, lease, royalty or similar agreement in respect of Intellectual Property or
similar intangible property requiring the Borrower or any of its Subsidiaries, as the case may be, during any twelve (12) month period
during the term of such license agreement, to make aggregate payments in excess of $1,000,000; provided that inbound license agreements
in the nature of over the counter software commercially available to the public and entered into in the ordinary course of business shall
not qualify as Material Inbound Licenses.
“Material
Indebtedness” means, at any time, any Indebtedness of the Borrower or any of its Subsidiaries, the outstanding principal
amount of which, individually or in the aggregate, exceeds $1,000,000 (or the Equivalent Amount thereof in other currencies).
“Material
Intellectual Property” means, (i) all Intellectual Property described in Schedule 7.05(b), and (ii) any Intellectual
Property of the Borrower or any of its Subsidiaries, whether currently owned or licensed or acquired, developed or otherwise licensed
or obtained after the date hereof, that (x) is useful or necessary in connection with such Person’s Product Development and Commercialization
Activities in the ordinary course as currently conducted or as currently contemplated to be conducted as of the date hereof and the loss
of which could reasonably be expected to result in a Material Adverse Effect, or (y) has a fair market value in excess of $1,000,000.
“Material
Regulatory Event” means an Adverse Regulatory Event that (i) individually has resulted in, or could reasonably be expected
to result in, a fine, penalty or Loss (including a loss of revenue) in excess of $1,000,000 per occurrence, (ii) when taken together
with each other Adverse Regulatory Event that has occurred since the Closing Date, has resulted in, or could reasonably be expected to
result in, a fine, penalty or Loss (including a loss of revenue) in excess of $2,000,000 in the aggregate or (iii) has occurred after
the Closing Date and has, directly or indirectly, resulted in both (x) a mandatory or voluntary recall of any Advanced Energy Product
and (y) the cessation of all sales or distribution of any such Advanced Energy Product for a period in excess of thirty (30) consecutive
days.
“Maturity
Date” means the earliest to occur of (i) November 8, 2028 and (ii) the acceleration of the Obligations pursuant to Section
11.02; provided that, when used herein, the term “scheduled Maturity Date” means the date set forth
in clause (i) above.
“Maximum
Rate” has the meaning set forth in Section 14.17.
“Medicaid”
means that government-sponsored entitlement program under Title XIX, P.L. 89-97 of the Social Security Act, which provides federal grants
to states for medical assistance based on specific eligibility criteria, as set forth on Section 1396, et seq. of Title 42 of the United
States Code.
“Medicare”
means that government-sponsored insurance program under Title XVIII, P.L. 89-97, of the Social Security Act, which provides for a health
insurance system for eligible elderly and disabled individuals, as set forth at Section 1395, et seq. of Title 42 of the United States
Code.
“Multiemployer
Plan” means any multiemployer plan, as defined in Section 400l(a)(3) of ERISA, to which any ERISA Affiliate incurs or otherwise
has any obligation or liability, contingent or otherwise.
“Net
Cash Proceeds” means, (i) with respect to any Casualty Event experienced or suffered by the Borrower or any of its Subsidiaries,
the amount of cash proceeds received (directly or indirectly) including, without limitation, in the form of insurance proceeds or condemnation
awards in respect of such Casualty Event, from time to time by or on behalf of such Person after deducting therefrom only (x) reasonable
costs and expenses related thereto incurred by the Borrower or such Subsidiary in connection therewith, and (y) Taxes (including transfer
Taxes or net income Taxes) paid or payable in connection therewith; and (ii) with respect to any Asset Sale by the Borrower or any of
its Subsidiaries, the amount of cash proceeds received (directly or indirectly) from time to time by or on behalf of such Person after
deducting therefrom only (x) reasonable costs and expenses related thereto incurred by the Borrower or such Subsidiary in connection
therewith, and (y) Taxes (including transfer Taxes or net income Taxes) paid or payable in connection therewith; provided that,
in each case of clauses (i) and (ii), costs and expenses shall only be deducted to the extent that the amounts so deducted
are (x) actually paid to a Person that is not an Affiliate of the Borrower or any of its Subsidiaries and (y) properly attributable to
such Casualty Event or Asset Sale, as the case may be.
“Note”
means a promissory note, in substantially the form attached hereto as Exhibit C, executed and delivered by the Borrower to any
Lender in accordance with Section 2.03.
“NY
UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York.
“Obligations”
means, with respect to any Obligor, all amounts, obligations, liabilities, covenants and duties of every type and description owing by
such Obligor to any Secured Party (including all Guaranteed Obligations and Warrant Obligations), any other indemnitee hereunder or any
participant, arising out of, under, or in connection with, any Loan Document, whether direct or indirect (regardless of whether acquired
by assignment), absolute or contingent, due or to become due, whether liquidated or not, now existing or hereafter arising and however
acquired, and whether or not evidenced by any instrument or for the payment of money, including, without duplication, (i) if such Obligor
is the Borrower, all Loans, (ii) all interest, whether or not accruing after the filing of any petition in bankruptcy or after the commencement
of any insolvency, reorganization or similar proceeding, and whether or not a claim for post-filing or post-petition interest is allowed
in any such proceeding, and (iii) all other fees, expenses (including fees, charges and disbursement of counsel), interest, commissions,
charges, costs, disbursements, indemnities and reimbursement of amounts paid and other sums chargeable to such Obligor under any Loan
Document.
“Obligors”
means, collectively, the Borrower, the Subsidiary Guarantors and any Subsidiary of the Borrower required to become a Subsidiary Guarantor
or execute and deliver or become a party to any Security Document pursuant to Section 8.11, and their respective successors and
permitted assigns.
“OFAC”
means the U.S. Department of the Treasury’s Office of Foreign Assets Control.
“One-Month
Term SOFR” means, the Term SOFR Reference Rate for a one month tenor on the day (such day, the “Periodic Term
SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of the applicable
Interest Period, as such rate is published by the Term SOFR Administrator; provided that if as of 5:00 p.m. (New York City time)
on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term
SOFR Administrator, then One-Month Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator
on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by
the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government
Securities Business Days prior to such Periodic Term SOFR Determination Day.
“Organic
Document” means, for any Person, such Person’s formation documents, including, as applicable, its certificate of
incorporation, by-laws, certificate of partnership, partnership agreement, certificate of formation, limited liability company agreement,
operating agreement and all shareholder agreements, voting trusts and similar agreements and arrangements applicable to such Person’s
Equity Interests, or any equivalent document of any of the foregoing.
“Other
Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between
such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered,
become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged
in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other
Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise
from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection
of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment made pursuant to Section 5.03(g)).
“Participant”
has the meaning set forth in Section 14.05(e).
“Participant
Register” has the meaning set forth in Section 14.05(g).
“Patents”
means all patents and patent applications, including (i) the Inventions and improvements described and claimed therein, (ii) patents
and patent applications in any form in any worldwide jurisdiction, including but not limited to reissues, oppositions, divisions, continuations,
renewals, extensions, rulings from any governmental authority regarding including ones arising from any proceeding such as Inter Partes
review, and continuations in part thereof, and (iii) all income, royalties, damages and payment now, previously or hereafter due
and payable with respect thereto, (iv) all damages and payment for past or future infringements thereof, and rights to sue thereof, and
(v) all rights whatsoever pertaining to patents and patent applications accruing thereunder or pertaining thereto throughout the world.
“Patriot
Act” has the meaning set forth in Section 14.20.
“Payment
Date” means (i) the last day of each Interest Period (provided that if such last day of any Interest Period is not a Business
Day, then the Payment Date shall be the next succeeding Business Day) and (ii) each scheduled Maturity Date or the Maturity Date (provided
that if such Maturity Date is not a Business Day, then the Payment Date shall be the next succeeding Business Day).
“PBGC”
means the United States Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar
functions.
“Permitted
Acquisition” means any Acquisition by the Borrower or any of its Subsidiaries; provided that:
(a)
immediately prior to, and after giving effect to such Acquisition, (i) all representations and warranties contained in this Agreement
and the other Loan Documents that are qualified by materiality, Material Adverse Effect or the like are, in each case, true and correct,
(ii) all representations and warranties contained in this Agreement and the other Loan Documents that are not qualified by materiality,
Material Adverse Effect or the like are, in each case, true and correct in all material respects, and (iii) no Default shall have occurred
and be continuing or could reasonably be expected to result therefrom;
(b)
all transactions in connection therewith shall be consummated in accordance with all applicable Laws;
(c)
in the case of an Acquisition of Equity Interests of any Person, all of such Equity Interests (except for any such securities in the
nature of directors’ qualifying shares required pursuant to any applicable Law) shall be owned by the Borrower or a Wholly-Owned,
direct or indirect Subsidiary of the Borrower and pledged by the Borrower to the Secured Parties pursuant to Section 8.11(a)(iii),
and, in the event of an Acquisition that results in the creation or acquisition of a new Subsidiary of the Borrower, the Borrower shall
have taken, or caused to be taken, as of the date such Person becomes a Subsidiary of the Borrower, each of the actions set forth in
Section 8.11(a), if applicable;
(d)
such Person (in the case of an Acquisition of Equity Interests of such Person) or assets (in the case of an Acquisition of assets or
a division of such Person) shall be engaged or used, as the case may be, in businesses or lines of business that would be permitted pursuant
to Section 9.4;
(e)
on a pro forma basis after giving effect to such Acquisition, the Borrower and its Subsidiaries shall be in compliance with the
financial covenant set forth in Section 10;
(f)
to the extent that the purchase price for any such Acquisition is paid in cash, the amount thereof, (i) with respect to any individual
Acquisition, does not exceed $500,000 (or the Equivalent Amount thereof), and (ii) when taken together with the purchase price paid in
cash for all other Acquisitions consummated or effected since the Closing Date, does not exceed $1,000,000 in the aggregate (or the Equivalent
Amount thereof);
(g)
the fair market value of the consideration paid in such Acquisition (including any cash proceeds received in respect the issuance of
any Equity Interests by the Borrower or any of its Subsidiaries), when taken together with the fair market value of consideration paid
in connection with all other Permitted Acquisitions consummated since the Closing Date (in each case for purposes hereof to be determined
by including all Indebtedness assumed in connection therewith, all payments made in connection therewith, whether in the form of Equity
Interests, cash or other property or assets, and all deferred purchase price payments, whether in respect of earn-out payments, post-closing
adjustments (other than customary working capital adjustments), payments on “seller notes” or otherwise related thereto,
in each case to the extent actually paid or reasonably expected to be paid), does not exceed $2,000,000 (or the Equivalent Amount thereof)
in the aggregate;
(h)
to the extent that all or any portion of the purchase price for any such Acquisition is paid in Equity Interests, all such Equity Interests
shall be Qualified Equity Interests of the Borrower;
(i)
the Borrower shall have provided the Administrative Agent with at least fifteen (15) calendar days’ prior written notice of such
Acquisition, together with (i) a copy of the draft purchase agreement related to the proposed Acquisition (and any related documents
requested by the Administrative Agent), (ii) any available quarterly and annual financial statements of the Person whose Equity Interests
or assets are being acquired for the twelve (12) month period ending thirty (30) days immediately prior to the projected closing date
for such Acquisition, including any audited financial statements that are available, (iii) a summary of due diligence conducted by or
on behalf of the Borrower or any of its Subsidiaries, as applicable, prior to such Acquisition, (iv) summary information regarding any
contingent liabilities or prospective research and development costs associated with the Person, business or assets being acquired and
(v) any other information reasonably requested by the Administrative Agent;
(j)
neither the Borrower nor any of its Subsidiaries shall, in connection with (and upon giving effect to) any such Acquisition, assume or
remain liable with respect to, or be subject to (x) any Indebtedness of the related seller or the business, Person or properties acquired,
except to the extent permitted pursuant to Section 9.01, or (y) any Lien on any business, Person or assets acquired, except to
the extent permitted pursuant to Section 9.02; and
(k)
at least three (3) Business Days subsequent to the proposed date of any Acquisition, the Administrative Agent shall have received a certificate
of a Responsible Officer of the Borrower (prepared in reasonable detail), certifying that the Acquisition complies with the requirements
of this definition, which certificate shall include a summary (prepared in reasonable detail), certifying as to any contingent liabilities
and prospective research and development costs associated with the Person, business or assets being acquired;
“Permitted
Cash Equivalent Investments” means (i) marketable direct obligations issued or unconditionally guaranteed by the United
States or any agency or any state thereof having maturities of not more than one year from the date of acquisition, (ii) commercial paper
maturing no more than two hundred and seventy (270) days after the date of its creation and rated at least “A-1” or “P-1”
by Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., (iii) any Dollar-denominated time deposit, insured
certificate of deposit, overnight bank deposit or bankers’ acceptance issued or accepted by any commercial bank that is (A) organized
under the laws of the United States, any state thereof or the District of Columbia, (B) “adequately capitalized” (as defined
in the regulations of its primary federal banking regulators) and (C) has Tier 1 capital (as defined in such regulations) in excess of
$500,000,000, and (iv) registered money market funds at least ninety-five percent (95.0%) of the assets of which constitute Permitted
Cash Equivalent Investments of the kinds described in clauses (i), (ii) and (iii) above.
“Permitted
Indebtedness” means any Indebtedness permitted under Section 9.01.
“Permitted
Liens” means any Liens permitted under Section 9.02.
“Permitted
Refinancing” means, with respect to any Indebtedness permitted to be refinanced, extended, renewed or replaced hereunder,
any refinancing, extension, renewal or replacement of such Indebtedness; provided that such refinancing, extension, renewal or
replacement shall not (i) increase the outstanding principal amount of the Indebtedness being refinanced, extended, renewed or replaced,
(ii) contain terms relating to outstanding principal amount, amortization, maturity, collateral security (if any) or subordination (if
any), or other material terms that, taken as a whole, are less favorable in any material respect to the Borrower and its Subsidiaries
or the Secured Parties than the terms of any agreement or instrument governing the Indebtedness being refinanced (provided that
the final maturity date of such Indebtedness shall be on or after the final maturity of the Indebtedness being refinanced and the Weighted
Average Life to Maturity of such Indebtedness shall be greater than the Weighted Average Life to Maturity of the Indebtedness being refinanced),
(iii) have an applicable interest rate or equivalent yield that exceeds the interest rate or equivalent yield of the Indebtedness being
refinanced, (iv) contain any new requirement to grant any Lien or to give any Guarantee that was not an existing requirement of the Indebtedness
being refinanced and (v) after giving effect to such refinancing, extension, renewal or replacement, no Default shall have occurred (or
could reasonably be expected to occur) as a result thereof.
“Person”
means any individual, corporation, company, voluntary association, partnership, limited liability company, joint venture, trust, unincorporated
organization or Governmental Authority or other entity of whatever nature.
“Plan”
means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412
of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Prepayment
Date” means any Business Day on which the Borrower (i) elects to optionally prepay or (ii) is required to repay or prepay,
in each case, all or any portion of the outstanding principal amount of the Loans pursuant to Section 3.03(a) or Section 3.03(b),
respectively.
“Product”
means (i) those Devices set forth (and described in reasonable detail) on Schedule 2 attached hereto, and (ii) any current or
future Device developed, manufactured, licensed, marketed, sold or otherwise commercialized by the Borrower or any of its Subsidiaries,
including any such Device currently in development.
“Product
Agreement” means, with respect to any Product, any Contract, license, document, instrument, interest (equity or otherwise)
or the like under which one or more Persons grants or receives (i) any right, title or interest with respect to the Product Development
and Commercialization Activities of any Product, or (ii) any right to exclude any other Person from engaging in, or otherwise restricting
any right, title or interest as to, any Product Development and Commercialization Activities with respect to such Product, including
any Contract with suppliers, manufacturers, distributors, clinical research organizations, hospitals, group purchasing organizations,
wholesalers, pharmacies or any other Person related to such entity.
“Product
Authorizations” means any and all Regulatory Approvals (including all applicable IDEs, PMAs, 510(k)s, Product Standards,
supplements, amendments, pre- and post- approvals, governmental price and reimbursement approvals and approvals of applications for regulatory
exclusivity), clearances, licenses, notifications, registrations or authorizations of any Regulatory Authority necessary for the ownership,
use or other commercialization of any Product or for any Product Development and Commercialization Activities with respect thereto in
any country or jurisdiction.
“Product
Development and Commercialization Activities” means, with respect to any existing or future Product that the Borrower or
any of its Subsidiaries is selling, distributing, marketing, promoting or otherwise commercializing (or intends to sell, distribute,
market, promote or otherwise commercialize), any combination of (i) research, development, manufacture, quality compliance, importation,
use, sale, storage, design, labeling, marketing, promotion, supply, distribution, testing, packaging, licensing, purchasing or other
commercialization activities, (ii) receipt of payment or other remuneration in respect of any of the foregoing (including, without limitation,
in respect of any licensing, royalty or similar payments), or (iii) any like or other activities the purpose of which is to commercially
exploit any such Product.
“Prohibited
Payment” means any bribe, rebate, payoff, influence payment, kickback or other payment or gift of money or anything of
value (including meals or entertainment) to any officer, employee or ceremonial office holder of any government or instrumentality thereof,
political party or supra-national organization (such as the United Nations), any political candidate, any royal family member or any
other person who is connected or associated personally with any of the foregoing that is prohibited under any Law for the purpose of
influencing any act or decision of such payee in such payee’s official capacity, inducing such payee to do or omit to do any act
in violation of such payee’s lawful duty, securing any improper advantage or inducing such payee to use such payee’s influence
with a government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality.
“Product
Related Information” means, with respect to any Product, all Product Agreements, books, records, lists, ledgers, files,
manuals, Contracts, correspondence, reports, plans, drawings, data and other information of every kind (in any form or medium), and all
techniques and other know-how, owned or possessed by the Borrower or any of its Subsidiaries that is necessary or useful for any Product
Development and Commercialization Activities relating to such Product, including (i) brand materials, packaging and other trade dress,
customer targeting and other marketing, promotion and sales materials and information, referral, customer, supplier and other contact
lists and information, product, business, marketing and sales plans, research, studies and reports, sales, maintenance and production
records, training materials and other marketing, sales and promotional information, (ii) clinical data, information included or supporting
any Product Authorization or other Regulatory Approval, any regulatory filings, updates, notices and correspondence (including adverse
event and other pharmacovigilance and other post-marketing reports and information and the like), technical information, product development
and operational data and records, and all other documents, records, files, data and other information relating to product development,
manufacture and use, (iii) litigation and dispute records, and accounting records; (iv) all documents, records and files relating to
Intellectual Property, including all material correspondence from and to third parties (including Intellectual Property counsel and patent,
trademark and other intellectual property registries, including the U.S. Patent & Trademark Office), and (v) all other information,
techniques and know-how necessary or useful in connection with the Product Development and Commercialization Activities for any Product.
“Product
Standards” means all safety, quality and other specifications and standards applicable to any Product, including all medical
device and other standards promulgated by Standards Bodies.
“Proportionate
Share” means, with respect to each Lender, the percentage obtained by dividing (i) the sum of all Commitments (or, if the
Commitments are terminated, the outstanding principal amount of the Loans) of such Lender then in effect by (ii) the sum of all Commitments
(or, if the Commitments are terminated, the outstanding principal amount of the Loans) of all Lenders then in effect.
“Qualified
Equity Interest” means, with respect to any Person, any Equity Interest of such Person that is not a Disqualified Equity
Interest.
“Qualified
Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) other than a Multiemployer Plan (i) that is
or was at any time maintained or sponsored by any Obligor or any ERISA Affiliate thereof or to which any Obligor or any ERISA Affiliate
thereof has ever made, or was ever obligated to make, contributions, and (ii) that is intended to be tax qualified under Section 401(a)
of the Code.
“Real
Property Security Documents” means any landlord consents, bailee letters and any mortgage or deed of trust or any other
real property security document executed or required hereunder to be executed by any Obligor and granting a security interest in real
property owned or leased (as tenant) by any Obligor in favor of the Administrative Agent for the benefit of the Secured Parties, in each
case, as amended, supplemented or otherwise modified from time to time.
“Recipient”
means the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any Obligation, as applicable.
“Redemption
Price” has the meaning set forth in Section 3.03(a)(i).
“Reference
Rate” means One-Month Term SOFR; provided that if One-Month Term SOFR can no longer be determined by the Administrative
Agent for any reason (in its sole but reasonable discretion, which determination shall be conclusive absent manifest error), including
as a result of the One-Month Term SOFR not being available or published on a current basis or as a result of the occurrence of a Reference
Rate Transition Event, then the Administrative Agent and the Borrower shall endeavor, in good faith, to establish an alternate rate of
interest to One-Month Term SOFR that gives due consideration to the then prevailing market convention for determining a rate of interest
for middle-market loans in the United States at such time, and shall enter into an amendment to this Agreement to reflect such alternate
rate of interest and such other related changes to this Agreement as may be applicable; provided, further that, until such
alternate rate of interest is agreed upon by the Administrative Agent and the Borrower, the Reference Rate for purposes hereof and of
each other Loan Document shall be the Wall Street Journal Prime Rate.
“Reference
Rate Transition Event” means the occurrence of one or more of the following events with respect to the Reference Rate then
in effect:
(a)
a public statement or publication of information by or on behalf of the administrator of such Reference Rate announcing that such administrator
has ceased or will cease to provide such Reference Rate, permanently or indefinitely; provided that, at the time of such statement
or publication, there is no successor administrator that will continue to provide such Reference Rate;
(b)
a public statement or publication of information by the Governmental Authority governing or regulating the administrator of such Reference
Rate, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the then-current administrator for such Reference
Rate, a resolution authority with jurisdiction over the then-current administrator for such Reference Rate or a court or an entity with
similar insolvency or resolution authority over the administrator for such Reference Rate, which in any case states that the then-current
administrator of such Reference Rate has ceased or will cease to provide such Reference Rate permanently or indefinitely; provided
that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Reference
Rate; or
(c)
a public statement or publication of information by the Governmental Authority governing or regulating the then-current administrator
of such Reference Rate announcing that such Reference Rate is no longer representative.
For
the avoidance of doubt, a “Reference Rate Transition Event” will be deemed to have occurred with respect to
any Reference Rate if a public statement or publication of information set forth above has occurred with respect to each then-current
available tenor of such Reference Rate (or the published component used in the calculation thereof).
“Referral
Source” has the meaning set forth in Section 7.07(b).
“Refinanced
Debt” means the Indebtedness and related obligations under that certain Credit, Security and Guaranty Agreement dated as
of February 17, 2023 (as amended, restated or otherwise modified from time to time), by and between the Borrower, Apyx China Holding
Corp., Midcap Funding IV Trust and Midcap Financial Trust.
“Register”
has the meaning set forth in Section 14.05(d).
“Regulation
T” means Regulation T of the Board of Governors of the Federal Reserve System, as amended.
“Regulation
U” means Regulation U of the Board of Governors of the Federal Reserve System, as amended.
“Regulation
X” means Regulation X of the Board of Governors of the Federal Reserve System, as amended.
“Regulatory
Approvals” means (i) any Governmental Approval relating to any Product or Product Development and Commercialization Activities,
including all Product Authorizations held by any Obligor or any of its licensors or that are pending before the FDA or equivalent non-U.S.
Governmental Entity with respect to the Products.
“Regulatory
Authority” means any Governmental Authority (including the FDA and all equivalent Governmental Authorities having jurisdiction
outside the U.S.) that is concerned with or has regulatory oversight with respect to the use, permitting, control, safety, efficacy,
reliability, manufacturing, marketing, distribution, sale or other Product Development and Commercialization Activities relating to any
Device, including any Product, of an Obligor.
“Related
Fund” means, with respect to any Lender, any Fund which is managed or advised by the same investment manager or investment
adviser as such Lender or, if it is managed by a different investment manager or investment adviser, then a Fund whose investment manager
or investment adviser is an Affiliate of the investment manager or investment adviser of such Lender.
“Related
Parties” has the meaning set forth in Section 14.16.
“Resolution
Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible
Officer” means, of any Person, each of the chief executive officer, president, vice president, treasurer, secretary, chief
financial officer and each similar officer of such Person.
“Restricted
Payment” means any dividend or other distribution (whether in cash, Equity Interests or other property) with respect to
any Equity Interests of the Borrower or any of its Subsidiaries, any payment of interest, principal or fees in respect of any Indebtedness
owed by the Borrower or any of its Subsidiaries to any holder of any Equity Interests of the Borrower or any of its Subsidiaries, or
any payment (whether in cash, Equity Interests or other property), including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such Equity Interests of the Borrower or any of its Subsidiaries,
or any option, warrant or other right to acquire any such Equity Interests of the Borrower or any of its Subsidiaries.
“Restrictive
Agreement” means any Contract or other arrangement that prohibits, restricts or imposes any condition upon (i) the ability
of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets (other than (x) customary
provisions in Contracts (including without limitation leases and licenses of Intellectual Property) restricting the assignment thereof
and (y) restrictions or conditions imposed by any agreement governing secured Permitted Indebtedness permitted under Section 9.01(g),
to the extent that such restrictions or conditions apply only to the property or assets securing such Indebtedness), or (i) the ability
of the Borrower or any of its Subsidiaries to pay dividends or other distributions with respect to any of their respective Equity Interests
or to make or repay loans or advances to the Borrower or any of its Subsidiaries or such other Obligor or to Guarantee Indebtedness of
the Borrower or any of its Subsidiaries thereof or such other Obligor.
“Sanction”
means any international economic sanction administered or enforced by the United States government (including, without limitation, OFAC),
the United Nations Security Council, the European Union or its Member States, His Majesty’s Treasury or other relevant sanctions
authority.
“Secured
Parties” means the Initial Lender and any other Person that becomes a “Lender” hereunder, the Administrative
Agent, each other Indemnified Party and any other holder of any Obligation, and any of their respective permitted transferees or assigns.
“Securities
Account” means any securities account, as such term is defined in Section 8-501 of the NY UCC.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Security
Agreement” means the Security Agreement, dated as of the date hereof, among the grantors party thereto (including the Borrower)
and the Administrative Agent, granting a security interest in such grantor’s personal property in favor of the Administrative Agent,
for the benefit of the Secured Parties, as amended or otherwise modified from time to time.
“Security
Documents” means, collectively, the Security Agreement, each Short-Form IP Security Agreement, each Real Property Security
Document, and each other security document, control agreement or financing statement, registration, recordation, filing, instrument or
approval required, or entered into to grant, perfect and otherwise render enforceable Liens in favor of the Secured Parties for purposes
of securing the Obligations, including (without limitation) pursuant to Section 8.11, in each case, as amended or modified from
time to time.
“Short-Form
IP Security Agreements” means short-form copyright, patent or trademark (as the case may be) security agreements, dated
as of the date hereof and substantially in the form attached as Exhibits B, C, and D to the Security Agreement, entered into by one or
more Obligors in favor of the Administrative Agent, for the benefit of the Secured Parties, each in form and substance satisfactory to
the Administrative Agent (and as amended, modified or replaced from time to time).
“SOFR”
means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR
Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing
rate).
“Solvent”
means, at the time of determination and with respect to any Person and its Subsidiaries, taken as a whole, that (i) the present fair
saleable value of the property of such Person and its Subsidiaries is greater than the total amount of liabilities (including contingent
liabilities) of such Person and its Subsidiaries, (ii) the present fair saleable value of the property of such Person and its Subsidiaries
is not less than the amount that would be required to pay the probable aggregate liabilities of such Person and its Subsidiaries on their
collective debts as they become absolute and matured, and (iii) such Person and its Subsidiaries have not incurred and do not intend
to, and do not believe that they will, incur debts or liabilities beyond such Person’s and its Subsidiaries’ ability to pay
as such debts and aggregate liabilities mature.
“Subsidiary”
means, with respect to any Person (for purposes of this definition, the “parent”) at any date, any corporation,
limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent
in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such
date, as well as any other corporation, limited liability company, partnership, association or other entity (i) of which Equity Interests
representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or, in the case
of a partnership, more than fifty percent (50%) of the general partnership interests are, as of such date, owned, controlled or held,
directly or indirectly, or (ii) that is, as of such date, otherwise Controlled, by the parent or one or more direct or indirect Subsidiaries
of the parent or by the parent and one or more Subsidiaries of the parent. Unless otherwise specified, references herein to a “Subsidiary”
or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.
“Subsidiary
Guarantors” means each of the Subsidiaries of the Borrower identified under the caption “SUBSIDIARY GUARANTORS”
on the signature pages hereto and each Subsidiary of the Borrower that becomes, or is required to become, a “Subsidiary Guarantor”
after the date hereof pursuant to Section 8.11(a).
“Summary
of Terms” means the Proposal Letter, dated October 19, 2023, between the Borrower and Perceptive Advisors LLC, together
with the Outline of Proposed Terms and Conditions attached thereto.
“Taxes”
means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees
or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Technical
Information” means all data and any information submitted to a regulatory authority to obtain marketing or other governmental
approvals, all trade secrets, invention disclosures and other proprietary or confidential information, public information, non-proprietary
know-how, any information of a scientific, technical, or commercial nature related to any Product Development and Commercialization Activities
of the Borrower and its Subsidiaries, any information of business nature in any form or medium, standards and specifications, conceptions,
ideas, innovations, discoveries, Invention disclosures, all documented research, developmental, demonstration or engineering work and
all other information, data, plans, specifications, reports, summaries, experimental data, manuals, models, samples, know-how, technical
information, systems, methodologies, computer programs, information technology and any other information.
“Term
SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR
Reference Rate selected by the Administrative Agent in its reasonable discretion).
“Term
SOFR Reference Rate” means the forward-looking term rate based on SOFR.
“Title
IV Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) other than a Multiemployer Plan (i) that
is or was at any time maintained or sponsored by the Borrower or any of its Subsidiaries or any ERISA Affiliate thereof or to which the
Borrower or any of its Subsidiaries or any ERISA Affiliate thereof has ever made, or was obligated to make, contributions, and (ii) that
is or was subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA.
“Trademarks”
means all trade names, trademarks and service marks, monograms, logos, trademark and service mark registrations, and applications for
trademark and service mark registrations, including (i) all renewals of trademark and service mark registrations, (ii) all rights to
recover for all past, present and future infringements thereof and all rights to sue therefor, and (iii) all rights whatsoever accruing
thereunder or pertaining thereto throughout the world, together, in each case, with the goodwill of the business connected with the use
thereof.
“Transactions”
means the execution, delivery and performance by each Obligor of this Agreement and the other Loan Documents to which such Obligor is
intended to be a party, the Borrowings of the Loans and the use of the proceeds thereof, the granting and perfection of the Liens created
under and pursuant to the Loan Documents, and all other transactions contemplated pursuant to this Agreement and the other Loan Documents.
“U.S.
Government Securities Business Day” means any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the
Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire
day for purposes of trading in United States government securities.
“U.S.
Person” means a “United States Person” within the meaning of Section 7701(a)(30) of the Code.
“U.S.
Tax Compliance Certificate” has the meaning set forth in Section 5.03(f)(ii)(B)(3).
“UCC”
means the Uniform Commercial Code as in effect in the applicable jurisdiction, as may be modified from time to time.
“UK
Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time
to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook
(as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions
and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK
Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for
the resolution of any UK Financial Institution.
“United
States” or “U.S.” means the United States of America, its fifty (50) states and the District
of Colombia.
“Wall
Street Journal Prime Rate” means the Wall Street Journal Prime Rate, as published and defined in The Wall Street Journal.
“Warrant
Certificate” means each Warrant Certificate in substantially the form of Exhibit I, to be delivered pursuant to
Section 6 (as a condition precedent to any Borrowing hereunder), as amended or otherwise modified pursuant to the terms hereof
or thereof.
“Warrant
Obligations” means all Obligations of the Borrower arising out of, under or in connection with the Warrant Certificates.
“Weighted
Average Life to Maturity” means, when applied to any Indebtedness on any date, the number of years obtained by dividing:
(i) the sum of the product obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated
to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (ii) then outstanding principal amount
of such Indebtedness.
“Withdrawal
Liability” means, at any time, any liability incurred (whether or not assessed) by any ERISA Affiliate and not yet satisfied
or paid in full at such time with respect to any Multiemployer Plan pursuant to Section 4201 of ERISA.
“Write-Down
and Conversion Powers” means, (i) with respect to any EEA Resolution Authority, the write-down and conversion powers of
such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down
and conversion powers are described in the EU Bail-In Legislation Schedule, and (ii) with respect to the United Kingdom, any powers of
the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any
UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into
shares, securities or obligations of that Person or any other Person, to provide that any such contract or instrument is to have effect
as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In
Legislation that are related to or ancillary to any of those powers.
1.02
Accounting Terms and Principles. Unless otherwise specified, all accounting terms used in each Loan Document shall be interpreted,
and all accounting determinations and computations thereunder (including under Section 10 and any definitions used in such calculations)
shall be made, in accordance with GAAP. Unless otherwise expressly provided, all financial covenants and defined financial terms shall
be computed on a consolidated basis for the Borrower and its Subsidiaries, in each case without duplication.
1.03
Interpretation. For all purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise
requires,
(a)
the terms defined in this Agreement include the plural as well as the singular and vice versa;
(b)
words importing gender include all genders;
(c)
any reference to a Section, Annex, Schedule or Exhibit refers to a Section of, or Annex, Schedule or Exhibit to, this Agreement;
(d)
any reference to “this Agreement” refers to this Agreement, including all Annexes, Schedules and Exhibits hereto, and the
words herein, hereof, hereto and hereunder and words of similar import refer to this Agreement and its Annexes, Schedules and Exhibits
as a whole and not to any particular Section, Annex, Schedule, Exhibit or any other subdivision;
(e)
references to days, months and years refer to calendar days, months and years, respectively;
(f)
all references herein to “include” or “including” shall be deemed to be followed by the words “without
limitation”;
(g)
the word “from” when used in connection with a period of time means “from and including” and the word “until”
means “to but not including”;
(h)
the words “asset” and “property” shall be construed to have the same meaning and effect and to refer broadly
to any and all assets and properties, whether tangible or intangible, real or personal, including cash, Equity Interests, rights under
Contractual obligations and permits and any right or interest in any such assets or property;
(i)
the word “will” shall have the same meaning as the word “shall”;
(j)
where any provision in this Agreement or any other Loan Document refers to an action to be taken by any Person, or an action which such
Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly;
(k)
references to any Lien granted or created hereunder or pursuant to any other Loan Document securing any Obligations shall be deemed to
be a Lien for the benefit of the Secured Parties;
(l)
references to any Law will include all statutory and regulatory provisions amending, consolidating, replacing, supplementing or interpreting
such Law from time to time; and
(m)
accounting terms not specifically defined herein (other than “property” and “asset”) shall be construed in accordance
with GAAP.
Unless
otherwise expressly provided herein, references to organizational documents, agreements (including the Loan Documents) and other Contractual
instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto
permitted by the Loan Documents.
1.04
Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or
any comparable event under a different jurisdiction’s laws): (i) if any asset, right, obligation or liability of any Person becomes
the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person
to the subsequent Person, and (ii) if any new Person comes into existence, such new Person shall be deemed to have been organized on
the first date of its existence by the holders of its Equity Interests at such time.
1.05
Reference Rate Replacement. For purposes of this Agreement and each other Loan Document, the Obligors jointly and severally acknowledge
and agree for the benefit of each Secured Party as follows:
(a)
Upon the occurrence of an event of the type described in the first proviso of the definition of “Reference Rate”, the Administrative
Agent will promptly notify the Borrower thereof and, as set forth in such proviso, the Administrative Agent and the Borrower shall endeavor,
in good faith, to establish an alternate rate of interest to One-Month Term SOFR. However, the Administrative Agent does not warrant
or accept any responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter
related to One-Month Term SOFR or any other rate referenced herein or in any other Loan Document or with respect to any alternative or
successor rate thereto, or replacement rate thereof (including, without limitation, whether the composition or characteristics of any
such alternative, successor or replacement Reference Rate will be similar to, or produce the same value or economic equivalence of, One-Month
Term SOFR or have the same volume or liquidity as did One-Month Term SOFR prior to its discontinuance or unavailability).
(b)
There is no assurance that the composition or characteristics of any such alternative, successor or replacement Reference Rate will be
similar to or produce the same value or economic equivalence as One-Month Term SOFR or that it will have the same volume or liquidity
as did One-Month Term SOFR prior to its discontinuance or unavailability.
1.06
Equivalent Amounts. The applicable amount of any currency other than Dollars for purposes of the Loan Documents shall be such Equivalent
Amount in Dollars as determined by the Administrative Agent.
SECTION
2
THE
COMMITMENT and the loans
2.01
Loans.
(a)
On the terms and subject to the conditions of this Agreement, each Lender agrees to make the Initial Loan to the Borrower in a single
Borrowing on the Closing Date.
(b)
On the terms and subject to the conditions of this Agreement, each Lender agrees to make the Delayed Draw Loan to the Borrower in a single
Borrowing on the Delayed Draw Date.
(c)
No amounts paid or prepaid with respect to any Loan may be reborrowed.
2.02
Borrowing Procedures. Unless waived by the Administrative Agent, at least five (but not more than ten) Business Days prior to the
proposed Borrowing Date, the Borrower shall deliver to the Administrative Agent an irrevocable Borrowing Notice (which notice, if received
by the Administrative Agent on a day that is not a Business Day or after 10:00 A.M. New York City time on a Business Day, shall be deemed
to have been delivered on the next Business Day).
2.03
Notes. If requested by any Lender, the Loans shall be evidenced by one or more Notes. The Borrower shall prepare, execute and deliver
to each requesting Lender such promissory note(s) payable to such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and substantially in the form attached hereto as Exhibit C. Thereafter, the Loans and interest thereon shall at all times
(including after assignment pursuant to Section 14.05) be represented by one or more promissory notes in such form payable to
the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
2.04
Use of Proceeds. The Borrower shall use the proceeds of the Loans for the purposes of (i) the repayment in full of the Refinanced
Debt on the Closing Date, (ii) working capital and general corporate purposes, and (iii) without duplication, the payment of fees and
expenses associated with this Agreement and the other Loan Documents and the transactions contemplated hereby and thereby.
SECTION
3
PAYMENTS
OF PRINCIPAL AND INTEREST
3.01
Repayments and Prepayments Generally; Application.
(a)
Until the first Payment Date occurring after October 31, 2027, there will be no scheduled repayments of the principal on the Loans. On
each Payment Date occurring after October 31, 2027 and prior to the scheduled Maturity Date, the Borrower shall make a payment of principal
on the Loans (each an “Amortization Payment”) in an amount equal to three percent (3.00%) of the aggregate
principal amount of the Loans outstanding as of such Payment Date, together with accrued and unpaid interest and fees thereon. In any
event, and without limiting the foregoing, on the Maturity Date the Borrower shall repay the entire remaining outstanding principal balance
of the Loans, together with all accrued and unpaid interest and fees, including all applicable accrued and unpaid (or payable) Early
Prepayment Fees and accrued and unpaid interest thereon, as applicable, in full and in cash.
(b)
The Borrower agrees that all amounts payable hereunder or under any other Loan Document, in respect of any Loans, fees or interest accrued
or accruing thereon, or any other Obligations, shall be repaid and prepaid solely in Dollars and no other currency. Except as otherwise
provided in this Agreement, proceeds of each payment (including each repayment and prepayment of Loans) by or on behalf of the Borrower
shall be deemed to be made ratably to the Lenders in accordance with their respective Proportionate Shares of the Loans being repaid
or prepaid.
3.02
Interest.
(a)
Interest Generally. The outstanding principal amount of the Loans, as well as the amount of all other outstanding Obligations
(including, without limitation, any applicable Early Prepayment Fee), shall accrue interest at the Interest Rate on and from the Closing
Date. The Administrative Agent’s determination of the Interest Rate shall be binding on the Borrower, its Subsidiaries and the
Lenders in the absence of manifest error.
(b)
Default Interest. Notwithstanding the foregoing, upon the occurrence and during the continuance of any Event of Default, the Applicable
Margin shall increase automatically by three percent (3.00%) per annum (the Interest Rate, as increased pursuant to this Section
3.02(b), being the “Default Rate”). If any Obligation is not paid when due under any applicable Loan Document,
the amount thereof shall accrue interest at the Default Rate.
(c)
Interest Payment Dates. Accrued interest on the Loans shall be payable in cash in arrears on each Payment Date with respect to
the most recently completed Interest Period, and upon the payment or prepayment of the Loans, in whole or in part (on the principal amount
being so paid or prepaid); provided that interest payable at the Default Rate, or any accrued interest not paid on or before the
Maturity Date, shall also be payable from time to time in cash on demand by the Administrative Agent until paid in full.
(d)
Conforming Changes. In connection with the use or administration of One-Month Term SOFR, the Administrative Agent will have the
right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document,
any amendments implementing such Conforming Changes will, absent manifest error, become effective without any further action or consent
of any other party to this Agreement or any other Loan Document. The Administrative Agent will promptly notify the Borrower and the Lenders
of the effectiveness of any Conforming Changes in connection with the use or administration of One-Month Term SOFR.
(e)
Compensation for Losses. In the event of the payment of any principal of any Loan other than on the last day of the Interest Period
applicable thereto (including as a result of an Event of Default), then, in any such event, the Borrower shall compensate each Lender
for any loss, cost or expense attributable to such event, including any loss, cost or expense arising from the liquidation or redeployment
of funds. A certificate of any Lender setting forth the details of such loss and any amount or amounts that such Lender is entitled to
receive pursuant to this Section 3.02(e) shall be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.
3.03
Prepayments; Prepayment Fees.
(a)
Optional Prepayments.
(i)
Subject to prior written irrevocable notice pursuant to clause (ii) below and the payment of the Early Prepayment Fee pursuant
to clause (c) below, the Borrower shall have the right to optionally prepay, in whole or in part, the outstanding principal amount
of the Loans on any Business Day (a “Prepayment Date”); provided that, in addition to such prepaid principal
amount and the applicable Early Prepayment Fee, the Borrower shall also make payment in full in cash on such Prepayment Date of all accrued
but unpaid interest on the principal amount of the Loans being prepaid (such aggregate amount of principal, the applicable Early Prepayment
Fee and accrued interest, the “Redemption Price”).
(ii)
A notice of optional prepayment shall be effective only if received by the Administrative Agent not later than 2:00 p.m. (New York City
time) on a date not less than three (nor more than five) Business Days prior to the proposed Prepayment Date. Each notice of optional
prepayment shall specify the proposed Prepayment Date, the principal amount of the Loans to be prepaid, the amount of accrued and unpaid
interest that will be paid on the Prepayment Date, and, in reasonable detail, a calculation of the Early Prepayment Fee, if applicable,
payable on such Prepayment Date in connection with such proposed prepayment. Each notice of optional prepayment shall be irrevocable
once received by the Administrative Agent (but may be conditioned upon the consummation of another transaction).
(b)
Mandatory Prepayments. Within ten (10) Business Days of the receipt by any Obligor of Net Cash Proceeds from the occurrence of
any Casualty Event or Asset Sale, the Borrower shall apply an amount equal to one hundred percent (100%) of the Net Cash Proceeds received
with respect to such Casualty Event or Asset Sale, as the case may be, to (i) the prepayment of outstanding Loans, (ii) the payment of
accrued and unpaid interest on the principal amount of the Loans being prepaid and (iii) the payment of the Early Prepayment Fee. Such
Net Cash Proceeds shall be allocated to such prepayment and payments such that the full amount of principal, interest and the Early Prepayment
Fee, if applicable, payable hereunder shall be paid in full with such Net Cash Proceeds. Notwithstanding the foregoing, so long as no
Event of Default has occurred and is continuing or shall immediately result therefrom, if, within thirty (30) days following the earlier
of (i) the occurrence of any such Casualty Event or Asset Sale and (ii) the receipt of Net Cash Proceeds as a result of any such Casualty
Event or Asset Sale, a Responsible Officer of the Borrower delivers to the Administrative Agent a notice to the effect that the Borrower
intends to apply (or cause to be applied) the Net Cash Proceeds from such Casualty Event or Asset Sale, to repair, refurbish, restore,
replace or rebuild the asset subject to such Casualty Event or Asset Sale or to the cost of purchase or constructing other assets useful
in the business of the Borrower or another Obligor, then such Net Cash Proceeds of such Casualty Event or Asset Sale may be applied for
such purpose in lieu of such mandatory prepayment otherwise required pursuant to this clause (b) to the extent such Net Cash Proceeds
of such Casualty Event or Asset Sale are actually applied for such purpose; provided that, in the event that Net Cash Proceeds
have not been so applied within one hundred and eighty (180) days following such Obligor’s receipt of such Net Cash Proceeds, the
Borrower shall make a mandatory prepayment of the Loans to be made in an aggregate amount equal to one hundred percent (100%) of the
unused balance of such Net Cash Proceeds with respect to such Casualty Event or Asset Sale, as the case may be, together with payment
of accrued and unpaid interest on the principal amount of the Loans being so prepaid and the applicable Early Prepayment Fee, if applicable,
with such amount of Net Cash Proceeds being allocated to the prepayment of principal, the payment of accrued and unpaid interest on such
principal amount of the Loans being prepaid and the payment of the Early Prepayment Fee, if applicable, such that the full amount payable
with respect to such mandatory prepayment is paid with such unused balance of Net Cash Proceeds.
(c)
Early Prepayment Fee. Without limiting the foregoing, whenever any prepayment of Loans is made pursuant to Section 3.03(a)
or Section 3.03(b) or otherwise, whether voluntary, involuntary, mandatory, as a result of a Default, acceleration or otherwise,
or any other repayment, prepayment or cancellation of Loans is made or occurs at any time prior to the scheduled Maturity Date, an Early
Prepayment Fee shall be payable in full in cash on the applicable Prepayment Date for such repayment, prepayment or cancellation, as
the case may be.
(d)
Application. All prepayments made pursuant to clauses (a) or (b) above shall be applied as follows:
(i)
first, to the payment of any Obligations of the Obligors in respect of any costs or expenses referred to in Section 14.03
then due and owing until paid in full;
(ii)
second, to the payment of any Obligations of the Obligors in respect of any unpaid interest and any fees then due and owing until
paid in full;
(iii)
third, to the payment of any Obligations of the Obligors in respect of any amounts due and owing on account of the unpaid principal
amount of the Loans until paid in full;
(iv)
fourth, to the payment of any other Obligation then due and owing, including payment of the Early Prepayment Fee until paid in
full; and
(v)
fifth, to the Borrower or such other Persons as may lawfully be entitled to or directed by the Borrower to receive the remainder.
3.04
Upfront Fee. On the Closing Date, the Borrower shall pay to the Administrative Agent (for the pro rata benefit of the Lenders) a
fee equal to nine hundred thousand dollars ($900,000) (the “Upfront Fee”). Upon receipt of payment from the
Borrower, the Administrative Agent will promptly thereafter distribute like funds relating to any such payment to the Lenders pro rata
on the basis of each Lender’s Proportionate Share. The Upfront Fee may be deducted from the proceeds of the Loan made on the Closing
Date and, once paid by the Borrower, shall be non-refundable.
SECTION
4
PAYMENTS,
ETC.
4.01
Payments.
(a)
Payments Generally. Each payment of principal, interest and other amounts to be made by the Obligors under this Agreement or any
other Loan Document shall be made (i) in Dollars, in immediately available funds, without deduction, set off or counterclaim, to the
Administrative Agent, for the account of the respective Lenders to which such payment is owed, to the deposit account of the Administrative
Agent designated by the Administrative Agent by notice to the Borrower, and (ii) not later than 2:00 p.m. (New York City time) on the
date on which such payment is due (each such payment made after such time on such due date shall be deemed to have been made on the next
succeeding Business Day).
(b)
Application of Payments. All such payments referenced in clause (a) above shall be applied as set forth in Section 3.03(d)
above.
(c)
Non-Business Days. If the due date of any payment under this Agreement (whether in respect of principal, interest, fees, costs
or otherwise) would otherwise fall on a day that is not a Business Day, then such date shall be extended to the next succeeding Business
Day, and, in the case of any payment accruing interest, interest thereon shall continue to accrue and be payable through the period of
such extension.
4.02
Computations. All computations of interest and fees hereunder shall be computed on the basis of a year of three hundred and sixty
(360) days and actual days elapsed during the period for which payable.
4.03
Set-Off.
(a)
Set-Off Generally. Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent, each of the
Lenders and each of their Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Law,
to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations
at any time owing by the Administrative Agent, any Lender and any of their Affiliates to or for the credit or the account of any Obligor
against any and all of the Obligations, whether or not such Person shall have made any demand and although such obligations may be unmatured.
Any Person exercising rights of set-off hereunder agrees promptly to notify the Borrower after any such set-off and application, provided
that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Administrative
Agent, each Lender and each of their Affiliates under this Section 4.03 are in addition to other rights and remedies (including
other rights of set-off) that such Persons may have.
(b)
Exercise of Rights Not Required. Nothing contained in Section 4.03(a) shall require the Administrative Agent, any Lender
or any of their Affiliates to exercise any such right or shall affect the right of such Persons to exercise, and retain the benefits
of exercising, any such right with respect to any other indebtedness or obligation of any Obligor.
(c)
Payments Set Aside. To the extent that any payment by or on behalf of any Obligor is made to the Administrative Agent or any Lender,
or the Administrative Agent, any Lender or any Affiliate of the foregoing 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, such Lender or such Affiliate in its discretion) to be repaid to
a trustee, receiver or any other party, in connection with any Insolvency Proceeding or otherwise, then (i) 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 (ii) each Lender severally agrees to pay to the Administrative Agent upon
demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest
thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate from
time to time in effect.
SECTION
5
YIELD
PROTECTION, ETC.
5.01
Additional Costs.
(a)
Change in Laws Generally. If, on or after the date hereof, the adoption of any Law, or any change in any Law, or any change in
the interpretation or administration thereof by any court or other Governmental Authority charged with the interpretation or administration
thereof, or compliance by the Administrative Agent or any Lender (or its lending office) with any request or directive (whether or not
having the force of law) of any such Governmental Authority, shall impose, modify or deem applicable any reserve (including any such
requirement imposed by the Board of Governors of the Federal Reserve System), special deposit, contribution, insurance assessment or
similar requirement, in each case that becomes effective after the date hereof, against assets of, deposits with or for the account of,
or credit extended by, a Lender (or its lending office) or other Recipient or shall impose on a Lender (or its lending office) or other
Recipient any other condition affecting the Loans or the Commitment, and the result of any of the foregoing is to increase the cost to
such Lender or other Recipient of making or maintaining the Loans, or to reduce the amount of any sum received or receivable by such
Lender or other Recipient under this Agreement or any other Loan Document, or subject any Lender or other Recipient to any Taxes on its
Loan, Commitment or other obligations, or its deposits, reserves, other liabilities or capital (if any) attributable thereto (other than
(i) Indemnified Taxes, (ii) Taxes described in clause (ii) through (iv) of the definition of “Excluded Taxes”
and (iii) Connection Income Taxes), then the Borrower shall pay to such Lender or other Recipient on demand such additional amount or
amounts as will compensate such Lender or other Recipient for such increased cost or reduction.
(b)
Change in Capital Requirements. If a Lender shall have determined that, on or after the date hereof, the adoption of any Law regarding
capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having
the force of law) of any such Governmental Authority, in each case that becomes effective after the date hereof, has or would have the
effect of reducing the rate of return on capital of a Lender (or its parent) as a consequence of a Lender’s obligations hereunder
or the Loans to a level below that which a Lender (or its parent) could reasonably be expected to achieve but for such adoption, change,
request or directive by an amount reasonably and in good faith deemed by it to be material, then the Borrower shall pay to such Lender
on demand such additional amount or amounts as will compensate such Lender (or its parent) for such reduction.
(c)
Notification by Lender. Each Lender promptly will notify the Borrower of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Lender to compensation pursuant to this Section 5.01. Before giving any such notice pursuant
to this Section 5.01(c) such Lender shall designate a different lending office if such designation (x) will, in the reasonable
judgment of such Lender, avoid the need for, or reduce the amount of, such compensation and (y) will not, in the reasonable judgment
of such Lender, be materially disadvantageous to such Lender. A certificate of such Lender claiming compensation under this Section
5.01, setting forth the additional amount or amounts to be paid to it hereunder, shall be conclusive and binding on the Borrower
in the absence of manifest error.
(d)
Delays in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of
this Section 5.01 shall not constitute a waiver of such Lender’s right to demand such compensation except to the extent
the Borrower is materially prejudiced thereby.
(e)
Other Changes. Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection
Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines
or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be
deemed to constitute a change in Law for all purposes of this Section 5.01, regardless of the date enacted, adopted or issued.
5.02
Illegality. Notwithstanding any other provision of this Agreement, in the event that on or after the date hereof the adoption of
or any change in any Law or in the interpretation or application thereof by any competent Governmental Authority shall make it unlawful
for a Lender or its lending office to make or maintain the Loans (and, in the opinion of such Lender, the designation of a different
lending office would either not avoid such unlawfulness or would be disadvantageous in a material respect to such Lender), then such
Lender shall promptly notify the Borrower thereof, following which (i) such Lender’s Commitment shall be suspended until such time
as such Lender may again make and maintain the Loans hereunder and (ii) if such Law shall so mandate, the Loans shall be prepaid by the
Borrower on or before such date as shall be mandated by such Law in an amount equal to the Redemption Price applicable on the date of
such prepayment in accordance with Section 3.03(a).
5.03
Taxes.
(a)
Payments Free of Taxes. Any and all payments to any Lender by or on account of any Obligation shall be made without deduction
or withholding for any Taxes, except as required by any Law. If any Law (as determined in the good faith discretion of the Borrower)
requires the deduction or withholding of any Tax from any such payment by an Obligor in respect of any Obligation, then such Obligor
shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental
Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by such Obligor shall be increased
as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional
sums payable under this Section 5) the applicable Recipient receives an amount equal to the sum it would have received had no
such deduction or withholding been made.
(b)
Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with
Law, or at the option of the Administrative Agent or the applicable Lender, timely reimburse it for, Other Taxes.
(c)
Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to
this Section 5.03, the Borrower shall deliver to each applicable Recipient the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment.
(d)
Indemnification by the Obligors. The Borrower and each other Obligor each hereby jointly and severally agrees to indemnify and
hold harmless and reimburse each applicable Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified
Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 5) payable or
paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by such applicable Recipient shall be
conclusive absent manifest error.
(e)
Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand
therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified
the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable
to such Lender’s failure to comply with the provisions of Section 14.05(g) relating to the maintenance of a Participant
Register, and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent
in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes
the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise
payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this
clause (e).
(f)
Status of Lenders.
(i)
Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document
shall deliver to the Borrower such properly completed and executed documentation reasonably requested by the Borrower as will permit
such payments to be made without withholding or at a reduced rate of withholding; provided that, other than in the case of U.S.
federal withholding Taxes, such Recipient has received written notice from the Borrower advising it of the availability of such exemption
or reduction and containing all applicable documentation. In addition, each applicable Recipient shall deliver such other documentation
prescribed by Law as reasonably requested by the Borrower as will enable the Borrower to determine whether or not such Recipient is subject
to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences,
the completion, execution and submission of such documentation (other than such documentation set forth in Section 5.03(f)(ii)(A),
(ii)(B), and (ii)(D)) shall not be required if in such Lender’s reasonable judgment such completion, execution or submission
would subject such Recipient to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position
of such Recipient.
(ii)
Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person:
(A)
any Recipient that is a U.S. Person shall deliver to the Borrower on or prior to the date on which such Recipient becomes a Lender under
this Agreement (and from time to time thereafter upon the reasonable request of the Borrower), executed copies of IRS Form W-9 (or successor
form) certifying that such Recipient is exempt from U.S. federal backup withholding tax;
(B)
any non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower (in such number of copies as shall
be requested by the Borrower) on or prior to the date on which such non-U.S. Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the reasonable request of the Borrower), whichever of the following is applicable:
(1)
in the case of a non-U.S. Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect
to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E as applicable (or successor
forms) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of
such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E as
applicable (or successor forms) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business
profits” or “other income” article of such tax treaty;
(2)
executed copies of IRS Form W-8ECI (or successor form);
(3)
in the case of a non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x)
a certificate substantially in the form of Exhibit D-1 to the effect that such non-U.S. Lender is not a “bank” within
the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section
881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S.
Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E as applicable (or successor
forms); or
(4)
to the extent a non-U.S. Lender is not the beneficial owner, executed copies of IRS Form W-8IMY (or successor form), accompanied by IRS
Form W-8ECI (or successor form), IRS Form W-8BEN or IRS Form W-8BEN-E (or successor form), a U.S. Tax Compliance Certificate, substantially
in the form of Exhibit D-2 or D-3, IRS Form W-9 (or successor form), and/or other certification documents from each beneficial
owner, as applicable; provided that if the non-U.S. Lender is a partnership and one (1) or more direct or indirect partners of
such non-U.S. Lender are claiming the portfolio interest exemption, such non-U.S. Lender may provide a U.S. Tax Compliance Certificate
substantially in the form of Exhibit D-4 on behalf of each such direct and indirect partner on behalf of each such direct and
indirect partner.
(C)
any non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower (in such number of copies as shall
be requested by the Borrower) on or prior to the date on which such non-U.S. Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the reasonable request of the Borrower), executed copies of any other form prescribed by Law as a basis for claiming
exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may
be prescribed by Law to permit the Borrower to determine the withholding or deduction required to be made; and
(D)
any non-U.S. Lender shall deliver to the Borrower any forms and information necessary to establish that such non-U.S. Lender is not subject
to withholding tax under FATCA.
(g)
Treatment of Certain Tax Benefits. If any party to this Agreement determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 5 (including by the payment
of additional amounts pursuant to this Section 5), then it shall pay to the indemnifying party an amount equal to such refund
(but only to the extent of indemnity payments made under this Section 5 with respect to the Taxes giving rise to such refund),
net of all reasonable and documented out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (plus any penalties, interest
or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund
to such Governmental Authority. Notwithstanding anything to the contrary in this Section 5.03(g), in no event will the indemnified
party be required to pay any amount to an indemnifying party pursuant to this Section 5.03(g) the payment of which would place
the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification
payments or additional amounts giving rise to such refund had never been paid. This Section 5.03(g) shall not be construed to
require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential)
to the indemnifying party or any other Person.
(h)
Mitigation Obligations. If the Borrower is required to pay any Indemnified Taxes or additional amounts to any Recipient or to
any Governmental Authority for the account of any Recipient pursuant to Section 5.01 or this Section 5.03, then such Recipient
shall (at the request of the Borrower) use commercially reasonable efforts to designate a different lending office, if in existence,
for funding or booking its Loans hereunder or to assign and delegate its rights and obligations hereunder to another of its offices,
branches or Affiliates if, in the sole reasonable judgment of such Recipient, such designation or assignment and delegation would (i)
eliminate or reduce amounts payable pursuant to Section 5.01 or this Section 5.03, as the case may be, in the future, (ii)
not subject such Recipient to any non-de minimis unreimbursed cost or expense and (iii) not otherwise be disadvantageous in any non-de
minimis respect to such Recipient. The Borrower hereby agrees to pay all reasonable and documented costs and expenses incurred by any
Recipient in connection with any such designation or assignment and delegation.
(i)
Survival. Each party’s obligations under this Section 5 shall survive the assignment of rights by, or the replacement
of, a Lender, and the repayment, satisfaction or discharge of all Obligations under any Loan Document.
SECTION
6
CONDITIONS PRECEDENT
6.01
Conditions to the Borrowing of the Initial Loan. The obligation of the Initial Lender to make the Initial Loan shall be subject to
(i) the execution and delivery of this Agreement by the parties hereto, (ii) the delivery of a Borrowing Notice as required pursuant
to Section 2.02, (iii) the delivery of a funds flow memorandum summarizing, in reasonable detail, the use of proceeds of the Initial
Loan, and (iv) the prior or concurrent satisfaction (or waiver thereof by the Administrative Agent) of each of the conditions precedent
set forth below in this Section 6.01.
(a)
Officer’s Certificate, Etc. The Administrative Agent shall have received from each Obligor (other than Apyx Bulgaria) party
to a Loan Document on the Closing Date:
(i)
a copy of a good standing certificate (or equivalent thereof), dated a date reasonably close to the Closing Date, for each such Person;
and
(ii)
a certificate, dated as of the Closing Date, duly executed and delivered by such Person’s secretary, assistant secretary, managing
member, general partner or equivalent, as to:
(A)
resolutions of each such Person’s Board then in full force and effect authorizing the execution, delivery and performance of each
Loan Document to be executed and delivered by such Person and the Transactions on the Closing Date and the Transactions contemplated
to be consummated in connection with the Borrowing of the Initial Loan ;
(B)
the incumbency and signatures of those of its officers, managing member or general partner or equivalent authorized to act with respect
to each Loan Document to be executed and delivered by such Person; and
(C)
true and complete copies of each Organic Document of such Person and copies thereof;
which
certificates shall be in form and substance reasonably satisfactory to the Administrative Agent and upon which the Administrative Agent
and the Lenders may conclusively rely until they shall have received a further certificate of the secretary, assistant secretary, managing
member, general partner or equivalent of any such Person cancelling or amending the prior certificate of such Person.
(b)
Closing Date Certificate. The following statements shall be true and correct, and the Administrative Agent shall have received
a certificate, dated as of the Closing Date (the “Closing Date Certificate”), substantially in the form of
Exhibit J and otherwise in form and substance reasonably satisfactory to the Administrative Agent, duly executed and delivered
by a Responsible Officer of the Borrower certifying that: (i) both immediately before and after giving effect to the making of the Loans
on the Closing Date, (x) the representations and warranties set forth in each Loan Document that are qualified by materiality, Material
Adverse Effect or the like are, in each case, true and correct; provided that to the extent that such representations and warranties
specifically refer to an earlier date, they shall be true and correct as of such earlier date, (y) the representations and warranties
set forth in each Loan Document that are not qualified by materiality, Material Adverse Effect or the like are, in each case, true and
correct in all material respects; provided that to the extent that such representations and warranties specifically refer to an
earlier date, they shall be true and correct in all material respects as of such earlier date, and (z) no Default has occurred and is
continuing, or could reasonably be expected to result from the making of the Loan, or the consummation of any Transactions contemplated
to occur on the Closing Date, and (ii) all of the conditions set forth in this Section 6.01 have been satisfied (or waived in
writing by the Administrative Agent). All documents and agreements required to be appended to the certificate delivered pursuant to this
Section 6.01(b), if any, shall be in form and substance reasonably satisfactory to the Administrative Agent, shall have been executed
and delivered by the requisite parties, and shall be in full force and effect.
(c)
Delivery of Notes. Each requesting Lender shall have received a Note in favor of such Lender evidencing such Lender’s Loan,
dated as of the Closing Date, duly executed and delivered by a Responsible Officer of the Borrower.
(d)
Compliance with Minimum Liquidity Covenant. The Administrative Agent shall have received evidence reasonably satisfactory to it
that, immediately after giving effect to the making of the Loans on the Closing Date, the Borrower will be in compliance with the covenant
set forth in Section 10.01.
(e)
Solvency Certificate. The Administrative Agent shall have received a Solvency Certificate, substantially in the form of Exhibit
K, duly executed and delivered by the chief financial or accounting Responsible Officer of the Borrower, dated as of the Closing
Date, in form and substance reasonably satisfactory to the Administrative Agent.
(f)
Security Documents. The Administrative Agent shall have received executed counterparts of each Security Document, dated as of
the date hereof, duly executed and delivered by each Obligor party thereto, together with:
(i)
delivery of all certificates (in the case of Equity Interests that are securities (as defined in the NY UCC)) evidencing the issued and
outstanding Equity Interests owned by the Borrower and each Subsidiary that are required to be pledged under the Security Documents,
which certificates in each case shall be accompanied by undated instruments of transfer duly executed in blank, or, in the case of Equity
Interests that are uncertificated securities (as defined in the NY UCC), confirmation and evidence reasonably satisfactory to the Administrative
Agent that the security interest required to be pledged therein under the Security Documents has been transferred to and perfected by
the Administrative Agent for the benefit of the Secured Parties in accordance with Articles 8 and 9 of the NY UCC and all Laws otherwise
applicable to the perfection of the pledge of such Equity Interests;
(ii)
financing statements naming each Obligor (other than Apyx Bulgaria) as a debtor and the Administrative Agent as the secured party, or
other similar instruments, registrations or documents, in each case suitable for filing, under the UCC (or equivalent law) of all jurisdictions
as may be necessary or, in the reasonable opinion of the Administrative Agent, desirable to perfect the Liens of the Secured Parties
pursuant to the Security Documents;
(iii)
UCC-3 termination statements, if any, necessary to release all Liens (other than Permitted Liens) and other rights of any Person in any
collateral described in the Security Documents previously granted by any Person; and
(iv)
all Short-Form IP Security Agreements, and any other agreement, document or instrument required to be provided under any Security Document,
duly executed and delivered by the applicable Obligors.
(g)
Information and Collateral Certificate. The Administrative Agent shall have received a fully completed Information and Collateral
Certificate, in form and substance reasonably acceptable to the Administrative Agent, dated as of the Closing Date, duly executed and
delivered by a Responsible Officer of the Borrower, which is true and correct as of the Closing Date. All documents required to be appended
to the Information and Collateral Certificate, if any, shall be in form and substance reasonably acceptable to the Administrative Agent,
shall have been executed by the requisite parties and shall be in full force and effect.
(h)
Lien Searches. The Administrative Agent shall be satisfied with Lien searches regarding the Borrower and its Subsidiaries made
within thirty (30) days prior to the Borrowing of the Initial Loan.
(i)
Closing Date Warrant Certificate. The Administrative Agent shall have received an executed counterpart of a Warrant Certificate,
dated as of the Closing Date, exercisable in the aggregate into 1,250,000 shares of the Borrower’s common stock duly executed,
delivered and validly issued by the Borrower.
(j)
Insurance. The Administrative Agent shall have received:
(i)
certificates of insurance evidencing that the insurance required to be maintained pursuant to Section 8.05 is in full force and
effect, together with endorsements naming the Administrative Agent, for the benefit of the Lenders, as additional insured and loss payee
thereunder, in each case, in form and substance reasonably satisfactory to the Administrative Agent; and
(ii)
certified copies of the insurance policies (or binders in respect thereof), from one or more insurance companies reasonably satisfactory
to the Administrative Agent, required to be maintained pursuant to Section 8.05.
(k)
Opinions of Counsel. The Administrative Agent shall have received one or more legal opinions (including from such local counsel
as the Lender may determine, in its sole discretion, is reasonably necessary), each dated as of the Closing Date and addressed to the
Administrative Agent and the Lenders, from outside legal counsel to the Borrower and the other Obligors reasonably satisfactory to the
Administrative Agent, in each case, in form and substance reasonably satisfactory to the Administrative Agent.
(l)
Payoff of Refinanced Debt. The Refinanced Debt, together with all accrued and unpaid interest and related fees, costs and expenses,
shall be, substantially contemporaneously with the funding of the Loans, paid in full, and the Administrative Agent shall have received
executed payoff letters, in form and substance reasonably satisfactory to the Administrative Agent, providing for such payment in full
(and irrevocable termination) of the Refinanced Debt and satisfactory arrangements shall have been made for the termination of all loan
documents evidencing such Refinanced Debt and all Liens granted in connection therewith. On the Closing Date, after giving effect to
the Transactions, the Borrower and its Subsidiaries shall not have any Indebtedness other than the Obligations and other Permitted Indebtedness.
(m)
Anti-Terrorism Laws. The Administrative Agent shall have received, as applicable, all documentation and other information required
by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including
the Patriot Act and the Beneficial Ownership Regulation.
(n)
Material Adverse Change. Since December 31, 2022, no Material Adverse Change shall have occurred.
(o)
All Other Loan Documents. The Administrative Agent shall have received all other Loan Documents in form and substance reasonably
satisfactory to the Administrative Agent and its counsel, and the Administrative Agent and its counsel shall have received all information,
approvals, resolutions, opinions, documents or instruments as the Administrative Agent or its counsel may reasonably request.
(p)
Satisfactory Legal Form. All documents (including all Loan Documents), including any attachments or appendices thereto, executed,
delivered or submitted pursuant hereto by or on behalf of the Borrower or any of its Subsidiaries shall be reasonably satisfactory in
form and substance to the Administrative Agent and its counsel, and the Administrative Agent and its counsel shall have received all
information, approvals, resolutions, opinions, documents or instruments as the Administrative Agent or its counsel may reasonably request.
(q)
Governmental Approvals and Third Party Consents. The Administrative Agent shall have received evidence that the Borrower and its
Subsidiaries have obtained all Governmental Approvals and third party permits, licenses, approvals and consents necessary in connection
with the execution, delivery and performance of the Loan Documents, the consummation of the Transactions or the operation and conduct
of its business and ownership of its properties.
(r)
Upfront Fee, Other Fees, Expenses, Etc. The Administrative Agent shall have received for its account and the account of each Lender,
the Upfront Fee, and all other reasonable and documented fees, costs and expenses due and payable pursuant to the Summary of Terms and
Section 14.03, including all reasonable and documented out-of-pocket legal, due diligence and other costs and expenses of the
Administrative Agent and the Lenders incurred in connection with the Transactions in excess of the Expense Deposit.
6.02
Conditions to the Borrowing of the Delayed Draw Loan. The obligation of each Lender to make its Delayed Draw Loan shall be subject
to (i) the prior making of the Initial Loan, (ii) the delivery of a Borrowing Notice for such Delayed Draw Loan as required pursuant
to Section 2.02, (iii) the occurrence of the Delayed Draw Date on or before December 31, 2024, and (iv) the satisfaction (or waiver
thereof by the Administrative Agent) of each of the conditions precedent set forth below in this Section 6.02.
(a)
Minimum Advanced Energy Net Revenue. The Administrative Agent shall have received evidence reasonably satisfactory to it that
the Borrower and its Subsidiaries have received Advanced Energy Net Revenue for the period of twelve (12) consecutive months ending on
the Delayed Draw Date in an aggregate amount of not less than fifty million dollars ($50,000,000).
(b)
Delayed Draw Certificate. The following statements shall be true and correct, and the Administrative Agent shall have received
a certificate, dated as of the Delayed Draw Date (the “Delayed Draw Certificate”), in form and substance reasonably
satisfactory to the Administrative Agent, duly executed and delivered by a Responsible Officer of the Borrower certifying that: (i) both
immediately before and after giving effect to the making of the Delayed Draw Loan on the Delayed Draw Date, (x) the representations and
warranties set forth in each Loan Document that are qualified by materiality, Material Adverse Effect or the like are, in each case,
true and correct; provided that to the extent that such representations and warranties specifically refer to an earlier date,
they shall be true and correct as of such earlier date, (y) the representations and warranties set forth in each Loan Document that are
not qualified by materiality, Material Adverse Effect or the like are, in each case, true and correct in all material respects; provided
that to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct
in all material respects as of such earlier date, and (z) no Default has occurred and is continuing, or could reasonably be expected
to result from the making of the Delayed Draw Loan, or the consummation of any Transactions contemplated to occur on the Delayed Draw
Date, and (ii) all of the conditions set forth in this Section 6.02 have been satisfied (or waived in writing by the Administrative
Agent); provided that, with respect to the representation, warranty and certification referenced in clauses (x) and (y) above
relating to representations and warranties set forth in each Loan Document, (1) references in such representations and warranties to
“the Closing Date” or “the date hereof” shall be deemed to be references to “the Delayed Draw Date”
and (2) the Borrower may supplement the schedules to this Agreement and the other Loan Documents as reasonably necessary in order for
such certification to be true and correct on the Delayed Draw Date; provided, further, that no such supplement shall be
permitted if the Administrative Agent reasonably determines that the circumstance or event necessitating such supplement either (A) was
the result of the occurrence and continuance of an Event of Default, or (B) constituted a Material Adverse Effect or (with respect to
any supplement that does not reflect an action or transaction permitted by this Agreement) was otherwise materially adverse to the interests
of the Lenders under the Loan Documents. All documents and agreements required to be appended to the certificate delivered pursuant to
this Section 6.02(b), if any, shall be in form and substance reasonably satisfactory to the Administrative Agent, shall have been
executed and delivered by the requisite parties, and shall be in full force and effect.
(c)
Officer’s Certificate, Etc. The Administrative Agent shall have received from each Obligor party to a Loan Document on the
Delayed Draw Date:
(i)
a copy of a good standing certificate (or equivalent thereof), dated a date reasonably close to the Delayed Draw Date, for each such
Person and
(ii)
a certificate, dated as of the Delayed Draw Date, duly executed and delivered by such Person’s secretary, assistant secretary,
managing member, general partner or equivalent, as to:
(A)
resolutions of each such Person’s Board then in full force and effect authorizing the execution, delivery and performance of each
Loan Document to be executed and delivered by such Person on the Delayed Draw Date and the Transactions contemplated to be consummated
in connection with the Borrowing of the Delayed Draw Loan;
(B)
the incumbency and signatures of those of its officers, managing member or general partner or equivalent authorized to act with respect
to each Loan Document to be executed and delivered by such Person on the Delayed Draw Date; and
(C)
true and complete copies of each Organic Document of such Person and copies thereof;
which
certificates shall be in form and substance reasonably satisfactory to the Administrative Agent and upon which the Administrative Agent
and the Lenders may conclusively rely until they shall have received a further certificate of the secretary, assistant secretary, managing
member, general partner or equivalent of any such Person cancelling or amending the prior certificate of such Person.
(d)
Delivery of Notes. Each requesting Lender shall have received a Note in favor of such Lender evidencing such Lender’s Delayed
Draw Loan, dated as of the Delayed Draw Date, duly executed and delivered by a Responsible Officer of the Borrower.
(e)
Compliance with Financial Covenants. The Administrative Agent shall have received evidence reasonably satisfactory to it that,
immediately after giving effect to the making of the Delayed Draw Loans on the Delayed Draw Date, the Borrower will be in compliance
with the covenant set forth in Section 10.01, if applicable.
(f)
Delayed Draw Date Warrant. The Administrative Agent shall have received an executed counterpart of a Warrant Certificate, dated
as of the Closing Date, exercisable in the aggregate into 250,000 shares of the Borrower’s common stock duly executed, delivered
and validly issued by the Borrower.
(g)
Information and Collateral Certificate. The Administrative Agent shall have received a fully completed Information and Collateral
Certificate, in form and substance reasonably acceptable to the Administrative Agent, dated as of the Delayed Draw Date, duly executed
and delivered by a Responsible Officer of the Borrower, which is true and correct as of the Delayed Draw Date; provided that the
Borrower may supplement the Information and Collateral Certificate delivered on the Closing Date in order for such certification to be
true and correct as of such date; provided, further that no such supplement shall be permitted if the Administrative Agent
reasonably determines that the circumstance or event necessitating such supplement either (i) was the result of the occurrence and continuance
of an Event of Default, or (ii) constituted a Material Adverse Effect or (with respect to any supplement that does not reflect an action
or transaction permitted by this Agreement) was otherwise materially adverse to the interests of the Lenders under the Loan Documents.
All documents required to be appended to the Information and Collateral Certificate, if any, shall be in form and substance reasonably
acceptable to the Administrative Agent, shall have been executed by the requisite parties and shall be in full force and effect.
(h)
Satisfactory Legal Form. All documents (including all Loan Documents), including any attachments or appendices thereto, executed,
delivered or submitted pursuant hereto by or on behalf of the Borrower or any of its Subsidiaries in connection with the Borrowing of
the Delayed Draw Loan shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel, and the Administrative
Agent and its counsel shall have received all information, approvals, resolutions, documents or instruments as the Administrative Agent
or its counsel may reasonably request.
(i)
Fees, Expenses, Etc. The Administrative Agent shall have received for its account and the account of each Lender all reasonable
and documented fees, costs and expenses due and payable pursuant to Section 14.03, including all reasonable and documented out-of-pocket
legal, due diligence and other costs and unpaid expenses of the Administrative Agent and the Lenders incurred in connection with the
Transactions contemplated in connection with the Borrowing of the Delayed Draw Loan.
SECTION
7
REPRESENTATIONS AND WARRANTIES
The
Obligors hereby jointly and severally represent and warrant to the Administrative Agent and each Lender that:
7.01
Power and Authority. Each of the Borrower and its Subsidiaries (i) is duly organized and validly existing under the Laws of its jurisdiction
of organization, (ii) has all requisite corporate or other power, and has all Governmental Approvals necessary to own its assets and
carry on its business as now being or as proposed to be conducted, except to the extent that failure to have the same could not reasonably
be expected to have a Material Adverse Effect, (iii) is qualified to do business and is in good standing in all jurisdictions in which
the nature of the business conducted by it makes such qualification necessary and where failure so to qualify (either individually or
in the aggregate) could reasonably be expected to have a Material Adverse Effect, and (iv) has full power, authority and legal right
to enter into and perform its obligations under each of the Loan Documents to which it is a party and, in the case of the Borrower, to
borrow the Loans hereunder.
7.02
Authorization; Enforceability. Each of the Transactions to which an Obligor or any of its Subsidiaries is a party (or to which it
or any of its assets or properties is subject) is within such Person’s corporate or other powers and has been duly authorized by
all necessary corporate and, if required, by all necessary approvals by holders of Equity Interests. This Agreement and each other Loan
Document to which an Obligor or any of its Subsidiaries is a party has been duly executed and delivered by each such Person and constitutes,
and each of the other Loan Documents to which such Person is a party when executed and delivered by such Person will constitute, a legal,
valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as such enforceability
may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar Laws of general applicability affecting the enforcement
of creditors’ rights and (ii) the application of general principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
7.03
Governmental and Other Approvals; No Conflicts. No authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or any other Person (other than those that have been duly obtained or made and which are in full force and
effect) is required for the due execution, delivery or performance by any Obligor or any of its Subsidiaries of any Loan Document to
which it is a party, except for filings and recordings in respect of perfecting or recording the Liens created pursuant to the Security
Documents. The execution, delivery and performance by each Obligor and each of its Subsidiaries of each Loan Document to which it is
a party will not (i) violate or conflict with any Law, (ii) violate or conflict with any Organic Document of any such Person, (iii) violate
or conflict with any Governmental Approval of any Governmental Authority, (iv) violate or result in a default under any Material Agreement
binding upon the Borrower or any of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to result in
a Material Adverse Effect or (v) result in the creation or imposition of any Lien (other than Permitted Liens) on any asset of the Borrower
or any of its Subsidiaries.
7.04
Financial Statements; Material Adverse Change.
(a)
Financial Statements. The Borrower has heretofore furnished to the Administrative Agent and the Lenders certain consolidated financial
statements as provided for in Section 8.01. Such financial statements, and all other financial statements delivered by the Borrower
to the Administrative Agent or the Lenders (whether prior to the Closing Date or otherwise) present fairly, in all material respects,
the consolidated financial position and results of operations and cash flows of the Borrower and its Subsidiaries as of such dates and
for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements
of the type described in Section 8.01(c). Neither the Borrower nor any of its Subsidiaries has any material contingent liabilities
or unusual forward or long-term commitments not disclosed in the aforementioned financial statements.
(b)
No Material Adverse Change. Since December 31, 2022, no Material Adverse Change has occurred.
7.05
Properties.
(a)
Property Generally. With respect to all real and personal assets and properties of the Borrower and each of its Subsidiaries (other
than Intellectual Property which is covered in clause (b) below), the Borrower and each of its Subsidiaries has good and marketable
fee simple title to, or valid leasehold interests in, all such real and personal assets and properties, whether tangible or intangible,
subject only to Permitted Liens and as could not reasonably be expected to (i) interfere in any material respect with its ability to
conduct its business as currently conducted or to utilize such assets and properties for their intended purposes, including in connection
with Product Development and Commercialization Activities, and (ii) prevent or interfere in any material respect with the ability of
any Obligor or any of its Subsidiaries to conduct any Product Development and Commercialization Activities with respect to any of its
Products.
(b)
Intellectual Property.
(i)
Schedule 7.05(b) contains, with respect to the Borrower and each of its Subsidiaries (set for forth on a Person-by-Person basis):
(A)
a complete and accurate list of all applied for, issued or registered Patents that would qualify as Material Intellectual Property, owned
by or licensed to the Borrower or any of its Subsidiaries, including the jurisdiction and patent number;
(B)
a complete and accurate list of all registered, unregistered or applied for Trademarks that would qualify as Material Intellectual Property,
owned by or licensed to the Borrower or any of its Subsidiaries, including the jurisdiction, trademark application or registration number
and the application or registration date;
(C)
a complete and accurate list of all applied for or registered Copyrights that would qualify as Material Intellectual Property, owned
by or licensed to the Borrower or any of its Subsidiaries; and
(D)
a complete and accurate list of all Technical Information necessary for the Product Development and Commercialization Activities of the
borrower and its Subsidiaries in the ordinary course and that would qualify as Material Intellectual Property.
(ii)
With respect to any such Intellectual Property listed on Schedule 7.5(b) that is in-licensed by the Borrower or any of its Subsidiaries
from a third party, such in-licensing arrangement is subject to a license agreement or similar Contract that is in full force and effect,
there are no unpaid fees or royalties (or similar payment obligations) payable by the Borrower or any of its Subsidiaries currently past
due and there is no currently outstanding breach or default by the Borrower or any of its Subsidiaries, or, to the knowledge of the Borrower,
by any other party thereto, outstanding under any such licensing agreement or other Contract.
(iii)
With respect to all Intellectual Property listed on Schedule 7.5(b) other than any such Intellectual Property described in clause
(ii) above, the Borrower or one of its Subsidiaries, as applicable, is the registered beneficial owner of all right, title and interest
in and to all such Intellectual Property, with good and marketable title, free and clear of any Liens or Claims (other than Permitted
Liens) and the Borrower or such Subsidiary, as the case may be, has the right to exercise its rights under such Intellectual Property
in the ordinary course of its Product Development and Commercialization Activities as currently conducted and as anticipated to be conducted.
Without limiting the foregoing, and except as set forth on Schedule 7.5(b)(iii):
(A)
other than customary restrictions in in-bound licenses of Intellectual Property and non-disclosure agreements, there are no judgments,
covenants not to sue, permits, grants, licenses, Liens (other than Permitted Liens), Claims, or other agreements or arrangements relating
to or otherwise adversely affecting any Material Intellectual Property, including any development, submission, services, research, license
or support agreements which bind, obligate or otherwise restrict the Borrower or any of its Subsidiaries with respect to any Material
Intellectual Property;
(B)
the use by the Borrower or any of its Subsidiaries of any of its respective Material Intellectual Property in the ordinary course of
such Person’s businesses (including in connection with Product Development and Commercialization Activities) does not breach, violate,
infringe or interfere with or constitute a misappropriation of any valid rights arising under any Intellectual Property of any other
Person that could reasonably be expected to result in a Material Adverse Effect;
(C)
(1) there are no pending or, to the Borrower’s knowledge, threatened Claims against the Borrower or any of its Subsidiaries relating
to any of their respective Material Intellectual Property, including any Claims of adverse ownership, invalidity, infringement, misappropriation,
violation or other opposition to or conflict with such Intellectual Property; and (2) neither the Borrower nor any of its Subsidiaries
have received any notice from, or Claim by, any other Person asserting that the Product Development and Commercialization Activities
of the Borrower or any of its Subsidiaries, or the use of any Material Intellectual Property by the Borrower or any of its Subsidiaries,
infringes upon, violates or constitutes a misappropriation of, or infringes upon, violates or constitutes a misappropriation of, or otherwise
interferes with, any Intellectual Property of any such other Person, in each case, in any material respect, which has not been finally
resolved;
(D)
to the Borrower’s knowledge, no Material Intellectual Property of the Borrower or any of its Subsidiaries is being infringed, violated,
misappropriated or otherwise used by any other Person without the express authorization of the Borrower; neither the Borrower nor any
of its Subsidiaries notified any other Person of actual or potential infringement, violation or misappropriation of any such Material
Intellectual Property, and neither the Borrower nor any of its Subsidiaries has initiated the enforcement of any Claim in respect of
any of the foregoing against any Person with respect to any such Material Intellectual Property;
(E)
all relevant current and former employees and contractors of the Borrower and each of its Subsidiaries have executed written confidentiality
agreements (or equivalents) and have either entered into or are obligated to enter into invention assignment Contracts with the Borrower
or such Subsidiary, as applicable, that irrevocably assign to the Borrower or such Subsidiary, as applicable, or its designee all rights
of such employees and contractors to any Inventions relating to all Product Development and Commercialization Activities of the Borrower
and its Subsidiaries as currently conducted and anticipated to be conducted; and
(F)
the Borrower and each of its Subsidiaries has taken reasonable precautions to protect the secrecy, confidentiality and value of its respective
Material Intellectual Property comprised of trade secrets or information of a proprietary or confidential nature.
(iv)
With respect to Material Intellectual Property of the Borrower and its Subsidiaries consisting of Patents, except as set forth on Schedule
7.5(b)(iv), and without limiting the representations and warranties in Section 7.5(b)(iii):
(A)
no Claim has been asserted in writing (or, to the knowledge of the Borrower, threatened) by any Person that any of the issued claims
in such Patents owned by the Borrower or any of its Subsidiaries or exclusively licensed to the Borrower or any of its Subsidiaries is
not valid or enforceable;
(B)
each inventor named in any such Patents has executed, or has an obligation to execute, one or more written Contracts that irrevocably
assigns to the Borrower, one of its Subsidiaries or one of their respective predecessors-in-interest all of such inventor’s rights,
title and interest to any of the Inventions claimed in such Patents;
(C)
all such Patents are in good standing and none of the Patents, or the Inventions claimed in any such Patent, have been dedicated to the
public;
(D)
to the knowledge of the Borrower, all prior art material to such Patents has been adequately disclosed to or considered by the respective
patent offices during prosecution of such Patents;
(E)
subsequent to the issuance of such Patents, neither the Borrower nor any of its Subsidiaries nor, to the knowledge of the Borrower, any
of their respective predecessors-in-interest, has filed any disclaimer or made or permitted any other voluntary reduction in the scope
of the claims set forth in such Patents;
(F)
no written Claim has been made or, to the Borrower’s knowledge, threatened, by any Person that any allowable or allowed claim in
such Patents is subject to any competing conception claims of allowable or allowed subject matter of any patent applications or patents
of any third party, and no such allowable or allowed claim has been the subject of any interference or been the subject of any re-examination,
opposition or other post-grant proceedings, and there is no written or, to the Borrower’s knowledge, threatened, Claim by any Person
for any such interference, re-examination, opposition, inter partes review, post grant review or any other post-grant proceedings;
(G)
none of such Patents owned by or exclusively licensed to the Borrower or any of its Subsidiaries have been finally adjudicated to be
invalid, unpatentable or unenforceable for any reason in any administrative, arbitration, judicial or other proceeding, and, with the
exception of publicly available documents in the applicable patent office recorded with respect to any such Patents, neither the Borrower
nor any of its Subsidiaries has received any notice asserting that any such Patent is invalid, unpatentable or unenforceable; and to
the extent any such Patent is terminally disclaimed to another patent or patent application, all patents and patent applications subject
to such terminal disclaimer are included in the Collateral;
(H)
neither the Borrower nor, to the knowledge of the Borrower, any of its Subsidiaries has received a written opinion from patent counsel
which concludes that a challenge to the validity or enforceability of any such Patents is more likely than not to succeed;
(I)
neither the Borrower nor any of its Subsidiaries nor, to the knowledge of the Borrower, any prior owner of any such Patent, or any of
their respective agents or representatives, have engaged in any conduct, or omitted to perform any necessary act, the result of which
would invalidate or render unpatentable or unenforceable any such Patent; and
(J)
all maintenance fees, annuities, and the like due or payable on or with respect to any Patents have been timely paid, except to the extent
failure to pay, whether individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
(v)
The Borrower and its Subsidiaries, taken together, license or otherwise own or hold rights to all Intellectual Property necessary to
conduct their current and currently anticipated Product Development and Commercialization Activities.
7.06
No Actions or Proceedings.
(a)
Litigation. There is no litigation, investigation or proceeding pending or, to the Borrower’s knowledge, threatened with
respect to the Borrower of any of its Subsidiaries by or before any Governmental Authority or arbitrator (i) that either individually
or in the aggregate could reasonably be expected to have a Material Adverse Effect or result in a Material Regulatory Event, except as
specified in Schedule 7.06(a), or (ii) that involves this Agreement, any other Loan Document or any of the Transactions.
(b)
Environmental Matters. The operations and property of the Borrower and each of its Subsidiaries comply with all applicable Environmental
Laws, except to the extent the failure to so comply (either individually or in the aggregate) could not reasonably be expected to have
a Material Adverse Effect.
(c)
Labor Matters. There are no strikes, lockouts or other material labor disputes against the Borrower or any of its Subsidiaries
or, to the Borrower’s knowledge, threatened against or affecting the Borrower or any such Subsidiary, and no material unfair labor
practice complaint is pending against the Borrower or any such Subsidiary or, to the knowledge of the Borrower, threatened against any
of them before any Governmental Authority. Except as set forth on Schedule 7.06(c), neither the Borrower nor any of its Subsidiaries
is a party to any collective bargaining agreements, no union representation exists on any facilities of the Borrower or any of its Subsidiaries
and neither the Borrower not any of its Subsidiaries has any knowledge of any union organizing activities that are taking place in respect
thereof.
7.07
Physician Referrals.
(a)
Any physician, other licensed healthcare professional, or any other Person who is in a position to refer patients or other business to
any Obligor or any of its Subsidiaries (collectively, a “Referral Source”) who has a direct ownership, investment,
or financial interest in such Obligor or such Subsidiary paid fair market value for such ownership, investment or financial interest;
any ownership or investment returns distributed to any Referral Source is in proportion to such Referral Source’s ownership, investment
or financial interest; and no preferential treatment or more favorable terms were or are offered to such Referral Source compared to
investors or owners who are not in a position to refer patients or other business. No Obligor, nor any of its respective Subsidiaries,
directly or indirectly, has guaranteed any Indebtedness, made a payment toward any Indebtedness or otherwise subsidized any Indebtedness
for any Referral Source including, without limitation, any Indebtedness related to financing the Referral Source’s ownership, investment
or financial interest in such Obligor or such Subsidiary.
(b)
Without limiting the generality of the foregoing, except where noncompliance individually or in the aggregate would not reasonably be
expected to result in a Material Adverse Effect or a Material Regulatory Event:
(i)
all financial relationships between or among any Obligor or any of its Subsidiaries, on the one hand, and any Referral Source, on the
other hand (i) comply with all applicable Healthcare Laws including, without limitation, the Federal Anti-Kickback Statute, the Stark
Law and applicable state antikickback and self-referral laws; (ii) reflect fair market value, have commercially reasonable terms and
were negotiated at arm’s length; and (iii) do not obligate the Referral Source to purchase, use, recommend or arrange for the use
of any products or services of any Obligor or any of its respective Subsidiaries; and
(ii)
each Obligor and each of its Subsidiaries has implemented policies and procedures to monitor, collect and report any payments or transfers
of value to certain healthcare providers and teaching hospitals, in accordance with industry standards and the Affordable Care Act of
2010 and its implementing regulations and any applicable state disclosure and transparency laws.
7.08
Taxes. Except as set forth on Schedule 7.08, the Borrower and each of its Subsidiaries has timely filed or caused to be filed
all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it,
except Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower has set aside on its books
adequate reserves with respect thereto in accordance with GAAP.
7.09
Full Disclosure. None of the reports, financial statements, certificates or other written information furnished by or on behalf of
the Borrower or any of its Subsidiaries to the Administrative Agent or any Lender in connection with the negotiation of this Agreement
and the other Loan Documents or delivered hereunder or thereunder (as modified or supplemented by other information so furnished), taken
as a whole, or in connection with any of the Transactions contains any untrue statement of material fact or omits to state any material
fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading;
provided that, with respect to projected financial information, the Borrower represents only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time, and does not assure that such projections will be obtained.
7.10
Securities Law Regulation.
(a)
Investment Company Act. Neither the Borrower nor any of its Subsidiaries is an “investment company” as defined in,
or subject to regulation under, the Investment Company Act of 1940.
(b)
Margin Stock. Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its significant activities,
in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and
no part of the proceeds of the Loans will be used to buy or carry any Margin Stock in violation of Regulation T, U or X.
7.11
Solvency. The Borrower and its Subsidiaries, taken as a whole and on a consolidated basis, are, and immediately after giving effect
to any Borrowing and the use of proceeds thereof, will be, Solvent.
7.12
Subsidiaries and Other Investments.
(a)
Set forth on Schedule 7.12(a) is a complete and correct list of all direct and indirect Subsidiaries of the Borrower as of the
Closing Date. Each such Subsidiary is duly organized and validly existing under the jurisdiction of its organization shown in said Schedule
7.12(a), and the percentage ownership by the Borrower (or any of its Subsidiaries) of each such Subsidiary is as shown in said Schedule
7.12(b).
(c)
Set forth on Schedule 7.12(b) is a complete and correct list of all other Equity Interests held by each Obligor in any Person
that is not a direct or indirect Subsidiary of the Borrower as of the Closing Date. Such Schedule 7.12(b) also sets forth, in
reasonable detail, the type of Equity Interest held by each such Obligor in such Person and the fully-diluted percentage ownership held
beneficially by such Obligor in such Person.
7.13
Continuing Secured Indebtedness. Set forth on Schedule 7.13 is a complete and correct list of all Indebtedness of the Borrower
and each of its Subsidiaries outstanding as of the date hereof that (i) will remain outstanding immediately after the Borrowing of the
Loans and the application of the proceeds therefrom on the Closing Date and (ii) is secured by a Lien on assets or properties of the
Borrower or any of its Subsidiaries. Such Schedule also describes, in reasonable detail, the assets or properties (and the locations
thereof) secured by any such Lien.
7.14
Material Agreements. Set forth on Schedule 7.14 is a complete and correct list of each Material Agreement (including any such
Contract creating or evidencing Material Intellectual Property or Material Indebtedness). Accurate and complete copies of each Contract
disclosed on such schedule have been made available to the Administrative Agent. All such Material Agreements are in full force and effect.
None of the Obligors nor any of their Subsidiaries is in default under any such Material Agreement, and to the Borrower’s knowledge,
no counterparty to a Material Agreement in default thereunder, and there are no pending or, to the Borrower’s knowledge, threatened
in writing Claims against any Obligor or any of its Subsidiaries asserted by any other Person relating to any Material Agreements, including
any Claims of breach or default under any such Material Agreements.
7.15
Restrictive Agreements. Neither the Borrower nor any of its Subsidiaries is subject to any Restrictive Agreement, except those listed
on Schedule 7.15 or otherwise permitted under Section 9.11.
7.16
Real Property. Neither the Borrower nor any of its Subsidiaries owns or leases (as tenant thereof) any real property, except as described
on Schedule 7.16.
7.17
Pension Matters. Schedule 7.17 sets forth a complete and correct list of, and that separately identifies, (i) all Title IV
Plans, (ii) all Multiemployer Plans and (iii) all material Benefit Plans of the Borrower and each of its Subsidiaries. Each such Benefit
Plan, and each trust thereunder, intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Laws so qualifies.
Each such Benefit Plan is in material compliance with applicable provisions of ERISA, the Code and other Laws; there are no existing
or pending (or, to the knowledge of the Borrower, threatened) Claims (other than routine Claims for benefits in the normal course), sanctions,
actions, lawsuits or other proceedings or investigations involving any Benefit Plan to which any Obligor or Subsidiary thereof incurs
or otherwise has or could reasonably be expected to have an obligation or any liability or Claim and (z) no ERISA Event is reasonably
expected to occur. The Borrower and each of its ERISA Affiliates has met all applicable requirements under the ERISA Funding Rules with
respect to each Title IV Plan, and no waiver of the minimum funding standards under the ERISA Funding Rules has been applied for or obtained.
As of the most recent valuation date for any Title IV Plan, the funding target attainment percentage (as defined in Section 430(d)(2)
of the Code) is at least sixty percent (60%), and none of the Borrower nor any of its Subsidiaries nor any of their ERISA Affiliates
knows of any facts or circumstances that could reasonably be expected to cause the funding target attainment percentage to fall below
sixty percent (60%) as of the most recent valuation date. As of the date hereof, no ERISA Event has occurred or is reasonably expected
to occur in connection with which obligations and liabilities (contingent or otherwise) remain outstanding. No ERISA Affiliate would
reasonably be expected to have any Withdrawal Liability as a result of a complete withdrawal from any Multiemployer Plan on the date
this representation is made.
7.18
Priority of Obligations. Except as set forth on Schedule 7.13, other than the Obligations, no Indebtedness of the Borrower
or any of its Subsidiaries is secured by a Lien. Neither the Borrower nor any of its Subsidiaries is party to any Contract that would
require the subordination of (or have the effect of subordinating) any monetary Obligation arising hereunder or under any other Loan
Document to any other Indebtedness.
7.19
Compliance with Laws and Agreements; Governmental Approvals, Regulatory Approvals, etc.
(a)
Each of the Obligors and its Subsidiaries is in compliance in all material respects with all Laws and all Contracts binding upon it or
its property or businesses; provided that, for purposes of this Section 7.07, the term “property” shall not
include Intellectual Property, which is covered by Section 7.05.
(b)
Each Obligor and each of its Subsidiaries holds, and will continue to hold, either directly or through licensees and agents, all Regulatory
Approvals, Governmental Approvals and Product Authorizations necessary or required for such Obligor and its Subsidiaries to conduct its
operations and businesses in the manner currently conducted, including all Product Development and Commercialization Activities related
thereto.
(c)
Set forth on Schedule 7.19(c) is a complete and accurate list of all material Regulatory Approvals relating to each Obligor and
each of its Subsidiaries, the conduct of their business (including all Product Development and Commercialization Activities) and each
of their Products (on a per Product basis). All such Regulatory Approvals are (i) legally and beneficially owned or held exclusively
by such Obligors or such Subsidiary, as the case may be, free and clear of all Liens other than Permitted Liens, (ii) validly registered
and on file with the applicable Governmental Authority, in material compliance with all registration, filing and maintenance requirements
(including any fee requirements) thereof, and (iii) in good standing, valid and enforceable with the applicable Governmental Authority
in all material respects.
(d)
(i) All material regulatory filings, notices, registrations, listings, reports and similar items required to be filed or made by any
Regulatory Authority or in respect of any Regulatory Approval or Product Authorization with respect to any Product or any Product Development
and Commercialization Activities have been made, and all such filings are complete and correct in all material respects and have for
the last five (5) years complied in all material respects with all Laws, (ii) all clinical and pre-clinical trials, if any, of investigational
Products have for the last five (5) years been conducted by each Obligor and each of their Subsidiaries according to all Laws in all
material respects along with appropriate monitoring of clinical investigator trial sites for their compliance, and (iii) each Obligor
and its Subsidiaries has disclosed to the Administrative Agent all such material regulatory filings and all material communications between
representatives of each Obligor and its Subsidiaries and any Regulatory Authority.
(e)
Each Obligor and its Subsidiaries and each of their agents are in compliance in all material respects with all applicable Laws (including
all Regulatory Approvals, Governmental Approvals and Product Authorizations) with respect to each Product and all Product Development
and Commercialization Activities related thereto. Each Obligor and each of its Subsidiaries has and maintains in full force and effect
all the necessary and requisite Regulatory Approvals and Product Authorizations.
(f)
Except as set forth on Schedule 7.19(f), and without limiting the generality of any other representation or warranty made by any
Obligor hereunder or under any other Loan Document: (i) all Products comply in all material respects with (A) all applicable Laws of
the FDA and each other applicable Regulatory Authority, whether U.S. or non-U.S., and (B) all Product Authorizations and other Regulatory
Approvals and Governmental Approvals; (ii) no Obligor, nor any of its Subsidiaries nor, to the knowledge of the Borrower, any of their
respective agents, suppliers, Collaboration Partners, licensors or licensees have received any inspection reports, warning letters or
notices or similar documents with respect to any Product from any Regulatory Authority within the last six (6) years that asserts lack
of compliance with any applicable Laws, Regulatory Approvals, Governmental Approvals or other orders, injunctions, or decrees; (iii)
no Obligor, nor any of its Subsidiaries nor, to the knowledge of the Borrower, any of their respective agents, suppliers, Collaboration
Partners, licensors or licensees have received any notification from any Regulatory Authority within the last five (5) years, asserting
that any Product lacks a required Regulatory Approval or Product Authorization; (iv) there is no pending regulatory action, investigation
or inquiry (other than non-material routine or periodic inspections or reviews) against any Obligor, any of its Subsidiaries or, to the
knowledge of the Borrower, any of their respective suppliers, Collaboration Partners, licensors or licensees with respect to any Product,
and, to the Borrower’s knowledge, there is no reasonable basis for any adverse regulatory action against such Obligor or any of
its Subsidiaries or, to the knowledge of the Borrower, any of their respective suppliers agents, Collaboration Partners, licensors or
licensees with respect to any Product; and (v) without limiting the foregoing, other than as set forth on Schedule 7.19(f), (A) (1) there
have been no product recalls, safety alerts, corrections, withdrawals, marketing suspensions, removals or the like conducted, undertaken
or issued by any Obligor or any of its Subsidiaries, whether voluntary, at the request, demand or order of any Regulatory Authority or
otherwise, with respect to any Product within the last five (5) years, (2) no such product recall, safety alert, correction, withdrawal,
marketing suspension, removal or the like has been requested, demanded or ordered by any Regulatory Authority within the last five (5)
years, and, to the knowledge of the Borrower, there is no reasonable basis for the issuance of any such product recall, safety alert,
correction, withdrawal, marketing suspension, removal or the like with respect to any Product, and (B) no criminal, injunctive, seizure,
detention or civil penalty action has been commenced or threatened in writing by any Regulatory Authority within the last three (3) years
with respect to or in connection with any Product, there are no consent decrees (including plea agreements) that relate to any Product,
and, to the knowledge of the Borrower, there is no reasonable basis for the commencement of any criminal injunctive, seizure, detention
or civil penalty action by any Regulatory Authority relating to any Product or for the issuance of any consent decree. No Obligor nor
any of its Subsidiaries nor, to the Borrower’s knowledge any of their respective agents, suppliers, Collaboration Partners, licensees
or licensors is employing or utilizing the services of any individual who has been debarred or temporarily suspended under any applicable
Law, including but not limited to 21 U.S.C. § 335a.
(g)
Neither any Obligor, nor any of its Subsidiaries, nor, to the Borrower’s knowledge, any officer, employee or agent thereof, has
made an untrue statement of a material fact or fraudulent statements to the FDA or any other Regulatory Authority, failed to disclose
a material fact required to be disclosed to the FDA or any other Regulatory Authority, or committed an act, made a statement, or failed
to make a statement that, at the time such disclosure was made (or was not made), could reasonably be expected to provide a basis for
the FDA or any such other Regulatory Authority to invoke its policy respecting Fraud, Untrue Statements of Material Facts, Bribery and
Illegal Gratuities, set forth in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy.
(h)
The clinical, preclinical, safety and other studies and tests conducted by or on behalf of or sponsored by each Obligor or any of its
Subsidiaries, or in respect of which any Products or Product candidates under development have participated, have been conducted materially
in accordance with standard medical and scientific research procedures and all applicable Laws, Regulatory Approvals and Product Authorizations.
No Obligor nor any of its Subsidiaries has received any notices or other correspondence from the FDA or any such other Regulatory Authority
or IRB requiring the termination or suspension of any clinical, preclinical, safety or other studies or tests used to support regulatory
clearance of, or any Product Authorization or Regulatory Approval for, any Product.
(i)
Each Obligor and each of its Subsidiaries is operating, and at all times during the past five (5) years has operated, in compliance in
all material respects with all Health Care Laws. None of the Obligors or any of its Subsidiaries nor, to the Borrower’s knowledge,
any of their respective affiliates or their respective directors, officers, managers, and, to the knowledge of the Borrower, its employees
and consultants, is in violation of any Health Care Laws. Neither any Obligor, nor any of its Subsidiaries have, within the past six
(6) years, been the subject of any investigation conducted by any Governmental Authority, or a defendant in any qui tam or other False
Claims Act litigation. As of the date of this Agreement, neither any Obligor, nor any of its Subsidiaries, are subject to any enforcement,
regulatory or administrative proceedings against or affecting any Obligor or its Subsidiaries relating to or arising under any Healthcare
Law, and to the Borrower’s knowledge, no such enforcement, regulatory or administrative proceeding has been threatened.
(j)
Neither any Obligor, nor any of its Subsidiaries, are or have during the past six (6) years participated in any Federal Health Care Programs.
(k)
Neither any Obligor, nor any of its Subsidiaries nor to the Borrower’s knowledge, none of its officers, employees, agents, or contractors
(while employed or engaged by the Borrower or any of its Subsidiaries) are or have been (i) debarred, excluded or suspended from participating
in any Federal Health Care Program, (ii) subject to a civil monetary penalty assessed under Section 1128A of the Social Security Act
or (iii) listed on the General Services Administration published list of parties excluded from federal procurement programs and non-procurement
programs.
7.20
Transactions with Affiliates. Except as set forth on Schedule 7.20, neither the Borrower nor any of its Subsidiaries is a
party to any transaction or other arrangement (including the purchase, sale, lease, transfer or exchange of property or assets of any
kind or the rendering of services of any kind) with any Affiliate that, after giving effect to the Closing Date, would not be permitted
pursuant to Section 9.10.
7.21
Sanctions. No Obligor, nor any of its Subsidiaries, nor, to the knowledge of the Borrower, any of their respective directors, officers
or employees nor, to the knowledge of the Borrower, any agents or other Persons acting on behalf of any of the foregoing (i) is currently
the target of any Sanctions, (ii) is located, organized or residing in any Designated Jurisdiction, (iii) is or has been (within the
previous five (5) years) engaged in any transaction with, or for the benefit of, any Person who is now or was then the target of Sanctions
or who is located, organized or residing in any Designated Jurisdiction or (iv) is in violation of or subject to an investigation relating
to Sanctions. No Loan, nor the proceeds from any Loan, will be used, directly or indirectly, to lend, contribute or provide to, or will
be otherwise made available to fund, any activity or business in any Designated Jurisdiction or to fund any activity or business of any
Person located, organized or residing in any Designated Jurisdiction or who is the subject of any Sanctions, or in any other manner that
will result in any violation by any Person (including the Administrative Agent, the Lenders and their Affiliates) of Sanctions.
7.22
Anti-Corruption. No Obligor, nor any of its Subsidiaries, nor, to the knowledge of the Borrower, any of their respective directors,
officers, or employees nor, to the knowledge of the Borrower, any agents or other persons acting on behalf of any of the foregoing, directly
or indirectly, is (i) in violation of any applicable anti-corruption Law, (ii) made, offered to make, promised to make or authorized
the payment or giving of, directly or indirectly, any Prohibited Payment or (iii) subject to any investigation by any Governmental Authority
with regard to any actual or alleged Prohibited Payment.
7.23
Deposit and Disbursement Accounts. Schedule 7.23 contains a list of all banks and other financial institutions at which any
Obligor or any of its Subsidiaries maintains Deposit Accounts, Securities Accounts, Commodity Accounts, lockboxes, disbursement accounts,
investment accounts or other similar accounts, whether within or outside the U.S., and such Schedule correctly identifies the name, address
and telephone number of each bank or financial institution, the name in which the account is held, the type of account, and the complete
account number therefor.
7.24
Royalty and Other Payments. Except as set forth on Schedule 7.24, no Obligor nor any of its Subsidiaries is obligated to pay
any royalty, milestone payment, deferred payment or any other contingent payment in respect of any Product.
SECTION
8
AFFIRMATIVE COVENANTS
Each
Obligor jointly and severally covenants and agrees, for the benefit of the Administrative Agent and the Lenders that, until the Commitments
have expired or been terminated and all Obligations (other than Warrant Obligations and inchoate indemnification and expense obligations
for which no Claim has been made) have been indefeasibly paid in full in cash:
8.01
Financial Statements and Other Information. The Borrower will furnish to the Administrative Agent (with copies for each Lender):
(a)
Within ten (10) days after the end of each calendar month of each fiscal year, proof of the Borrower’s compliance with Section
10.01, which proof may be in the form of copies of one or more bank statements demonstrating such compliance, accompanied by a certification
thereof from the chief financial officer of the Borrower.
(b)
Within forty-five (45) days after the end of each fiscal quarter, (i) an unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal quarter, and (ii) the related unaudited consolidated statements of income, shareholders’
equity and cash flows of the Borrower and its Subsidiaries for such quarter and the portion of the fiscal year through the end of such
fiscal quarter, in each case, prepared in accordance with GAAP consistently applied (subject to changes resulting from normal, year-end
audit adjustments and except for the absence of notes), all in reasonable detail and setting forth in comparative form the figures for
the corresponding period in the preceding fiscal year, together with (iii) a certificate of a Responsible Officer of the Borrower stating
that such financial statements (x) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries
as at such date and the results of operations of the Borrower and its Subsidiaries for the period ended on such date and (y) have been
prepared in accordance with GAAP consistently applied, subject to changes resulting from normal, year-end audit adjustments and except
for the absence of notes; provided that documents required to be furnished pursuant to this Section 8.01(b) shall be deemed
furnished on the date that such documents are publicly available on “EDGAR” and notice of such availability is provided to
the Administrative Agent.
(c)
As soon as available and in any event within ninety (90) days after the end of each fiscal year, (i) the audited consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such fiscal year, and (ii) the related audited consolidated statements of
income, shareholders’ equity and cash flows of the Borrower and its Subsidiaries for such fiscal year, in each case prepared in
accordance with GAAP consistently applied, all in reasonable detail and setting forth in comparative form the figures for the previous
fiscal year, accompanied by a report and opinion thereon of RSM US LLP or another firm of independent certified public accountants of
recognized national standing reasonably acceptable to the Administrative Agent, which report and opinion shall be prepared in accordance
with GAAP, consistently applied, and shall not be subject to any “going concern” or like qualification or exception of any
qualification or exception as to the scope of such audit (except, within one year of the Maturity Date, solely to the extent that the
Obligations maturing on the Maturity Date may be considered “current indebtedness” in accordance with GAAP), and in the case
of such consolidated financial statements, certified by a Responsible Officer of the Borrower; provided that documents required
to be furnished pursuant to this Section 8.01(c) shall be deemed furnished on the date that such documents are publicly available
on “EDGAR” and notice of such availability is provided to the Administrative Agent.
(d)
(i) together with the financial statements required pursuant to Sections 8.01(b) and 8.01(c), a compliance certificate
delivered by the chief financial Responsible Officer of the Borrower as of the end of the applicable accounting period, substantially
in the form of Exhibit E (a “Compliance Certificate”) including a summary of Advanced Energy Net Revenue
generated by the Products (in reasonable detail and in a manner that segregates Advanced Energy Net Revenue by type of Product) and which
evidences the Obligors’ compliance with Section 10 and (ii) together with the financial statements required pursuant to
Sections 8.01(b) and 8.01(c), a management discussion and analysis, prepared in writing and in reasonable detail, discussing
Borrower’s financial condition and results of operations as set forth in such financial statements.
(e)
As soon as available and in any event no later than sixty (60) days following the end of each fiscal year of the Borrower, copies of
an annual budget (or equivalent) on a consolidated basis for the Borrower and its Subsidiaries, approved by the Borrower’s Board,
for the then current fiscal year, together with the projections used in the preparation thereof, accompanied by a certificate of the
chief financial officer of the Borrower certifying (in his or her capacity as an officer of the Borrower and not in his or her individual
capacity) that such projections are based on reasonable estimates, information and assumptions and that such Responsible Officer has
no reason to believe that such projections are incorrect or misleading in any material respect.
(f)
Promptly, and in any event within ten (10) days after receipt thereof by the Borrower or any of its Subsidiaries, copies of (x) each
material notice or other material correspondence received from any securities regulator or exchange to the authority of which any Obligor
or any of its Subsidiaries are subject concerning any investigation or possible investigation or other inquiry by such agency regarding
financial or other operational results of such Obligor or any such Subsidiary and (y) all press releases; provided that documents
required to be furnished pursuant to this Section 8.01(f) shall be deemed furnished on the date that such documents are publicly
available on “EDGAR” and notice of such availability is provided to the Administrative Agent.
(g)
Promptly, and in any event within ten (10) days, after the same are available, copies of each annual report, proxy or financial statement
or other report or communication sent to all the stockholders of the Borrower or any of its Subsidiaries, and copies of all annual, regular,
periodic and special reports and registration statements which the Borrower or any of its Subsidiaries may file or be required to file
with any securities regulator or exchange to the authority of which the Borrower or any such Subsidiary, as applicable, are subject;
provided that documents required to be furnished pursuant to this Section 8.01(g) shall be deemed furnished on the date
that such documents are publicly available on “EDGAR” and notice of such availability is provided to the Administrative Agent.
(h)
Copies of all letters of representations signed by any Obligor to its auditors and, promptly upon receipt thereof, copies of all auditor
reports delivered for each fiscal quarter.
(i)
Upon request of the Administrative Agent, the information regarding insurance maintained by the Borrower and its Subsidiaries as required
under Section 8.05.
(j)
Promptly following the Administrative Agent’s reasonable request at any time, proof of the Borrower’s compliance with Section
10.01.
(k)
Within five Business Days of delivery, copies of all statements, reports and notices (including board presentations) made available to
holders of the Borrower’s Equity Interests or to the Borrower’s Board; provided that any such material may be redacted
by the Borrower to exclude information relating to the Lenders (including the Borrower’s strategy regarding the Loans).
(l)
As soon as possible and in any event within ten (10) Business Days after the Borrower obtains knowledge of any return, recovery, dispute
or Claim related to any Product or inventory that involves more than $1,000,000, written notice thereof from a Responsible Officer of
the Borrower which notice shall set forth in reasonable detail the basis for such return, recovery, dispute or Claim.
(m)
Such other information respecting the operations, properties, business, liabilities or condition (financial or otherwise) of the Borrower
and each of its Subsidiaries (including with respect to the Collateral) as the Administrative Agent or any Lender may from time to time
reasonably request.
The
Borrower hereby acknowledges that the Administrative Agent or the Lenders may not wish to receive material non-public information with
respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and the Administrative Agent, the Lenders
or their respective personnel may be engaged in investment and other market-related activities with respect to such Persons’ securities.
The Borrower covenants and agrees that, for purposes of both this Section 8.01 and Section 8.02 below, neither the Borrower
nor any Person acting on its behalf will provide, or become obligated to provide, the Administrative Agent or any Lender or their respective
representatives or agents with any information that the Borrower reasonably believes constitutes material non-public information, unless
prior thereto, such receiving Person shall have confirmed to the Borrower in writing that it consents to receive such information; provided
that, notwithstanding the foregoing, the information required to be delivered pursuant to (i) clauses (a), (b), (c),
(d), (g), and (k) of Section 8.01 and (ii) clauses (a), (g), (j), (k) and (l)
of Section 8.02 shall be furnished and delivered to the Administrative Agent as provided herein whether or not such information
qualifies as material non-public information. The Borrower hereby acknowledges that the Administrative Agent and each Lender is relying
on the foregoing covenant in effecting transactions in securities of the Borrower and the Administrative Agent and each Lender acknowledges
that all material non-public information shall be subject to Section 14.16.
8.02
Notices of Material Events. The Borrower will furnish to the Administrative Agent written notice of the following promptly, but in
any event within five (5) Business Days, after a Responsible Officer of the Borrower or any of its Subsidiaries first learns of or acquires
knowledge of the existence of any of the below circumstances or events (prepared in reasonable detail):
(a)
The occurrence or existence of any Default or any event, circumstance, act or omission that has resulted in, or could reasonably be expected
to result in, a Material Adverse Effect.
(b)
The occurrence of any event with respect to any property or assets of the Borrower or any of its Subsidiaries resulting in a Loss aggregating
$1,000,000 (or the Equivalent Amount in other currencies) or more.
(c)
Any Claim, action, suit, notice of violation, hearing, investigation or other proceeding pending or, to the Borrower’s knowledge,
threatened against or affecting the Borrower or any of its Subsidiaries or with respect to the ownership, use, maintenance and operation
of their respective businesses, operations or properties.
(d)
The filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority or any other Person
against or affecting the Borrower or any of its Affiliates that, if adversely determined, could reasonably be expected to result in a
Material Adverse Effect.
(e)
(i) On or prior to any filing by any ERISA Affiliate of any notice of intent to terminate any Title IV Plan, a copy of such notice and
(ii) promptly, and in any event within ten (10) days, after any Responsible Officer of any ERISA Affiliate knows or has reason to know
(A) that an ERISA Event has occurred or is reasonably expected to occur or (B) that a request for a minimum funding waiver under Section
412 of the Code has been filed with respect to any Title IV Plan or Multiemployer Plan, a notice (which may be made by telephone if promptly
confirmed in writing) describing such waiver request and any action that any ERISA Affiliate proposes to take with respect to either
of the foregoing, together with a copy of any notice filed with the PBGC or the IRS pertaining thereto.
(f)
(i) The termination of any Material Agreement other than in accordance with its terms, including as a result of a breach or default;
(ii) the receipt by the Borrower or any of its Subsidiaries of any material notice under any Material Agreement (and a copy thereof);
(iii) the entering into of any new Material Agreement by an Obligor (and a copy thereof); or (iv) any material amendment to a Material
Agreement (and a copy thereof). In the event that the Borrower or any of its Subsidiaries enters into any new Material Agreement, the
Borrower shall update Schedule 7.14 to reflect such new Material Agreement and shall delivery the updated Schedule 7.14 (along
with a copy of such Material Agreement) to the Administrative Agent within thirty (30) days after the end of the fiscal quarter during
which such new Material Agreement is executed.
(g)
The reports and notices as required by the Security Documents.
(h)
Within thirty (30) days of the date thereof, or, if earlier, on the date of delivery of any financial statements pursuant to Section
8.01, notice of any material change in accounting policies or financial reporting practices by the Obligors.
(i)
Promptly after the occurrence thereof, notice of any labor controversy resulting in or threatening to result in any strike, work stoppage,
boycott, shutdown or other material labor disruption against or involving the Borrower or any of its Subsidiaries.
(j)
Any licensing agreement or similar arrangement entered into by the Borrower or any of its Subsidiaries in connection with (or as a result
of) any infringement or alleged infringement by the Borrower or any of its Subsidiaries of the Intellectual Property of another Person.
(k)
Concurrently with the delivery of financial statements under Section 8.01(b) or (c), the creation or other acquisition
of any new Intellectual Property by the Borrower or any Subsidiary after the date hereof and during such prior fiscal quarter or fiscal
year, as applicable, for which such financial statements were delivered, which is registered or becomes registered or the subject of
an application for registration with the U.S. Copyright Office or the U.S. Patent and Trademark Office, as applicable, or with any other
equivalent foreign Governmental Authority.
(l)
Any change to the ownership of the Deposit Accounts, Securities Accounts and Commodity Accounts of the Borrower or any of its Subsidiaries,
by delivering the Administrative Agent an updated Schedule 7 to the Security Agreement setting forth a complete and correct list of all
such accounts as of the date of such change.
(m)
The occurrence or existence of any event, circumstance, act or omission that would cause any representation or warranty contained in
Section 7.07, Section 7.18 or Section 7.19 to be incorrect in any material respect if such representation or warranty
was to be made at the time the Borrower learned of such event, circumstance, act or omission.
(n)
The acquisition by the Borrower or any of its Subsidiaries, in a single or series of related transactions, of any fee interest in any
real property having a fair market value in excess of $1,000,000.
(o)
Any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect or an Adverse Regulatory
Event.
Each
notice delivered under this Section 8.02 shall be accompanied by a statement of a financial officer or other executive officer
of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken
with respect thereto. Nothing in this Section 8.02 is intended to waive, consent to or otherwise permit any action or omission
that is otherwise prohibited by this Agreement or any other Loan Document.
8.03
Existence; Conduct of Business. The Borrower shall, and shall cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and maintain in full force and effect its legal existence and all Governmental Approvals necessary or material
to its Product Development and Commercialization Activities.
8.04
Payment of Obligations. The Borrower shall, and shall cause each of its Subsidiaries to, pay and discharge its obligations, including
(i) all taxes, fees, assessments and governmental charges or levies imposed upon it or upon its properties or assets prior to the date
on which penalties attach thereto, and all lawful claims for labor, materials and supplies which, if unpaid, might become a Lien upon
any properties or assets of the Borrower or any Subsidiary, except to the extent such taxes, fees, assessments or governmental charges
or levies, or such claims are being contested in good faith by appropriate proceedings and are adequately reserved against in accordance
with GAAP, and (ii) all lawful claims which, if unpaid, would by law become a Lien upon its property not constituting a Permitted Lien.
8.05
Insurance. The Borrower shall, and shall cause each of its Subsidiaries to, maintain, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations. Upon the request of the Administrative Agent, the Borrower shall furnish the Administrative
Agent from time to time with (i) information as to the insurance carried by each Obligor and each of its Subsidiaries and, if so requested,
copies of all such insurance policies and (ii) a certificate from the Borrower’s insurance broker or other insurance specialist
stating that all premiums then due on the policies relating to insurance on the Collateral have been paid and that such policies are
in full force and effect. The Borrower shall use commercially reasonable efforts to ensure, or cause others to ensure, that all insurance
policies required under this Section 8.05 shall provide that they shall not be terminated or cancelled nor shall any such policy
be materially changed in a manner adverse to the insured Person without at least thirty (30) days’ prior written notice to the
Borrower and the Administrative Agent. Receipt of notice of termination or cancellation of any such insurance policies or reduction of
coverages or amounts thereunder shall entitle the Secured Parties to renew any such policies, cause the coverages and amounts thereof
to be maintained at levels required pursuant to the first sentence of this Section 8.05 or otherwise to obtain similar insurance
in place of such policies, in each case at the expense of the Borrower (payable on demand). The amount of any such expenses shall accrue
interest at the Default Rate if not paid on demand and shall constitute “Obligations.”
8.06
Books and Records; Inspection Rights. The Borrower shall, and shall cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities.
The Borrower shall, and shall cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent, upon
reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss
its affairs, finances and condition (financial or otherwise) with its officers and independent accountants, all at such reasonable times
(but not more often than once a year unless an Event of Default has occurred and is continuing) as the Administrative Agent or any Lender
may request. The Obligors shall pay all reasonable and documented out of pocket costs and expenses of all such inspections.
8.07
Compliance with Laws, Maintenance of Regulatory Approvals, Contracts, Intellectual Property, Etc..
(a)
The Borrower shall, and shall cause each of its Subsidiaries to, (i) comply in all material respects with all applicable Laws (including
Environmental Laws), Regulatory Approvals and Governmental Approvals (including all such Laws, Regulatory Approvals and Governmental
Approvals necessary in connection with the execution, delivery and performance of the Loan Documents, the consummation of the Transactions
or the operation and conduct of its business and ownership of its properties), and (ii) comply in all material respects with all terms
of Indebtedness and all other Material Agreements, except, in each case, where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
(b)
With respect to the Products and all Product Development and Commercialization Activities, the Borrower shall, and shall cause each other
Obligor and each of their respective Subsidiaries (to the extent applicable) and Collaboration Partners to, (i) maintain in full force
and effect all Regulatory Approvals (including all Product Authorizations), Contracts, Product Related Information, Material Intellectual
Property, and other rights, interests or assets (whether tangible or intangible) necessary for the operations of the Borrower’s
or such Obligor’s business, as the case may be, including any Product Development and Commercialization Activities, (ii) notify
the Administrative Agent, promptly after learning of (x) any product recalls, safety alerts, corrections, withdrawals, marketing suspensions,
removals or the like conducted, to be undertaken or issued by the Borrower, any such Obligor or any of their respective suppliers, as
the case may be, whether or not at the request, demand or order of any Governmental Authority or otherwise with respect to any Product
or any Product Development and Commercialization Activities, or (y) any basis for undertaking or issuing any such action or item, (iii)
maintain in full force and effect, and pay all costs and expenses relating to such maintenance, all Intellectual Property owned or controlled
by the Borrower or any such Obligor that is used in and is necessary for the operations of the business of such Person, including Product
Development and Commercialization Activities, and all Material Agreements, (iv) notify the Administrative Agent, promptly after learning
thereof, of any infringement or other violation by any Person of the Borrower’s or any other Obligor’s Intellectual Property
that is used in the operations of the business of such Person, or in connection with any Product Development and Commercialization Activities,
and aggressively pursue any such infringement or other violation, to the extent the Borrower deems it commercially reasonable to do so,
(v) use commercially reasonable efforts to pursue and maintain in full force and effect legal protection for all new Intellectual Property
developed or controlled by the Borrower or any other Obligor, as the case may be, that is used in and necessary for the operations of
the business of such Person, or in connection with any Product Development and Commercialization Activities, and (vi) notify the Administrative
Agent, promptly after learning thereof, of (x) any claim by any Person that the conduct of the Borrower’s or any such Obligor’s
business (including any Product Development and Commercialization Activities) infringes any Intellectual Property of such Person, or
(y) any event, circumstance, act or omission that would cause any representation or warranty contained in Section 7.19 to be incorrect
in any material respect if such representation or warranty was to be made at the time such Obligor learned of such event, circumstance,
act or omission.
8.08
Maintenance of Properties, Etc.. The Borrower shall, and shall cause each of its Subsidiaries to, maintain and preserve all of its
assets and properties, whether tangible or intangible, necessary or useful in the proper conduct of the Borrower’s or such Subsidiary’s
business in good working order and condition in accordance with the general practice of other Persons of similar character and size,
ordinary wear and tear and damage from casualty or condemnation excepted.
8.09
Action under Environmental Laws. The Borrower shall, and shall cause each of its Subsidiaries to, upon becoming aware of the release
of any Hazardous Materials or the existence of any environmental liability under applicable Environmental Laws with respect to their
respective businesses, operations or properties, take all actions, at their cost and expense, as shall be necessary or advisable to investigate
and clean up the condition of their respective businesses, operations or properties, including all required removal, containment and
remedial actions, and restore their respective businesses, operations or properties to a condition in compliance in all material respects
with applicable Environmental Laws.
8.10
Use of Proceeds. The proceeds of the Loans will be used only as provided in Section 2.04. Without limiting the foregoing,
no part of the proceeds of the Loans will be used, whether directly or indirectly, for any purpose that violates the Regulations of the
Board of Governors of the Federal Reserve System, including Regulations T, U and X.
8.11
Certain Obligations Respecting Subsidiaries; Further Assurances.
(a)
Subsidiary Guarantors. The Borrower shall take such action from time to time as shall be necessary to ensure that (x) each of
its Subsidiaries that is a party to this Agreement as of the date hereof will be and will remain an Obligor and Subsidiary Guarantor
hereunder (except as otherwise permitted by Section 9.03), and (y) each of its other Subsidiaries, whether direct or indirect,
now existing or hereafter created, will, within ten (10) Business Days of becoming a Subsidiary, become an “Obligor” and
a “Subsidiary Guarantor” pursuant to this Section 8.11. Without limiting the generality of the foregoing, if the Borrower
or any of its Subsidiaries forms or acquires any new Subsidiary, then the Borrower concurrently shall (unless otherwise agreed by the
Administrative Agent in its sole discretion), within ten (10) Business Days of such event:
(i)
cause such Subsidiary to become an “Obligor” and a “Subsidiary Guarantor” hereunder, a “Grantor”
(or the equivalent thereof) under the applicable Security Document, and a “Subsidiary Party” under the Intercompany Subordination
Agreement;
(ii)
take such action or cause such Subsidiary to take such action (including joining the Security Agreement or the applicable Security Documents
and delivering certificated Equity Interests together with undated transfer powers executed in blank, applicable control agreements,
and other instruments) as shall be deemed reasonably necessary or desirable by the Administrative Agent to create and perfect, in favor
of the Administrative Agent, for the benefit of the Secured Parties, valid and enforceable first priority Liens on substantially all
of the personal property of such new Subsidiary as collateral security for the Obligations hereunder;
(iii)
cause the parent of such Subsidiary to execute and deliver a pledge agreement in favor of the Administrative Agent, for the benefit of
the Secured Parties, in respect of all outstanding issued Equity Interests of such Subsidiary for the purpose of creating and perfecting,
in favor of the Administrative Agent, for the benefit of the Secured Parties, a valid and perfected first priority Lien on such Equity
Interests; and
(iv)
deliver such proof of corporate action, incumbency of officers, opinions of counsel and other documents as is consistent with those delivered
by each Obligor pursuant to Section 6.01 or as the Administrative Agent shall have reasonably requested.
(b)
Further Assurances.
(i)
Each Obligor shall, and shall cause each of its direct or indirect Subsidiaries (including any newly formed or newly acquired Subsidiaries)
to take such action from time to time as shall reasonably be requested by the Administrative Agent to effectuate the purposes and objectives
of this Agreement (including this Section 8.11) and the applicable Security Documents.
(ii)
Subject to section 8.11(c), in the event that the Borrower or any of its Subsidiaries holds or acquires any Intellectual Property
or other assets or properties, the Borrower or any such Subsidiary shall take any action as shall be reasonably necessary to ensure that
the provisions of this Agreement and the Security Agreement shall apply thereto and any such Intellectual Property or other assets or
properties shall constitute part of the Collateral under the Security Documents.
(iii)
Without limiting the generality of the foregoing, within ten (10) Business Days following written request from the Administrative Agent,
the Borrower shall cause each Person that is required to be a Subsidiary Guarantor or an Obligor hereunder to take such action from time
to time (including executing and delivering such assignments, security agreements, control agreements and other instruments, and delivering
certificated Equity Interests together with undated transfer powers executed in blank) as shall be reasonably requested by the Administrative
Agent to create, in favor of the Secured Parties, a first priority perfected security interest and Lien in substantially all of the assets
and property of such Person as collateral security for the Obligations; provided that any such security interest or Lien shall
be subject to the relevant requirements of the applicable Security Documents.
(iv)
In the event that the Borrower or any of its Subsidiaries acquires any real property with a value in excess of $1,000,000 during the
term of this Agreement, the Borrower shall promptly notify the Administrative Agent and provide the Administrative Agent with a description
of such real property, the acquisition date thereof and the purchase price therefor. Upon the request of the Administrative Agent, the
Borrower or any such Subsidiary shall execute and deliver a mortgage with respect to such acquired real property to secure the Obligations.
(c)
Costs and Benefits. Notwithstanding any term or provision of this Section 8.11 to the contrary, without limiting the right
of the Administrative Agent or the Lenders to require a Lien or a security interest in the Equity Interests of, or Guarantee from, any
newly acquired or created Subsidiary of the Borrower, or a Lien or security interest on any assets or properties of the Borrower or any
of its Subsidiaries, so long as no Event of Default has occurred and is continuing, the Borrower may request in writing to the Administrative
Agent that the Majority Lenders waive the requirements of this Section 8.11 to provide a Lien, security interest or Guarantee,
as the case may be, due to the cost or burden thereof to the Borrower and its Subsidiaries (when taken as a whole) being unreasonably
excessive relative to the benefit that would inure to the Secured Parties, and describing such cost or burden in reasonable detail. Upon
receipt of any such written notice, the Administrative Agent shall review and consider such request in good faith and, within five (5)
Business Days of receipt of such request, the Administrative Agent shall determine in its sole but commercially reasonable discretion,
and notify the Borrower of such determination, whether the Administrative Agent will grant such request for a waiver. With respect to
any Subsidiary for which the requirement to provide a Lien, security interest or Guarantee, as the case may be, has been waived by the
Administrative Agent in accordance with this Section 8.11(c), such waiver may be terminated by the Administrative Agent if it
determines in its sole but commercially reasonable discretion that the cost or burden of providing such Lien, security interest or Guarantee
is no longer unreasonably excessive relative to the benefits that would inure to the Secured Parties. If such waiver is terminated, such
Subsidiary shall be required to comply with the requirements of this Section 8.11.
8.12
Termination of Non-Permitted Liens. In the event that the Borrower or any of its Subsidiaries shall become aware or be notified by
the Administrative Agent or any Lender of the existence of any outstanding Lien against any asset or property of the Borrower or any
of its Subsidiaries, which Lien is not a Permitted Lien, the Borrower shall use its commercially reasonable efforts to promptly terminate
or cause the termination of such Lien.
8.13
Intellectual Property.
(a)
In the event that any of the Obligors or any of their respective Subsidiaries acquire, develop or create Intellectual Property during
the term of this Agreement, then the provisions of this Agreement and the other Loan Documents, to the extent applicable, shall automatically
apply thereto and any such Intellectual Property shall automatically constitute part of the Collateral under the Security Documents,
without further action by any party, in each case from and after the date of such acquisition, development or creation (except that any
representations or warranties of any Obligor shall apply to any such Intellectual Property only from and after the date, if any, subsequent
to such acquisition or creation that such representations and warranties are brought down or made anew as provided herein). Promptly
after such creation, development or acquisition of Intellectual Property that constitutes Material Intellectual Property, the Borrower
shall give written notice thereof, in reasonable detail, to the Administrative Agent.
(b)
The Borrower shall, and shall cause each of its Subsidiaries (to the extent applicable) to, (i) promptly upon obtaining knowledge thereof,
notify the Administrative Agent of any infringement or other violation by any Person of the Material Intellectual Property owned by the
Borrower or any such Subsidiary, and aggressively pursue any such infringement or other violation, except in any specific circumstance
where the Borrower reasonably determines in good faith that it is not commercially reasonable to do so, (ii) use commercially reasonable
efforts to pursue and maintain in full force and effect legal protection for all new Material Intellectual Property owned by the Borrower
or any of its Subsidiaries, as the case may be, and (iii) promptly after obtaining knowledge thereof, notify the Administrative Agent
of any written Claim by any Person that the conduct of the business of the Borrower or any of its Subsidiaries (including any Product
Development and Commercialization Activities with respect to any product) has infringed upon any Intellectual Property of another Person
that could reasonably be expected to result in a Material Adverse Effect.
8.14
Litigation Cooperation. The Borrower shall make available to the Administrative Agent and the Lenders, without expense to the Administrative
Agent or the Lenders, reasonable access to each Obligor, each of such Obligor’s Subsidiaries and each of their officers, employees
and agents and the books and records of each such Obligor and its Subsidiaries, to the extent that the Administrative Agent or any Lender
may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against the Administrative
Agent or any Lender with respect to any Collateral, the subject of any Loan Documents or relating to any Obligor or any of its Subsidiaries
under the Loan Documents.
8.15
ERISA Compliance. The Borrower shall comply, and shall cause each of its Subsidiaries to comply, in all material respects, with the
provisions of ERISA with respect to any Plans to which the Borrower or any Subsidiary is a party as employer.
8.16
Cash Management. Subject to Section 8.18, each Obligor shall:
(a)
maintain at all times all Deposit Accounts, Securities Accounts, Commodity Accounts, lockboxes and similar accounts (other than Excluded
Accounts) held by the Obligor with a bank or financial institution that has executed and delivered to the Administrative Agent an Account
Control Agreement in favor of the Administrative Agent, in form and substance reasonably acceptable to the Administrative Agent (each
such Deposit Account, Securities Account, Commodity Account, lockbox or similar account, a “Controlled Account”);
(b)
maintain each such Controlled Account as a cash collateral account, with all cash, checks and other similar items of payment in such
account securing payment of the Obligations, and the Obligor shall have granted a Lien and security interest to the Administrative Agent,
for the benefit of the Secured Parties, over such Controlled Accounts;
(c)
deposit promptly, and in any event no later than five (5) Business Days after the date of receipt thereof, all cash, checks, drafts or
other similar items of payment relating to or constituting payments made in respect of any and all accounts receivable, Contracts or
any other rights and interests into one or more Controlled Accounts;
(d)
at any time after the occurrence of an Event of Default, at the request of the Administrative Agent, direct all payments constituting
proceeds of accounts receivable to be directed into lockbox accounts pursuant to agreements in form and substance reasonably satisfactory
to the Administrative Agent; and
(e)
in the event of any change to any Obligor’s ownership of any Deposit Account, Securities Account or Commodity Account, within seven
(7) Business Days after the occurrence of such change deliver written notice to the Administrative Agent (prepared in reasonable detail)
of such change and the reason or circumstance causing such change.
8.17
Conference Calls. No later than five (5) Business Days after delivery of the financial statements pursuant to Sections 8.01(b)
and 8.01(c), at the request of the Administrative Agent, the Borrower shall cause its chief financial officer (or its chief
executive officer) to participate in conference calls with the Administrative Agent and the Lenders to discuss, among other things, the
financial condition of each Obligor and any financial or earnings reports; provided that such conference calls shall be held at
reasonable times during normal business hours and, so long as no Event of Default has occurred and is continuing, not more frequently
than once per fiscal quarter.
8.18
Post-Closing Covenants. The Borrower shall complete or shall cause to be completed each of the items set forth on Schedule
8.18 in the timeframes set forth therein.
SECTION
9
NEGATIVE COVENANTS
Each
Obligor jointly and severally covenants and agrees, for the benefit of the Administrative Agent and the Lenders that, until the Commitments
have expired or been terminated and all Obligations (other than Warrant Obligations and inchoate indemnification and expense obligations
for which no Claim has been made) have been paid in full indefeasibly in cash:
9.01
Indebtedness. The Borrower shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, whether directly or indirectly, except for the following:
(a)
the Obligations;
(b)
Indebtedness existing on the Closing Date and set forth on Schedule 7.13(a) and Permitted Refinancings thereof; provided
that, in each case, such Indebtedness is subordinated to the Obligations on terms satisfactory to the Administrative Agent;
(c)
accounts payable to trade creditors for goods and services and current operating liabilities (not the result of the borrowing of money)
incurred in the ordinary course of such Obligor’s or such Subsidiary’s business in accordance with customary terms and paid
within the specified time, unless contested in good faith by appropriate proceedings and reserved for in accordance with GAAP;
(d)
Indebtedness consisting of Guarantees resulting from endorsement of negotiable instruments for collection by any Obligor in the ordinary
course of business;
(e)
Indebtedness of an Obligor (other than any Foreign Subsidiary), including in respect of Guarantees owed, to any other Obligor; provided
that, in each case, such Indebtedness is subordinated to the Obligations pursuant to an Intercompany Subordination Agreement;
(f)
normal course of business equipment financing; provided that (i) if secured, the collateral therefor consists solely of the assets
being financed, the products and proceeds thereof and books and records related thereto, and (ii) the aggregate outstanding principal
amount of such Indebtedness does not exceed $500,000 (or the Equivalent Amount in other currencies) at any time;
(g)
Indebtedness under Hedging Agreements permitted by Section 9.05(f); and
(h)
Indebtedness in respect of Capital Lease Obligations not to exceed $500,000 at any time.
9.02
Liens. The Borrower shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or permit to exist any Lien
or security interest on any property or assets now or in the future owned by it or such Subsidiary, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except for the following:
(a)
Liens securing the Obligations;
(b)
any Lien on any property or asset of the Borrower or any of its Subsidiaries existing on the Closing Date and set forth on Schedule
7.13; provided that (i) no such Lien shall extend to any other property or asset of the Borrower or any of its Subsidiaries
and (ii) any such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;
(c)
Liens securing Indebtedness permitted under Section 9.01(f); provided that such Liens are restricted solely to the collateral
described on Section 9.01(f);
(d)
Liens imposed by Law arising in the ordinary course of business, including (but not limited to) carriers’, warehousemen’s
and mechanics’ liens and other similar Liens arising in the ordinary course of business and which (x) do not in the aggregate materially
detract from the value of the property subject thereto or materially impair the use thereof in the operations of the business of such
Person or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property subject to such Liens and for which adequate reserves have been made if required in accordance with GAAP;
(e)
pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance or
other similar social security legislation;
(f)
Liens securing Taxes, assessments and other governmental charges, the payment of which is not yet due or is being contested in good faith
by appropriate proceedings promptly initiated and diligently conducted and for which such reserve or other appropriate provisions, if
any, as shall be required by GAAP shall have been made;
(g)
servitudes, easements, rights of way, restrictions and other similar encumbrances on real property imposed by any Law and encumbrances
consisting of zoning or building restrictions, easements, licenses, restrictions on the use of property or minor imperfections in title
thereto which, in the aggregate, are not material, and which do not in any case materially detract from the value of the property subject
thereto or interfere in any material respect with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;
(h)
with respect to any real property, (i) such defects or encroachments as might be revealed by an up-to-date survey of such real property;
(ii) the reservations, limitations, provisos and conditions expressed in the original grant, deed or patent of such property by the original
owner of such real property pursuant to Laws; and (iii) rights of expropriation, access or use or any similar right conferred or reserved
by or in any Law, which, in the aggregate for (i), (ii) and (iii), are not material, and which do not in any case materially detract
from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;
and
(i)
bankers’ liens, rights of setoff and similar Liens incurred on deposits made in the ordinary course of business;
provided
that no Lien otherwise permitted under any of clauses (b) through (i) above shall apply to any Material Intellectual
Property.
9.03
Fundamental Changes and Acquisitions. The Borrower shall not, and shall not permit any of its Subsidiaries to, (i) enter into any
transaction of merger, amalgamation or consolidation, (ii) liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution),
(iii) sell or issue any of its Equity Interests, or (iv) make any Acquisition or otherwise acquire any business or substantially all
the property from, or Equity Interests in, or be a party to any acquisition of, any Person, except for the following (in each case, solely
to the extent that no Event of Default has occurred and is continuing, or could not reasonably be expected to result therefrom):
(a)
Investments permitted under Section 9.05(e) and the issuance of Equity Interests pursuant to Benefit Plans existing on the Closing
Date or adopted by the Borrower’s stockholders after the Closing Date;
(b)
the merger, amalgamation or consolidation of any Subsidiary Guarantor with or into any other Obligor (other than any Foreign Subsidiary);
provided that with respect to any such transaction involving the Borrower, the Borrower must be the surviving or successor entity
of such transaction;
(c)
the sale, lease, transfer or other disposition by any Subsidiary Guarantor of any or all of its property (upon voluntary liquidation
or otherwise) to any other Obligor (other than any Foreign Subsidiary);
(d)
the sale, transfer or other disposition of the Equity Interests of any Subsidiary Guarantor to any other Obligor (other than any Foreign
Subsidiary);
(e)
Permitted Acquisitions;
(f)
Asset Sales permitted pursuant to Section 9.09; and
(g)
the dissolution of Bovie Medical, LLC pursuant to Section 8.18.
9.04
Lines of Business. The Borrower shall not, and shall not permit any of its Subsidiaries to, engage to any material extent in any
business other than the business engaged in on the Closing Date by the Borrower or its Subsidiaries or a business reasonably related
thereto and reasonable extensions thereof.
9.05
Investments. The Borrower shall not, and shall not permit any of its Subsidiaries to, make, directly or indirectly, or permit to
remain outstanding any Investments except for the following:
(a)
Investments outstanding on the date hereof and identified on Schedule 9.05;
(b)
operating deposit accounts with banks that comply with Section 8.16;
(c)
extensions of credit in the nature of accounts receivable or notes receivable arising from the sales of goods or services in the ordinary
course of business;
(d)
cash and Permitted Cash Equivalent Investments in Controlled Accounts;
(e)
Investments by any Obligor in the Subsidiary Guarantors (other than Foreign Subsidiaries);
(f)
so long as no Event of Default has occurred and is continuing or could reasonably be expected to result therefrom, Hedging Agreements
entered into in the Borrower’s ordinary course of business for the purpose of hedging currency risks (and not for speculative purposes);
(g)
Investments consisting of security deposits with utilities and other like Persons made in the ordinary course of business;
(h)
employee loans, travel advances and Guarantees in accordance with the Borrower’s usual and customary practices with respect thereto
(if permitted by Laws) which in the aggregate shall not exceed $500,000 outstanding at any time (or the Equivalent Amount in other currencies);
(i)
Investments received in connection with any Insolvency Proceedings in respect of any customers, suppliers or clients and in settlement
of delinquent obligations of, and other disputes with, customers, suppliers or clients;
(j)
Investments permitted under Section 9.03;
(k)
so long as no Event of Default has occurred and is continuing or could reasonably be expected to result therefrom, Investments of cash
and Permitted Cash Equivalent Investments in Apyx Bulgaria; provided that (x) the aggregate amount of such Investments (including
payments in respect of intercompany Indebtedness or in connection with intercompany transfer pricing and cost-plus pricing arrangements)
made with respect to Apyx Bulgaria does not, at any time, exceed $1,000,000 in any calendar year, and (y) the amount of such Investments
in Apyx Bulgaria at any time outstanding does not exceed the amount necessary to fund the current monthly operating expenses of Apyx
Bulgaria;
(l)
so long as no Event of Default has occurred and is continuing or could reasonably be expected to result therefrom, Investments of cash
and Permitted Cash Equivalent Investments by Apyx China Holding in Apyx SY; provided that (x) the aggregate amount of such Investments
(including payments in respect of intercompany Indebtedness or in connection with intercompany transfer pricing and cost-plus pricing
arrangements) made with respect to Apyx SY does not, at any time, exceed $350,000 in any calendar year, and (y) the amount of such Investments
in Apyx SY at any time outstanding does not exceed the amount necessary to fund the current monthly operating expenses of Apyx SY (taking
into account its revenue from other sources and other investments in Apyx SY from its equityholders); and
(m)
Investments by any Obligor of cash and Permitted Cash Equivalent Investments in Apyx China Holding for the purposes of making the Investments
permitted pursuant to Section 9.05(l); provided that the aggregate amount of any such Investments does not, at any time,
exceed $350,000 in any calendar year.
9.06
Restricted Payments. The Borrower shall not, and shall not permit any of its Subsidiaries to, declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, other than the following (in each case, solely to the extent that no Event of Default
has occurred and is continuing, or could not reasonably be expected to result therefrom):
(a)
dividends with respect to the Borrower’s Equity Interests payable solely in shares of its Qualified Equity Interests;
(b)
the Borrower’s purchase, redemption, retirement, or other acquisition of its Equity Interests with the proceeds received from a
substantially concurrent issue of new shares of its Qualified Equity Interests;
(c)
dividends or other distributions paid by any Subsidiary Guarantor to any other Obligor (other than any Foreign Subsidiary); and
(d)
dividends or other distributions paid by any Subsidiary of an Obligor to an Obligor (other than any Foreign Subsidiary).
9.07
Payments of Indebtedness. The Borrower shall not, and shall not permit any of its Subsidiaries to, make any payments in respect of
any Indebtedness other than (i) payments of the Obligations, (ii) scheduled payments (and not accelerated, voluntary or other similar
contractually unscheduled payments) of other Permitted Indebtedness and (iii) repayment of intercompany Indebtedness permitted in reliance
upon Section 9.01(e).
9.08
Change in Fiscal Year. The Borrower shall not, and shall not permit any of its Subsidiaries to, change the last day of its fiscal
year from that in effect on the date hereof, except to change the fiscal year of a Subsidiary acquired in connection with an Acquisition
to conform its fiscal year to that of the Borrower.
9.09
Sales of Assets, Etc.. The Borrower shall not, and shall not permit any of its Subsidiaries to, sell, lease, license, transfer or
otherwise dispose of any of its property (including accounts receivable and Equity Interests of Subsidiaries), or forgive, release or
compromise any amount owed to such Obligor or Subsidiary, in each case, in one transaction or series of transactions (any thereof, an
“Asset Sale”), except for the following (provided that, in the case of any Asset Sale of the type described
in clause (b) or (d) below, such Asset Sale shall only be permitted to the extent that no Event of Default has occurred
and is continuing, or could not reasonably be expected to result therefrom):
(a)
sales of inventory in the ordinary course of its business on customary business terms;
(b)
the forgiveness, release or compromise of any amount owed to any other Obligor in the ordinary course of business;
(c)
Asset Sales that constitute outbound licenses permitted pursuant to Section 9.13(b);
(d)
transfers of property (other than Material Intellectual Property) by any Subsidiary Guarantor to any other Obligor (other than any Foreign
Subsidiary);
(e)
dispositions of any property that is obsolete or worn out or no longer used or useful in such Person’s business; and
(f)
in connection with any transaction permitted under Section 9.03 or 9.05.
9.10
Transactions with Affiliates. The Borrower shall not, and shall not permit any of its Subsidiaries to, sell, lease, license or otherwise
transfer any assets to, or purchase, lease, license or otherwise acquire any assets from, or otherwise engage in any other transactions
with, any of its Affiliates, except for the following:
(a)
transactions between or among Obligors (other than any Foreign Subsidiary);
(b)
customary compensation and indemnification of, and other employment arrangements with, directors, officers and employees of the Borrower
or any Subsidiary in the ordinary course of business; and
(c)
any other transaction of such Obligor or any of its Subsidiaries that is (i) on fair and reasonable terms that are no less favorable
(including with respect to the amount of cash or other consideration receivable or payable in connection therewith ) to such Obligor
or such Subsidiary, as applicable, than it could obtain in an arm’s-length transaction with a Person that is not an Affiliate of
such Obligor or such Subsidiary, and (ii) of the kind which would be entered into by a prudent Person in the position of such Obligor
or such Subsidiary, as applicable, with another Person that is not an Affiliate of such Obligor or such Subsidiary, as applicable.
9.11
Restrictive Agreements. The Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any Restrictive Agreement other than (i) restrictions and conditions imposed by Law or by the Loan Documents
and (ii) the Restrictive Agreements listed on Schedule 7.15, which Restrictive Agreements may not be amended or otherwise modified
without the consent of the Administrative Agent.
9.12
Modifications, Terminations, Etc. of Material Agreements and Organic Documents.
(a)
The Borrower shall not, and shall not permit any of its Subsidiaries to:
(i)
waive, amend, terminate, replace or otherwise modify any term or provision of any Organic Document, in any manner that would be materially
adverse to the interests of the Secured Parties or any of the Obligations; or
(ii)
(x) take or omit to take any action that results in the termination of any Material Agreement or (y) take any action that permits any
Material Agreement to be terminated by any counterparty thereto prior to its stated date of expiration (in each case, unless such terminated
Material Agreement is replaced with another agreement that, viewed as a whole, is on equal or better terms for the Borrower or such Subsidiary),
except to the extent such omission or action could not reasonably be expected to have or result in a Material Adverse Effect.
(b)
Without the Administrative Agent’s prior written consent, which consent may be withheld, delayed or conditioned in the sole determination
of the Administrative Agent, the Borrower will not, directly or indirectly, solicit, encourage, consider, propose, recommend, participate
in or otherwise agree or consent to any compromise, arrangement or reorganization of the type described in or contemplated by Article
EIGHTH of the Borrower Certificate of Incorporation.
(c)
In the event any creditor or stockholder of the Borrower proposes that the Borrower, directly or indirectly, enter into or participate
in any such compromise, arrangement or reorganization of the type described in or contemplated by Article EIGHTH of the Borrower Certificate
of Incorporation the Borrower shall promptly provide the Administrative Agent with written notice thereof (prepared in reasonable detail)
, but in any event within two (2) Business Days of receipt of such proposal. Not later than two (2) Business Days following receipt of
any such proposal the Borrower shall notify such creditor or stockholder, as the case may be, in writing (with a copy of such notice
delivered to the Administrative Agent), of the restrictions binding upon the Borrower pursuant to Section 9.12(b) above.
(d)
The Borrower shall take all commercially reasonable action, including arranging for (and expressly providing its affirmative recommendation
in support of) a vote of its stockholders, to amend the Borrower Certificate of Incorporation to delete Article EIGHTH therefrom in its
entirety, such vote to occur at the Borrower’s 2024 annual meeting (for the 2023 fiscal year) of stockholders, but in no event
later than December 31, 2024. Copies of all notices to stockholders in respect of such amendment shall be delivered simultaneously to
the Administrative Agent.
9.13
Inbound and Outbound Licenses.
(a)
Material Inbound Licenses. Set forth on Schedule 9.13(a) is a list of all Material Inbound Licenses entered into on or
prior to the Closing Date that are currently in effect and as to which the Borrower or any of its Subsidiaries is subject. After the
Closing Date neither the Borrower nor any of its Subsidiaries shall enter into any Material Inbound License unless (i) such license has
been entered into by the Borrower or one of its Subsidiaries, as the case may be, in the ordinary course of business on an arm’s-length
basis, on commercially reasonable terms with a non-Affiliated third party, and (ii) the Borrower has provided prior written notice to
the Administrative Agent of the material terms of such Material Inbound License with a description of its anticipated and projected impact
on the Borrower’s or such Subsidiary’s business or financial condition, as the case may be.
(b)
Material Outbound Licenses. The Borrower shall not, and shall not permit any of its Subsidiaries to, enter into or become or remain
bound by any outbound license, including any collaboration or development agreement, of Material Intellectual Property of the Borrower
or any of its Subsidiaries unless such outbound license: (i) has been entered into by the Borrower or one of its Subsidiaries, as the
case may be, on an arm’s-length basis with non-Affiliated third party, on commercially reasonable terms and in the ordinary course
of business, (ii) to the extent such Material Intellectual Property constitutes Collateral, does not prevent or impair the ability of
any Secured Party from fully exercising its remedial rights under any of the Loan Documents in the event of an Event of Default (including
a disposition or liquidation in connection with a foreclosure), (iii) is not perpetual and (iv) is not an Exclusive License.
9.14
Sales and Leasebacks. Except as disclosed on Schedule 9.14, the Borrower shall not, and shall not permit any of its Subsidiaries
to, become liable, directly or indirectly, with respect to any lease, whether an operating lease or a Capital Lease Obligation, of any
property (whether real, personal, or mixed), whether now owned or hereafter acquired, (i) which such Obligor or Subsidiary has sold or
transferred or is to sell or transfer to any other Person, and (ii) which such Obligor or Subsidiary intends to use for substantially
the same purposes as property which has been or is to be sold or transferred.
9.15
Hazardous Material. the Borrower shall not, and shall not permit any of its Subsidiaries to, use, generate, manufacture, install,
treat, release, store or dispose of any Hazardous Material, except in compliance with all applicable Environmental Laws or where the
failure to comply could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect.
9.16
Off-Label Promotion. The Borrower shall not, and shall not permit any of its Subsidiaries to, (i) make statements with respect to
any Products or Product Development and Commercialization Activities that the FDA could reasonably be expected to characterize as off-label
promotion, or (ii) directly or indirectly, assist, encourage or otherwise condone the making of statements by any Collaboration Partner
with respect to any Products or Product Development and Commercialization Activities that the FDA could reasonably be expected to characterize
as off-label promotion. To the extent compliance with the U.S. Federal Food, Drug, and Cosmetic Act, as amended from time to time (21
U.S.C. § 301 et seq.) is required in any agreement with a Collaboration Partner, the Borrower and its Subsidiaries shall exercise
their contractual rights to prohibit conduct or statements with respect to any Products or Product Development and Commercialization
Activities that the FDA could reasonably be expected to characterize as off-label promotion.
9.17
Accounting Changes. The Borrower shall not, and shall not permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required or permitted by GAAP.
9.18
Compliance with ERISA. No ERISA Affiliate shall cause or suffer to exist (i) any event that could reasonably be expected to result
in the imposition of a Lien with respect to any Title IV Plan or Multiemployer Plan or (ii) any other ERISA Event that could reasonably
be expected to, in the aggregate, have a Material Adverse Effect. No Obligor or Subsidiary thereof shall cause or suffer to exist any
event that could result in the imposition of a Lien with respect to any Benefit Plan.
9.19
Inconsistent Agreements. The Borrower shall not, and shall not permit any of its Subsidiaries to, enter into any agreement containing
any provision which would (i) be violated or breached by such Person hereunder or by the performance by such Person of any of its obligations
hereunder or under any other Loan Document, (ii) prohibit any such Person from granting to the Administrative Agent a Lien on any of
its assets or (iii) create or permit to exist or become effective any Lien or restriction on the ability of any Obligor to (x) pay dividends
or make other distributions to the Borrower, or pay any Indebtedness owed to the Borrower, (y) make loans or advances to the Borrower
or (z) transfer any of its assets or properties to the Borrower.
9.20
Sanctions; Anti-Corruption; Use of Proceeds. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or
indirectly, use the proceeds of the Loans, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture
partner or other Person, (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money,
or anything else of value, to any Person in violation of any applicable anti-corruption Law, or (ii) (A) to fund any activities or business
of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of
Sanctions, or (B) in any other manner that could reasonably be expected to result in a violation of Sanctions by any Person.
9.21
Passive Holding Company Status of Apyx China Holding. Apyx China Holding shall not engage in any operating or business activities;
provided that the following activities shall be permitted: (i) its ownership of the Equity Interests of Apyx SY and activities
incidental thereto, (ii) the maintenance of its legal existence (including the ability to incur fees, costs and expenses relating to
such maintenance), (iii) the performance of its Obligations under or in connection with the Loan Documents, (iv) receipt of Investments
permitted pursuant to Section 9.05(m), (v) making of Investments in Apyx SY to the extent permitted pursuant to Section 9.05(l),
(vi) participating in tax, accounting and other administrative matters as a member of the consolidated group that includes the Borrower
and Apyx China Holding, (vii) holding any cash incidental to any activities permitted under this Section 9.20, (viii) providing
indemnification to officers, managers and directors and (ix) obtaining a royalty-free license from Borrower related to the manufacture
and sale of certain products utilizing intellectual property of the Borrower, and sub-licensing such rights to Apyx SY. Notwithstanding
the foregoing, Apyx China Holding shall not (a) incur any Liens other than those in favor of the Administrative Agent for the benefit
of the Secured Parties or non-consensual Liens permitted by Section 9.02, (b) own any Equity Interests, other than those of Apyx
SY, (c) sell, transfer or otherwise dispose of any Equity Interests, or any of its rights or interests therein, of Apyx SY, or (d) incur,
assume or otherwise become liable with respect to any Indebtedness other than the Obligations.
9.22
Restrictions Applicable to Foreign Subsidiaries. Notwithstanding any other provision hereof to the contrary, the Borrower shall not,
and shall not permit any of its Subsidiaries to, do any of the following:
(a)
permit the aggregate amount of cash and Permitted Cash Equivalent Investments held by Foreign Subsidiaries to exceed $3,000,000 (or the
Equivalent Amount in other currencies) at any one time;
(b)
consummate any Asset Sale to or make any Investment in any Foreign Subsidiary other than Investments of cash and Permitted Cash Equivalent
Investments permitted to be made pursuant to Section 9.05(k) or Section 9.05(l), as applicable;
(c)
commingle any of its assets (including any Deposit Accounts, Securities Accounts, Commodities Accounts, lockboxes or other similar accounts,
cash or Permitted Cash Equivalent Investments) with the assets of any Foreign Subsidiary or (ii) permit any Foreign Subsidiary to commingle
any of its assets (including any Deposit Accounts, Securities Accounts, Commodities Accounts, lockboxes or other similar accounts, cash
or Permitted Cash Equivalent Investments) with the assets of any such other Person; or
(d)
permit any Foreign Subsidiary to own, or have an Exclusive License in respect of, any Material Intellectual Property.
SECTION
10
FINANCIAL COVENANTS
10.01
Minimum Liquidity. The Borrower shall at all times hold and maintain a minimum aggregate balance of three million dollars ($3,000,000)
in unrestricted cash-on-hand and Permitted Cash Equivalent Investments in one or more Controlled Accounts (Subject to Section 8.18)
maintained with one or more commercial banks or similar deposit-taking institutions in the U.S. that are free and clear of all Liens,
other than Liens granted under the Loan Documents in favor of the Administrative Agent for the benefit of the Secured Parties.
10.02
Minimum Advanced Energy Net Revenue. On each calculation date set forth below (each, a “Calculation Date”),
the Borrower and its Subsidiaries shall have received consolidated Advanced Energy Net Revenue for the period of twelve (12) consecutive
months ending on the last day of such Calculation Date, determined on the basis of the financial statements most recently delivered pursuant
to Section 8.01(c), in an aggregate amount not less than the corresponding amount set forth opposite such Calculation Date:
Calculation
Date |
|
TTM
Advanced Energy Net Revenue |
March
31, 2024 |
|
$35,000,000 |
June
30, 2024 |
|
$36,200,000 |
September
30, 2024 |
|
$38,900,000 |
December
31, 2024 |
|
$41,600,000 |
March
31, 2025 |
|
$43,900,000 |
June
30, 2025 |
|
$47,700,000 |
September
30, 2025 |
|
$51,800,000 |
December
31, 2025 |
|
$57,000,000 |
March
31, 2026 |
|
$59,400,000 |
June
30, 2026 |
|
$63,800,000 |
September
30, 2026 |
|
$66,300,000 |
December
31, 2026 |
|
$70,200,000 |
March
31, 2027 |
|
$73,100,000 |
June
30, 2027 |
|
$76,600,000 |
September
30, 2027 |
|
$81,500,000 |
December
31, 2027 |
|
$87,800,000 |
March
31, 2028 |
|
$90,600,000 |
June
30, 2028 |
|
$93,700,000 |
September
30, 2028 |
|
$96,800,000 |
SECTION
11
EVENTS OF DEFAULT
11.01
Events of Default. Each of the following events shall constitute an “Event of Default”:
(a)
Principal or Interest Payment Default. The Borrower shall fail to pay any principal of or interest on the Loans, when and as the
same shall become due and payable, whether at the due date thereof, at a date fixed for prepayment thereof or otherwise.
(b)
Other Payment Defaults. Any Obligor shall fail to pay any Obligation (other than an amount referred to in Section 11.01(a))
when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) Business Days.
(c)
Representations and Warranties. Any representation or warranty made or deemed made by or on behalf of any Obligor or any of its
Subsidiaries under or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof,
or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof, shall: (i) prove to have been incorrect when made or deemed made
to the extent that such representation or warranty contains any materiality or Material Adverse Effect qualifier; or (ii) prove to have
been incorrect in any material respect when made or deemed made to the extent that such representation or warranty does not otherwise
contain any materiality or Material Adverse Effect qualifier.
(d)
Certain Covenants. Any Obligor shall fail to observe or perform any covenant, condition or agreement contained in Sections
8.01, 8.02, 8.03 (with respect to the Borrower’s existence), 8.07, 8.08, 8.10, 8.11,
8.13, 8.16, 8.18, Section 9 or Section 10.
(e)
Other Covenants. Any Obligor shall fail to observe or perform any covenant, condition or agreement contained in this Agreement
(other than those specified in Section 11.01(a), (b) or (d)) or any other Loan Document, and, in the case of any
failure that is capable of cure, such failure shall continue unremedied for a period of thirty (30) or more days.
(f)
Payment Default on Other Indebtedness. Any Obligor or any of its Subsidiaries shall fail to make any payment (whether of principal
or interest and regardless of amount) in respect of any Material Indebtedness or other Indebtedness having an aggregate principal amount
in excess of $1,000,000, in any such case, when and as the same shall become due and payable after giving effect to any applicable grace
or cure period as originally provided by the terms of such Indebtedness.
(g)
Other Defaults on Other Indebtedness or any Material Agreement.
(i)
(i) Any material breach of, or “event of default” or similar event under, the documentation governing any Material Indebtedness
shall occur, (ii) any event or condition occurs (A) that results in any Material Indebtedness becoming due prior to its scheduled maturity
or (B) that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of such Material
Indebtedness or any trustee or agent on its or their behalf to cause such Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity, or (iii) there occurs under any Hedging Agreement an early
termination date (as defined in such Hedging Agreement) resulting from (x) any event of default under such Hedging Agreement as to which
the Borrower or any of its Subsidiaries is the defaulting party (as defined in such Hedging Agreement) or (y) any termination event (as
defined in such Hedging Agreement) under such Hedging Agreement as to which the Borrower or any Subsidiary is an affected party (as defined
in such Hedging Agreement) and, in either event, the termination value (if determined in accordance with the Hedging Agreement) or the
amount determined as the mark-to-market value (if the termination value has not been so determined) for such affected Hedging Agreement
that is owed by the Borrower or such Subsidiary as a result thereof is greater than $1,000,000; provided that this Section
11.01(g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Material Indebtedness so long as such Indebtedness is repaid when required under the documents related to such Material
Indebtedness.
(ii)
(x) Any material breach of, or “event of default” or similar event under any Material Agreement shall occur (after the expiration
of any applicable grace period contained therein) or (y) any Material Agreement is terminated by any counterparty thereto prior to the
scheduled expiration thereof.
(h)
Insolvency, Bankruptcy, Etc.
(i)
The Borrower and its Subsidiaries (taken together and on a consolidated basis) fail to be Solvent, or generally do not or become unable
to pay their respective debts or meet their respective liabilities as the same become due; or the Borrower or any of its Subsidiaries
admit in writing its inability to pay its debts generally, or declares any general moratorium on its indebtedness, or proposes a compromise
or arrangement or deed of company arrangement between it and any class of its creditors.
(ii)
The Borrower or any of its Subsidiaries makes an assignment of its property for the general benefit of its creditors.
(iii)
The Borrower or any of its Subsidiaries institutes any proceeding seeking to adjudicate it an insolvent, or seeking liquidation, dissolution,
winding-up, reorganization, compromise, arrangement, adjustment, protection, moratorium, relief, stay of proceedings of creditors generally
(or any class of creditors), or composition of it or its debts or any other relief, under any federal, provincial or foreign Law now
or hereafter in effect relating to bankruptcy, winding-up, insolvency, reorganization, receivership, plans of arrangement or relief or
protection of debtors or at common law or in equity, or files an answer admitting any material allegations of a petition filed against
it in any such proceeding.
(iv)
The Borrower or any of its Subsidiaries applies for the appointment of, or the taking of possession by, a receiver, interim receiver,
receiver/manager, sequestrator, conservator, custodian, administrator, trustee, liquidator, voluntary administrator, receiver and manager
or other similar official for it or any substantial part of its property.
(v)
The Borrower or any of its Subsidiaries takes any action, corporate or otherwise, for the purpose of affecting any of the actions described
in this Section 11.01(h).
(vi)
Any petition is filed, application made or other proceeding instituted against or in respect of the Borrower or any of its Subsidiaries:
(A)
seeking to adjudicate it as insolvent;
(B)
seeking a receiving order against it;
(C)
seeking liquidation, dissolution, winding-up, reorganization, compromise, arrangement, adjustment, protection, moratorium, relief, stay
of proceedings of creditors generally (or any class of creditors), deed of company arrangement or composition of it or its debts or any
other relief under any federal, provincial or foreign Law now or hereafter in effect relating to bankruptcy, winding-up, insolvency,
reorganization, receivership, plans of arrangement or relief or protection of debtors or at common law or in equity; or
(D)
seeking the entry of an order for relief or the appointment of, or the taking of possession by, a receiver, interim receiver, receiver/manager,
sequestrator, conservator, custodian, administrator, trustee, liquidator, voluntary administrator, receiver and manager or other similar
official for it or any substantial part of its property, and such petition, application or proceeding referred to in this Section
11.01(h)(vi) continues undismissed, or unstayed and in effect, for a period of sixty (60) calendar days after the institution thereof;
provided that if an order, decree or judgment is granted or entered (whether or not entered or subject to appeal) against the
Borrower or such Subsidiary thereunder in the interim, such grace period will cease to apply.
(vii)
Any other event occurs which, under the Laws of any applicable jurisdiction, has an effect equivalent to any of the events referred to
in section 11.01(h) above.
(i)
Judgments. One or more judgments for the payment of money which, together with all other outstanding final judgments for the payment
of money (not covered by insurance and as to which the insurer has been notified of such judgment and has not denied or failed to acknowledge
coverage), in an aggregate amount in excess of $1,000,000 (or the Equivalent Amount in other currencies) shall be rendered against any
Obligor or any of its Subsidiaries or any combination thereof and the same shall remain undischarged for a period of sixty (60) calendar
days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of any Obligor to enforce any such judgment.
(j)
ERISA and Pension Plans. (i) An ERISA Event shall have occurred that, in the opinion of the Administrative Agent, when taken together
with all other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries
in an aggregate amount exceeding (i) $500,000 in the aggregate since the Closing Date.
(k)
Change of Control. A Change of Control shall have occurred.
(l)
Material Adverse Change, Etc. A Material Adverse Change or Material Regulatory Event shall have occurred.
(m)
Impairment of Security, Etc. (i) Any Lien created by any of the Security Documents shall at any time not constitute a valid and
perfected Lien on the applicable Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, free and clear
of all other Liens (other than Permitted Liens), (ii) except for expiration in accordance with its terms, any of the Security Documents
or any Guarantee of any of the Obligations (including that contained in Section 13) shall cease to be in full force and effect,
or (iii) any Obligor shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature, priority or enforceability
of any such Lien, Loan Document or Guarantee.
(n)
Failure to be Registered. The outstanding shares of common stock of the Borrower at any time fail to be registered with the United
States Securities and Exchange Commission or such common stock fails to remain listed for trading on the Nasdaq Stock Market, in either
case, which failure continues unremedied for a period of thirty (30) calendar days.
11.02
Remedies. Upon the occurrence of any Event of Default, then, and in every such event (other than an Event of Default described in
Section 11.01(h)), and at any time thereafter, the Administrative Agent may, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately,
and (ii) declare the Loans then outstanding to be immediately due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared
to be due and payable, together with accrued interest thereon and all fees and other Obligations, shall become due and payable immediately
(in the case of the Loans, at the Redemption Price therefor), without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by each Obligor; and in case of an Event of Default described in Section 11.01(h), the Commitment shall
automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other
Obligations, shall automatically become due and payable immediately (in the case of the Loans, at the Redemption Price therefor), without
presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Obligor. Unless expressly provided otherwise
herein, upon the occurrence thereof Events of Default shall remain outstanding until waived or otherwise cured in writing by the Administrative
Agent.
11.03
Additional Remedies. Upon the occurrence of an Event of Default, if the Borrower or any of its Subsidiaries shall be in uncured default
under a Material Agreement, the Administrative Agent or the Lenders shall have the right (but not the obligation) to cause the default
or defaults under such Material Agreement to be remedied (including without limitation by paying any unpaid amount thereunder) and otherwise
exercise any and all rights of the Borrower or such Subsidiary, as the case may be, thereunder, as may be necessary to prevent or cure
any default. Without limiting the foregoing, upon any such default, the Borrower and each of its Subsidiaries shall promptly execute,
acknowledge and deliver to the Administrative Agent such instruments as may reasonably be required of the Borrower or such Subsidiary
to permit the Administrative Agent and the Lenders to cure any default under the applicable Material Agreement or permit the Administrative
Agent and the Lenders to take such other action required to enable the Administrative Agent and the Lenders to cure or remedy the matter
in default and preserve the interests of the Administrative Agent or Lenders. Any amounts paid by the Administrative Agent or Lenders
pursuant to this Section 11.03 shall be payable on demand by the Obligors, shall accrue interest at the Default Rate if not paid
on demand, and shall constitute “Obligations.”
SECTION
12
THE ADMINISTRATIVE AGENT
12.01
Appointment and Duties. Subject in all cases to clause (c) below:
(a)
Appointment of Administrative Agent. Each of the Lenders hereby irrevocably appoints Perceptive Credit Holdings IV, LP (together
with any successor to the Administrative Agent pursuant to Section 12.09) as the administrative agent hereunder and authorizes
the Administrative Agent to (i) execute and deliver the Loan Documents and accept delivery thereof on its behalf from the Borrower or
any of its Subsidiaries, (ii) take such action on its behalf and to exercise all rights, powers and remedies and perform the duties as
are expressly delegated to the Administrative Agent under such Loan Documents and (iii) exercise such powers as are reasonably incidental
thereto.
(b)
Duties as Collateral and Disbursing Agent. Without limiting the generality of Section 12.01(a), the Administrative Agent
shall have the sole and exclusive right and authority (to the exclusion of the Lenders), and is hereby authorized by each Lender, to
(i) act as the disbursing and collecting agent for the Lenders with respect to all payments and collections arising in connection with
the Loan Documents (including in any proceeding described in Section 11.01(h) or any other bankruptcy, insolvency or similar proceeding);
provided that (x) the Administrative Agent shall only be required to act in such agency capacity if it has notified the Borrower
and the Lenders in writing that it has elected to do so, and (y) so long as the Administrative Agent has not delivered any such election
notice it shall not be deemed to be acting as a disbursing and collecting agent for any other Lender or Secured Party and no Person shall
be authorized to make any payment to the Administrative Agent for such purpose, (ii) file and prove claims and file other documents necessary
or desirable to allow the claims of the Secured Parties with respect to any Obligation in any proceeding described in Section 11.01(h)
or any other bankruptcy, insolvency or similar proceeding (but not to vote, consent or otherwise act on behalf of such Secured Party),
(iii) act as collateral agent for each Secured Party for purposes of the perfection of all Liens created by such agreements and all other
purposes stated therein, (iv) manage, supervise and otherwise deal with the Collateral, (v) take such other action as is necessary or
desirable to maintain the perfection and priority of the Liens created or purported to be created by the Loan Documents, (vi) except
as may be otherwise specified in any Loan Document, exercise all remedies given to the Administrative Agent and the other Secured Parties
with respect to the Collateral, whether under the Loan Documents, applicable Laws or otherwise and (vii) execute any amendment, consent
or waiver under the Loan Documents on behalf of any Lender that has consented in writing to such amendment, consent or waiver; provided
that the Administrative Agent hereby appoints, authorizes and directs each Lender to act as collateral sub-agent for the Administrative
Agent and the Lenders for purposes of the perfection of all Liens with respect to the Collateral, including any deposit account maintained
by any Obligor with, and cash and Permitted Cash Equivalent Investments held by, such Lender, and may further authorize and direct the
Lenders to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateral
subject thereto to the Administrative Agent, and each Lender hereby agrees to take such further actions to the extent, and only to the
extent, so authorized and directed.
(c)
Limited Duties. The Lenders and the Obligors hereby each acknowledge and agree that the Administrative Agent (i) has undertaken
its role hereunder purely as an accommodation to the parties hereto and the Transactions and (ii) subject only to the notice provisions
set forth in Section 12.09, may resign from such role at any time for any reason or no reason whatsoever. Without limiting the
foregoing, the parties hereto further acknowledge and agree that under the Loan Documents, the Administrative Agent (i) is acting solely
on behalf of the Lenders (except to the limited extent provided in Section 12.11), with duties that are entirely administrative
in nature and do not (and are not intended to) create any fiduciary obligations, notwithstanding the use of the defined term “the
Administrative Agent”, the terms “agent”, “administrative agent” and “collateral agent” and
similar terms in any Loan Document to refer to the Administrative Agent, which terms are used for title purposes only, (ii) is not assuming
any obligation under any Loan Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for
any Lender or any other Secured Party and (iii) shall have no implied functions, responsibilities, duties, obligations or other liabilities
under any Loan Document (fiduciary or otherwise), and each Lender hereby waives and agrees not to assert any claim against the Administrative
Agent based on the roles, duties and legal relationships expressly disclaimed in this clause (c).
12.02
Binding Effect. Each Lender agrees that (i) any action taken by the Administrative Agent or the Majority Lenders (or, if expressly
required hereby, a greater proportion of the Lenders) in accordance with the provisions of the Loan Documents, (ii) any action taken
by the Administrative Agent in reliance upon the instructions of the Majority Lenders (or, where so required, such greater proportion)
and (iii) the exercise by the Administrative Agent or the Majority Lenders (or, where so required, such greater proportion) of the powers
set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon
all of the Secured Parties.
12.03
Use of Discretion.
(a)
No Action without Instructions. The Administrative Agent shall not be required to exercise any discretion or take, or to omit
to take, any action, including with respect to enforcement or collection, except (subject to clause (b) below) any action it is
required to take or omit to take (i) under any Loan Document or (ii) pursuant to instructions from the Majority Lenders (or, where expressly
required by the terms of this Agreement, a greater proportion of the Lenders).
(b)
Right Not to Follow Certain Instructions. Notwithstanding Section 12.03(a) or any other term or provision of this Section
12, the Administrative Agent shall not be required to take, or to omit to take, any action (i) unless, upon demand, the Administrative
Agent receives an indemnification satisfactory to it from the Lenders (or, to the extent applicable and acceptable to the Administrative
Agent, any other Secured Party) against all liabilities that, by reason of such action or omission, may be imposed on, incurred by or
asserted against the Administrative Agent or any Related Parties thereof or (ii) that is, in the opinion of the Administrative Agent,
in its sole and absolute discretion, contrary to any Loan Document, applicable Law or the best interests of the Administrative Agent
or any of its Affiliates or Related Parties.
12.04
Delegation of Rights and Duties. The Administrative Agent may, upon any term or condition it specifies, delegate or exercise any
of its rights, powers and remedies under, and delegate or perform any of its duties or any other action with respect to, any Loan Document
by or through any trustee, co-agent, employee, attorney-in-fact and any other Person (including any Secured Party). Any such Person shall
benefit from this Section 12 to the extent provided by the Administrative Agent.
12.05
Reliance and Liability.
(c)
The Administrative Agent may, without incurring any liability hereunder, (i) consult with any of its Related Parties and, whether or
not selected by it, any other advisors, accountants and other experts (including advisors to, and accountants and experts engaged by,
any Obligor) and (ii) rely and act upon any document and information and any telephone message or conversation, in each case believed
by it to be genuine and transmitted, signed or otherwise authenticated by the appropriate parties.
(d)
Neither the Administrative Agent nor any of its Related Parties shall be liable for any action taken or omitted to be taken by any of
them under or in connection with any Loan Document, and each Lender and the Borrower hereby waives and shall not assert (and the Borrower
shall cause each other Obligor to waive and agree not to assert) any right, claim or cause of action based thereon, except to the extent
of liabilities resulting primarily from the fraudulent conduct or behavior or gross negligence or willful misconduct of the Administrative
Agent or, as the case may be, such Related Party (each as determined in a final, non-appealable judgment or order by a court of competent
jurisdiction) in connection with the duties expressly set forth herein. Without limiting the foregoing, the Administrative Agent:
(i)
shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Majority
Lenders or for the actions or omissions of any of their Related Parties selected with reasonable care (other than employees, officers
and directors of the Administrative Agent, when acting on behalf of the Administrative Agent);
(ii)
shall not be responsible to any Secured Party for the due execution, legality, validity, enforceability, effectiveness, genuineness,
sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection
with, any Loan Document;
(iii)
makes no warranty or representation, and shall not be responsible, to any Secured Party for any statement, document, information, representation
or warranty made or furnished by or on behalf of any Related Party, in or in connection with any Loan Document or any transaction contemplated
therein, whether or not transmitted by the Administrative Agent, including as to completeness, accuracy, scope or adequacy thereof, or
for the scope, nature or results of any due diligence performed by the Administrative Agent in connection with the Loan Documents; and
(iv)
shall not have any duty to ascertain or to inquire as to the performance or observance of any provision of any Loan Document, whether
any condition set forth in any Loan Document is satisfied or waived, as to the financial condition of any Obligor or as to the existence
or continuation or possible occurrence or continuation of any Default or Event of Default and shall not be deemed to have notice or knowledge
of such occurrence or continuation unless it has received a notice from the Borrower or any Lender describing such Default or Event of
Default clearly labeled “notice of default” (in which case the Administrative Agent shall promptly give notice of such receipt
to all Lenders);
and,
for each of the items set forth in clauses (i) through (iv) above, each Lender and the Borrower hereby waives and agrees not to assert
(and the Borrower shall cause each other Obligor to waive and agree not to assert) any right, claim or cause of action it might have
against the Administrative Agent based thereon.
12.06
Agent Individually. The Administrative Agent and its Affiliates may make loans and other extensions of credit to, acquire stock and
stock equivalents of, engage in any kind of business with, any Obligor or Affiliate thereof as though it were not acting as the Administrative
Agent and may receive separate fees and other payments therefor. To the extent the Administrative Agent or any of its Affiliates makes
any Loan or otherwise becomes a Lender hereunder, it shall have and may exercise the same rights and powers hereunder and shall be subject
to the same obligations and liabilities as any other Lender and the terms “Lender”, “Majority Lender”, and any
similar terms shall, except where otherwise expressly provided in any Loan Document, include, without limitation, the Administrative
Agent or such Affiliate, as the case may be, in its individual capacity as Lender or as one of the Majority Lenders, respectively.
12.07
Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, any
Lender or any of their Related Parties or upon any document solely or in part because such document was transmitted by the Administrative
Agent or any of its Related Parties, conducted its own independent investigation of the financial condition and affairs of each Obligor
and has made and continues to make its own credit decisions in connection with entering into, and taking or not taking any action under,
any Loan Document or with respect to any Transaction contemplated in any Loan Document, in each case based on such documents and information
as it shall deem appropriate.
12.08
Expenses; Indemnities.
(e)
Each Lender agrees to reimburse the Administrative Agent and each of its Related Parties (to the extent not reimbursed by any Obligor)
promptly upon demand for such Lender’s Proportionate Share of any costs and expenses (including fees, charges and disbursements
of financial, legal and other advisors and Other Taxes paid in the name of, or on behalf of, any Obligor) that may be incurred by the
Administrative Agent or any of its Related Parties in connection with the preparation, syndication, execution, delivery, administration,
modification, consent, waiver or enforcement (whether through negotiations, through any work-out, bankruptcy, restructuring or other
legal or other proceeding or otherwise) of, or legal advice in respect of its rights or responsibilities under, any Loan Document.
(f)
Each Lender further agrees to indemnify the Administrative Agent and each of its Related Parties (to the extent not reimbursed by any
Obligor), from and against such Lender’s aggregate Proportionate Share of the liabilities (including Taxes, interests and penalties
imposed for not properly withholding or backup withholding on payments made to on or for the account of any Lender) that may be imposed
on, incurred by or asserted against the Administrative Agent or any of its Related Parties in any matter relating to or arising out of,
in connection with or as a result of any Loan Document or any other act, event or transaction related, contemplated in or attendant to
any such Loan Document, or, in each case, any action taken or omitted to be taken by the Administrative Agent or any of its Related Parties
under or with respect to any of the foregoing; provided that no Lender shall be liable to the Administrative Agent or any of its
Related Parties to the extent such liability has resulted primarily from the gross negligence or willful misconduct of the Administrative
Agent or, as the case may be, such Related Party, as determined by a court of competent jurisdiction in a final non-appealable judgment
or order.
12.09
Resignation of the Administrative Agent.
(g)
At any time upon not less than five (5) Business Days prior written notice, the Administrative Agent may resign as the “Administrative
Agent” hereunder, in whole or in part (in the sole and absolute discretion of the Administrative Agent), effective on the date
set forth in such notice, which effective date shall not be less than five (5) Business Days following delivery of such notice. If the
Administrative Agent delivers any such notice, the Majority Lenders shall have the right to appoint a successor to the Administrative
Agent reasonably satisfactory to the Borrower; provided that if a successor to the Administrative Agent has not been appointed
on or before the effectiveness of the resignation of the resigning Administrative Agent, then the resigning Administrative Agent may,
on behalf of the Lenders, appoint any Person reasonably chosen by it as the successor to the Administrative Agent.
(h)
Effective immediately upon its resignation, (i) the resigning Administrative Agent shall be discharged from its duties and obligations
under the Loan Documents to the extent set forth in the applicable resignation notice, (ii) the Lenders shall assume and perform all
of the duties of the Administrative Agent until a successor to the Administrative Agent shall have accepted a valid appointment hereunder,
(iii) the resigning Administrative Agent and its Related Parties shall no longer have the benefit of any provision of any Loan Document
other than with respect to (x) any actions taken or omitted to be taken while such resigning Administrative Agent was, or because the
Administrative Agent had been, validly acting as the Administrative Agent under the Loan Documents or (y) any continuing duties such
resigning Administrative Agent continues to perform, and (iv) subject to its rights under Section 12.04, the resigning Administrative
Agent shall take such action as may be reasonably necessary to assign to the successor Administrative Agent its rights as the Administrative
Agent under the Loan Documents. Effective immediately upon its acceptance of a valid appointment as the Administrative Agent, a successor
Administrative Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the resigning Administrative
Agent under the Loan Documents.
12.10
Release of Collateral or Guarantors. Each Lender hereby consents to the release and hereby directs the Administrative Agent to release
(or, in the case of Section 12.10(b)(ii), release or subordinate) the following:
(i)
any Subsidiary of the Borrower from its guaranty of any Obligation of any Obligor if all of the Equity Interests in such Subsidiary owned
by any Obligor or any of its Subsidiaries are disposed of in an Asset Sale permitted under the Loan Documents (including pursuant to
a waiver or consent), to the extent that, after giving effect to such Asset Sale, such Subsidiary would not be required to guaranty any
Obligations pursuant to Section 8.11(a); and
(j)
any Lien held by the Administrative Agent for the benefit of the Secured Parties against (i) any Collateral that is disposed of by an
Obligor in an Asset Sale permitted by the Loan Documents (including pursuant to a valid waiver or consent) and (ii) all of the Collateral
and all Obligors upon (w) termination of the Commitments, (x) payment and satisfaction in full of all Loans and all other Obligations
(other than inchoate indemnification and expense reimbursement obligations for which no Claim has been made) that the Administrative
Agent has been notified in writing are then due and payable, (y) deposit of cash collateral with respect to all contingent Obligations
(other than inchoate indemnification and expense reimbursement obligations for which no Claim has been made), in amounts and on terms
and conditions and with parties satisfactory to the Administrative Agent and each Indemnified Party that is owed such Obligations, and
(z) to the extent requested by the Administrative Agent, receipt by the Secured Parties of liability releases from the Obligors, each
in form and substance acceptable to the Administrative Agent.
Each
Lender hereby directs the Administrative Agent, and the Administrative Agent hereby agrees, upon receipt of reasonable advance notice
from the Borrower, to execute and deliver or file such documents and to perform other actions reasonably necessary to release the Guarantees
and Liens when and as directed in this Section 12.10.
12.11
Additional Secured Parties. The benefit of the provisions of the Loan Documents directly relating to the Collateral or any Lien granted
thereunder shall extend to and be available to any Secured Party that is not a Lender so long as, by accepting such benefits, such Secured
Party agrees, as among the Administrative Agent and all other Secured Parties, that such Secured Party is bound by (and, if requested
by the Administrative Agent, shall confirm such agreement in a writing in form and substance acceptable to the Administrative Agent)
this Section 12 and the decisions and actions of the Administrative Agent and the Majority Lenders (or, where expressly required
by the terms of this Agreement, a greater proportion of the Lenders) to the same extent a Lender is bound; provided that, notwithstanding
the foregoing, (i) such Secured Party shall be bound by Section 12.08 only to the extent of liabilities, costs and expenses with
respect to or otherwise relating to the Collateral held for the benefit of such Secured Party, in which case the obligations of such
Secured Party thereunder shall not be limited by any concept of Proportionate Share or similar concept, (ii) each of the Administrative
Agent and each Lender shall be entitled to act in its sole discretion, without regard to the interest of such Secured Party, regardless
of whether any Obligation to such Secured Party thereafter remains outstanding, is deprived of the benefit of the Collateral, becomes
unsecured or is otherwise affected or put in jeopardy thereby, and without any duty or liability to such Secured Party or any such Obligation
and (iii) such Secured Party shall not have any right to be notified of, consent to, direct, require or be heard with respect to, any
action taken or omitted in respect of the Collateral or under any Loan Document.
SECTION
13
GUARANTEE
13.01
The Guarantee. The Subsidiary Guarantors hereby jointly and severally Guarantee to the Secured Parties the prompt payment in full
when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest on the Loans, all fees and other
amounts and Obligations from time to time owing to the Secured Parties by the Borrower under this Agreement or under any other Loan Document
and by any other Obligor under any of the Loan Documents, in each case strictly in accordance with the terms hereof and thereof (such
obligations being herein collectively called the “Guaranteed Obligations”). The Subsidiary Guarantors hereby
further jointly and severally agree that if the Borrower or any other Obligor shall fail to pay in full when due (whether at stated maturity,
by acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same, without any demand
or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such
extension or renewal.
13.02
Obligations Unconditional. The obligations of the Subsidiary Guarantors under Section 13.01 are absolute and unconditional,
joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the Borrower
or any other Obligor under this Agreement or any other agreement or instrument referred to herein, or any substitution, release or exchange
of any other Guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by Law, irrespective
of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 13.02 that the obligations of the Subsidiary Guarantors hereunder shall be absolute and unconditional,
joint and several, under any and all circumstances. Without limiting the generality of the foregoing, it is agreed that the occurrence
of any one or more of the following shall not alter or impair the liability of the Subsidiary Guarantors hereunder, which shall remain
absolute and unconditional as described above:
(a)
at any time or from time to time, without notice to the Subsidiary Guarantors, the time for any performance of or compliance with any
of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;
(b)
any of the acts mentioned in any of the provisions of this Agreement or any other agreement or instrument referred to herein shall be
done or omitted;
(c)
the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented
or amended in any respect, or any right under this Agreement or any other Loan Document, agreement or instrument referred to herein shall
be waived or any other Guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole
or in part or otherwise dealt with; or
(d)
any lien or security interest granted to, or in favor of, the Secured Parties as security for any of the Guaranteed Obligations shall
fail to be perfected.
The
Subsidiary Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement
that any Secured Party exhaust any right, power or remedy or proceed against the Borrower or any other Subsidiary Guarantor under this
Agreement or any other agreement or instrument referred to herein, or against any other Person under any other Guarantee of, or security
for, any of the Guaranteed Obligations.
13.03
Reinstatement. The obligations of the Subsidiary Guarantors under this Section 13 shall be automatically reinstated if and
to the extent that for any reason any payment by or on behalf of the Borrower in respect of the Guaranteed Obligations is rescinded or
must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Subsidiary Guarantors jointly and severally agree that they will indemnify the Secured Parties on
demand for all reasonable costs and expenses (including fees of counsel) incurred by such Persons in connection with such rescission
or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted
a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar Law.
13.04
Subrogation. The Subsidiary Guarantors hereby jointly and severally agree that, until the payment and satisfaction in full of all
Guaranteed Obligations (other than Warrant Obligations) and the expiration and termination of the Commitments, they shall not exercise
any right or remedy arising by reason of any performance by them of their Guarantee in Section 13.01, whether by subrogation or
otherwise, against the Borrower or any other guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.
13.05
Remedies. The Subsidiary Guarantors jointly and severally agree that, as between the Subsidiary Guarantors, on one hand, and the
Secured Parties, on the other hand, the obligations of the Borrower under this Agreement and under the other Loan Documents may be declared
to be forthwith due and payable as provided in Section 11 (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 11) for purposes of Section 13.01 notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower and that, in the
event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether
or not due and payable by the Borrower) shall forthwith become due and payable by the Subsidiary Guarantors for purposes of Section
13.01.
13.06
Instrument for the Payment of Money. Each Subsidiary Guarantor hereby acknowledges that the Guarantee in this Section 13 constitutes
an instrument for the payment of money, and consents and agrees that the Secured Parties, at their sole option, in the event of a dispute
by such Subsidiary Guarantor in the payment of any moneys due hereunder, shall have the right to proceed by motion for summary judgment
in lieu of complaint pursuant to N.Y. Civ. Prac. L&R § 3213.
13.07
Continuing Guarantee. The Guarantee in this Section 13 is a continuing Guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
13.08
General Limitation on Guarantee Obligations. In any action or proceeding involving any provincial, territorial or state corporate
Law, or any state or federal bankruptcy, insolvency, reorganization or other Law affecting the rights of creditors generally, if the
obligations of any Subsidiary Guarantor under Section 13.01 would otherwise be held or determined to be void, invalid or unenforceable,
or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 13.01, then, notwithstanding
any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Subsidiary Guarantor,
the Administrative Agent, any Lender or any other Person, be automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.
SECTION
14
MISCELLANEOUS
14.01
No Waiver. No failure on the part of the Administrative Agent or any Lender to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power or privilege under any Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege under any Loan Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by Law.
14.02
Notices. All notices, requests, instructions, directions and other communications provided for herein (including any modifications
of, or waivers, requests or consents under, this Agreement) or in the other Loan Documents shall be given or made in writing (including
by telecopy or email) delivered, if to the Borrower, another Obligor, the Administrative Agent or any Lender, to its address specified
on the signature pages hereto or its Guarantee Assumption Agreement, as the case may be, or at such other address as shall be designated
by such party in a written notice to the other parties. Except as otherwise provided in this Agreement, all such communications shall
be deemed to have been duly given upon receipt of a legible copy thereof, in each case given or addressed as aforesaid. All such communications
provided for herein by telecopy shall be confirmed in writing promptly after the delivery of such communication (it being understood
that non-receipt of written confirmation of such communication shall not invalidate such communication).
14.03
Expenses, Indemnification, Etc..
(a)
Expenses. Each Obligor, jointly and severally, agrees to pay or reimburse (i) the Administrative Agent and the Lenders for all
of their reasonable and documented out of pocket costs and expenses (including the reasonable fees, costs and expenses of Morrison &
Foerster LLP, Chinese legal counsel and Bulgarian legal counsel, each acting as special counsel to the Administrative Agent and the Initial
Lender), in connection with (x) the negotiation, preparation, execution and delivery of this Agreement and the other Loan Documents and
the making of the Loans (exclusive of post-closing costs), and the Administrative Agent and the Lenders agree to apply the Expense Deposit
to such costs and expenses, (y) post-closing costs (including, without limitation, costs and expenses associated with the maintenance
and preservation of Liens and related rights in respect of the Collateral) and (z) the negotiation or preparation of any modification,
supplement or waiver of any of the terms of this Agreement or any of the other Loan Documents (whether or not consummated) and (ii) the
Administrative Agent and the Lenders for all of their reasonable and documented out of pocket costs and expenses (including the fees
and expenses of outside legal counsel) in connection with any enforcement or collection proceedings resulting from the occurrence of
an Event of Default.
(b)
Exculpation, Indemnification, etc.
(i)
In no event shall the Administrative Agent, any Lender, any successor, transferee or assignee of the Administrative Agent or any Lender,
or any of their respective Affiliates, directors, officers, employees, attorneys, agents, advisors or controlling parties (each, an “Exculpated
Party”) have any obligation or responsibility for (and the Obligors jointly and severally waive any claims they may have
in respect of) any Loss, on any theory of liability, for consequential, indirect, special or punitive damages arising out of or otherwise
relating to this Agreement or any of the other Loan Documents or any of the Transactions or the actual or proposed use of the proceeds
of the Loans; provided that nothing in this clause (i) shall relieve any Obligor of any obligation such Obligor may have
to indemnify an Indemnified Party, as provided in clause (ii) below, against any special, indirect, consequential or punitive
damages asserted against such Indemnified Party by a third party. Each Obligor agrees, to the fullest extent permitted by applicable
Law, that it will not assert, directly or indirectly, any Claim against any Exculpated Party with respect to any of the foregoing.
(ii)
Each Obligor, jointly and severally, hereby indemnifies the Administrative Agent, the Lenders, and their respective successors, transferees
or assigns and their Affiliates, directors, officers, employees, attorneys, agents, advisors and controlling parties (each, an “Indemnified
Party”) from and against, and agrees to hold them harmless against, any and all Claims and Losses of any kind (including
reasonable fees and disbursements of counsel), joint or several, that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or relating to any investigation, litigation or proceeding or the preparation
of any defense with respect thereto arising out of or in connection with or relating to this Agreement or any of the other Loan Documents
or the Transactions or any use made or proposed to be made with the proceeds of the Loans, whether or not such investigation, litigation
or proceeding is brought by the any Obligor, any of its Subsidiaries, any of its shareholders or creditors, an Indemnified Party or any
other Person, or an Indemnified Party is otherwise a party thereto, and whether or not any of the conditions precedent set forth in Section
6 are satisfied or the other transactions contemplated by this Agreement are consummated, except to the extent such Claim or Loss
is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s
gross negligence or willful misconduct. No Obligor shall assert any claim against any Indemnified Party, on any theory of liability,
for consequential, indirect, special or punitive damages arising out of or otherwise relating to this Agreement or any of the other Loan
Documents or any of the Transactions or the actual or proposed use of the proceeds of the Loans.
14.04
Amendments, Etc.. Except as otherwise expressly provided in this Agreement, any provision of this Agreement and any other Loan Document
may be modified or supplemented only by an instrument in writing signed by the Borrower, the Administrative Agent and the Majority Lenders;
provided that:
(k)
any such modification or supplement that is disproportionately adverse to any Lender as compared to other Lenders or subjects any Lender
to any additional obligation shall not be effective without the consent of such affected Lender;
(l)
the consent of all of the Lenders directly affected thereby shall be required to:
(i)
amend, modify, discharge, terminate or waive any of the terms of this Agreement or any other Loan Document if such amendment, modification,
discharge, termination or waiver would increase the amount of the Loans or any Commitment of any Lender, reduce the fees payable to any
Lender hereunder, reduce interest rates or other amounts payable with respect to the Loans held by any Lender, extend any date fixed
for payment of principal, interest or other amounts payable relating to the Loans held by any Lender or extend the repayment dates of
the Loans held by any Lender;
(ii)
amend, modify, discharge, terminate or waive any Security Document if the effect is to release a material part of the Collateral subject
thereto other than pursuant to the terms hereof or thereof; or
(iii)
amend this Section 14.04 or the definition of “Majority Lenders”.
(m)
if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical nature,
in each case, in any provision of the Loan Documents, then the Administrative Agent and the Borrower shall be permitted to amend such
provision, and, in each case, such amendment shall become effective without any further action or consent of any other party to any Loan
Document if the same is not objected to in writing by the Majority Lenders to the Administrative Agent within ten (10) Business Days
following receipt of notice thereof.
14.05
Successors and Assigns.
(a)
General. The provisions of this Agreement and the other Loan Documents shall be binding upon and shall inure to the benefit of
the parties hereto or thereto and their respective successors and assigns permitted hereby or thereby, except that no Obligor may assign
or otherwise transfer any of its rights or obligations hereunder or under any of the other Loan Documents without the prior written consent
of the Administrative Agent. Any Lender may assign or otherwise transfer any of its rights or obligations hereunder or under any of the
other Loan Documents (i) to an assignee in accordance with the provisions of Section 14.05(b), (ii) by way of participation in
accordance with the provisions of Section 14.05(e) or (iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 14.05(f). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section
14.05(e) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b)
Assignments by Lender. Any Lender may at any time assign to one or more Eligible Transferees (or, if an Event of Default has occurred
and is continuing, to any Person) all or a portion of its rights and obligations under this Agreement (including all or a portion of
the Commitment and the Loans at the time owing to it) and the other Loan Documents; provided that (i) no such assignment shall
be made to any Obligor, an Affiliate of any Obligor, or any employees or directors of any Obligor at any time and (ii) no such assignment
shall be made without the prior written consent of the Administrative Agent. Subject to the recording thereof by the Lender pursuant
to Section 14.05(d), from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall
be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations
of the Lender under this Agreement and the other Loan Documents, and correspondingly the assigning Lender shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment
and Assumption covering all of the Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party
hereto) and the other Loan Documents but shall continue to be entitled to the benefits of Section 5 and Section 14.03.
Any assignment or transfer by the Lender of rights or obligations under this Agreement that does not comply with this Section 14.05(b)
shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance
with Section 14.05(e).
(c)
Amendments to Loan Documents. Each of the Administrative Agent, the Lender, the Borrower and its Subsidiaries agrees to enter
into such amendments to the Loan Documents, and such additional Security Documents and other instruments and agreements, in each case
in form and substance reasonably acceptable to the Administrative Agent, the Lender, the Borrower and such Subsidiaries, as shall reasonably
be necessary to implement and give effect to any assignment made under this Section 14.05.
(d)
Register. The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain at
one of its offices a register for the recordation of the name and address of any assignee of the Lender and the Commitment and outstanding
principal amount of the Loans owing thereto (the “Register”). The entries in the Register shall be conclusive,
absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as the “Lender” hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(e)
Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower, sell participations to any Person
(other than a natural person or any Obligor or any of its Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of the Lender’s rights and/or obligations under this Agreement (including all or a portion of the Commitment
and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower
shall continue to deal solely and directly with such Lender in connection therewith. Any agreement or instrument pursuant to which any
Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that would (i) increase
or extend the term of such Lender’s Commitment, (ii) extend the date fixed for the payment of principal of or interest on the Loans
or any portion of any fee hereunder payable to the Participant, (iii) reduce the amount of any such payment of principal, or (iv) reduce
the rate at which interest is payable thereon to a level below the rate at which the Participant is entitled to receive such interest.
Subject to Section 14.05(f), the Borrower agrees that each Participant shall be entitled to the benefits of Section 5 (subject
to the requirements and limitations therein including under Section 5.03(f) (it being understood that the documentation required
under Section 5.03(f) shall be delivered to the participating Lender)) to the same extent as if it were the Lender and had acquired
its interest by assignment pursuant to Section 14.05(b); provided that such Participant agrees to be subject to the provisions
of Section 5.03(h) as if it were an assignee under Section 14.05(b) above. To the extent permitted by Law, each Participant
also shall be entitled to the benefits of Section 4.03(a) as though it were the Lender.
(f)
Limitations on Rights of Participants. A Participant shall not be entitled to receive any greater payment under Section 5.01
or 5.03 than the participating Lender would have been entitled to receive with respect to the participation sold to such Participant,
except to the extent such entitlement to receive a greater payment results from a change in Law that occurs after the Participant acquired
the applicable participation.
(g)
Participant Register. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of
the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest)
of each Participant’s interest in the Loans or other Obligations under the Loan Documents (the “Participant Register”);
provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity
of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, or its other Obligations
under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan,
or other Obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant
Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant
Register.
(h)
Certain Pledges. The Lender may at any time pledge or assign a security interest in all or any portion of its rights under this
Agreement and any other Loan Document to secure obligations of the Lender, including any pledge or assignment to secure obligations to
a Federal Reserve Bank; provided that no such pledge or assignment shall release the Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for the Lender as a party hereto.
14.06
Survival. The obligations of the Borrower under Sections 5.01, 5.02, 5.03, 14.03, 14.05, 14.09,
14.10, 14.11, 14.12, 14.13, 14.14 and 14.16, and the obligations of the Subsidiary Guarantors
under Section 13 (solely to the extent Guaranteeing any of the obligations under the foregoing Sections) shall survive the repayment
of the Obligations and the termination of the Commitment and, in the case of the Lenders’ assignment of any interest in the Commitment
or the Loans hereunder, shall survive, in the case of any event or circumstance that occurred prior to the effective date of such assignment,
the making of such assignment, notwithstanding that the Lenders may cease to be “Lenders” hereunder. In addition, each representation
and warranty made, or deemed to be made by a Borrowing Notice (or other certificate required to be delivered hereunder at any time),
herein or pursuant hereto shall survive the making of such representation and warranty.
14.07
Captions. The table of contents and captions and section headings appearing herein are included solely for convenience of reference
and are not intended to affect the interpretation of any provision of this Agreement.
14.08
Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. Delivery
of an executed signature page of this Agreement by facsimile transmission or electronic transmission (in PDF format) shall be effective
as delivery of a manually executed counterpart hereof. Any signature (including, without limitation, (x) any electronic symbol or process
attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such
contract or record and (y) any facsimile or .pdf signature) hereto or the other Loan Documents or to any other certificate, agreement
or document related to any Loan Document or the Transactions, and any contract formation or record-keeping, in each case, through electronic
means, shall have the same legal validity and enforceability as a manually executed signature or use of a paper-based record-keeping
system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any similar state law based on the Uniform Electronic Transactions
Act, and the parties hereto hereby waive any objection to the contrary.
14.09
Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed in accordance
with, the Law of the State of New York, without regard to principles of conflicts of laws that would result in the application of the
laws of any other jurisdiction; provided that Section 5-1401 of the New York General Obligations Law shall apply.
14.10
Jurisdiction, Service of Process and Venue.
(a)
Submission to Jurisdiction. Each Obligor agrees that any suit, action or proceeding with respect to this Agreement or any other
Loan Document to which it is a party or any judgment entered by any court in respect thereof may be brought initially in the federal
or state courts in New York, New York or in the courts of its own corporate domicile and irrevocably submits to the non-exclusive jurisdiction
of each such court for the purpose of any such suit, action, proceeding or judgment. This Section 14.10(a) is for the benefit
of the Administrative Agent and the Lenders only and, as a result, no Lender shall be prevented from taking proceedings in any other
courts with jurisdiction. To the extent allowed by any Law, the Lenders may take concurrent proceedings in any number of jurisdictions.
(b)
Alternative Process. Nothing herein shall in any way be deemed to limit the ability of the Administrative Agent or the Lenders
to serve any process or summons in any manner permitted by any applicable Law.
(c)
Waiver of Venue, Etc. Each Obligor irrevocably waives to the fullest extent permitted by Law any objection that it may now or
hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement or any other
Loan Document and hereby further irrevocably waives to the fullest extent permitted by Law any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. A final judgment (in respect of which time for all appeals has elapsed)
in any such suit, action or proceeding shall be conclusive and may be enforced in any court to the jurisdiction of which such Obligor
is or may be subject, by suit upon judgment.
14.11
Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
14.12
Waiver of Immunity. To the extent that any Obligor may be or become entitled to claim for itself or its property or revenues any
immunity on the ground of sovereignty or the like from suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution
of a judgment or execution of a judgment, and to the extent that in any such jurisdiction there may be attributed such an immunity (whether
or not claimed), such Obligor hereby irrevocably agrees not to so claim and hereby irrevocably waives such immunity with respect to its
obligations under this Agreement and the other Loan Documents.
14.13
Entire Agreement. This Agreement and the other Loan Documents constitute the entire agreement among the parties with respect to the
subject matter hereof and thereof and supersede any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof, including any confidentiality (or similar) agreements. EACH OBLIGOR ACKNOWLEDGES, REPRESENTS AND WARRANTS THAT
IN DECIDING TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR IN TAKING OR NOT TAKING ANY ACTION HEREUNDER OR THEREUNDER,
IT HAS NOT RELIED, AND WILL NOT RELY, ON ANY STATEMENT, REPRESENTATION, WARRANTY, COVENANT, AGREEMENT OR UNDERSTANDING, WHETHER WRITTEN
OR ORAL, OF OR WITH THE ADMINISTRATIVE AGENT OR THE LENDERS OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
14.14
Severability. If any provision hereof is found by a court to be invalid or unenforceable, to the fullest extent permitted by any
Law the parties agree that such invalidity or unenforceability shall not impair the validity or enforceability of any other provision
hereof.
14.15
No Fiduciary Relationship. The Borrower acknowledges that the Administrative Agent and the Lenders have no fiduciary relationship
with, or fiduciary duty to, the Borrower arising out of or in connection with this Agreement or the other Loan Documents, and the relationship
between the Lenders and the Borrower is solely that of creditor and debtor. This Agreement and the other Loan Documents do not create
a joint venture among the parties.
14.16
Confidentiality. The Administrative Agent and each Lender agree to keep confidential all non-public information provided to them
orally or in writing by any Obligor pursuant to this Agreement that is designated by such Obligor as confidential in accordance with
its customary procedures for handling its own confidential information; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (i) to the Administrative Agent, any other Lender or, subject to an agreement
to comply with the provisions of this Section 14.16, any Affiliate of a Lender or any Eligible Transferee or other assignee permitted
under Section 14.05(b), (ii) subject to an agreement to comply with the provisions of this Section, to any actual or prospective
direct or indirect counterparty to any Hedging Agreement (or any professional advisor to such counterparty), (iii) to its employees,
officers, directors, agents, attorneys, accountants, trustees and other professional advisors or those of any of its affiliates (collectively,
its “Related Parties”), (iv) upon the request or demand of any Governmental Authority or any regulatory authority
purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (v) in response to any order of any court or other Governmental Authority or as may otherwise
be required pursuant to any Law, (vi) if requested or required to do so in connection with any litigation or similar proceeding, (vii)
that has been publicly disclosed (other than as a result of a disclosure in violation of this Section 14.16), (viii) to the National
Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to
information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender, (ix) in connection
with the exercise of any remedy hereunder or under any other Loan Document, (x) on a confidential basis to (A) any rating agency in connection
with rating the Borrower or its Subsidiaries or the Loan or (B) the CUSIP Service Bureau or any similar agency in connection with the
issuance and monitoring of CUSIP numbers of other market identifiers with respect to the Loan or (xi) to any other party hereto.
14.17
Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any
Loan, together with all fees, charges and other amounts that are treated as interest on such Loan under applicable Law (collectively,
“charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) that may be
contracted for, charged, taken, received or reserved by the Administrative Agent and the Lender holding such Loan in accordance with
applicable Law, the rate of interest payable in respect of such Loan hereunder, together with all charges payable in respect thereof,
shall be limited to the Maximum Rate. To the extent lawful, the interest and charges that would have been paid in respect of such Loan
but were not paid as a result of the operation of this Section shall be cumulated and the interest and charges payable to such Lender
in respect of other Loans or periods shall be increased (but not above the amount collectible at the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective Rate for each day to the date of repayment, shall have
been received by such Lender. Any amount collected by such Lender that exceeds the maximum amount collectible at the Maximum Rate shall
be applied to the reduction of the principal balance of such Loan so that at no time shall the interest and charges paid or payable in
respect of such Loan exceed the maximum amount collectible at the Maximum Rate.
14.18
Early Prepayment Fee . If the Loans are accelerated or otherwise become due prior to the Maturity Date, as a result of an Event of
Default (including upon the occurrence of a Insolvency Proceeding (including the acceleration of claims by operation of law)), the amount
of principal of and premium on the Loans that becomes due and payable shall equal 100% of the principal amount of the Loans plus the
applicable Early Prepayment Fee in effect on the date of such acceleration or such other prior due date, as if such acceleration or other
occurrence were a voluntary prepayment of the Loans accelerated or otherwise becoming due. Without limiting the generality of the foregoing,
it is understood and agreed that if the Loans are accelerated or otherwise become due prior to the scheduled Maturity Date, in respect
of any Event of Default (including upon the occurrence of a Insolvency Proceeding (including the acceleration of claims by operation
of law)), the Early Prepayment Fee will also be due and payable on the date of such acceleration or such other prior due date as though
the Loans were voluntarily prepaid as of such date and shall constitute part of the Obligations, in view of the impracticability and
extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each Lender’s
loss as a result thereof. Any such premium payable above shall be presumed to be the liquidated damages sustained by each Lender and
each Obligor agrees that it is reasonable under the circumstances currently existing. THE OBLIGORS HEREBY, JOINTLY AND SEVERALLY, EXPRESSLY
WAIVE (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT
THE COLLECTION OF THE EARLY PREPAYMENT FEE. Each Obligor expressly agrees (to the fullest extent it may effectively do so) that: (i)
the Early Prepayment Fee is reasonable and the product of an arm’s length transaction between sophisticated business people, ably
represented by counsel; (ii) the Early Prepayment Fee shall be payable notwithstanding the then prevailing market rates at the time payment
is made; (iii) there has been a course of conduct between the Lenders and the Obligors giving specific consideration in this transaction
for such agreement to pay the Early Prepayment Fee; and (iv) each Obligor shall be estopped hereafter from claiming differently than
as agreed to in this Section.
14.19
Judgment Currency.
(a)
If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder in US Dollars into another currency,
the parties hereto agree, to the fullest extent permitted by Law, that the rate of exchange used shall be that at which, in accordance
with normal banking procedures, the Administrative Agent could purchase Dollars with such other currency at the buying spot rate of exchange
in the New York foreign exchange market on the Business Day immediately preceding that on which any such judgment, or any relevant part
thereof, is given.
(b)
The obligations of the Obligors in respect of any sum due to the Administrative Agent hereunder and under the other Loan Documents shall,
notwithstanding any judgment in a currency other than Dollars, be discharged only to the extent that on the Business Day following receipt
by the Administrative Agent of any sum adjudged to be so due in such other currency the Administrative Agent may, in accordance with
normal banking procedures, purchase Dollars with such other currency. If the amount of Dollars so purchased is less than the sum originally
due to the Administrative Agent in Dollars, the Borrower agrees, to the fullest extent that it may effectively do so, as a separate obligation
and notwithstanding any such judgment, to indemnify the Administrative Agent against such loss. If the amount of Dollars so purchased
exceeds the sum originally due to the Administrative Agent in Dollars, the Administrative Agent shall remit such excess to the Borrower.
14.20
USA PATRIOT Act. The Administrative Agent and the Lenders hereby notify the Borrower and its Subsidiaries that pursuant to the requirements
of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”)
and the Beneficial Ownership Regulation, they are required to obtain, verify and record information that identifies the Borrower and
its Subsidiaries, which information includes the name and address of each of the Borrower and its Subsidiaries and other information
that will allow such Person to identify the Borrower or such Subsidiary in accordance with the Patriot Act and the Beneficial Ownership
Regulation.
14.21
Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document
or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of
any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the
Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be
bound by:
(a)
the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder
which may be payable to it by any party hereto that is an Affected Financial Institution; and
(b)
the effects of any Bail-in Action on any such liability, including, if applicable:
(i)
a reduction in full or in part or cancellation of any such liability;
(ii)
a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution,
its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other
instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any
other Loan Document; or
(iii)
the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable
Resolution Authority.
[Signature
Pages Follow]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.
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BORROWER: |
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APYX
MEDICAL CORPORATION |
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By
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/s/
Charles Goodwin |
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Name: |
Charles Goodwin |
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Title: |
Chief Executive
Officer |
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Address
for Notices: |
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SUBSIDIARY
GUARANTORS: |
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APYX
CHINA HOLDING CORP. |
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By
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/s/
Tara Semb |
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Name: |
Tara Semb |
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Title: |
Chief Financial
Officer |
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APYX
BULGARIA EOOD |
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By
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/s/
Charles Goodwin |
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Name: |
Charles Goodwin |
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Title: |
Managing Director |
INITIAL LENDER
AND ADMINISTRATIVE AGENT:
PERCEPTIVE
CREDIT HOLDINGS IV, LP
By
Perceptive Credit Opportunities GP, LLC, its general partner |
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By: |
/s/ Sandeep
Dixit |
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Name: |
Sandeep
Dixit |
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Title: |
Chief Credit Officer |
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By: |
/s/ Sam Chawla |
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Name: |
Sam Chawla |
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Title: |
Portfolio Manager |
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Perceptive Credit
Holdings IV, LP
c/o Perceptive
Advisors LLC
51 Astor place, 10th floor
New York, NY 10003
Attn: Sandeep Dixit
Email: Sandeep@perceptivelife.com;
PFOCReporting@perceptivelife.com
Exhibit
99.1
Apyx
Medical Corporation Announces New Debt Facility with Perceptive Advisors
New
facility includes senior, secured term loans of up to $45 million
CLEARWATER,
FL — November 9, 2023 - Apyx Medical Corporation (NASDAQ:APYX) (the “Company”), the manufacturer of a proprietary
helium plasma and radiofrequency technology marketed and sold as Renuvion®, today announced that the Company and its subsidiaries
have entered into a new, five-year credit agreement with Perceptive Credit Holdings IV, LP (“Perceptive”), an affiliate of
Perceptive Advisors. The Perceptive Credit Agreement provides for a facility of up to $45 million in senior secured term loans, with
an initial loan of $37.5 million fully drawn at closing.
“We
are excited to announce this new debt facility with Perceptive Advisors,” said Charlie Goodwin, President and Chief Executive Officer.
“This new facility provides Apyx Medical with access to additional capital – and at more attractive terms overall –
than our prior agreement, significantly strengthening our balance sheet and enhancing our financial flexibility.”
“We
are excited to partner with Apyx Medical and believe that Renuvion will be a formidable product in the market as the company executes
on its strategy,” said Sam Chawla, Portfolio Manager of Perceptive Advisors.
The
Perceptive credit facility matures on November 8, 2028 and includes an initial loan of $37.5 million and a delayed draw loan of $7.5
million. The initial loan of $37.5 million was fully funded on November 8, 2023, with approximately $11.0 million of the proceeds used
to satisfy all obligations under the Company’s MidCap credit agreement, in addition to approximately $2.5 million of transaction
fees and other expenses incurred in connection with the Perceptive Credit Agreement. The delayed draw loan can be drawn at the Company’s
option until December 31, 2024, upon satisfaction of certain conditions and covenants, including, but not limited to, the achievement
of a minimum revenue target.
The
initial loan and delayed draw loan bear interest at a floating rate based on one-month SOFR, subject to a floor of 5.0%, plus 7.0%. The
Perceptive Credit Agreement provides for 48 months of interest-only payments. Subsequent to the interest-only period, the outstanding
principal amount of the loans is repayable in monthly payments of 3.0% of the outstanding balance on the payment date. All remaining
outstanding principal, together with all accrued and unpaid interest, is due at maturity. The loans may be voluntarily prepaid in full,
or in part, at any time, subject to terms and conditions set forth in the Perceptive Credit Agreement. Additionally, the loans are subject
to mandatory prepayment obligations, pursuant to the terms of the Perceptive Credit Agreement. The obligations under the Perceptive credit
facility are secured by first priority liens on substantially all of the assets of the Company.
In
connection with the Company’s initial loan under the Perceptive Credit Agreement, the Company issued Perceptive warrants to purchase
up to 1,250,000 shares of its common stock, par value $0.001, with an exercise price of $2.43 per share. Upon the issuance of the delayed
draw loan, if applicable, the Company will issue Perceptive warrants to purchase up to 250,000 shares of its common stock, par value
$0.001, with an exercise price of equal to the 10-day volume weighted average sale price from the preceding business day.
Craig-Hallum
served as financial advisor to the Company on the transaction. Additional detail regarding the foregoing financing is set forth in the
Company’s Current Report on Form 8-K, to be filed with the U.S. Securities and Exchange Commission.
Investor
Relations Contact:
ICR
Westwicke on behalf of Apyx Medical Corporation
Mike Piccinino, CFA
investor.relations@apyxmedical.com
About
Apyx Medical Corporation:
Apyx
Medical Corporation is an advanced energy technology company with a passion for elevating people’s lives through innovative products,
including its Helium Plasma Technology products marketed and sold as Renuvion in the cosmetic surgery market and J-Plasma® in the
hospital surgical market. Renuvion and J-Plasma offer surgeons a unique ability to provide controlled heat to tissue to achieve their
desired results. The Company also leverages its deep expertise and decades of experience in unique waveforms through OEM agreements with
other medical device manufacturers. For further information about the Company and its products, please refer to the Apyx Medical Corporation
website at www.ApyxMedical.com.
About
Perceptive Advisors:
Founded
in 1999, Perceptive Advisors is a leading healthcare focused investment firm with approximately $9.5 billion of regulatory assets under
management. Since inception, Perceptive Advisors has focused on supporting progress in the life sciences industry by identifying opportunities
and directing financial resources toward the most promising technologies in modern healthcare. For more information about Perceptive,
visit www.perceptivelife.com.
Cautionary
Statement on Forward-Looking Statements:
Certain
matters discussed in this release and oral statements made from time to time by representatives of the Company may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. Although the Company
believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance
that its expectations will be achieved.
All
statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not
limited to, projections of net revenue, margins, expenses, net earnings, net earnings per share, or other financial items; projections
or assumptions concerning the possible receipt by the Company of any regulatory approvals from any government agency or instrumentality
including but not limited to the U.S. Food and Drug Administration (the “FDA”), supply chain disruptions, component shortages,
manufacturing disruptions or logistics challenges; or macroeconomic or geopolitical matters and the impact of those matters on the Company’s
financial performance.
Forward-looking
statements and information are subject to certain risks, trends and uncertainties that could cause actual results to differ materially
from those projected. Many of these factors are beyond the Company’s ability to control or predict. Important factors that may
cause the Company’s actual results to differ materially and that could impact the Company and the statements contained in this
release include but are not limited to risks, uncertainties and assumptions relating to the regulatory environment in which the Company
is subject to, including the Company’s ability to gain requisite approvals for its products from the FDA and other governmental
and regulatory bodies, both domestically and internationally; the impact of the March 14, 2022 FDA Safety Communication on our business
and operations; sudden or extreme volatility in commodity prices and availability, including supply chain disruptions; changes in general
economic, business or demographic conditions or trends; changes in and effects of the geopolitical environment; liabilities and costs
which the Company may incur from pending or threatened litigations, claims, disputes or investigations; and other risks that are described
in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and the Company’s other filings with
the Securities and Exchange Commission. For forward-looking statements in this release, the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company assumes no obligation
to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.
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Apyx Medical (NASDAQ:APYX)
過去 株価チャート
から 8 2024 まで 9 2024
Apyx Medical (NASDAQ:APYX)
過去 株価チャート
から 9 2023 まで 9 2024