Full Press Release Details
INFORMATION IN THIS EXHIBIT IDENTIFIED BY [***] IS CONFIDENTIAL
AND HAS BEEN EXCLUDED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF
PROFOUND MEDICAL INC.
PROFOUND MEDICAL CORP.
2753079 ONTARIO INC.
PROFOUND MEDICAL (U.S.) INC. and
PROFOUND MEDICAL GMBH
CANADIAN IMPERIAL BANK OF COMMERCE
| Article I. Interpretation | 1 | |
| Section 1.01 | Definitions | 1 |
| Section 1.02 | PPSA | 20 |
| Section 1.03 | Headings | 21 |
| Section 1.04 | References to Sections | 21 |
| Section 1.05 | Currency | 21 |
| Section 1.06 | Gender and Number | 21 |
| Section 1.07 | Invalidity of Provisions | 21 |
| Section 1.08 | Transition from GAAP to US GAAP | 21 |
| Section 1.09 | Amendment or Waiver | 21 |
| Section 1.10 | Non-Business Days | 22 |
| Section 1.11 | Currency Equivalents | 22 |
| Section 1.12 | German Terms | 22 |
| Article II. The Loans | 23 | |
| Section 2.01 | The Commitments | 23 |
| Section 2.02 | Loans | 23 |
| Section 2.03 | Fees | 23 |
| Section 2.04 | Payment; Computation | 23 |
| Section 2.05 | Loan Account | 23 |
| Article III. Payments and Prepayments | 24 | |
| Section 3.01 | Repayment of Loans | 24 |
| Section 3.02 | Interest | 24 |
| Section 3.03 | End of Term Payment | 25 |
| Section 3.04 | Optional Prepayments | 25 |
| Section 3.05 | Mandatory Prepayments | 26 |
| Section 3.06 | Application of Prepayments | 27 |
| Section 3.07 | Notice of Prepayments | 27 |
| Section 3.08 | Payments Generally | 27 |
| Section 3.09 | Change in Law and Increased Costs | 28 |
| Section 3.10 | Taxes | 29 |
| Section 3.11 | Illegality | 31 |
| Article IV. Security | 31 | |
| Section 4.01 | Security Documents | 31 |
| Section 4.02 | Control of Collateral; Control Agreements | 32 |
| Section 4.03 | Guarantors | 32 |
| Section 4.04 | Real Estate | 32 |
| Section 4.05 | Delivery of Additional Documentation Required | 33 |
| Section 4.06 | Right to Inspect | 33 |
| Article V. Representations and Warranties | 33 | |
| Section 5.01 | Incorporation and Status | 33 |
| Section 5.02 | Corporate Power and Due Authorization | 34 |
| Section 5.03 | Business of the Loan Parties | 34 |
| Section 5.04 | No Contravention | 34 |
| Section 5.05 | Not Insolvent | 34 |
| Section 5.06 | Approvals and Consents | 35 |
| Section 5.07 | Welfare and Pension Plans | 35 |
| Section 5.08 | Changes Since Date of Financial Statements | 35 |
| Section 5.09 | No Default Under Agreements | 36 |
| Section 5.10 | Title to Assets | 36 |
| Section 5.11 | Financial Matters | 36 |
| Section 5.12 | No Material Adverse Change | 37 |
| Section 5.13 | Environmental Matters | 37 |
| Section 5.14 | Assets in Good Condition | 37 |
| Section 5.15 | Licenses and Agreements | 37 |
| Section 5.16 | Tax Matters | 37 |
| Section 5.17 | Insurance | 38 |
| Section 5.18 | Intellectual Property | 38 |
| Section 5.19 | Permits | 39 |
| Section 5.20 | Regulatory Required Permits | 39 |
| Section 5.21 | Compliance with Laws and Litigation | 39 |
| Section 5.22 | Material Facts Disclosed | 40 |
| Section 5.23 | No Rights to Acquire Assets | 40 |
| Section 5.24 | No Rights to Provide Financial Advisory Services | 40 |
| Section 5.25 | Chief Executive Office and Location of Assets | 40 |
| Section 5.26 | Minute Books | 40 |
| Section 5.27 | Use of Proceeds; Margin Stock | 41 |
| Section 5.28 | Investment Company Act | 41 |
| Section 5.29 | Bank Accounts | 41 |
| Section 5.30 | Shares and Corporate Structure | 41 |
| Section 5.31 | Liabilities | 42 |
| Section 5.32 | Employee Matters | 42 |
| Section 5.33 | Non-Arm's Length Transactions | 43 |
| Section 5.34 | Description of Real Property | 43 |
| Section 5.35 | Sanctions | 43 |
| Section 5.36 | Anti-Terrorism and Anti-Money Laundering Laws | 44 |
| Article VI. Covenants | 44 | |
| Section 6.01 | Use of Proceeds | 44 |
| Section 6.02 | Payment of Principal and Interest; Secured Obligations | 44 |
| Section 6.03 | Lender Expenses | 44 |
| Section 6.04 | Compliance with Laws; Permits; Corporate Existence | 44 |
| Section 6.05 | Delivery of Collateral and Perfection | 45 |
| Section 6.06 | Collateral | 45 |
| Section 6.07 | Operating Leases | 45 |
| Section 6.08 | Insurance | 45 |
| Section 6.09 | Transactions with Affiliates | 45 |
| Section 6.10 | Material Agreement | 46 |
| Section 6.11 | Reporting | 46 |
| Section 6.12 | Healthcare Regulatory Matters | 46 |
| Section 6.13 | Accounts | 47 |
| Section 6.14 | Sanctions | 47 |
| Section 6.15 | Anti-Terrorist Financing and Anti-Money Laundering Laws | 47 |
| Section 6.16 | Negative Covenants | 48 |
| Section 6.17 | Maintenance of Records | 49 |
| Section 6.18 | Notices | 49 |
| Section 6.19 | Limitations on Modifications, Waivers, Extensions | 50 |
| Section 6.20 | Financial Covenants | 50 |
| Section 6.21 | Intellectual Property | 50 |
| Section 6.22 | Pension Plans | 51 |
| Section 6.23 | Material Subsidiaries | 51 |
| Section 6.24 | Centre of Main Interests | 52 |
| Section 6.25 | Post-Closing Obligations | 52 |
| Article VII. Conditions | 52 | |
| Section 7.01 | Conditions Precedent to the Initial Extension of Credit | 52 |
| Section 7.02 | Conditions Precedent to all Extensions of Credit | 54 |
| Article VIII. Events of Default | 54 | |
| Section 8.01 | Events of Default | 54 |
| Section 8.02 | Lender's Remedies Upon Default | 57 |
| Section 8.03 | Lender Protective Payments | 58 |
| Section 8.04 | Remedies Cumulative | 58 |
| Section 8.05 | Power of Attorney | 58 |
| Section 8.06 | Notice of Event of Default | 59 |
| Section 8.07 | Default under Other Encumbrances | 59 |
| Section 8.08 | Judgment | 59 |
| Section 8.09 | Application of Proceeds | 59 |
| Section 8.10 | Limitation of Liability | 60 |
| Section 8.11 | Borrower Liable | 60 |
| Article IX. Benchmark Replacement Setting | 60 | |
| Section 9.01 | Benchmark Replacement Setting | 60 |
| Article X. General | 65 | |
| Section 10.01 | Releases | 65 |
| Section 10.02 | Governing Law; Jurisdiction; Jury Trial Waiver and Judicial Reference | 65 |
| Section 10.03 | Whole Agreement | 66 |
| Section 10.04 | Time | 66 |
| Section 10.05 | Notices | 66 |
| Section 10.06 | Successors and Assigns | 67 |
| Section 10.07 | Indemnification | 68 |
| Section 10.08 | No Set-Off | 68 |
| Section 10.09 | Permitted Encumbrance | 68 |
| Section 10.10 | Press Releases | 68 |
| Section 10.11 | Confidentiality | 68 |
| Section 10.12 | Judgment Currency | 69 |
| Section 10.13 | Anti-Money Laundering Legislation | 69 |
| Section 10.14 | Counterparts | 70 |
CREDIT AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, the "Agreement")
dated as of November 3, 2022, by and among Profound Medical Inc., an Ontario corporation, as borrower ("Borrower"),
Profound Medical Corp., an Ontario corporation, as a guarantor ("Parent"), 2753079 Ontario Inc., an Ontario
corporation, as a guarantor ("275 Ontario"), Profound Medical GmbH, a German limited liability company (Gesellschaft
mit beschr nkter Haftung), as a guarantor ("PM Germany") Profound Medical (U.S.) Inc., a Delaware corporation,
as a guarantor ("PM USA"), and Canadian Imperial Bank of Commerce, as lender ("Lender").
the Borrower has requested that Lender extend credit to it in a maximum aggregate principal amount of up to $10,000,000 for the various
purposes set out herein.
the Borrower is a wholly-owned subsidiary of Parent and PM Germany and PM USA are each a wholly-owned subsidiary of the Borrower.
Parent, PM Germany and PM USA have agreed to guarantee the obligations of the Borrower hereunder.
WHEREAS Lender is willing to extend such credit on and subject to the terms and conditions hereof.
THEREFORE in consideration of the covenants and agreements herein the parties hereto agree as follows:
Section 1.01 Definitions
the meaning set forth in the preamble to this Agreement.
means a person obligated on an Account.
meaning given to such term in the PPSA.
"Acquisition" means,
with respect to any Person, any purchase or other acquisition by such Person, regardless of how accomplished or effected (including any
such purchase or other acquisition effected by way of amalgamation, merger, arrangement, business combination or other form of corporate
reorganization or by way of purchase, lease or other acquisition arrangements), of (a) any other Person (including any purchase or
acquisition of such number of the issued and outstanding securities of, or such portion of an Equity Interest in, such other Person so
that such other Person becomes a Subsidiary of the purchaser or of any of its Affiliates) or of all or a material portion of the Property
of any other Person, or (b) any division, business, operation or undertaking of any other Person or of all or a material portion
of the Property of any division, business, operation or undertaking of any other Person or (c) any material real estate asset.
"Additional Documents"
has the meaning set forth in Section 4.05.
with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled
by or is under common Control with the Person specified.
"Agreement," "hereto,"
"herein," "hereof," "hereby," "hereunder," and any similar
expressions refer to this Agreement and the schedules attached hereto and not to any particular article, section or other portion hereof,
and include any and every instrument supplemental hereto or amending or replacing any part hereof.
means, in respect of any Person, property, transaction, event or other matter, as applicable, all Laws relating or applicable to such
Person, property, transaction, event or matter.
"Anti-Terrorist Financing and
Anti-Money Laundering Laws" means all Applicable Law concerning or related to money laundering or financing terrorism and which
are applicable to the Lender, any Loan Party or any Affiliate thereof, including the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act (Canada) and all similar laws, rules, regulations and other Applicable Laws in place in any foreign country, including
has the meaning set forth in Section 6.15.
"Board" means a Person's
board of directors, board of managers, board of members or similar governing body, provided that, unless otherwise specified, "Board"
shall refer to the applicable Loan Party's Board.
meaning set forth in the preamble to this Agreement.
consolidated and consolidating projections and budget, prepared annually on a monthly basis, for Parent and its Subsidiaries adopted and
approved by Parent's Board for the given period.
"Business Day" means
a day other than a Saturday, Sunday or any other day on which banks located in the City of Toronto, Province of Ontario are not open for
and "$" mean lawful money of Canada.
"Canadian Guarantee"
has the meaning set forth in Section 4.01(b).
"Canadian IP Security Agreement"
has the meaning set forth in Section 4.01(d).
"Canadian Pension Plan"
means any "pension plan" that is subject to the funding requirements of the Pension Benefits Act (Ontario) or applicable
pension benefits legislation in any other Canadian jurisdiction.
"Canadian Security Agreement"
has the meaning set forth in Section 4.01(a).
"Capital Lease" means
any lease that would be considered to be a capital lease in accordance with GAAP; provided, that any lease that would be considered to
be an operating lease in accordance with GAAP on the date of this agreement shall not be considered to be a Capital Lease notwithstanding
any change in GAAP after such date that may reclassify it as a capital lease.
means (a) marketable direct obligations issued or unconditionally guaranteed by the United States, the Government of Canada or any
agency or any state or province, as applicable, thereof having maturities of not more than one (1) year from the date of acquisition;
(b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard &
Poor's Ratings Group or Moody's Investors Service, Inc.; (c) certificates of deposit issued maturing no more than
one (1) year after issue; (d) money market funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents
of the kinds described in clauses (a) through (c) of this definition; and (e) comparable instruments as those
described in clauses (a) through (d) for any Loan Party that is not formed under the federal or provincial laws
of Canada and operates in a jurisdiction outside of Canada.
means, with respect to any Property of any Person, any loss of or damage to, or any condemnation or other taking of, such Property for
which such Person or any of its Subsidiaries receives insurance proceeds, or proceeds of a condemnation award or other compensation.
any date, the annual rate of interest which is the rate based on an average rate applicable to Canadian Dollar bankers' acceptances
for a specified term appearing on the "Refinitiv Screen CDOR Page" (as defined in the International Swaps and Derivatives
Association, Inc., definitions, as modified and amended from time to time) at approximately 10:00 a.m. (Toronto time), on such
date, or if such date is not a Business Day, then on the immediately preceding Business Day, provided that if such rate does not
appear on the Refinitiv Screen CDOR Page on such date as contemplated, then CDOR on such date shall be the rate for the term referred
to above applicable to Canadian Dollar bankers' acceptances quoted by the Lender as of 10:00 a.m. (Toronto time) on such date
or, if such date is not a Business Day, then on the immediately preceding Business Day; provided further, that if CDOR is less
than zero, it shall be deemed to be zero hereunder.
"Centre of Main Interests"
means the "centre of main interests" of a Loan Party incorporated in a member state of the European Union as that term is
used in Article 3(1) of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency
proceedings (recast).
of Control" means, unless otherwise waived in writing by Lender, (a) the consummation of any transaction (including,
without limitation, any plan of arrangement, merger, amalgamation or consolidation) the result of which is that any Person or group of
Persons acquires or otherwise beneficially owns, directly or indirectly, or acquires or has the voting power and/or investment power in
respect of, 50% or more of the Shares of Parent; (b) the first day on which a majority of the members of the Board of the Parent
are not Continuing Directors; or (c) if any Loan Party that is a Subsidiary of Parent ceases to be a wholly-owned Subsidiary of Parent