Exhibit 10.7

EXECUTION VERSION

THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER

THIS THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this “Agreement”) dated as
of August 14, 2018 (the “Third Amendment Effective Date”) is entered into among
VENUS CONCEPT CANADA CORP., an Ontario corporation (“Venus Canada”), VENUS
CONCEPT USA INC., a Delaware corporation (“Venus USA” and together with Venus
Canada, each a `Borrower” and collectively, the “Borrowers”), VENUS CONCEPT
LTD., an Israeli corporation (the “Parent’), the Lenders party hereto and MADRYN
HEALTH PARTNERS, LP, a Delaware limited partnership, as Administrative Agent.
All capitalized terms used herein and not otherwise defined herein shall have
the meanings given to such terms in the Existing Credit Agreement (as defined
below) or the Amended Credit Agreement (as defined below), as the context shall
require.

RECITALS

WHEREAS, the Borrowers, the Parent, the Guarantors, the Lenders and the
Administrative Agent have entered into that certain Credit Agreement dated as of
October 11, 2016 (as amended by that certain First Amendment to Credit Agreement
and Investment Documents dated as of May 25, 2017, that certain Second Amendment
to Credit Agreement and Consent Agreement dated as of February 15, 2018, and as
further amended or modified from time to time, the “Existing Credit Agreement”);

WHEREAS, the Loan Parties have requested that the Lenders waive the Events of
Default set forth in Annex A to this Agreement (such Events of Default, the
“Existing Events of Default”);

WHEREAS, the Loan Parties have requested that the Existing Credit Agreement be
amended to provide for certain modifications of the terms of the Existing Credit
Agreement, and that, as so amended, the Existing Credit Agreement for ease of
reference be restated (after giving effect to this Agreement) in the form of
Schedule 1 hereto;

WHEREAS, the Lenders are willing to waive the Existing Events of Default and
amend the Existing Credit Agreement, in each case, subject to the terms and
conditions hereof;

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. Amendments.

Effective as of the Third Amendment Effective Date:

(a) The Existing Credit Agreement is hereby amended by this Agreement and for
ease of reference restated (after giving effect to this Agreement) in the form
of Schedule 1 hereto (the Existing Credit Agreement, as so amended by this
Agreement, being referred to as the “Amended Credit Agreement”).

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(b) Schedules 1.01, 2.01, 6.06, 6.10, 6.13(a), 6.13(b), 6.17,6.20(a), 6.22 and
11.02 to the Existing Credit Agreement are hereby amended to read as provided on
Schedules 1.01, 2.01. 6.06, 6.10, 6.13(0, 6.13(b), 6.17, 6.20(0, 6.22 and 11.02
hereto.

(c) Schedule 7.19 to the Exiting Credit Agreement is hereby deleted in its
entirety.

(d) Exhibit B-1 to the Existing Credit Agreement is hereby re-titled as Exhibit
B-1 (A).

(e) Exhibits A, B-1(A), B-2, C, D, E and G to the Existing Credit Agreement are
hereby amended and restated to read, in their entirety, in the form of Exhibits
A, B-1(A), B-2, C, D, E and G hereto.

(f) Exhibits B-1(B) and _6 hereto are hereby added to the Existing Credit
Agreement as new Exhibits B-I (B) and B-6 thereto.

Except as expressly set forth above, all Schedules and Exhibits to the Existing
Credit Agreement will continue in their present forms as Schedules and Exhibits
to the Amended Credit Agreement.

2. Waiver of Existing Events of Default.

Subject to the other terms and conditions of this Agreement, the Lenders hereby
waive the Existing Events of Default. The above shall not modify or affect the
Loan Parties’ obligations to comply fully with the terms of the Credit Agreement
or any other duty, term, condition or covenant contained in the Credit Agreement
or any other Investment Document in the future. This waiver is limited solely to
the Existing Events of Default, and nothing contained in this Agreement shall be
deemed to constitute a waiver of any other rights or remedies the Administrative
Agent or any Lender may have under the Credit Agreement or any other Investment
Documents or under applicable Law.

3. Conditions Precedent.

This Agreement shall be effective upon satisfaction of the following conditions
precedent:

(a) receipt by the Administrative Agent of counterparts of this Agreement duly
executed by the Loan Parties, the Lenders and the Administrative Agent;

(b) receipt by the Administrative Agent of counterparts of (i) the amended and
restated fee letter duly executed by the Borrowers and the Administrative Agent,
(ii) the Term A-1 Notes duly executed by the Borrowers, (iii) the Term A-2 Notes
duly executed by the Borrowers and (iv) the 2018 Israeli Debenture duly executed
by the Parent and the Administrative Agent;

 

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(c) receipt by the Administrative Agent of (i) the Third Amendment STA, (ii) the
Conversion Side Letter, (iii) that that certain voting undertaking dated as of
August 13, 2018 made by certain holders of preferred shares of the Parent to the
Parent (the “Voting Undertaking”) and (iv) a certificate signed by a Responsible
Officer of the Parent attaching executed copies of each document necessary to
effectuate the Third Amendment STA, the Conversion Side Letter, the Voting
Undertaking and the transactions contemplated thereby, in each case in form and
substance satisfactory to the Administrative Agent;

(d) the Lenders shall have closed on the purchase of the Purchased Shares (as
defined in the Third Amendment STA) of the Parent from the Sellers (as defined
in the Third Amendment STA), as contemplated by the Third Amendment STA and the
other documents and agreements related thereto;

(e) receipt by the Administrative Agent of the following, each of which shall be
originals or pdf scans or facsimiles (in each case followed promptly by
originals), in form and substance reasonably satisfactory to the Administrative
Agent and its legal counsel:

(i) (A) copies of the Organization Documents of each Loan Party (except for the
Parent and Venus Canada) certified to be true and complete as of a recent date
by the appropriate Governmental Authority of the state or other jurisdiction of
its incorporation or organization, where applicable, and certified by a
secretary or assistant secretary of such Loan Party (or other Responsible
Officer of such Loan Party) to be true and correct as of the Third Amendment
Effective Date and (B) copies of the Articles of Association of the Parent and
Organization Documents of Venus Canada, in each case, certified to be true and
complete as of the Third Amendment Effective Date by a Responsible Officer of
the Parent;

(ii) (A) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement, the Third Amendment STA,
the Conversion Side Letter and the 2018 Israeli Debenture and (B) without
limiting the generality of the foregoing, (I) copies of resolutions of the Board
of Directors of the Parent and, if applicable, any other Israeli Guarantor, as
are required to comply with applicable law and the Organization Documents of the
Parent or such other Israeli Guarantor, as the case may be, (II) to the extent
applicable, copies of the resolutions of any committee of the Board of
Directions of each Israeli Guarantor and (Ill) if any transaction contemplated
by any Investment Document involving an Israeli Guarantor qualifies as a
transaction with an Interested Party (bawl inyan) (as that term is defined in
the Israeli Companies Law), resolutions and approvals of the requisite
shareholders of such Israeli Guarantor, the board of directors of such Israeli
Guarantor and any other required organ of such Israeli Guarantor approving each
Investment Document to which such Israeli Guarantor is a party and the
performance of such Israeli Guarantor’s obligations thereunder, such approval in
accordance with the Israeli Companies Law, Part VI, Chapter 5; and

(iii) such documents and certifications as the Administrative Agent may require
to evidence that each Loan Party is duly organized or formed, and is validly
existing, in good standing and qualified to engage in business in its state or
other jurisdiction of organization or formation;

 

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(f) receipt by the Administrative Agent of favorable opinions of legal counsel
to the Loan Parties, addressed to the Administrative Agent and each Lender,
dated as of the Third Amendment Effective Date, and in form and substance
reasonably satisfactory to the Administrative Agent;

(g) receipt by the Administrative Agent of the quarterly financial statements
required by Section 7.01(b) of the Existing Credit Agreement and an accompanying
Compliance Certificate that satisfies the requirements of Section 7.02(α) of the
Amended Credit Agreement, in each case for the fiscal quarter ending June 30,
2018;

(h) receipt by the Administrative Agent of (i) evidence in form and substance
reasonably satisfactory to the Administrative Agent of the calculation (in
reasonable detail) of Consolidated Revenues for the four consecutive fiscal
quarter period ending December 31, 2017 both before and after giving effect to
the change in revenue reporting practices of treating subscription arrangements
as capital leases under GAAP and (ii) a certificate in form and substance
reasonably satisfactory to the Administrative Agent and signed by a Responsible
Officer of each of the Borrowers certifying the calculation (in reasonable
detail) of the amount of the Available Funding Amount as of the Third Amendment
Effective Date;

(i) receipt by the Administrative Agent of all Third Amendment Cash Pay
Interest;

(j) receipt by the Administrative Agent of (i) a Loan Notice with respect to the
Term A-2 Borrowing to be made on the Third Amendment Effective Date and (ii) a
reasonably satisfactory letter of direction containing funds flow information
with respect to the proceeds of the Loans to be made on the Third Amendment
Effective Date; and

(k) receipt by Moore & Van Allen PLLC, counsel to the Administrative Agent, of
all its fees and expenses unpaid to date and owing pursuant to the terms of the
Investment Documents; provided, that, after the Borrowers shall have paid the
first $100,000 of such fees and expenses plus any VAT, the Borrowers shall only
be required to pay fifty percent (50%) of any such fees and expenses that are in
excess of such first $100,000 2M VAT (it being understood and agreed that info
event shall anything in this Section 3(k) derogate from or diminish the
obligations of the Loan Parties to pay fees and expenses of the Administrative
Agent and its Affiliates to the extent incurred after the Third Amendment
Effective Date).

4. Conditions Subsequent.

The Loan Parties agree that they will deliver, or will cause to be delivered, to
the Administrative Agent, within fifteen (15) Business Days of the Third
Amendment Effective Date (or such later date as the Administrative Agent may
agree in its sole discretion), evidence in form and substance reasonably
satisfactory to the Administrative Agent that the “Events of Default” under
Sections 7(1) (arising from the Borrowers’ failure to comply with Section 6(a)
of the CNB

 

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Loan Agreement (as defined below)) and 7(c) (arising from the Existing Events of
Default) of that certain Loan Agreement dated as of May 25, 2017 between the
Borrowers and the Permitted Senior Revolving Credit Lender (the “CNB Loan
Agreement”) shall have been waived by the Permitted Senior Revolving Credit
Lender.

5. Paid-In-Kind Interest.

Each of the parties hereto agrees that the amount of accrued interest on the
Loans as of the Third Amendment Closing Date is $623,052.95 (the “Aggregate
Accrued Interest Amount”). Notwithstanding anything to the contrary in the
Existing Credit Agreement or the Amended Credit Agreement, (a) $431,344.35 of
the Aggregate Accrued Interest Amount shall constitute Cash Pay Interest (as
defined in the Existing Credit Agreement) and be due and payable on the Third
Amendment Effective Date (such amount, the “Third Amendment Cash Pay Interest”)
and (b) $191,708.60 of the Aggregate Accrued Interest Amount shall constitute
Paid-in-Kind Interest (as defined in the Existing Credit Agreement) and be added
to the outstanding principal amount of the Term A-1 Loans on the Third Amendment
Effective Date.

6. Reaffirmation.

Each of the Loan Parties acknowledges and reaffirms (a) that it is bound by all
of the terms of the Investment Documents to which it is a party and (b) that it
is responsible for the observance and full performance of all of the
Obligations, including without limitation, the repayment of the Loans.
Furthermore, the Loan Parties acknowledge and confirm that by entering into this
Agreement, the Administrative Agent and the Lenders do not, except as expressly
set forth herein, waive or release any term or condition of the Credit Agreement
or any of the other Investment Documents or any of their rights or remedies
under such Investment Documents or any applicable Law or any of the obligations
of the Loan Parties thereunder.

7. Release.

As a material part of the consideration for Administrative Agent and the Lenders
entering into this Agreement, the Loan Parties agree as follows (the “Release
Provision”):

(a) By their respective signatures below, the Loan Parties hereby agree that the
Administrative Agent, the Lenders, each of their respective Affiliates and each
of the foregoing Persons’ respective officers, managers, members, directors,
advisors, sub-advisors, partners, agents and employees, and their respective
successors and assigns (hereinafter all of the above collectively referred to as
the “Lender Group”), are irrevocably and unconditionally released, discharged
and acquitted from any and all actions, causes of action, claims, demands,
damages and liabilities of whatever kind or nature, in law or in equity, now
known or unknown, suspected or unsuspected to the extent that any of the
foregoing arises from any action or failure to act under or otherwise arising in
connection with the Investment Documents on or prior to the Third Amendment
Effective Date.

 

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(b) Each Loan Party hereby acknowledges, represents and warrants to the Lender
Group that:

(i) it has read and understands the effect of the Release Provision. Each Loan
Party has had the assistance of independent counsel of its own choice, or has
had the opportunity to retain such independent counsel, in reviewing,
discussing, and considering all the terms of the Release Provision; and if
counsel was retained, counsel for such Loan Party has read and considered the
Release Provision and advised such Loan Party with respect to the same. Before
execution of this Agreement, such Loan Party has had adequate opportunity to
make whatever investigation or inquiry it may deem necessary or desirable in
connection with the subject matter of the Release Provision.

(ii) no Loan Party is acting in reliance on any representation, understanding,
or agreement not expressly set forth herein. Each Loan Party acknowledges that
the Lender Group has not made any representation with respect to the Release
Provision except as expressly set forth herein.

(iii) each Loan Party has executed this Agreement and the Release Provision
thereof as its free and voluntary act, without any duress, coercion, or undue
influence exerted by or on behalf of any person.

(iv) the Loan Parties are the sole owners of the claims released by the Release
Provision, and no Loan Party has heretofore conveyed or assigned any interest in
any such claims to any other Person.

(c) Each Loan Party understands that the Release Provision was a material
consideration in the agreement of the Administrative Agent and the Lenders to
enter into this Agreement. The Release Provision shall be in addition to any
rights, privileges and immunities granted to the Administrative Agent and the
Lenders under the Investment Documents.

8. Miscellaneous.

(a) The Credit Agreement and the obligations of the Loan Parties thereunder and
under the other Investment Documents, except as expressly modified by this
Agreement, are hereby ratified and confirmed and shall remain in full force and
effect according to their terms. This Agreement is a Loan Document.

(b) The Loan Parties hereby represent and warrant as follows:

(i) Each Loan Party has taken all necessary action to authorize the execution,
delivery and performance of this Agreement.

(ii) This Agreement has been duly executed and delivered by such Loan Party and
constitutes such Loan Party’s legal, valid and binding obligations, enforceable
in accordance with its terms, except as such enforceability may be limited by
Debtor Relief Laws and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

(iii) No consent, approval, exemption, authorization or other action by, or
notice to, or filing with, any Governmental Authority or any other Person is
necessary or required in connection with the execution, delivery or performance
by any Loan Party of this Agreement.

 

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(c) The Loan Parties represent and warrant to the Administrative Agent and the
Lenders that after giving effect to this Agreement (i) the representations and
warranties of the Loan Parties set forth in Article VI of the Credit Agreement
and in each other Loan Document are true and correct in all material respects
(and in all respects if any such representation or warranty is already qualified
by materiality or reference to Material Adverse Effect) as of the date hereof
with the same effect as if made on and as of the date hereof, except to the
extent such representations and warranties expressly relate solely to an earlier
date in which case they shall be true and correct in all material respects (and
in all respects if any such representation or warranty is already qualified by
materiality or reference to Material Adverse Effect) as of such earlier date and
(ii) no event has occurred and is continuing which constitutes a Default or an
Event of Default.

(d) Each of the Loan Parties hereby affirms the Liens created and granted in the
Loan Documents in favor of the Administrative Agent, for the benefit of the
Secured Parties, and agrees that this Agreement does not adversely affect or
impair such liens and security interests in any manner.

(e) This Agreement may be executed in counterparts (and by different parties
hereto in different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.
Delivery of an executed counterpart of a signature page of this Agreement by
facsimile or other electronic imaging means (e.g. “pdf’ or “tif”) shall be
effective as delivery of a manually executed counterpart of this Agreement.

(f) If any provision of this Agreement is held to be illegal, invalid or
unenforceable, (i) the legality, validity and enforceability of the remaining
provisions of this Agreement shall not be affected or impaired thereby and
(ii) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

(g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AM) INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

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Each of the parties hereto has caused a counterpart of this Agreement to be duly
executed and delivered as of the date first above written.

BORROWERS

 

VENUS CONCEPT CANADA CORP., an Ontario corporation /s/ Domenic Serafino Name:
Domenic Serafino Title: CEO

 

VENUS CONCEPT USA INC a Delaware corporation /s/ Domenic Serafino Name: Domenic
Serafino Title: President

PARENT:

 

VENUS CONCEPT LTD., an Israeli corporation /s/ Domenic Serafino Name: Domenic
Serafino Title: CEO

 

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ADMINISTRATIVE AGENT:

 

MADRYN HEALTH PARTNERS. LP,

a Delaware limited partnership

By:  

MADRYN HEALTH ADVISORS, LP

its General Partner

By:

 

MADRYN HEALTH ADVISORS GP, LLC,

its General Partner

 

By:

  /s/ Peter Faroni

Name:

  Peter Faroni

Title:

  Member

 

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LENDERS:

 

MADRYN HEALTH PARTNERS, LP.

a Delaware limited partnership

By:   MADRYN HEALTH ADVISORS, LP

its General Partner By:   MADRYN HEALTH ADVISORS GP, LLC,

its General Partner

By:   /s/ Peter Faroni

Name:   Peter Faroni Title:   Member

 

MADRYN HEALTH PARTNERS

(CAYMAN MASTER) LP

By:   MADRYN HEALTH ADVISORS, LP

its General Partner By:   MADRYN HEALTH ADVISORS GP, LLC,

its General Partner

By:

  /s/ Peter Faroni

Name:

  Peter Faroni Title:   Member

 

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