Document:

hair-ex411_659.htm

 

Exhibit 4.11

 

RESTORATION ROBOTICS, INC.

NOTE PURCHASE AGREEMENT

 

 

February 28, 2019

 

 

 

 

TABLE OF CONTENTS

 

	
 
	
 
	
 
	
 
	
 
	
Page

	
 
	
 
	
 
	
 
	
 
	
 

	
1.
	
 
	
Definitions
	
1

	
 
	
 
	
 
	
 
	
 
	
 

	
2.
	
 
	
Sale and Issuance of Notes
	
1

	
 
	
 
	
2.1
	
 
	
Closing
	
1

	
 
	
 
	
 
	
 
	
 
	
 

	
3.
	
 
	
Terms and Conditions of Notes
	
1

	
 
	
 
	
 
	
 
	
 
	
 

	
4.
	
 
	
Representations and Warranties of the Company
	
2

	
 
	
 
	
4.1
	
 
	
Organization, Good Standing and Qualification
	
2

	
 
	
 
	
4.2
	
 
	
Authorization
	
2

	
 
	
 
	
4.3
	
 
	
Compliance with Other Instruments
	
2

	
 
	
 
	
4.4
	
 
	
Governmental Consents and Filings
	
2

	
 
	
 
	
 
	
 
	
 
	
 

	
5.
	
 
	
Representations and Warranties of the Lenders
	
2

	
 
	
 
	
5.1
	
 
	
Authorization
	
2

	
 
	
 
	
5.2
	
 
	
Purchase Entirely for Own Account
	
2

	
 
	
 
	
5.3
	
 
	
Disclosure of Information
	
3

	
 
	
 
	
5.4
	
 
	
Investment Experience
	
3

	
 
	
 
	
5.5
	
 
	
Accredited Investor
	
3

	
 
	
 
	
5.6
	
 
	
Restricted Securities
	
3

	
 
	
 
	
5.7
	
 
	
Legends
	
3

	
 
	
 
	
 
	
 
	
 
	
 

	
6.
	
 
	
Miscellaneous
	
3

	
 
	
 
	
6.1
	
 
	
Successors and Assigns
	
3

	
 
	
 
	
6.2
	
 
	
Governing Law
	
3

	
 
	
 
	
6.3
	
 
	
Counterparts
	
4

	
 
	
 
	
6.4
	
 
	
Titles and Subtitles
	
4

	
 
	
 
	
6.5
	
 
	
Notices
	
4

	
 
	
 
	
6.6
	
 
	
Finder’s Fee
	
4

	
 
	
 
	
6.7
	
 
	
Expenses
	
5

	
 
	
 
	
6.8
	
 
	
Entire Agreement; Amendments and Waivers
	
5

	
 
	
 
	
6.9
	
 
	
Effect of Amendment or Waiver
	
5

	
 
	
 
	
6.10
	
 
	
Severability
	
5

	
 
	
 
	
6.11
	
 
	
Stock Purchase Agreement
	
5

	
 
	
 
	
6.12
	
 
	
Exculpation Among Lenders
	
5

	
 
	
 
	
6.13
	
 
	
Further Assurance
	
5

	
 
	
 
	
6.14
	
 
	
Waiver of Jury Trial
	
6

 

 

 

i

 

NOTE PURCHASE AGREEMENT

 

THIS NOTE PURCHASE AGREEMENT (this “Agreement”) is made as of February 28, 2019, by and among RESTORATION ROBOTICS, INC., a Delaware corporation (the “Company”), and the lenders (each individually a “Lender,” and collectively the “Lenders”) named on the Schedule of Lenders attached hereto (the “Schedule of Lenders”). Capitalized terms not otherwise defined in this Agreement shall have the meanings ascribed to them in Section 1 below.

 

In consideration of the mutual promises and covenants contained in this Agreement, the parties hereto agree as follows:

 

	
 
	
1.
	
Definitions.

 

	
 
	
(a)
	
“Act” means the Securities Act of 1933, as amended.

 

	
 
	
(b)
	
“Common Stock” shall mean the Company’s common stock, $0.0001 par value per share.

 

	
 
	
(c)
	
“Financing Shares” shall mean, collectively, the shares of capital stock issued upon conversion or cancellation of the Notes.

 

	
 
	
(d)
	
“Notes” shall mean the one or more Unsecured Subordinated Convertible Promissory Notes issued to the Lenders pursuant to Section 2 below, the form of which is attached hereto as Exhibit A.

 

	
 
	
(e)
	
“Qualified Financing” shall have the meaning given to such term in the

Notes.

 

	
 
	
(f)
	
“Requisite Lenders” shall mean Lenders holding at least 66% of the

aggregate principal amount of the Notes then outstanding.

 

	
 
	
2.
	
Sale and Issuance of Notes.

 

2.1Closing.

 

(a)The closing of the sale and purchase of Notes under this Agreement (the “Closing”) shall take place remotely on February 28, 2019, unless another date, time and place is agreed to in writing by the Company and the Requisite Lenders (such date, the “Closing Date”).

 

(b)At the Closing, each Lender agrees to purchase, and the Company agrees to sell and issue to such Lender, a Note in the principal amount set forth opposite such Lender’s name in the Schedule of Lenders attached hereto under the heading “Principal Amount of Note at Closing”.

 

(c)The obligation of each Lender to purchase a Note at the Closing is subject to the Company’s delivery to such Lender, at or before the Closing, of a Note executed by the Company representing the applicable principal amount.

 

	
 
	
3.
	
Terms and Conditions of Notes. Each Note shall be convertible into shares of the Company’s capital stock as expressly set forth in such Note and shall contain all other rights and restrictions, and be subject to all other terms and conditions, set forth in the form of Note attached hereto as Exhibit A.

 

 

	
 
	
4.
	
Representations and Warranties of the Company. The Company hereby represents and warrants to each Lender that the following representations are true and complete as of the date hereof and as of the date of each Closing:

4.1Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties.

 

4.2Authorization. Except for the authorization and issuance of the shares issuable in connection with the Qualified Financing, all corporate action has been taken on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the Notes. Except as may be limited by applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors’ rights, the Company has taken all corporate action required to make all of the obligations of the Company reflected in the provisions of this Agreement and the Notes the valid and enforceable obligations they purport to be.

 

4.3Compliance with Other Instruments. Neither the authorization, execution and delivery of this Agreement, nor the issuance and delivery of the Notes, will constitute or result in a material default or violation of any law or regulation applicable to the Company or any material term or provision of the Company’s Amended and Restated Certificate of Incorporation or its current bylaws or any material agreement or instrument by which it is bound or to which its properties or assets are subject.

 

4.4Governmental Consents and Filings. Assuming the accuracy of the representations made by the Purchasers in Section 5 of this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority is required on the part of the Company in connection with the consummation of the transactions contemplated by this Agreement, except for any required filings pursuant to applicable state or federal securities laws, which have been made or will be made in a timely manner.

 

	
 
	
5.
	
Representations and Warranties of the Lenders. Each Lender hereby represents and warrants, severally and not jointly, to the Company that the following representations are true and complete as of the date hereof and as of the date of each Closing:

 

5.1Authorization. This Agreement constitutes such Lender’s valid and legally binding obligation, enforceable in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors’ rights and (ii) laws relating to the availability of specific performance, injunctive relief or other equitable remedies. Each Lender represents that it has full power and authority to enter into this Agreement.

 

5.2Purchase Entirely for Own Account. Each Lender acknowledges that this Agreement is made with Lender in reliance upon such Lender’s representation to the Company that the Notes, the Warrants and the Financing Shares (collectively, the “Securities”) will be acquired for investment for Lender’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that such Lender has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, each Lender further represents that such Lender does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to the Securities.

2

 

 

5.3Disclosure of Information. Each Lender acknowledges that it has received all the information it considers necessary or appropriate for deciding whether to acquire the Securities. Each Lender further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities.

 

5.4Investment Experience. Each Lender is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment 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 the Securities. If other than an individual, each Lender also represents it has not been organized solely for the purpose of acquiring the Securities.

 

5.5Accredited Investor. Each Lender is an “accredited investor” within the meaning of Rule 501 of Regulation D of the Securities and Exchange Commission (the “SEC”), as presently in effect.

 

5.6Restricted Securities. Each Lender understands that the Securities are characterized as “restricted securities” under the federal securities laws 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 Act only in certain limited circumstances. Each Lender represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Act.

 

5.7Legends. It is understood that the Securities may bear the following legend:

 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.”

 

	
 
	
6.
	
Miscellaneous.

 

6.1Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

6.2Governing Law. This Agreement and any controversy arising out of or relating to this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York (without regard to conflict of law principles that would result in the application of any law other than the law of the State of New York).

 

3

 

6.3Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

6.4Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

6.5Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, if not so confirmed, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the following addresses (or at such other addresses as shall be specified by notice given in accordance with this Section 6.5):

 

If to the Company:

 

RESTORATION ROBOTICS, INC.

128 Baytech Drive

San Jose, California 95134 Attention: Chief Financial Officer

With a copy to (which shall not constitute notice): Latham & Watkins LLP

140 Scott Dr.

Menlo Park, California 94025

Attention: Brian J. Cuneo, Esq. If to Lenders:

At the respective addresses shown on the signature pages hereto.

 

 

6.6 Finder’s Fee. Each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with the transactions contemplated by this Agreement. Lender agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which Lender or any of its officers, partners, employees or representatives is responsible. The Company agrees to indemnify and hold harmless each Lender from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

 

4

 

6.7Expenses. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. The Company and the Lenders will bear their own legal and other expenses with respect to the transactions contemplated by this Agreement.

 

6.8Entire Agreement; Amendments and Waivers. This Agreement and the Notes and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. The Company’s agreements with each of the Lenders are separate agreements, and the sales of the Notes to each of the Lenders are separate sales. Nonetheless, any term of this Agreement, the Notes may be amended and the observance of any term of this Agreement, the Notes may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Requisite Lenders; provided that such amendment affects each Lender in materially the same manner. Any waiver or amendment effected in accordance with this Section shall be binding upon each party to this Agreement and any holder of any Note purchased under this Agreement at the time outstanding and each future holder of all such Notes.

 

6.9Effect of Amendment or Waiver. Each Lender acknowledges that by the operation of Section 6.8 hereof, the Requisite Lenders, will have the right and power to diminish or eliminate all rights of such Lender under this Agreement and each Note issued to such Lender.

 

6.10Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 

6.11Stock Purchase Agreement. Each Lender understands and agrees that the conversion of the Notes into Financing Shares may require such Lender’s execution of certain agreements (in form reasonably agreeable to the Lender) relating to the purchase and sale of such securities.

 

6.12Exculpation Among Lenders. Each Lender acknowledges that it is not relying upon any person, firm, corporation or stockholder, other than the Company and its officers and directors in their capacities as such, in making its investment or decision to invest in the Company. Each Lender agrees that no other Lender nor the respective controlling persons, officers, directors, partners, agents, stockholders or employees of any other Lender shall be liable for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase and sale of the Securities.

 

6.13Further Assurance. From time to time, the Company shall execute and deliver to the Lenders such additional documents and shall provide such additional information to the Lenders as any Lender may reasonably require to carry out the terms of this Agreement and the Notes and any agreements executed in connection herewith or therewith, or to be informed of the financial and business conditions and prospects of the Company.

 

5

 

6.14Waiver of Jury Trial. TO THE EXTENT EACH MAY LEGALLY DO SO, EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALING OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT EACH MAY LEGALLY DO SO, EACH PARTY HERETO HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT EITHER PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER PARTY HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

 

[Remainder of Page Intentionally Left Blank.]

 

 

6

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

			
	
RESTORATION ROBOTICS, INC.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Mark Hair

	
Name:
	
 
	
Mark Hair

	
Title:
	
 
	
Chief Financial Officer

 

			
	
Address:

	
 
	
 
	
 

	
RESTORATION ROBOTICS, INC.

	
128 Baytech Drive

	
San Jose, California 95134

	
Attention: Chief Financial Officer

 

 

 

SIGNATURE PAGE TO

NOTE PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

 

			
	
LENDERS:

	
 

	
INTERWEST PARTNERS IX, LP

	
 
	
 
	
 

	
By:
	
 
	
InterWest management Partners IX, LLC

	
Its:
	
 
	
General Partner

 

			
	
By:
	
 
	
/S/ Gilbert H. Kliman

	
Name:
	
 
	
Gilbert H., Kliman

	
Title:
	
 
	
Managing Director

	
 
	
 
	
 

	
FRED MOLL

 

 

 

SIGNATURE PAGE TO

NOTE PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

 

			
	
LENDERS:

	
 

	
INTERWEST PARTNERS IX, LP

	
 
	
 
	
 

	
By:
	
 
	
InterWest management Partners IX, LLC

	
Its:
	
 
	
General Partner

 

			
	
By:
	
 
	
 

	
Name:
	
 
	
 

	
Title:
	
 
	
 

	
 
	
 
	
 

	
FRED MOLL: /S/ FRED MOLL

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURE PAGE TO

NOTE PURCHASE AGREEMENT

 

 

SCHEDULE OF LENDERS

 

 

		
	
Name of Lender
	
Principal Amount

of Note at First Closing

	
InterWest Partners IX, LP

2710 Sand Hill Road, Suite 200 Menlo Park, CA 94025

c/o InterWest Attn:

Email:
	
$2,000,000.00

	
Fred Moll

4000 E. Denny Blaine PLace Seattle, WA 98112

Email: fredmoll@gmail.com
	
$3,000,000.00

	
TOTAL
	
$5,000,000.00

 

 

 

Exhibit A

 

Form of Unsecured Subordinated Promissory Notehair-ex412_660.htm

 

Exhibit 4.12

NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY AND THE EXERCISE OF ANY RIGHT OR REMEDY IN RESPECT OF SUCH INDEBTEDNESS ARE SUBJECT TO THE PROVISIONS OF THAT CERTAIN SUBORDINATION AGREEMENT, DATED AS OF FEBRUARY 28, 2019 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF, THE “SUBORDINATION AGREEMENT”), AMONG SOLAR CAPITAL LTD., A MARYLAND CORPORATION AS “SENIOR CREDITOR” DEFINED THEREIN, THE HOLDER AND THE OTHER HOLDERS OF THE NOTES (AS DEFINED BELOW). IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE SUBORDINATION AGREEMENT AND THIS NOTE, THE TERMS OF THE SUBORDINATION AGREEMENT SHALL GOVERN AND CONTROL.

 

THIS NOTE AND ANY SHARES ACQUIRED UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE MAKER THAT SUCH REGISTRATION IS NOT REQUIRED.

 

RESTORATION ROBOTICS, INC.

UNSECURED SUBORDINATED CONVERTIBLE PROMISSORY NOTE

 

			
	
$3,000,000.00
	
 
	
February 28, 2019

	
 
	
 
	
 

	
 
	
 
	
No. CN-2

 

FOR VALUE RECEIVED, Restoration Robotics, Inc., a Delaware corporation (the “Maker”), promises to pay to Fred Moll or his assigns (the “Holder”) the principal sum of $3,000,000.00, together with interest on the unpaid principal balance of this Note from time to time outstanding at the rate of 8.0% per year until paid in full. This Note is one of a series of Notes issued pursuant to that certain Note Purchase Agreement dated February 28, 2019 among the Maker, the Holder and certain other investors as the same may be amended, restated or otherwise modified from time to time (the “Purchase Agreement”). Capitalized terms used but not defined herein shall have the meaning set forth in the Purchase Agreement.

 

Subject to the conversion provisions set forth herein, all principal and accrued interest under this Note shall be due and payable on August 28, 2020 (the “Maturity Date”) and in no event earlier than such date.

 

Interest on this Note shall be computed on the basis of a year of 365/366 days for the actual number of days elapsed. All payments by the Maker under this Note shall be in immediately available funds.

 

 

 

Effective upon the closing of a Qualified Financing (as defined below), all of the outstanding principal and interest under this Note will automatically be converted into shares of the same class and series of capital stock of the Maker issued to other investors in the Qualified Financing (the “Qualified Financing Securities”) at a conversion price equal to the price per share of Qualified Financing Securities paid by the other investors in the Qualified Financing, with any resulting fraction of a share rounded to the nearest whole share (with 0.5 being rounded up) and on the same terms offered to the other investors in the Qualified Financing. “Qualified Financing” means the first issuance or series of related issuances of capital stock of the Maker (or its successor entity) after the date hereof, with immediately available gross proceeds to the Maker (excluding proceeds from this and any other indebtedness of the Maker that convert into equity in such financing) of at least $20,000,000. The Maker shall notify the Holder in writing of the anticipated occurrence of the Qualified Financing at least five days prior to the closing date of the Qualified Financing.

 

This Note shall become immediately due and payable without notice or demand (but subject to the conversion rights set forth herein) upon the occurrence at any time of any of the following events of default (individually, an “Event of Default” and collectively, “Events of Default”):

 

(1)the Maker fails to pay any of the principal, interest or any other amounts payable under this Note when due and payable after the occurrence of the Discharge of the Senior Debt (as defined in the Subordination Agreement);

 

(2)the Maker files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or seeks the appointment of a custodian, receiver, trustee (or other similar official) of the Maker or all or any substantial portion of the Maker’s assets, or makes any assignment for the benefit of creditors or takes any action in furtherance of any of the foregoing, or fails to generally pay its debts as they become due;

 

(3)an involuntary petition is filed, or any proceeding or case is commenced, against the Maker (unless such proceeding or case is dismissed or discharged within 60 days of the filing or commencement thereof) under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, liquidation or moratorium statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is applied or appointed for the Maker or to take possession, custody or control of any property of the Maker, or an order for relief is entered against the Maker in any of the foregoing;

 

(4)any of the Maker’s indebtedness for borrowed money is accelerated as a result of a default or breach of or under any agreement or instrument evidencing or relating to such indebtedness for borrowed money;

 

(5)the Maker suspends the operation of the usual business of the Maker; or

 

(6)the Maker admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of creditors.

 

Notwithstanding the foregoing, if any of the foregoing shall occur prior to the date upon which the Discharge of the Senior Debt (as defined in the Subordination Agreement) shall have occurred and such event or circumstance is not also an “Event of Default” under the Senior Loan Agreement (as defined below), such event or circumstance shall not be an Event of Default hereunder until the occurrence of the Discharge of the Senior Debt (as defined in the Subordination Agreement).

- 2 -

 

 

 

Upon the occurrence of an Event of Default, the Holder shall have then, or at any time thereafter, all of the rights and remedies afforded creditors generally by the applicable federal laws or the laws of the State of New York; provided that Holder, by countersigning below, agrees not to pursue any such rights or remedies unless and until such action is approved by the written consent of the holders of at least 66% of the aggregate amount of outstanding principal under the Notes.

 

The Holder agrees that the indebtedness evidenced by this Note is expressly subordinated in right of priority and payment to the prior payment in full of all current senior secured indebtedness of the Company outstanding under certain Loan and Security Agreement, dated as of May 10, 2018, by and among the Maker, Solar Capital Ltd. (as amended, the “Term Agent”) and the other parties thereto, as may be amended, restated, modified, extended or amended and restated from time to time (the “Senior Loan Agreement”), pursuant to the Subordination Agreement.

 

This Note may not be prepaid, in whole or in part, without the prior written consent of the Holder.

 

All payments by the Maker under this Note shall be made without set-off or counterclaim and be free and clear and without any deduction or withholding for any taxes or fees of any nature whatever, unless the obligation to make such deduction or withholding is imposed by law.

 

The amendment or waiver of any term of this Note, the resolution of any controversy or claim arising out of or relating to this Note and the provision of notice shall be conducted pursuant to the terms of the Purchase Agreement.

 

No delay or omission on the part of the Holder in exercising any right under this Note shall operate as a waiver of such right or of any other right of the Holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or any other right on any future occasion.

 

The parties hereto hereby acknowledge and agree that, notwithstanding that the Note is titled as an “Unsecured Subordinated Convertible Promissory Note,” for United States federal and state income tax purposes the Note is, and at all times has been, more properly characterized as equity. Accordingly, the parties hereto agree to treat the Note as equity for all United States federal and state income tax purposes (including, without limitation, on their respective tax returns or other informational statements). For the avoidance of doubt, the Maker hereby agrees that, with regard specifically to the rule set forth in Section 385 of the Internal Revenue Code of 1986, as amended, the Maker will treat the Note as equity as of the time of issuance. For the avoidance of doubt, nothing in this paragraph shall prevent any party hereto from negotiating or settling a dispute with the Internal Revenue Service or any other tax authority regarding the tax treatment of the Note.

 

All payments by the Maker under this Note shall be applied first to the accrued interest due and payable hereunder and the remainder, if any, to the outstanding principal.

 

The Maker and every endorser or guarantor of this Note, regardless of the time, order or place of signing, hereby waives presentment, demand, protest and notices of every kind and assents to any permitted extension of the time of payment and to the addition or release of any other party primarily or secondarily liable hereunder.

 

- 3 -

 

 

The Holder agrees that no stockholder, director or officer of the Maker shall have any personal liability for the repayment of this Note.

 

Until the conversion of this Note, the Holder shall not have or exercise any rights by virtue hereof as a stockholder of the Maker.

 

[Remainder of Page Intentionally Left Blank]

 

- 4 -

 

 

RESTORATION ROBOTICS, INC

 

	
By:
	
 
	
/s/ Mark Hair

	
Name:
	
 
	
Mark Hair

	
Title:
	
 
	
CFO

 

	
HOLDER

	
 

	
 

	
FRED MOLL

	
 

	
 

 

- 5 -

 

 

RESTORATION ROBOTICS, INC

 

	
By:
	
 
	
 

	
Name:
	
 
	
 

	
Title:
	
 
	
 

 

	
HOLDER

	
 

	
 

	
FRED MOLL

	
 

	
/S/ FRED MOLL

 

- 6 -

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