Item 1.01 Entry into a Material Definitive Agreement.
On
The obligations of the Borrowers under the Loan Agreement are secured by certain assets of the Borrowers, including substantially all of the assets of the Company, excluding the Company's intellectual property.
The Term Loan bears a variable interest rate equal to the greater of (i) 8.45% and (ii) the sum of (a) the Prime Rate as reported in The Wall Street Journal plus (b) 2.25%. The Company may prepay, at its option, all, but not less than all, of the outstanding principal balance and all accrued and unpaid interest with respect to the principal balance being prepaid of the Term Loan, subject to a prepayment premium to which the Lenders are entitled and certain notice requirements.
The Lenders may elect at any time following the Closing Date and prior to the
full repayment of the Term Loan to convert any portion of the principal amount
of the term loans then outstanding, up to an aggregate of
The proceeds of borrowings under the Loan Agreement are expected to be used for working capital and general corporate requirements.
The Loan Agreement contains customary representations and warranties and
affirmative and negative covenants, including covenants that limit or restrict
the ability of the Borrowers or their subsidiaries to, among other things,
dispose of assets, make changes to their business, management, ownership or
business locations, merge or consolidate, incur additional indebtedness, pay
dividends or other distributions or repurchase equity, make investments, and
enter into certain transactions with affiliates, in each case subject to certain
exceptions. In addition, starting in
The Loan Agreement contains customary events of default, including a change in control. Upon the occurrence and continuation of an event of default, all amounts due under the Loan Agreement become (in the case of a bankruptcy event), or may become (in the case of all other events of default and at the option of the administrative agent), immediately due and payable.
In addition, under the Loan Agreement, the Company agreed to issue to K2HV a
warrant to purchase up to that number of shares of the Company's common stock
(the "Warrant") equal to the quotient of 2.0% of the aggregate funded Term Loan
amount divided by the warrant price. The warrant price will be equal to the
Lowest Trailing Three-Day VWAP for the period commencing on
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The Loan Agreement and the Warrant each provide the Lenders with certain piggyback registration rights with respect to the Conversion Shares and the shares issuable upon exercise of the Warrant.
The foregoing descriptions of the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Loan Agreement filed as Exhibit 10.1 attached hereto. The Company will file the Warrant with an amendment to this Current Report on Form 8-K.
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 above regarding the Loan Agreement is incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of
The information set forth in Item 1.01 above regarding the Warrant and the Conversion Shares is incorporated by reference into this Item 3.02. The issuance of shares of the Company's common stock underlying the Warrant and the Conversion Shares will be made in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D thereunder.
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