Item 1.01 Entry into a Material Definitive Agreement
Effective as of
The first tranche of the New Credit Facility of up to
For advances under the New Credit Facility, the Company will make interest only
payments through
Advances under the New Credit Facility will initially bear an interest rate (the
"New Credit Facility Interest Rate") equal to the greater of either (i) 8.50%
plus the Prime Rate (as reported in The Wall Street Journal) minus 5.25%, and
(ii) 8.50%. Upon the Company achieving cumulative net avacopan revenues of at
least
The Company may prepay advances under the New Credit Facility, in whole or in part, at any time subject to a prepayment charge equal to: (a) 2.0 % of amounts so prepaid, if such prepayment occurs during the first year following the Closing Date; (b) 1.5% of the amount so prepaid, if such prepayment occurs during the second year following the Closing Date, and (c) 1.0% of the amount so prepaid, if such prepayment occurs after the second year following the Closing Date.
The Company will pay an end of term charge of 7.15% of the aggregate amount of the advances under the New Credit Facility, which will occur on the earliest of (i) the loan maturity date; (ii) the date that the Company prepays all of the outstanding principal in full, or (iii) the date the loan payments are accelerated due to an event of default. The New Credit Facility is secured by substantially all of the Company's assets, excluding intellectual property.
In connection with the Amended Loan Agreement, the Company also entered into a
Right to Invest Agreement with Hercules, pursuant to which Hercules shall have
the right to participate, in an amount up to
The Amended Loan Agreement also includes customary affirmative and negative
covenants and events of default, the occurrence and continuance of which provide
Hercules with the right to demand immediate repayment of all principal and
unpaid interest under Amended Loan Agreement, and to exercise remedies against
the Company and the collateral securing the Amended Loan Agreement. These events
of default include, among other things: (i) insolvency, liquidation, bankruptcy
or similar events; (ii) failure to pay any debts due under the Amended Loan
Agreement or other loan documents on a timely basis; (iii) failure to observe
any covenant or secured obligation under the Amended Loan Agreement, which
failure, in most cases, is not cured within 15 days; (iv) occurrence of an event
that could reasonably be expected to have a material adverse effect;
(v) material misrepresentations; (vi) occurrence of any default under any other
agreement involving indebtedness in excess of
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The foregoing description of the Amended Loan Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Amended Loan Agreement and the Right to Invest Agreement, which will be filed
with the Company's Quarterly Report on Form 10-Q for the period ending on
On
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) The following exhibit is included in of this Current Report on Form 8-K by reference.
99.1 Press release issued by the Registrant onJanuary 9, 2020
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