Section 1.01 Entering into a Material Definitive Agreement.
On
Under the New Credit Agreement, the Company has provided a first ranking security interest in all existing and future Acquired Assets, including Intellectual Property, held by the Company. The New Credit Agreement contains certain covenants that limit the Company’s ability to engage in certain transactions that may be in the Company’s long-term interest. Subject to certain limited exceptions, these covenants limit the Company’s ability to, among other things:
? create, incur, assume or permit additional indebtedness to exist, or
create, contract, authorize or permit the existence of additional privileges;
? enter into any amendment, supplement, waiver or other modification of, or enter
in any forbearance to exercise any rights with respect to, the terms or
provisions contained in certain agreements without consent;
? make certain changes in the activities, exercise, management,
entity name, business locations;
? liquidate or dissolve, merge with or into, consolidate with or acquire all or
substantially all of the share capital or assets of any other company;
? pay cash dividends, make any other distributions in respect of, or redeem,
withdraw or redeem any shares in the share capital of the Company;
? make certain investments; and
? enter into transactions with affiliates of the Company.
The New Credit Agreement also contains customary indemnification obligations and events of default, including, but not limited to, (i) non-payment, (ii) breach of warranty, (iii) breach of covenants and obligations, (iv) default on other debts, (v) judgments, (vi) change of control, (vii) bankruptcy and insolvency, (viii) impairment of collateral, (ix) key permit events, ( (x) termination of a pension plan, (xi) regulation (xii) material adverse effect and (xiii) breach of material contracts.
In addition, the Company must maintain minimum net income levels tested on a quarterly basis. In the event of default under the New Credit Agreement, the Company would be required to pay interest on the principal and all other due and unpaid obligations at the prevailing rate plus 2%.
MidCap Term Loans mature on
Subject to certain limits, mid-cap term loans carry a prepayment charge of 3.0% of the prepaid principal amount for the first year following the mid-cap term loan closing date, 2.0 % of the principal amount prepaid for the second year following the closing date and 1.0% of the principal amount prepaid for the third year following the closing date and thereafter. The Company is also required to pay an exit fee at maturity or in the event of early redemption equal to 5% of all principal borrowings (or in the event of early redemption, the principal amount being repaid early).
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the New Credit Agreement, a copy of which is filed as an attachment to this current Report on Form 8-K.
Section 1.02 Termination of a Material Definitive Agreement.
On
A description of the material terms of the existing credit agreement is contained in the company’s annual report on Form 10-K for the year ended
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under a
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Section 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01 Financial statements and supporting documents.
(d) Exhibits Exhibit No. Document 10.1 Credit and Security Agreement, dated as ofMay 26, 2022 , by and amongTELA Bio, Inc. ,MidCap Financial Trust and the lenders from time to time party thereto. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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