TELA BIO, INC. Item 1.01 Entry into a Material Definitive Agreement.
On
Pursuant to the New Credit Agreement, the Company provided a first priority security interest in all existing and future acquired assets, including intellectual property, owned 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 best interests. Subject to certain limited exceptions, these covenants limit the Company's ability to, among other things:
? create, incur, assume or permit to exist any additional indebtedness, or
create, incur, allow or permit to exist any additional liens;
? enter into any amendment, supplement, waiver or other modification of, or enter
into any forbearance from exercising any rights with respect to, the terms or
provisions contained in certain agreements without consent;
? effect certain changes in the Company's business, fiscal year, management,
entity name, business locations;
? liquidate or dissolve, merge with or into, consolidate with, or acquire all or
substantially all of the capital stock or assets of, any other company;
? pay cash dividends on, make any other distributions in respect of, or redeem,
retire or repurchase, any shares of the Company's capital stock;
? make certain investments; and
? enter into transactions with the Company's affiliates.
The New Credit Agreement also contains customary indemnification obligations and customary events of default, including, among other things, (i) non-payment, (ii) breach of warranty, (iii) non-performance of covenants and obligations, (iv) default on other indebtedness, (v) judgments, (vi) change of control, (vii) bankruptcy and insolvency, (viii) impairment of security, (ix) key permit events, (x) termination of a pension plan, (xi) regulatory matters, (xii) material adverse effect and (xiii) breach of material contracts.
In addition, the Company must maintain minimum net revenue levels tested quarterly. In the event of default under the New Credit Agreement, the Company would be required to pay interest on principal and all other due and unpaid obligations at the current rate in effect plus 2%.
The MidCap Term Loans mature on
Subject to certain limitations, the MidCap Term Loans have a prepayment fee equal to 3.0% of the prepaid principal amount for the first year following the closing date of the MidCap Term Loans, 2.0% of the prepaid principal amount for the second year following the closing date and 1.0% of the prepaid principal amount for the third year following the closing date and thereafter. The Company is also required to pay an exit fee at the time of maturity or prepayment event equal to 5% of all principal borrowings (or in the event of a prepayment event, the amount of principal being prepaid).
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 exhibit to this Current Report on Form 8-K.
Item 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 an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(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).
© Edgar Online, source
