Aradigm Corporation (NASDAQ:ARDM) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On April13, 2018, Aradigm Corporation (the “Company”) entered into a senior note purchase agreement (the “Purchase Agreement”) whereby the lenders set forth on Schedule A of the Purchase Agreement (the “Lenders”) agreed to purchase up to approximately $7million aggregate principal amount of the Company’s 9.0% senior promissory notes due 2021 (the “Notes”). Unless the Company elects otherwise, accrued interest payable on each outstanding Note will be capitalized on the applicable interest payment date by adding such accrued interest to the principal balance of such Note, at which time such interest will be deemed to have been paid. The Notes were sold in a private placement conducted to Regulation D under the Securities Act of 1933, as amended. The Company completed the first closing under the Purchase Agreement on April13, 2018, at which time the Company issued and sold approximately $2million aggregate principal amount of Notes to the Lenders. Subject to the satisfaction or waiver of the applicable closing conditions set forth in the Purchase Agreement at each subsequent closing, the Company anticipates the sale of the remaining approximately $5million principal amount of the Notes to occur in five subsequent monthly closings, the first of which is anticipated to occur on May13, 2018.
The Notes are senior unsecured obligations of the Company and bear interest at a fixed rate of 9.0% per annum, payable semiannually in arrears on May1 and November1 of each year, beginning on May1, 2018 in the case of Notes issued on April13, 2018 and on November1, 2018 in the case of Notes issued thereafter, unless earlier redeemed or cancelled in accordance with the terms of the Notes. The Notes rank (i)senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Notes, (ii)equal in right of payment to any of the Company’s indebtedness that is not so subordinated, including the Company’s 9.0% Convertible Senior Notes due 2021, issued to that certain Indenture, dated as of April25, 2016, between the Company and U.S. Bank National Association, as trustee, (iii)effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness, and (iv)structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries.
The Company may, at its option, redeem for cash all or any portion of the outstanding Notes (or a pro rata basis) at any time in whole and, from time to time, in part. There is no sinking fund provided for the Notes. The redemption price for the Notes will equal 50% of the aggregate principal amount being redeemed plus accrued and unpaid interest to, but excluding, any redemption date.
The events of default under the terms of the Notes, which may result in the acceleration of the maturity of each Note, include:
(i) the Company’s default in any payment of interest on such Note when due and payable and the default continues for a period of thirty calendar days;
(ii) the Company’s default in the payment of principal of such Note, including capitalized interest, when due and payable at its stated maturity, upon redemption, upon declaration of acceleration or otherwise;
(iii) the Company’s failure to comply with its obligations under the covenant in such Note relating to the consolidation or merger of the Company or the sale of its assets;
(iv) the Company’s failure for sixty days, after written notice from the holder of such Note is received, to comply with any of the Company’s other agreements contained in such Note;
(v) default by the Company or any of its significant subsidiaries with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $500,000 (or its foreign currency equivalent) in the aggregate of the Company and/or any such significant subsidiary, whether such indebtedness existed at the time of issuance or where thereafter created, (i)resulting in such indebtedness becoming or being declared due and payable or (ii)constituting a failure to pay the principal or interest of any such indebtedness when due and payable at its stated maturity, upon declaration of acceleration or otherwise if such default is not cured or waived, or such acceleration is not rescinded within thirty calendar days;
(vi) a final judgment for the payment of $500,000 (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) in the aggregate rendered against the Company or any of the Company’s significant subsidiaries, which judgment is not paid, discharged or stayed within sixty calendar days after (i)the date on which the right to appeal thereof has expired, if no such appeal has commenced, or (ii)the date on which all rights to appeal have been extinguished; and
(vii) certain events of bankruptcy, insolvency, or reorganization of the Company or any of its significant subsidiaries.
The above descriptions of the Purchase Agreement and the Notes do not purport to be complete and are qualified in their entirety by reference to the Purchase Agreement and the Form of Promissory Note, which are filed as exhibits to this report and are incorporated herein by reference.
|Item 1.01||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 above with respect to the Notes is hereby incorporated by reference into this Item 1.01, insofar as it relates to the creation of a direct financial obligation.
|Item 1.01||Financial Statements and Exhibits.|
ARADIGM CORP ExhibitEX-1.1 2 d563004dex11.htm EX-1.1 EX-1.1 EXHIBIT 1.1 SENIOR NOTE PURCHASE AGREEMENT THIS SENIOR NOTE PURCHASE AGREEMENT (this Agreement) is made as of April 13,…To view the full exhibit click
About Aradigm Corporation (NASDAQ:ARDM)
Aradigm Corporation is a pharmaceutical company focused on the development and commercialization of products for the treatment and prevention of severe respiratory diseases. The Company’s lead product candidate is Pulmaquin inhaled ciprofloxacin, which is in Phase III clinical trials. It offers AERx pulmonary drug delivery platform and other technologies. Its partnered programs under development include Inhaled Ciprofloxacin. It is also engaged in developing Smoking Cessation Therapy (ARD-1600 Inhaled Nicotine). Its lead development candidates are its formulations of the potent antibiotic ciprofloxacin (Pulmaquin (ARD-3150) and Lipoquin (ARD-3100)) that are delivered by inhalation for the management of infections associated with the severe respiratory diseases, such as cystic fibrosis (CF) and non-cystic fibrosis bronchiectasis (BE). Pulmaquin uses slow release liposomal formulation (Lipoquin) mixed with a small amount of ciprofloxacin dissolved in an aqueous medium.