Egalet Corporation (NASDAQ:EGLT) Files An 8-K Entry into a Material Definitive Agreement

Egalet Corporation (NASDAQ:EGLT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

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Revolving Credit Agreement

As previously disclosed as being contemplated, on March20, 2019 (the “Closing Date”), Egalet Corporation (the “Company”) entered into a credit agreement (the“Revolving Credit Agreement”) with Cantor Fitzgerald Securities as administrative agent and collateral agent (in such capacities, the “Agent”) and certain funds managed by Highbridge Capital Management, LLC, as lenders (collectively, the “Lenders”), which Revolving Credit Agreement consists of a $20.0 million revolving line of credit. The Company drew $5.0 million on the Closing Date and must maintain at least 25% of the commitment amount outstanding at all times. The Company will use the proceeds of the loans under the Revolving Credit Agreement for working capital purposes and to pay costs and expenses incurred by the Revolving Credit Agreement and related transactions.

Advances under the Revolving Credit Agreement bear interest at the Company’s option at either the LIBOR Rate (as defined in the Revolving Credit Agreement) plus 5.00% or the Base Rate (as defined in the Revolving Credit Agreement) plus 4.00%. The Revolving Credit Agreement matures on March20, 2022.

The obligations of the Company under the Revolving Credit Agreement are unconditionally guaranteed on a senior secured basis by the Company’s wholly-owned subsidiaries, Egalet US Inc. and Egalet Ltd. (collectively, the“Guarantors”). As security for the Company’s obligations under the Revolving Credit Agreement, the Company and the Guarantors have granted to the Agent, for the benefit of the Lenders and other secured parties, a first priority lien on substantially all of their tangible and intangible personal property (other than certain specified excluded assets), including proceeds and accounts related to this property and the capital stock of the Guarantors, to the terms of that certain Collateral Agreement, dated as of the Closing Date (the “Collateral Agreement”), among the Company and the Guarantors in favor of the Agent for the benefit of the Lenders and other secured parties. The Revolving Credit Agreement will (i)be equal in right of payment to all existing and future pari passu indebtedness of the Company, (ii)be senior in right of payment to the obligations of the Company to that certain Indenture, dated as of January31, 2019 (the “Indenture”), among the Company, the Guarantors and U.S. Bank National Association, as trustee and collateral agent, and (iii)be senior in right of payment to all existing and future subordinated indebtedness of the Company.

The Company may terminate the commitments under the Revolving Credit Agreement at its option, in whole or in part from time to time, subject to a termination fee equal to (x)1.0% from the Closing Date through March20, 2020 and (y)0.50% from March20, 2020 through March20, 2021.

to the Revolving Credit Agreement, the Company and its subsidiaries must also comply with certain customary affirmative covenants, such as furnishing financial statements to the Lenders, and negative covenants, including limitations on the following: incurring debt; issuing preferred and/or disqualified stock; paying dividends, repurchasing shares and, under certain conditions, making certain other restricted payments; prepaying, redeeming or purchasing subordinated debt; conducting a merger or consolidation involving the Company; engaging in certain transactions with affiliates; disposing of assets under certain circumstances; and making certain investments, in each

case, other than those permitted by the Revolving Credit Agreement. In addition, commencing with the fiscal quarter ending on December31, 2019, the Company must maintain a minimum level of consolidated liquidity, based on unrestricted cash on hand and availability under any revolving credit facility, equal to the greater of (1)the quotient of the outstanding principal amount of the senior secured notes issued to the Indenture divided by 9.5 and (2)$7,500,000.

The Revolving Credit Agreement contains customary events of default (including the Company’s failure to make any payment of principal or interest when due and payable, the failure to comply with the minimum consolidated liquidity covenant or other covenants described above, or upon a Change of Control (as defined in the Revolving Credit Agreement)), and, upon such events of default occurring and continuing, the Lenders may accelerate the loans. In the event of certain events of bankruptcy, insolvency or reorganization involving the Company or its subsidiaries, the obligations under the Revolving Credit Agreement will automatically become due and payable. With respect to any event of default due to the Company’s non-compliance with the minimum liquidity covenant (described above), the Company may, within ten business days, cure such default through the issuance of equity securities, subordinated debt securities or certain other capital contributions.

The description of the Revolving Credit Agreement contained herein is qualified in its entirety by reference to the Revolving Credit Agreement, which is filed as Exhibit10.1 to this Current Report on Form8-K and is incorporated herein by reference.

Collateral Agreement

On the Closing Date and in connection with its entry into of the Revolving Credit Agreement, the Company and the Guarantors entered into the Collateral Agreement, which granted a first priority lien on substantially all of the Company’s and the Guarantors’ assets, in each case subject to certain existing liens and other exclusions.

The description of the Collateral Agreement contained herein is qualified in its entirety by reference to the Collateral Agreement, which is filed as Exhibit10.2 to this Current Report on Form8-K and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information required by this Item 2.03 relating to the Revolving Credit Agreement set forth under Item 1.01 of this Current Report on Form8-K is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

Exhibits.

ExhibitNumber

Description

10.1

Revolving Credit Agreement, dated as of March20, 2019, among the Company, Cantor Fitzgerald Securities, as administrative agent and collateral agent, and the lenders party thereto.

10.2

Collateral Agreement, dated as of March20, 2019, among the Company, the subsidiaries of the Company party thereto as Guarantors, and Cantor Fitzgerald Securities, as collateral agent.

Egalet Corp Exhibit
EX-10.1 2 a19-6876_1ex10d1.htm EX-10.1 Exhibit 10.1   EXECUTION VERSION     CREDIT AGREEMENT   by and among   CANTOR FITZGERALD SECURITIES   as Agent,…
To view the full exhibit click here

About Egalet Corporation (NASDAQ:EGLT)

Egalet Corporation is a specialty pharmaceutical company. The Company is engaged in developing, manufacturing and commercializing treatments for pain and other conditions. The Company’s products include OXAYDO and SPRIX Nasal Spray. The Company is developing two late-stage product candidates, ARYMO ER and Egalet-002 using Guardian Technology. The Company’s product SPRIX Nasal Spray, which contains ketorolac tromethamine is a non-steroidal anti-inflammatory drug (NSAID) indicated in adult patients for the short-term management of moderate to moderately severe pain that requires analgesia at the opioid level. The Company’s product OXAYDO is an approved immediate-release (IR) oxycodone product formulated to deter abuse through snorting. The Company’s product candidate, ARYMO ER is an abuse-deterrent (AD), extended-release (ER), oral morphine formulation. The Company’s product candidate, Egalet-002, is an abuse-deterrent, extended-release, oral oxycodone formulation.

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