Vericel Corporation (NASDAQ:VCEL) Files An 8-K Termination of a Material Definitive Agreement
Item 1.02. Termination of a Material Definitive Agreement.
On December14, 2018, Vericel Corporation (the “Company”) provided notice to prepay in full all outstanding indebtedness under and to terminate the Loan and Security Agreement dated as of September9, 2016, by and between the Company, Silicon Valley Bank as Agent and Silicon Valley Bank, MidCap Financial Trust, MidCap Funding III Trust and other lenders listed therein as lenders (the “Original Loan Agreement”), as amended by that certain First Loan Modification Agreement, dated as of December30, 2016 (the “First Modification Agreement”), that certain Second Loan Modification Agreement, dated May9, 2017 (the “Second Modification Agreement”) and that certain Third Loan Modification Agreement, dated December6, 2017 (the “Third Modification Agreement”, and together with the Original Loan Agreement, the First Modification Agreement, and the Second Modification Agreement, the “SVB Loan Agreement”), which termination was effective December19, 2018.
The SVB Loan Agreement provided for a term loan facility up to $15 million and a $10 million revolving line of credit with Silicon Valley Bank and MidCap Financial Trust. The SVB Loan Agreement included terms and conditions, including customary events of default, such as non-payment of principal or interest, violations of covenants, bankruptcy and material judgments. Under the SVB Loan Agreement, the Company’s obligations to the lenders were secured by substantially all of the Company’s assets, excluding intellectual property. A further description of the SVB Loan Agreementcan be found in the Company’s Current Reports on Form8-K filed with the Securities and Exchange Commission on September14, 2016, December30, 2016, May9, 2017 and December8, 2017, which descriptions are incorporated herein by this reference. The foregoing description of the SVB Loan Agreement is only a summary and is qualified in its entirety by reference to the Original Loan Agreement, a copy of which is filed as Exhibit10.1 to the Company’s Current Report on Form8-K filed on September14, 2016, the First Modification Agreement, a copy of which is filed as Exhibit10.1 to the Company’s Current Report on Form8-K filed on December30, 2016, the Second Modification Agreement, a copy of which is filed as Exhibit10.1 to the Company’s Current Report on Form8-K/A filed on June2, 2017 and the Third Modification Agreement, a copy of which is filed as Exhibit10.1 to the Company’s Current Report on Form8-K filed on December8, 2017.
As of the date of termination, the Company had $17,083,333 in outstanding borrowings and $92,701 in outstanding interest and fees under the SVB Loan Agreement, which were repaid in full at the time of termination. In connection with the termination of the SVB Loan Agreement, the Company paid an additional prepayment premium in the amount of $225,000, which represents 1.50% of the original principal amount of the term loan and a final payment in the amount of $540,000, which represents 3.60% of the aggregate original principal amount of the term loan commitment. The Company did not incur any other early termination penalties in connection with the termination of the SVB Loan Agreement or the prepayment of indebtedness thereunder.
About Vericel Corporation (NASDAQ:VCEL)
Vericel Corporation, formerly Aastrom Biosciences, Inc., is a commercial-stage biopharmaceutical company dedicated to the identification, development and commercialization of therapies that enable the body to repair and regenerate damaged tissues and organs to restore normal structure and function. The Company operates through the research, product development, manufacture and distribution of patient-specific, expanded cellular therapies for use in the treatment of specific diseases segment. Its autologous cell therapy products include Carticel (autologous cultured chondrocytes), which is an autologous chondrocyte implant for the treatment of cartilage defects in the knee, and Epicel (cultured epidermal autografts), which is a permanent skin replacement for the treatment of patients with deep-dermal or full-thickness burns. The Company is developing MACI, which is a third-generation autologous chondrocyte implant and ixmyelocel-T, which is a patient-specific multicellular therapy.