NxStage: Entry Into A Material Definitive Agreement
The following excerpt is from the company's SEC filing
On June 10, 2014, NxStage Medical, Inc. (“NxStage”) and substantially all of its wholly-owned U.S. subsidiaries (collectively, “Borrowers”) entered into a Credit Agreement with General Electric Capital Corporation and Silicon Valley Bank (together, “Lenders”) for a revolving credit facility of up to $35 million (“Agreement”). Availability of credit will be subject to a borrowing base that is calculated with reference to certain accounts receivable, inventory and equipment of NxStage. Borrowings under the Agreement may be repaid and reborrowed from time to time, and the Agreement will terminate, and any outstandi
ng borrowings will mature, on June 9, 2019. Borrowings may be used for working capital, capital expenditures and other general corporate purposes of the Borrowers. The Agreement is secured by substantially all of the Borrowers’ assets.
NxStage generally may elect that each borrowing bear interest at an annual rate equal to (1) a LIBOR rate plus 2.5% or (2) a base rate plus 1.5%, where the base rate is the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.5% and (c) a LIBOR rate plus 1%.
The Agreement requires that while any borrowings are outstanding the Borrowers comply with certain financial covenants as well as certain negative covenants that, subject to certain exceptions, limit the Borrowers’ ability to, among other things, incur additional indebtedness or engage in a substantially different material line of business. The Agreement also contains customary representations and warranties and events of default, including payment defaults and certain breaches of representations and warranties, covenant defaults, events of bankruptcy, regulatory events, cross-defaults, judgments, and ownership changes. If such an event of default occurs, the Lenders would be entitled to take various actions, including the acceleration of amounts due under the Agreement and other actions permitted to be taken by a secured creditor.
In the ordinary course of their respective businesses, the Lenders and their affiliates have engaged, and may in the future engage, in commercial banking and financing transactions with NxStage and its affiliates.
The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here. NxStage Medical next reports earnings on July 21, 2014.
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