Item 1.01
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Entry into a Material Definitive Agreement.
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On December 10, 2018 (the “
Closing Date
”), Presbia PLC (the “
Company
”), its wholly-owned subsidiary, Presbia USA, Inc. (“
Presbia USA
”), and Richard Ressler, a member of the Company’s board of directors and its majority stockholder (the “
Investor
”), entered into and closed a Securities Purchase & Exchange Agreement (the “
Purchase Agreement
”) pursuant to which, on the Closing Date, the Investor, in a private placement transaction (the “
Financing
”): (i) provided Presbia USA with a secured loan in the aggregate principal amount of $3,500,000 (the “
Secured Loan
”) pursuant to the terms of a Secured Promissory Note dated as of the Closing Date and issued by Presbia USA (the “
Secured Note
”); (ii) purchased 100 of the Company’s newly-designated Series 2 Redeemable Preferred Shares (the “
Presbia PLC New Preferred Shares
”) for an aggregate purchase price of $100,000, with such proceeds for the purchase of the Presbia PLC New Preferred Shares being applied (by way of set-off) to redeem from the Investor and retire all 100 of the preferred shares of the Company previously purchased by the Investor in April 2018; (iii) exchanged all 4,900 shares of Presbia USA preferred stock previously purchased by the Investor in April 2018 for an aggregate 5,239 shares of Presbia USA’s newly-designated Presbia USA New Preferred Stock (the “
Presbia USA New Preferred Shares
”); and (iv) was issued a warrant (the “
Warrant
”) to purchase 14,731,667 ordinary shares of the Company (the “
Warrant Shares
”) at an exercise price of $0.60 per share, subject to adjustments as provided under the terms of the Warrant. The Financing resulted in net proceeds to the Company on the Closing Date of $3.5 million, prior to deducting the Company’s expenses associated with the Financing.
Prior to closing the Financing transactions pursuant to the Purchase Agreement, the Company effectuated a corporate restructuring transaction involving certain of the Company’s subsidiaries, pursuant to which Presbia USA (which was previously an indirect subsidiary of the Company and a direct subsidiary of Presbia Ireland, Limited) became a direct subsidiary of the Company, and Presbia Ireland, Limited (which was previously a direct subsidiary of the Company) became an indirect subsidiary of the Company and a direct subsidiary of Presbia USA.
Pursuant to the Secured Note, the Secured Loan accrues interest on the unpaid principal amount at a rate of ten percent (10.0%) per annum, compounded monthly. Interest is payable annually, in arrears, beginning on January 10, 2020 and on each annual anniversary of such date. In the event that any amount due under the Secured Note is not paid when due, such overdue amount shall bear interest at an annual rate of twelve percent (12.0%) until paid in full. The Secured Note provides for a maturity date (at which time the aggregate principal amount then outstanding, plus accrued and unpaid interest thereon, shall be due) on the fifth anniversary of the date of the Secured Note, subject to the Investor’s right to accelerate such maturity with no less than thirty (30) days’ notice delivered on or after the second anniversary of the date of the Secured Note.
Pursuant to the terms of a Security and Pledge Agreement dated as of the Closing Date and entered into by and between Presbia USA and the Investor (the “
Security and Pledge Agreement
”), Presbia USA’s obligations to the Investor under the Secured Note are secured by a lien on substantially all of Presbia USA’s assets and properties, and a pledge of the membership interests in Presbia USA’s subsidiary, PresbiBio, LLC. Presbia USA also pledged its ordinary shares in Presbia Ireland, Limited pursuant to a Charge of Shares dated as of the Closing Date and entered into by and between Presbia USA and the Investor (the “
Irish Share Charge
”). In addition, the Company guaranteed Presbia USA’s obligations under the Secured Note and the Security and Pledge Agreement pursuant to a Guaranty dated as of the Closing Date (the “
Loan Guaranty
”). In connection with the Loan Guaranty, the Company also pledged its shares of common stock in Presbia USA pursuant to a Pledge Agreement dated as of the Closing Date by and between the Company and the Investor (the “
Company Pledge Agreement
”).
The Presbia PLC New Preferred Shares purchased by the Investor have the rights set forth in the Subscription Letter dated as of the Closing Date (the “
Subscription Letter
”). The Presbia USA New Preferred Shares issued to the Investor (in exchange for the shares of Presbia USA preferred stock previously purchased by the Investor in April 2018) have the rights set forth in the Second Amended and Restated Certificate of Incorporation of Presbia USA (the “
Restated Certificat
e”).
The Presbia PLC New Preferred Shares and the Presbia USA New Preferred Shares carry a one times (1x) liquidation preference. The Presbia USA New Preferred Shares are redeemable upon a liquidation event in which all classes of equity holders are entitled to receive the same form of consideration, and the Presbia PLC New
Preferred Shares and the Presbia USA New Preferred Shares
are redeemable at any time at the
issuing company
’s sole election, provided that a majority of the independent directors approve such redemption.
The P
resbia PLC New Preferred Shares do not carry a right to any dividend declared by the Company, provided that no dividends or distributions may be made to the Company’s ordinary shareholders before the Presbia PLC New Preferred Shares have been redeemed in f
ull.
The
Presbia USA New Preferred Shares
have an original issue price of $1,000 per share and
accrue a dividend at
a fixe
d rate of 15% per annum, compounded quarterly and accruing daily
, payable in
additional Presbia USA New Preferred Shares
on a quarterly basis. As long as the
Presbia PLC New
Preferred Shares or
Presbia USA New
Preferred Shares remain outstanding, neither the Company nor
Presbia USA
shall take the following actions, without obtaining the prior consent of the holder of the
p
referred shares
: (a) effect any alteration, repeal, change or amendment of the rights, privileges or preferences of the
Presbia PLC New
Preferred Shares or the
Presbia USA New
Preferred Shares in a manner that adversely affects the rights, privileges or p
references of those shares or any series thereof; (b) amend, modify or repeal any provision of the organizational documents in a manner that adversely affects the powers, preferences or rights of the
Presbia PLC New
Preferred Shares or
Presbia USA New
Pr
eferred Shares; (c) agree to any debt financing in an amount in excess of $8,000,000 (such amount being the maximum amount payable by the company under
all such
debt instruments); (d) execute a guarantee; (e) effect
certain transactions, including any re
structuring or liquidation
; (f) settle any lawsuit or civil investigation requiring the payment of more than $1,000,000; or (g)
execute any document or enter into any arrangement that has a potential liability to the Company in excess of $1,000,000.
The P
urchase Agreement
provides that
,
to the extent permitted by applicable law (including laws in respect of creditors’ rights), the Investor shall have the option to convert all or part of the accrued value of the Presbia USA New Preferred Shares into a secur
ed loan to Presbia USA on terms substantial
ly similar to the Secured Loan (
for this purpose
,
the accrued value of such Presbia USA New Preferred Shares
shall be
equal to the sum of the original issue price of such shares and the accrued but unpaid dividend
s on such shares that would be payable if a liquidation event had occurred
)
.
In addition, the Company guaranteed
Presbia USA’s
payment of the redemption price and any accrued and unpaid dividends with respect to the
Presbia USA New Preferred Shares pursua
nt to a Guarant
y dated as of the Closing Date (the “
Preferred Stock Guranty
”).
The Warrant is exercisable for five years from the issuance date. The Warrant contains near cashless exercise provisions, including a provision allowing (solely to the extent permitted by applicable law, and subject to first complying with any applicable requirements thereof), the application towards the exercise price of the Warrant of any amounts due and owing by the Company under the Loan Guaranty or the Preferred Stock Guaranty.
The foregoing descriptions of the Financing (including the descriptions of the Secured Loan and the security provided therefor, the terms of the Presbia PLC New Preferred Shares and the Presbia USA New Preferred Shares, and the terms of the Warrant), and the descriptions of the documents governing the terms thereof, are summaries and are qualified in their entirety by reference to the full text of the copies of the corresponding Financing documents (including the Purchase Agreement, the Secured Note, the Security and Pledge Agreement, the Irish Share Charge, the Loan Guaranty, the Company Pledge Agreement, the Subscription Letter, the Restated Certificate, the Preferred Stock Guaranty and the Warrant, which are attached hereto as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8, 10.9 and 10.10, respectively, and are incorporated by reference herein).