Item 1.01 Entry into a Material Definitive Agreement
On November 14, 2017, Miragen Therapeutics, Inc. (the Company) entered into an Amended and Restated Loan and Security Agreement (the
Loan Agreement) with Silicon Valley Bank (Lender). The Loan Agreement amended and restated the Loan and Security Agreement, dated as of April 30, 2015, by and between the Company and Lender, as amended by that certain
First Loan Modification Agreement, dated as of December 22, 2016, and that certain Assumption Agreement, dated as of February 13, 2017 (collectively, the Prior Loan Agreement). Upon entry into the Loan Agreement, Lender made
available to the Company a $10.0 million growth capital term loan (the Loan).
The Company used a portion of the proceeds of the Loan
(i) to repay the $2,833,333.42 outstanding principal amount of the loan issued under the Prior Loan Agreement, and (ii) to pay to Lender a fee of $275,000 due under the Prior Loan Agreement. The Company expects to use the remainder of the
Loan for general corporate purposes.
The per annum interest rate for the Loan under the Loan Agreement is a floating rate equal to the prime rate as
reported in The Wall Street Journal, with changes to the rate to be effective on the effective date of any changes to the prime rate.
Monthly payments
under the Loan Agreement are interest only for 18 months (which may be extended to 24 months if specified conditions are met, including that the Company has received net proceeds from the issuance of new equity securities and/or subordinated debt of
at least a specified amount) followed, in either case, by equal monthly payments of principal, plus accrued interest until November 1, 2021. The Company may elect to prepay prior to maturity all or any portion of the outstanding principal
amounts under the Loan Agreement. If the Company elects to prepay any outstanding principal amounts under the Loan Agreement prior to maturity, a prepayment charge of 3.0%, 2.0%, or 1.0% of the then outstanding principal balance also will be due,
depending upon whether the Company prepays in year one, in year two, or after year two of the closing date, respectively. In addition, the Company will be required to prepay all such outstanding amounts and such prepayment charge upon the occurrence
of an event of default in which the Companys obligations to repay the Loan are accelerated. Lender has agreed to waive such prepayment fee if, at the time of such prepayment, no event of default has occurred and is continuing, and the
Companys obligations under the Loan Agreement are refinanced and
re-documented
with the Lender or an affiliate thereof prior to the maturity date.
Upon final payment of the Loan, whether at maturity or via prepayment, the Company shall make an additional payment to Lender of $900,000.
The Companys obligations under the Loan Agreement are secured by a first priority security interest, right, and title in all business assets, excluding
the Companys intellectual property, which is subject to a negative pledge.
The Loan Agreement includes customary representations, warranties and
covenants (affirmative and negative), including restrictive covenants that limit the Companys ability to: encumber or dispose of the collateral securing the loan; change the business of the Company; transfer a material portion of the
Companys assets; acquire other businesses; and merge or consolidate with or into any other business organization; incur additional indebtedness; declare or pay any cash dividend or make a cash distribution on any class of stock or other equity
interest; enter into specified material transactions with Company affiliates; make
non-ordinary
course payments or enter into any amendment regarding subordinated debt of the Company; or become an
investment company under the Investment Company Act of 1940, as amended; in each case subject to specified exceptions.
The Loan Agreement
also includes standard events of default, including payment defaults, breaches of covenants following any applicable cure period, material breaches of representations or warranties, the occurrence of a material adverse change (as defined in the Loan
Agreement), events relating to bankruptcy or insolvency; breaches of material third-party agreements; the occurrence of an unsatisfied material judgment against the Company; specified governmental actions against the Company, including specified
actions by the U.S. Food and Drug Administration. Upon the occurrence of an event of default, Lender may declare all outstanding obligations immediately due and payable, including a prepayment charge, and take such other actions as are set forth in
the Loan Agreement. Upon the occurrence of an event of default, at the Lenders discretion, interest on the Loan will accrue at 5.0% above the rate that is otherwise applicable thereto until the earlier of the repayment of the Companys
obligations under the Loan Agreement or the cure of such event of default.
The foregoing description of the Loan Agreement is not intended to be complete
and is qualified in its entirety by reference to the full text of the Loan Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
Item 1.02 Termination of a Material Definitive Agreement
The information set forth in Item 1.01 is incorporated herein by reference. On November 14, 2017, the Prior Loan Agreement was amended and restated, and,
as a result thereof, terminated in its entirety upon the effectiveness of the Loan Agreement. Under the Prior Loan Agreement, the Company could borrow up to $10.0 million in two separate tranches. The first tranche of $5.0 million was
funded in May 2015 and had a
30-month
payment period following an
18-month
interest-only payment period that ended in November 2016. Amounts outstanding bore interest at
the prime rate minus 0.25%, with a final payment fee equal to 5.50% of amounts borrowed. Borrowings were secured by a priority security interest, right, and title in all business assets, excluding the Companys intellectual property, which is
subject to a negative pledge.
In December 2016, the Prior Loan Agreement was amended to extend the end of the draw period from December 31, 2016 to
July 31, 2017. The Company chose not to draw the second $5.0 million tranche prior to the expiration of the draw period in July 2017.
The
foregoing description and the information contained in Item 1.01 with respect to the Prior Loan Agreement are not intended to be complete and are qualified in their entirety by reference to the full text of the Prior Loan Agreement, which was filed
as Exhibit 10.47 to the Companys Registration Statement on Form
S-4
(File
No. 333-214893),
as filed with the U.S Securities and Exchange Commission (the
SEC) on December 2, 2016 and the full text of the First Loan Modification Agreement, dated as of December 22, 2016, by and between the Company and Lender which was filed Exhibit 10.47.1 to Amendment No. 1 to the
Registrants Registration Statement on
S-4
(File
No. 333-214893),
as filed with the SEC on January 4, 2017, each of which is incorporated by reference
herein.