Item 1.01 Entry Into a Material Definitive Agreement.
On March 8, 2022, Xeris Biopharma Holdings, Inc. (the “Company”), Xeris Pharmaceuticals, Inc. (“Xeris Pharma”) and certain subsidiaries of the Company parties thereto entered into a Credit Agreement and Guaranty (the "Credit Agreement") with the lenders from time to time parties thereto (the “Lenders”) and Hayfin Services LLP, as administrative agent for the Lenders, pursuant to which the Company and its subsidiaries parties thereto granted a first priority security interest in substantially all of their assets, including intellectual property, subject to certain exceptions. The Credit Agreement provides for the Lenders to extend $100.0 million in term loans (the “Initial Loan”) to the Company initially and up to an additional $50.0 million in delayed draw term loans during the one year period immediately following the closing date (the “Delayed Draw Term Loans” and, together with the Initial Loan, the “Loans”) in no more than three drawings of no less than $10.0 million per drawing subject to the Company being in pro forma compliance with the financial covenants and other conditions set forth therein. In conjunction with the execution of the Credit Agreement, the Amended and Restated Loan and Security Agreement by and among the Company, Xeris Pharma, certain subsidiaries of the Company, Silicon Valley Bank and Oxford Finance LLC (as amended, the “A&R LSA”), was repaid in full and the final payment of $45.8 million was paid. In addition to utilizing the proceeds to repay the obligations under the A&R LSA in full, the proceeds will otherwise be used for general corporate purposes. After repayment, the Loans may not be re-borrowed.
The Lenders also received warrants to purchase 1,315,789 shares of common stock of the Company at a price of $2.28 per share (the “Warrants”). The Warrants are (i) exercisable until the seventh (7th) anniversary of the closing date; (ii) freely transferable and detachable from the Loans; and (iii) subject to customary warrant holder rights and protections, including structural-based anti-dilution protection and adjustments for stock dividends, splits, combinations, reclassifications and the like.
All of the Loans incur interest at a floating per annum rate in an amount equal to the sum of (i) 9.0% (or 8.0% per annum if the replacement rate in effect is the Wall Street Journal Prime Rate) plus (ii) the greater of (x) (1) CME Group Benchmark Administration Limited (CBA) Term SOFR (or the replacement rate, if applicable) if CBA Term SOFR is greater than 1.00% plus 0.26161% or (2) 1.00% if CME Term SOFR is less than 1.00% and (y) one percent (1.00%) per annum (or 2.0% per annum if the replacement rate in effect is the Wall Street Journal Prime Rate).
The Credit Agreement allows the Company to voluntarily prepay the outstanding amounts thereunder. The Company is subject to an early prepayment fee equal to (i) for any prepayment that occurs prior to the second anniversary of the closing date, the applicable make-whole amount, (ii) for any prepayment that occurs after the second anniversary of the closing date but on or prior to the fourth anniversary of the closing date: (x) the amount of any principal so prepaid, multiplied by (y) for any prepayment that occurs (A) after the second anniversary of the closing date and on or prior to the third anniversary of the closing date, five percent (5.0%), and (B) after the third anniversary of the closing date and on or prior to the fourth anniversary of the closing date, three percent (3.0%), and (iii) after the fourth anniversary of the closing date, zero percent (0.0%).
The Credit Agreement contains customary representations and warranties, events of default (including an event of default upon a material adverse change of the Company) and affirmative and negative covenants, including, among others, covenants that limit or restrict the Company’s ability to incur additional indebtedness, grant liens, merge or consolidate, make acquisitions, pay dividends or other distributions or repurchase equity, make investments, dispose of assets and enter into certain transactions with affiliates, in each case subject to certain exceptions.
The foregoing descriptions of the Credit Agreement and Form of Warrant are qualified in their entirety by reference to the complete text of the Credit Agreement and Form of Warrant, which the Company intends to file with the Securities and Exchange Commission (“SEC”) as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.