I'm not sure if this was previously posted, but there are clear terms established for prepayment of the Hercules loan in the first amendment of the loan agreement filed with the SEC on September 8th, 2015. No haggling with Hercules required; just five days' written notice from Amedica is all that's needed.
From section 2.5:
"2.5
Prepayments and Commitment Terminations.
(a)Voluntary Prepayments and Commitment Terminations. At its option upon at least five (5) Business Days prior notice to Agent, Borrower may prepay all, but not less than all, of the outstanding Term Loan by paying the entire principal balance, all accrued and unpaid interest thereon, together with a prepayment charge equal to the following percentage of the amount being prepaid: if such amount is prepaid on or before September 8, 2016, 1.5%; after September 8, 2016, 0.75% (each, a “Prepayment Charge”). Borrower agrees that the Prepayment Charge is a reasonable calculation of Lender’s lost profits in view of the difficulties and impracticality of determining actual damages resulting from an early repayment of the Term Loan.
(b)Term Loan Prepayment Amounts. Upon the date of (i) any voluntary prepayment of the Term Loan in accordance with Section 2.5(a) or (ii) any mandatory prepayment of the Term Loan required under this Agreement (whether by acceleration of the Obligations pursuant to Section 8.2 or otherwise), Borrower shall pay to Agent, for the benefit of Lenders in accordance with their Pro Rata Shares, a sum equal to all outstanding principal and all accrued interest thereon and other Obligations with respect to the Term Loan. In addition, Borrower shall pay the Prepayment Charge as provided in Section 2.5(a)."
Also, in Section 3:
"3. As of the Effective Date, Section 2.6(b) of the Agreement is amended and restated in its entirety as follows:
(a)End of Term Fee.
(i)
On the earliest to occur of (i) the Final Maturity Date, (ii) the date that Borrower prepays the outstanding Obligations, or (iii) the date that the Obligations become due and payable, Borrower shall pay to Agent, for the benefit of Lenders in accordance with their Pro Rata Shares, a non-refundable end of term fee in an amount equal to $1,450,000. Notwithstanding the required payment date of fee, it shall be deemed fully earned as of the Closing Date regardless of the early termination of this Agreement.
(ii)
On the earliest to occur of (i) the Final Maturity Date, (ii) the date that Borrower prepays the outstanding Obligations, or (iii) the date that the Obligations become due and payable, Borrower shall pay to Agent, for the benefit of Lenders in accordance with their Pro Rata Shares, a non-refundable end of term fee in an amount equal to $200,000. Notwithstanding the required payment date of fee, it shall be deemed fully earned as of September 8, 2015 regardless of the early termination of this Agreement."
So, assuming that $4,000,000 is the most that Amedica owes to Hercules (from the company's June 9th press release earlier this year; that figure is total debt owed, so the Hercules amount could be less), the company would have to pay, at the most, an additional $30,000 for the "Prepayment Charge" ($4,000,000 x .0075). In addition, the company also has to pay $1,650,000 to cover the "End of Term Fee".
AI
