Item 1.01 Entry into a Material Definitive Agreement.
On February 22, 2008 Crdentia Corp. (“Crdentia”) replaced its existing credit facility by entering into a $10.2 million debt refinancing (the “Refinancing”) with ComVest Capital, LLC (“ComVest”) pursuant to a Revolving Credit and Term Loan Agreement (the “Agreement”). In addition to the Agreement, Crdentia also executed the following documents in connection with the Refinancing, all dated as of February 22, 2008, including: (i) a Revolving Credit Note in the amount of $5,200,000 (the “Revolving Note”), (ii) a Term Note (Tranche A) of $2,500,000 (the “Term Note A”) and (iii) a Term Note (Tranche B) of $2,500,000 (the “Term Note B”).
The Revolving Note bears interest at the greater of (a) the prime rate of interest publicly announced by Citibank, N.A. plus 2% or (b) 8.5%. Term Note A bears interest at 12.5% annually and requires that (a) interest payments be made on the first calendar day of each month commencing on March 1, 2008 and (b) principal payments be made in twenty-three (23) equal monthly installments of $104,166.67 beginning on March 1, 2009, with the final payment due on February 28, 2011. Term Note B bears interest at 12.5% annually and requires that (a) interest payments be made on the first calendar day of each month commencing on March 1, 2008 and (b) that the principal be paid in full on February 28, 2011.
In addition to the above and in connection with the Refinancing, on February 22, 2008, Crdentia issued a Common Stock Purchase Warrant to ComVest to purchase up to eight million (8,000,000) shares of Common Stock of Crdentia with an exercise price of $0.001 per share (the “Warrant”). The Warrant is exercisable upon the earlier of (a) August 22, 2008, or (b) upon the occurrence of an event causing the acceleration of Crdentia’s obligations under the Agreement. The Warrant expires on February 28, 2014. Crdentia has agreed to register the shares issuable upon the exercise of the Warrant pursuant to a Registration Rights Agreement dated as of February 22, 2008 by and between Crdentia and ComVest (the “Registration Rights Agreement”).
The description of the Refinancing set forth above is qualified in its entirety by reference to the Agreement, the Revolving Note, Term Note A, Term Note B, the Warrant and the Registration Rights Agreement, which are filed with this current report as Exhibits 10.1 through 10.6, respectively.
Crdentia issued a press release on February 27, 2008 regarding the Refinancing, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K.
