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RMTI > SEC Filings for RMTI > Form 8-K on 20-Jun-2013All Recent SEC Filings

Show all filings for ROCKWELL MEDICAL, INC.

Form 8-K for ROCKWELL MEDICAL, INC.


20-Jun-2013

Creation of a Direct Financial Obligation or an Obligation under an Off-Ba


Item 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENTOF A REGISTRANT.

On June 17, 2013, Rockwell Medical, Inc. (the "Company") and its wholly owned subsidiary, Rockwell Transportation, Inc. (together with the Company, the "Borrower"), entered into a Loan and Security Agreement, dated as of June 14, 2013 (the "Loan Agreement"), with Hercules Technology III, L.P. ("Hercules"). Pursuant to the Loan Agreement, the Company has borrowed $20 million. Proceeds from the loan are intended to be used to fund the Company's clinical trials and for general corporate purposes.

The loan will mature and become due on December 1, 2016, subject to adjustment as provided below, and will bear interest at the greater of (i) 12.50% plus the prime rate as reported in The Wall Street Journal minus 3.25%, or (ii) 12.50%. The Borrower will be required to make only monthly interest payments through May 31, 2014 (or August 31, 2014 if Borrower meets primary end points for both Phase 3 trials for its SFP drug prior to December 15, 2013). If the interest only period is extended, the maturity date for the loan will be extended to March 1, 2017. Monthly principal and interest payments will be due on the loan following the interest only period through the maturity date. The loan may be prepaid at any time after June 14, 2014 without penalty. The Company paid a fee of $0.2 million at closing and is required to pay a fee of $1.1 million upon any prepayment or at maturity. The loan will also mature and become due upon a change in control of the Company.

In connection with the loan, the Company granted Hercules a security interest in substantially all of the Borrower's assets other than certain intellectual property, motor vehicles, real property and certain other interests. The Loan and Security Agreement also provides for standard indemnification of Hercules and contains representations, warranties and non-financial covenants of the Company. The Loan Agreement also contains covenants that, among other things, limit the Company's ability to incur additional indebtedness, transfer assets acquire assets of or merge with another entity and pay dividends to the Company's shareholders. Hercules is permitted to participate in the next institutional equity offering by the Company, if any, in an amount up to $1 million on the same terms as other investors in such an offering.

Events of default under the Loan Agreement include the failure to pay principal or interest payments on time; breach of representations, warranties or covenants; the occurrence of a material adverse effect on the Borrower, the collateral or the perfection of the security interest, or a material impairment of Borrower's ability to perform under the Loan Agreement or Hercules' ability to enforce its rights under the Loan Agreement; certain events involving Borrower's bankruptcy or insolvency; the occurrence of certain judgments; and the occurrence of certain defaults under other agreements to which Borrower is a party.

The above description of the Loan Agreement does not purport to be a complete statement of the provisions thereof. Such description is qualified in its entirety by reference to the Loan Agreement, which is attached to this Current Report on Form 8-K and is incorporated herein by reference.




Item 9.01 Financial Statements and Exhibits.

The following exhibit is filed herewith:

Exhibit number                           Exhibit Description
4.18             Loan and Security Agreement, dated as of June 14, 2013, among
                 Rockwell Medical, Inc., Rockwell Transportation, Inc. and Hercules
                 Technology III, L.P.

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