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MELA > SEC Filings for MELA > Form 8-K on 12-Sep-2013All Recent SEC Filings

Show all filings for MELA SCIENCES, INC. /NY



Termination of a Material Definitive Agreement

Item 2.01 - Termination of a Material Definitive Agreement

On September 10, 2013, MELA Sciences, Inc. (the "Company") and Hercules Technology Growth Capital, Inc. (the "Lender") executed an agreement to terminate the Loan and Security Agreement (the "Loan Agreement") entered into by the parties on March 15, 2013. The Company agreed to pay the Lender a total of $6,440,675, representing $6,000,000 in principal, $15,675 in accrued interest and a $425,000 end of term fee, as required under the terms of the Loan Agreement, in full satisfaction of all amounts due under the Loan Agreement. In consideration for this payment, the Lender agreed to waive the pre-payment penalty of $180,000. As a result, the Lender released all liens and security interests held by the Lender in the Company's assets and the Lender has no further obligation to extend credit to the Company. Each party released the other party from any and all claims, causes of actions, damages and liabilities in connection with the Loan Agreement or the transactions related thereto; provided, however, that the Company's indemnification obligation to the Lender under the Loan Agreement survives the termination of the Loan Agreement. The warrant to purchase 693,202 shares of the Company's common stock at $1.118 per share previously issued to the Lender remains outstanding and is not affected by termination of the Loan Agreement.

The decision to terminate the Loan Agreement resulted from discussions between the Company and the Lender. After review and consideration of various factors by the Company's Board of Directors, including the burden of the loan on the Company's expenses and the fact that the loan was not otherwise supporting the Company's overall financial condition as a result of the assertion by the Lender of new restrictions to be imposed on use of all Company funds, the Board determined that full repayment of the loan and termination of the Loan Agreement were in the best interest of the Company.

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