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CEMP > SEC Filings for CEMP > Form 8-K on 2-Jul-2014All Recent SEC Filings

Show all filings for CEMPRA, INC.

Form 8-K for CEMPRA, INC.


Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement.

On June 30, 2014, Cempra, Inc. entered into an Amendment No. 4 to Loan and Security Agreement ("Amendment No. 4") with Hercules Capital Funding Trust 2012-1 ("Hercules Trust") and Hercules Technology Growth Capital, Inc. ("HTGC" and, together with Hercules Trust, "Hercules"), pursuant to which Hercules agreed to provide us with additional credit of $10 million upon our request, provided we meet all conditions precedent to requesting an advance. The credit of $10 million made available pursuant to Amendment No. 4 (the "Fourth Term Loan A Advance") is in addition to the additional credit of $3,000,000 made available under that certain Amendment No. 3 to Loan and Security Agreement with Hercules dated March 27, 2014, and which we borrowed on June 30, 2014. The Fourth Term Loan A Advance will be made available to us as follows: $5 million upon the receipt of a specified amount of milestone payments from Toyama Chemical Co., Ltd., and the remaining $5 million upon our receipt, by a specified date, of designated Phase 3 data for oral Solithromycin.

The amendment also provides for us to make interest only payments through May 2015. Principal and interest payments will start June 1, 2015 over a 36-month amortization period, provided that if we borrow any of the Fourth Term Loan A Advance during June 2015, the aggregate loan advances outstanding on June 30, 2015, will be re-amortized and payable in equal monthly installments of principal and interest beginning on July 1, 2015 through April 1, 2018. The principal balance outstanding on the loan agreement and all accrued but unpaid interest thereunder will be due and payable on April 1, 2018.

In addition to the previous two agreement amendment charges, on the earliest to occur of (i) the maturity date of the term loan, (ii) the date that we prepay the outstanding secured obligations under the loan agreement in full, or
(iii) the acceleration of the secured obligations under the loan agreement, we must pay HTGC a charge of up to $200,000 (the "Fourth Amendment Charge"). Notwithstanding the required payment date of the Fourth Amendment Charge,
(a) $100,000 representing half of the Fourth Amendment Charge is deemed earned by Hercules as of June 30, 2014, and, as applicable, (b) $100,000 representing the second half of the Fourth Amendment Charge is deemed earned by Hercules as of the date the first Fourth Term Loan A Advance is made. All other terms of the loan agreement, as previously amended, remain in full force and effect, without any modification.

The foregoing is a summary of the terms of Amendment No. 4 and does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 4, a copy of which we will file with the Securities and Exchange Commission as an exhibit to our Form 10-Q for the quarter ended June 30, 2014. We intend to seek confidential treatment of certain terms of Amendment No. 4 in connection with the filing of Amendment No. 4 in accordance with the procedures of the Securities and Exchange Commission.

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