UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 28, 2007 (November 21, 2007)
NxSTAGE MEDICAL, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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000-51567
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04-3454702 |
(State or other jurisdiction of
incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer Identification No.) |
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439 S. Union St, 5th Floor, Lawrence, MA
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01843 |
(Address of principal executive offices)
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(Zip Code) |
(978) 687-4700
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
On November 21, 2007, NxStage Medical, Inc. (NxStage) and its
subsidiaries, EIR Medical, Inc.,
Medisystems Corporation and Medisystems Services Corporation (the Other Borrowers), entered into
a credit and security agreement (the Credit Agreement), effective November 21, 2007, with a group
of lenders (the Lenders) led by Merrill Lynch Capital, a division of Merrill Lynch Business
Services, Inc. The Credit Agreement provides for a $30 million term loan (in two tranches of $25
million and $5 million respectively) and a $20 million revolving credit facility (collectively, the
Credit Facility). The Credit Facility is secured by all of the assets of NxStage and the Other
Borrowers, other than intellectual property.
NxStage drew the first $25 million tranche under the term loan on November 21, 2007, and has the
option to draw the second $5 million tranche within the next six months. NxStage used $4.9
million of the proceeds from this term loan to repay all amounts owed under NxStages prior loan
with Silicon Valley Bank (the Previous Credit Agreement). Borrowings under the term loan bear
interest equal to LIBOR plus 6% per annum, fixed on November 21 for the first tranche (at a rate of
10.77% per annum) and at the date of borrowing for the second tranche. Payments of interest only
must be made under the term loan through the end of 2008. Beginning on February 1, 2009, principal
under the term loan must be repaid in 29 equal monthly installments. The term loan has a final
payment fee of $900,000 to be paid at the time of loan payoff. NxStages borrowing capacity
under the revolving credit facility is subject to the satisfaction of certain conditions and
calculation of the borrowing amount. Any borrowings under the revolving credit facility will bear
interest at LIBOR plus 4.25% per annum. There is an unused line fee of 0.75% per annum and
descending deferred revolving credit facility commitment fees that are charged in the event the
revolving credit facility is terminated prior to May 21, 2011 of 4% in year one, 2% in year two,
and 1% thereafter.
The Credit Facility includes covenants that (a) require NxStage to achieve
certain minimum net
revenue and certain minimum EBITDA
targets relating to the acquired Medisystems business, (b) place limitations on NxStages and its subsidiaries ability to incur debt, (c) place
limitations on NxStages and its subsidiaries ability to grant or incur liens, carry out mergers,
and make investments and acquisitions, and (d) place limitations on NxStages and its subsidiaries
ability to pay dividends, make other restricted payments, enter into transactions with affiliates,
and amend certain contracts. The Credit Agreement contains customary events of default, including
nonpayment, misrepresentation, breach of covenants, material adverse effects, and bankruptcy.
Item 1.02. Termination of a Material Definitive Agreement.
As stated in Item 1.01 above, NxStages Previous Credit Agreement (defined above) was terminated in
connection with the repayment by NxStage of the aggregate principal amount outstanding thereunder,
with proceeds borrowed under the Credit Facility (defined above).
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The disclosure under Item 1.01 of this report relating to the
Credit Agreement (defined above) is incorporated
herein by reference.
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