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Borrowing

9 Months Ended

Sep. 30, 2020

Borrowing

Borrowing

NOTE 5. BORROWING

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Solar Capital and Western Alliance Bank Loan Agreement

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On May 16, 2018, the Company entered into a loan and security agreement (the “Loan Agreement”), with Solar Capital Ltd. and Western Alliance Bank (collectively the “Lenders”). The Loan Agreement provides for a $50.0 million term loan facility with a maturity date of November 1, 2022 (the “Term Loan”).

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On October 9, 2020, the Company and the Lenders entered into an amendment to the Loan Agreement to extend the  date through which the Company is permitted to make interest-only payments on the Term Loan by twelve months. Please see Note 13 for additional information. Borrowings under the Term Loan, before the October 2020 amendment, bore interest at a floating per annum rate equal to 7.45% plus the one-month LIBOR, and the Company was permitted to make interest-only payments on the Term Loan until December 1, 2020.

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The Company paid a closing fee of 1% of the Term Loan, or $0.5 million, upon the closing of the Term Loan, and the Company is obligated to pay a final fee equal to 3.95% of the Term Loan upon the earliest to occur of the maturity date, the acceleration of the Term Loan, the prepayment or repayment of the Term Loan or the termination of the Loan Agreement. The Company may voluntarily prepay the outstanding Term Loan, subject to a prepayment premium of (i) 3% of the principal amount of the Term Loan if prepaid prior to or on the first anniversary of the Closing Date, (ii) 2% of the principal amount of the Term Loan if prepaid after the first anniversary of the Closing Date through and including the second anniversary of the Closing Date, or (iii) 1% of the principal amount of the Term Loan if prepaid after the second anniversary of the Closing Date and prior to the maturity date. The Term Loan is secured by substantially all the Company’s assets, except for the Company’s intellectual property and certain other customary exclusions. Additionally, in connection with the Term Loan, the Company entered into the Exit Fee Agreement, as discussed in Note 4.

The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants. As of September 30, 2020, the Company was in compliance with all of the covenants set forth in the Loan Agreement.

The Loan Agreement also contains customary events of default that entitle the Lender to cause the Company’s indebtedness under the Loan Agreement to become immediately due and payable, and to exercise remedies against the Company and the collateral securing the Term Loan, including the Company’s cash. Upon the occurrence and for the duration of an event of default, an additional default interest rate equal to 4.0% per annum will apply to all amounts owed under the Loan Agreement. As of September 30, 2020, to the Company’s knowledge, there were no facts or circumstances in existence that would give rise to an event of default.

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As of September 30, 2020, the Company’s future payment obligations related to the Term Loan, excluding interest payments and the Exit Fee, are as follows:

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​	​	​	​
Total repayment obligations	​	$	51,975
Less: Unamortized discount and debt issuance costs	​	​	(467)
Less: Unaccreted value of final fee	​	​	(827)
Loan payable	​	​	50,681
Less: Loan payable, current portion	​	​	—
Loan payable, net of current portion	​	$	50,681

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- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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