The Term Loan Facility accrues interest per annum at a rate of 6.44% plus the greater of (i) the Wall Street Journal Prime Rate and (ii) 3.0%, which is payable in arrears on a monthly basis. An exit payment equal to 3.0% of the Fortress Financing is due upon prepayment or the maturity date of the Fortress Financing, in addition to any early prepayment fee. Proceeds of the Fortress Financing were used, in part, to repay all amounts outstanding under that certain Amended and Restated Loan and Security Agreement, dated as of December 30, 2021, as amended on June 9, 2022, and September 15, 2022, among Allurion, the other borrowers party thereto from time to time, the lenders party thereto from time to time and Runway Growth Finance Corp, as administrative agent and collateral agent for the lenders party thereto.
Additionally, per the terms of the Term Loan Facility and the Backstop Agreement, New Allurion issued an aggregate of 950,000 shares of New Allurion Common Stock to an affiliate of Fortress (the “Additional Fortress Shares”) pursuant to a subscription agreement between New Allurion and such affiliate. Such shares of New Allurion Common Stock are subject to the registration rights set forth in the Credit Agreement. For the avoidance of doubt, the Backstop Shares issued to Fortress are included in the aggregate issuance of 950,000 shares of New Allurion Common Stock issued to an affiliate of Fortress.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Credit Agreement, which is attached hereto as Exhibit 10.25 and is incorporated herein by reference.
Indemnification Agreements
The Company has entered into indemnification agreements with each of its directors and executive officers.
Each indemnification agreement provides for indemnification and advancements by New Allurion of certain expenses and costs relating to claims, suits or proceedings arising from each director or executive officer’s service to New Allurion, or, at New Allurion’s request, service as directors or officers of other entities, in each case, to the maximum extent permitted by applicable law.
The foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the indemnification agreements, a form of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The disclosure set forth under “Introductory Note” above is incorporated into this Item 2.01 by reference.
Cautionary Note Regarding Forward-Looking Statements
This Report includes statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for future operations of New Allurion. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Report (including in information that is incorporated by reference into this Report), words such as “estimates,” “projected,” “expects,” “estimated,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “would,” “future,” “propose,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements constitute projections and forecasts, are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of New Allurion, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.
Forward-looking statements include, but are not limited to, statements about the ability of New Allurion and Allurion to:
| • | | realize the benefits expected from the Mergers; |