Debt

9 Months Ended

Sep. 30, 2020

DebtIn August 2020, the Borrowers, entered into the Sixth Street Financing Agreement, pursuant to which the Lenders agreed to extend a senior secured credit facility to the Company providing for term loans in an aggregate principal amount up to

$500,000 plus any capitalized interest paid in kind. The facility consists of an initial term loan of $275,000, which the Borrowers borrowed at closing, and delayed draw term loans in an aggregate principal amount not exceeding $225,000, available until August 31, 2021, with $100,000 of the delayed draw term loans currently available at the Borrowers' option. The remaining $125,000 in delayed draw term loans becomes available if net sales from NURTEC ODT during the first quarter of 2021 or second quarter of 2021 equal at least $45,000. The facility terminates and the term loans become due and payable in August 2025.

Each term loan drawn under the facility will bear floating interest on the unpaid principal amount at a rate per annum equal to the three-month LIBOR rate, adjusted for applicable reserve requirements, and subject to a floor of 1.00%, plus 9.00%. Interest on amounts borrowed under the facility will be payable quarterly. The contractual interest rate as of September 30, 2020 was 10.00% and the effective interest rate is approximately 11.50%. The interest expense for the three and nine months ended September 30, 2020, was $4,356. For each borrowing under the facility, the Company has the right to elect to pay up to 4.00% per annum of the interest on the term loans comprising such borrowing in the form of payment in kind for the first eight fiscal quarters after the date of such borrowing. The Company elected to pay in kind the maximum amount for its interest payment made in September 2020.

The Company will have the right to prepay borrowings under the facility in whole or in part at any time, subject to a customary prepayment fee on the principal amount being prepaid, which declines over time. In connection with the initial term loan of $275,000, the Company paid customary fees with respect to the initial term loan and delayed draw term loans at closing. The Company also agreed to pay customary fees on the funding of any delayed draw term loans. The net proceeds received from the initial term loan, after fees and expenses, was approximately $260,000.

The Sixth Street Financing Agreement contains mandatory prepayments, restrictions and covenants applicable to the Company and its subsidiaries that are customary for financings of this type. Among other requirements, the Borrowers will be required to maintain a minimum unrestricted cash balance of $50,000, which will increase to $80,000, commencing on the date that any portion of the remaining $225,000 delayed draw term loan is funded. The minimum unrestricted cash balance will be waived for any fiscal quarter in which the Borrowers achieve $400,000 of net sales of the Company’s products in the four consecutive quarterly periods prior to such fiscal quarter. The Sixth Street Financing Agreement also includes representations, warranties, indemnities and events of default that are customary for financings of this type, including an event of default relating to a change of control of the Company. Upon or after an event of default, the administrative agent and the lenders may declare all or a portion of our obligations under the Sixth Street Financing Agreement to be immediately due and payable and exercise other rights and remedies provided for under the Sixth Street Financing Agreement.

The obligations under the Sixth Street Financing Agreement are and will be guaranteed by each of the Company's existing and future direct and indirect subsidiaries, subject to certain exceptions. The obligations of the Company and its subsidiaries under the Sixth Street Financing Agreement are secured, subject to customary permitted liens and other agreed upon exceptions, by a security interest in certain existing and after-acquired assets of the Company and its subsidiaries.

The following table is a summary of the Company’s borrowing as of September 30, 2020:


	September 30, 2020
Long-term debt
Floating rate note due August 2025 (10.00% at September 30, 2020)(1)	$	276,650
Total debt principal	276,650
Unamortized debt discount and issuance costs	(12,515)
Less: current portion	—
Long-term debt	$	264,135

(1) Includes $1,650 of paid in kind interest that was added to the principal during the three months ended September 30, 2020

The following is a summary of the Company's required repayments of debt principal due during each of the next five years and thereafter, as of September 30, 2020:


2020 (remaining three months)	$	—
2021	—
2022	—
2023	6,916
2024	20,749
Thereafter	248,985
	$	276,650