Item 1.01 Entry Into a Material Definitive Agreement.
Revolving Credit Facility
On
September 30, 2016, OraSure Technologies, Inc. (the Company) entered into a credit agreement (the Credit Agreement) with Wells Fargo Bank, National Association, as administrative agent (the Agent), and the
lenders party thereto. The Credit Agreement provides for revolving extensions of credit in an initial aggregate amount of up to $10,000,000 (inclusive of a letter of credit subfacility of $2,500,000), with an option for the Company to request, prior
to the second anniversary of the closing date, that existing or new lenders, at their election, provide up to $5,000,000 of additional revolving commitments. In no event may increases occur on more than two occasions in the aggregate for all such
increases in commitments. The Companys obligations under the Credit Agreement are guaranteed by OraSure Technologies, LLC, the Companys wholly-owned domestic subsidiary (together with the Company, the Loan Parties). The Loan
Parties obligations under the Credit Agreement are secured by a first priority security interest in certain accounts receivable of the Company, 65% of the equity of the Companys Canadian subsidiary, DNA Genotek, Inc., cash and cash
equivalents held by the Company, and certain related assets.
Borrowings under the Credit Agreement are subject to compliance with
borrowing base limitations tied to eligibility of accounts receivable. Interest under the Credit Agreement is payable at the London Interbank Offered Rate for one, two, three or six-month loans, as selected by the Company, plus 2.50% per annum.
The Credit Agreement will be subject to an unused line fee of 0.375% per annum on the unused portion of the commitment under the Credit Agreement during the revolving period. The Company will be required to pay letter of credit participation
fees and a fronting fee on the average daily amount of any lenders exposure with respect to any letters of credit issued under the Credit Agreement. The maturity date of the Credit Agreement is the third anniversary of the closing date.
In connection with the Credit Agreement, the Loan Parties have made certain representations and warranties and must comply with various
covenants and reporting requirements customary for facilities of this type. In addition, under certain circumstances, the Company must comply with a minimum fixed charge coverage ratio of ratio of 1.10 to 1.00, measured as of the last day of each
fiscal month and for the twelve-fiscal month period ending on such date.
The Credit Agreement contains events of default customary for
facilities of this type. Upon the occurrence of an event of default, the Agent, at the instruction of the lenders, may terminate the commitments and declare the outstanding advances and all other obligations under the Credit Agreement immediately
due and payable. During the continuation of certain events of default and subject, in certain cases, to the instructions of the lenders, the Company must pay interest at a default rate of 2.00% per annum in excess of the interest rate otherwise
applicable to obligations under the Credit Agreement.