Item 1.01 Entry Into a Material Definitive Agreement.
Loan and Security Agreement
On June 8, 2020, Albireo Pharma, Inc. (the "Company") and Albireo AB, a
wholly-owned subsidiary of the Company ("Albireo AB"), as borrowers
(collectively, the "Borrower"), entered into a Loan and Security Agreement (the
"Loan and Security Agreement") with the several banks and other financial
institutions or entities from time to time parties to the Loan and Security
Agreement, as lenders (collectively, referred to as the "Lender"), and Hercules
Capital, Inc., in its capacity as administrative agent and collateral agent for
itself and Lender (in such capacity, the "Agent" or "Hercules").
Amount. The Loan and Security Agreement provides for term loans in an aggregate
principal amount of up to $80.0 million to be delivered in multiple tranches
(the "Term Loans"). The tranches consist of (i) a term loan advance to Borrower
in an aggregate principal amount of up to $15.0 million, of which (A) Albireo AB
agreed to borrow an aggregate principal amount of $10.0 million on the date on
which all conditions to the funding of the Term Loans by the Lender are met (the
"Closing Date"), and (B) a right of the Borrower to request that the Lender make
an additional term loan advance to the Company and/or Albireo AB in an aggregate
principal amount of $5.0 million prior to December 15, 2020, (ii) subject to the
achievement of certain initial performance milestones ("Performance Milestone
I"), a right of the Borrower to request that the Lender make additional term
loan advances to the Company and/or Albireo AB in an aggregate principal amount
of up to $20.0 million from January 1, 2021 through December 15, 2021 in minimum
increments of $10.0 million, and (iii) subject to the Lender's investment
committee's sole discretion, a right of the Borrower to request that the Lender
make additional term loan advances to the Company and/or Albireo AB in an
aggregate principal amount of up to $45.0 million through March 31, 2022 in
minimum increments of $5.0 million. The Borrower intends to use the proceeds of
the Term Loans for working capital and general corporate purposes.
Maturity. The Term Loans mature on January 1, 2024, which is extendable to June
1, 2024 upon achievement of Performance Milestone I (the "Maturity Date").
Interest Rate and Amortization. The principal balance of the Term Loans bears
interest at an annual rate equal to the greater of (i) the sum of (a) 9.15% plus
(b) the prime rate as reported in The Wall Street Journal minus 3.25%, and (ii)
9.15%. Borrowings under the Loan and Security Agreement are repayable in monthly
interest-only payments through January 1, 2022 and extendable to (i) July 1,
2022 upon achievement of Performance Milestone I and (ii) July 1, 2023 upon
achievement of certain additional performance milestones. After the
interest-only payment period, borrowings under the Loan and Security Agreement
are repayable in equal monthly payments of principal and accrued interest until
the Maturity Date.
Prepayment Premium. The Borrower may, at its option upon at least seven business
days' prior notice to the Agent, prepay all, but not less than all, or a portion
(in minimum increments of $5.0 million), of the then outstanding principal
balance and all accrued and unpaid interest on the Term Loans, subject to a
prepayment premium equal to (i) 3.0% of the principal amount outstanding if the
prepayment occurs during the first six months following the Closing Date, (ii)
2.0% of the principal amount outstanding if the prepayment occurs after the
first six months following the Closing Date, but on or prior to 24 months
following the Closing Date, and (iii) 1.0% of the principal amount outstanding
at any time thereafter but prior to the Maturity Date.
Security. The Borrower's obligations are secured by a security interest, senior
to any current and future debts and to any security interest, in all of
Borrower's right, title, and interest in, to and under all of Company's property
and other assets, and certain equity interests and accounts of Albireo AB,
subject to limited exceptions including the Borrower's intellectual property.
Covenants; Representations and Warranties; Other Provisions. The Loan and
Security Agreement contains customary representations, warranties and covenants,
including covenants by the Borrower limiting additional indebtedness, liens
(including a negative pledge on intellectual property and other assets),
guaranties, mergers and consolidations, substantial asset sales, investments and
loans, certain corporate changes, transactions with affiliates and fundamental
changes.
Default Provisions. The Loan and Security Agreement provides for events of
default customary for term loans of this type, including but not limited
. . .
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information provided in Item 1.01 of this Current Report on Form 8-K
regarding the Amendment is incorporated by reference into this Item 2.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K
regarding the Loan and Security Agreement is incorporated by reference into this
Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The information provided in Item 1.01 of this Current Report on Form 8-K
regarding the Warrants is incorporated by reference into this Item 3.02.
Item 8.01 Other Events.
On June 9, 2020, the Company issued a press release announcing the execution of
the Loan and Security Agreement. A copy of the press release is attached hereto
as Exhibit 99.1 and is incorporated herein by reference.
3
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
10.1 Loan and Security Agreement, dated as of June 8, 2020, by and between
the Company and Hercules Capital, Inc.
10.2 Form of Warrant issued by the Company to Hercules Capital, Inc.
10.3* Amendment No 1. to Royalty Interest Acquisition Agreement, dated as
of June 8, 2020, by and among Elobix AB, HealthCare Royalty Partners
III, L.P. and, solely for the purposes specified therein, the
Company.
99.1 Press Release of the Company, dated June 9, 2020.
* Confidential portions of this exhibit have been omitted from the exhibit.
4
© Edgar Online, source Glimpses