Item 1.01. Entry into a Material Definitive Agreement.
On March 1, 2018, CareDx, Inc. (the Company) entered into a binding commitment letter (the Commitment Letter) with Perceptive
Credit Holdings II, LP (Perceptive), pursuant to which, subject to the conditions set forth therein, Perceptive committed to provide the Company with a term loan of up to $35.0 million, subject to funding in two tranches (the
Facility).
The commitment of Perceptive under the Commitment Letter is subject to the satisfaction of several customary conditions,
including, among others, (i) the execution and delivery of definitive loan documentation for the Facility consistent with the terms of the Commitment Letter, (ii) the absence of a material adverse effect, (iii) the accuracy of certain
specified representations by the Company, and (iv) other customary conditions.
The Commitment Letter contemplates that the first tranche of either
$15.0 million or $25.0 million of debt at the Companys election (the Tranche A Term Loan) will be available upon the execution of the definitive loan documentation for the Facility (the Closing Date), subject
to certain customary conditions. The second tranche of up to $10.0 million (the Tranche B Term Loan and, together with the Tranche A Term Loan, the Term Loan) will be available on the Closing Date or within the
one-year
period following the Closing Date subject to the Company achieving certain product revenue targets before the one year anniversary of the date the Tranche A Term Loan is made available and satisfying
customary conditions. The Term Loan will mature on the fifth anniversary of Closing Date, but may be prepaid by the Company, in whole or in part at any time, subject to a prepayment fee.
The Commitment Letter provides that the Term Loan will be secured by substantially all of the Companys assets and a pledge of 65% of the equity
interests of CareDx International AB (formerly Allenex AB). The Term Loan will accrue interest at a calculated LIBOR-based variable rate. Payments under the Term Loan will be interest-only until the first principal payment is due on the last day of
the first calendar month following the third anniversary of the Closing Date, followed by monthly payments of principal and interest through the scheduled maturity date.
The Commitment Letter contemplates that upon the occurrence of an event of default and following any applicable cure periods, if any, a default interest rate
of an additional 3.00% may be applied to the outstanding loan balances, and Perceptive may declare all outstanding obligations immediately due and payable and take such other actions as will be set forth in the definitive loan documentation for the
Facility.
The Commitment Letter will expire on April 15, 2018 unless the Closing Date occurs on or prior thereto.
The definitive loan documentation for the Facility will contain certain customary representations and warranties, affirmative and negative financial
covenants, indemnity obligations and events of default consistent with the terms set forth in the Commitment Letter or as mutually and reasonably agreed. The Company will also reimburse Perceptive for certain fees and expenses and issue Perceptive a
warrant to purchase shares of the Companys Common Stock, in each case as will be described in the definitive loan documentation for the Facility.
The Company expects that the proceeds of the Term Loan will be used for general corporate purposes and for the repayment of the Companys outstanding
indebtedness with JGB Collateral LLC and certain of its affiliates (collectively, JGB), FastPartner AB, Mohammed Al Amoudi and Danske Bank A/S.
The foregoing description of the Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the copy of the Commitment
Letter that will be filed with the Securities and Exchange Commission as an exhibit to the Companys Quarterly Report on Form
10-Q
for the quarter ending March 31, 2018.