Item 1.01 Entry into a Material Definitive Agreement
Senior Secured Term Loan
On May 8, 2024, Coherus BioSciences, Inc., a Delaware corporation (the “Company”), entered into a senior secured term loan facility of up to $38.7 million (the “Term Loan”), all to be funded on May 8, 2024 (the “Effective Date”), with Ankura Trust Company, LLC, as administrative agent (in such capacity, the “Agent”), and the lenders signatory thereto (collectively, the “Lenders”). The proceeds of the Term Loan will be used by the Company to help repay in full the existing outstanding indebtedness owed by the Company to BioPharma Credit, PLC, BPCR Limited Partnership, and Biopharma Credit Investments V (Master) LP, acting by its general partner, BioPharma Credit Investments V GP LLC pursuant to the senior secured term loan facility that was entered into January 5, 2022 (as amended on April 7, 2022, February 6, 2023 and February 5, 2024, the “Prior Loan Agreement”).
The Term Loan is governed by a loan agreement, dated as of the Effective Date, by and among the Company, the Agent and the Lenders (the “Loan Agreement”). The Term Loan will mature on May 8, 2029. The amounts borrowed under the Term Loan accrue interest at a per annum rate equal to 8.00% per annum, plus a three month SOFR rate (the “Interest Rate”). The Term Loan provides for interest-only payments on a quarterly basis until maturity. The Company may prepay the Term Loan in full or in part provided that the Company (i) provides at least three (3) business days’ prior written notice to the Agent, (ii) pays on the date of such prepayment (A) all outstanding principal to be prepaid plus accrued and unpaid interest, (B) a prepayment fee of (x) 10.00% of the Term Loans so prepaid if paid on or after the first anniversary of the Effective Date and before the second anniversary of the Effective Date; (y) 5.00% of the Term Loans so prepaid if paid after the second anniversary of the Effective Date and on or before the third anniversary of the Effective Date; and (z) 0.00% of the Term Loans so prepaid if paid after the third anniversary of the Effective Date and (C) all other sums, if any, that shall become due and payable under the Loan Agreement, including interest at the default rate with respect to any past due amounts. Amounts outstanding during an event of default shall accrue interest at an additional rate of 4.00% per annum, which interest shall be payable on demand in cash.
The Term Loan is secured by a lien on substantially all of the assets of the Company, including intellectual property, subject to customary exclusions and exceptions. The Loan Agreement contains customary representations and warranties, covenants and events of default, including a financial covenant commencing on the Effective Date, which requires the Company to maintain certain levels of cash and cash equivalents. The Loan Agreement also contains other customary provisions, such as expense reimbursement, as well as indemnification rights for the benefit of the Agent and the Lenders.
The foregoing description of the material terms of the Loan Agreement is qualified in its entirety by the full terms and conditions of the Loan Agreement, which will be filed with the Securities and Exchange Commission (the “SEC”) as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.
In connection with the entry into the Loan Agreement, on the Effective Date, the Company repaid in full all outstanding indebtedness and terminated all commitments under the Prior Loan Agreement, the material terms of which have been disclosed previously. The aggregate principal amount of the loan outstanding under the Prior Loan Agreement was $75 million at the time of repayment. The Company did not incur any penalties, but did incur a prepayment fee and paid a make-whole amount, as a result of the foregoing.
Revenue Participation Right Purchase and Sale Agreement
On May 8, 2024, the Company entered into a revenue participation right purchase and sale agreement (the “Revenue Purchase and Sale Agreement”) with Coduet Royalty Holdings, LLC, as administrative agent and each buyer named in an annex thereto (collectively, the “Purchaser”). Under the terms of the Revenue Purchase and Sale Agreement, in exchange for the Purchaser’s payment to the Company of a purchase price of $37.5 million, in the