Item 1.01. Entry
into a Material Definitive Agreement.
On November 1, 2021, iBio, Inc. (the “Company”)
and its subsidiary, iBio CDMO LLC (“iBio CDMO”, and collectively with the Company, the “Purchaser”)
entered into a series of agreements (the “Transaction”) with College Station Investors LLC (“College Station”),
and Bryan Capital Investors LLC, each affiliates of Eastern Capital Limited (“Bryan Capital” and, collectively with
College Station, “Seller”) described in more detail below whereby in exchange for a certain cash payment and a warrant
to purchase shares of common stock, the Company:
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(i)
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acquired the 130,000 square-foot cGMP manufacturing facility in Bryan, Texas located
at 8800 HSC Parkway, Bryan, Texas 77807 (the “Facility”) where iBio CDMO currently conducts business and the rights
as the tenant in the Facility’s ground lease;
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(ii)
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acquired all of the equity owned by Bryan Capital in the Company and iBio CDMO;
and
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(iii)
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otherwise terminated all agreements between the Company and Seller.
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The Facility is a Class A life sciences
building located on land owned by the Board of Regents of the Texas A&M University System (“Texas A&M”) and
is designed and equipped for the manufacture of plant-made biopharmaceuticals. iBio CDMO had held a sublease for the Facility through
2050, subject to extension until 2060 (the “Sublease”).
The Purchase and Sale Agreement
On
November 1, 2021, the Purchaser entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”)
with the Seller pursuant to which: (i) the Seller sold to Purchaser all of its rights, title and interest as the tenant in the
Ground Lease Agreement (the “Ground Lease Agreement”) that it entered into with Texas A&M (the
“Landlord’’) related to the property at which the Facility is located together with all improvements
pertaining thereto (the “Property”), which previously had been the subject of the Sublease; (ii) the Seller sold
to Purchaser all of its rights, title and interest to any tangible personal property owned by Seller and located on the Property
including the Facility; (iii) the Seller sold to Purchaser all of its rights, title and interest to all licensed, permits and
authorization for use of the Property; and (iv) College Station and iBio CDMO terminated the Sublease. The total purchase price for
the Property, the termination of the Sublease and other agreements among the parties, and the equity described below is $28,750,000,
which was paid $28,000,000 in cash and by the issuance to Seller of warrants (the “Warrant”) described below. As
part of the transaction, iBio CDMO became the tenant under the Ground Lease Agreement for the Property until 2060 upon exercise of
available extensions. The base rent payable under the Ground Lease Agreement is 6.5% of the Fair Market Value (as defined in the
Ground Lease Agreement ) of the Property, which was $151,450 for the prior year. The Ground
Lease Agreement includes various covenants, indemnities, defaults, termination rights, and other provisions customary for lease
transactions of this nature.
The Equity Purchase Agreement
The Company also entered into an Equity
Purchase Agreement with Bryan Capital on November 1, 2021 (the “Equity Purchase Agreement”) pursuant to which the Company
acquired for $50,000 cash, plus the Warrant, the one (1) share of iBio CMO Preferred Tracking Stock and the 0.01% interest in iBio CDMO
owned by Bryan Capital. iBio CDMO is now a wholly-owned subsidiary of the Company.
The Credit Agreement
In connection with the Purchase and
Sale Agreement, iBio CDMO entered into a Credit Agreement, dated November 1, 2021, with Woodforest National Bank (the “Credit
Agreement”) pursuant to which Woodforest National Bank provided iBio CDMO a $22,375,000 secured term loan (the “Term
Loan”) to purchase the Facility, which Term Loan is evidenced by a Term Note (the “Term Note”). The Term
Loan was advanced in full on the closing date. The Term Loan bears interest at a rate of 3.25%, with higher interest rates upon an event
of default, which interest is payable monthly beginning November 5, 2021. Principal on the Term Loan is payable on November 1, 2023 subject
to early termination upon events of default. The Term Loan provides that it may be prepaid by iBio CDMO at any time and provides for mandatory
prepayment upon certain circumstances.
The
Credit Agreement contains customary events of default (which are in some cases subject to certain exceptions, thresholds, notice
requirements and grace periods), including, but not limited to, nonpayment of principal or interest, failure to perform or observe
covenants, breaches of representations and warranties, cross-defaults with certain other indebtedness, certain bankruptcy-related
events or proceedings, final monetary judgments or orders and certain change of control events. The covenants include a prohibition
on the incurrence of Debt (as defined in the Credit Agreement) except permitted Debt (as defined in the Credit Agreement) and Liens
(as defined in the Credit Agreement) and termination of the Ground Lease Agreement. In addition, the Company must maintain unrestricted
cash of no less than $10,000,000.
The proceeds of the Term Loan were
used (a) to fund a portion of the purchase price under the Purchase Agreement, and (b) to pay closing costs in connection with the Credit
Agreement. The term loan is secured by (a) a leasehold deed of trust on the Facility, (b) a letter of credit issued by JPMorgan Chase
Bank, and (c) a first lien on all assets of iBio CDMO including the Facility.
Security and Pledge Agreements,
Guaranties and Deed of Trust
iBio CDMO also entered into a Security
Agreement on November 1, 2021 with Woodforest National Bank (the “Security Agreement”) providing Woodforest National
Bank a security interest in the following assets of iBio CDMO (subject to certain exclusions): all personal and fixture property of every
kind and nature, including, without limitation, all goods (including, but not limited to, all equipment and any accessions thereto), all
inventory, instruments (including promissory notes), documents, accounts, chattel paper (whether tangible or electronic), deposit accounts,
securities accounts, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), money, commercial tort claims,
securities and all other investment property, supporting obligations, contracts, contract rights, other rights to the payment of money,
insurance claims and proceeds, software, fixtures, vehicles and rolling stock (whether or not subject to a certificate of title statute),
leasehold improvements, general intangibles (including all payment intangibles), and all of iBio CDMO’s company and other business
books, reports, memoranda, customer lists, credit files, data compilations, and computer software, in any form, including, without limitation,
whether on tape, disk, card, strip, cartridge, or any other form, pertaining to any and all of the foregoing property, and all products
and proceeds of the foregoing.
The Company also entered into a Guaranty
for the benefit of Woodforest National Bank (the “Guaranty”) pursuant to which it guaranteed all of the obligations
of iBio CDMO to Woodforest National Bank.
In addition, iBio CDMO entered into
a Leasehold Deed of Trust, Assignment of Rents, Security Agreement and UCC Financing Statement For Fixture Filing (the “Deed
of Trust”) with the trustee named therein and Woodforest National Bank as beneficiary, securing all of iBio CDMO’s obligations
to Woodforest National Bank by a senior priority security interest in the Property.
The Company and iBio CDMO also entered
into an Environmental Indemnity Agreement in favor of Woodforest National Bank (the “Environmental Indemnity Agreement”).
The Warrant
As part of the consideration for the purchase
and sale of the rights set forth above, the Company issued to Bryan Capital a Warrant to purchase 1,289,581 shares of the common stock
of the Company at an exercise price of $1.33 per share. The Warrant expires October 10, 2026, is exercisable immediately, provides for
a cashless exercise at any time and automatic cashless exercise on the expiration date if on such date the exercise price of the Warrant
exceeds its fair market value as determined in accordance with the terms of the Warrant and adjustments in the case of stock dividends
and stock splits. Of the shares issued under the Warrant, 289,581, which are valued at $217,255, reflect the final payment of rent due
under the Sublease.
The foregoing
descriptions of the Term Note, the Warrant, the Purchase and Sale Agreement, the Equity Purchase Agreement, the Credit Agreement,
the Guaranty, the Deed of Trust, the Security Agreement and the Environmental Indemnity Agreement do not purport to be complete and
are qualified in their entirety by reference to the Term Note, the Warrant, the Purchase and Sale Agreement, the Equity Purchase
Agreement, the Credit Agreement, the Guaranty, the Deed of Trust, the Security Agreement, the Environmental Indemnity Agreement and
the Ground Lease Agreement, complete copies of which are filed as Exhibits 4.1, 4.2, 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7 and 10.8 to
this Current Report on Form 8-K and are incorporated herein by reference.