Item 1.01. Entry
into a Material Definitive Agreement.
Loan
Agreement and First Lien Secured Note
On
December 12, 2022, Gamida Cell Ltd. (the “Company”), as guarantor, and, its wholly owned subsidiary, Gamida Cell Inc., as
borrower (the “Borrower”), entered into a Loan and Security Agreement (the “Loan Agreement”) with certain funds
managed by Highbridge Capital Management, LLC (collectively, “Highbridge”), as the lenders (together with the other lenders
from time to time party thereto, the “Lenders”), and Wilmington Savings Fund Society, FSB, as collateral agent and administrative
agent. Pursuant to the Loan Agreement, the Borrower borrowed an aggregated principal amount of $25.0 million through the issuance and
sale of a First Lien Secured Note (the “Note”). The Company expects to use the proceeds of the Note for: (i) commercial readiness
activities to support potential launch of omidubicel, if approved; (ii) the continued clinical development of the Company’s NK
product candidates, including GDA-201; and (iii) general corporate purposes, including general and administrative expenses and working
capital. The Note was issued with an original issue discount of 3.00%.
The
Note is exchangeable, at the option of the Lenders, into the Company’s ordinary shares (the “Ordinary Shares”) at an
exchange rate of 0.52356 Ordinary Shares per $1.00 principal amount, together with a make-whole premium equal to all accrued and unpaid
and remaining coupons due through the Maturity Date (the “Make Whole Amount”). The exchange rate is subject to adjustment
in the event of Ordinary Share dividends, reclassifications and certain other fundamental transactions affecting the Ordinary Shares.
The
Company has fully and unconditionally guaranteed the obligations of the Borrower under the Loan Agreement and the Note. The obligations
under the Loan Agreement and the Note are secured by substantially all assets of the Company and its subsidiaries.
The
Loan Agreement and the Notes will mature on December 12, 2024 (the “Maturity Date”), unless earlier repurchased, redeemed
or exchanged in accordance with the terms, and bear interest at the annual rate of 7.50%, payable on a quarterly basis, with the interest
rate increasing to 12.00% at any time upon any event of default under the Loan Agreement or certain failures to register the resale of
the Ordinary Shares issuable pursuant to the Note.
Commencing
four months after the closing date for the Loan Agreement, the Company shall make monthly installment payments in an amount equal to
(a) a ratable amount of the outstanding principal amount of the Loan Agreement divided by the remaining months to Maturity Date plus
(b) accrued and unpaid interest on such amount. Such installment payments will also include a 5% prepayment premium on the principal
being repaid (the “Repayment Premium”).
Subject
to certain conditions, the Note will be immediately callable by the Company at any time at a redemption price equal to (a) 100% of the
principal amount of the Loan Agreement to be redeemed, plus (b) the Make Whole Amount, and plus (c) the Repayment Premium.
To
the extent that certain conditions are satisfied under the Note (including the effectiveness of a resale registration statement), principal
amortization payments, interest, the Make-Whole Amount and the Repayment Premium payable in respect of principal amortization payments
may be paid in Ordinary Shares which will be valued at 95% of the volume weighted average price over the ten preceding trading days (the
“VWAP Price”).
Upon
satisfying certain conditions, the Borrower may elect to exchange the outstanding principal amount of the Notes into Ordinary Shares
at the exchange ratio, together with the Make-Whole Amount applicable to the principal being exchanged. This exchange option shall not
exceed $5,000,000 at any one time, and the aggregate principal amount of Notes exchanged shall not exceed $10,000,000 within any one-month
period, and there must be at least 15 trading days between each exchange option. If the Borrower or the Lenders elect to exchange any
of the Notes, the amount exchanged will be equal to the principal and unpaid accrued interest plus the Prepayment Premium and the Make
Whole Amount.
The
Loan Agreement contains customary representations and warranties and covenants, including a $20.0 million minimum liquidity covenant
and certain negative covenants restricting dispositions, changes in business and business locations, mergers and acquisitions, indebtedness,
issuances of preferred stock, liens, collateral accounts, restricted payments, transactions with affiliates, compliance with laws, and
issuances of capital stock. Most of these restrictions are subject to certain minimum thresholds and exceptions. Certain of the negative
covenants will terminate when less than $5.0 million of principal amount is outstanding under the Loan Agreement.
The
Loan Agreement also contains customary events of default, after which the obligations under the Loan Agreement and the Note may be due
and payable immediately, including, without limitation, payment defaults, material inaccuracy of representations and warranties, covenant
defaults, material adverse changes, bankruptcy and insolvency proceedings, cross-defaults to certain other agreements, judgments against
us, change of control, termination of any guaranty, governmental approvals, and lien priority.
Registration
Rights Agreement
In
connection with the Note, the Company entered into a registration rights agreement (the “Registration Rights Agreement”),
pursuant to which the Company has agreed to register the resale of the Ordinary Shares issuable in accordance with the terms of the Note.
The
Company will use commercially reasonable efforts to keep such registration statement continuously effective until all of the registrable
securities covered by such registration statement have been sold by the Holders (as defined in the Registration Rights Agreement). Subject
to certain conditions, the Company will be obligated to pay certain damages to each Holder if the Company fails to file the registration
statement when required, fails to cause the registration statement to be declared effective by the SEC when required, or if the Company
fails to maintain the effectiveness of the registration statement. In addition, the Company will be obligated to pay additional interest
on the Notes and the Ordinary Shares issued upon exchange of the Notes if the resale registration statement is not timely filed or made
effective or if the resale registration statement is unavailable for periods in excess of those permitted. Such additional interest will
accrue until the date prior to the day the default is cured at a rate per year equal to an annual rate of 4.50% of the aggregate principal
amount of such Notes outstanding (or the principal amount of such Notes exchanged into Ordinary Shares).
The
foregoing descriptions in this Current Report on Form 8-K of the material terms of the Loan Agreement, the Note and the Registration
Rights Agreement do not purport to be complete descriptions of the rights and obligations of the parties thereunder and are qualified
in their entirety by the Loan Agreement, Note, and Registration Rights Agreement, copies of which are attached hereto as Exhibit 10.1,
Exhibit 10.2 and Exhibit 10.3, respectively and incorporated by reference herein.