Item 1.01 Entry Into a Material Definitive Agreement.
As previously disclosed, PhaseBio Pharmaceuticals, Inc. (the "Company") entered
into a Loan and Security Agreement, dated as of March 25, 2019 (as amended by
that certain Consent and First Amendment to Loan and Security Agreement dated as
of March 19, 2020, the "Loan Agreement"), with Silicon Valley Bank ("SVB"), in
its capacity as administrative agent and collateral agent, SVB, as a lender, and
SVB Innovation Credit Fund VIII, L.P. (formerly known as WestRiver Innovation
Lending Fund VIII, L.P., "SVB Innovation"), as a lender. On October 3, 2022,
SVB, SVB Innovation (collectively, "Assignor") and JMB Capital Partners Lending,
LLC ("JMB") entered into a Non-Recourse Loan Document Sale and Assignment
Agreement (the "Assignment Agreement"), pursuant to which Assignor sold and
assigned to JMB all of Assignor's right, title, interest and obligations under
(i) the Loan Agreement, (ii) that certain Subordination Agreement, dated as of
March 19, 2020, by and among SFJ Pharmaceuticals X, Ltd. ("SFJ") and Assignor
(the "Subordination Agreement") and (iii) that certain Intellectual Property
Security Agreement, dated as of March 19, 2020, by and among the Company and
Assignor (the "IP Security Agreement" and together with the Loan Agreement and
the Subordination Agreement, the "Loan Documents") in exchange for, among other
things, the payment in full of all outstanding principal and accrued interest
under the Loan Agreement. The Assignment Agreement provided that SVB resign as
agent under the Loan Documents and that JMB become the successor agent under the
Loan Documents.
In connection with the Assignment Agreement, on October 3, 2022, the Company
entered into a Second Amendment (the "Second Amendment") to the Loan Agreement
with JMB, as assignee of SVB, in its capacity as administrative agent and
collateral agent, and JMB, as a lender. Pursuant to the Second Amendment, JMB
became the successor lender and agent under the Loan Agreement. Under the Second
Amendment, JMB agreed to make additional advances to the Company as Tranche A
Growth Capital Advances (as defined in the Loan Agreement) from time to time in
an amount up to $6.25 million, at an initial issue price of eighty percent (80%)
of the aggregate amount so advanced. Effective October 4, 2022, the Company
borrowed $6.25 million at an initial issue price of eighty percent (80%) as
Tranche A Growth Capital Advances under the Loan Agreement, as amended by the
Second Amendment. In addition, among other things, the Second Amendment revised
the definition of a "Material Adverse Change" under the Loan Agreement to
exclude the occurrence of or failure to cure the Going Concern Condition (as
defined in that certain Co-Development Agreement, dated as of January 9, 2020,
by and between the Company and SFJ (the "Co-Development Agreement")), the
delivery by SFJ of a Program Transfer Notice (as defined in the Co-Development
Agreement) or the taking of any action with respect to the foregoing.
In connection with the Second Amendment, the Company and JMB entered into an
Intellectual Property Security Agreement, dated October 7, 2022 (the "Additional
IP Security Agreement"), granting JMB a security interest in all of the
Company's intellectual property that has not already been recorded against by
SVB in the United States Patent and Trademark Office pursuant to the IP Security
Agreement.
The foregoing description of the Second Amendment and the Additional IP Security
Agreement does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the terms of the agreements, copies of which will
be filed with the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2022.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of the Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
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