Exhibit 10.3
CONSENT AND THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
This CONSENT AND THIRD AMENDMENT to Loan and Security Agreement (this “Amendment”) is entered into as of April 7, 2022, by and between SILICON VALLEY BANK, a California corporation (“Bank”) and BIODESIX, INC., a Delaware corporation (“Borrower”).
RECITALS
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
“(i) Voluntary Prepayment. On or about the Second Amendment Effective Date, Borrower made a prepayment to Bank in an amount equal to Twenty Million Dollars ($20,000,000) of the outstanding principal balance of the Term Loan Advance as of such date. On or about April 1, 2022, Borrower made a prepayment to Bank in an amount equal to Two Million Dollars ($2,000,000) of the outstanding principal balance of the Term Loan Advance on such date.
On or prior to the earlier to occur of (A) the Third Amendment Effective Date or (B) the date on which Bank, at Borrower’s request, issues a cash secured Letter of Credit with Centennial Valley Properties I, LLC as the beneficiary securing Borrower’s obligations under the Lease Agreement, Borrower shall prepay an additional One Million Dollars ($1,000,000) of the outstanding principal balance of the Term Loan Advance as of such date (the “Third Amendment Prepayment”); provided that, for the avoidance of doubt, no Prepayment Fee shall apply to the Third Amendment Prepayment.
On or prior to the 2022 Prepayment Date, Borrower shall prepay an additional Two Million Dollars ($2,000,000) of the outstanding principal balance of the
Term Loan Advance as of such date (the “2022 Prepayment”); provided that, for the avoidance of doubt, no Prepayment Fee shall apply to the 2022 Prepayment.
At any time, Borrower shall have the option to prepay all, but not less than all, of the remaining outstanding principal balance of the Term Loan Advance, provided Borrower (A) delivers written notice to Bank of its election to prepay the remaining outstanding principal balance of the Term Loan Advance at least five (5) Business Days prior to such prepayment, and (B) pays, on the date of such prepayment (w) all remaining outstanding principal due hereunder with respect to the Term Loan Advance, plus accrued and unpaid interest thereon, (x) the Prepayment Fee, if applicable, (y) the Final Payment, and (z) all other sums, if any, that shall have become due and payable hereunder with respect to the Term Loan Advance, including interest at the Default Rate with respect to any past due amounts.”
“(a) Prepayment Fee. The Prepayment Fee, when due hereunder; provided that (i) the Prepayment Fee shall be deemed to be automatically waived by Bank if the Term Loan Advance is refinanced with another credit facility from Bank, (ii) Bank hereby agrees to waive Borrower’s payment of that portion of the Prepayment Fee that would otherwise by due and owing to Bank in connection with each of (A) the prepayment by Borrower of Twenty Million Dollars ($20,000,000) of the Term Loan Advance on or prior to the Second Amendment Effective Date, (B) the prepayment by Borrower of Two Million Dollars ($2,000,000) of the Term Loan Advance on April 1, 2022, (C) the Third Amendment Prepayment, and (D) the 2022 Prepayment; and
(b) Final Payment. The Final Payment, when due hereunder; provided that Bank hereby agrees to defer payment of that portion of the Final Payment that would otherwise by due and owing to Bank in connection with the prepayment by Borrower of Twenty Million Dollars ($20,000,000) of the Term Loan Advance on or prior to the Second Amendment Effective Date, Two Million Dollars ($2,000,000) of the Term Loan Advance on April 1, 2022, the Third Amendment Prepayment and the 2022 Prepayment until the earliest to occur of (i) the Term Loan Maturity Date, (ii) the acceleration of the Term Loan Advance, or (iii) the prepayment of the remaining principal balance of the Term Loan Advance pursuant to Section 2.1.1(c).”
“(b) Minimum Revenue (Performance to Plan).
(iii) The required minimum revenue (performance to plan) covenant levels for the quarterly measuring periods ending after December 31, 2022, shall, unless
Borrower and Bank shall otherwise agree in writing, (A) be set at seventy- five percent (75%) of the Borrower’s projections delivered to Bank in accordance with Section 6.2(e) hereof and measured on a trailing six (6) month basis, (B) reflect year-over-year revenue growth (determined in accordance with GAAP) for each measuring period and (C) be documented pursuant to an amendment to this Agreement to be entered into on or prior to December 31 of each calendar year (commencing with December 31, 2022). So long as Borrower shall have been provided a copy of such amendment not less than ten (10) Business Days prior to December 31st of any applicable calendar year and an opportunity to review and provide comment on such amendment, and the terms and conditions of such amendment shall not otherwise be prohibited as a matter of contract or applicable law, Borrower’s failure to enter into such amendment to this Agreement to reset such covenant levels on or prior to December 31st of any applicable year shall be an immediate and non-curable Event of Default hereunder.”
“(n) Indebtedness incurred in connection with that certain Letter of Credit issued by Bank in favor of Centennial Valley Properties I, LLC as the beneficiary thereunder in an aggregate amount not to exceed Five Million Dollars ($5,000,000) in connection with the Lease Agreement;
(o) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (n) above, provided that (i) the principal amount thereof is not increased and (ii) taken as a whole, the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.”
“2022 Prepayment Date” is May 15, 2022, provided that if Borrower achieves the First Equity Event, the 2022 Prepayment Date shall automatically with no further action required by the parties hereto, be extended to May 31, 2022, and provided further that if Borrower achieves the First Equity Event and the Second Equity Event, the 2022 Prepayment Date shall automatically, with no further action required by the parties hereto, be extended to the earlier of (a) September 30, 2022, or (b) the date on which the sum of Borrower’s unrestricted and unencumbered cash and Cash Equivalents at Bank is less than Twelve Million Dollars ($12,000,000).
“First Equity Event” means Borrower has received, on or after April 7, 2022, but on or prior to May 15, 2022, into its accounts at Silicon Valley Bank, net cash proceeds in an aggregate amount not less than Twelve Million Dollars ($12,000,000) from the sale of Borrower’s equity securities and/or the incurrence of Subordinated Debt on terms and from investors acceptable to Bank.
“Integrated Diagnostics APA” means that certain Asset Purchase Agreement and Plan of Reorganization, dated as of June 30, 2018, by and between Borrower, Integrated Diagnostics and the stockholders of Integrated Diagnostics
set forth on Exhibit A thereto as amended by that certain Amendment No. 1 to Asset Purchase Agreement and Plan of Reorganization dated as of July 29, 2021, that certain Amendment No. 2 to Asset Purchase Agreement and Plan of Reorganization dated as of August 9, 2021 and that certain Amendment No. 3 to Asset Purchase Agreement and Plan of Reorganization dated as of April 7, 2022.
“Lease Agreement” means that certain Lease Agreement dated as of March 11, 2022 as amended by that certain First Amendment to Lease Agreement dated as of March 11, 2022 by and among Borrower and Centennial Valley Properties I, LLC pursuant to which Borrower will lease certain leasable square feet at the premises located at 919 West Dillion Road, Louisville, CO 80027.
“Second Equity Event” means Borrower has received, on or after April 7, 2022, but on or prior to May 31, 2022, into its accounts at Silicon Valley Bank, net cash proceeds in an aggregate amount not less than Fifteen Million Dollars ($15,000,000) (inclusive of any amounts received from the First Equity Event) from the sale of Borrower’s equity securities and/or the incurrence of Subordinated Debt on terms and from investors acceptable to Bank.
“Third Amendment Effective Date” is April 7, 2022.
hereto.
“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.” (Emphasis added.)
follows:
[Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.
BANK:
SIICON VALLEY BANK
By: /s/ KRISTINE ROHMER
Name: Kristine Rohmer
Title: Director
BORROWER:
BIODESIX, INC.
By: /s/ SCOTT HUTTON
Name: Scott Hutton
Title: Chief Executive Officer
[Signature Page to Consent and Third Amendment to Loan and Security Agreement]
EXHIBIT B
COMPLIANCE STATEMENT
TO: SILICON VALLEY BANK Date: FROM: BIODESIX, INC.
Under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”): Borrower is in compliance in all material respects for the period ending
with all required covenants except as noted below. Attached are the required documents evidencing such compliance, setting forth calculations prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.
Please indicate compliance status by circling Yes/No under “Complies” column.
Reporting Covenants | Required | Complies | |
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Quarterly financial statements with Compliance Statement | Within 5 Business Days following the date Borrower is required to file its Form 10-Q | Yes | No |
Annual financial statements (CPA Audited) | Within 5 Business Days following the date Borrower is required to file its Form 10-K | Yes | No |
A/R & A/P Agings and a Detailed Listing of Borrower’s Account Debtors | Monthly within 10 Business Days | Yes | No |
Inventory Reports | Monthly within 30 days | Yes | No |
10-Q, 10-K and 8-K | Within 5 Business Days after filing with SEC | Yes | No |
Board approved projections | Within 75 days after FYE, or, if earlier, the 7th Business Day following approval by the Borrower’s board of directors, and within seven (7) Business Days of any material updates/amendments thereto | Yes | No |
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Financial Covenants | Required | Actual | Complies |
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Minimum Liquidity Ratio (maintain at all times) | 0.95:1.0 | :1.0 | Yes No |
Minimum Revenue (measured on a trailing three (3) month basis for the quarters ending June 30, 2022, September 30, 2022 and December 31, 2022 and trailing six (6) month basis thereafter) (tested quarterly) | See Schedule 1 | $ | Yes No |
Other Matters
Have there been any amendments of or other changes to the capitalization table of Borrower and to the Operating Documents of Borrower or any of its Subsidiaries? If yes, provide copies of any such amendments or changes with this Compliance Statement.
Yes No
The following financial covenant analysis and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Compliance Statement.
The following are the exceptions with respect to the statements above: (If no exceptions exist, state “No exceptions to note.”)
Schedule 1 to Compliance Statement
In the event of a conflict between this Schedule and the Agreement, the terms of the Agreement shall govern.
Dated:
Actual:
Is line E greater than 0.95:1.00?
No, not in compliance Yes, in compliance
Required: Achieve revenue (measured in accordance with GAAP and tested as of the last day of each calendar quarter ending after March 31, 2022 on a trailing three (3) month basis) of not less than (x) fifty-three percent (53%) of the Borrower’s projected revenue numbers for the quarter ending June 30, 2022, (y) fifty percent (50%) of the Borrower’s projected revenue for the quarter ending September 30, 2022, and (z) fifty percent (50%) of the Borrower’s projected revenue for the quarter ending December 31, 2022, in each case as the projected revenue is set forth in Borrower’s projections delivered to Bank on March 29, 2022 and titled “Biodesix, Inc. – Income Statement”.
Actual:
A. Borrower’s revenue (determined in accordance with GAAP) measured on a trailing 3-
month basis. $
Is line A equal to or greater than the required revenue set forth above for the corresponding measuring period?
No, not in compliance Yes, in compliance