| Item 1.01 | Entry Into a Material Definitive Agreement. |
On January 3, 2019, Aimmune Therapeutics, Inc. (the “Company”) entered into a Credit Agreement (the “Agreement”) with KKR Peanut Aggregator L.P., an affiliate of KKR LLC (together with the several banks and other financial institutions from time to time party to the Agreement, collectively, the “Lenders”) and Cortland Capital Market Services LLC , as the administrative agent and the collateral agent (the “Agent”). The Agreement consists of asix-year term loan facility for an up to aggregate principal amount of $170.0 million (the “Term Loans”). The Agreement provides for an initial Term Loan of $40.0 million, which was funded on January 4, 2019 (the “Closing Date”). Subject to the fulfillment of certain customary conditions precedent, including the issuance of an approval letter by the FDA with respect to a Biologic License Application for AR101 on or prior to December 31, 2020 (“Regulatory Approval”), the Company must draw an additional $85.0 million of the Term Loans. At the Company’s option and, subject to the fulfillment of customary conditions precedent, including the Company’s achievement of aggregate net sales (as defined in the Agreement) for AR101 by July 31, 2020 in an amount of at least $30.0 million, the Company may draw the remaining $45.0 million of the Term Loans. The Term Loans under the Agreement bear interest through maturity, at the Company’s election, with respect to (a) ABR Loans, 6.50% per annum and (b) LIBOR Loans, 7.50% per annum. The Company will begin paying accrued interest on outstanding Term Loans on March 31, 2019, and on the last Business Day of each March, June, September and December thereafter while any Term Loan is outstanding, as well as on the final maturity date of the Term Loans (each such date, an “Interest Payment Date”). For each Interest Payment Date until and including the fiscal quarter ending June 30, 2020, the Company has the option to elect whether the interest payments due on such Interest Payment Date shall be paid in cash or paid in kind and capitalized. The Company has selected to pay in kind and have the interest capitalized for the fiscal quarter ending March 31, 2019.
Principal payments on the Term Loans are paid according to the following schedule: (i) on December 31, 2023, 50.0% of the outstanding principal amount of the Term Loans as of such date, including any capitalized interest, (ii) on each Interest Payment Date thereafter, 12.5% of the outstanding principal amount of the Term Loans as of December 31, 2023 and (iii) on January 3, 2025 (the “Maturity Date”), any remaining outstanding balance of the Term Loans. The Company is also required to make mandatory prepayments of the Term Loans under the Agreement, subject to specified exceptions, with the proceeds of asset sales, debt issuances, royalty transactions, collaboration transactions, and specified other events. In addition, upon the occurrence of a change of control, the Company must prepay, the outstanding amount of the Term Loans.
If all or any of the Term Loans are prepaid or required to be prepaid under the Agreement, then the Company shall pay, in addition to such prepayment, a prepayment premium (the “Prepayment Premium”) equal to (i) with respect to any such prepayment paid on or prior to January 3, 2021, the amount, if any, by which (a) the present value as of such date of determination of (x) 105.00% of the principal amount of the Term Loans prepaid plus (y) all required interest payments that would have been due on the principal amount of the Term Loans prepaid through and including January 3, 2021, computed using a discount rate equal to the treasury rate most nearly equal to the period from such date of prepayment to January 3, 2021 plus 50 basis points exceeds (b) the principal amount of the Term Loans prepaid, (ii) with respect to any prepayment paid or required to be paid after January 3, 2021 but on or prior to January 3, 2022, 5.00% of the principal amount of the Term Loans prepaid, (iii) with respect to any prepayment paid or required to be paid after January 3, 2022 but on or prior to January 3, 2023, 2.00% of the principal amount of the Term Loans prepaid and (iv) with respect to any prepayment paid or required to be prepaid thereafter, 0.00% of the principal amount of the Term Loans prepaid. If the Company receives Regulatory Approval, the Company must pay on the earlier of (i) the date on which commitments have been terminated and no Term Loans are outstanding and (ii) the Interest Payment Date falling in the first full fiscal quarter after receipt of Regulatory Approval, a premium in an amount equal to $3.4 million and the Prepayment Premium for such date on a principal amount equal to $85.0 million. The premium with respect to the Regulatory Approval described in the immediately preceding sentence is not due if the Company draws the additional (after the first $40.00 million on the Closing Date) $85.0 million of the Term Loans.
Upon the prepayment or repayment of all or any of the Term Loans, the Company shall pay an additional (in addition to the Prepayment Premium) exit fee in an amount equal to 4.00% of the principal amount of the Term Loans prepaid or repaid. In addition, the Company paid certain customary fees and expenses to the Agent and other service providers on the Closing Date.
The obligations under the Agreement are secured by a lien on substantially all of the Company’s tangible and intangible property. The Agreement contains certain affirmative covenants, negative covenants and events of default, including, covenants and restrictions that among other things, require the Company and its subsidiary guarantors to satisfy a minimum cash balance covenant and restricts the ability of the Company and its subsidiary’s ability to, incur liens, incur additional indebtedness, make loans and investments, engage in mergers and acquisitions, engage in asset sales or sale and leaseback transactions, and declare dividends or redeem or repurchase capital stock. A failure to comply with these covenants could permit the Lenders under the Agreement to declare the Term Loans, together with accrued interest and fees, to be immediately due and payable.
