BioSenic : summary bonds refinancing_20240411

Company:

BioSenic SA, having its registered office at Rue Granbonpré 11,

Building H, 1435 Mont-Saint-Guibert, Belgium and with enterprise

number 0882.015.654 (RLE Hainaut, Division Charleroi).

Lenders/Bondholders:

(1) Patronale Life SA, located at 33 Boulevard Bischoffsheim, 1000

Brussels, Belgium (hereinafter "Patronale"); and

(2) Monument Assurance Belgium NV, located at Phoenix-gebouw,

Koning Albert II-laan 19, 1210 Sint-Joost-ten-Node, Belgium

(hereinafter "Monument"),

Hereinafter each a "Bondholder" and together the "Bondholders".

Original debts:

(1) Twenty (20) non-convertible bonds for an amount of two million

euro (EUR 2,000,000) issued pursuant to a subscription agreement

dated 25 June 2019 entered into between Monument as subscriber

and the Company as issuer (the "Monument Non-convertible

Bonds"); and

(2) Eight hundred (800) convertible bonds for an amount of two million

euro (EUR 2,000,000) convertible into ordinary shares of the

Company, issued pursuant to a subscription agreement dated 7 May

2020 entered into between Monument as subscriber and the

Company as issuer (the "Monument Convertible Bonds"),

the Monument Non-convertible Bonds and the Monument Convertible

Bonds hereinafter referred to jointly as the "Monument Loans"; and

(3) Fifteen (15) non-convertible bonds for an amount of one million

five hundred thousand euro (EUR 1,500,000), pursuant to a

subscription agreement dated 25 June 2019 entered into between

Patronale as subscriber and the Company as issuer (the "Patronale

Bonds"); and

(4) An unsecured straight loan for an amount of two million euro

(EUR 2,000,000) (the "Patronale Straight Loan"), made available

pursuant to an agreement between Patronale and the Company

dated 26 August 2021 (the "Straight Loan Agreement"),

the Patronale Bonds and the Patronale Straight Loan hereinafter

referred to jointly as the "Patronale Loans".

Proposed transaction:

Replacement of the outstanding Monument Loans and Patronale

Loans by new convertible bonds to be issued by the Company (the

"New CBs") on the terms and subject to the conditions of this Term

Sheet.

Standstill:

Upon execution of this Term Sheet, Monument and Patronale agree

and confirm that they will not take any actions to enforce their rights to

be repaid under, respectively, the Monument Loans and the Patronale

Loans until the earlier of (i) Closing Date (as defined hereinafter) of

the issuance of the New CBs or (ii) termination of the subscription

the Bondholder during the Conversion Period.

Conversion Period

As from ten trading days after the announcement of the official

remittance to the Regulatory Agency of the Final Clinical Report

following the results of the phase III clinical trial with cGvHD up to

close of business on the date which is expected to fall 10 dealing

days prior to the New Maturity Date or, as the case may be, the

Extended Maturity Date or, in the case of an earlier redemption, the

date falling 10 dealing days prior to the relevant early redemption

date. The Company shall notify in writing the Bondholders of the

official remittance to the Regulatory Agency of the Final Clinical

Report.

Conversion price:

The New CBs will be convertible into new ordinary shares of the

Company at a conversion price of 95% of the 30-calendar day VWAP

immediately preceding the date of the conversion notice.

The Company can also elect (i) to cash settle conversion notices

using this formula: ((conversion amount/conversion price) * VWAP on

the day the conversion notice is issued) or (ii) to direct a third party to

buy the relevant New CBs from the Bondholder(s) at the same cash

price.

No more than one conversion per month will be allowed. Upon

conversion, the Company shall deliver the newly issued freely

tradable shares within 10 trading days.

Mandatory early

Upon Event of Default.

prepayments:

The Company will pay to the Bondholders and the EIB an aggregate

amount of 37.5% of any upfront license payments or sales price for

ALLOB or JTA received by BioSenic prior to the New Maturity

Date/Extended Maturity Date, as an early repayment of the

outstanding New CBs and the EIB Loan, provided that such upfront

license payment or sales price is at least EUR 15 million.

Early prepayments shall be made to each Bondholder and to the EIB

pro rata to their respective outstanding (convertible) loan amounts,

but no lender shall receive more than 12.5% of the relevant upfront

license payment.

Accrued Interest shall be calculated taking into account any early

prepayment.

For the avoidance of doubt, the abovementioned prepayment

requirement shall not apply to (i) any payments made by a license

partner to BioSenic that are not upfront payments because they must

be allocated to the further development, analysis or follow-up of, or

any other investment in, ALLOB or JTA or (ii) any licensing

arrangements entered into by Medsenic SAS.

Voluntary early prepayment

The Company has the right to prepay at any time without any penalty

right for the Company:

all or part of the outstanding New CBs and Interest accrued. No

prepayment fees or penalties or break costs shall apply. Prepayment

notice of two weeks. Prepayment of New CBs to be done pro rata

with prepayment of EIB Loan (pari passu).

No voluntary prepayment possible by the Company in the period

starting from the public announcement of the final topline results of

the phase 3 clinical trial with cGvHD until 10 days after the start of the

Conversion Period.

Change of Control

Upon the occurrence of a change of control, Bondholders may require

Protection

the Company to redeem the New CBs at the Principal Amount, plus

accrued Interest.

Events of Default:

The Bondholders may require the Company to prepay all or part of

the New CBs (together with the Interest) upon the occurrence of an

Event of Default as will be defined in the final subscription

agreement(s). The description of the Events of Default will be aligned

with concept as used in existing Monument Convertible Bonds and

Patronale Bonds.

Ranking of the New CBs:

The New CBs rank equally (pari passu), without any priority among

themselves for any reason whatsoever. Also pari passu with EIB

Loan.

Transferability

The New CBs are in registered form and are transferable, but will not

be listed. The Bondholders cannot sell the New CBs in or into the

United States of America, nor to investors in Canada, Australia or

Japan.

Governing law:

The New CBs shall be governed and construed in accordance with

the laws of Belgium.

Jurisdiction:

Failing out of court settlement, the French-speaking courts of

Brussels shall have exclusive jurisdiction to settle any dispute arising

out of or in connection with the New CBs.

Company:

BioSenic SA, having its registered office at Rue Granbonpré 11,

Building H, 1435 Mont-Saint-Guibert, Belgium and with enterprise

number 0882.015.654 (RLE Hainaut, Division Charleroi), represented

by Francois Rieger and Veronique Pomi, Directors.

Lender:

The European Investment Bank, having its seat at 100 blvd Konrad

Adenauer, Luxembourg, L-2950 Luxembourg ("EIB").

Original credit:

Tranche A loan of eight (8) million euro (the "EIB Loan") made

available under the credit agreement entered into between the

Company and EIB on 30 June 2021 (the "Existing Finance

Contract").

Proposed transactions:

Amendment of the Existing Finance Contract on the terms and

subject to the conditions of this Term Sheet (the "Amendment").

Defined Terms

Words and expressions defined in the Existing Finance Contract shall

have the same meaning when used herein.

2. PROPOSED AMENDMENTS

Interest

Fixed interest rate of five percent (5.00%) per year, payable annually.

Additional non-compounding interest of three percent (3.00%) per

year, that will be added to the principal amount upon (p)repayment of

Tranche A. Interest free period of 12 months after Closing, meaning

for the avoidance of doubt that the aforementioned interest shall only

accrue as from the first anniversary of Closing. No tax gross-up by the

Company, unless if EIB confirms that no withholding taxes are due on

interest payments by the Company to EIB.

Any unpaid interest that has accrued and that shall accrue under the

EIB Loan until the earlier of (i) Closing Date or (ii) termination of the

restructuring agreement of the Existing Finance Contract shall not be

paid and shall be added to the principal amount of the amended EIB

Loan.

New Maturity Date

31 December 2030, provided that if the total cash balance of the

Company at the New Maturity Date is less than EUR 15 million the

Company will have the option to extend the maturity date by up to 24

months (the "Extended Maturity Date"). Between the New Maturity

Date and the Extended Maturity Date the Company shall use no less

than one fourth of its available operating cashflow to reimburse (pro

rata) the outstanding principal amount of the EIB loan and the New

CBs on a quarterly basis.

Mandatory early

The Company will pay to the Bondholders and the EIB an aggregate

prepayments:

amount of 37.5% of any upfront license payments or sales price for

ALLOB or JTA received by BioSenic prior to the New/Accelerated

Maturity Date, as an early repayment of the outstanding New CBs

and the EIB Loan, provided that such upfront license payment or

sales price is at least EUR 15 million.

but no lender shall receive more than 12.5% of the relevant upfront

license payment.

Accrued Interest shall be calculated taking into account any early

prepayment.

For the avoidance of doubt, the abovementioned prepayment

requirement shall not apply to (i) any payments made by a license

partner to BioSenic that are not upfront payments because they must

be allocated to the further development, analysis or follow-up of, or

any other investment in, ALLOB or JTA or (ii) any licensing

arrangements entered into by Medsenic SAS.

Security

The obligations under the amended credit agreement with EIB (the

"Amended Credit Agreement") will remain unsecured. The

Company undertakes not to sell, transfer, pledge or grant any other

security interests on, its shares in Medsenic SAS to any third party.

Warrants

Terms of outstanding warrants of EIB (including exercise ratio,

exercise price and exercise period) to be cancelled. EIB gets an extra

5% one-off return upon repayment of the EIB Loan (with

timing/conditions aligned with the conversion of the New CBs), such

return being conditional upon and proportionate with the New CBs

being effectively converted.

Prepayment

Any voluntary or mandatory prepayments must occur on a pari passu

basis with the debts outstanding under the New CBs. No prepayment

fees or costs.

Conversion of Tranche A

EIB has the option at any time to convert the outstanding Tranche A

into convertible bonds

loan into new convertible bonds, having the same terms and

conditions as the New CBs.