Item
1.01 Entry into a Material Definitive Agreement.
Anderson
Note
On
December 22, 2017, Marrone Bio Innovations, Inc. (the “Company”) and Dwight W. Anderson (“Anderson”) entered
into a secured promissory note (the “Anderson Note”), which amended and restated in its entirety that certain Amended
and Restated Promissory Note, dated as of October 23, 2017, which was given in replacement of, and amended and restated in its
entirety, that certain Promissory Note, dated as of October 12, 2017. The Anderson Note is a secured promissory note in the aggregate
principal amount of up to $6,000,000, due on October 12, 2020 (the “Maturity Date”). Pursuant to the Anderson Note,
Anderson has funded amounts to the Company in various separate disbursements, $4,000,000 aggregate principal amount of which has
already been provided to the Company (i) on October 12, 2017, in an aggregate principal amount of $1,000,000, (ii) on October
23, 2017, in an aggregate principal amount of $1,000,000, (iii) on December 1, 2017, in an aggregate principal amount of $500,000,
(iv) on December 4, 2017, in an aggregate principal amount of $500,000, (v) on December 8, 2017, in an aggregate principal amount
of $500,000 and (vi) on December 26, 2017, in an aggregate principal amount of $500,000. Anderson may, in his sole discretion,
fund the remaining $2,000,000 aggregate principal amount, as the Company may request from time to time in whole or in part.
From
the date of any such disbursement through December 31, 2017 (or such later date as Anderson may decide in his reasonable discretion
and as notified to the Company), the Anderson Note will bear interest at a rate of 1% per annum, payable in arrears on the Maturity
Date, unless earlier converted into shares of the Company’s common stock as described below. Thereafter, beginning January
1, 2018 (or such later date as described above), the Anderson Note will bear interest at a rate of 10% per annum, payable in arrears
on the Maturity Date, unless earlier converted into shares of the Company’s common stock as described below.
Any
or all of the principal or accrued interest under the Anderson Note may be converted into shares of the Company’s common
stock at a rate of one share of common stock per $1.00 of converting principal or interest, rounded down to the nearest share
with any fractional amounts cancelled, at the election of Anderson by delivery of written notice to the Company. In addition,
upon the consummation of a qualified equity financing of the Company prior to the Maturity Date, the aggregate outstanding principal
balance of the Anderson Note and all accrued and unpaid interest thereon may convert, at the option of Anderson, into that number
of the securities issued and sold in such financing, determined by dividing (a) such aggregate principal and accrued interest
amounts, by (b) the purchase price per share or unit paid by the purchasers of the Company’s securities issued and sold
in such financing; provided that at least 50% of the amount invested in such financing must be made by persons who are not affiliates
of the Company. Notwithstanding the foregoing, Anderson’s ability to effect any such conversions will be limited by applicable
provisions governing issuances of shares of the Company’s common stock under the rules of The Nasdaq Capital Market, subject
to the Company’s receipt of any applicable waivers thereof, and any amounts not issuable to Anderson in the Company’s
equity securities as a result of this limitation will be payable in cash.
Anderson
is an “accredited investor” (as defined in Rule 501(a) of Regulation D) and the Anderson Note was, and any equity
securities issued upon conversion thereof are, offered and sold pursuant to an exemption from the registration requirements under
Section 4(a)(2) of the Securities Act of 1933, as amended.
The
Anderson Note is filed herewith as Exhibit 10.1 and is incorporated herein by reference, and the foregoing description is qualified
in its entirety by the terms contained therein.
Security
Agreement
On
December 22, 2017, the Company and Anderson entered into a security agreement (the “Security Agreement”), pursuant
to which the Company, to secure its obligations under the Anderson Note, granted to Anderson a security interest in the Company’s
(i) personal property, whether owned or acquired after the date of the Security Agreement, including all accounts, chattel paper,
commercial tort claims, deposit accounts, documents, equipment (including all fixtures), general intangibles, instruments, inventory,
investment property, letter-of-credit rights, money, and other goods, and (ii) real property and real property interests, appurtenances,
and fixtures, including rights of possession and use under leases and licenses, tenant improvements, and rights under options
to lease or purchase and the like, as well as all products, proceeds and supporting obligations of the foregoing clauses (i) and
(ii) (collectively, the “Anderson Collateral”).
Upon
an event of default under the Anderson Note, Anderson may declare amounts under the Anderson Note immediately due and payable
and may exercise remedies available under the Security Agreement, including the sale, disposition or collection of the Anderson
Collateral, the proceeds of which would be applied to satisfy the Company’s obligations under the Anderson Note.
The
Security Agreement is filed herewith as Exhibit 10.2, and is incorporated herein by reference, and the foregoing description is
qualified in its entirety by the terms contained therein.