SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit 10.26
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is
entered into as of November 10, 2022, by and among OXFORD FINANCE LLC, a Delaware limited liability company with an office located at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000 (“Oxford”), as collateral agent (in such capacity, “Collateral Agent”), the Lenders listed on Schedule 1.1 to the Loan Agreement (as defined below) or otherwise a party thereto from time to time including Oxford in its capacity as a Lender and SILICON VALLEY BANK, a California corporation with an office located at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 (“Bank” or “SVB”) (each a “Lender” and collectively, the “Lenders”), and SCHOLAR ROCK HOLDING CORPORATION, a Delaware corporation (“Parent”), and SCHOLAR ROCK, INC., a Delaware corporation (together with Parent, individually and collectively, jointly and severally, “Borrower”) with an office located at 000 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, XX 00000.
Agreement
NOW, THEREFORE, in consideration of the promises, covenants and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Borrower, Lenders and Collateral Agent hereby agree as follows:
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“THIS LOAN AND SECURITY AGREEMENT (as the same may from time to time be amended, modified, supplemented or restated, this “Agreement”) dated as of October 16, 2020 (the “Effective Date”) among OXFORD FINANCE LLC, a Delaware limited liability company with an office located at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000 (“Oxford”), as collateral agent (in such capacity, “Collateral Agent”), the Lenders listed on Schedule 1.1 hereof or otherwise a party hereto from time to time including Oxford in its capacity as a Lender and SILICON VALLEY BANK, a California corporation with an office located at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 (“Bank” or “SVB”) (each a “Lender” and collectively, the “Lenders”), SCHOLAR ROCK HOLDING CORPORATION, a Delaware corporation (“Parent”) and SCHOLAR ROCK, INC., a Delaware corporation (together with Parent, individually and collectively, jointly and severally, “Borrower”), with an office located at 000 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, XX 00000, provides the terms on which the Lenders shall lend to Borrower and Borrower shall repay the Lenders. The parties agree as follows:”
“(ii) Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, during the Second Draw Period, to make term loans to Borrower (but in a single disbursement) in an aggregate amount up to Twenty-Five Million Dollars ($25,000,000.00) according to each Lender’s Term B Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a “Term B Loan”, and collectively as the “Term B Loans”). After repayment, no Term B Loan may be re-borrowed.
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follows:
“Repayment. Borrower shall make monthly payments in arrears of interest only commencing on the first (1st) Payment Date following the Funding Date of each Term Loan, and continuing on the Payment Date of each successive month thereafter through and including the Payment Date immediately preceding the Amortization Date. Xxxxxxxx agrees to pay, on the Funding Date of each Term Loan, any initial partial monthly interest payment otherwise due for the period between the Funding Date of such Term Loan and the first Payment Date thereof. Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall make consecutive equal monthly payments of principal, together with applicable interest, in arrears, to each Lender, as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error) based upon: (1) the amount of such Lender’s Term Loan, (2) the effective rate of interest, as determined in Section 2.3(a), and (3) a repayment schedule equal to (x) thirty-six (36) months if the Amortization Date is December 1, 2024 and (y) twenty- four (24) months if the Amortization Date is December 1, 2025. All unpaid principal and accrued and unpaid interest with respect to each Term Loan is due and payable in full on the Maturity Date. Each Term Loan may only be prepaid in accordance with Sections 2.2(c) and 2.2(d).”
“(e) Acknowledgment of Term A Loan and Term B Loan. Xxxxxx agrees that, as of the Second Amendment Effective Date and pursuant to the transactions contemplated by the Second Amendment, the Credit Extensions it made to Borrower prior to the Second Amendment Effective Date, which constitute Oxford’s Pro Rata Share of the principal amounts of the Term A Loan and Term B Loan, will each continue as the aggregate outstanding principal amount of the Term A Loan and Term B Loan, respectively, as shown on Schedule 1.1 as amended by the Second Amendment. Xxxxxxxx agrees and acknowledges that Oxford’s Term A Loan Commitment and Term B Loan Commitment have been fully extended and Oxford has no obligation to make any further Credit Extensions of the Term A Loan or the Term B Loan. Furthermore, following any repayment (including the prepayments contemplated in the Second Amendment), no Term A Loan or Term B Loan may be reborrowed and, as of the Second Amendment Effective Date, any Term Loan Commitment of SVB associated with the Term A Loan and/or the Term B Loan will be terminated.”
“(f) Second Amendment Accrued Final Payment. A fully earned, non-refundable Final Payment in the aggregate amount of Nine Hundred Twenty-Two Thousand Three Hundred Seventy-Nine and 30/100 Dollars ($922,379.30) in respect of the Term A Loans and Term B Loans (the “Second Amendment Accrued Final Payment”) to be shared between the Lenders in accordance with their respective Pro Rata Shares (in effect immediately prior to the repayment of the Term A Loan and Term B Loan held by SVB with the proceeds of the Term C Loan) due and payable on the Second Amendment Effective Date. The Second Amendment Accrued Final Payment shall not reduce the Final Payment otherwise due pursuant to Section 2.5(b) hereof. From and after the Second Amendment Effective Date, the Final Payment in respect of the Term A Loan and Term B Loan held by Oxford shall accrue from the Second Amendment Effective Date.”
“Additionally, Borrower will be permitted to use the proceeds of the Credit Extensions of the Term C Loan to repay all outstanding Credit Extensions made by SVB of the Term A Loan and the Term B Loan as of the Second Amendment Effective Date as well as any accrued and unpaid interest thereon and any other fees associated therewith (including any Final Payment).”
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“Amortization Date” is December 1, 2024; provided, however, upon the occurrence of the Term D Milestone, then the Amortization Date with respect to all Term Loans shall automatically be extended to December 1, 2025.
“Approved Fund” is any (a) Person, investment company, fund, securitization vehicle or conduit that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender, or (iii) a Person (other than a natural person) or an Affiliate of a Person (other than a natural person) that administers or manages a Lender, or (b) any Person (other than a natural person) which temporarily warehouses loans, or provides financing or securitizations, in each case, for any Lender or any entity described in the preceding clause (a).
“Basic Rate” is the per annum rate of interest (based on a year of three hundred sixty (360) days) equal to the greater of (a) nine and thirty-five hundredths of one percent (9.35%), and (b) the sum of (i) the “prime rate” reported in The Wall Street Journal on the last Business Day of the month that immediately precedes the month in which the interest will accrue, and (ii) four and six tenths of one percent (4.60%). If The Wall Street Journal no longer reports the “prime rate” or if The Wall Street Journal ceases to exist, Collateral Agent may, in good faith, select a replacement publication and shall notify Borrower of such replacement publication. Notwithstanding the foregoing, the Basic Rate for the Term Loan for the period from the Second Amendment Effective Date through and including November 30, 2022, shall be ten and eighty-five hundredths of one percent (10.85%).
“Final Payment Percentage” is two percent (2.00%). “Maturity Date” is, for each Term Loan, November 1, 2027.
“Obligations” are all of Borrower’s obligations to pay when due any debts, principal, interest, Lenders’ Expenses, the Prepayment Fee (if any), the Second Amendment Accrued Final Payment, the Final Payment, and other amounts Borrower owes the Lenders now or later, in connection with, related to, following, or arising from, out of or under, this Agreement or, the other Loan Documents, or otherwise, including, without limitation, all obligations relating to letters of credit (including reimbursement obligations for drawn and undrawn letters of credit), cash management services, and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Xxxxxxxx assigned to the Lenders and/or Collateral Agent, and the performance of Borrower’s duties under the Loan Documents.
“Prepayment Fee” is, with respect to any funded Term Loan subject to prepayment prior to the Maturity Date, whether by mandatory or voluntary prepayment, acceleration or otherwise, an additional fee payable to the Lenders in amount equal to:
“Term Loan” is defined in Section 2.2(a)(v) hereof.
13.1 of the Loan Agreement as follows:
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“Second Amendment” means that certain Second Amendment to Loan and Security Agreement , dated as of the Second Amendment Effective Date, by and among Borrower, Parent, Oxford as a lender and Collateral Agent and SVB as a lender.
“Second Amendment Accrued Final Payment” is defined in Section 2.5(f) hereof. “Second Amendment Effective Date” is November 10, 2022.
“Term C Loan” is defined in Section 2.2(a)(iii) hereof.
“Term D Draw Period” is the period commencing on the date of the occurrence of the Term D Milestone and ending on the earliest of (i) December 31, 2023, (ii) the date that is ninety (90) days after the achievement of the Term D Milestone and (iii) the occurrence of an Event of Default; provided, however, that the Term D Draw Period shall not commence if on the date of the occurrence of the Term D Milestone an Event of Default has occurred and is continuing.
“Term D Loan” is defined in Section 2.2(a)(iv) hereof.
“Term D Milestone” is Xxxxxxxx’s delivery to Collateral Agent and the Lenders of evidence, satisfactory to Collateral Agent and the Lenders in their sole but reasonable discretion, that Borrower has either (i) (A) dosed at least twenty (20) patients in any single cohort of Part B of the DRAGON Phase 1 clinical trial for SRK-181, (B) disclosed positive efficacy data for SRK-181 at a scientific conference or by other means prior to December 31, 2023 and (C) after first satisfying clauses (A) and (B) of this clause (i), Borrower has received unrestricted net cash proceeds of not less than One Hundred Million Dollars ($100,000,000.00) from the issuance and sale of its equity securities after the Second Amendment Effective Date but prior to December 31, 2023 in a single equity financing transaction; or (ii) (A) dosed at least twenty
(20) patients in any single cohort of Part B of the DRAGON Phase 1 clinical trial for SRK-181, (B) disclosed efficacy data for SRK-181 at a scientific conference or by other means prior to December 31, 2023 and (C) Borrower has entered into a new joint venture, collaboration or other strategic partnership transaction for SRK-181 after the Second Amendment Effective Date and Borrower has received unrestricted net cash proceeds of not less than One Hundred Million Dollars ($100,000,000.00) from the issuance and sale of its equity securities and/or an upfront payment concurrently with the closing of such transaction from the counterparty to such transaction or any of its Affiliates.
“Term E Loan” is defined in Section 2.2(a)(v) hereof.
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acknowledges that it is not relying upon and has not relied upon any representation or statement made by Bank with respect to the facts underlying this release or with regard to any of such party’s rights or asserted rights.
Person;
$7,534.72 accruing after the Second Amendment Effective Date;
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electronic transmission (e.g. “.pdf”) of an executed counterpart of this Amendment shall be effective as a manually executed counterpart signature thereof.
[Balance of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to Loan and Security Agreement to be executed as of the date first set forth above.
BORROWER:
SCHOLAR ROCK HOLDING CORPORATION
By: /s/ Xxxxxx Xx
Name: Xxxxxx Xx
Title: Secretary
SCHOLAR ROCK, INC.
By: /s/ Xxxxxx Xx
Name: Xxxxxx Xx
Title: General Counsel and Secretary
COLLATERAL AGENT AND LENDER:
OXFORD FINANCE LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
COLLATERAL AGENT AND LENDER:
LENDER:
SILICON VALLEY BANK
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Vice President
(Signature Page to Second Amendment to Loan and Security Agreement)
SCHEDULE 1.1
Lenders and Commitments
Term A Loans | ||
Lender | Term Loan Commitment | Commitment Percentage |
OXFORD FINANCE LLC | $12,500,000.00 | 100.00% |
SILICON VALLEY BANK** | $0.00 | 0.00% |
TOTAL | $12,500,000.00 | 100.00% |
Term B Loans | ||
Lender | Term Loan Commitment | Commitment Percentage |
OXFORD FINANCE LLC | $12,500,000.00 | 100.00% |
SILICON VALLEY BANK** | $0.00 | 0.00% |
TOTAL | $12,500,000.00 | 100.00% |
Term C Loans | ||
Lender | Term Loan Commitment | Commitment Percentage |
SILICON VALLEY BANK** | $25,000,000.00 | 100.00% |
TOTAL | $25,000,000.00 | 100.00% |
Term D Loans | ||
Lender | Term Loan Commitment | Commitment Percentage |
OXFORD FINANCE LLC | $12,500,000.00 | 50.00% |
SILICON VALLEY BANK | $12,500,000.00 | 50.00% |
TOTAL | $25,000,000.00 | 100.00% |
Aggregate (all Term Loans) | ||
Lender | Term Loan Commitment | Commitment Percentage |
OXFORD FINANCE LLC | $37,500,000.00 | 50.00% |
SILICON VALLEY BANK | $37,500,000.00 | 50.00% |
TOTAL | $75,000,000.00 | 100.00% |
** On the Second Amendment Effective Date, the proceeds of the Term C Loan were used to prepay in full the Term A Loan in the principal amount of $12,500,000 held by SVB and the Term B Loan in the principal amount of
$12,500,000 held by SVB.
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