On December 22, 2021, Syndax Pharmaceuticals, Inc. (the "Company") reported that it entered into Amendment No. 1 to the Company’s Loan and Security Agreement (the "First Amendment") with the several banks and financial institutions or entities from time-to-time party thereto (collectively, the "Lender") and Hercules Capital, Inc., in its capacity as administrative agent for itself and the Lender (in such capacity, the "Agent") (Filing, 8-K, Syndax, DEC 22, 2021, View Source [SID1234597660]). The First Amendment amended that certain Loan and Security Agreement dated as of February 7, 2020 (the "Existing Loan Agreement," as amended by the First Amendment, the "Loan Agreement") among the Borrower, the Lender and the Agent.
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The First Amendment increases the amount that the Company may borrow by $50.0 million, from up to $30.0 million to up to $80.0 million, in multiple tranches. The First Amendment increases the second tranche ("Tranche 2") from $10.0 million to $30.0 million with $15.0 million being available at the Company’s option through April 30, 2022 and another $15.0 million being available at the Company’s option through November 30, 2022, which availability period will be extended to April 30, 2023 if the first $15.0 million is drawn prior to April 30, 2022. The First Amendment also provides for a third tranche of $30.0 million ("Tranche 3"), which is available, subject to the Agent’s investment committee approval, through the Interest-Only Period (as defined below). The Company’s only borrowings to date under the Loan Agreement are the first tranche of $20.0 million, which the Company drew upon the closing of the Loan Agreement on February 7, 2020.
Additionally, the First Amendment, among other things, (i) extended the expiration of the period in which interest-only payments on borrowings under the Loan Agreement are required from October 1, 2021 to January 1, 2023, which is further extendable to December 31, 2023 upon the partial or full draw of Tranche 2 (the "Interest-Only Period"), (ii) extended the maturity date of Loan Agreement from September 1, 2023 to April 1, 2024, (iii) decreased the annual interest rate from the greater of (w) 9.85% or (x) 5.10% plus the Wall Street Journal prime rate to the greater of (y) 9.25% or (z) 6.00% plus the Wall Street Journal prime rate, (iv) applies a facility charge equal to 0.50% of any future draws, (v) applies a 4.99% end of term charge to any future draws payable on the maturity date, (vi) permits the entry into the Collaboration and License Agreement as previously disclosed with Incyte Corporation, and (vii) adds a minimum cash covenant applicable on the occurrence of certain events. The First Amendment also resets the prepayment premium requirements as of the date of the First Amendment so that any prepayments are subject to a prepayment premium equal to (i) 2.0% of the principal amount outstanding if the prepayment occurs during the first year following the Loan Amendment, (ii) 1.5% of the principal amount outstanding if the prepayment occurs during the second year following the Loan Amendment, and (iii) 1.0% of the principal amount outstanding at any time thereafter but prior to the Maturity Date.