| Item 1.01 | Entry Into a Material Definitive Agreement. |
First Amendment to Loan and Security Agreement
Effective December 28, 2021, ZIOPHARM Oncology, Inc. (the “Company”), as borrower, entered into a First Amendment (the “Amendment”) to the Loan and Security Agreement (the “Original Agreement” and, as so amended, the “Amended Agreement”), dated August 6, 2021, by and among the Company, the lenders party thereto (the “Lenders”) and Silicon Valley Bank, as administrative agent and collateral agent (in such capacity, the “Agent”). The Amendment principally makes the below modifications.
Amortization. The Original Agreement provided that borrowings were repayable in monthly interest-only payments through March 31, 2022 (which could be automatically extended to August 31, 2022, if the Company achieved certain fundraising milestones (the “Original Equity Milestone”) on or prior to March 31, 2022, and could be further extended to August 31, 2023 if the Company achieved certain performance milestones (the “Original Performance Milestone”) and the Company requested the funding of the Term B Tranche (as defined below) prior to August 31, 2022). After the interest-only payment period, aggregate outstanding borrowings were repayable in equal monthly payments of principal plus accrued interest until the Maturity Date (as defined below).
The Amended Agreement extends the interest-only period through August 31, 2022, and provides for an automatic extension through August 31, 2023, if, on or prior to August 31, 2022, the Agent and the Lenders have received evidence, satisfactory to them, confirming that the Company has (i) received at least $50.0 million in net cash proceeds from the sale of the Company’s equity securities after the date of the Amended Agreement, on terms and conditions acceptable to the Agent and the Lenders, and (ii) achieved positive data in the first cohort of the Library TCR-T Trial endorsed by an independent safety monitoring committee as a safe dose to proceed (together, the “Amended Milestones”). After the interest-only payment period, aggregate outstanding borrowings are repayable in twelve consecutive, equal monthly installments of principal plus accrued interest.
Amount. The Original Agreement provided for two tranches of term loans, in an aggregate principal amount of up to $50.0 million. The first tranche was a term loan advance in an aggregate principal amount of $25.0 million (the “Term A Tranche”), which was fully funded at the closing of the Original Agreement. The second tranche allowed the Company to request that the Lenders make an additional term loan advance in an aggregate principal amount of $25.0 million (the “Term B Tranche”), subject to achievement of the Original Performance Milestone. The Amendment removes the Term B Tranche, which remained unfunded, leaving only the Term A Tranche (referred to, with respect to the Amended Agreement, as the “Term Loan”).
Maturity. The Original Agreement provided for the Term A Tranche to mature on March 1, 2023, with an automatic extension to August 1, 2025, in the event the Company achieved the Original Equity Milestone on or prior to March 31, 2022. The Amended Agreement provides that the Term Loan will mature on August 1, 2023; provided that, if the Company achieves the Amended Milestones on or prior to August 31, 2022, then the maturity will automatically extend to August 1, 2024 (in each case, the “Maturity Date”).
Cash Collateralization. Under the Original Agreement, the Company was required to cash collateralize half of the sum of the outstanding principal amount of the term loans, plus an amount equal to 5.75% of the original principal amount of any portion of the Term A Tranche or Term B Tranche actually extended to the Company, if the Company did not achieve the Original Equity Milestone on or prior to December 31, 2021.
Under the Amended Agreement, the Company is now required to cash collateralize half of the sum of only the then-outstanding principal amount of the Term Loan, plus an amount equal to 5.75% of the original principal amount of the Term Loan (the “Final Payment”) if the Company does not achieve the Amended Milestones on or prior to August 31, 2022, eight months later than the corresponding deadline for the Original Equity Milestone under the Original Agreement. In the event a cash collateralization were to occur, so long as no event of default has occurred and, after subtracting the eighth scheduled payment of principal and interest on the Term Loan, the sum of the aggregate of outstanding principal and accrued and unpaid interest, plus the Final Payment, is equal to or less than $9,770,933.33, then, within ten business days of the date of receipt of the eighth scheduled payment of principal and interest on the Term Loan, the Agent will release $2.5 million from the collateral account, so long as the balance in the collateral account after the release would equal or exceed $10.0 million. If no event of default has occurred and, after subtracting the tenth scheduled payment of principal and interest on the Term Loan, the sum of the aggregate of outstanding principal and accrued and unpaid interest, plus the Final Payment, is equal to or less than $5,604,166.66, then, within ten business days of the date of receipt of the tenth scheduled payment of principal and interest on the Term Loan, the Agent will release a further $4.0 million from the collateral account, so long as the balance in the collateral account after the release would equal or exceed $6.0 million.
