H2R Tuesday, 10/31/17 04:44:55 PM Re: None Post # of 1491 New 8-k out today Quote:On October 27, 2017 (the “Closing Date”), Cytokinetics, Incorporated (the “Company”) entered into a Second Amendment (the “Amendment”) to that certain Loan and Security Agreement (the “Original Loan Agreement”), dated as of October 19, 2015, with Oxford Finance LLC, as collateral agent, and the lenders party thereto. The Original Loan Agreement, as amended by the Amendment (the “Amended Loan Agreement”), provides for secured growth capital term loans of up to $50.0 million (the “Term Loans”). The Term Loans are available in three tranches. The first tranche of $32.0 million was made available to the Company on the Closing Date (“Term Loan A”), with the proceeds of Term Loan A used in part to repay in full all of the outstanding the term loans under the Original Loan Agreement in an aggregate principal amount of $30.0 million. Upon satisfaction of certain conditions related to the outcome of the Company’s clinical trial called VITALITY-ALS, the Company may draw a second tranche of $8.0 million (“Term Loan B”). Upon satisfaction of certain conditions related to Phase 2 data for CK-2127107 in spinal muscular atrophy (the “Third Draw Period Milestone”), the Company may draw an additional $10.0 million (“Term Loan C”). The Term Loans shall be interest-only through June 1, 2019 followed by 41 months of equal principal and interest. However, if the Company achieves the Third Draw Period Milestone, then the interest-only period will be extended through December 1, 2019 and the amortization period will be reduced to 35 months. Interest on Term Loan A, Term Loan B, and Term Loan C will bear interest at a rate equal to the greater of (i) 8.05% and (ii) the sum (a) the 30 day U.S. LIBOR rate reported in the Wall Street Journal on the last business day of the month that immediately precedes the month in which interest will accrue, plus (b) 6.81%. The Company will pay a facility fee equal to 0.25% in respect of Term Loan B and Term Loan C on the date drawn. The Company will be required to make a final payment fee of 6.5% of the amounts of the Term Loans drawn payable on the earlier of (i) the prepayment of the Term Loans or (ii) the maturity of the Term Loans. The Company may prepay the Term Loans by paying a prepayment fee equal to (i) 3.00% of the applicable Term Loan prepaid in the first anniversary of the funding date, (ii) 2.00% of the applicable Term Loan prepaid in the second anniversary of the funding date, and (iii) 1.00% of the applicable Term Loan prepaid after the third anniversary date and prior to the maturity date. In addition, under the Amended Loan Agreement, the Company agreed to issue the Lenders warrants to purchase shares of the Company’s common stock (the “Warrants”) upon the Company’s draw of Term Loan B and Term Loan C. The number of shares of common stock underlying the Warrants will be equal to 3.00% of the Term Loan B and Term Loan C amounts drawn divided by the exercise price. The exercise price per share for the Warrants is determined in each case as the lower of (i) the average closing price per share of the Company’s common stock as reported on the NASDAQ Capital Market for the 10 days prior to the draw or (ii) the closing price per share of the Company’s common stock as reported on the NASDAQ Capital Market on the day before the draw. The Warrants, if issued, will be exercisable for 5 years from the date of issuance. The Amended Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries, including, among other things, restrictions on dispositions, changes in business, management, ownership or business locations, mergers or acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and subordinated debt. The Amended Loan Agreement also includes customary events of default, including but not limited to the nonpayment of principal or interest, violations of covenants, material adverse changes, attachment, levy, restraint on business, cross-defaults on material indebtedness, bankruptcy, material judgments, misrepresentations, subordinated debt, governmental approvals, lien priority and delisting. Upon an event of default, the Lenders may, among other things, accelerate the loans and foreclose on the collateral. The foregoing is only a summary of the material terms of the Amendment and does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, which will be filed as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.