On March 24, 2023 Mersana Therapeutics, Inc. (the "Company") reported that it has entered into a Fourth Amendment to Loan and Security Agreement (the "Fourth Amendment"), by and among the Company, Oxford Finance LLC, in its capacity as collateral agent (in such capacity, the "Agent") and a lender, Silicon Valley Bridge Bank, N.A. (as the successor in interest to Silicon Valley Bank) as a lender ("SVB"), and the other parties thereto as lenders (collectively, the "Lenders") (Filing, 8-K, Mersana Therapeutics, MAR 24, 2023, View Source [SID1234629345]). The Fourth Amendment further amended that certain Loan and Security Agreement dated as of October 29, 2021 by and among the Company, the Lenders and the Agent (as amended by the First Amendment to Loan and Security Agreement dated as of February 17, 2022, the Second Amendment to Loan and Security Agreement dated as of October 17, 2022 and the Third Amendment to Loan Agreement dated as of December 27, 2022, the "Loan Agreement").
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The Fourth Amendment modified the covenant applicable to the Company’s obligation to maintain Collateral Accounts (as defined in the Loan Agreement) at SVB, which may be a securities account invested in money market mutual funds. Pursuant to the Fourth Amendment, the Company is permitted to conduct its banking activities, including, without limitation, cash management, letters of credit and business credit cards, with financial institutions which are not SVB or SVB’s affiliates. In addition, the Fourth Amendment reduced the minimum amounts that the Company is obligated to maintain in Collateral Accounts at SVB to be the lesser of (i) one hundred five percent (105.00%) of the outstanding principal amount of the Term Loans (as defined in the Loan Agreement) advanced solely by SVB (and for purposes of clarity, no other Lender) and (ii) the dollar value of all Collateral Accounts of the Company and certain of its subsidiaries at all financial institutions.
As of the Amendment Date, this obligation requires the Company to maintain a Collateral Account at SVB with 105% of the $12.5 million borrowed from SVB under the Loan Agreement. The Company did not pay any fees to Lenders in connection with the Fourth Amendment, and the Fourth Amendment did not otherwise modify the Company’s obligations under the Loan Agreement.
The foregoing description of the Fourth Amendment does not purport to be complete and is qualified in its entirety by reference to the Fourth Amendment, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ending March 31, 2023.