Fourth AMENDMENT TO LOAN AND SECURITY AGREEMENT
TO
This Fourth Amendment to Loan and Security Agreement (this “Amendment”) is dated as of April 23, 2019 and is entered into by and among (a) VERASTEM, INC., a Delaware corporation (“Borrower”), (b) the several banks and other financial institutions or entities from time to time parties to the Loan Agreement (collectively, referred to as “Lender”) and (c) HERCULES CAPITAL, INC., a Maryland corporation, in its capacity as administrative agent for itself and the Lender (in such capacity, the “Agent”). Capitalized terms used herein without definition shall have the same meanings given them in the Loan Agreement (as defined below).
Recitals
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A. Borrower, Agent and Lender have entered into that certain Loan and Security Agreement dated as of March 21, 2017, among Borrower, Agent and Lender, as amended by that certain First Amendment to Loan and Security Agreement dated as of January 4, 2018 among Borrower, Agent and Lender, that certain Second Amendment to Loan and Security Agreement dated as of March 6, 2018, among Borrower, Agent and Lender, and that certain Third Amendment to Loan and Security Agreement dated as of October 11, 2018, among Borrower, Agent and Lender (as amended, and as may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Loan Agreement”), pursuant to which Lender has agreed to extend and make available to Borrower certain advances of money. |
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B. In accordance with Section 11.3 of the Loan Agreement, Borrower and Lender have agreed to amend the Loan Agreement upon the terms and conditions more fully set forth herein. |
Agreement
NOW, THEREFORE, in consideration of the foregoing Recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
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1. Amendments. |
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1.1 The Loan Agreement is hereby amended to reflect the changes which are attached as Exhibit A hereto, such that on the Fourth Amendment Closing Date the terms set forth in Exhibit A hereto which appear in bold and double underlined text (inserted text) shall be added to the Loan Agreement and the terms appearing as text which is stricken (deleted text) shall be deleted from the Loan Agreement. |
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1.2 Each reference in the Loan Agreement to “this Agreement” and the words “hereof,” “herein,” “hereunder,” or words of like import, shall mean and be a reference to the Loan Agreement as amended by this Amendment. |
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2. Borrower’s Representations And Warranties. Borrower represents and warrants that: |
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2.1 Immediately upon giving effect to this Amendment (i) the representations and warranties contained in the Loan Documents are true and correct in all material respects except |
to the extent such representations and warranties relate to an earlier date, in which case they are true and correct in all material respects as of such date and (ii) no Event of Default has occurred and is continuing with respect to which Borrower has not been notified in writing by Agent or Lender. |
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2.2 Borrower has the corporate power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment. |
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2.3 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized by all necessary corporate action on the part of Borrower. |
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2.4 This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights. |
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2.5 As of the date hereof, it has no defenses against the obligations to pay any amounts under the Obligations. Borrower acknowledges that each of Agent and Lender has, as of the date hereof, acted in good faith and has conducted in a commercially reasonable manner its relationships with Borrower in connection with this Amendment and in connection with the Loan Documents. |
Borrower understands and acknowledges that each of Agent and Lender is entering into this Amendment in reliance upon, and in partial consideration for, the above representations and warranties, and agrees that such reliance is reasonable and appropriate.
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3. Limitation. The amendments set forth in this Amendment shall be limited precisely as written and shall not be deemed (a) to be a waiver or modification of any other term or condition of the Loan Agreement or of any other instrument or agreement referred to therein or to prejudice any right or remedy which Agent and/or Lender may now have or may have in the future under or in connection with the Loan Agreement (as amended hereby) or any instrument or agreement referred to therein; or (b) to be a consent to any future amendment or modification or waiver to any instrument or agreement the execution and delivery of which is consented to hereby. Except as expressly amended hereby, the Loan Agreement shall continue in full force and effect. |
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4. Effectiveness. This Amendment shall become effective on the Fourth Amendment Closing Date upon the satisfaction of all the following conditions precedent: |
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4.1 Amendment. Borrower, Agent and Lender shall have duly executed and delivered this Amendment to Lender. |
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4.2 2019 Facility Charge. Agent shall have received a nonrefundable, fully earned facility charge in the amount of $250,000.00 in good and collected funds. |
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4.3 Payment of End of Term Charge. Agent shall have received an End of Term Charge with respect to the Original Term Loan Advances in the amount of $1,125,000.00 in good and collected funds. |
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4.4 Corporate Documents. Agent shall have received: |
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(a) a certified copy of resolutions of the Board evidencing approval of this Amendment and other transactions evidenced by the Loan Documents; |
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(b) certified copies of the Certificate of Incorporation and the Bylaws, as amended through the Closing Date, of Borrower; and |
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(c) a certificate of good standing for Borrower from its state of incorporation. |
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4.5 Payment of Lender Expenses. Borrower shall have paid all reasonable Lender expenses (including all reasonable attorneys' fees and reasonable expenses) incurred through the date of this Amendment for the documentation and negotiation of this Amendment, in each case, to the extent invoiced on or prior to the Fourth Amendment Closing Date. |
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5. Release. In consideration of the agreements of Agent and each Lender contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, on behalf of itself and its successors, assigns, and other legal representatives, hereby to the extent possible under applicable law fully, absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and each Lender, and its successors and assigns, and its present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, Lender and all such other persons being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which Borrower, or any of its successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time prior to the execution of this Amendment, for or on account of, or in relation to, or in any way in connection with the Loan Agreement, or any of the other Loan Documents or transactions thereunder or related thereto. Borrower understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release. Borrower agrees that no fact, event, circumstance, evidence or transaction existing prior to the execution of this Amendment which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above. Borrower waives the provisions of California Civil Code section 1542, which states: |
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT IF
KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
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6. Counterparts. This Amendment may be signed in any number of counterparts, and by different parties hereto in separate counterparts, with the same effect as if the signatures to each such counterpart were upon a single instrument. All counterparts shall be deemed an original of this Amendment. This Amendment may be executed by facsimile, portable document format (.pdf) or similar technology signature, and such signature shall constitute an original for all purposes. |
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7. Incorporation By Reference. The provisions of Section 11 of the Loan Agreement shall be deemed incorporated herein by reference, mutatis mutandis. |
[Signature Page Follows]
In Witness Whereof, the parties have duly authorized and caused this Amendment to be executed as of the date first written above.
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BORROWER: |
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Signature: |
/s/ Xxxxxx Xxxxxxxxx |
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Print Name: |
Xxxxxx Xxxxxxxxx |
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Title: |
Chief Executive Officer |
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AGENT: |
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HERCULES CAPITAL, INC. |
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Signature: |
/s/ Xxxxxxxx Xxxx |
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Print Name: |
Xxxxxxxx Xxxx |
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Title: |
Assistant General Counsel |
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LENDER: |
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HERCULES CAPITAL, INC. |
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Signature: |
/s/ Xxxxxxxx Xxxx |
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Print Name: |
Xxxxxxxx Xxxx |
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Title: |
Assistant General Counsel |
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HERCULES CAPITAL FUNDING TRUST 2018-1 |
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Signature: |
/s/ Xxxxxxxx Xxxx |
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Print Name: |
Xxxxxxxx Xxxx |
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Title: |
Assistant General Counsel |
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HERCULES CAPITAL FUNDING TRUST 2019-1 |
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Signature: |
/s/ Xxxxxxxx Xxxx |
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Print Name: |
Xxxxxxxx Xxxx |
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Title: |
Assistant General Counsel |
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Exhibit A
This LOAN AND SECURITY AGREEMENT is made and dated as of March 21, 2017, and is entered into by and among (a) VERASTEM, INC., a Delaware corporation (“Verastem”), and each of its Qualified Subsidiaries (hereinafter collectively referred to as the “Borrower”), (b) the several banks and other financial institutions or entities from time to time parties to this Agreement (collectively, referred to as “Lender”), and (c) HERCULES CAPITAL, INC., a Maryland corporation, in its capacity as administrative agent and collateral agent for itself and the Lender (in such capacity, the “Agent”).
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C. B.Lender is willing to make the 2019 Term Loan Advances on the terms and conditions set forth in this Agreement. |
NOW, THEREFORE, Borrower, Agent and Lender agree as follows:
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1.1 Unless otherwise defined herein, the following capitalized terms shall have the following meanings: |
“1934 Act” means the Securities Exchange Act of 1934, as amended.
“2019 Amortization Date” means April 1, 2021; provided, however, that if the 2019 Interest Only Extension Conditions have been satisfied on or prior to December 31, 2020, the 2019 Amortization Date shall mean December 1, 2021.
“2019 Draw Period B” means the period of time commencing upon the satisfaction of each of the 2019 Term B Loan Funding Conditions and continuing through the earliest to occur of (a) September 30, 2020, or (b) an Event of Default that is continuing.
“2019 Draw Period C” means the period of time commencing upon the satisfaction of each of the 2019 Term C Loan Funding Conditions and continuing through the earliest to occur of (a) December 31, 2021, or (b) an Event of Default that is continuing.
“2019 End of Term Charge” shall have the meaning assigned to such term in Section 2.5.
“2019 Interest Only Extension Conditions” means satisfaction of each of the following events: (a) no Event of Default shall have occurred and be continuing; and (b) Agent’s and Lender’s receipt on or prior to December 31, 2020 of evidence reasonably acceptable to Agent and Lender in all respects that Borrower has achieved Net Product Revenues of at least Forty Million Dollars ($40,000,000.00) on a trailing six (6) month basis as of the end of any month ending on or prior to December 31, 2020.
“2019 Prepayment Charge” shall have the meaning assigned to such term in Section 2.4.
“2019 Term A Loan Advance” shall have the meaning assigned to such term in Section 2.1.1(a).
“2019 Term B Loan Advance” shall have the meaning assigned to such term in Section 2.1.1(a).
“2019 Term B Loan Funding Conditions” means, in addition to and without limiting the conditions set forth in Sections 4.2 and 4.3 hereof, receipt by Agent of evidence that Borrower has generated Cumulative Net Product Revenues of either (a) Thirty Seven Million Five Hundred Thousand Dollars ($37,500,000.00) or greater on or before April 30, 2020, or (b) Fifty Million Dollars ($50,000,000.00) or greater on or before June 30, 2020.
“2019 Term C Loan Advance” shall have the meaning assigned to such term in Section 2.1.1(a).
“2019 Term C Loan Funding Conditions” means, in addition to and without limiting the conditions set forth in Sections 4.2 and 4.3 hereof, the occurrence of all of the following: (a) receipt by Agent of an Advance Request in respect of the 2019 Term C Loan Advance at least thirty (30) days prior to the Advance Date of the 2019 Term C Loan Advance, (b) Lender has received all necessary internal and credit approvals for such 2019 Term C Loan Advance, (c) Borrower has delivered financial and other information required by Lender, which shall be satisfactory to Lender in its sole discretion, (d) no Event of Default exists at the time of the request for the 2019 Term C Loan Advance or would exist as a result of such 2019 Term C Loan Advance, (e) Lender has provided written approval in its sole discretion that such 2019 Term C Loan Advance shall be made, and (f) payment on or before the Advance Date of the any 2019 Term C Loan Advance of a loan fee in the amount of 0.50% of the principal amount of such 2019 Term C Loan Advance (which shall be fully earned and non-refundable on the Advance Date of such 2019 Term C Loan Advance). For clarity, the determination of whether to provide any such 2019 Term C Loan Advance shall be in Lender’s sole discretion and shall in no event occur automatically; provided that, for the avoidance of doubt, the fees described in clause (f) above shall not be due and payable unless such 2019 Term C Loan Advance shall be made.
“2019 Term Commitment” means as to any Lender, the obligation of such Lender, if any, to make 2019 Term Loan Advances to the Borrower in a principal amount not to exceed
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the amount set forth under the heading “2019 Term Commitment” opposite such Lender’s name on Schedule 1.1.
“2019 Term Loan Advance” and “2019 Term Loan Advances” shall have the meaning assigned to such terms in Section 2.1.1(a).
“2019 Term Loan Interest Rate” means for any day, a floating per annum rate equal to the greater of (a) 9.75% or (b) the lesser of (i) the sum of (A) 9.75%, plus (B) the Prime Rate minus five and one half of one percent (5.50%) and (ii) 12.00%.
“2019 Term Loan Maturity Date” means December 1, 2022.
“Account Control Agreement(s)” means any agreement entered into by and among the Agent, Borrower and a third-party Bank or other institution (including a Securities Intermediary) in which Borrower maintains a Deposit Account or an account holding Investment Property (in each case subject to the provisions of Section 7.12) and which grants Agent a perfected first priority security interest in the subject account or accounts.
“ACH Authorization” means the ACH Debit Authorization Agreement in substantially the form of Exhibit H, which account numbers shall be redacted for security purposes if and when filed publicly by the Borrower.
“ACH Failure” means (i) the failure of the Automated Clearing House (ACH) system to effect a transfer of funds requested by Lender to be used to satisfy all or part of Borrower’s obligations to pay principal and interest due hereunder or (ii) a failure by Lender to initiate debit entries for the periodic payments of such principal or interest.
“Advance(s)” means a Term Loan Advance or a 2019 Term Loan Advance.
“Advance Date” means the funding date of any Advance.
“Advance Request” means a request for an Advance submitted by Borrower to Agent in substantially the form of Exhibit A, which account numbers shall be redacted for security purposes if and when filed publicly by the Borrower.
“Affiliate” means (a) any Person that directly or indirectly controls, is controlled by, or is under common control with the Person in question, (b) any Person directly or indirectly owning, controlling or holding with power to vote ten percent (10%) or more of the outstanding voting securities of another Person, or (c) any Person ten percent (10%) or more of whose outstanding voting securities are directly or indirectly owned, controlled or held by another Person with power to vote such securities. As used in the definition of “Affiliate,” the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
“Agent” has the meaning given to it in the preamble to this Agreement.
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“Agreement” means this Loan and Security Agreement, as amended from time to time.
“Amortization Date” means November 1, 2018; provided however, if the Interest Only Extension Conditions are satisfied on or prior to November 1, 2018, then “Amortization Date” shall mean May 1, 2019.
“Assignee” has the meaning given to it in Section 11.13.
“Board” means Borrower’s board of directors or any duly qualified subcommittee thereof, as applicable.
“Borrower Products” means all products, software, service offerings, technical data or technology currently being designed, manufactured or sold by Borrower or which Borrower intends to sell, license, or distribute in the future including any products or service offerings under development, collectively, together with all products, software, service offerings, technical data or technology that have been sold, licensed or distributed by Borrower since its incorporation.
“Business Day” means any day other than Saturday, Sunday and any other day on which banking institutions in the State of California are closed for business.
“Cash” means all cash, cash equivalents and liquid funds.
“Change in Control” means any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the 1934 Act, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the 0000 Xxx) of more than fifty percent (50%) of the equity interests of Verastem entitled to vote for members of its Board on a fully diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right).
“Claims” has the meaning given to it in Section 11.10.
“Closing Date” means the date of this Agreement.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” means the property described in Section 3.
“Common Stock” means the common stock, $0.001 par value per share of Verastem.
“Confidential Information” has the meaning given to it in Section 11.12.
“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any Indebtedness, lease, dividend, letter of credit or other obligation of another, including any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with
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respect to undrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.
“Copyright License” means any written agreement granting any right to use any Copyright or Copyright registration, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.
“Copyrights” means all copyrights, whether registered or unregistered, held pursuant to the laws of the United States of America, any State thereof, or of any other country.
“Cumulative Net Product Revenues” means, as of any date of determination, the aggregate Net Product Revenues received by Borrower from and after the Fourth Amendment Closing Date.
“Deposit Accounts” means any “deposit accounts,” as such term is defined in the UCC, and includes any checking account, savings account, or certificate of deposit.
“Designated Foreign Subsidiary” means any Foreign Subsidiary, individually, and in the aggregate with other Foreign Subsidiaries, which owns personal property and assets, in each case determined as of the most recent fiscal year end, in an amount less than ten percent (10.0%) of all of the personal property and assets of Verastem.
“Domestic Subsidiary” means any Subsidiary that is not a Foreign Subsidiary or Excluded Subsidiary.
“Due Diligence Fee” means Twenty-Thousand Dollars ($20,000.00), which fee is due to Lender on or prior to the Closing Date, and shall be deemed fully earned on such date regardless of the early termination of this Agreement.
“Eligible Foreign Subsidiary” means any Foreign Subsidiary (which is not xxx Designated Foreign Subsidiary) whose execution of a Joinder Agreement would not result in a material adverse tax consequence to Borrower and whom Agent elects to join as a Borrower.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
“Event of Default” has the meaning given to it in Section 9.
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“Excluded Account” means (i) any Account (including, for the avoidance of doubt, any cash, cash equivalents, or other property contained therein) to the extent, and for so long as, such Account is pledged and used exclusively to secure performance of obligations arising under clauses (vi) and (xiv) of the defined term “Permitted Liens”, and whether such pledge is by escrow or otherwise, (ii) accounts used solely to fund payroll or employee benefits, (iii) withholding tax, benefits, trust, escrow, or fiduciary accounts, and (iv) other Accounts that have an aggregate balance not to exceed One Hundred Thousand Dollars ($100,000.00) for all such Accounts at any time and (v) deposit, securities, commodity or similar accounts in jurisdictions outside the United States of America that have an aggregate balance not to exceed One Hundred Thousand Dollars ($100,000.00) for all such accounts at any time.
“Excluded Subsidiary” means Verastem Securities Company, a Massachusetts securities corporation, which is a Subsidiary of Borrower that has applied or is in the process of applying to be classified as a “security corporation” under Massachusetts General Laws Ch. 63, Section 38B(a), as amended, supplemented and/or modified.
“Excluded Taxes” shall mean (i) taxes imposed on or with respect to Lender’s overall net or gross income or gross receipts, or franchise taxes imposed in lieu of the foregoing, by any jurisdiction in which Lender is resident, has a branch or otherwise has any other former or present connection (other than any connection solely attributable to this Agreement), (ii) branch profits taxes, (iii) any withholding taxes imposed on Lender with respect to the payments it is entitled to receive hereunder pursuant to laws in effect on the date it becomes a party to this Agreement (which in the case of any permitted assignee of Lender, shall mean the date as of which Lender’s rights and obligations under this Agreement are assigned to such Person), (iv) Taxes attributable to Lender’s failure to comply with Sections 7.10(b) and 7.10(c), (v) any U.S. federal withholding taxes imposed on Lender under FATCA, and (vi) any U.S. federal backup withholding tax.
“Facility Charge” means Seventy-Five Thousand Dollars ($75,000.00).
“FATCA” means Section 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any applicable intergovernmental agreement with respect thereto and applicable official implementing guidance thereunder.
“Financial Statements” has the meaning given to it in Section 7.1.
“First Amendment Closing Date” means January 4, 2018.
“Foreign Subsidiary” means any Subsidiary that is not a “United States person” within the meaning of Section 7701(a)(3) of the Code.
“Foreign Subsidiary HoldCo” means any (a) Domestic Subsidiary substantially all the assets of which consist, directly or indirectly, of equity interests (or equity interests and
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indebtedness) of one or more Foreign Subsidiaries that are treated as a controlled foreign corporation within the meaning of Section 957 of the Code, or (b) Subsidiary that is disregarded for U.S. federal income tax purposes and substantially all the assets of which consist, directly or indirectly, of equity interests (or equity interests and indebtedness) of one or more Foreign Subsidiaries that are treated as a controlled foreign corporation within the meaning of Section 957 of the Code.
“Fourth Amendment Closing Date” means April 23, 2019.
“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time, consistently applied, except that for purposes of the classification of operating leases (other than with respect to Section 7.1), GAAP shall be determined on the basis of such principles in effect on the Closing Date. For purposes of Section 7.1, GAAP shall be determined on the basis of such principles in effect on the Closing Date and consistent with those used in the preparation of the most recent audited or unaudited financial statements filed with the Securities and Exchange Commission in a Form 10-K or Form 10-Q (with such changes as are permitted to be made to GAAP pursuant to Section 7.1).
“Indebtedness” means indebtedness of any kind, including (a) all indebtedness for borrowed money or the deferred purchase price of property or services (excluding trade credit entered into in the ordinary course of business due within ninety (90) days), including reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations, and (d) all Contingent Obligations; provided that Indebtedness shall not include (i) prepaid or deferred revenue arising in the ordinary course of business and (ii) endorsements of checks or drafts arising in the ordinary course of business.
“Intellectual Property” means all of Borrower’s Copyrights; Trademarks; Patents; Licenses; trade secrets and inventions; mask works; Borrower’s applications therefor and reissues, extensions, or renewals thereof; and Borrower’s goodwill associated with any of the foregoing, together with Borrower’s rights to xxx for past, present and future infringement of Intellectual Property and the goodwill associated therewith.
“Interest Only Extension Conditions” means satisfaction of each of the following events: (a) no default or Event of Default shall have occurred; and (b) confirmation by Agent and Lender that Borrower has received, after the Closing Date but on or prior to November 1, 2018, unrestricted and unencumbered net cash proceeds in a minimum amount of at least Twenty Million Dollars ($20,000,000) in connection with either (i) a Permitted Convertible Debt Financing, (ii) the issuance and sale by Borrower of its equity securities or Subordinated Indebtedness with investors reasonably acceptable to Agent, and/or (iii) ongoing commercial partnerships reasonably acceptable to Agent with Persons reasonably acceptable to Agent.
“Inventory” means “inventory” as defined in Article 9 of the UCC.
“Investment” means any beneficial ownership (including stock, partnership or limited liability company interests) of or in any Person, or any loan, advance or capital contribution to any Person or the acquisition of all, or substantially all, of the assets of another Person. The
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amount of any Investment at any time shall be the original principal amount thereof less all dividends, distributions, interest payments, returns of principal or equity or other amount received on the sale or disposition of such Investment on or before such time and shall, if made by the transfer or exchange of assets other than cash, be deemed to have been made in an amount equal to the fair market value of such assets at the time of such Investment
“Joinder Agreements” means for each Qualified Subsidiary, a completed and executed Joinder Agreement in substantially the form attached hereto as Exhibit G.
“Lender” has the meaning given to it in the preamble to this Agreement.
“License” means any Copyright License, Patent License, Trademark License or other license of rights or interests.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, xxxx, xxxx or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, against any property, any conditional sale or other title retention agreement, and any lease in the nature of a security interest; provided that in no event shall an operating lease entered into in the ordinary course of business or any precautionary UCC filings made pursuant thereto by an applicable lessor or lessee, be deemed to be a Lien.
“Liquidity Requirement” shall have the meaning assigned to such term in Section 7.15.
“Liquidity Threshold” means as of any date of determination, that Borrower maintains, in accounts in the name of Borrower that are subject to an Account Control Agreement, unrestricted and unencumbered (other than as a result of this Agreement) Cash in an aggregate amount greater than or equal to one hundred ten percent (110%) of the aggregate principal amount of the outstanding Advances on such date, as reasonably determined by Agent (based upon supporting documentation reasonably requested by Agent).
“Loan” means the Advances made under this Agreement.
“Loan Documents” means this Agreement, the Notes (if any), the ACH Authorization, the Account Control Agreements, the Joinder Agreements, all UCC Financing Statements, any subordination agreement, and any other documents executed in connection with the Secured Obligations or the transactions contemplated hereby, as the same may from time to time be amended, modified, supplemented or restated.
“Material Adverse Effect” means a material adverse effect upon: (i) the business, operations, properties, assets or financial condition of Borrower and its Subsidiaries taken as a whole; or (ii) the ability of Borrower to perform or pay the Secured Obligations in accordance with the terms of the Loan Documents, or the ability of Agent or Lender to enforce any of its rights or remedies with respect to the Secured Obligations; or (iii) the Collateral or Agent’s Liens on the Collateral or the priority of such Liens.
“Maximum Rate” shall have the meaning assigned to such term in Section 2.3.
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“Maximum Term Loan Amount” means an aggregate principal amount of up to Fifty Million Dollars ($50,000,000); provided, however, upon satisfaction of the 2019 Term C Loan Funding Conditions, the Maximum Term Loan Amount shall mean Seventy-Five Million Dollars ($75,000,000).
“Milestone Event” shall mean that (a) no Event of Default shall have occurred, and (b) Agent shall have confirmed, in Agent’s reasonable discretion, on or prior to September 20, 2017, that Borrower has achieved the pre-specified primary endpoint in a Phase III clinical study evaluating the safety and efficacy of Duvelisib in the treatment of patients with relapsed/refractory chronic lymphocytic leukemia or small lymphocytic lymphoma.
“Net Product Revenues” means net revenues received by Borrower from the commercial sales of COPIKTRA, net of revenue recognition from up-front payments associated with collaboration agreements between Borrower and one or more third parties.
“Net Product Revenue Threshold” means Net Product Revenues of at least sixty percent (60%) of the amounts shown on Borrower’s most recent Board approved financial and business projections reasonably approved by Agent and the Lender, measured on a trailing six (6) month basis and tested as of the end of each fiscal quarter.
“Note(s)” means a promissory note or promissory notes to evidence Lender’s Loans substantially in the form of Exhibit B.
“Original Term Loan Advances” has the meaning given to it in Section 2.1.1(a).
“Patent License” means any written agreement granting any right with respect to any invention on which a Patent is in existence or a Patent application is pending, in which agreement Borrower now holds or hereafter acquires any interest.
“Patents” means all letters patent of, or rights corresponding thereto, in the United States of America or in any other country, all registrations and recordings thereof, and all applications for letters patent of, or rights corresponding thereto, in the United States of America or any other country.
“Permitted Conversion Payments” has the meaning given to it in Section 7.4.
“Permitted Convertible Debt Financing” means the issuance by Borrower of convertible notes in a single transaction issued by the Borrower after the Closing Date in an aggregate principal amount of not more than One Hundred Seventy-Five Million Five Hundred Thousand Dollars ($175,000,000.00)$250,000,000; provided that for so long as any portion of the Secured Obligations remain outstanding such convertible notes shall (a) have a scheduled maturity date no earlier than one hundred eighty (180) days after the 2019 Term Loan Maturity Date, (b) be unsecured, (c) not be guaranteed by any Subsidiary of Verastem that is not a Qualified Subsidiary and (d) not provide for any prepayments, repurchases or redemptions of principal (other than customary fundamental change obligations and, for the avoidance of doubt, Permitted Conversion Payments) at the option of the holder thereof or the Borrower, in each case, earlier than 180 days after the 2019 Term Loan Maturity Date.”
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“Permitted Indebtedness” means: (i) Indebtedness of Borrower in favor of Lender or Agent arising under this Agreement or any other Loan Document; (ii) Indebtedness existing on the Closing Date which is disclosed in Schedule 1A; (iii) Indebtedness of up to Two Hundred Thousand Dollars ($200,000) outstanding at any time secured by a Lien described in clause (vii) of the defined term “Permitted Liens,” provided such Indebtedness does not exceed the cost of the Equipment financed with such Indebtedness; (iv) Indebtedness to trade creditors incurred in the ordinary course of business, and Indebtedness incurred in the ordinary course of business with corporate credit cards (including travel and entertainment expenses and similar expenses incurred in the ordinary course of business); (v) Indebtedness that also constitutes a Permitted Investment; (vi) Subordinated Indebtedness; (vii) reimbursement obligations in connection with letters of credit and cash management services (including credit cards, debit cards and similar instruments) that are secured by Cash and issued on behalf of the Borrower or a Subsidiary thereof in an amount not to exceed Five Hundred Fifty Thousand Dollars ($550,000) at any time outstanding, (viii) other unsecured Indebtedness in an amount not to exceed Two Hundred Thousand Dollars ($200,000) at any time outstanding, (ix) intercompany Indebtedness as long as either (A) each of the Subsidiary obligor and the Subsidiary obligee under such Indebtedness is a Qualified Subsidiary that has executed a Joinder AgreementBorrower or (B) neither the Subsidiary obligor nor the Subsidiary obligee under such Indebtedness is a Borrower, (x) Permitted Convertible Debt Financing, and (xi) extensions, refinancings, renewals, modifications, amendments, restatements, or amendments and restatements of any items of Permitted Indebtedness, provided that the principal amount is not increased or the terms modified do not impose materially more burdensome terms upon Borrower or its Subsidiary, as the case may be.
“Permitted Investment” means: (i) Investments existing on the Closing Date which are disclosed in Schedule 1B; (ii) (a) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one year from the date of acquisition thereof, (b) commercial paper maturing no more than one year from the date of creation thereof and currently having a rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Xxxxx’x Investors Service, (c) certificates of deposit issued by any bank with assets of at least Five Hundred Million Dollars ($500,000,000) maturing no more than one year from the date of investment therein, (d) money market accounts, and (e) such other Investments as are described in the Board-approved investment guidelines delivered to Agent prior to the Closing Date or with such changes as reasonably acceptable to Agent made after the Closing Date; (iii) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; (iv) Investments accepted in connection with Permitted Transfers; (v) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of Borrower’s business; (vi) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business, provided that this subparagraph (vi) shall not apply to Investments of Borrower in any Subsidiary; (vii) Investments consisting of loans not involving the net transfer on a substantially contemporaneous basis of cash proceeds to employees, officers or directors relating to the purchase of capital stock of Borrower pursuant to employee stock purchase plans or other similar agreements approved by the Board; (viii) Investments consisting of travel advances in the ordinary course of business; (ix) Investments in newly-formed Domestic Subsidiaries, provided
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that each such Domestic Subsidiary enters into a Joinder Agreement promptly after its formation by Borrower or any Subsidiary and executeexecutes such other documents as shall be reasonably requested by Agent; (x) intercompany Investments as long as either (A) each of the Subsidiary investor and the Subsidiary investee under such Investments is a Qualified Subsidiary that has executed a Joinder AgreementBorrower or (B) neither the Subsidiary investor nor the Subsidiary investee under such Investment is a Borrower or anthe Excluded Subsidiary; (xi) Investments in Foreign Subsidiaries approved in advance in writing by Agent; (xii) joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the nonexclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash Investments by Borrower or any Subsidiary do not exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate in any fiscal year; (xiii) Investments in the Excluded Subsidiary, so long as an Event of Default does not exist at the time of such Investment and would not exist after giving effect to such Investment and provided that Borrower is, at all times, in compliance with the Liquidity RequirementThreshold at the time of such Investment and after giving effect to such Investment; and (xiv) additional Investments that do not exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate.
“Permitted Liens” means any and all of the following: (i) Liens in favor of Agent or Lender; (ii) Liens existing on the Closing Date which are disclosed in Schedule 1C; (iii) Liens for taxes, fees, assessments or other governmental charges or levies, either (A) not delinquent or (B) being contested in good faith by appropriate proceedings and Borrower maintains adequate reserves therefor in accordance with GAAP (to the extent required thereby); (iv) Liens securing claims or demands of materialmen, artisans, mechanics, carriers, warehousemen, landlords and other like Persons arising in the ordinary course of Borrower’s business and imposed without action of such parties; provided, that the payment thereof is not yet required; (v) Liens arising from judgments, decrees or attachments in circumstances which do not constitute an Event of Default hereunder; (vi) deposits to secure the performance of obligations (including by way of deposits to secure letters of credit issued to secure the same) under commercial supply and/or manufacturing agreements in an amount not to exceed Five Hundred Thousand Dollars ($500,000) and the following deposits, to the extent made in the ordinary course of business: deposits under worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations (other than Liens arising under ERISA or environmental Liens) or surety or appeal bonds, or to secure indemnity, performance or other similar bonds; (vii) Liens on Equipment or software or other intellectual property constituting purchase money Liens and Liens in connection with capital leases securing Indebtedness permitted in clause (iii) of “Permitted Indebtedness”; (viii) Liens incurred in connection with Subordinated Indebtedness; (ix) leasehold interests in leases, subleases, licenses or sublicenses granted in the ordinary course of business and not interfering in any material respect with the business of the licensor; (x) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties that are promptly paid on or before the date they become due; (xi) Liens on insurance proceeds securing the payment of financed insurance premiums that are promptly paid on or before the date they become due (provided that such Liens extend only to such insurance proceeds and not to any other property or assets); (xii) statutory and common law rights of set-off and other similar rights as to deposits of cash and securities in favor of banks, other depository institutions and brokerage firms; (xiii) easements, zoning restrictions, rights-of-way and similar
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encumbrances on real property imposed by law or arising in the ordinary course of business so long as they do not materially impair the value or marketability of the related property; (xiv) (A) Liens on Cash securing obligations permitted under clause (vii) of the definition of Permitted Indebtedness and (B) security deposits in connection with real property leases, the combination of (A) and (B) in an aggregate amount not to exceed Seven Hundred Thousand Dollars ($700,000) at any time; (xv) sales, transfers, licenses, sublicenses, leases, subleases or other dispositions of assets not prohibited by Section 7.8 and, in connection therewith, customary rights and restrictions contained in agreements relating to such transactions pending the completion thereof or during the term thereof, and any option or other agreement to sell, transfer, license, sublicense, lease, sublease or dispose of an asset not prohibited by Section 7.8 and (xvi) Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clauses (i) through (xvi) above; provided, that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced, modified, amended, restated or amended and restated (as may have been reduced by any payment thereon) does not increase.
“Permitted Transfers” means (i) sales, transfers or other dispositions of Inventory in the ordinary course of business, (ii) licenses, sublicenses and similar arrangements for the use of Intellectual Property and related assets in the ordinary course of business and other licenses and sublicenses that could not result in a legal transfer of title of the licensed property, (iii) transfers expressly permitted under Section 7.5, 7.6 or 7.7, (iv) dispositions of worn-out, obsolete or surplus Equipment at fair market value in the ordinary course of business, (v) transfers by and among theto a Borrower and any of its Subsidiaries, provided that such Subsidiary has entered into a Joinder Agreement and such other documents as shall reasonably be required by Agent, (vi) transfers by and among Subsidiaries, provided that no Subsidiary transferor involved in such transfer is a Borrower or anthe Excluded Subsidiary, (vii) the use or transfer of cash or cash equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents and in the ordinary course of business, (viii) transfers consisting of Permitted Liens, and (ix) other Transfers of assets having a fair market value of not more than Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate in any fiscal year.
“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, other entity or government.
“Prepayment Charge” shall have the meaning assigned to such term in Section 2.4.
“Prime Rate” is the “prime rate” as reported in The Wall Street Journal or any successor publication thereto.
“Proposed Future Royalty Backed Indebtedness Transactions” is defined in Section 11.19 hereof.
“Qualified Subsidiary” means any direct or indirect Domestic Subsidiary (other than the Excluded Subsidiary) or Eligible Foreign Subsidiary.
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“Receivables” means (i) all of Borrower’s Accounts, Instruments, Documents, Chattel Paper, Supporting Obligations, letters of credit, proceeds of any letter of credit, and Letter of Credit Rights, and (ii) all customer lists, software, and business records related thereto.
“Register” shall have the meaning assigned to such term in Section 11.7(b).
“Required Lenders” means at any time, the holders of more than 50% of the aggregate unpaid principal amount of the 2019 Term Loan Advances then outstanding.
“Secured Obligations” means Borrower’s obligations under this Agreement and any Loan Document, including any obligation to pay any amount now owing or later arising.
“SPE” means any Subsidiary formed for the sole purpose of effectuating a Proposed Future Royalty Backed Indebtedness Transactions.
“Subordinated Indebtedness” means Indebtedness subordinated to the Secured Obligations in amounts and on terms and conditions satisfactory to Agent in its sole but reasonable discretion.
“Subsidiary” means an entity, whether corporate, partnership, limited liability company, joint venture or otherwise, in which Borrower owns or controls 50% or more of the outstanding voting securities, including each entity listed on Schedule 1 hereto.
“Tax” and “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any governmental authority, including any interest, additions to tax or penalties applicable thereto.
“Term Loan” shall have the meaning assigned to such term in the preamble to this Agreement.
“Term A Loan Advance” shall have the meaning assigned to such term in Section 2.1(a).
“Term B Draw Period” means the period of time commencing upon the Closing Date, and continuing through the earliest to occur of (a) December 20, 2017, (b) the date that is ninety (90) days after the occurrence of the Milestone Event, or (c) an Event of Default.
“Term B Loan Advance” shall have the meaning assigned to such term in Section 2.1(a).
“Term C Draw Period” means the period of time commencing upon the occurrence of each of (a) the Milestone Event and (b) Lender making both the Term A Loan Advance and the Term B Loan Advance, and continuing through the earliest to occur of (a) December 20, 2017, (b) the date that is ninety (90) days after the occurrence of the Milestone Event, or (c) an Event of Default.
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“Term C Loan Advance” shall have the meaning assigned to such term in Section 2.1(a).
“Term D Commitment Fee” shall have the meaning assigned to such term in Section 2.1(a).
“Term D Loan Advance” shall have the meaning assigned to such term in Section 2.1(a).
“Term Commitment” means as to any Lender, the obligation of such Lender, if any, to make a Term Loan Advance to the Borrower in a principal amount not to exceed the amount set forth under the heading “Term Commitment” opposite such Lender’s name on Schedule 1.1.
“Term E Draw Period” means the period of time commencing upon the occurrence of the Term E Milestone Event and continuing through the earliest to occur of (a) the date that is ninety (90) days after the occurrence of the Term E Milestone Event, and (b) an Event of Default.
“Term E Loan Advance” shall have the meaning assigned to such term in Section 2.1(a).
“Term E Milestone Event” shall mean that (a) no Event of Default shall have occurred, (b) Agent shall have confirmed in writing to Borrower, receipt of Borrower’s Board approved financial and business projections, in form and substance reasonably acceptable to Agent, and (c) Agent shall have confirmed in writing to Borrower, in Agent’s reasonable discretion, on or prior to September 30, 2018, that the FDA has accepted Borrower’s new drug application with respect to Borrower’s “Duvelisib” product for the treatment of patients with relapsed/refractory chronic lymphocytic leukemia or small lymphocytic lymphoma.
“Term F Draw Period” means the period of time commencing upon the occurrence of Lender making each of the Term A Loan Advance, the Term B Loan Advance, the Term C Loan Advance, the Term D Loan Advance, and each Term E Loan Advance through the earliest to occur of (a) March 31, 2019, and (b) an Event of Default.
“Term F Loan Advance” shall have the meaning assigned to such term in Section 2.1(a).
“Term Loan Advance” and “Term Loan Advances” shall have the meaning assigned to such terms in Section 2.1(a).
“Term Loan Interest Rate” means for any day a floating per annum rate of interest equal to the greater of either (a) 10.5% and (b) the lesser of (i) 12.75% and (ii) the sum of (x) 10.5% plus (y) (A) the Prime Rate minus (B) 4.5%.
“Term Loan Maturity Date” means December 1, 2020.
“Trademark License” means any written agreement granting any right to use any Trademark or Trademark registration, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.
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“Trademarks” means all trademarks (registered, common law or otherwise) and any applications in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States of America, any State thereof or any other country or any political subdivision thereof.
“UCC” means the Uniform Commercial Code as the same is, from time to time, in effect in the State of California; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Agent’s Lien on any Collateral is governed by the Uniform Commercial Code as the same is, from time to time, in effect in a jurisdiction other than the State of California, then the term “UCC” shall mean the Uniform Commercial Code as in effect, from time to time, in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.
Unless otherwise specified, all references in this Agreement or any Annex or Schedule hereto to a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule” shall refer to the corresponding Section, subsection, Exhibit, Annex, or Schedule in or to this Agreement. Unless otherwise specifically provided herein, any accounting term used in this Agreement or the other Loan Documents shall have the meaning customarily given such term in accordance with GAAP, and all financial computations hereunder shall be computed in accordance with GAAP, consistently applied; provided that if the Borrower notifies Agent that the Borrower wishes to amend any covenant in Section 7.15 (or any related definition) to eliminate or to take into account the effect of any change in GAAP on the operation of such covenant or definition or provision, as applicable (or if Agent notifies the Borrower that Required Lenders wish to amend Section 7.15 (or any related definition) for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant (or related definition) is amended in a manner satisfactory to the Borrower and Required Lenders. Unless otherwise defined herein or in the other Loan Documents, terms that are used herein or in the other Loan Documents and defined in the UCC shall have the meanings given to them in the UCC.
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4.1 Maximum Interest. Notwithstanding any provision in this Agreement or any other Loan Document, it is the parties’ intent not to contract for, charge or receive interest at a rate that is greater than the maximum rate permissible by law that a court of competent jurisdiction shall deem applicable hereto (which under the laws of the State of California shall be deemed to be the laws relating to permissible rates of interest on commercial loans) (the “Maximum Rate”). If a court of competent jurisdiction shall finally determine that Borrower has actually paid to Lender an amount of interest in excess of the amount that would have been payable if all of the Secured Obligations had at all times borne interest at the Maximum Rate, then such excess interest actually paid by Borrower shall be applied as follows: first, to the payment of the Secured Obligations consisting of the outstanding principal of the 2019 Term Loan Advances; second, after all principal is repaid, to the payment of Lender’'s accrued interest, costs, expenses, professional fees and any other Secured Obligations; and third, after all Secured Obligations are repaid, the excess (if any) shall be refunded to Borrower. |
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Notwithstanding the foregoing, Agent and Lender agree to waive the 2019 Prepayment Charge if Agent and Lender (in its sole and absolute discretion) agree in writing to refinance the 2019 Term Loan Advances prior to the 2019 Term Loan Maturity Date. Notwithstanding anything to the contrary contained in this Agreement, Borrower may rescind or delay any notice of prepayment if such prepayment would have resulted from a refinancing of all or a portion of the Term Loan Advances, which refinancing shall not be consummated or shall otherwise be delayed.
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agrees that it is reasonable under the circumstances existing as of the Fourth Amendment Closing Date. The 2019 Prepayment Charge (if any) and the 2019 End of Term Charge shall also be payable in the event the Secured Obligations are satisfied or released by foreclosure (whether by power of judicial proceeding), deed in lieu of foreclosure, or by any other means after acceleration of the Secured Obligations in accordance with the terms hereof. Borrower expressly waives (to the fullest extent it may lawfully do so) the provisions of any present or future statute or law that prohibits or may prohibit the collection of the foregoing 2019 Prepayment Charge and 2019 End of Term Charge in connection with any such acceleration. Borrower agrees (to the fullest extent that each may lawfully do so): (a) each of the 2019 Prepayment Charge and the 2019 End of Term Charge is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (b) each of the 2019 Prepayment Charge and the 2019 End of Term Charge shall be payable notwithstanding the then prevailing market rates at the time payment is made; (c) there has been a course of conduct between the Lender and Borrower giving specific consideration in this transaction for such agreement to pay the 2019 Prepayment Charge and the 2019 End of Term Charge as a charge (and not interest) in the event of prepayment (in the case of the 2019 Prepayment Charge or, to the extent the Secured Obligations are prepaid in full, the 2019 End of Term Charge) or acceleration (in the case of the 2019 Prepayment Charge and the 2019 End of Term Charge); (d) Borrower shall be estopped from claiming differently than as agreed to in this paragraph. Borrower expressly acknowledges that their agreement to pay each of the 2019 Prepayment Charge and the 2019 End of Term Charge to the Lender as herein described was made on the Fourth Amendment Closing Date and continues to be a material inducement to the Lender to provide the 2019 Term Loan Advances. |
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interests (as determined for U.S. federal income tax purposes) of such Subsidiary, (c) any of the outstanding capital stock or other equity interests of a Subsidiary owned by a Foreign Subsidiary HoldCo, (d) equipment financed by capital leases or purchase money financing, products, proceeds and insurance proceeds of the foregoing, but only to the extent and for so long as the agreements under which the equipment is financed prohibit granting a security interest therein to Lender, or (e) any particular asset if the pledge thereof or the security interest therein is prohibited or restricted by applicable law, rule or regulation (including any requirement to obtain the consent of any governmental authority, regulatory authority or third party), provided that the foregoing exclusion of this clause (e) shall in no way be construed (1) to apply to the extent that any described prohibition or restriction is unenforceable under Section 9-406, 9-407, 9-408, or 9-409 of the UCC or other applicable law or (2) to apply to the extent that any consent or waiver has been obtained, or is hereafter obtained, that would permit the Agent’s security interest or Lien notwithstanding the prohibition or restriction on the pledge of such asset. |
The obligations of Lender to make the Term Loan Advances hereunder, in each case, are subject to the satisfaction by Borrower of the following conditions:
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perfect the Liens of Agent with respect to all Collateral, in all cases in form and substance reasonably acceptable to Agent; |
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(b) certified copy of resolutions of the Board evidencing approval of the Loan and other transactions evidenced by the Loan Documents; |
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(c) certified copies of the Certificate of Incorporation and the Bylaws, as amended through the Closing Date, of Borrower; |
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Borrower represents and warrants that:
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5.4 Material Adverse Effect. No event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing. |
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violation or default is reasonably expected to result in a Material Adverse Effect. Borrower is not in default in any manner under any provision of any agreement or instrument evidencing material Indebtedness in excess of One Hundred Fifty Thousand Dollars ($150,000), or any other material agreement to which it is a party or by which it is bound, which default could reasonably be expected to have a material adverse effect on Borrower’s business. Borrower, its Subsidiaries and, to the knowledge of the Borrower and its Subsidiaries, any agent or other party acting on behalf of Borrower or its Subsidiaries are in compliance with all applicable anti-money laundering, economic sanctions and anti-bribery laws and regulations, and none of the funds to be provided under this Agreement will be used, directly or indirectly, for any activities in violation of such laws and regulations. |
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agreements under which Borrower licenses Intellectual Property from third parties (other than shrink-wrap software licenses), together with application or registration numbers, as applicable, owned by Borrower or any Subsidiary, in each case as of the Closing Date. Borrower is not in breach of, nor has Borrower failed to perform any obligations under, any of the foregoing contracts, licenses or agreements and, to Borrower’s knowledge, no third party to any such contract, license or agreement is in breach thereof or has failed to perform any obligations thereunder, in each case, to the extent such breach could be reasonably expected to have a material adverse effect on Borrower’s business. |
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to Borrower’s business nor the production and sale of Borrower Products material to Borrower’s business infringes the Intellectual Property or other rights of others. |
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for its global master property insurance policies and additional insured for liability insurance for any future global master insurance that Borrower may acquire from such insurer. Attached to the certificates of insurance will be additional insured endorsements for global master liability and lender’s loss payable endorsements for all global master risk property damage insurance. All such certificates of insurance will provide for a minimum of thirty (30) days advance written notice to Agent of cancellation (other than cancellation for non-payment of premiums, for which ten (10) days’ advance written notice shall be sufficient) or any other change adverse to Agent’s interests. Any failure of Agent to scrutinize such insurance certificates for compliance is not a waiver of any of Agent’s rights, all of which are reserved. Borrower shall provide Agent with a copy of each global master insurance policy, and upon entering or amending any such global master insurance policy required hereunder, Borrower shall provide Agent with a copy of such global master insurance policies and shall promptly deliver to Agent updated insurance certificates with respect to such global master insurance policies. |
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7.1 Financial Reports. Borrower shall furnish to Agent the financial statements and reports listed hereinafter (the “Financial Statements”): |
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(d) as soon as practicable (and in any event within 30 days) after the end of each month, a Compliance Certificate in the form of Exhibit F; |
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(e) at Agent’s written request, a report showing agings of accounts receivable and accounts payable; |
Borrower shall not make any material change in its (a) accounting policies or reporting practices except for any change required by GAAP through the mandate of new procedures, unless Borrower used commercially reasonable efforts to notify Agent within thirty (30) days in advance of such change, or (b) fiscal years or fiscal quarters, unless Borrower shall have notified Agent in writing within thirty (30) days in advance of such change. The fiscal year of Borrower shall end on December 31.
The executed Compliance Certificate may be sent via email to Agent at xxxxx@xxxxxxxxxxxx.xxx. All Financial Statements required to be delivered pursuant to clauses (a), (b) and (c) shall be sent via e-mail to xxxxxxxxxxxxxxxxxxx@xxxxxxxxxxxx.xxx with a copy to xxxxx@xxxxxxxxxxxx.xxx provided, that if e-mail is not available or sending such Financial Statements via e-mail is not possible, they shall be sent to Agent at: xxxxx@xxxxxxxxxxxx.xxx the address set forth in Section 11.2(a), attention Chief Credit Officer.
Notwithstanding the foregoing, documents required to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower emails a link thereto to Agent; provided that Borrower shall directly provide Agent all Financial Statements required to be delivered pursuant to Section 7.1(b) and (c) hereunder.
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Event of Default has occurred and is continuing, such examinations shall be limited to no more often than once per fiscal year. In addition, any such representative shall have the right to meet with management and officers of Borrower to discuss such books of account and records at reasonable times and upon reasonable notice during normal business hours. In addition, Agent or Lender shall be entitled at reasonable times and intervals acceptable to Borrower to consult with and advise the management and officers of Borrower concerning significant business issues affecting Borrower; provided that management and officers of Borrower shall not be bound to accept any such advisement. Such consultations shall not unreasonably interfere with Borrower’s business operations. The parties intend that the rights granted Agent and Lender shall constitute “management rights” within the meaning of 29 C.F.R. Section 2510.3-101(d)(3)(ii), but that any advice, recommendations or participation by Agent or Lender with respect to any business issues shall not be deemed to give Agent or Lender, nor be deemed an exercise by Agent or Lender of, control over Borrower’s management or policies. |
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Subsidiary to any Borrower, or (ii) if such Subsidiary is not a Borrower, intercompany Indebtedness owed by such Subsidiary to another Subsidiary that is not a Borrower or (d) as otherwise permitted hereunder or approved in writing by Agent. |
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7.6 Investments. Borrower shall not directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments. |
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money to any employees, officers or directors or guarantee the payment of any such loans granted by a third party in excess of One Hundred Fifty Thousand Dollars ($150,000) in the aggregate or (d) waive, release or forgive any Indebtedness owed by any employees, officers or directors in excess of One Hundred Fifty Thousand Dollars ($150,000) in the aggregate. |
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were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), Lender shall deliver to Borrower and Agent at the time or times prescribed by law and at such time or times reasonably requested by Borrower or Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower or Agent as may be necessary for Borrower and Agent to comply with its obligations under FATCA and to determine that Lender has complied with Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (c), “FATCA” shall include any amendments made to FATCA after the date hereof. |
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7.14 Notification of Event of Default. Borrower shall notify Agent immediately of the occurrence of any Event of Default. |
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The occurrence of any one or more of the following events shall be an Event of Default:
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9.3 Material Adverse Effect. A circumstance has occurred that would reasonably be expected to have a Material Adverse Effect; or |
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under the Loan Documents, or shall become insolvent; or (iii) shall file a voluntary petition in bankruptcy; or (iv) shall file any petition, answer, or document seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation pertinent to such circumstances; or (v) shall seek or consent to or acquiesce in the appointment of any trustee, receiver, or liquidator of Borrower or of all or any substantial part (i.e., 33-1/3% or more) of the assets or property of Borrower; or (vi) shall cease operations of its business as its business has normally been conducted, or terminate substantially all of its employees; or (vii) Borrower or the Board or majority shareholders shall take any action initiating any of the foregoing actions described in clauses (i) through (vi); or (B) either (i) forty-five (45) days shall have expired after the commencement of an involuntary action against Borrower seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, without such action being dismissed or all orders or proceedings thereunder affecting the operations or the business of Borrower being stayed; or (ii) a stay of any such order or proceedings shall thereafter be set aside and the action setting it aside shall not be timely appealed; or (iii) Borrower shall file any answer admitting or not contesting the material allegations of a petition filed against Borrower in any such proceedings; or (iv) the court in which such proceedings are pending shall enter a decree or order granting the relief sought in any such proceedings; or (v) forty-five (45) days shall have expired after the appointment, without the consent or acquiescence of Borrower, of any trustee, receiver or liquidator of Borrower or of all or any substantial part of the properties of Borrower without such appointment being vacated; or |
37
First, to Agent and Lender in an amount sufficient to pay in full Agent’s and Lender’s reasonable costs and professionals’ and advisors’ fees and expenses as described in Section 11.11;
Second, to Lender in an amount equal to the then unpaid amount of the Secured Obligations (including principal, interest, and default rate interest pursuant to Section 2.3), in such order and priority as Agent may choose in its sole discretion; and
Finally, after the full and final payment in Cash of all of the Secured Obligations (other than inchoate obligations), to any creditor holding a junior Lien on the Collateral, or to Borrower or its representatives or as a court of competent jurisdiction may direct.
Agent shall be deemed to have acted reasonably in the custody, preservation and disposition of any of the Collateral if it complies with the obligations of a secured party under the UCC.
38
HERCULES CAPITAL, INC.
Legal Department
Attention: Chief Legal Officer
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
email: xxxxx@xxxxxxxxxxxx.xxx
Telephone: 000-000-0000
HERCULES CAPITAL, INC.
Legal Department
Attention: Chief Legal Officer
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
email: xxxxx@xxxxxxxxxxxx.xxx
Telephone: 000-000-0000
39
Attention: Xxxxxx ChiapponiSean X. Xxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
email: xxxxxxxxxxxxxxxx@xxxxxxxx.xxx
Telephone: (000) 000-0000-000-0000
or to such other address as each party may designate for itself by like notice.
40
such waiver and any such amendment, supplement or modification shall apply equally to each Lender and shall be binding upon Borrower, the Lender, the Agent and all future holders of the Loans. |
41
shall be conclusive absent manifest error, and the Borrower, the Agent and the Lender shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of the Loan Documents. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. |
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11.8 Governing Law. This Agreement and the other Loan Documents have been negotiated and delivered to Agent and Lender in the State of California, and shall have been accepted by Agent and Lender in the State of California. Payment to Agent and Lender by Borrower of the Secured Obligations is due in the State of California. This Agreement and the other Loan Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of California, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction. |
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11.9 Consent to Jurisdiction and Venue. All judicial proceedings (to the extent that the reference requirement of Section 11.10 is not applicable) arising in or under or related to this Agreement or any of the other Loan Documents may be brought in any state or federal court located in the State of California. By execution and delivery of this Agreement, each party hereto generally and unconditionally: (a) consents to nonexclusive personal jurisdiction in Santa Xxxxx County, State of California; (b) waives any objection as to jurisdiction or venue in Santa Xxxxx County, State of California; (c) agrees not to assert any defense based on lack of jurisdiction or venue in the aforesaid courts; and (d) irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement or the other Loan Documents. Service of process on any party hereto in any action arising out of or relating to this Agreement shall be effective if given in accordance with the requirements for notice set forth in Section 11.2, and shall be deemed effective and received as set forth in Section 11.2. Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of either party to bring proceedings in the courts of any other jurisdiction. |
42
performance, or any equitable or legal relief of any kind, arising out of this Agreement, any other Loan Document. |
43
determines that any such party should have access to such information in connection with such party’s responsibilities in connection with the Loan or this Agreement and, provided that such recipient of such Confidential Information either (i) agrees to be bound by the confidentiality provisions of this paragraph or (ii) is otherwise subject to confidentiality restrictions that reasonably protect against the disclosure of Confidential Information; (b) if such information is generally available to the public; (c) if required or appropriate in any report, statement or testimony submitted to any governmental authority having or claiming to have jurisdiction over Agent or Lender; (d) if required or appropriate in response to any summons or subpoena or in connection with any litigation, to the extent permitted or deemed advisable by Agent’s or Lender’s counsel; (e) to comply with any legal requirement or law applicable to Agent or Lender; (f) to the extent reasonably necessary in connection with the exercise of any right or remedy under any Loan Document, including Agent’s sale, lease, or other disposition of Collateral after an Event of Default; (g) to any participant or assignee of Agent or Lender or any prospective participant or assignee; provided, that such participant or assignee or prospective participant or assignee agrees in writing to be bound by this Section prior to disclosure; or (h) otherwise with the prior consent of Borrower; provided, that any disclosure made in violation of this Agreement shall not affect the obligations of Borrower or any of its Affiliates or any guarantor under this Agreement or the other Loan Documents. |
44
part thereof, is rescinded, reduced, avoided, avoidable, restored, returned, or recovered, the Loan Documents and the Secured Obligations shall be deemed, without any further action or documentation, to have been revived and reinstated except to the extent of the full, final, and indefeasible payment to Agent or Lender in Cash. |
45
|
(i) |
be subject to any fiduciary or other implied duties, regardless of whether any default or any Event of Default has occurred and is continuing; |
46
expressed therein, upon any certificates or opinions furnished to Agent and conforming to the requirements of the Loan Agreement or any of the other Loan Documents. Agent may consult with counsel, and any opinion or legal advice of such counsel shall be full and complete authorization and protection in respect of any action taken, not taken or suffered by Agent hereunder or under any Loan Documents in accordance therewith. Agent shall have the right at any time to seek instructions concerning the administration of the Collateral from any court of competent jurisdiction. Agent shall not be under any obligation to exercise any of the rights or powers granted to Agent by this Agreement, the Loan Agreement and the other Loan Documents at the request or direction of Lenders unless Agent shall have been provided by Lender with adequate security and indemnity against the costs, expenses and liabilities that may be incurred by it in compliance with such request or direction. |
47
IN WITNESS WHEREOF, Borrower, Agent and Lender have duly executed and delivered this Loan and Security Agreement as of the day and year first above written.
Signature:_______________________
Print Name:_______________________
Accepted in Palo Alto, California:
Signature:_______________________
Print Name:_______________________Jennifer Xxxx
Title:_______________________Assistant General Counsel
Signature:_______________________
Print Name:_______________________Jennifer Xxxx
Title:_______________________Assistant General Counsel
HERCULES CAPITAL FUNDING TRUST 2018-1
Signature:_______________________
48
Title:Assistant General Counsel
HERCULES CAPITAL FUNDING TRUST 2019-1
Signature:_______________________
Title:Assistant General Counsel
49
Table of Exhibits and Schedules
Exhibit A:Advance Request
Attachment to Advance Request
Exhibit C:Name, Locations, and Other Information for Borrower
Exhibit D:Borrower’s Patents, Trademarks, Copyrights and Licenses
Exhibit E:Borrower’s Deposit Accounts and Investment Accounts
Exhibit F:Compliance Certificate
Exhibit H:ACH Debit Authorization Agreement
Schedule 1Subsidiaries
Schedule 1.1Commitments
Schedule 1AExisting Permitted Indebtedness
Schedule 1BExisting Permitted Investments
Schedule 1CExisting Permitted Liens
Schedule 5.3Consents, Etc.
Schedule 5.8Tax Matters
Schedule 5.9Intellectual Property Claims
Schedule 5.10Intellectual Property
Schedule 5.11Borrower Products
Schedule 5.14Capitalization
50
To: Agent:Date:__________, 20[__]
Hercules Capital, Inc. (the “Agent”)
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
email: xxxxx@xxxxxxxxxxxx.xxx
Attn:
VERASTEM, INC. (“Borrower”) hereby requests from Hercules Capital, Inc. (“Lender”) an Advance in the amount of _____________________ Dollars ($________________) on ______________, _____ (the “Advance Date”) pursuant to the Loan and Security Agreement among Borrower, Agent and Lender (the “Agreement”). Capitalized words and other terms used but not otherwise defined herein are used with the same meanings as defined in the Agreement.
(a)Issue a check payable to Borrower________
(b)Wire Funds to Borrower’s account________ [IF FILED PUBLICLY, ACCOUNT INFO REDACTED FOR SECURITY PURPOSES]
Bank: _____________________________
Address: _____________________________
_____________________________
ABA Number: _____________________________
Account Number: _____________________________
Account Name: _____________________________
Contact Person: _____________________________
Phone Number
To Verify Wire Info: _____________________________
Email address: _____________________________
Borrower represents that the conditions precedent to the Advance set forth in the Agreement are satisfied, waived, or shall be satisfied upon the making of such Advance, including but not limited to: (i) that no event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing; (ii) that the representations and warranties set forth in the Agreement are and shall be true and correct in all material respects on and as of the Advance Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date in which case they shall be true and correct in all material respects as of such date; (iii) that Borrower is in compliance with all the terms and provisions set forth in each Loan Document on its part to be observed or performed; and (iv) that as of the Advance Date, no fact or condition exists that would (or would, with the passage
51
of time, the giving of notice, or both) constitute an Event of Default under the Loan Documents. Borrower understands and acknowledges that Agent has the right to review the financial information supporting this representation and, based upon such review in its sole but reasonable discretion, Lender may decline to fund the requested Advance.
Borrower hereby represents that Borrower’s corporate status and locations have not changed since the date of the Agreement or, if the Attachment to this Advance Request is completed, are as set forth in the Attachment to this Advance Request.
Borrower agrees to notify Agent promptly before the funding of the Loan if any of the matters which have been represented above shall not be true and correct on the Borrowing Date and if Agent has received no such notice before the Advance Date then the statements set forth above shall be deemed to have been made and shall be deemed to be true and correct as of the Advance Date.
BORROWER: VERASTEM, INC.
SIGNATURE:________________________
TITLE:_____________________________
PRINT NAME:______________________
52
ATTACHMENT TO ADVANCE REQUEST
Dated: _______________________
Borrower hereby represents and warrants to Agent that Borrower’s current name and organizational status is as follows:
Name:Verastem, Inc.
Type of organization:Corporation
State of organization:Delaware
Organization file number:4853179
Borrower hereby represents and warrants to Agent that xxx xxxxxx xxxxxxxxx, xxxxxx, xxxxxx and postal codes of its current locations are as follows:
000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000
53
[THE FOLLOWING LEGEND SHALL BE INCLUDED, IF APPLICABLE:
THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY SECTION 1275(C) OF THE CODE.
HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE, AND THE YIELD TO MATURITY RELATING TO THE NOTES BY CONTACTING [NAME OR TITLE] [ADDRESS] [TELEPHONE NUMBER]
FOR VALUE RECEIVED, VERASTEM, INC., a Delaware corporation, for itself and each of its Qualified Subsidiaries (the “Borrower”) hereby promises to pay to Hercules Capital, Inc., a Maryland corporation (or its registered assigns) (the “Lender”) at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx, XX 00000 or such other place of payment as the registered holder of this Secured Term Promissory Note (this “Promissory Note”) may specify from time to time in writing, in lawful money of the United States of America, the principal amount of TwentyThirty-Five Million Dollars ($25,000,00035,000,000) or such other principal amount as Lender has advanced to Borrower, together with interest at a rate as set forth in Section 2.12.1.1(c) of the Loan Agreement based upon a year consisting of 360 days, with interest computed daily based on the actual number of days in each month.
This Promissory Note is the Note referred to in, and is executed and delivered in connection with, that certain Loan and Security Agreement dated [ ], 2017, by and among Borrower, Hercules Capital, Inc., a Maryland corporation (the “Agent”) and the several banks and other financial institutions or entities from time to time party thereto as lender (as the same may from time to time be amended, modified or supplemented in accordance with its terms, the “Loan Agreement”), and is entitled to the benefit and security of the Loan Agreement and the other Loan Documents (as defined in the Loan Agreement), to which reference is made for a statement of all of the terms and conditions thereof. All payments shall be made in accordance with the Loan Agreement. All terms defined in the Loan Agreement shall have the same definitions when used herein, unless otherwise defined herein. An Event of Default under the Loan Agreement shall constitute a default under this Promissory Note.
Borrower waives presentment and demand for payment, notice of dishonor, protest and notice of protest under the UCC or any applicable law. Borrower agrees to make all payments under this Promissory Note without setoff, recoupment or deduction and regardless of any counterclaim or defense. This Promissory Note has been negotiated and delivered to Lender and is payable in the State of California. This Promissory Note shall be governed by and construed and
enforced in accordance with, the laws of the State of California, excluding any conflicts of law rules or principles that would cause the application of the laws of any other jurisdiction.
BORROWER FOR ITSELF AND
ON BEHALF OF ITS QUALIFIED SUBSIDIARIES:VERASTEM, INC.
NAME, LOCATIONS, AND OTHER INFORMATION FOR BORROWER
1. Borrower represents and warrants to Agent that Borrower’s current name and organizational status as of the Closing Date is as follows:
Type of organization:Corporation
State of organization:Delaware
Organization file number:4853179
2. Borrower represents and warrants to Agent that for five (5) years prior to the Closing Date, Borrower did not do business under any other name or organization or form except the following:
Name:None.Verastem Oncology (d/b/a)
Used during dates of:NoneApril 11, 2018.
Type of Organization:None.
State of organization:None.
Organization file number: None.
Borrower’s fiscal year ends on December 31
Borrower’s federal employer tax identification number is: 00-0000000
3. Borrower represents and warrants to Agent that its chief executive office is located at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000.
EXHIBIT D
BORROWER’S PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
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Institution Name and Address |
Account Number |
|||
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Silicon Valley Bank |
3300743570 |
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Silicon Valley Bank |
||||
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Silicon Valley Bank |
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State Street Bank and Trust 0000 Xxxxx Xxxxxx Xxxxx Xxxxxx, XX 00000 |
DE4020 |
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State Street Bank and Trust 0000 Xxxxx Xxxxxx Xxxxx Xxxxxx, XX 00000 |
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EXHIBIT F
Hercules Capital, Inc. (as “Agent”)
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Reference is made to that certain Loan and Security Agreement dated [ ], 2017 and the Loan Documents (as defined therein) entered into in connection with such Loan and Security Agreement all as may be amended from time to time (hereinafter referred to collectively as the “Loan Agreement”) by and among VERASTEM, INC. (the “Company”) as Borrower, the several banks and other financial institutions or entities from time to time party thereto (collectively, the “Lender”) and Hercules Capital, Inc., as agent for the Lender (the “Agent”). All capitalized terms not defined herein shall have the same meaning as defined in the Loan Agreement.
The undersigned is an Officer of the Company, knowledgeable of all Company financial matters, and is authorized to provide certification of information regarding the Company; hereby certifies, in such capacity, that in accordance with the terms and conditions of the Loan Agreement, the Company is in compliance for the period ending ___________ of all covenants, conditions and terms and hereby reaffirms that all representations and warranties contained therein are true and correct in all material respects on and as of the date of this Compliance Certificate with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, after giving effect in all cases to any standard(s) of materiality contained in the Loan Agreement as to such representations and warranties. Attached are the required documents supporting the above certification. The undersigned further certifies that these are prepared consistent with past management practice (except for the absence of footnotes with respect to unaudited financial statement and subject to normal year end adjustments) and are consistent from one period to the next except as explained below.
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REPORTING REQUIREMENT |
REQUIRED |
CHECK IF ATTACHED |
|
Interim Financial Statements |
Monthly within 30 days (commencing 3/31/17) |
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Interim Financial Statements |
Quarterly within 45 days |
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Audited Financial Statements |
FYE within 90 days |
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ACCOUNTS
Liquidity Covenant: Borrower shall at all times maintain in accounts of Borrower that are subject to an Account Control Agreement, unrestricted and unencumbered cash (other than as a result of the Loan Agreement) in an aggregate amount greater than or equal to the lesser of (a) one hundred twenty-five percent (125%) of the aggregate outstanding Advances and (b) one hundred percent (100%) of all cash of Borrower maintained in any accounts (other than Excluded Accounts).
125% of Advances: $___________________
Cash of Borrower maintained in Account Control Agreements: $_________________
All cash of Borrower: $______________________
Cash of Borrower in Excluded Accounts: $______________
The undersigned hereby also confirms the below disclosed accounts represent all depository accounts and securities accounts presently open in the name of each Borrower or Borrower Subsidiary/Affiliate, as applicable.
Have any depository or securities accounts been opened since the last Compliance Certificate? YES/NO
Net Product Revenue Threshold (7.15(a)) At all times following the date on which Borrower has received 2019 Term Loan Advances in an aggregate amount of at least Forty Million Dollars ($40,000,000):
(A)net revenues received by Borrower from the commercial sales of COPIKTRA, net of revenue recognition from up-front payments associated with collaboration agreements between Borrower and one or more third parties (measured on a trailing six (6) month basis):
(B)the amount of Net Product Revenue shown on Borrower’s most recent Board approved financial and business projections reasonably approved by Agent and the Lender (measured on a trailing six (6) month basis):
(C)Line B multiplied by 0.6:$__________________
Is Line (A) greater than or equal to Line (C)?
_____ Yes (in compliance); _____ No (not in compliance)
If not in compliance: Borrower must attach evidence that Borrower is in compliance with the Liquidity Threshold. ____ (check if attached)
Liquidity Threshold (7.15(b)):
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(A) |
Unrestricted Cash held by Borrower in accounts subject to an Account Control Agreement in favor of Agent: $___________________ |
Is (i) (A) greater than or equal to (B), or (ii) all Cash of Borrower and Qualified Subsidiaries (other than Cash in an Excluded Account) in accounts in the name of Borrower that are subject to an Account Control Agreement?
_____ Yes (in compliance); _____ No (not in compliance)
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By:____________________________
Name: _____________________________
Its:____________________________
EXHIBIT G
This Joinder Agreement (the “Joinder Agreement”) is made and dated as of [ ], 20[ ], and is entered into by and between__________________., a ___________ corporation (“Subsidiary”), and HERCULES CAPITAL, INC., a Maryland corporation (as “Agent”).
A. Subsidiary’s Affiliate, VERASTEM, INC., a Delaware corporation (“Company”) has entered into that certain Loan and Security Agreement dated [ ], 2017, with the several banks and other financial institutions or entities from time to time party thereto as lender (collectively, the “Lender”) and the Agent, as such agreement may be amended (the “Loan Agreement”), together with the other agreements executed and delivered in connection therewith;
B. Subsidiary acknowledges and agrees that it will benefit both directly and indirectly from Company’s execution of the Loan Agreement and the other agreements executed and delivered in connection therewith;
NOW THEREFORE, Subsidiary and Agent agree as follows:
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1. |
The recitals set forth above are incorporated into and made part of this Joinder Agreement. Capitalized terms not defined herein shall have the meaning provided in the Loan Agreement. |
any assignee for the benefit of creditors, receiver, bankruptcy trustee or itself as debtor-in-possession under any bankruptcy proceeding) to the fullest extent provided by law, any and all claims, rights or defenses to the enforcement of this Joinder Agreement on the basis that (a) it failed to receive adequate consideration for the execution and delivery of this Joinder Agreement or (b) its obligations under this Joinder Agreement are avoidable as a fraudulent conveyance. |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE TO JOINDER AGREEMENT]
________________________________.
HERCULES CAPITAL, INC.
By:____________________________________
Name:__________________________________
Title: ___________________________________
Address:
000 Xxxxxxxx Xxx., Xxxxx 000
Xxxx Xxxx, XX 00000
email: xxxxx@xxxxxxxxxxxx.xxx
Telephone: 000-000-0000
EXHIBIT H
ACH DEBIT AUTHORIZATION AGREEMENT
Hercules Capital, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Re: Loan and Security Agreement dated _______________ (the “Agreement”) by and among Verastem, Inc. (the “Borrower”), each of its Qualified Subsidiaries (as defined therein) the Lender (as defined therein) from time to time party thereto and Hercules Capital, Inc., as administrative agent and collateral agent for itself and the Lender (the “Agent”)
In connection with the above referenced Agreement, the Borrower hereby authorizes the Company to initiate debit entries for (i) the periodic payments due under the Agreement and (ii) out-of-pocket legal fees and costs incurred by Agent or Lender pursuant to Section 11.11 of the Agreement to the Borrower’s account indicated below. The Borrower authorizes the depository institution named below to debit to such account.
[IF FILED PUBLICLY, ACCOUNT INFO REDACTED FOR SECURITY PURPOSES]
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DEPOSITORY NAME |
BRANCH |
|
CITY |
STATE AND ZIP CODE |
|
TRANSIT/ABA NUMBER |
ACCOUNT NUMBER |
This authority will remain in full force and effect so long as any amounts are due under the Agreement.
VERASTEM, INC.
(Borrower)(Please Print)
By: _________________________________________
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LENDER |
TRANCHE |
|
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Hercules Capital, Inc. |
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Hercules Capital, Inc. |
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Hercules Capital, Inc. |
$25,000,000 |
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TOTAL COMMITMENTS |
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