SECOND AMENDMENT TO Loan and security agreement

 

This Second Amendment to Loan and Security Agreement (this “Amendment”) is dated
as of March 6, 2018, is entered into by and among VERASTEM, INC., a Delaware
corporation (the “Borrower”), the several banks and other financial institutions
or entities from time to time parties to the Loan Agreement (as defined below)
as Lender, and HERCULES CAPITAL, INC., a Maryland corporation, in its capacity
as administrative agent for itself and Lender (in such capacity, “Agent”).

WHEREAS, Lender and Borrower are parties to that certain Loan and Security
Agreement dated as of March 21, 2017 (as amended by the First Amendment to Loan
and Security Agreement, dated as of January 4, 2018, among the Borrower, Lender
(as defined therein) and the Agent, and as may from time to time be further
amended, modified, supplemented or restated, the “Loan Agreement”); and

WHEREAS, in accordance with Section 11.3 of the Loan Agreement, Borrower, Lender
and Agent desire to amend the Loan Agreement as more fully set forth herein.

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:

1. Definitions.  Capitalized terms used but not defined in this Amendment shall
have the meanings given to them in the Loan Agreement.

2. Amendment to Loan Agreement- Subject to the satisfaction of the conditions
set forth in Section 3 of this Amendment, the Loan Agreement is hereby amended
as follows:

(a) The Loan Agreement shall be amended by amending and replacing clause (vii)
of the definition of “Permitted Indebtedness” in Section 1.1 thereof as follows:

“(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,”

3. Conditions to Effectiveness.  Agent, Lender and Borrower agree that this
Amendment shall become effective upon Agent’s and Lender’s receipt of a
fully-executed counterpart of this Amendment signed by Borrower.

4. Representations and Warranties.  The Borrower hereby represents and warrants
to Lender as follows:

(a) Representations and Warranties in the Agreement.  The representations and
warranties of Borrower set forth in Section 5 of the Loan Agreement (after
giving effect to this Amendment) are true and correct in all material respects
on and as of the date hereof with the same effect as though made on and as of
such date, except to the extent such

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representations and warranties expressly relate to an earlier date, in which
case they are true and correct as of such date.

(b) Authority, Etc.  The execution and delivery by Borrower of this Amendment
and the performance by Borrower of all of its agreements and obligations under
the Loan Agreement and the other Loan Documents, as amended hereby, are within
the corporate authority of Borrower and have been duly authorized by all
necessary corporate action on the part of Borrower.  With respect to Borrower,
the execution and delivery by Borrower of this Amendment does not and will not
require any registration with, consent or approval of, or notice to any Person
(including any governmental authority).

(c) Enforceability of Obligations.  This Amendment, the Loan Agreement and the
other Loan Documents, as amended hereby, constitute the legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with their
terms, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium, general equitable principles or other laws relating
to or affecting generally the enforcement of, creditors’ rights and except to
the extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.

(d) No Default.  Before and after giving effect to this Amendment (i) no fact or
condition exists that would (or would, with the passage of time, the giving of
notice, or both) constitute an Event of Default, and (ii) no event that has had
or could reasonably be expected to have a Material Adverse Effect has occurred
and is continuing.

(e) Event of Default.  By its signature below, Borrower hereby agrees that it
shall constitute an Event of Default if any representation or warranty made
herein should be false or misleading in any material respect when made.

5. Reaffirmations.  Except as expressly provided in this Amendment, all of the
terms and conditions of the Loan Agreement and the other Loan Documents remain
in full force and effect. Nothing contained in this Amendment shall in any way
prejudice, impair or effect any rights or remedies of Agent or Lender under the
Loan Agreement and the other Loan Documents.  Except as specifically amended
hereby, Borrower hereby ratifies, confirms, and reaffirms all covenants
contained in the Loan Agreement and the other Loan Documents.  The Loan
Agreement, together with this Amendment, shall be read and construed as a single
agreement.  All references in the Loan Documents to the Loan Agreement or any
other Loan Document shall hereafter refer to the Loan Agreement or any other
Loan Document as amended hereby. 

6. Execution in 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.

7. 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

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hereby acknowledged, Borrower, on behalf of itself and its successors, assigns,
and other legal representatives, hereby 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, each 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 on or
prior to the day and date 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 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.

8. Miscellaneous. 

(a) THIS AMENDMENT 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. 

(b) The captions in this Amendment are for convenience of reference only and
shall not define or limit the provisions hereof.

(c) This Amendment expresses the entire understanding of the parties with
respect to the transactions contemplated hereby. No prior negotiations or
discussions shall limit, modify, or otherwise affect the provisions hereof.

(d) Any determination that any provision of this Amendment or any application
hereof is invalid, illegal or unenforceable in any respect and in any instance
shall not affect the validity, legality, or enforceability of such provision in
any other instance, or the validity, legality or enforceability of any other
provisions of this Amendment.

[Signature page follows.]

 

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In Witness Whereof, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.

 

 

 

 

LENDER

BORROWER

 

HERCULES FUNDING II, LLC

 

 

By:   /s/ Jennifer Choe____________

Name: Jennifer Choe_____________

Title:  Assistant General Counsel ___

 

VERASTEM, INC.

 

 

By:   /s/ Julie B. Feder____________

Name: Julie B. Feder_____________

Title:  CFO_____________________

 

AGENT

 

 

HERCULES CAPITAL, INC.

 

 

By:   /s/ Jennifer Choe____________

Name: Jennifer Choe_____________

Title:  Assistant General Counsel ___

 

 

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