Exhibit 10.1

 

AMENDMENT AGREEMENT TO

ARCH THERAPEUTICS, INC.

ACCELERATOR FUNDING AGREEMENT

 

This AMENDMENT AGREEMENT (“Amendment”) is made as of the 28th day of September,
2016 by and between the Massachusetts Life Sciences Center (“MLSC”), an
independent public instrumentality of The Commonwealth of Massachusetts
established pursuant to Chapter 23I of the Massachusetts General Laws, and Arch
Therapeutics, Inc. (“Recipient”), a Nevada corporation, having its principal
office and place of business at 235 Walnut Street, Suite 6, Framingham, MA
01702.

 

WHEREAS, MLSC and Recipient are parties to that certain Massachusetts Life
Sciences Center Accelerator Funding Agreement, dated as of September 30, 2013
(the “Loan Agreement”), pursuant to which MLSC loaned recipient $1,000,000 (the
“Loan”);

 

WHEREAS, in connection with the Loan Agreement, Recipient issued MLSC that
certain Promissory Note in the original principal amount of $1,000,000 issued by
Recipient to MLSC on September 30, 2013 (the “Note” and collectively with the
Loan Agreement and the Loan (the “Loan Documents”); and

 

WHEREAS, MLSC and Recipient have agreed to an early repayment plan of the Loan,
a reduction in the interest rate and amendment of the Loan Documents on the
terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:

 

1.           Repayment of Loan.

 

a.           Section 1.1(b) of the Loan Agreement shall be deleted in its
entirety and the following Section 1.1(b) shall be inserted in lieu thereof:

 

The Loan will bear interest at the rate of ten percent (10%) per annum
compounding annually based on a 365-day year and determined as of the
Distribution Date (as defined in Section 1.4 hereof) through October 2, 2016 and
at the rate of seven percent (7%) based on a 360-day year as of October 3, 2016
and in accordance with the schedule attached as Exhibit F whereby Recipient
shall make twelve (12) monthly payments of $106,022.04 (“Installment Payments”)
on or before the third day of each month beginning with October 3, 2016 and
making a final payment of $106,022.05 on October 3, 2017 (“Maturity Date”).

 

 

 

 

Notwithstanding the foregoing, in the event of the earlier of (i) the closing of
a Corporate Event (as defined below) or (ii) the occurrence of a Default (as
defined in the Note), the principal and any remaining unpaid accrued interest on
the Note (the “Accrued Balance”), less the total of any Installment Payments,
shall be immediately due and payable.

 

Recipient may elect to redeem the Note and pay the Accrued Balance, in whole or
in part (whether by stated maturity, by acceleration or otherwise) without
penalty or premium, subject to providing MLSC with thirty (30) days’ written
notice of proposed redemption.

 

b.           Section 1.1(c)(v) of the Loan Agreement shall be deleted in its
entirety and the following Section 1.1(c)(v) shall be inserted in lieu thereof:

 

“Qualified Financing” shall mean a sale of any shares of Recipient’s capital
stock or any other equity interest to any party pursuant to which Recipient
receives, in a single transaction or series of transactions, cumulative net
proceeds of not less than five million dollars ($5,000,000) from October 3, 2016
through the Maturity Date.

 

c.           The second paragraph of the Note shall be deleted in its entirety
and the following paragraph shall be inserted in lieu thereof:

 

All outstanding principal and unpaid accrued interest shall be due and payable
upon the earlier of (i) October 3, 2017 (“Maturity Date”), (ii) the closing of a
Corporate Event (as defined herein) or (iii) upon Default (as defined herein).

 

2.           Event of Default. Section 4 of the Note is amended by adding the
following Section 4(h) at the end thereof:

 

(h)Recipient shall have (i) breached or violated any provision of the Amendment
Agreement, dated as of September 28th, 2016, by and between Recipient and MLSC
and (ii) not cured such breach within ten (10) business days after Recipient is
notified by MLSC in writing of such breach.

 

3.           Corporate Event. Section 5(b) of the Note shall be deleted in its
entirety and the following Section 5(b) shall be inserted in lieu thereof:

 

“Qualified Financing” shall mean a sale of any shares of Recipient’s capital
stock or any other equity interest to any party pursuant to which Recipient
receives, in a single transaction or series of transactions, cumulative net
proceeds of not less than five million dollars ($5,000,000) from October 3, 2016
through the Maturity Date.

 

 

 

 

4.           Amendment Provision. This Amendment is entered into by the MLSC and
Recipient in a manner consistent with the provisions of Section 7.7 of the Loan
Agreement and Section 7 of the Note. Except as expressly set forth in this
Amendment, each of the Loan Documents is not amended or modified, MLSC has not
waived the terms of any of the Loan Documents, and the terms and provisions of
each of the Loan Documents are ratified and confirmed and such terms shall
remain in full force and effect.

 

5.           General. Capitalized terms used herein and not defined shall have
the meanings ascribed to them in the Loan Agreement. This Amendment may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. The
terms of this Amendment shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, without regard to choice of law provisions.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment Agreement on
the date first written above.

 

MASSACHUSETTS LIFE SCIENCES CENTER   ARCH THERAPEUTICS, INC.           By: /s/
Travis McCready   By: /s/ Terrence W. Norchi, MD   Travis McCready     Terrence
W. Norchi, MD   President and CEO     President and CEO