Exhibit 10.1

 

FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

 

This First Amendment to Loan and Security Agreement (the “Amendment”), is
entered into as of December 3, 2014, by and between SQUARE 1 BANK (“Bank”) and
MARINUS PHARMACEUTICALS, INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated
as of April 2, 2014 (as amended from time to time, the “Agreement”). The parties
desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1)             Section 2.1(b) of the Agreement is hereby amended and restated,
as follows:

 

(b)                                 Term Loans.

 

(i)                                    Term Loans A.  As of December 3, 2014,
$2,000,000 in aggregate principal amount of term loans have been issued and are
outstanding under this Agreement.  All of such term loans are hereby designated
as the “Term Loan A.”

 

(ii)                                Term Loans B.  Subject to and upon the terms
and conditions of this Agreement, Bank agrees to make one (1) term loan to
Borrower in the aggregate principal amount of Five Million Dollars ($5,000,000)
(the “Term Loan B”).  The proceeds of the Term Loan B shall be used for general
working capital purposes.

 

(iii)                            Term Loans C.  Subject to and upon the terms
and conditions of this Agreement, Bank agrees to make one (1) or more term loans
to Borrower in an aggregate principal amount not to exceed Two Million Five
Hundred Thousand Dollars ($2,500,000) (each a “Term Loan C” and collectively the
“Term Loans C”).  Borrower may request Term Loans C at any time after the Term
Loan C Availability Start Date but on or before the Term Loan C Availability End
Date.  The proceeds of the Term Loans C shall be used for general working
capital purposes.

 

(iv)                             Term Loans D.  Subject to and upon the terms
and conditions of this Agreement, Bank agrees to make one (1) or more term loans
to Borrower in an aggregate principal amount not to exceed Two Million Five
Hundred Thousand Dollars ($2,500,000) (each a “Term Loan D” and collectively the
“Term Loans D”, and together with the Term Loan A, the Term Loan B, and the Term
Loans C, each a “Term Loan” and collectively the “Term Loans”).  Borrower may
request Term Loans D at any time after the achievement of the Clinical Trial
Milestone but on or before the Term Loan D Availability End Date.  The proceeds
of the Term Loans D shall be used for general working capital purposes.

 

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(v)                                 Interest shall accrue from the date of each
Term Loan at the rate specified in Section 2.3(a), and through the Interest-Only
End Date for the applicable Term Loan, shall be payable monthly beginning on the
3rd day of the month next following the date of such Term Loan, and continuing
on the same day of each month thereafter.  Any Term Loans that are outstanding
at the close of business on the Interest-Only End Date shall be payable in equal
monthly installments of principal, with each such installment calculated
according to a 24-month amortization schedule, plus all accrued and unpaid
interest, beginning on the date that is one month immediately following the
Interest-Only End Date, and continuing on the same day of each month thereafter
through the Term Loan Maturity Date, at which time all amounts due in connection
with the Term Loans and any other amounts due under this Agreement shall be
immediately due and payable. Term Loans, once repaid, may not be reborrowed. 
Borrower may prepay any Term Loan without penalty or premium.

 

(vi)                             When Borrower desires to obtain a Term Loan,
Borrower shall notify Bank (which notice shall be irrevocable) by facsimile
transmission to be received no later than 3:30 p.m. Eastern time on the day on
which the Term Loan is to be made.  Such notice shall be substantially in the
form of Exhibit C.  The notice shall be signed by an Authorized Officer.

 

2)             Section 2.3(a)(i) of the Agreement is hereby amended and
restated, as follows:

 

(i)                                    Term Loans.  Except as set forth in
Section 2.3(b), the Term Loans shall bear interest, on the outstanding daily
balance thereof, at a variable annual rate equal to the greater of: (A) 3.25%
above the Prime Rate then in effect; or (B) 6.50%.

 

3)             Section 3.2 of the Agreement is hereby amended and restated, as
follows:

 

3.2                               Conditions Precedent to all Credit
Extensions.  The obligation of Bank to make each Credit Extension, including the
initial Credit Extension, is contingent upon Borrower’s compliance with all
applicable provisions of Section 3.1 above, and is further subject to the
following conditions:

 

(a)                                 timely receipt by Bank of the Loan
Advance/Paydown Request Form as provided in Section 2.1;

 

(b)                                 Borrower shall be in compliance with
Section 6.6;

 

(c)                                  in Bank’s sole discretion, there has not
been a Material Adverse Effect;

 

(d)                                 Borrower’s actual cash burn is not
significantly greater than that set forth in Borrower’s board-approved plan
delivered pursuant to Section 6.2(iii) or as revised and approved by Borrower’s
board of directors and acceptable to Bank;

 

(e)                                  Borrower has not previously received any
FDA notification of an event or decision that is of such a significant severity
as to jeopardize the outcome or continuation of an ongoing trial; and

 

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(f)                                   the representations and warranties
contained in Section 5 shall be true and correct in all material respects on and
as of the date of such Loan Advance/Paydown Request Form and on the effective
date of each Credit Extension as though made at and as of each such date, and no
Event of Default shall have occurred and be continuing, or would exist after
giving effect to such Credit Extension (provided, however, that those
representations and warranties expressly referring to another date shall be
true, correct and complete in all material respects as of such date).  The
making of each Credit Extension shall be deemed to be a representation and
warranty by Borrower on the date of such Credit Extension as to the accuracy of
the facts referred to in this Section 3.2.

 

4)             Section 6.2(a) of the Agreement is hereby amended and restated,
as follows:

 

(a)                                 Within 30 days after the last day of each
month, Borrower shall deliver to Bank with the monthly financial statements a
Compliance Certificate certified as of the last day of the applicable month and
signed by a Responsible Officer in substantially the form of Exhibit D hereto,
together with (i) aged listings by invoice date of accounts receivable (if any)
and accounts payable, (ii) a report of clinical trial enrollment, (iii) a report
of actual cash burn vs. Borrower’s cash burn plan, including notification of any
changes to Borrower’s cash burn plan, and (iv) upon Bank’s request, account
statements for any bank accounts or investment accounts held outside Bank.

 

5)             Section 6.6 of the Agreement is hereby amended and restated, as
follows:

 

6.6                               “Primary Depository”.  Borrower shall maintain
all its depository and operating accounts with Bank and its primary investment
accounts with Bank or Bank’s affiliates.  Notwithstanding the foregoing, at all
times when Borrower’s Cash exceeds two times Borrower’s outstanding Indebtedness
to Bank, (i) Borrower may keep Cash in accounts outside Bank, and (ii) Borrower
shall not be required to maintain its primary investment accounts with Bank or
Bank’s affiliates.

 

6)             The following defined terms are hereby added to Exhibit A to the
Agreement, as follows:

 

“Term Loan C Availability End Date” means September 1, 2015.

 

“Term Loan C Availability Start Date” means the date on which Bank receives
minutes of a meeting of Borrower’s board of directors documenting plans to move
forward with development (i.e., to proceed to the next level of the trial) for
at least one of the orphan indications (FragileX or Female pediatric epilepsy)
and, if Bank so desires, Bank receives verbal confirmation of the same from
Borrower’s board members.

 

“Term Loan D Availability End Date” means March 31, 2016.

 

7)             The following defined terms in Exhibit A to the Agreement are
hereby amended and restated, as follows:

 

“Clinical Trial Milestone” means Borrower’s achievement, on or before August 31,
2015, of 80% enrollment of Borrower’s ongoing Phase 3 trial for focal onset
epilepsy.

 

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“Credit Card Maturity Date” means December 2, 2015.

 

“Interest-Only End Date” means December 3, 2015; except that, if Borrower
achieves full enrollment of Borrower’s ongoing Phase 3 trial for focal onset
epilepsy on or before December 3, 2015, then the term “Interest-Only End Date”
shall instead mean June 3, 2016.

 

“Term Loan Maturity Date” means December 3, 2017; except that, if Borrower
achieves full enrollment of Borrower’s ongoing Phase 3 trial for focal onset
epilepsy on or before December 3, 2015, then the term “Term Loan Maturity Date”
shall instead mean June 3, 2018.

 

8)             Unless otherwise defined, all initially capitalized terms in this
Amendment shall be as defined in the Agreement.  The Agreement, as amended
hereby, shall be and remain in full force and effect in accordance with its
respective terms and hereby is ratified and confirmed in all respects.  Except
as expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right,
power, or remedy of Bank under the Agreement, as in effect prior to the date
hereof.  Borrower ratifies and reaffirms the continuing effectiveness of all
agreements entered into in connection with the Agreement.

 

9)             Borrower represents and warrants that the representations and
warranties contained in the Agreement are true and correct as of the date of
this Amendment.

 

10)      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 instrument.

 

11)      As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the following:

 

a)             this Amendment, duly executed by Borrower;

 

b)             an officer’s certificate of Borrower with respect to incumbency
and resolutions authorizing the execution and delivery of this Amendment;

 

c)              a Loan Advance Request form pursuant to
Section 2.1(b)(vi) requesting that Bank make the Term Loan B;

 

d)             payment of a $10,000 facility fee, which may be debited from any
of Borrower’s accounts at Bank;

 

e)              payment of all Bank Expenses, including Bank’s expenses for the
documentation of this Amendment and any related documents, and any UCC, good
standing or intellectual property search or filing fees, which may be debited
from any of Borrower’s accounts; and

 

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f)               such other documents and completion of such other matters, as
Bank may reasonably deem necessary or appropriate.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.

 

MARINUS PHARMACEUTICALS, INC.

 

SQUARE 1 BANK

 

 

 

 

 

By:

/s/ Edward F. Smith

 

By:

/s/ Evan Travis

Name:

Edward F. Smith

 

Name:

Evan Travis

Title:

Chief Financial Officer

 

Title:

VP, Life Sciences

 

[Signature Page to First Amendment to Loan and Security Agreement]

 

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