Exhibit 10.2

 

SECOND LOAN MODIFICATION AGREEMENT

 

This Second Loan Modification Agreement (this “Loan Modification Agreement”) is
entered into as of August 13, 2012 by and among (i) MIDCAP FUNDING III, LLC, a
Delaware limited liability company with an office located at 7255 Woodmont
Avenue, Suite 200, Bethesda, Maryland 20814 (“MidCap”), as collateral agent
(“Agent”); (ii) MidCap as a “Lender”; (iii) SILICON VALLEY BANK, a California
corporation with a loan production office located at 100 Matsonford Road,
Building 5, Suite 555, Radnor, Pennsylvania 19087 (“SVB”), as a “Lender” (MidCap
and SVB in their capacities as a “Lender” are each referred to herein as a
“Lender”, and are collectively referred to herein as the “Lenders”); and
(iv) NUPATHE INC., a Delaware corporation (“Borrower”).

 

1.                                       DESCRIPTION OF EXISTING INDEBTEDNESS
AND OBLIGATIONS. Borrower is indebted to the Lenders pursuant to a loan
arrangement dated as of May 13, 2010, evidenced by, among other documents, a
certain Loan and Security Agreement dated as of May 13, 2010, among Borrower,
Agent and the Lenders, as amended by a First Loan Modification Agreement dated
as of June 13, 2011 (the “Loan Agreement”).  Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to such terms in the
Loan Agreement.

 

2.                                       DESCRIPTION OF COLLATERAL.  Repayment
of the Obligations is secured by the Collateral as described in the Loan
Agreement (together with any other document pursuant to which collateral
security is granted to Agent, for the ratable benefit of the Lenders, the
“Security Documents”).  Hereinafter, the Security Documents, together with all
other documents evidencing or securing the Obligations shall be referred to as
the “Existing Loan Documents”.

 

3.                                       DESCRIPTION OF CHANGE IN TERMS.

 

A.                                   Modifications to Loan Agreement.

 

1.                                       The Loan Agreement shall be amended by
deleting the “and” at the end of Section 2.4(c), deleting the “.” at the end of
Section 2.4(d) and inserting “; and” in lieu thereof, and adding a new
Section 2.4(e) reading as follows:

 

“Amendment Fee.  A fully earned, non-refundable amendment fee in an amount equal
to one percent (1.00%) of the aggregate outstanding principal amount of the
Terms Loans as of the Second Loan Modification Effective Date to be shared among
the Lenders pursuant to their respective Commitment Percentages, which amendment
fee shall be due and payable immediately upon the occurrence of an Additional
Capital Raise.”

 

2.                                       The Loan Agreement shall be amended by
amending and restating the proviso appearing in Section 6.6(a) thereof to read
as follows:

 

“; provided, that on and after the date which is sixty (60) days after the
Effective Date, Borrower and Guarantor shall (i) maintain their primary
operating accounts with SVB and/or one of its Affiliates, (ii) prior to the
Second Loan Modification Effective Date, maintain at least 50% of their
aggregate excess cash and Cash Equivalents (i.e., monies held for investment)
with SVB and/or one of its Affiliates, and (iii) on and after the Second Loan
Modification Effective Date, maintain at least 95% of their aggregate excess
cash and Cash Equivalents (i.e., monies held for investment) with SVB and/or one
of its Affiliates.”

 

3.                                       The Loan Agreement shall be amended by
amending and restating Section 6.13 to read as follows:

 

“6.13                     Liquidity Covenant.  (i) At all times prior to the
Second Loan Modification Effective Date, Borrower shall maintain unrestricted
cash and Cash Equivalents of not

 

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less than $3,000,000, (ii) at all times after the Second Loan Modification
Effective Date but prior to the occurrence of an Additional Capital Raise,
Borrower shall maintain unrestricted cash and Cash Equivalents of not less than
$1,000,000, and (iii) at all times after the occurrence of an Additional Capital
Raise, Borrower shall maintain unrestricted cash and Cash Equivalents of not
less than $3,000,000.”

 

4.                                       The Loan Agreement shall be amended by
deleting the following definition appearing in Section 14.1 thereof:

 

““Final Payment Percentage” is two percent (2.00%).”

 

and inserting in lieu thereof the following:

 

““Final Payment Percentage” is four percent (4.00%).”

 

5.                                       The Loan Agreement shall be amended by
adding the following definitions in Section 14.1 thereof in alphabetical order:

 

““Additional Capital Raise” shall mean the receipt by Borrower, after the Second
Loan Modification Effective Date, of unrestricted net cash proceeds of at least
Ten Million Dollars ($10,000,000.00) from (i)  the closing of an equity round of
financing pursuant to the sale of Borrower’s equity or convertible debt
securities, or (ii) up-front payments from a joint venture or partnership.”

 

“Second Loan Modification Effective Date” means August 13, 2012.

 

4.                                       EXPENSES.  Borrower shall reimburse
Agent and the Lenders for all legal fees and out-of pocket expenses incurred in
connection with this Loan Modification Agreement.

 

5.                                       RATIFICATION OF LOAN DOCUMENTS. 
Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of
all security or other collateral granted to Agent, for the ratable benefit of
the Lenders, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.

 

6.                                       PERFECTION CERTIFICATE.  Borrower
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in Borrower’s Perfection Certificate dated as of June 13,
2011, and acknowledges, confirms and agrees that the disclosures and information
that Borrower provided to Agent and the Lenders in such Perfection Certificate
have not changed, as of the date hereof.

 

7.                                       NO DEFENSES OF BORROWER.  Borrower
hereby acknowledges and agrees that Borrower has no offsets, defenses, claims,
or counterclaims against Agent and/or the Lenders with respect to the
Obligations, or otherwise, and that if Borrower now has, or ever did have, any
offsets, defenses, claims, or counterclaims against Agent and/or the Lenders,
whether known or unknown, at law or in equity, all of them are hereby expressly
WAIVED and Borrower hereby RELEASES Agent and/or the Lenders from any liability
thereunder.

 

8.                                       REPRESENTATIONS AND WARRANTIES.  To
induce Agent and the Lenders to enter into this Loan Modification Agreement,
Borrower does hereby warrant, represent and covenant to Agent and the Lenders
that, after giving effect to this Loan Modification Agreement, (i) each
representation or warranty of Borrower set forth in the Loan Agreement is hereby
restated and reaffirmed as true and correct in all material respects on and as
of the date of this Loan Modification Agreement as if such representation or
warranty were made on and as of the date of this Loan Modification Agreement
(except to the extent that any such representation or warranty expressly relates
to a prior specific date or period), (ii) no Default or Event of Default has
occurred and is continuing as of the date hereof and (iii) Borrower has the
power and is duly authorized to enter into, deliver and perform this Loan
Modification Agreement and this Loan Modification Agreement is the legal, valid
and binding obligation of Borrower enforceable against Borrower in accordance
with its terms.

 

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9.                                       CONTINUING VALIDITY.  Except as
expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.  The
Lenders’ agreement to modifications to the existing Obligations pursuant to this
Loan Modification Agreement in no way shall obligate Agent or the Lenders to
make any future modifications to the Obligations.  Nothing in this Loan
Modification Agreement shall constitute a satisfaction of the Obligations.  It
is the intention of Agent, the Lenders and Borrower to retain as liable parties
all makers of Existing Loan Documents, unless the party is expressly released by
the Lenders in writing.  No maker will be released by virtue of this Loan
Modification Agreement.

 

10.                                 CONDITION PRECEDENT TO EFFECTIVENESS OF THIS
LOAN MODIFICATION AGREEMENT.  This Loan Modification Agreement shall become
effective as of the date referred to above upon the satisfaction of the
following conditions precedent:

 

A.                                   Agent shall have received, in form and
substance satisfactory to Agent and the Lenders, one or more counterparts of
this Loan Modification Agreement, duly executed and delivered by Borrower, Agent
and the Lenders.

 

B.                                     Borrower shall have executed and
delivered to Agent and the Lenders such additional documents, instruments, and
agreements as Agent may reasonably request.

 

11.                                 COUNTERPARTS.  This Loan Modification
Agreement may be executed in multiple counterparts, each of which shall be
deemed to be an original and all of which when taken together shall constitute
one and the same instrument.

 

12.                                 GOVERNING LAW.  THIS LOAN MODIFICATION
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF MARYLAND APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS.

 

13.                                 ENTIRE AGREEMENT.  The Existing Loan
Documents as and when amended through this Loan Modification Agreement embody
the entire agreement between the parties hereto relating to the subject matter
thereof and supersede all prior agreements, representations and understandings,
if any, relating to the subject matter thereof.

 

[Remainder of Page Intentionally Left Blank —

Signature Page(s) to Follow.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Loan Modification
Agreement to be executed as of the date first written above.

 

 

BORROWER:

 

 

 

NUPATHE INC.

 

 

 

By:

/s/ Armando Anido

 

Name:

Armando Anido

 

Title:

Chief Executive Officer

 

 

 

 

 

AGENT:

 

 

 

MIDCAP FUNDING III, LLC, as Agent

 

 

 

By:

/s/ Luis Viera

 

Name:

Luis Viera

 

Title:

Managing Director

 

 

 

 

 

LENDERS:

 

 

 

MIDCAP FUNDING III, LLC, as a Lender

 

 

 

By:

/s/ Luis Viera

 

Name:

Luis Viera

 

Title:

Managing Director

 

 

 

 

 

SILICON VALLEY BANK, as a Lender

 

 

 

By:

/s/ Danny Boyle

 

Name:

Danny Boyle

 

Title:

VP Relationship Manager

 

 

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