EXHIBIT
10.1


 


FIRST
AMENDMENT TO LOAN AND SECURITY AGREEMENT


 


THIS
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”)
dated as of April 8, 2022 (the “Amendment Effective Date”), is made among HARROW HEALTH, INC., a Delaware
corporation (“Lender”), MELT PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), and
certain subsidiaries of the Borrower from time to time party to the Loan and Security Agreement as guarantors (defined below) (each
a “Guarantor” and collectively, jointly and severally, “Guarantors” and collectively with the
Borrower, each a “Loan Party” and collectively, the “Loan Parties”).


 


RECITALS


 


A. Loan Parties and Lender are parties to a Loan and Security Agreement, dated as of September 1, 2021 (as may be amended, restated,
supplemented or otherwise modified from time to time, the “Loan and Security Agreement”).


 


B.
Borrower has requested that Lender agree to certain amendments to the Loan and Security Agreement. Lender has agreed to such request,
subject to the terms and conditions hereof.


 


AGREEMENTS


 


NOW,
THEREFORE, in consideration of the foregoing, the terms and conditions set forth in this Amendment, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


 


SECTION
1. Defined Terms; Interpretation.


 


(a) Terms Defined in Loan and Security Agreement. All capitalized terms used in this Amendment (including in the recitals hereof)
and not otherwise defined herein shall have the meanings assigned to them in the Loan and Security Agreement.


 


(b) Interpretation. The rules of interpretation set forth in Section 1.1 of the Loan and Security Agreement shall be applicable
to this Amendment and are incorporated herein by this reference.


 


SECTION
2. Amendments to the Loan and Security Agreement.


 


(a) The Loan and Security Agreement shall be amended as follows effective as of the Amendment Effective Date:


 


(i) New Definitions. The following definitions are hereby added to Exhibit A in their proper alphabetical order:


 


“Cash
Equivalents” shall mean (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any
agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper
maturing no more than one (1) year after its creation and having a rating of at least A-1 from Standard & Poor’s Ratings
Group or at least a P-1 from Moody’s Investors Service, Inc.; (c) certificates of deposit, time deposits, overnight bank
deposits or bankers’ acceptances maturing within one (1) year from the date of acquisition thereof issued by any bank
organized under the laws of the United States or any state thereof or the District of Columbia or any United States branch of a
foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $500,000,000; and (d)
other short term liquid investments reasonably acceptable to Lender.”


 






    	 



    	 



    

 


“First
Amendment” shall mean that certain First Amendment to Loan and Security Agreement, dated as of April 8, 2022, by and among
the Lender and the Loan Parties.”


 


“Liquidity”
shall mean the aggregate amount of unrestricted cash on hand and Cash Equivalents of a Person.”


 


(ii) Amended
and Restated Definitions. The definitions of “Material Adverse Effect” and “Maturity Date” in Exhibit
A are hereby amended and restated in their entirety as follows:


 


“Material
Adverse Effect” shall mean a material adverse effect on (i) the business operations, properties, assets or condition (financial
or otherwise) of the Loan Parties taken as a whole; (ii) the ability of any Loan Party to fully and timely perform its Obligations; (iii)
the legality, validity, binding effect, or enforceability against a Loan Party of a Loan Document to which it is a party; or (iv) the
rights and remedies available to, or conferred upon, Lender. Further, a Material Adverse Effect shall be deemed to have occurred in the
event that data from the phase 2 study of MELT-300 failed to demonstrate the benefit of the combination MELT-300 study drug versus the
individual components of the same MELT-300 study drug, as reasonably determined by Lender.”


 


“Maturity
Date” means, the earlier of (a) September 1, 2026 (or if such date is not a Business Day, on the next Business Day after such
date), and (b) the date on which the maturity date of the Loan accelerates after or upon an Event of Default.”


 


(iii) Access to Bank Accounts. The following language is hereby added as a new Section 5.15 (Access to Bank Accounts):


 


“5.15
Access to Bank Accounts. Each Loan Party will provide Lender with monthly bank statements, view access to such accounts, and
any information or documentation reasonably required or requested by Lender to evidence any amounts held in such accounts.”


 


(iv) Financial
Covenants. The following language is hereby added as a new Section 6.15 (Financial Covenants):


 


“6.15
Financial Covenants.


 


(a) Minimum
Liquidity. Borrower shall not permit Liquidity to be less than (a) $7,000,000 at all times during the period beginning on the
date Borrower has consummated a Qualifying Financing (as defined in the First Amendment) and ending on the date that is one (1) year
thereafter (the “Liquidity Adjustment Date”) and (b) $5,000,000 at all times after the Liquidity Adjustment Date
and continuing until the Maturity Date.”


 


(b) References Within Loan and Security Agreement. Each reference in the Loan and Security Agreement to “this Agreement”
and the words “hereof,” “herein,” “hereunder,” or words of like import, shall mean and be a reference
to the Loan and Security Agreement as amended by this Amendment.


 


SECTION
3. Conditions of Effectiveness. Except as set forth in this Section 3, this Amendment shall become effective as of
the date on which Borrower shall have delivered to Lender this Amendment duly executed by an authorized officer of Borrower, and
Lender shall have executed and delivered this Amendment. The effectiveness of Section 2 of this Amendment shall be subject to
the satisfaction of each of the following conditions precedent; provided, that the requirements of Section 3(c) below
are satisfied no later than August 31, 2022 (or such later date as Lender may agree in its sole discretion):


 






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(a) Fees and Expenses. Borrower shall have paid (i) all invoiced costs and expenses then due in accordance with Section 5(c),
and (ii) all other fees, costs and expenses, if any, due and payable as of the Amendment Effective Date under the Loan and Security Agreement.


 


(b) Representations and Warranties; No Default. On the Amendment Effective Date, after giving effect to the amendment of the Loan
and Security Agreement contemplated hereby:


 


(i) The representations and warranties contained in Section 4 herein shall be true and correct on and as of the Amendment Effective
Date as though made on and as of such date; and


 


(ii) There shall exist no Events of Default or events that with the passage of time would result in an Event of Default.


 


(c)
Consummation of Qualifying Financing. Lender shall have received evidence in form and substance acceptable to Lender in its reasonable
discretion that Borrower has consummated a Qualifying Financing. For purposes of this Section 3(c), “Qualifying Financing”
means (i) the issuance by Borrower of its common Equity Interests in an underwritten primary public offering (other than a public offering
pursuant to a registration statement on Form S-8) that results in such common Equity Interests being publicly traded on any United States
national securities exchange or over the counter market resulting in cash gross proceeds to Borrower of at least $15,000,000; or (ii)
the closing of any bona-fide equity financing with third party investors resulting in cash gross proceeds to Borrower of at least $15,000,000.


 


(d)
Officer’s Certificate. Lender shall have received a certificate from an officer of the Borrower, in form and substance satisfactory
to the Lender in its reasonable discretion, certifying that the conditions set forth in this Section 3 have been satisfied.


 


SECTION
4. Representations and Warranties. To induce Lender to enter into this Amendment, each Loan Party hereby confirms, as
of the date hereof, that:


 


(a) the representations and warranties made by it in Section 4 of the Loan and Security Agreement and in the other Loan Documents
are true and correct in all material respects; provided, however, that to the extent such representations and warranties
by their terms expressly relate only to a prior date such representations and warranties shall be true and correct in all material respects
as of such prior date, provided, further, that in each case such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text thereof;


 


 (b) there has not been and there does not exist a Material Adverse Effect;




 


(c) Lender has and shall continue to have valid, enforceable and perfected first-priority liens, subject only to Permitted Liens, on and
security interests in the Collateral and all other collateral heretofore granted to Lender pursuant to the Loan Documents;


 


(d) the agreements and obligations of each Loan Party contained in the Loan Documents and in this Amendment constitute the legal, valid and
binding obligations of such Loan Party, enforceable against Borrower in accordance with their respective terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’
rights or by the application of general principles of equity; and





 






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(e) the execution, delivery and performance of this Amendment by the Loan Parties will not violate any law, rule, regulation, order, material
contractual obligation or organizational document of any Loan Party and will not result in, or require, the creation or imposition of
any lien, claim or encumbrance of any kind on any of its properties or revenues (other than any liens, claims or encumbrances created
or permitted under any of the Loan Documents); and


 


(f)
except as disclosed to Lender, no Loan Party has amended its organizational documents since the date of the Loan Documents.


 


For
the purposes of this Section 4, each reference in Section 5 of the Loan and Security Agreement to “this Agreement,”
and the words “hereof,” “herein,” “hereunder,” or words of like import in such Section, shall mean
and be a reference to the Loan and Security Agreement as amended by this Amendment.


 


SECTION
5. Miscellaneous.


 


(a) Loan Documents Otherwise Not Affected; Reaffirmation; No Novation.




 


(i) Except as expressly amended pursuant hereto or referenced herein, the Loan and Security Agreement and the other Loan Documents shall
remain unchanged and in full force and effect and are hereby ratified and confirmed in all respects. Lender’s execution and delivery
of, or acceptance of, this Amendment shall not be deemed to create a course of dealing or otherwise create any express or implied duty
by any of them to provide any other or further amendments, consents or waivers in the future.


 


(ii)
Each Loan Party hereby expressly (1) reaffirms, ratifies and confirms its Obligations under the Loan and Security Agreement and the other
Loan Documents, (2) reaffirms, ratifies and confirms the grant of security under Section 3.1 of the Loan and Security Agreement,
(3) reaffirms that such grant of security in the Collateral secures all Obligations under the Loan and Security Agreement, as of the
date hereof, and with effect from (and including) the Amendment Effective Date, such grant of security in the Collateral: (x) remains
in full force and effect notwithstanding the amendments expressly referenced herein; and (y) secures all Obligations under the Loan and
Security Agreement, as amended by this Amendment, and the other Loan Documents, (4) agrees that this Amendment shall be a “Loan
Document” under the Loan and Security Agreement and (5) agrees that the Loan and Security Agreement and each other Loan Document
shall remain in full force and effect following any action contemplated in connection herewith.


 


(iii)
This Amendment is not a novation and the terms and conditions of this Amendment shall be in addition to and supplemental to all
terms and conditions set forth in the Loan Documents. Nothing in this Amendment is intended, or shall be construed, to constitute an
accord and satisfaction of any Loan Party’s Obligations under or in connection with the Loan and Security Agreement and any
other Loan Document or to modify, affect or impair the perfection or continuity of Lender’s security interest in, security
titles to or other liens on any Collateral for the Obligations.


 


(b) No Reliance. Each Loan Party hereby acknowledges and confirms to Lender that such Loan Party is executing this Amendment on the
basis of its own investigation and for its own reasons without reliance upon any agreement, representation, understanding or communication
by or on behalf of anyother Person.


 


(c) Costs
and Expenses. Borrower agrees to pay to Lender within ten (10) days of its receipt of an invoice (or on the Amendment Effective
Date to the extent invoiced on or prior to the Amendment Effective Date), the reasonable and out-of-pocket costs and expenses of
Lender, and the reasonable and out-of-pocket fees and disbursements of counsel to Lender, in connection with the negotiation,
preparation, execution and delivery of this Amendment and any other documents to be delivered in connection herewith on the
Amendment Effective Date or after such date.


 






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(d) Binding Effect. This Amendment binds and is for the benefit of the successors and permitted assigns of each party.


 


(e)
Governing Law. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF DELAWARE (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAWS OTHER THAN THE
LAWS OF THE STATE OF DELAWARE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL.


 


(f)
Complete Agreement; Amendments. This Amendment and the Loan Documents represent the entire agreement about this subject matter
and supersede prior negotiations or agreements with respect to such subject matter. All prior agreements, understandings, representations,
warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment
and the Loan Documents.


 


(g) Severability of Provisions. Each provision of this Amendment is severable from every other provision in determining the enforceability
of any provision.


 


(h) Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, is an original, and all taken together, constitute one Amendment. Delivery of an executed
counterpart of a signature page of this Amendment by facsimile, portable document format (.pdf) or other electronic transmission, including
by electronic signature, will be as effective as delivery of a manually executed counterpart hereof.


 


(i)
Loan Documents. This Amendment and the documents related thereto shall constitute Loan Documents.


 


(j)
Release. For and in consideration of Lender’s agreements contained in this Amendment and as a material inducement to Lender
to enter into this Amendment on which Lender is relying, each Loan Party, for and on behalf of itself and all of its respective direct
or indirect parents, divisions, subsidiaries, affiliates, members, managers, participants, predecessors, successors, and assigns, and
each of their respective current and former directors, officers, shareholders, members, managers, partners, agents, and employees, and
each of their respective predecessors, successors, heirs, and assigns (collectively, “Releasors”), each intending
to be legally bound, hereby voluntarily, intentionally and knowingly releases and forever waives and discharges the Released Parties
of and from any and all claims existing on or before the Amendment Effective Date and which relate to or arise out of (i) any or all
of the Loan Documents or transactions contemplated thereby or any actions or omissions in connection therewith, (ii) any aspect of the
dealings or relationships between or among any or all of the Loan Parties, on the one hand, and any or all of the Released Parties, on
the other hand, relating to any or all of the documents, transactions, actions or omissions referenced in clause (i) hereof, or (iii)
the negotiation for and execution of this Amendment (including, without limitation, any contracting for, charging, taking, reserving,
collecting or receiving interest in excess of the highest lawful rate applicable), irrespective of whether any such claims arise out
of contract, tort, violation of law or regulations, or otherwise, and the Loan Parties, for themselves and the other Releasors, waive
all defenses with respect to the enforcement by any Released Party of the provisions of the release set forth herein.


 


[Signatures
Appear on the Following Page]





 






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	LENDER:	 
	 	 
	HARROW
    HEALTH, INC.	 
	 	 	 
	By:	/s/
    Andrew Boll	 
	Title:	Chief
Financial Officer	 


 




    	 



    	 



    

 


IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed as of the date first written above.


 


	 	LOAN
    PARTIES:
	 	 
	 	MELT
    PHARMACEUTICALS, INC.
	 	 	                                      
	 	By:	/s/
    Larry Dillaha
	 	Name:	Larry
    Dillaha
	 	Title:	Chief
    Executive Officer


 


Signature Page to First Amendment to Loan & Security Agreement