Document:

Exhibit 10.1

 

SCBT Financial Corporation — Executive Performance Plan

 

PURPOSE - The purpose of the SCBT Financial Corporation Executive Performance Plan (this “Executive Performance Plan” or this “Plan”, which terms includes any Annex attached hereto or that may hereafter be attached hereto) is to establish reasonable goals and objectives in light of the economic environment while promoting the long-term growth and financial success of SCBT Financial Corporation and its subsidiaries (the “Company”) by (1) attracting and retaining key officers and employees of outstanding ability, (2) strengthening the Company’s capability to develop, maintain, and direct a competent management team, (3) providing an effective means for selected key officers and employees to acquire and maintain ownership of Company stock, and (4) providing incentive compensation opportunities competitive with those of other major corporations.

 

This Executive Performance Plan describes the terms pursuant to which the Company plans to distribute cash bonuses and issue stock options and restricted stock to certain of the Company’s key officers and employees.  The stock options and restricted stock described in this Executive Performance Plan will be reserved for issuance under, and will be issued pursuant to, the Company’s 2004 Stock Incentive Plan.  The actual issuance of stock options and restricted stock will be made pursuant to separate agreements that will be entered into between the Company and each participant under the 2004 Stock Incentive Plan.  Capitalized terms not defined in this Executive Performance Plan shall have the definitions attributed to such terms in the 2004 Stock Incentive Plan.

 

TERM - This Executive Performance Plan is intended to cover the fiscal year ending on December 31, 2011. In addition, the Compensation Committee of the Board (the “Committee”) of the Company may determine in its discretion whether to apply this plan in any subsequent years (in which case the Compensation Committee will attached new Annex A and/or Annex B to this Plan with respect to any such year), or to implement a different incentive plan, or no incentive plan, in any subsequent year.  The Committee anticipates that the cash bonus and/or the stock options and restricted stock grants under the Executive Performance Plan for 2011 would be paid out and/or issued in January 2012, based on the achievement of specified performance goals for the year 2011, and otherwise in the discretion of the Committee (and the Committee anticipates that in any subsequent year in which this Plan applies, the cash bonus and/or the stock options and restricted stock grants under the Executive Performance Plan would be paid out and/or issued in January of the subsequent year, based on the achievement of specified performance goals for the applicable performance year, and otherwise in the discretion of the Committee).

 

EQUITY TYPE - Two equity instruments will be used in the Executive Performance Plan: stock options and restricted stock.  The Committee’s intent is to use incentive stock options (as defined in IRC § 422) whenever practical.  All equity awards described in this Executive Performance Plan will be issued under and pursuant to the terms of the 2004 Stock Incentive Plan, unless another equity plan has been duly adopted in accordance with applicable law and stock exchange requirements, in which case the Committee may also elect to issue stock options or restricted stock under such equity plan.

 

PARTICIPANTS - The Committee shall have the discretion to designate the key officers and employees who will participate in the Executive Performance Plan.

 

AWARDS - The Committee anticipates that three types of awards will be granted pursuant to this Executive Performance Plan, one of which is cash based and two of which are equity based (stock options and restricted stock).  The Company intends to reserve a number of shares of Common Stock for the annual award of stock options and annual grant of restricted stock to each participant.  However, the actual issuance or grant of options or restricted stock to each participant would likely be made at the beginning of the year following the applicable performance year, or as soon thereafter as practicable.  The Executive Performance Plan permits both performance-based opportunities and discretionary bonus payments, based on the Committee’s discretionary assessment of performance. The 

 

 

Company’s achievement of certain performance goals, and the Committee’s exercise of its discretion, will determine the actual amount of stock options and restricted stock that may be issued, and the issuance would be made during or after January of the year immediately following the relevant performance year.

 

ANNUAL PERFORMANCE GOALS

 

Under the Executive Performance Plan, performance-based opportunities may be based on levels of, maintenance of or changes in (or ratios based on) any of the following (as determined by the Committee, in its discretion): non-performing asset levels; the classified assets/capital ratio; regulatory ratings; net income; loans; deposits; earnings before extraordinary, nonrecurring and/or unusual items; net operating income; operating earnings per share; consolidated total revenue; market share; earnings before taxes; stock price; return on equity, tangible equity, or assets; total shareholders’ return; levels of expenses; overhead ratios;  efficiency ratios; loan quality (including classified assets); net charge offs, including ratios of charge-total loans or other measures; customer satisfaction scores; economic value added; and/ or any such other measures of soundness, profitability and/or growth as the Committee deems to be appropriate.  The performance-based Executive Performance Plan goals for a particular year shall be determined by the Committee and set forth on Annex A.

 

ANNUAL DISCRETIONARY BONUS OPPORTUNITY

 

Discretionary bonus payments/issuances, if any, are determined in the discretion of the Committee.  The Committee may take into consideration, among other factors, team building, customer relations, strategic initiatives or other factors, as the Committee may deem to be appropriate in its discretion.

 

NEW PARTICIPANTS - If an executive joins the Company during an applicable Plan year, the Board may elect to include the new executive in the Executive Performance Plan for such year.  The executive would be awarded a pro rata annual award for such year.

 

TERMINATION OF EMPLOYMENT - Unless determined otherwise by the Committee, each option and restricted stock agreement will contain substantially the following provisions:

 

(a)  If the termination of employment is voluntary on the part of the participant and without written consent of the Company, or is by the Company with cause (as such term is defined in the participant’s employment agreement with the Company as then in effect, if any), the participant will (i) be entitled to retain all vested restricted stock but will forfeit any unvested awards and (ii) have 90 days to exercise any vested stock options but will forfeit any unvested options.

 

(b)  If the termination of employment is by the Company without cause, the participant will (i) be entitled to retain all vested and unvested shares of restricted stock (and all unvested awards will vest immediately upon termination) and (ii) have 90 days to exercise any vested stock options but will forfeit any unvested options.

 

(c)  If termination is due to the participant’s death or disability (as determined by the Committee or the Board of Directors of the Company), (i) the participant (or the participant’s beneficiary) will receive not only the vested shares of restricted stock but also the number of shares earned but unvested (the remaining shares will vest upon the participant’s death), and (ii) all outstanding stock options will vest upon the participant’s death or disability and the participant (or the participant’s beneficiary) will have one year (in the case of disability) and two years (in the case of death) to exercise the stock options.

 

(d)  In the event of a change in control, all earned but unvested shares of restricted stock and unvested stock options will become fully vested immediately.

 

 

STOCK OPTION AND RESTRICTED STOCK AGREEMENTS - The Company will prepare separate stock option and restricted stock agreements to reflect the issuance of the stock options and restricted stock described in this Executive Performance Plan.  The Company reserves full discretion to establish the terms of each such agreement, including terms that may be different from or inconsistent with those described in this Executive Performance Plan.  To the extent the terms of any such agreement prepared by the Company are inconsistent with the terms of this Executive Performance Plan, the terms of the individual agreement shall control.

 

DODD-FRANK ACT COMPLIANCE - The Dodd-Frank Act requires the SEC to direct the national securities exchanges and national securities associations to prohibit the listing of any security of an issuer that does not, among other things, implement a policy (a “claw-back policy”) providing, among other things, that, in the event that the issuer is required to prepare an accounting restatement due to the material noncompliance of the issuer with any financial reporting requirement under the securities laws, the issuer will recover from any current or former executive officer of the issuer who received incentive-based compensation (including stock options awarded as compensation) during the 3-year period preceding the date on which the issuer is required to prepare an accounting restatement, based on the erroneous data, in excess of what would have been paid to the executive officer under the accounting restatement.  If and when SCBT adopts any such claw-back policy, any cash payments or equity awards under this Plan shall be subject to such claw-back policy if and to the extent provided in such claw-back policy.

 

MISCELLANEOUS - This Executive Performance Plan (which term includes any Annex attached hereto) is a statement of current intention only, and it does not create any legally binding rights in favor of any officer or employee of the Company to receive cash bonuses, stock options or restricted stock from the Company.  Any bonus payment/issuance under this Executive Performance Plan for 2011 performance shall be made before March 14, 2012; and if the Executive Performance Plan is applied in any subsequent year then any bonus payment/issuance under this Executive Performance Plan for such year shall be made on or before March 14 of the year immediately subsequent to the performance year.  This timing requirement shall be binding, notwithstanding that the rest of the provisions of this Executive Performance Plan are non-binding, on the Company.  A participant must be employed by the Company on the date of payment/issuance in order to receive a payment/issuance under the Executive Performance Plan, unless the Committee determines otherwise in its sole discretion in a specific instance.  The Committee has the right to interpret this Executive Performance Plan in its sole discretion, and its interpretations shall be binding on any participants.  The Committee can modify, amend or terminate this Executive Performance Plan at any time.  This Executive Performance Plan is not intended to be exclusive; the Company may provide compensation in any other manner that it chooses.

 

 

ANNEX A

 

SCBT EXECUTIVE PERFORMANCE PLAN

 

STRUCTURE OF AWARDS FOR 2011 PERFORMANCE

 

For 2011, the Executive Performance Plan shall have three components:

 

1.                                       Cash Incentive: For 2011, the Executive Performance Plan will pay out 50% in the form of cash.  The amount of cash will be paid out one-half (1/2) based upon applicable goals and objectives for 2011 and one-half (1/2) based upon a discretionary assessment of performance.  The specific amounts of cash paid out will depend upon the specific officer level.

 

2.                                       Equity Incentive: In addition to cash, for 2011 the Executive Performance Plan will pay out 50% in the form of equity.  The equity will be made up of both restricted stock and stock options as follows:

 

·                                          Restricted Stock: Of the equity granted, 75% will be in the form of restricted stock.  Of the total opportunity (cash & equity) for a given level, this will represent 37.5% of the total 100% opportunity level.  Similar to the cash portion, one-half (1/2) of the restricted stock will be granted based upon achievement of 2011 goals and objectives.  The remaining one-half (1/2) will be granted on a discretionary basis based upon strategic initiatives.  The 30-day moving average of SCBT’s stock price will be utilized to determine the value of restricted stock and, accordingly, in calculating how many shares of restricted stock will be issued under the Executive Performance Plan for 2011.

 

·                                          Stock Options: The remaining 25% of equity will be granted in the form of stock options, representing 12.5% of the total opportunity for a given level. Each stock option will have an exercise price equal to SCBT’s stock price on the grant date and will be valued based on the stock option’s fair value computed by SCBT’s financial reporting software in accordance with FASB ASC Topic 718. Stock options will be entirely discretionary based upon strategic initiatives.

 

Performance-Based Goals & Objectives: The specific 2011 goals and objectives are provided below.  The goals and objectives are predicated upon threshold performance where 50% of the opportunity is paid, target where 100% of the opportunity is paid, and maximum, where 170% of the opportunity is paid.  The Committee also may award, in addition to any discretionary bonus described below, a discretionary performance-based cash and equity payment/issuance if the Committee determines that performance has been extraordinary.

 

Discretionary (Strategic Initiatives):  While goals & objectives dictate 50% of how the 2011 Executive Performance Plan will pay out with respect to the Cash Incentive component and Restricted Stock component, the other 50% will be discretionary for the Cash Incentive component and Restricted Stock component.  The Stock Option component will be 100% discretionary.  The Committee may take into consideration, among other factors, team building, customer relations, and other strategic initiatives as the Committee may deem to be appropriate in its discretion.  This is done to allow the Committee to, among other things, take into account actions, circumstances and events which are not necessarily formulaic in nature.  Because stock options are granted on an entirely discretionary basis, payouts under the 2011 Executive Performance Plan may be weighted toward discretionary (strategic initiatives) payouts.  For example, at target levels, performance-based goals establish how 43.75% of the 2011 Executive Performance Plan will pay out, and 56.25% will be paid out under the discretionary component based upon strategic initiatives.

 

 

	
 
    	
 
    	
Performance-Based Levels
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Threshold
    	
 
    	
Target
    	
 
    	
Maximum
    	
 
    	
Extraordinary
    	
 
    	
Discretionary
    	
 
    
	
Payout as % of Target
    	
 
    	
50
    	
%
    	
100
    	
%
    	
170
    	
%
    	
Discretion
    	
 
    	
Up to 170%
    	
 
    
	
Cash Incentive (as a % of Payout)
    	
 
    	
57.1
    	
%
    	
57.1
    	
%
    	
57.1
    	
%
    	
Discretion
    	
 
    	
44.4%
    	
 
    
	
Restricted Stock (as a % of Payout)
    	
 
    	
42.9
    	
%
    	
42.9
    	
%
    	
42.9
    	
%
    	
Discretion
    	
 
    	
33.3%
    	
 
    
	
Stock Options (as a % of Payout)
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Discretion
    	
 
    	
22.2%
    	
 
    

 

PERFORMANCE GOALS FOR 2011 - Three categories of performance goals will be used:  Soundness, Profitability, and Loan and Deposit Growth.  The amount of cash bonus, restricted stock issued and stock options granted will depend on the level achieved for each performance goal.  Each award level will increase upon achievement of performance goals at the threshold, target or maximum level.  The Committee will approve the performance goals for each particular cash bonus or grant of restricted stock or stock options prior to making that cash bonus or particular grant, as applicable.

 

The “Soundness” goal is measured based on the following components: (i) receiving a prescribed rating from the principal bank regulator that is at least as high as the Company’s most recent rating; (ii) maintaining a percentage of non-performing assets under 2.75% (threshold), 2.4% (target), or 2.25% (maximum) as of December 31, 2011, and (iii) attaining a level of classified assets/capital under 52% (threshold), 49% (target), or 47% (maximum) as of December 31, 2011.  The “Soundness” goal is weighted at 40% of the total performance-based opportunity under the Executive Performance Plan (with achievement of the prescribed regulatory rating being a prerequisite for any payment under the “Soundness” category, and, assuming such rating is achieved, the percentage of non-performing assets determining 20% of the total performance-based opportunity and the level of classifies assets/capital determining 20% of the total performance-based opportunity).

 

The “Profitability” goal is achieved by earning the budgeted amount (threshold), reaching 112% of budgeted amount(target), or reaching 130% of budgeted amount(maximum).  The “Profitability” goal is weighted at 40% of the total performance-based opportunity under the Executive Performance Plan for 2011.

 

The “Loan and Deposit Growth” goal is measured by increasing loans by 3.5% (threshold), 4.5% (target) or 5.5% (maximum), and by increasing deposits by 4.0% (threshold), 6.2% (target) or 7.2% (maximum).  In determining the percentage of growth in 2011, only non-FDIC covered loans are included and certificates of deposit are excluded.  The “Loan and Deposit Growth” goal is weighted at an aggregate of 20% of the total performance-based opportunity under the Executive Performance Plan (with the loan growth goal and the core deposit growth each being weighted at 10% of the total performance-based opportunity under the Executive Performance Plan for 2011).

 

 

PERFORMANCE-BASED (FORMULA-BASED) CASH INCENTIVE -  Annex B shows the applicable percentage of each participant’s base salary that the participant is eligible to receive if the performance-based goals of the Company are achieved at the threshold (50% of target opportunity), target, or maximum (170% of target opportunity) levels.  The Committee also has the discretion to award, in addition to any discretionary cash bonus described below, additional performance-based cash payments if the Committee determines that performance has been extraordinary in 2011.

 

DISCRETIONARY-BASED CASH INCENTIVE - Participants would also be eligible for a discretionary-based cash incentive based on service in 2011.  The Committee has discretion to set the level of such cash payouts that any participant receives up to a maximum payout of 100% of the value of the maximum performance-based cash opportunity level for the particular participant based on performance in 2011 (regardless of whether any of the performance-based goals have been achieved).

 

PERFORMANCE-BASED (FORMULA-BASED) EQUITY INCENTIVE - Annex B shows the applicable percentage of the each participant’s base salary that the participant would be eligible to receive in shares of restricted stock and stock options if the performance-based goals of the Company are achieved at the threshold (50% of target opportunity), target, or maximum (170% of target opportunity) levels.  The Committee also has the discretion to issue, in addition to any discretionary equity bonus described below, additional performance-based equity awards if the Committee determines that performance has been extraordinary in 2011.  Dividends paid and voting rights will be attached to all shares of restricted stock issued under the Executive Performance Plan for 2011.

 

DISCRETIONARY-BASED EQUITY INCENTIVE — Participants would also be eligible for a discretionary-based equity incentive based on service in 2011.  The Committee has discretion to set the level of such grants of restricted stock and stock options that any participant receives up to a maximum value (determined as set forth in the Executive Performance Plan) of 125% of the value of the maximum performance-based cash opportunity level for the particular participant based on performance in 2011 (regardless of whether any of the performance-based goals have been achieved).

 

Any merger or acquisition related activity awards payout may result in adjustments to the 2011 Executive Performance Plan, to be determined by the Committee, or may be provided as discretionary payouts under the plan.

 

 

ANNEX B

 

SCBT EXECUTIVE PERFORMANCE PLAN

 

PERFORMANCE-BASED LEVELS

 

	
 
    	
 
    	
 
    	
 
    	
Cash Performance-Based
   Opportunity
    	
 
    	
Equity Performance-Based
   Opportunity (1)
    	
 
    	
Total Performance-Based
   Opportunity (Cash +Equity)(2)
    	
 
    
	
Name
    	
 
    	
Position
    	
 
    	
Thresh
    	
 
    	
Target
    	
 
    	
Max
    	
 
    	
Thresh
    	
 
    	
Target
    	
 
    	
Max
    	
 
    	
Thresh
    	
 
    	
Target
    	
 
    	
Max
    	
 
    
	
Payout as a % of Target
    	
 
    	
(50%)
    	
 
    	
(100%)
    	
 
    	
(170%)
    	
 
    	
(50%)
    	
 
    	
(100%)
    	
 
    	
(170%)
    	
 
    	
(50%)
    	
 
    	
(100%)
    	
 
    	
(170%)
    	
 
    
	
Robert Hill 
    	
 
    	
President   and CEO
    	
 
    	
13.0
    	
%
    	
26.0
    	
%
    	
44.0
    	
%
    	
9.8
    	
%
    	
19.5
    	
%
    	
33.0
    	
%
    	
22.8
    	
%
    	
45.5
    	
%
    	
77.0
    	
%
    
	
John Pollok 
    	
 
    	
Senior   EVP, COO
    	
 
    	
12.5
    	
%
    	
25.0
    	
%
    	
42.0
    	
%
    	
9.4
    	
%
    	
18.8
    	
%
    	
31.5
    	
%
    	
21.9
    	
%
    	
43.8
    	
%
    	
73.5
    	
%
    
	
John Windley 
    	
 
    	
President   of SCBT, N.A.
    	
 
    	
10.75
    	
%
    	
21.5
    	
%
    	
36.5
    	
%
    	
8.1
    	
%
    	
16.1
    	
%
    	
27.4
    	
%
    	
18.8
    	
%
    	
37.6
    	
%
    	
63.9
    	
%
    
	
Donnie Pickett 
    	
 
    	
EVP,   CFO
    	
 
    	
10.75
    	
%
    	
21.5
    	
%
    	
36.5
    	
%
    	
8.1
    	
%
    	
16.1
    	
%
    	
27.4
    	
%
    	
18.8
    	
%
    	
37.6
    	
%
    	
63.9
    	
%
    
	
Joe Burns 
    	
 
    	
Sr.   EVP, Chief Risk Off.
    	
 
    	
10.75
    	
%
    	
21.5
    	
%
    	
36.5
    	
%
    	
8.1
    	
%
    	
16.1
    	
%
    	
27.4
    	
%
    	
18.8
    	
%
    	
37.6
    	
%
    	
63.9
    	
%
    

 

	
(1)
    	
 
    	
Any grants of   performance-based equity incentive bonuses will be comprised of restricted   stock. Because stock options are granted on an entirely discretionary basis,   payouts under the 2011 Executive Performance Plan may be weighted toward   discretionary (strategic initiatives) payouts. For example, at target levels,   performance goals establish how 43.75% of the 2011 Executive Performance Plan   will pay out, and 56.25% will be paid out under the discretionary component   based upon strategic initiatives.
    
	
 
    	
 
    	
 
    
	
(2)
    	
 
    	
Each participant may   also receive, in addition to any discretionary bonus described below, a   discretionary performance-based cash and equity payment/issuance, in the   Committee’s discretion, if the Committee determines that performance has been   extraordinary.
    

 

DISCRETIONARY BONUS LEVELS

 

In addition to the performance-based incentive cash payments and equity issuances, each participant will also be eligible to receive an additional discretionary (strategic initiatives based) bonus of up to the value of the 128.57% of the percentage of each participant’s base salary as reflected in the “Max” column under “Total Performance-Based Opportunity (Cash +Equity).”  Discretionary bonuses will be paid 44.4% in cash and 55.6% in equity, with such equity being (i) 60% in the form of restricted stock and (ii) 40% in the form of stock options, as described in the Executive Performance Plan.  The Committee may take into consideration, among other factors, team building, customer relations, strategic initiatives or other factors, as the Committee may deem to be appropriate in its discretion, in determining whether to provide a discretionary bonus and/or the amount of any discretionary bonus.Exhibit 4.1

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of August 2, 2011, by and between NUPATHE INC., a Delaware corporation (the “Company”), and ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company (together with it permitted assigns, the “Buyer”).  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Common Stock Purchase Agreement by and between the parties hereto, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”).

 

WHEREAS:

 

A.         Upon the terms and subject to the conditions of the Purchase Agreement, (i) the Company has agreed to issue to the Buyer and the Buyer has agreed to purchase up to Thirty Million Dollars ($30,000,000) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), pursuant to Section 1 of the Purchase Agreement (such shares, the “Purchase Shares”), and (ii) the Company has agreed to issue to the Buyer such number of shares of Common Stock as is required pursuant to Section 4(e) of the Purchase Agreement (the “Commitment Shares”); and

 

B.         To induce the Buyer to enter into the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations there under, or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws.

 

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

 

1.         DEFINITIONS.

 

As used in this Agreement, the following terms shall have the following meanings:

 

a.         “Person” means any person or entity including any corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof or a governmental agency.

 

b.         “Register,” “registered,” and “registration” refer to a registration effected by preparing and filing one or more registration statements of the Company in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous basis (“Rule 415”), and the declaration or ordering of effectiveness of such registration statement(s) by the U.S. Securities and Exchange Commission (the “SEC”).

 

c.         “Registrable Securities” means the Purchase Shares which have been, or which may from time to time be, issued or issuable to the Buyer upon purchases of the Available Amount under the Purchase Agreement (without regard to any limitation or restriction on purchases) and the Commitment Shares issued or issuable to the Buyer and any shares of capital stock issued or issuable with respect to the Purchase Shares or Commitment Shares  or the Purchase Agreement as a result of

 

 

any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitation on purchases under the Purchase Agreement.

 

d.         “Registration Statement” means a registration statement of the Company covering only the sale of the Registrable Securities.

 

2.         REGISTRATION.

 

a.         Mandatory Registration.  The Company shall within ten (10) Business Days from the date hereof file with the SEC the Registration Statement.  The Registration Statement shall register only the Registrable Securities and no other securities of the Company.  The Buyer and its counsel shall have a reasonable opportunity to review and comment upon such Registration Statement or any amendment to such Registration Statement and any related prospectus prior to its filing with the SEC.  Buyer shall furnish all information reasonably requested by the Company for inclusion therein.  The Company shall use its reasonable best efforts to have the Registration Statement or any amendment declared effective by the SEC as soon as reasonably practicable.  Subject to Section 3(e) hereto, the Company shall use reasonable best efforts to keep the Registration Statement effective and available for continuous sales-pursuant to Rule 415 promulgated under the 1933 Act and available for sales of all of the Registrable Securities at all times until the earlier of (i) the date as of which the Buyer may sell all of the Registrable Securities without restriction pursuant to Rule 144 promulgated under the 1933 Act (or successor thereto) without regard to the fact that a Registration Statement covering the sale of the Registrable Securities may then be in effect or (ii) the date on which (A) the Buyer shall have sold all the Registrable Securities and no Available Amount remains under the Purchase Agreement, or (iii) the date on which the Purchase Agreement is terminated (the “Registration Period”).  The Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not, on its effective date (and on the effective date of any amendment thereto, or the date of any supplement contained therein) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.

 

b.         Rule 424 Prospectus.  The Company shall, as required by applicable securities regulations, from time to time file with the SEC, pursuant to Rule 424 promulgated under the 1933 Act, a prospectus and prospectus supplements, if any, to be used in connection with sales of the Registrable Securities under the Registration Statement.  The Buyer and its counsel shall have one (1) Business Day to review and comment upon such prospectus prior to its filing with the SEC.

 

c.         Sufficient Number of Shares Registered.  In the event the number of shares available under the Registration Statement is insufficient to cover the Registrable Securities, the Company shall, to the extent necessary and permissible, amend the Registration Statement or file a new registration statement (a “New Registration Statement”), so as to cover all of such Registrable Securities as soon as practicable, but in any event not later than ten (10) Business Days after the necessity therefor arises.  The Company shall use its reasonable best efforts to have such amendment and/or New Registration Statement become effective as soon as reasonably practicable following the filing thereof.

 

2

 

3.         RELATED OBLIGATIONS.

 

With respect to the Registration Statement and whenever any Registrable Securities are to be registered pursuant to Sections 2(a) and (c), including on any New Registration Statement, the Company shall use its reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:

 

a.         The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to any Registration Statement and the prospectus used in connection with such Registration Statement, as may be necessary to keep the Registration Statement or any New Registration Statement effective at all times during the Registration Period, subject to Section 3(e) hereto, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement or any New Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement.  Should the Company file a post-effective amendment to the Registration Statement or a New Registration Statement, the Company will use its reasonable best efforts to have such filing declared effective by the SEC within thirty (30) consecutive Business Days as of the date of filing.

 

b.         The Company shall submit to the Buyer for review and comment  any disclosure in the Registration Statement or any New Registration Statement and all amendments and supplements thereto (other than prospectus supplements that consist only of a copy of a filed Form 10-Q) containing information provided by the Buyer for inclusion in such document and any descriptions or disclosure regarding the Buyer, the Purchase Agreement, including the transactions contemplated thereby, or this Agreement at least one (1) Business Day prior to their filing with the SEC, and not file any document in a form to which Buyer reasonably objects.  Upon request of the Buyer, the Company shall provide to the Buyer all disclosure in the Registration Statement or any New Registration Statement and all amendments and supplements thereto (other than prospectus supplements that consist only of a copy of a filed Form 10-Q) at least one (1) Business Day prior to their filing with the SEC, and not file any document in a form to which Buyer reasonably and timely objects.  The Buyer shall use its reasonable best efforts to comment upon the Registration Statement or any New Registration Statement and any amendments or supplements thereto within one (1) Business Day from the date the Buyer receives the final version thereof.  The Company shall furnish to the Buyer, without charge, any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to the Registration Statement or any New Registration Statement.

 

c.         Upon request of the Buyer, the Company shall furnish to the Buyer, (i) promptly after the same is prepared and filed with the SEC, at least one copy of the Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits, (ii) upon the effectiveness of any Registration Statement, a copy of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as the Buyer may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as the Buyer may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Buyer.

 

3

 

d.         The Company shall use reasonable best efforts to (i) register and qualify, unless an exemption from registration and qualification is available, the Registrable Securities covered by a registration statement under such other securities or “blue sky” laws of such jurisdictions in the United States as the Buyer reasonably requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.  The Company shall promptly notify the Buyer who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

 

e.         As promptly as reasonably practicable after becoming aware of such event or facts, the Company shall notify the Buyer in writing if the Company has determined that the prospectus included in any Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and promptly prepare a prospectus supplement or amendment to such registration statement to correct such untrue statement or omission, and, upon the Buyer’s request, deliver a copy of such prospectus supplement or amendment to the Buyer.  In providing this notice to the Buyer, the Company shall not include any other information about the facts underlying the Company’s determination and shall not in any way communicate any material nonpublic information about the Company or the Common Stock to the Buyer.  The Company shall also promptly notify the Buyer in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to the Buyer by facsimile or e-mail on the same day of such effectiveness), (ii) of any request by the SEC for amendments or supplements to any registration statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate.

 

f.          The Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of any Registration Statement, or the suspension of the qualification of any Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest practical time and to notify the Buyer of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

 

g.         The Company shall (i) cause all the Registrable Securities to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) secure designation and quotation of all the Registrable Securities if the Principal Market

 

4

 

(as such term is defined in the Purchase Agreement) is an automated quotation system.  The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section.

 

h.         The Company shall cooperate with the Buyer to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to any Registration Statement and enable such certificates to be in such denominations or amounts as the Buyer may reasonably request and registered in such names as the Buyer may request.

 

i.          The Company shall at all times provide a transfer agent and registrar with respect to its Common Stock.

 

j.          If reasonably requested by the Buyer, the Company shall (i) promptly incorporate in a prospectus supplement or post-effective amendment such information as the Buyer believes should be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities; (ii) make all required filings of such prospectus supplement or post-effective amendment promptly after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement.

 

k.         The Company shall use its reasonable best efforts to cause the Registrable Securities covered by any Registration Statement to be registered with or approved by such other governmental agencies or authorities in the United States as may be necessary to consummate the disposition of such Registrable Securities.

 

l.          Within one (1) Business Day after any Registration Statement is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Buyer) confirmation that such Registration Statement has been declared effective by the SEC in the form attached hereto as Exhibit A.  Thereafter, if reasonably requested by the Buyer at any time, the Company shall require its counsel to deliver to the Buyer a written confirmation of whether or not the effectiveness of such Registration Statement has lapsed at any time for any reason (including, without limitation, the issuance of a stop order) and whether or not the registration statement is currently effective and available to the Buyer for sale of all of the Registrable Securities.

 

m.        The Company agrees to cooperate with the Buyer as reasonably requested by the Buyer to expedite and facilitate disposition by the Buyer of Registrable Securities pursuant to any Registration Statement.

 

5

 

4.         OBLIGATIONS OF THE BUYER.

 

a.         The Buyer has furnished to the Company in Exhibit B hereto such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.  The Company shall notify the Buyer in writing of any other information the Company reasonably requires from the Buyer in connection with any Registration Statement hereunder.  The Buyer will promptly notify the Company of any material change in the information set forth in Exhibit B, other than changes in its ownership of the Common Stock.

 

b.         The Buyer agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder.

 

c.         The Buyer agrees that, upon receipt of any notice from the Company of the happening of any event or existence of facts of the kind described in Section 3(f) or any notice of the kind described in the first sentence of 3(e), the Buyer will immediately discontinue disposition of Registrable Securities pursuant to any registration statement(s) covering such Registrable Securities until the Buyer’s receipt (which may be accomplished through electronic delivery) of the copies of the filed supplemented or amended prospectus contemplated by Section 3(f) or the first sentence of 3(e). In addition, upon receipt of any notice from the Company of the kind described in the first sentence of Section 3(e), the Buyer will immediately discontinue purchases or sales of any securities of the Company. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to promptly deliver shares of Common Stock without any restrictive legend in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which the Buyer has received a Purchase Notice or VWAP Purchase Notice prior to the Buyer’s receipt of a notice from the Company of the happening of any event of the kind described in Section 3(f) or the first sentence of 3(e) and for which the Buyer has not yet settled.

 

5.         EXPENSES OF REGISTRATION.

 

All reasonable expenses, other than sales or brokerage commissions and fees and disbursements of counsel for the Buyer, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company, shall be paid by the Company.

 

6.         INDEMNIFICATION.

 

a.         To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Buyer, each Person, if any, who controls the Buyer, the members, the directors, officers, partners, employees, agents, representatives of the Buyer and each Person, if any, who controls the Buyer within the meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended (the “1934 Act”) (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, attorneys’ fees, amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing

 

6

 

by or before any court or governmental, administrative or other regulatory agency or body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in the Registration Statement, any New Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to the Registration Statement or any New Registration Statement (the matters in the foregoing clauses (i) through (iiii) being, collectively, “Violations”).  The Company shall reimburse each Indemnified Person promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.  Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (A) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Buyer expressly for use in connection with the preparation of the Registration Statement, any New Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company; (B) with respect to any superceded prospectus, shall not inure to the benefit of any person from whom the person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any other Indemnified Person) if the untrue statement or omission of material fact contained in the superceded prospectus was corrected in the revised prospectus, as then amended or supplemented, if such revised prospectus was timely made available by the Company, and the Buyer was advised in writing not to use the incorrect prospectus prior to the use giving rise to a violation; (C) shall not be available to the extent such Claim is based on a failure of the Buyer to deliver or to cause to be delivered the prospectus made available by the Company, if such prospectus was theretofore made available by the Company; and (D) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Buyer pursuant to Section 9.

 

b.         In connection with the Registration Statement or any New Registration Statement, the Buyer agrees to indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement or any New Registration Statement, each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (collectively and together with an Indemnified Person, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or

 

7

 

Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information about the Buyer set forth on Exhibit B attached hereto or updated from time to time in writing by the Buyer and furnished to the Company by the Buyer expressly for use in connection with such registration statement; and, subject to Section 6(d), the Buyer will reimburse any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Buyer, which consent shall not be unreasonably withheld; provided, further, however, that the Buyer shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to the Buyer as a result of the sale of Registrable Securities pursuant to such registration statement.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Buyer pursuant to Section 9.

 

c.         Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or claim.  The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto.  No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent.  No indemnifying party shall, without the consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such claim or litigation.  Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.

 

8

 

d.         The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.  Any person receiving a payment pursuant to this Section 6 which person is later determined to not be entitled to such payment shall return such payment to the person making it.

 

e.         The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

 

7.         CONTRIBUTION.

 

To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.

 

8.         REPORTS AND DISCLOSURE UNDER THE SECURITIES ACTS.

 

With a view to making available to the Buyer the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Buyer to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees, at the Company’s sole expense, to:

 

a.         make and keep public information available, as those terms are understood and defined in Rule 144;

 

b.         file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required to satisfy the current public information requirements of Rule 144; and

 

c.         furnish to the Buyer so long as the Buyer owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the requirements of Rule 144(c)(1)(i), and (ii) such other information, if any, as may be reasonably requested to permit the Buyer to sell such securities pursuant to Rule 144 without registration.

 

d.         take such additional action as is requested by the Buyer to enable the Buyer to sell the Registrable Securities pursuant to Rule 144, including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to the Company’s Transfer Agent as may be reasonably requested from time to time by the Buyer and otherwise fully cooperate with Buyer and Buyer’s broker to effect such sale of securities pursuant to Rule 144.

 

9

 

The Company agrees that damages may be an inadequate remedy for any breach of the terms and provisions of this Section 8 and that Buyer shall, whether or not it is pursuing any remedies at law, be entitled to equitable relief in the form of a preliminary or permanent injunctions, without having to post any bond or other security, upon any breach or threatened breach of any such terms or provisions.

 

9.                                    ASSIGNMENT OF REGISTRATION RIGHTS.

 

The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Buyer.  The Buyer may not assign its rights under this Agreement without the written consent of the Company.

 

10.       AMENDMENT OF REGISTRATION RIGHTS.

 

Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Buyer.

 

11.       MISCELLANEOUS.

 

a.         Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same.  The addresses and facsimile numbers for such communications shall be:

 

If to the Company:

NuPathe Inc.

227 Washington Street, Suite 200

Conshohocken, PA 19428

Telephone:        484-567-0130

Facsimile:          484-567-0136

Attention:           Keith A. Goldan, Chief Financial Officer

 

With required copies to:

NuPathe Inc.

227 Washington Street, Suite 200

Conshohocken, PA 19428

Telephone:        484-567-0130

Facsimile:          484-567-0136

Attention:           Michael F. Marino, General Counsel

 

Morgan, Lewis & Bockius LLP

1701 Market Street

 

10

 

Philadelphia, PA 19103-2921

Telephone:       215-963-5000

Facsimile:         215-963-5001

Attention:          Michael N. Peterson

 

If to the Buyer:

Aspire Capital Fund, LLC

155 North Wacker Drive, Suite 1600

Chicago, IL 60606

Telephone:      312-658-0400

Facsimile:        312-658-4005

Attention:         Steven G.  Martin

 

With a required copy to:

O’Melveny & Myers LLP

1625 Eye Street, NW

Washington, DC 20006

Telephone:      202-383-5418

Facsimile:        202-383-5414

Attention:         Martin P. Dunn, Esq.

 

or at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party three (3) Business Days prior to the effectiveness of such change.  Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.  Any party to this Agreement may give any notice or other communication hereunder using any other means (including messenger service, ordinary mail or electronic mail), but no such notice or other communication shall be deemed to have been duly given unless it actually is received by the party for whom it is intended.

 

b.         No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

 

c.         The corporate laws of the State of Delaware shall govern all issues concerning the relative rights of the Company and its stockholders.  All other questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Illinois.   Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting the City of Chicago, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or 

 

11

 

proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

d.         This Agreement and the Purchase Agreement constitute the entire understanding among the parties hereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein.  This Agreement and the Purchase Agreement supersede all other prior oral and written agreements between the Buyer, the Company, their affiliates and persons acting on their behalf with respect to the subject matter hereof and thereof.

 

e.         Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.

 

f.          The headings in this Agreement are for convenience of reference and shall not form part of or affect the interpretation of this Agreement.

 

g.         This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile or pdf (or other electronic reproduction) signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or pdf (or other electronic reproduction) signature.

 

h.         Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

i.          The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.

 

j.          This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

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* * * * * *

 

13

 

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be duly executed as of day and year first above written.

 

 

	
 
    	
THE COMPANY:
    
	
 
    	
 
    
	
 
    	
NUPATHE INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
  /s/ Jane H.   Hollingsworth
    	
 
    
	
 
    	
Name: Jane H. Hollingsworth
    
	
 
    	
Title:  Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BUYER:
    
	
 
    	
 
    
	
 
    	
ASPIRE CAPITAL   FUND, LLC
    
	
 
    	
BY: ASPIRE CAPITAL PARTNERS, LLC
    
	
 
    	
BY: SGM HOLDINGS   CORP.
    
	
 
    	
 
    
	
 
    	
By:
    	
  /s/ Steven G. Martin
    	
 
    
	
 
    	
Name: Steven G. Martin
    
	
 
    	
Title: President
    

 

14

 

EXHIBIT A

 

TO REGISTRATION RIGHTS AGREEMENT

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

[Date]

 

Broadridge Corporate Issuer Solutions, Inc.

44 W. Lancaster Ave

Ardmore, PA 19003

Attention:  [  ]

 

Re: NUPATHE INC.

 

Ladies and Gentlemen:

 

We refer to that certain Common Stock Purchase Agreement, dated as of August 2, 2011 (the “Purchase Agreement”), entered into by and between NUPATHE INC., a Delaware corporation (the “Company”), and ASPIRE CAPITAL FUND, LLC (the “Buyer”) pursuant to which the Company has agreed to issue to the Buyer shares of the Company’s Common Stock, par value $0.001 (the “Common Stock”), in an amount up to Thirty Million Dollars ($30,000,000), in accordance with the terms of the Purchase Agreement.  Pursuant to the  Purchase Agreement, the Company has registered with the U.S. Securities & Exchange Commission (the “SEC”) the sale of the following shares of Common Stock:

 

(1)                              up to 2,816,868 shares of Common Stock with an aggregate value of up to $30,000,000 to be issued upon purchase from the Company by the Buyer from time to time (the  “Purchase Shares”).

 

(2)                              84,866 shares of Common Stock which have been issued to the Buyer as a commitment fee (the “Commitment Shares”).

 

In connection with the transactions contemplated by the  Purchase Agreement, the Company has filed a registration statement on Form S-1, File No. 333-xxxxxx (the “Registration Statement”), with the SEC to register for sale under the Securities Act of 1933, as amended (the “1933 Act”), the Purchase Shares and Commitment Shares.

 

Accordingly, the Company advises you that (i) the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [time] P.M. on [date], (ii) the Company has no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC, and (iii) the Purchase Shares and Commitment Shares are available for sale under the 1933 Act pursuant to the Registration Statement and may be issued without any restrictive legend.

 

 

	
 
    	
Very truly   yours,
    
	
 
    	
 
    
	
 
    	
 
    	
 
    

 

cc:         Aspire Capital Fund, LLC

 

 

EXHIBIT B

 

TO REGISTRATION RIGHTS AGREEMENT

 

Information About The Buyer Furnished To The Company By The Buyer

Expressly For Use In Connection With The Registration Statement

 

As of the date of the Purchase Agreement, Aspire Capital beneficially owned zero shares of common stock of the Company.  Steven G. Martin, Erik J. Brown and Christos Komissopoulos, the principals of Aspire Capital, are deemed to be beneficial owners of all of the shares of common stock owned by Aspire Capital.  Messrs. Martin, Brown and Komissopoulos have shared voting and investment power over the shares being offered under the prospectus filed with the SEC in connection with the transactions contemplated under the Purchase Agreement.  Aspire Capital is not a licensed broker dealer or an affiliate of a licensed broker dealer.

 

 

PLAN OF DISTRIBUTION

 

The common stock may be sold or distributed from time to time by the selling stockholder directly to one or more purchasers or through brokers, dealers, or underwriters who may act solely as agents at market prices prevailing at the time of sale, at prices related to the prevailing market prices, at negotiated prices, or at fixed prices, which may be changed. The sale of the common stock offered by this prospectus may be effected in one or more of the following methods:

 

	
·
    	
ordinary brokers’   transactions;
    
	
 
    	
 
    
	
·
    	
transactions   involving cross or block trades;
    
	
 
    	
 
    
	
·
    	
through brokers,   dealers, or underwriters who may act solely as agents;
    
	
 
    	
 
    
	
·
    	
“at the market”   into an existing market for the common stock;
    
	
 
    	
 
    
	
·
    	
in other ways not   involving market makers or established business markets, including direct   sales to purchasers or sales effected through agents;
    
	
 
    	
 
    
	
·
    	
in privately   negotiated transactions; or
    
	
 
    	
 
    
	
·
    	
any combination   of the foregoing.
    

 

In order to comply with the securities laws of certain states, if applicable, the shares may be sold only through registered or licensed brokers or dealers. In addition, in certain states, the shares may not be sold unless they have been registered or qualified for sale in the state or an exemption from the registration or qualification requirement is available and complied with.

 

The selling stockholder may also sell shares of common stock under Rule 144 promulgated under the Securities Act, if available, rather than under this prospectus. In addition, the selling stockholder may transfer the shares of common stock by other means not described in this prospectus.

 

Brokers, dealers, underwriters, or agents participating in the distribution of the shares as agents may receive compensation in the form of commissions, discounts, or concessions from the selling stockholder and/or purchasers of the common stock for whom the broker-dealers may act as agent. Aspire Capital has informed us that each such broker-dealer will receive commissions from Aspire Capital which will not exceed customary brokerage commissions.

 

 

The selling stockholder and its affiliates have agreed not to engage in any direct or indirect short selling or hedging of our common stock during the term of the Purchase Agreement.

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