FIRST AMENDMENT TO THE SENIOR SECURED
PROMISSORY NOTE, WARRANTS, AND SECURITIES
PURCHASE AGREEMENT DATED MARCH 11, 2021
THIS FIRST AMENDMENT to the Note (as defined below), Warrants (as defined below), and SPA (as defined below) (the “Amendment”) is entered into on August 13, 2021 (the “Effective Date”), by and between Nexgel, Inc., a Delaware corporation (the “Company”), and Auctus Fund, LLC, a Delaware limited liability company (the “Holder”) (each the Company and the Holder a “Party” and collectively the “Parties”).
A.The Company and Holder are the parties to that certain securities purchase agreement (the “SPA”) dated March 11, 2011, pursuant to which the Company issued to Holder a senior secured promissory note on even date in the original principal amount of $1,500,000.00 (as amended from time to time, the “Note”), the Warrants (as defined in the SPA) (the “Warrants”), the Registration Rights Agreement (as defined in the SPA) (the “Registration Rights Agreement”) and the Security Agreement (as defined in the SPA) (the “Security Agreement”); and
B. The Company is contemplating an additional private placement financing of no less than $1,500,000 and no more than $2,500,000 (the “August Financing”), and the Holder has agreed to enter into the lock-up agreement attached hereto as Exhibit A (the “Lock-Up Agreement”) in connection with the Company’s consummation of the August Financing; and
The Parties desire to amend the Note, Warrants, and SPA as set forth expressly below.
NOW THEREFORE, in consideration of the execution and delivery of the Amendment and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1.The Company’s obligations under Section 4(d) of the SPA shall terminate with no further action required by the Company or the Holder on the date that the Company consummates an Uplist Offering (as defined in the SPA) (the “Uplist Offering”).
2.The Company’s obligations under Section 4(p) of the SPA shall terminate with no further action required by the Company or the Holder on the Post Lock-Up Termination Date (as defined in this Amendment), so long as the Company’s common stock is listed for trading on the NASDAQ Stock Market, the New York Stock Exchange, the NYSE American, or any other national securities exchange on the Post Lock-Up Termination Date. The “Post Lock-Up Termination Date” shall mean the date that is one hundred and twenty (120) calendar days after the date that the Holder is no longer subject to any restrictions under the Lock-Up Agreement. For the avoidance of doubt, any adjustments that have occurred under Section 4(p) of the SPA prior to the termination of Section 4(p) of the SPA shall remain in full force and effect at all times, including after the Company’s obligations under Section 4(p) of the SPA have terminated.
3.Section 4(g) of the SPA shall be replaced in its entirety with the following:
“(g) Listing. The Company will, beginning on October 31, 2021 and continuing so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on a Principal Market or any equivalent replacement exchange or electronic quotation system (including but not limited to the Pink Sheets electronic quotation system) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the Principal Market and any other exchanges or electronic quotation systems on which the Common Stock is then traded regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.”
4.Section 3.18 of the Note shall be replaced in its entirety with the following:
“3.18 Delisting, Suspension, or Quotation of Trading of Common Stock. If, at any time on or