SECOND AMENDMENT TO LOAN AND
SECURITY AGREEMENT
T HIS S
ECOND A MENDMENT TO L
OAN AND S
ECURITY A GREEMENT (this “Amendment”) is entered into as
of June 23, 2008 (the “Amendment Date”), by and among
EPICEPT CORPORATION, a Delaware corporation
(“EpiCept”), and MAXIM PHARMACEUTICALS INC., a Delaware
corporation (“Maxim”; EpiCept and Maxim are sometimes
referred to individually as a “Borrower” and
collectively as the “Borrowers”) and HERCULES
TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation
(“Lender”).
R ECITALS
A. Borrowers and Lender are parties to that certain
Loan and Security Agreement, dated as of August 30, 2006, as
amended by a First Amendment to Loan and Security Agreement dated
as of May 5, 2008 (the “First Amendment” and, as
amended by the First Amendment, the “Agreement”).
Unless otherwise defined herein, capitalized terms in this
Amendment shall have the meanings assigned in the
Agreement.
B . The parties
desire to amend the Agreement, as set forth in this
Amendment.
N OW , T
HEREFORE , the parties agree as follows:
1. Lender irrevocably waives any and all of the
Borrowers’ obligations in Paragraph 4 of the First
Amendment.
2. Lender acknowledges that, after giving effect to
the waiver in Paragraph 1 of this Amendment, no Event of Default
has occurred as of the date hereof.
3. Upon receipt of the proceeds from the Purchase
Agreement between EpiCept and the purchasers named therein in
connection with the direct placement of common stock and warrants
to be entered into contemporaneously with the execution of this
Amendment (the “Purchase Agreement”), Borrowers shall
pay Lender $500,000 (which may be paid from Borrower’s
restricted account and which restricted account may be dissolved
after payment), which Lender shall apply first to any outstanding
interest, and then to the last principal installments owing under
the Agreement. Lender agrees that after such payment Borrower shall
have no further obligation to maintain any funds in such restricted
account.
4. After giving effect to the payment specified in
Paragraph 3 hereof, the outstanding principal balance under the
Agreement is $4,873,735. From the date hereof, $1,000,000 of the
outstanding principal balance shall be deemed the “Bridge
Tranche”. All Obligations shall bear interest at a rate equal
to 15% from the date hereof. Borrower shall pay Lender $200,000 in
partial repayment of the Bridge Tranche on the earliest to occur of
(i) an equity raise by the Borrower in which the Borrower receives
net proceeds equal to or greater than $5,000,000, (ii) the date
that all amounts under the Agreement become due and payable,
whether by acceleration or otherwise, and (iii) August 15, 2008.
Borrower shall pay Lender the remaining principal balance of the
Bridge Tranche and any accrued and unpaid interest on the earliest
to occur of (i) an equity raise by the Borrower in which the
Borrower receives net proceeds equal to or greater tha
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