Exhibit 10.1

535 W 24th Street

New York, NY 10011

 

 

 

Emmaus Life Sciences, Inc.

21250 Hawthorne Blvd., Ste 800

Torrance, CA 90503

 

February 28, 2018

 

Re:  Payoff Letter

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Securities Purchase and Security
Agreement, dated December 29, 2017 (the “Loan Agreement”), by and between Emmaus
Life Sciences, Inc., a Delaware corporation (the “Company”), and GPB Debt
Holdings II, LLC (“GPB”).  The Company has requested payoff instructions with
respect to the repayment in full of the indebtedness and all other obligations
including but not limited to principal, accrued and unpaid interest, fees, costs
and expenses (collectively, the “Obligations”) under the Loan Agreement as of
the date hereof; the only indebtedness owing by the Company to GPB is under the
Loan Agreement.  Capitalized terms not defined herein shall have the meaning as
set forth in the Loan Agreement.

 

We hereby agree with the Company and confirm, as follows:

 

1.Notwithstanding anything in the Loan Agreement to the contrary, but solely to
the extent received by GPB on or prior to February 28, 2018 (the “Proposed
Payoff Date”), the aggregate amount, in U.S. dollars and immediately available
funds, required to payoff the Obligations of the Company under the Loan
Agreement on the Proposed Payoff Date, will be $13,409,347.51 (the “Payoff
Amount”).  If GPB does not receive funds in an amount sufficient to repay the
Payoff Amount in full on the Proposed Payoff Date, additional interest and fees
shall accrue and be payable in the amount of U.S. $4,882.22 per day (the “Per
Diem Amount”) until the Payoff Amount and accrued Per Diem Amounts, if any, are
paid in full (such date, the “Payoff Date”). The Payoff Amount must be received
by GPB, in U.S. dollars and immediately available funds, by 4:30 p.m. New York
time on the Proposed Payoff Date in order for the Company to avoid the accrual
of the Per Diem Amounts.

 

2.Payment of the Payoff Amount and the Per Diem Amounts, if any, shall be made
by a wire transfer to GPB, as follows:

 

Bank:  Signature Bank                            

Bank Address:  Forest Hills, NY                               

ABA Routing Number:  026 013 576                                   

Beneficiary Name:  GPB Debt Holdings II, LLC                          

Beneficiary Account:  1502521701                     

Page 1

 

--------------------------------------------------------------------------------

 

 

 

3.Upon GPB’s receipt of the Payoff Amount (together with any applicable Per Diem
Amount) on the Payoff Date, all outstanding indebtedness and other amounts of
the Company and/or any of its Subsidiaries owed to GPB pursuant to the Loan
Agreement (including, without limitation and for the avoidance of doubt, the
Obligations) shall automatically be deemed paid in full without any further
action by any party and neither the Company nor any of its Subsidiaries shall
have any remaining outstanding indebtedness owed to GPB pursuant to the Loan
Agreement, and GPB hereby agrees to execute and deliver such further instruments
and documents requested by the Company from time to time for the purpose of
effectuating the intent of this letter.

 

4.Upon GPB’s receipt of the Payoff Amount, GPB agrees that the Loan Agreement
and all other Transaction Documents, other than the Initial Warrant and the
Registration Rights Agreement, shall automatically be terminated without any
further action by any party, (ii)  all commitments of GPB to extend credit under
the Loan Agreement, including under the Escrow Agreement, shall be terminated,
(iii) all guarantees provided under the Loan Agreement or any other Transaction
Document shall automatically be terminated and (iv) any security interest or
lien granted under or pursuant to any Transaction Document in any personal
property or real property securing amounts evidenced by the Transaction
Documents shall automatically terminate and be of no further force and effect.
Further, upon and after GPB’s receipt of the Payoff Amount, GPB hereby
(a) agrees to promptly prepare, execute and deliver any such lien releases,
mortgage releases, discharges of security interest, pledges and guarantees and
other similar discharge or release documents, as may be requested by Borrower to
release, as of record, the security interests and all notices of security
interests and liens previously filed by GPB, (b) authorizes the Company to file,
publish, and/or otherwise deliver the same (including, for the avoidance of
doubt, UCC-3 financing statement terminations substantially in the form attached
hereto as Exhibit A), and to deliver to any person a copy of this letter or any
other termination or release deemed by the Borrower to be necessary or
appropriate to evidence (and/or reflect on public record) the termination and
release of all security interests and liens under the Transaction Documents,
including termination of the IP Security Agreement for recording with the U.S.
Patent and Trademark Office, (c) agrees to promptly deliver to the Company all
instruments evidencing pledged debt and all equity certificates and any other
similar collateral previously delivered in physical form by the Company to GPB
under the Transaction Documents, and hereby authorizes the Company or its
designee to cancel all such instruments of indebtedness and assignments or
pledges of collateral; and (d) agrees to promptly deliver to the Escrow Agent a
notice of termination of the Escrow Agreement and instructions to release the
Escrow Funds to GPB and release the Escrow Note and Escrow Warrant to the
Company.

 

5.For and in consideration of the agreements of GPB contained herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company hereby forever releases and discharges GPB,
each of its respective officers, directors, employees, agents, affiliates,
representatives, successors and assigns (collectively, the “GPB Released
Parties”) from any and all claims, causes of actions, damages and liabilities of
any nature whatsoever, known or unknown, which the Company ever had, now has or
might hereafter have against one or more of GPB Released Parties which relates,
directly or indirectly, to the Loan Agreement or any of the other Transaction
Documents or the transactions relating

Page 2

 

--------------------------------------------------------------------------------

 

 

thereto, to the extent that any such claim, cause of action, damage or liability
shall be based in whole or in part upon facts, circumstances, actions or events
existing on or prior to the Payoff Date. For avoidance of doubt, the foregoing
release shall not apply to GPB’s obligations under this letter.

This letter and the Transaction Documents constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and supersede all
prior negotiations, letters and understandings relating to the subject matter
hereof and are fully binding on the parties.  

This letter may be executed simultaneously in any number of counterparts.  Each
counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument.  This letter may be executed and
accepted by facsimile signature and any such signature shall be of the same
force and effect as an original signature.  

The terms of this letters hall be binding upon and shall inure to the benefit of
each of the Company and GPB and their respective successors and assigns.  

This letter may not be amended or modified except in writing signed by each of
the Company and GPB.

All questions concerning the construction, validity, enforcement and
interpretation of this letter shall be governed by the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, 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 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 letter
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.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  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 with or arising out of this letter or any
transaction contemplated hereby.

 

Page 3

 

--------------------------------------------------------------------------------

 

Each party hereto acknowledges that, in view of the uniqueness of the
transactions contemplated by this letter, the other parties hereto will not have
an adequate remedy at law for money damages in the event that this letter is not
performed in accordance with its terms, and therefore agrees that such other
parties shall be entitled to specific enforcement of the terms hereof in
addition to any other remedy to which they may be entitled, at law or in equity.

Very truly yours,

 

GPB Debt Holdings II, LLC

 

By:

  /s/ Evan Myrianthopoulos
Name: Evan Myrianthopoulos
Title: Managing Partner

 

 

ACKNOWLEDGED AND AGREED:

 

EMMAUS LIFE SCIENCES, INC.

By:

/s/ Yutaka Niihara
Name: Yutaka Niihara
Title: CEO

 

 

 

Page 4

 

--------------------------------------------------------------------------------

 

 

Exhibit A

 

[see attached]

Page 5