Document:

Exhibit 10.1

 

 

 

 

 

VIA ELECTRONIC MAIL AND HAND DELIVERY

 

October 1, 2018

 

Jeffrey Davis

36 Lake End Road

Newfoundland, NJ 07435

 

Dear Jeffrey:

 

This letter of agreement and general release (“Agreement”)
confirms our mutual agreement regarding the terms and conditions of your separation from employment with Abeona Therapeutics, Inc.
(the “Company”). You and the Company agree as follows:

 

		1.	Separation Date; Transition Period - Provided you sign this Agreement, your effective date of separation from
the Company will be November 2, 2018 (the “Separation Date”), unless your employment is terminated earlier as addressed
below. The period between the date of this Agreement and the Separation Date will be a transition period (the “Transition
Period”), during which time you agree to reasonably assist the Company with the transition of your job duties and to perform
any other transition duties as may be reasonably requested by the Company (it being understood and agreed that such assistance
will not require any travel or a material amount of your time) (collectively, the “Transition Duties”). The Company
shall maintain, at the Company’s cost and expense, your current level of benefits (health/medical and any other applicable
benefits) and salary at all times during the Transition Period.

 

		2.	Compensation/Severance Benefits

 

		(a)	The Company will pay your current annual base salary through the Separation Date in accordance with the Company’s usual
payroll guidelines and practices.

 

		(b)	On the next payroll date following the Separation Date, you will be paid an amount equal $98,438 in respect of to your prorated
target bonus for 2018.

 

		(c)	You will further be paid for any accrued but unused vacation days, and will be reimbursed for previously submitted, but un-reimbursed,
business expenses in accordance with the Company’s usual guidelines and practices.

 

		(d)	Following your Separation Date, provided that: (i) you have satisfactorily performed the Transition Duties set forth in Paragraph
1 in all material respects

 

    

    
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and complied with your other obligations
under this Agreement in all material respects (it being understood and agreed that the Company will provide you written notice
of any such non-compliance and that you will be deemed to have complied with any such obligations if you cure such non-compliance,
if curable, within five (5) days following the receipt of such notice); (ii) you have executed this Agreement on or before October
3, 2018, and you did not exercise your right to revoke during the 7-day revocation period specified in Paragraph 9; and (iii) you
execute a final release in a form substantially similar to Attachment A (the “Final Release”) on, and not before, the
Separation Date, and you do not exercise your right to revoke during the 7-day revocation period specified in Attachment A, in
consideration for your release and waiver of claims and other commitments set forth herein and in Attachment A:

 

		(i)	The Company will pay you severance pay in the form of a forty-seven (47) week continuation of your base salary, less all applicable
state and federal taxes and withholdings. The severance pay will be paid as salary continuation in accordance with the Company’s
normal payroll practices, but in no event shall payment begin prior to the Separation Date or earlier than the eighth (8th) day
after your execution and timely return of the Final Release.

 

		(ii)	The Company shall make a lump-sum payment within 30 days following the Separation Date equal to the COBRA premiums that you
would pay if you elected continued health coverage under the Company’s health plan for you and your dependents for the 12-month
period following the Separation Date, based on the COBRA rates in effect at the Separation Date.

 

		(e)	You will be entitled to receive your vested accrued benefits, if any, under the Company’s 401(k) plan in accordance with
the terms and conditions of such plan.

 

You will not be eligible for, nor shall you have a
right to receive, any payments from the Company following the Separation Date other than, as applicable, the amounts set forth
in subparagraphs (a), (b), (c), (d) and (e) above.

 

		3.	Release – In consideration of your continued employment with the Company through the Transition Period
and your eligibility to receive payment of the severance benefits described in Paragraph 2, both of which you acknowledge you would
not otherwise be entitled to receive, you waive, subject to Paragraph 3a below, all claims available under federal, state or local
law against the Company and the directors, officers, employees, employee benefit plans and agents of the Company arising out of
your employment with the Company or the termination of that employment, including but not limited to all claims arising under the
Americans with Disabilities Act, the Age Discrimination in Employment Act, the Civil Rights Act of 1991, the Employee Retirement
Income Security Act (“ERISA”), the Equal Pay Act, the Genetic Information Non-discrimination Act, the Family and Medical
Leave Act, Section 1981 of U.S.C, Title VII of the Civil Rights Act; the New York State Human Rights Law, the New York State Executive
Law, the New York State Civil Rights Law, the retaliation provisions of the New York State Workers' Compensation Law, the New York
Labor Law, the New York City Human Rights Law, and the New York City Administrative Code; as well as wrongful termination claims,
breach of contract claims, discrimination claims, harassment claims, retaliation claims, whistleblower claims (to the fullest extent
they may be released under applicable law), defamation or other tort claims, and claims for attorneys’ fees and costs.

 

    

    
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		a.	The only claims not being waived, released and discharged by this Agreement are (i) those that relate to your rights and remedies
under this Agreement, (ii) any rights to indemnification exculpation and/or contribution to which you are entitled as of the date
hereof pursuant to the Company’s and its affiliates organizational documents, any indemnification or similar agreement or
applicable law (and any rights under any insurance policies of the Company or its affiliates), and (iii) those that cannot be waived
as a matter of applicable law; any claims you may have to government-sponsored and administered benefits such as unemployment insurance,
workers’ compensation insurance (excluding claims for retaliation under workers’ compensation laws), state disability
insurance and paid family leave insurance benefits; and any benefits that vested on or prior to the Separation Date pursuant to
a written benefit plan sponsored by the Company and governed by the ERISA.

 

		b.	Nothing in this Agreement prevents you from filing a charge with, cooperating with, or participating in any proceeding before
the Equal Employment Opportunity Commission or a state fair employment practices agency (except that you acknowledge that you may
not recover any monetary benefits or personal relief in connection with any such claim, charge or proceeding).

 

		c.	You hereby represent that you have not instituted, assisted or otherwise participated in connection with, any action, complaint,
claim, charge, grievance, arbitration, lawsuit or administrative agency proceeding, or action at law or otherwise against the Company
or any other member of the Company or any of their respective shareholders, officers, employees, directors, shareholders or agents.

 

		4.	Post-Separation Obligations/Non-Disparagement - Subject to Paragraph 5, you acknowledge and reaffirm your obligation
to keep confidential and not to disclose any and all non-public information concerning the Company that you acquired during the
course of your employment with the Company, including, but not limited to, any non-public information concerning the Company’s
business affairs, business prospects and financial condition. You agree that you will not make any public statement intended to
disparage the Company. The Company agrees that it will not issue or authorize any public statement intended to disparage you.

 

    

    
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		5.	Disclosure Exceptions - Nothing in this Agreement or the Final Release shall prohibit or restrict you from lawfully
(A) initiating communications directly with, cooperating with, providing information to, causing information to be provided to,
or otherwise assisting in an investigation by any governmental or regulatory agency, entity, or official(s) (collectively, “Governmental
Authorities”) regarding a possible violation of any law; (B) responding to any inquiry or legal process directed to you individually
(and not directed to the Company and/or its subsidiaries) from any such Governmental Authorities; (C) testifying, participating
or otherwise assisting in an action or proceeding by any such Governmental Authorities relating to a possible violation of law;
or (D) making any other disclosures that are protected under the whistleblower provisions of any applicable law. Additionally,
pursuant to the federal Defend Trade Secrets Act of 2016, you shall not be held criminally or civilly liable under any federal
or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local
government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating
a suspected violation of law; or (b) is made to your attorney in relation to a lawsuit for retaliation against you for reporting
a suspected violation of law; or (c) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing
is made under seal. Nor does this Agreement require you to obtain prior authorization from the Company before engaging in any conduct
described in this paragraph, or to notify the Company that you have engaged in any such conduct.

 

		6.	Amendment - This Agreement and the Final Release shall be binding upon the parties and may not be modified in
any manner, except by an instrument in writing of concurrent or subsequent date signed by the parties hereto or their duly authorized
representatives. This Agreement and the Final Release are binding upon and shall inure to the benefit of the parties and their
respective agents, assigns, heirs, executors, successors and administrators.

 

		7.	Confidentiality of this Agreement - Subject to Paragraph 5, you understand and agree that in exchange for the
consideration set forth above, both during the Transition Period and thereafter, the terms and conditions of this Agreement, the
Final Release, and the contents of any negotiations and discussions resulting in this Agreement and the Final Release, shall be
maintained as confidential by you and your agents and representatives and shall not be disclosed to any third party except (i)
to the extent required by federal or state law or otherwise agreed to in writing by the Company or (ii) in connection with the
enforcement of your rights under this Agreement; provided that you and the Company shall be entitled to make third parties (including
your prospective employers) aware of this Agreement and your obligations under this Agreement (including those set forth in Paragraph
14 hereof).

 

		8.	Nature of Agreement - You understand and agree that this Agreement and the Final Release represent a severance
agreement and do not constitute an admission of liability or wrongdoing on the part of the Company.

 

		9.	Acknowledgments - You acknowledge that you are being provided at least twenty-one (21) days to consider this
Agreement, including all attachments hereto, and that the Company hereby advises you to consult with an attorney of your own choosing
prior to signing this Agreement. You understand that you may revoke this Agreement for a period of seven (7) days after execution,
and the Agreement shall not be effective or enforceable until the expiration of this seven (7) day period. You understand and agree
that by entering into this Agreement you are waiving any and all rights or claims you may have under the Age Discrimination in
Employment Act, as amended by the Older Workers Benefit Protection Act, and that you have received consideration beyond that to
which you were previously entitled. You agree that changes to this Agreement, whether material or immaterial, do not restart the
running of the 21-day consideration period.

 

    

    
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		10.	Taxes – All payments hereunder will be subject to applicable deductions and withholdings. You shall bear
all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under
this Agreement. This Agreement shall be interpreted to avoid any penalty sanctions under Section 409A of the Internal Revenue Code
(the “Code”). If any payment or benefit cannot be provided or made at the time specified herein without incurring
sanctions under Section 409A of the Code, then such benefit or payment shall be provided in full (to extent not paid in part at
earlier date) at the earliest time thereafter when such sanctions will not be imposed. For purposes of Section 409A of the Code,
all payments to be made upon a termination of employment under this Agreement may only be made upon the your “separation
from service” (within the meaning of such term under Section 409A of the Code) and each payment made under this Agreement
shall be treated as a separate payment. In no event shall you, directly or indirectly, designate the calendar year of payment,
except as permitted under Section 409A of the Code.

 

		11.	Further Cooperation – You agree that, during and after the term of this Agreement, you will make yourself
available, upon reasonable notice and under reasonable conditions, to assist the Company in any capacity with respect to matters
of which you were involved or had knowledge while employed by the Company. To that end, you agree to cooperate with the Company
in connection with any pending or future investigation or pending or threatened litigation matters, lawsuits or administrative
proceedings in which the Company believes you are an individual with knowledge concerning the subject thereof. In particular, but
without limitation, you agree to make yourself available for meetings, interviews, depositions, and court appearances, as reasonably
requested by the Company, and to otherwise reasonably assist the Company in connection with any such investigation or litigation,
or other proceedings. You also agree to provide the Company with any and all documents which may be in your possession that may
concern the subject matter of any pending or future investigation or litigation. You understand that the Company will reimburse
you for all reasonable, documented out-of-pocket expenses incurred as a result of my obligations under this paragraph in accordance
with the Company’s then-applicable Expense Guidelines.

 

		12.	Exercise of Stock Options – You understand that you are not entitled to any future grants of stock or stock
options. In accordance with the Stock Option Agreement and Prospectus, you understand that up to and including the Separation Date,
all stock options that have vested as of the Separation Date, if any, must be exercised by the earlier of 12 months of the Separation
Date or the expiration of the option. You further understand that following the Separation Date, all stock options that vested
as of the Separation Date, if any, must be exercised within 12 months of the Separation Date. You further understand that upon
death or disability, all stock options that have vested as of the Separation Date, if any, must be exercised within twelve months
of said death or disability.

 

    

    
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		13.	Agreement Not to Seek Rehire – You agree that, without prior written Company approval, you will
not seek or accept employment with the Company (including all subsidiaries and affiliates), including assignment to or on behalf
of the Company as an independent contractor or through any third party, and the Company has no obligation to consider you for any
future employment or assignment.

 

		14.	Restrictive Covenants

 

		(a)	Non-Competition – In consideration for the promises made by the Company herein, you agree that you shall
not, during the 47 week period after the Separation Date (the “Restriction Period”), directly or indirectly, own, manage,
operate, join, control, be employed by, or participate in the ownership, management, operation or control of, or be connected in
any manner with, including, without limitation, holding any position as a stockholder, director, officer, consultant, independent
contractor, employee, partner, or investor in, any Restricted Enterprise (as defined below); provided, that in no event shall ownership
by you of two percent (2%) or less of the outstanding securities of any class of any issuer whose securities are registered under
the Securities Exchange Act of 1934, as amended, standing alone, be prohibited by this Paragraph 14, so long as you do not have,
or exercise, any rights to manage or operate the business of such issuer other than rights as a stockholder thereof. For purposes
of this paragraph, “Restricted Enterprise” shall mean any person or entity that, on the Separation Date, is engaged,
directly or indirectly, in a business of developing or commercializing biopharmaceutical therapies for those therapeutic indications
that the Company or its subsidiaries has either commercialized products or programs in pre-clinical or clinical development or
has undertaken material efforts to so engage on the Separation Date, in any country or territory in which on the Separation Date
the Company or any of its affiliates markets any of its services or products or has material plans to begin marketing any of its
services or products in such country or territory; provided, that if such business of any such person or entity which otherwise
would be a Restricted Enterprise is immaterial to the other businesses of such person or entity and part of a separate division
or subsidiary from that which you are then employed, then such person or entity shall not be deemed to be a Restricted Enterprise.

 

		(b)	Non-Solicitation of Employees – During the Restriction Period, you shall not directly or indirectly, hire,
contact, recruit, induce or solicit (or assist any person to hire, contact, induce or solicit) for employment or other services
any person who is, or within twelve (12) months prior to the date of such hiring, contacting, inducing or solicitation was, an
employee, independent contractor, or consultant of the Company or any of its subsidiaries. For purposes of this Paragraph 14, independent
contractors and consultants refer to such persons, companies, or entities that on or prior to the Termination Date performed services
related to the business of the Company.

 

    

    
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		(c)	Non-Solicitation of Customers – During the Restriction Period, you shall not directly or indirectly, solicit,
contact (including but not limited to e-mail, regular mail, express mail, telephone, fax, and instant message), attempt to contact,
or meet with the Company’s current, former, or prospective customers for purposes of offering or accepting goods or services
for Restricted Enterprises or cause any such customer to terminate or diminish their commercial relationship with the Company.
For purposes of this Agreement, a “prospective customer” is any person or entity with whom the Company is or was engaged
in material communications with respect to potential business transactions at the time of employment termination or six (6) months
prior to date of the Termination Date.

 

		15.	Entire Agreement – This Agreement sets forth the entire agreement and understanding of the parties hereto
with respect to the matters covered hereby and supersedes and replaces any express or implied prior agreement with respect to the
terms of your employment and the termination thereof which you may have had with the Company (including, without limitation, the
Retention Agreement (other than Section 3 thereof, which will remain in full force and effect)). This Agreement may be amended
only by a written document signed by the parties hereto.

 

		16.	Voluntary Assent – You affirm that you have read this Agreement, and understand all of its terms, including
the full and final release of claims set forth in Paragraph 3. You further acknowledge that you have voluntarily entered into this
Agreement; that you have not relied upon any representation or statement, written or oral, not set forth in this Agreement; that
the only consideration for signing this Agreement is as set forth herein; and that this document gives you the opportunity and
encourages you to have this Agreement reviewed by your attorney and/or tax advisor.

 

		17.	Waiver – The failure of either party to this Agreement to enforce any of its terms, provisions or covenants
will not be construed as a waiver of the same or of the right of such party to enforce the same. Waiver by either party hereto
of any breach or default by the other party of any term or provision of this Agreement will not operate as a waiver of any other
breach or default.

 

		18.	Severability – In the event that any provision of this Agreement is held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remainder of this Agreement will not in any way be affected or impaired thereby.
If any provision of this Agreement is held to be excessively broad as to duration, activity or subject, such provision will be
construed by limiting and reducing it so as to be enforceable to the maximum extent allowed by applicable law.

 

		19.	Counterparts – This Agreement may be executed in one or more counterparts, which together will constitute
one and the same agreement.

 

    

    
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		20.	Notices – All notices, demands, requests or other communications which may be or are required to be given,
served, or sent by a party pursuant to this Agreement shall be in writing and shall be hand delivered (including delivery by courier),
mailed by first-class, registered or certified mail, return-receipt requested, postage prepaid, or transmitted by telegram, telex
or facsimile transmission, addressed as follows:

 

If to the
Company:

 

Abeona Therapeutics

1330 Avenue
of the Americas

New York,
NY 10019

Attention:
Kristina Maximenko, HR

Telephone:
(781) 267-4056

Email: kmaximenko@abeonatherapeutics.com

 

If to you:

 

At your address
on file with the Company.

 

Each party may designate by notice
in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent

 

		21.	Applicable Law - This Agreement shall be governed by the laws of New York without reference to that jurisdiction's
choice of law rules.

 

 

If you have any questions about the matters covered
in this Agreement, please contact me at (203) 747 0604.

 

Very truly yours,

 

Abeona Therapeutics, Inc.

 

 

By:   /s/ Carsten Thiel_____________________________________

 

F. Carsten Thiel, Ph.D.

Chief Executive Officer

 

 

    

    
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I hereby agree to the terms and conditions set forth
above. I intend that this Agreement become a binding agreement between me and the Company. I further understand that payment of
the consideration and other benefits described herein is conditioned upon my timely execution, return and non-revocation of this
Agreement and the Final Release.

 

	 	 	 
	 	 	 
	 	/s/ Jeffrey
    Davis	Date  10/01/18
	 	Jeffrey Davis	 

 

 

    

    
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ATTACHMENT A

 

FINAL RELEASE OF CLAIMS

 

		1.	Release - In consideration of the severance benefits set forth in the Agreement to which this Final Release of
Claims (the “Final Release”) is attached, which you acknowledge you would not otherwise be entitled to receive, you
waive, subject to the exceptions specified below, all claims available under federal, state or local law against the Company and
the directors, officers, employees, employee benefit plans and agents of the Company arising out of your employment with the Company
or the termination of that employment, including but not limited to all claims arising under the Americans with Disabilities Act,
the Age Discrimination in Employment Act, the Civil Rights Act of 1991, the Employee Retirement Income Security Act (“ERISA”),
the Equal Pay Act, the Genetic Information Non-discrimination Act, the Family and Medical Leave Act, Section 1981 of U.S.C, Title
VII of the Civil Rights Act; the New York State Human Rights Law, the New York State Executive Law, the New York State Civil Rights
Law, the retaliation provisions of the New York State Workers' Compensation Law, the New York Labor Law, the New York City Human
Rights Law, and the New York City Administrative Code; as well as wrongful termination claims, breach of contract claims, discrimination
claims, harassment claims, retaliation claims, whistleblower claims (to the fullest extent they may be released under applicable
law), defamation or other tort claims, and claims for attorneys’ fees and costs.

 

The only claims not being waived,
released and discharged by this Final Release are (i) those that relate to your rights and remedies under this Agreement, (ii)
any rights to the indemnification exculpation and/or contribution to which you are entitled as of the date hereof pursuant to the
Company’s and its affiliates organizational documents, any indemnification or similar agreement or applicable law (and any
rights under the insurance policies of the Company or its affiliates) and (iii) those that cannot be waived as a matter of applicable
law; any claims you may have to government-sponsored and administered benefits such as unemployment insurance, workers’ compensation
insurance (excluding claims for retaliation under workers’ compensation laws), state disability insurance and paid family
leave insurance benefits; and any benefits that vested on or prior to the Separation Date pursuant to a written benefit plan sponsored
by the Company and governed by ERISA.

 

Nothing in this Final Release prevents
you from filing a charge with, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission
or a state fair employment practices agency (except that you acknowledge that you may not recover any monetary benefits in connection
with any such claim, charge or proceeding).

 

    

    
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		2.	Business Expenses and Compensation - You acknowledge that you have been reimbursed by the Company for all business
expenses incurred in conjunction with the performance of your employment and that no other reimbursements are owed to you. You
further acknowledge that you have received payment in full for all services rendered in conjunction with your employment by the
Company and that no other compensation is owed to you except as provided in the Agreement.

 

		3.	Return of Company Property - You agree that you have returned all Company property, including but not limited
to keys, ID card, cell phone, PDA, thumb drive, and Company documents and information (either hard copy or electronic) other than
records related solely to your own compensation or benefits. To the extent you have any Company material or information stored
on any personal electronic devices, you represent and warrant that you have destroyed all such information currently known to you
(subject to any litigation preservation directive then in effect) and that you will cooperate with the Company to ensure the return
and permanent deletion of all such material and information discovered in the future.

 

		4.	Acknowledgments - You acknowledge that you are being provided twenty-one (21) days to consider this Final Release
and that the Company hereby advises you to consult with an attorney of your own choosing prior to signing this Final Release. You
understand that you may revoke this Final Release for a period of seven (7) days after you sign it by notifying me in writing,
and the Final Release shall not be effective or enforceable until the expiration of this seven (7) day revocation period. You understand
and agree that by entering into this Final Release, you are waiving any and all rights or claims you might have under the Age Discrimination
in Employment Act, as amended by the Older Workers Benefit Protection Act, and that you have received consideration beyond that
to which you were previously entitled.

 

		5.	Incorporation by Reference - This Final Release incorporates by reference, as if set forth fully herein, all
terms and conditions of the September 28, 2018 Agreement between you and the Company, including the recitation of consideration
provided by the Company. By signing this Final Release, you hereby waive, release and forever discharge any and all claims that
may have arisen through the date of your execution of this Final Release. You acknowledge that this Final Release is not intended
to otherwise change, alter or amend any of the terms and conditions of the September 28, 2018 Agreement, for which you received
adequate consideration, and which Agreement remains in full force and effect. You acknowledge and agree that you continue to be
bound by the terms and conditions of the September 28, 2018 Agreement.

 

 

    

    
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I hereby provide this Final Release as of the current date
and acknowledge that the execution of this Final Release is in further consideration of the severance benefits to which I acknowledge
I would not be entitled if I did not sign this Final Release. I intend that this Final Release become a binding agreement between
the Company and me if I do not revoke my acceptance in seven (7) days. 

	 	 	 	 
	 	 	 	 
	  	 	   	 
	Jeffrey Davis	 	Date	 

 

 

To be signed and returned within 21 days after the Separation
Date, but not before the Separation Date.EX-10.1

 Exhibit 10.1 

EXCHANGE AGREEMENT 
 This
EXCHANGE AGREEMENT (this “Agreement”) dated as of October 5, 2018, is by and among KemPharm, Inc., a Delaware corporation (the “Borrower”), Deerfield Private Design Fund III, L.P.
(“DPDF”) and Deerfield Special Situations Fund, L.P. (“DSS” and, together with DPDF, the “Purchasers”). Capitalized terms used but not otherwise defined in this Agreement shall have the meanings
given to them in the Indenture, dated as of February 9, 2016 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee. 

RECITALS: 
 A. The
Purchasers own an aggregate of $75,000,000 principal amount of the Borrower’s 5.50% Senior Convertible Notes due 2021 (the “Notes”). 

B. The Board of Directors of the Borrower has authorized the creation of a new series of Preferred Stock denominated as Series A Convertible
Preferred Stock (the “Series A Preferred Stock”) with the preferences, rights and limitations described in the Certificate of Designation of Preferences, Rights and Limitations of the Series A Preferred Stock, in the form attached
hereto as Exhibit A (the “Certificate of Designation”). 
 B. Pursuant to this Agreement (and subject to the terms and
conditions hereof), the Purchasers will exchange an aggregate of $9,577,000 of the principal amount of Notes (the “Exchanged Securities”) for the number of shares of Series A Preferred Stock set forth on Schedule 1 hereto (the
“Exchange Shares”) which Exchange Shares shall be convertible from time to time by the holder thereof, into shares of Common Stock, par value $0.0001 per share (“Common Stock”) of the Borrower (the
“Conversion Shares”). 
 C. The parties intend that the foregoing amendments and exchange of a portion of the Notes for
Series A Preferred Stock are part of, and pursuant to, a Plan of Recapitalization and Reorganization of the Borrower described in Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended (the “Code”). 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 

ARTICLE I. 
 EXCHANGE

 Section 1.01. Exchange. Subject to the terms and conditions hereof, each Purchaser hereby agrees to exchange the
Exchanged Securities for the issuance by the Borrower to such Purchaser of the Exchange Shares (the “Exchange”), as follows: 

(a) Issuance of Shares. Pursuant to the Exchange, the Exchanged Securities shall be exchanged for the number of Exchange Shares as set
forth on Schedule 1 hereto. 

 Section 1.02. Settlement.

(a) Upon effectiveness of the Exchange, which shall occur at or prior to 10:00 a.m. (New York time) on October 5, 2018, or such other date
and time as the parties hereto may mutually agree (subject to satisfaction (or waiver by the Purchasers) of the conditions set forth in Article V hereto), (i) the Purchasers shall assign and transfer all right, title and interest in and to
its Exchanged Securities to the Borrower, and deliver or cause to be delivered the Exchanged Securities to U.S. Bank National Association, as Trustee for the Notes (“Trustee”), by book-entry transfer through the facilities of The
Depositary Trust Company from the account(s) of the Purchasers, free and clear of any mortgage, lien, pledge, charge, security interest, encumbrance, title retention agreement, option, equity or other adverse claim thereto (collectively,
“Liens”) together with any customary documents of conveyance or transfer that the Borrower or Trustee may reasonably deem necessary or desirable to transfer to and confer in the Borrower all right, title and interest in and to the
Exchanged Securities; and (ii) the Borrower shall deliver to each Purchaser a certificate, duly executed on behalf of the Borrower and not bearing any restrictive legend, representing the number of Exchange Shares set forth across from such
Purchaser’s name on Schedule 1 hereto. 
 (b) Upon the consummation of the Exchange, (i) each Purchaser shall be deemed for all
corporate purposes to have become the legal, beneficial and record holder of the Exchange Shares; and (ii) the aggregate principal amount of the Exchanged Securities shall be deemed cancelled. 

(c) The parties acknowledge and agree that accrued and unpaid interest due to the Purchasers on the Exchanged Securities on the date hereof is
$95,104.93 in the aggregate (the “Accrued Interest”) and shall be paid in cash to the Purchasers as reflected on Schedule I on the date of the Exchange. For the avoidance of doubt, this Agreement does not affect any Notes not
exchanged pursuant to this Agreement. 
 ARTICLE II. 

REPRESENTATIONS AND WARRANTIES 

Section 2.01. Representations and Warranties of the Purchasers. Each Purchaser hereby represents and warrants to the Borrower as
of the date of this Agreement as follows: 
 (a) Organization and Good Standing. Such Purchaser is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as
currently conducted. 
 (b) Authority. Such Purchaser has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of each of this Agreement by such Purchaser and the consummation by it of the transactions contemplated hereby have been
duly authorized by all necessary action on the part of such Purchaser and no further action is required in connection herewith or therewith. 

  
 2 

 (c) Valid and Binding Agreement. This Agreement has been duly executed and delivered
by such Purchaser and constitutes the valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief
or other equitable remedies. 
 (d) Non-Contravention. The execution and delivery of this
Agreement by such Purchaser and the performance by such Purchaser of its obligations hereunder, does not and will not (i) violate any provision of such Purchaser’s certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which such Purchaser is subject, or by which any
of such Purchaser’s Notes is bound or affected except, in each instance of clauses (i) and (ii) hereof, where such violation or conflict would not reasonably be expected, individually or in the aggregate, to result in a material adverse
effect on the ability of such Purchaser to timely perform its obligations under this Agreement or the Certificate of Designation. 
 (e)
Exemption. Such Purchaser has held such Purchaser’s Notes of record and beneficially for a period of at least one (1) year for purposes of Rule 144 under the Securities Act and is not, and during the three-month period prior to the
date hereof has not been, an “affiliate” (as such term is used in Rule 144 under the Securities Act) of the Borrower. Such Purchaser understands that the Exchange Shares and the Conversion Shares are being offered, sold, issued and
delivered to it in reliance upon specific exemptions from registration or qualification under federal and applicable state securities laws. 

(f) Ownership of the Notes. Such Purchaser is the record and beneficial owner of, and has good and valid title to, such Purchaser’s
Exchanged Securities, free and clear of all Liens, and has full power to dispose thereof and to exercise all rights thereunder (other than as restricted by this Agreement or the Indenture (as defined below) and other than pledges or security
interests that such Purchaser may have created in favor of a prime broker under and in accordance with its prime brokerage account with such broker), without the consent or approval of, or any other action on the part of, any other Person. Other
than the transactions contemplated by this Agreement, there is no outstanding contract, vote, plan, pending proposal or other right of any Person to acquire such Purchaser’s Notes or any portion thereof. Such Purchaser has not, in whole or in
part, (a) assigned, transferred, hypothecated, pledged, exchanged or otherwise disposed of any of its Exchanged Securities or its rights in its Exchanged Securities, or (b) except, as would not materially and adversely affect the ability
of such Purchaser to consummate the transactions contemplated hereby, given any person or entity any transfer order, power of attorney or other authority of any nature whatsoever with respect to its Exchanged Securities. Upon such Purchaser’s
delivery of its Exchanged Securities to the Borrower pursuant to the Exchange, such Exchanged Securities shall be free and clear of all Liens created by such Purchaser. 

(g) Accredited Investor/Qualified Institutional Buyer. Such Purchaser is an “accredited investor” as that term is defined in
Rule 501(a) of Regulation D under the Securities Act. Such Purchaser is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act. Such Purchaser understands the economic risk of its investment in the
Shares, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Exchange Shares. 

  
 3 

 (h) Information. Such Purchaser acknowledges and agrees that (i) such Purchaser
has had the opportunity to review the Borrower’s SEC Reports (as defined below) and this Agreement (including the exhibits hereto), (ii) such Purchaser has had an opportunity to submit questions to the Borrower concerning the Borrower, its
business, operations, financial performance, financial condition and prospects, and the terms and conditions of the Exchange, and has all information that it considers necessary in making an informed investment decision, (iii) such Purchaser
has had the opportunity to consult with its accounting, tax, financial and legal advisors to be able to evaluate the risks involved in the Exchange and to make an informed investment decision with respect to such Exchange. Notwithstanding anything
to the contrary contained herein, the rights and remedies available to such Purchaser, neither any such review nor any due diligence investigation conducted by such Purchaser or its advisors, if any, or its representatives shall modify, amend or
otherwise affect such Purchaser’s right to rely on the representations and warranties of the Borrower contained in this Agreement. 

(i) No Illegal Transactions. Such Purchaser has not, directly or indirectly, and no person acting on behalf of or pursuant to any
understanding with it has, disclosed to a third party (other than to its legal and other representatives) any information regarding the Exchange or engaged in any transactions in the securities of the Company (including, without limitation, any
Short Sales (as defined below) involving any of the Company’s securities) since August 29, 2018. “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 of Regulation SHO promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps, derivatives and similar arrangements
(including on a total return basis), and sales and other transactions through non-U.S. broker-dealers or foreign regulated brokers. Solely for purposes of this Section 2.1(i), subject to such
Purchaser’s compliance with their respective obligations under the U.S. federal securities laws and such Purchaser’s respective internal policies, (a) such “Purchaser” shall not be deemed to include any employees,
subsidiaries or affiliates of such Purchaser that are effectively walled off by appropriate information barriers approved by such Purchaser’s respective legal or compliance department (and thus have not been privy to any information concerning
the Exchange), and (b) the foregoing representations and covenants of this Section 2.01(i) shall not apply to any transaction by or on behalf of an account of such Purchaser that was effected without the advice or participation of, or such
account’s receipt of information regarding the Exchange provided by, such Purchaser. 
 Section 2.02. Representations and
Warranties of the Borrower. The Borrower hereby represents and warrants to the Purchasers as of the date of this Agreement as follows: 

(a) Organization and Good Standing. The Borrower is an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. 

  
 4 

 (b) Authority. The Borrower has the requisite corporate power and authority, as
applicable, to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Borrower and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary action on the part of the Borrower, and no further action of the Borrower, its board of directors, managers, members or stockholders, as applicable, is required in
connection herewith or therewith. 
 (c) Consents. The Borrower is not required to obtain any consent from, authorization or order of,
or make any filing or registration with any governmental authority or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by this
Agreement, in accordance with the terms hereof or thereof, other than filing the Certificate of Designation with the Secretary of State of the State of Delaware and filing the 8-K Filing (as defined below)
with the U.S. Securities and Exchange Commission (the “Commission”). 
 (d) Valid and Binding Agreement. This
Agreement has been duly executed and delivered by the Borrower, and constitutes and, upon the filing thereof the Certificate of Designation, the Exchange Shares will constitute, the valid and binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general application affecting enforcement
of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. 

(e) Non-Contravention. The execution and delivery of this Agreement by the Borrower and the
performance by the Borrower of its obligations hereunder and under the Certificate of Designation do not (i) violate any provision of the Borrower’s organizational documents, (ii) conflict with or result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Borrower is subject, or by which any property or asset of the Borrower is bound or affected, (iii) require any
permit, authorization, consent, approval, exemption or other action by, notice to or filing with, any court or other federal, state, local or other governmental authority or other Person, other than filing the Certificate of Designation with the
Secretary of State of the State of Delaware and filing the 8-K Filing with the Commission, (iv) violate, conflict with, result in a material breach of, or constitute (with or without notice or lapse of
time or both) a material default under, or an event which would give rise to any right of notice, modification, acceleration, payment, cancellation or termination under, or in any manner release any party thereto from any obligation under, any
permit or contract to which the Borrower is a party or by which any of its properties or assets are bound, other than the Indenture, (v) violate, conflict with, result in a material breach of, or constitute (with or without notice or lapse of
time or both) a material default under, or an event which would give rise to any right of notice, modification, acceleration, payment, cancellation or termination under, or in any manner release any party thereto from any obligation under, the
Indenture, or (vi) result in the creation or imposition of any Lien on any part of the properties or assets of the Borrower, except, in each instance of clauses (ii), (iii), (iv) and (vi) hereof, where such violation, conflict, breach,
default or Lien would not reasonably be expected, individually or in the aggregate, to result in a material adverse effect on the business, operations, results of 

  
 5 

 
operations, condition (financial or otherwise) or properties of the Borrower and its Subsidiaries, taken as a whole, (b) the legality, validity or enforceability of any provision of this
Agreement or the Certificate of Designation, (c) the ability of the Borrower to timely perform its obligations under this Agreement or the Certificate of Designation, or (d) the rights and remedies of the Purchasers under this Agreement or
the Certificate of Designation. No Event of Default (as defined in the Indenture) under the Indenture exists as of the date hereof. 
 (f)
Issuance of Exchange Shares. The Exchange Shares are duly authorized and, when issued in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Borrower, and
will not be issued in violation of, or subject to, any preemptive or similar rights of any person. The Conversion Shares issuable upon conversion of the Exchange Shares, subject to the Beneficial Ownership Limitation (as defined in the Certificate
of Designation), are duly authorized and, when issued in accordance with the Certificate of Designation, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Borrower, and will not be issued in
violation of, or subject to, any preemptive or similar rights of any person. The Borrower has reserved from its duly authorized capital stock 3,192,334 shares of Common Stock for issuance hereafter upon conversion of the Exchange Shares, free and
clear of preemptive or similar rights. 
 (g) SEC Reports; Nasdaq. The Borrower has filed all reports, schedules, forms, statements
and other documents required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (the foregoing materials, including the exhibits
thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”). None of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Borrower is not in violation of the requirements of the Nasdaq Global
Market (“Nasdaq”) and has no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension of trading of the Common Stock in the foreseeable future. 

(h) Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by the Borrower or any of its affiliates or
representatives to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. The Purchasers shall have no obligation with respect to
any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 3.2(h) that may be due in connection with the transactions contemplated hereby. 

(i) Exemption from Registration. No registration under the Securities Act or any state securities laws is required for the offer and
issuance of the Exchange Shares by the Borrower to the Purchasers as contemplated hereby or for the offer and issuance of the Conversion Shares by the Borrower to the Purchasers as contemplated hereby and by the Certificate of Designation. The
amendments and transactions contemplated hereby, including the issuance and sale of the Exchange Shares hereunder and the issuance and sale of the Conversion Shares pursuant to the terms of the Certificate of Designation do not contravene, or
require stockholder approval pursuant to, the rules and regulations of Nasdaq. Assuming the Purchaser to which Exchange 

  
 6 

 
Shares or Conversion Shares are to be issued is not as of the date of issuance, and for a period of three (3) months prior to the date of issuance has not been, an “affiliate” (as
such term is used in Rule 144 under the Securities Act) of the Borrower (which the Borrower shall assume (and the applicable Purchaser shall be deemed to represent) unless such Purchaser has otherwise advised the Borrower in writing) and in reliance
on such Purchaser’s representations contained in Section 2.01(e) hereof, the Conversion Shares and the Exchange Shares will be freely tradeable by such Purchaser without restriction or limitation (including volume limitation), pursuant to
Rule 144 under the Securities Act, and will not contain or be subject to any legend or stop transfer instructions restricting the sale or transferability thereof. 

(j) No Integrated Offering. Neither the Borrower, nor any of its affiliates, nor any person acting on its or their behalf has, directly
or indirectly, made, or will make, any offers or sales of any security or solicited, or will solicit, any offers to buy any security, under circumstances that would cause this offering and issuance of the Exchange Shares or the offering and issuance
of any of the Conversion Shares to be integrated with prior offerings by the Borrower (i) for purposes of the Securities Act and which would require the registration of any such securities under the Securities Act, or (ii) for purposes of
any applicable stockholder approval provisions of Nasdaq and which would require stockholder approval for the issuance of any Exchange Shares or Conversion Shares. 

(k) No Unlawful Payments. Neither the Borrower, to the knowledge of the Borrower, nor any of its directors or officers or any
employee, agent, affiliate, representative of or other person associated with or acting on behalf of the Borrower, has (a) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity, (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds, (c) violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended, or (d) made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment. 

(l) Compliance with Money Laundering Laws. The operations of the Borrower are and have been conducted at all times in compliance
with all financial recordkeeping and reporting requirements applicable to the Borrower, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA PATRIOT) Act of 2001, and the money laundering and any related or similar laws of all jurisdictions in which the Borrower conducts business (collectively, the “Money Laundering Laws”) and no action, suit
or proceeding by or before any governmental authority involving the Borrower with respect to the Money Laundering Laws is pending or, to the knowledge of the Borrower, threatened. 

(m) OFAC. The Borrower is not (a) a country, the government of a country, or an agency of the government of a country,
(b) an organization directly or indirectly controlled by a country or its government, or (c) a person resident in or determined to be resident in a country, in each case, that is subject to a comprehensive country sanctions program
administered and enforced by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), and the Borrower is not a person named on the list of Specially Designated Nationals maintained by OFAC. 

  
 7 

 (n) Application of Takeover Protections. The Borrower and its board of directors have
taken all necessary action, if any, in order to render inapplicable the Borrower’s issuance of the Exchange Shares and Conversion Shares and the Purchasers’ ownership of such securities from the provisions of any control share acquisition,
interested stockholder, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the organizational documents of the Borrower or the laws of the state of its
incorporation which is applicable to the Purchasers as a result of the transactions contemplated by this Agreement, including, without limitation, the Borrower’s issuance of Exchange Shares and Conversion Shares and the Purchasers’
ownership of such securities. 
 (o) Underwritten Offering. The Borrower has entered into the Underwriting Agreement (as defined
below) for purposes of effecting the Offering (as defined below) on the Offering Terms (as defined below), and does not expect that the closing of the transactions contemplated thereby will be prevented or materially delayed, and is not aware of
facts or circumstances that would reasonably be expected to prevent or materially delay such closing. 
 ARTICLE III. 

COVENANTS 

Section 3.01. Reservation of Shares. On and after the date hereof, the Borrower shall at all times reserve and keep available,
free of preemptive or similar rights, a sufficient number of shares of Common Stock for the purpose of enabling the Borrower to issue Conversion Shares pursuant to the Certificate of Designation (without regard to the Beneficial Ownership
Limitation). 
 Section 3.02. Blue Sky Filings. The Borrower shall take such action as is necessary in order to obtain an
exemption for, or to qualify the Exchange Shares and the Conversion Shares for, issuance and sale to the Purchasers under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such
actions promptly upon request of any of the Purchasers. 
 Section 3.03. Listing. The Borrower has submitted an application for
the listing of the Conversion Shares on Nasdaq and will use its commercially reasonable efforts to secure such listing. For so long as any Notes remain outstanding, the Borrower shall use commercially reasonable efforts to maintain the Common
Stock’s listing on Nasdaq. The Borrower shall not take any action which would be reasonably expected to result in the delisting or suspension of trading the Common Stock on Nasdaq. The Borrower shall pay all fees and expenses in connection with
satisfying its obligations under this Section 3.03. 
 Section 3.04. Disclosure; Confidentiality. 

(a) On October 4, 2018, the Borrower filed with the Commission a preliminary prospectus supplement, dated October 4, 2018 (the
“Prospectus Supplement”), which supplements the prospectus, dated October 17, 2016 (including the documents incorporated by reference therein, the “Base Prospectus” and, together with the Prospectus Supplement,
the “Preliminary Prospectus”), forming a part of the Registration Statement on Form S-3 (File No. 333-213926) filed by the Borrower with the
Commission on October 3, 2016 and declared effective by the Commission on October 17, 2016. As of the date hereof, the Borrower has entered 

  
 8 

 
into the underwriting agreement (the “Underwriting Agreement”) with RBC Capital Markets referred to in the Prospectus Supplement, in connection with which the Borrower is
offering and selling 8,333,334 shares of its Common Stock (plus up to an additional 1,250,000 shares of its Common Stock to cover overallotments) at a public offering price of $3.00 per share (the “Offering” and the foregoing terms
thereof, the “Offering Terms”). The Preliminary Prospectus, as of its date and as of the date hereof does not, and as of the effectiveness of the Exchange the Preliminary Prospectus will not, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 

(b) In the Prospectus Supplement, the Borrower represents and warrants that it has disclosed all material,
non-public information (if any) provided or made available to any Purchaser (or any Purchaser’s agents or representatives) by Borrower or any of its respective officers, directors, employees, affiliates
or agents in connection with the transactions contemplated by this Agreement, the Offering or otherwise on or prior to the date hereof, including with respect to any actual, proposed or contemplated transaction involving the Borrower, any subsidiary
of the Borrower and/or any third party, other than the Pricing Information (as defined below). 
 (c) On or before 9:30 a.m., New York time,
on October 5, 2018, the Borrower shall issue a press release (through a recognized channel of distribution for the Borrower) announcing the completion of the Offering and the anticipated consummation of the transactions contemplated hereby, and
disclosing the number of Exchange Shares to be issued hereunder, the Conversion Price (as defined in the Certificate of Designation) for the Series A Preferred Stock, the aggregate number of Exchange Shares initially issuable upon conversion of the
Exchange Shares and any material information relating to the Offering (including the number of shares being offered and the public offering price) omitted from the Preliminary Prospectus (the “Pricing Information”) (the
“Announcing Press Release”). On or before 10:00 a.m., New York time, on October 5, 2018, the Borrower shall file a Current Report on Form 8-K (the “8-K Filing”) describing all the material terms of the transactions contemplated by this Agreement and attaching this Agreement, the Certificate Designation and the Announcing Press Release. 

(d) Notwithstanding anything contained in this Agreement to the contrary and without implication that the contrary would otherwise be true,
        , the Borrower expressly acknowledges and agrees that, from and after the issuance of the Announcing Press Release, no Purchaser shall have (unless expressly agreed to by a particular Purchaser in a
written definitive and binding agreement executed by the Borrower and such particular Purchaser or customary oral (confirmed by e-mail) “wall-cross” agreement (it being understood and agreed that no
Purchaser may bind any other Purchaser with respect thereto)), any duty of trust or confidence with respect to, or a duty not to trade on the basis of, any information regarding the Borrower. 

(e) Notwithstanding anything to the contrary herein, in the Facility Agreement (as defined below), in any Transaction Document (as defined in
the Facility Agreement) or in any other agreement entered into on or before the date hereof, in the event that the Borrower believes that a notice or communication to any of DPDF, DSS or to any officer, partner, employee or Affiliate (as defined in
the Certificate of Designation) of any of DPDF or DSS (collectively with DPDF and DSS, the “Deerfield Parties”) or any other information that may be provided by or on behalf of the Borrower or any of its subsidiaries to any of the
Deerfield Parties contains material, 

  
 9 

 
nonpublic information relating to the Borrower, any of its subsidiaries or Affiliates or any of their respective property, assets, securities or businesses, the Borrower shall so indicate to the
applicable Deerfield Party contemporaneously with delivery of such notice, communication or information, and such indication shall provide such Deerfield Party the means to refuse to receive such notice or communication; and in the absence of any
such indication, the Deerfield Party (and any other Deerfield Parties related thereto) shall be allowed to presume that all matters relating to such notice, communication or information do not constitute material, nonpublic information relating to
the Borrower, any of its subsidiaries or its Affiliates or any of their respective property, assets, securities or businesses. 
 (f) No
Deerfield Party shall have any duty of trust or confidence with respect to, or any obligation not to trade in any securities on the basis of, any material nonpublic information regarding the Borrower, any of its subsidiaries or Affiliates or any of
their respective property, assets, securities or businesses provided by, or on behalf of, the Borrower, any of its subsidiaries, any of their respective Affiliates or any of their respective officers, directors, employees, attorneys, representatives
or agents, in violation of any of the covenants set forth in this Section 3.04 or that is otherwise possessed (or continued to be possessed) by any Deerfield Party as a result of a breach of any of the covenants set forth in this
Section 3.04. 
 (g) DPDF and the Borrower hereby agree that Section 6.14 of that certain Facility Agreement, dated as of
June 2, 2014, between the Borrower and DPDF, as the same may be amended, modified or supplemented from time to time, shall be deemed amended by the foregoing Sections 3.04(e) and (f). 

Section 3.05. Taxes. The Borrower shall be responsible for paying all present or future stamp, court or documentary, intangible,
recording, filing or similar taxes that arise from any payment or issuance made under, from the execution, delivery, performance or enforcement of, or otherwise with respect to, this Agreement. 

Section 3.06. Tax Treatment. The parties intend and agree that the exchanges of a portion of the Notes for Exchange Shares
described herein are part of and pursuant to a Plan of Recapitalization and Reorganization of the Borrower described in Section 368(a)(1)(E) of the Code, and shall report the transactions for federal, state and local income tax purposes in
accordance therewith unless otherwise required by applicable law. 
 Section 3.07. Fees and Expenses. The Borrower shall
promptly reimburse the Purchasers for all of their reasonable out-of-pocket, costs, fees and expenses, including legal fees and expenses, incurred in connection with the
negotiation and drafting of this Agreement and the consummation of the transactions contemplated hereby, up to a maximum of $25,000 for all such expenses. 

  
 10 

 ARTICLE IV. 

ACKNOWLEDMENT OF THE BORROWER 

Section 4.01. The Borrower irrevocably and unconditionally acknowledges, affirms and covenants to each Purchaser that: 

(a) such Purchaser is not in default under the Indenture and has not otherwise breached any obligations to the Borrower; and 

(b) there are no offsets, counterclaims or defenses to the obligations under the Indenture as of the date hereof, including the liabilities and
obligations of the Borrower under the Notes or the rights, remedies or powers of such Purchaser in respect of any of the obligations under the Indenture, and the Borrower agrees not to interpose (and each does hereby waive and release) any such
defense, set off or counterclaim in any action brought by such Purchaser with respect thereto. 
 ARTICLE V. 

CONDITIONS PRECEDENT. 

Section 5.01. Conditions Precedent. The effectiveness of this Agreement and the Exchange is subject to the following conditions
precedent: 
 (a) Delivery of Documents. The Borrower and the Purchasers shall each have executed and delivered this Agreement. 

(b) Performance: No Default. The representations and warranties of the Borrower and Purchasers contained herein shall be true and
correct, and the Borrower and Purchasers shall have performed and complied with all agreements and conditions contained in this Agreement to be performed by or complied with by the Borrower or Purchasers, as applicable, prior to the date hereof in
all respects. 
 (c) The custodian designated by the Purchasers shall have received stock certificates, registered in the name of such
Purchasers, evidencing the number of shares of Series A Preferred Stock issuable hereunder to such Purchasers. 
 (d) The Purchasers shall
have received evidence satisfactory to the Purchasers that the Certificate of Designation has been filed with the Secretary of State of the State of Delaware and has become effective. 

(e) The Purchasers (or their counsel) shall have received customary legal opinions from Cooley LLP, as counsel to the Borrower. 

(f) The Purchasers shall have received the Accrued Interest. 

ARTICLE VI. 

MISCELLANEOUS 

Section 6.01. Entire Agreement. This Agreement constitute the entire agreement, and supersedes all other prior and contemporaneous
agreements and understandings, both oral and written, among the Purchasers and the Borrower with respect to the subject matter hereof. 

  
 11 

 Section 6.02. Amendments and Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed by the Borrower and (i) prior to the effectiveness of the Exchange, the Purchasers holding Exchanged Securities representing a majority of the outstanding principal amount of all Exchanged
Securities and (ii) following the effectiveness of the Exchange, the Purchasers holding a majority of the Exchange Shares issued hereunder. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any
manner impair the exercise of any such right. 
 Section 6.03. Successors and Assigns. All of the covenants and provisions of
this Agreement by or for the benefit of the Purchasers or the Borrower shall bind and inure to the benefit of their respective successors and permitted assigns. No party hereunder may assign its rights or obligations hereunder without the prior
written consent of the other parties hereto, except that a Purchaser may assign its rights hereunder to a permitted transferee of Exchange Shares or Conversion Shares. 

Section 6.04 Notices. Any notice, request or other communication to be given or made under this Agreement shall be in writing.
Such notice, request or other communication shall be deemed to have been duly given or made when it shall be delivered by hand, overnight mail, international courier (confirmed by facsimile), electronic mail or facsimile to the party to which it is
required or permitted to be given or made at such party’s address specified below or at such other address as such party shall have designated by notice to the other parties. 

If to the Borrower: KemPharm, Inc. 

1180 Celebration Blvd. 
 Suite
103 
 Celebration, FL 34747 

Fax: (321) 250-3698 

E-mail: lclifton@kempharm.com 

Attention: R. LaDuane Clifton, Chief Financial Officer 

With a copy to (which shall not constitute notice hereunder): 

Cooley LLP 
 1299 Pennsylvania
Avenue, NW 
 Suite 700 

Washington, DC 20004 
 Fax: (703) 456-8100 
 Email: bsiler@cooley.com 

Attention: Brent Siler 
 If to
DPDF or DSS: 
 Deerfield Management Company, L.P. 

780 Third Avenue, 37th Floor 
 New
York, NY 10017 Fax: (212) 599-3075 
 Email: dclark@deerfield.com 

Attn: David J. Clark 

  
 12 

 With a copy to: 

Katten Muchin Rosenman LLP 
 525
W. Monroe Street 
 Chicago, Illinois 60661-3693 

Fax: (212) 940-8776 

Email: mark.wood@kattenlaw.com 

Attn: Mark Wood 

Section 6.05 Applicable Law; Consent to Jurisdiction. 

(a) As part of the consideration and mutual promises being exchanged and given in connection with this Agreement, the parties hereto agree that
all claims, controversies and disputes of any kind or nature arising under or relating in any way to the enforcement or interpretation of this Agreement or to the parties’ dealings, rights or obligations in connection herewith, including
disputes relating to the negotiations for, inducements to enter into, or execution of, this Agreement, and disputes concerning the interpretation, enforceability, performance, breach, termination or validity of all or any portion of this Agreement
shall be governed by the laws of the State of New York without regard to its choice or conflicts of laws principles. 
 (b) The parties
hereto agree that all claims, controversies and disputes of any kind or nature relating in any way to the enforcement or interpretation of this Agreement or to the parties’ dealings, rights or obligations in connection herewith, shall be
brought exclusively in the state and federal courts sitting in The City of New York, borough of Manhattan. With respect to any such claims, controversies or disputes, each of the Parties hereby irrevocably: 

(i) submits itself and its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and
agrees that it will not bring any action in any court or tribunal other than the aforesaid courts; 
 (ii) waives, and agrees
not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding (A) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve
process in accordance with this Section 6.05, (B) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior
to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) to the fullest extent permitted by the applicable law, any claim that (1) the suit, action or proceeding in such court is brought in an
inconvenient forum, (2) the venue of such suit, action or proceeding is improper or (3) this Agreement, or the subject matter hereof, may not be enforced in or by such courts; and 

(iii) WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND 

  
 13 

 
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A
LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 6.05. 
 Notwithstanding the foregoing in this Section 6.05, a party may commence any action or proceeding in a court
other than the above-named courts solely for the purpose of enforcing an order or judgment issued by one of the above-named courts. 

Section 6.06. Counterparts; Effectiveness. This Agreement and any amendment hereto may be executed and delivered in any number of
counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. In the event that any signature
to this Agreement or any amendment hereto is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof. No party hereto shall raise the use of a facsimile machine or e-mail delivery of a “.pdf” format data file to deliver a signature to this Agreement or any amendment hereto or the fact that such signature was transmitted or communicated through the use of a facsimile
machine or e-mail delivery of a “.pdf” format data file as a defense to the formation or enforceability of a contract, and each party hereto forever waives any such defense. 

Section 6.07. No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any
person (other than the parties to this Agreement) any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 

Section 6.08. Specific Performance. The parties to this Agreement agree that irreparable damage would occur and that the parties
to this Agreement would not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties to
this Agreement shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case without the necessity of posting bond or other security or
showing actual damages, and this being in addition to any other remedy to which they are entitled at law or in equity. 
 Section 6.09.
Effect of Headings. The section and subsection headings herein are for convenience only and not part of this Agreement and shall not affect the interpretation thereof. 

Section 6.10. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without
invalidating the 

  
 14 

 
remainder of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited,
invalid or unenforceable provision(s). 
 Section 6.11. Reservation of Rights. None of the Purchasers has hereby waived any of
such Purchaser’s rights or remedies arising from any such breach or default or any right otherwise available under the Indenture or at law or in equity as to any of such Purchaser’s Notes that remain outstanding following the effectiveness
of the Exchange. Each of the Purchasers expressly reserves all such rights and remedies. Notwithstanding anything else to the contrary herein, each Purchaser hereby agrees that the issuance of the Exchange Shares to such Purchaser satisfies in full
any and all obligations of the Borrower under the Notes and Indenture as to the Exchanged Securities and such Purchaser’s remedies with regard to such Exchanged Securities shall be solely as described in this Agreement. 

Section 6.12. Further Assurances. The parties hereby agree, from time to time, as and when reasonably requested by any other party
hereto, to execute and deliver or cause to be executed and delivered, all such documents, instruments and agreements, including secretary’s certificates, stock powers and irrevocable transfer agent instructions, and to take or cause to be taken
such further or other action, as any party may reasonably deem necessary or desirable in order to carry out the intent and purposes of this Agreement. 

Section 6.13. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rule of strict construction will be applied against any party. 
 Section 6.14.
Interpretative Matters. Unless otherwise indicated or the context otherwise requires, (i) all references to Sections, Schedules, Appendices or Exhibits are to Sections, Schedules, Appendices or Exhibits contained in or attached to this
Agreement, (b) words in the singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter, (c) the words “hereof,”
“herein” and words of similar effect shall reference this Agreement in its entirety, and (d) the use of the word “including” in this Agreement shall be by way of example rather than limitation. 

 

  
 15 

 IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly executed
as of the date first written above. 
  

			
	THE BORROWER:
	
	KEMPHARM, INC.
		
	By:	 	 /s/ R. LaDuane Clifton

	Name:	 	R. LaDuane Clifton
	Title:	 	Chief Financial Officer

 [Signature page to Exchange Agreement] 

 
			
	PURCHASERS:
	
	DEERFIELD PRIVATE DESIGN FUND III, L.P.
		
	By:	 	Deerfield Mgmt III, L.P., its General Partner
	By:	 	J.E. Flynn Capital III , LLC, its General Partner
		
	By:	 	 /s/ David Clark

	Name:	 	David Clark
	Title:	 	Authorized Signatory
	
	DEERFIELD SPECIAL SITUATIONS FUND, L.P.
		
	By:	 	Deerfield Mgmt, L.P., its General Partner
	By:	 	J.E. Flynn Capital, LLC, its General Partner
		
	By:	 	 /s/ David Clark

	Name:	 	David Clark
	Title:	 	Authorized Signatory

 [Signature page to Exchange Agreement] 

 Schedule I 
  

																	
	 PURCHASER
	  	Accrued
Interest	 	  	Exchanged
Securities
(principal
amount)	 	  	Exchange
Shares	 	  	Conversion
Shares
underlying
Exchange
Shares	 
	 Deerfield Private Design Fund III, L.P.
	  	$	79,255.76	 	  	$	7,981,000	 	  	 	7,981	 	  	 	2,660,334	 
	 Deerfield Special Situations Fund, L.P.
	  	$	15,849.17	 	  	$	1,596,000	 	  	 	1,596	 	  	 	532,000	 
	 Total:
	  	$	95,104.93	 	  	$	9,577,000	 	  	 	9,577	 	  	 	3,192,334	 

 Exhibit A 

Certificate of Designation 

[Separately Provided]

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