Document:

EX-10.2

 EXHIBIT 10.2 

AMENDMENT 
 TO 

SEPTEMBER 2019 EXCHANGE AGREEMENT AND AMENDMENT TO FACILITY AGREEMENT 

This AMENDMENT TO SEPTEMBER 2019 EXCHANGE AGREEMENT AND AMENDMENT TO FACILITY AGREEMENT (including the schedules, annexes and exhibits
hereto, this “Agreement”), dated as of December 17, 2019, 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 “Lenders”). Capitalized terms used but not otherwise defined in this Agreement shall have the meanings given to them in the September 2019 Exchange
Agreement (as defined below). 
 RECITALS: 

A. The Lenders own an aggregate of $62,423,000 principal amount of the Borrower’s 5.50% Senior Convertible Notes due 2021 (the
“Indenture Notes”) issued pursuant to the Indenture, dated as of February 9, 2016 (the “Indenture”), between the Borrower and U.S. Bank National Association, as trustee under the Indenture (together with any
successor thereto, the “Trustee”). 
 B. Pursuant to the September 2019 Exchange Agreement and Amendment to Facility
Agreement (the “September Exchange Agreement”), dated as of September 3, 2019, among the Lenders and the Borrower, the Lenders have the right and option to exchange up to $27,000,000 principal amount of the Indenture Notes held
by the Lenders for shares of Common Stock (based on an exchange price of at least $0.9494 per share of Common Stock) or shares of Series B-2 Preferred Stock of the Borrower in accordance with Annex I to the
September Exchange Agreement. 
 C. Contemporaneously with the execution and delivery of this Agreement, the Borrower, the Lenders, Delaware
Street Capital Master Fund, L.P. (“DSCM”) are entering into the December 2019 Exchange Agreement and Amendment to Facility Agreement, Senior Secured Convertible Notes and Warrants (the “December 2019 Exchange
Agreement”), pursuant to which, among other things, the Lenders and DSCM are exchanging all of their Indenture Notes for Senior Secured Convertible Notes of the Borrower in substantially the form attached as an exhibit thereto. The Senior
Secured Convertible Notes being issued to the Lenders pursuant to the December 2019 Exchange Agreement and the Facility Agreement are referred to herein as the “December 2019 Notes.” References herein to the “Facility
Agreement” mean the Facility Agreement, as amended by the December 2019 Exchange Agreement. 
 D. Pursuant to this Agreement, the
Borrower and the Lenders desire to provide the Lenders (and not, for the avoidance of doubt, either Non-Deerfield Lender) the right and option to exchange December 2019 Notes for shares of Common Stock (based
on an exchange price of at least $0.60 per share of Common Stock) or shares of Series B-2 Preferred Stock of the Borrower substantially in accordance with the terms of Annex I to the September Exchange
Agreement, as amended by this Agreement. 

 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. 
 OPTIONAL
EXCHANGES 
 Section 1.01. Optional Exchanges. At any time and from time to time on or after the Effective Time (as
defined in, and determined in accordance with, the December 2019 Exchange Agreement), the Lenders (and their assignees) shall have the right and option, but not the obligation, to exchange the principal amount of the December 2019 Notes or FA Notes
(as defined in Exhibit A hereto) for shares of Common Stock or Series B-2 Preferred Stock in accordance with Annex I to the September Exchange Agreement, as amended and restated in accordance with
Section 1.02 of this Agreement (any such exchange, an “Optional Exchange”). References to “Annex I” in this Agreement or, from and after the Effective Time, within the text of Annex I mean Annex I to the
September Exchange Agreement, together with the schedules and exhibits thereto, as amended and restated in accordance with Section 1.02 of this Agreement. For the avoidance of doubt, nothing contained herein shall be deemed to limit or restrict
the ability of either Lender to exercise its conversion rights under the Notes (as defined in Annex I). For the avoidance of doubt, as of the Effective Time, this Section 1.01 supersedes Section 1.02 of the September Exchange Agreement,
which applied to Indenture Notes and shall no longer be effective from and after the Effective Time. 
 Section 1.02. Amended and
Restated Annex I. Upon the terms and subject to the conditions set forth in this Agreement, effective as of the Effective Time, Annex I shall hereby be amended and restated to read in its entirety as set forth in Exhibit A. 

ARTICLE II. 

REPRESENTATIONS AND WARRANTIES 

Section 2.01. Representations and Warranties of the Lenders. Each Lender, severally and not jointly, hereby represents and
warrants to the Borrower as of the date of this Agreement and as of the Effective Time as follows: 
 (a) Organization and Good
Standing. Such Lender 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 Lender 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 this Agreement by such Lender and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary action on the part of such Lender and no further action is required in connection herewith or therewith. 

  
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 (c) Valid and Binding Agreement. This Agreement has been duly executed and delivered
by such Lender and constitutes the valid and binding obligation of such Lender, enforceable against such Lender 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 Lender and the performance by such Lender of its obligations hereunder, does not and will not (i) violate any provision of such Lender’s organizational 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 Lender is subject, or by which any of such Lender’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 Lender to timely perform its obligations under this
Agreement. 
 (e) Exemption. Such Lender has held such Lender’s Indenture 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 Lender understands that the Option Exchange Shares (as defined in Annex I) and the shares of Common Stock issuable upon conversion of shares of Series B-2 Preferred Stock (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) Accredited Investor/Qualified Institutional Buyer. Such Lender is an “accredited investor” as that term is defined in Rule
501(a) of Regulation D under the Securities Act. Such Lender is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act. Such Lender understands the economic risk of its investment in the Option
Exchange Shares and the Conversion 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 Option Exchange Shares and the Conversion Shares. 

(g) Information. Such Lender acknowledges and agrees that (i) such Lender has had the opportunity to review the Borrower’s SEC
Reports (as defined below) and this Agreement (including the exhibits hereto), (ii) such Lender 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 potential Optional Exchanges (collectively, the “Transactions”), and has all information that it considers necessary in making an informed investment decision, (iii) such
Lender has had the opportunity to consult with its accounting, tax, financial and legal advisors to be able to evaluate the risks involved in the Transactions and to make an informed investment decision with respect to such Transactions.
Notwithstanding anything to the contrary contained herein, the rights and remedies available to such Lender, neither any such review nor any due diligence investigation conducted by such Lender or its advisors, if any, or its representatives shall
modify, amend or otherwise affect such Lender’s right to rely on the representations, warranties, covenants and agreements of the Borrower contained in this Agreement and the September Exchange Agreement, as amended hereby. 

  
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 Section 2.02. Representations and Warranties of the Borrower. The Borrower
hereby represents and warrants to the Lenders as of the date of this Agreement and as of the Effective Time 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. 
 (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 Annex I and otherwise to carry out its obligations hereunder and thereunder. The execution and
delivery of this Agreement by the Borrower and the consummation by it of the transactions contemplated hereby and by Annex I 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 and
Filings. On or prior to the date hereof, the Borrower has filed the Amendment to Certificate of Designation of Preferences, Rights and Limitations of Series B-2 Preferred Stock (the “Certificate of
Designation Amendment”) attached hereto as Exhibit B with the Secretary of State of the State of Delaware, and the Certificate of Designation Amendment has become, and is, effective. 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 or Annex I in accordance with the terms hereof or thereof, other than filing the Announcing 8-K Filing (as defined in the December 2019 Exchange Agreement) 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 of the Certificate of Designation Amendment, the Certificate of Designation, as amended by the Certificate of Designation Amendment (the “Certificate of
Designation”), and any Option Exchange Shares comprised of shares of Series B-2 Preferred Stock will constitute the valid and binding obligation of the Borrower, enforceable against the Borrower in
accordance with their 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. 

  
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 (e) Non-Contravention. The execution and
delivery of this Agreement by the Borrower and the performance by the Borrower of its obligations hereunder, under Annex I and under the Certificate of Designation do not and will 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 Announcing 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, (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 GPC License Agreement, or
(vi) result in the creation or imposition of any Lien (as defined in the Facility Agreement) 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 (a) the business, operations, results of operations, condition (financial or otherwise)
or properties of the Borrower and its Subsidiaries (as defined in the Facility Agreement), taken as a whole, (b) the legality, validity or enforceability of any provision of this Agreement, Annex I or any other Transaction Document,
(c) the ability of the Borrower to timely perform its obligations under this Agreement, Annex I or any other Transaction Document or (d) the rights and remedies of the Lenders under this Agreement, Annex I or any other Transaction
Document. As of the date hereof, no Event of Default (as defined in the Indenture) under the Indenture exists and no Event of Default (as defined in the Facility Agreement) under the Facility Agreement exists, and, to the knowledge of the Borrower,
no event has occurred, and no fact or circumstance exists, that, with or without notice, lapse of time or both would reasonably be expected to result in an Event of Default under either the Indenture or the Facility Agreement. 

(f) Issuance of Option Exchange Shares. The Option Exchange Shares are duly authorized and, when issued in accordance with this
Agreement and Annex I, 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 Option Exchange Shares (to the extent consisting of Series B-2 Preferred Stock) 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 28,439,015 shares of Common Stock for issuance hereafter upon conversion of the Option Exchange Shares (to the extent consisting of Series B-2 Preferred Stock)
and upon exchange of Notes in accordance with Annex I, in each case, free and clear of preemptive or similar rights. As of the date of this Agreement, there are 33,230,543 shares of Common Stock issued and outstanding. 

  
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 (g) 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 or
Annex I. The Lenders 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 2.02(g) that may be due in connection with the
transactions contemplated hereby. 
 (h) Exemption from Registration. No registration under the Securities Act or any state securities
laws is or will be required for the offer and issuance of the Option Exchange Shares by the Borrower to the Lenders as contemplated hereby or by Annex I or for the offer and issuance of the Conversion Shares by the Borrower to the Lenders as
contemplated hereby and by the Certificate of Designation. The amendments and transactions contemplated hereby, including the issuance and sale of the Option Exchange Shares under this Agreement and Annex I and the issuance and sale of the
Conversion Shares pursuant to the terms of the Certificate of Designation do not and will not contravene, or require stockholder approval pursuant to, the rules and regulations of The Nasdaq Stock Market LLC, as currently in effect. Assuming the
Lender to which Option Exchange 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 Lender shall be deemed to represent) unless such Lender has otherwise advised the Borrower in writing) and in reliance on such Lender’s
representations contained in Section 2.01(e) hereof, the Conversion Shares and the Option Exchange Shares will be freely tradeable by such Lender 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. The Borrower has not paid or given (and will not pay or give), directly or indirectly, any commission or
other remuneration for soliciting the exchange to be effected pursuant to this Agreement or otherwise in connection with the issuance and sale of any Option Exchange Shares or any Conversion Shares pursuant to this Agreement or the Certificate of
Designation. The Borrower is not, and never has been, a “shell company” (as defined in Rule 12b-2 under the Exchange Act) and is not an issuer of a type identified in, or subject to, Rule 144(i)(1)
under the Securities Act. 
 (i) 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 the offering and issuance of the Option Exchange
Shares or the offering and issuance of any of the Conversion Shares to be integrated with prior or contemporaneous 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 the Nasdaq GM and which would require stockholder approval for the issuance of any Option Exchange Shares or Conversion Shares. 

(j) No Bad Actor Disqualification. None of the Credit Parties, any of its predecessors, any director, executive officer, other officer
of any Credit Party participating in the offering of the Exchange Shares or the Conversion Shares, any beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of any
Credit Party’s outstanding voting equity securities, calculated on the basis of voting power, any “promoter” (as that term is 

  
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defined in Rule 405 under the Securities Act) connected with any Credit Party at the time this representation is made, any placement agent or dealer participating in the offering of the Exchange
Shares or the Conversion Shares and any of such agents’ or dealer’s directors, executive officers, other officers participating in the offering of the Notes or the Conversion Shares (each, a “Covered Person”) is subject to
any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”). The Borrower has exercised reasonable care to determine (i) the identity of
each person that is a Covered Person and (ii) whether any Covered Person is subject to a Disqualification Event. Each Credit Party has complied in all material respects, to the extent applicable, with its disclosure obligations under Rule
506(e). No Credit Party is any other reason disqualified from reliance upon Rule 506 of Regulation D for purposes of the offer, sale and issuance of the Exchange Shares or the Conversion Shares. 

(k) 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 Option Exchange Shares and Conversion Shares and the Lenders’ 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
Lenders as a result of the transactions contemplated by this Agreement, including the Borrower’s issuance of the Option Exchange Shares and Conversion Shares and the Lenders’ ownership of such securities. 

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 all of the Conversion Shares pursuant to the Certificate of Designation (without regard to the Beneficial Ownership
Limitation (as defined in the Certificate of Designation) or the Option Beneficial Ownership Cap (as defined in Annex I)) and shares of Common Stock in accordance with Annex I (without regard to the Option Beneficial Ownership Cap). 

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 Option Exchange Shares and the Conversion Shares for, issuance and sale to the Lenders 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 Lenders. 
 Section 3.03. Listing. The Borrower has submitted an application for the listing of the
Conversion Shares and the shares of Common Stock issuable in accordance with Annex I on the Nasdaq GM and will use its commercially reasonable efforts to secure such listing. The Borrower shall pay all fees and expenses in connection with satisfying
its obligations under this Section 3.03. 
 Section 3.04. Disclosure. In addition to the Borrower’s obligations under
Section 4.04 of the December 2019 Exchange Agreement, the Announcing 8-K Filing (as defined in the December 2019 Exchange Agreement) shall describe all the material terms of the transactions contemplated
by this Agreement, disclose the effectiveness of this Agreement and attach this Agreement (without redaction). 

  
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 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. 

ARTICLE IV. 

CONDITIONS PRECEDENT. 

Section 4.01. Conditions. The effectiveness of the amendments contemplated by Article I is subject to the occurrence of the
Effective Time (as defined in the December 2019 Exchange Agreement) pursuant to the December 2019 Exchange Agreement. 
 ARTICLE V.

 MISCELLANEOUS 

Section 5.01. Entire Agreement. This Agreement together with Annex I and the other Transaction Documents constitute the entire
agreement, and supersede all other prior and contemporaneous agreements and understandings, both oral and written, among the Lenders and the Borrower with respect to the subject matter hereof. 

Section 5.02. 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 Effective Time, each of the Lenders and (ii) following the Effective Time Lenders whose aggregate Pro Rata Exchange Limits exceed 50% of the aggregate Pro Rata Exchange Limits of all Lenders. 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 5.03. Successors and Assigns. All of the covenants and provisions of this Agreement by or for the benefit of the Lenders
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
Lender may assign its rights hereunder to an Affiliate of such Lender to which it transfers Notes, provided that (a) such Lender agrees in writing with the transferee or assignee to assign such rights, and such assignee or transferee agrees in
writing to accept such rights subject to, and to be bound by, the terms of this Agreement, and a copy of such agreement is furnished to the Borrower after such transfer or assignment; and (b) the Borrower is, after such transfer or assignment,
furnished with written notice of (i) the name and address of such transferee or assignee and (ii) the portion of such Notes with respect to which such rights are being transferred or assigned; provided, further, that an assignment of
rights under Annex I shall be subject to the provisions of Section 3 thereof. 

  
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 Section 5.04. 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 5.05. Reservation of Rights. None of the Lenders has hereby waived any of such Lender’s
rights or remedies arising from any breach or default or any right otherwise available under the Facility Agreement, any other Transaction Document or at law or in equity as to any of such Lender’s Notes. 

Section 5.06. 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. Without limiting the foregoing, the Borrower shall take such action, and deliver such notices,
documents, instruments and agreements as the Trustee may reasonably require to effectuate the exchange and surrender of Indenture Notes in accordance with this Agreement. 

Section 5.07. 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 5.08.
Interpretative Matters. Unless otherwise indicated or the context otherwise requires, (a) 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. Unless otherwise indicated,
references to “Transaction Documents” in this Agreement refer to Transaction Documents (as defined in the Facility Agreement), each as amended as of the Effective Date (as defined in the December 2019 Exchange Agreement), including
as provided by this Agreement and the December 2019 Exchange Agreement. 
 Section 5.09. Reaffirmation. Other than as expressly
provided in this Agreement, the execution and delivery of this Agreement shall not operate as a waiver of any right, power or remedy of the Lenders, constitute a waiver of any provision of the Facility Agreement or any other Transaction Document or
serve to effect a novation of the obligations thereunder. The Borrower, as issuer, debtor, grantor, pledger, mortgagor, guarantor or assignor, or in other any other similar 

  
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capacity in which it grants liens or security interests in its property hereby (i) acknowledges and agrees that it has reviewed this Agreement, (ii) ratifies and reaffirms all of its
obligations, contingent or otherwise, under each of the Transaction Documents and (iii) to the extent the Borrower granted Liens on or security interests in any of its property pursuant to any such Transaction Document as security for the
Obligations (as defined in the Facility Agreement) under or with respect to the Transaction Documents, ratifies and reaffirms such grant of security interests and Liens as provided in the Transaction Documents and confirms and agrees that such
security interests and Liens continue to secure all of the currently outstanding or future Obligations (as amended hereby) on the terms and conditions of the Transactions Documents (for the avoidance of doubt, as amended as of the date of this
Agreement (including as provided in this Agreement)). The Borrower hereby consents to this Agreement and acknowledges that each of this Agreement and Annex I is a Transaction Document and that each of the other Transaction Documents remains in full
force and effect and is hereby ratified and reaffirmed; provided that, nothing in this Section 5.11 shall obligate the Borrower to restate, or be considered to be a restatement of, the representations of the Borrower contained in Article 3 of
the Facility Agreement as of the Effective Date. Any reference in the Transaction Documents to “hereunder,” “hereof,” “herein,” or words of like import referring to such agreement shall refer to such Transaction
Document as amended as of the Effective Date (including as provided in this Agreement). 
 Section 5.10. Termination. Except to
the extent otherwise agreed in writing by the Lenders prior to the Effective Time, this Agreement shall terminate and be of no further force or effect if any of the conditions set forth in Article IV are not satisfied or waived by the Lenders on or
prior to December 18, 2019. If this Agreement is terminated as a result of the foregoing sentence of this Section 5.09, then Annex I of the September Exchange Agreement shall remain in full force and effect, without giving effect to the
amendments set forth in this Agreement. 
 Section 5.11. Independent Nature of Lenders. The obligations of each Lender under
this Agreement and each of the other Transaction Documents are several and not joint with the obligations of any other Lender, and no Lender shall be responsible in any way for the performance of the obligations of any other Lender under this
Agreement or any other Transaction Document. Each Lender shall be responsible only for its own representations, warranties, agreements and covenants hereunder and under the other Transaction Documents. 

Section 5.12. Incorporation by Reference. In addition to any other provision of the September Exchange Agreement incorporated
herein by reference as set forth above, the provisions of Sections 7.04 (Notices), 7.05 (Applicable Law; Consent to Jurisdiction), 7.07 (No Third Party Beneficiaries), 7.09 (Effect of Headings) and 7.10 (Severability) are incorporated by reference
herein and made applicable to this Agreement, mutatis mutandis. Such incorporation and such provisions and definitions shall survive any termination of the September 2019 Exchange Agreement. 

  
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 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 Amendment To September 2019 Exchange Agreement And Amendment To Facility Agreement]

 
			
	LENDERS:
	
	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 J. Clark

	Name: David J. 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 J. Clark

	Name: David J. Clark
	Title: Authorized Signatory

 [Signature Page To Amendment To September 2019 Exchange Agreement And Amendment To Facility Agreement]

 Exhibit A 

Amended and Restated Annex I 

 Amended and Restated Annex I 

This is Annex I to the September 2019 Exchange Agreement and Amendment to Facility Agreement, dated as of September 3,
2019, 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 “Lenders”) (the “Exchange Agreement”), as amended and restated pursuant to the Amendment to September 2019 Exchange
Agreement and Amendment to Facility Agreement, dated as of December 17, 2019 (the “Amendment”). Capitalized terms used but not defined in this Annex I have the meanings given to them in the Amendment. 

If either Lender elects to exchange all or any portion of such Lender’s Notes (subject to the Pro Rata Exchange Limit) pursuant to an
Optional Exchange, the following terms shall apply. 
 1. Definitions. For purposes of this Annex I, the following terms shall have
the following meanings: 
 (a) “Affiliate” means any person or entity that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act (“Rule 144”). With respect to a Lender, any investment
fund or managed account that is managed on a discretionary basis by the same investment manager as such Lender will be deemed to be an Affiliate of such Lender. 

(b) “Agreement Date” means December 17, 2019. 

(c) “Bloomberg” means Bloomberg Financial Markets or an equivalent, reliable reporting service mutually acceptable to and
designated by the Borrower and the Lenders. 
 (d) “Common Stock” means the common stock, par value $0.0001 per share, of
the Borrower. 
 (e) “Common Stock Exchange Price” means, as of any Exchange Date or other date of determination, the
greater of (A) the arithmetic average of the Volume Weighted Average Price of the Common Stock on each of the fifteen (15) Trading Days immediately preceding the Exchange Date (the “Measurement Period”); provided, that in
the event that a stock split, stock combination, reclassification, payment of stock dividend, recapitalization or other similar transaction of such character that the outstanding shares of Common Stock shall be changed into or become exchangeable
for a larger or small number of shares (a “Stock Event”) is consummated during the Measurement Period, the Volume Weighted Average Price for all Trading Days during the Measurement Period prior to the effectiveness of the Stock
Event shall be appropriately adjusted to reflect such Stock Event and (B) $0.60, subject to appropriate adjustment for any Stock Event that occurs on or after the Agreement Date. 

(f) “December 2019 Notes” means the Senior Secured Convertible Notes, originally issued pursuant to the Facility Agreement on
December 18, 2019 (as the same previously has been and in the future may be amended, modified, restated or otherwise supplemented from time to time) to Deerfield Private Design Fund III, L.P. and Deerfield Special Situations Fund, L.P. pursuant to
the December 2019 Exchange Agreement, together with any Senior Secured Convertible Note issued in replacement or substitution therefor. 

 (g) “Dollars” or “$” means United States Dollars. 

(h) “Effective Date” means the date on which the Effective Time (as defined in the December 2019 Exchange Agreement) occurs.

 (i) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 

(j) “Exchange Amount” means, in respect of any exchange of Notes in accordance with this Annex I, the aggregate principal
amount of the Notes to be exchanged. 
 (k) “Exchange Date” means the date of delivery via facsimile or electronic mail of
an Exchange Notice. 
 (l) “Exchange Price” means, as of any Exchange Date or other date of determination, (A) in
respect of any Exchange (as defined below) of the Notes (or portion thereof) for shares of Common Stock, the Common Stock Exchange Price, and (B) in respect of any Exchange of the Notes (or portion thereof) for Series B-2 Preferred Shares, the Series B-2 Exchange Price. 
 (m)
“Exchange Trigger Period” means the period commencing on and including December 18, 2019 and ending on the first date on which none of the Notes held by the Lenders remain outstanding. 

(n) “FA Note” means the Amended and Restated Senior Secured Convertible Note issued pursuant to the Facility Agreement on
June 2, 2014, as amended and restated pursuant to the December 2019 Exchange Agreement, together with any Senior Secured Convertible Note issued in replacement or substitution therefor. 

(o) “Notes” means the December 2019 Notes and the FA Note, collectively. 

(p) “Option Exchange Share Cap” means 28,439,015 shares of Common Stock, as appropriately adjusted for any Stock Event. 

(q) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, any other entity and a government or any department or agency thereof. 
 (r) “Principal
Market” means the Nasdaq Global Market (or any successor thereto) or if the Common Stock ceases to be listed on the Nasdaq Global Market (or any successor thereto), then Principal Market shall mean the principal securities exchange or
trading market for the Common Stock. 

 (s) “Pro Rata Exchange Limit” means, as of any time of determination
during the Exchange Trigger Period, with respect to each Lender, (A) the aggregate number of shares of Common Stock set forth opposite such Lender’s name on Schedule A-1 hereto, less (B) a
number of shares of Common Stock equal to the sum of (1) the aggregate number of shares of Common Stock previously issued to such Lender in Exchanges, or upon conversion of any shares of Series B-2
Preferred Stock previously issued to such Lender in Exchanges, plus (2) the aggregate number of Underlying Shares (as defined below) then issuable to such Lender. 

(t) “Securities Act” means the Securities Act of 1933, as amended. 

(u) “Series B-2 Exchange Price” means the Stated Value (as defined in the Series B-2 Certificate of Designation). 
 (v) “Series B-2
Preferred Shares” means shares of the Series B-2 Preferred Stock. 
 (w)
“Shares” means Series B-2 Preferred Shares or shares of Common Stock. 
 (x)
“Standard Settlement Period” means the standard settlement period for equity trades effected by U.S. broker-dealers, expressed in a number of Trading Days, as in effect on the date the applicable Exchange Notice (as defined below)
is received or deemed received by the Borrower. 
 (y) “Trading Day” means any day on which trading occurs on the Principal
Market or other securities markets in the United States. 
 (z) “Underlying Shares” means, with respect to each Lender as
of any time of determination, a number of shares of Common Stock equal to (x) the aggregate stated value of any outstanding shares of Series B-2 Preferred Stock held by such Lender at such time (or, for
purposes of Section 2(e)(ii), shares of Series B-2 Preferred Stock issued to such Lender upon an Exchange), divided by (y) $0.60, subject to adjustment as provided in the
Series B-2 Certificate of Designation. 
 (aa) “Volume Weighted Average Price”
means, for the Common Stock as of any Trading Day, the volume weighted average sale price of the Common Stock on the Principal Market as reported by Bloomberg. 

2. Exchange Rights. The Notes may be exchanged for shares of Common Stock or Series B-2
Preferred Shares on the terms and conditions set forth in this Section 2. 
 (a) Exchange at Option of each
Lender. Subject to Section 2(e) of this Annex I, at any time and from time to time during the Exchange Trigger Period, each Lender shall be entitled to exchange (an “Exchange”) the Notes (the
“Exchanged Notes”) held by such Lender (or any portion thereof) for fully paid and non-assessable shares of Common Stock or, at the election of such Lender, fully paid and non-assessable Series B-2 Preferred Shares (collectively, the “Option Exchange Shares”) at the Exchange Rate (as defined in
Section 2(b) of this Annex I) (an “Exchange”). The Borrower shall not issue any fraction of a share of Common Stock upon any Exchange (but may issue fractional Series
B-2 Preferred Shares). If the issuance would result in the issuance of a fraction of a share of Common Stock, then the Borrower shall round such fraction of a share up or down to the nearest whole share (with
0.5 rounded up). 

 (b) Exchange Rate. The number of Option Exchange Shares issuable upon an Exchange of
a Note (or portion thereof) pursuant to Section 2 of this Annex I shall be determined according to the following formula (the “Exchange Rate”): 

 

					
		 	 Exchange Amount
	 	
		 	Exchange Price	 	

 (c) Mechanics of Exchange. The Exchange of the Notes shall be conducted in the following manner: 

(i) Lender’s Delivery Requirements. To exchange a Note (or any portion thereof) for Option Exchange Shares on any
date, the applicable Lender shall transmit by facsimile or electronic mail (or otherwise deliver), for receipt on or prior to 5:00 p.m. New York City time on such date, a copy of an executed exchange notice in the form attached hereto as Exhibit
A (the “Exchange Notice”) to the offices of the Borrower, at 1180 Celebration Blvd., Suite 103, Celebration, FL 34747, Attention: R. LaDuane Clifton, Chief Financial Officer, Fax: (321)
250-3698, E-mail: lclifton@kempharm.com, or such other address, facsimile number or email address as the Borrower may designate in writing. Notwithstanding anything to
the contrary set forth herein, in connection with any Lender’s exchange of a Note (or portion thereof), pursuant hereto, such Lender shall not be required to physically surrender the applicable Note to the Borrower unless the entire principal
amount thereof is being exchanged. Each Lender and the Borrower shall maintain records showing the principal amount of Notes exchanged by such Lender hereto, the dates of any such exchanges by such Lender (and also, for the avoidance of doubt, any
conversions of the Notes by such Lender) and the number of shares of Common Stock and Series B-2 Preferred Stock issued pursuant hereto or shall use such other method, reasonably satisfactory to such Lender
and the Borrower so as not to require physical surrender of any Note upon any partial exchange. For the avoidance of doubt, each Lender shall have the right to deliver an Exchange Notice that provides for the issuance of both shares of Common Stock
and shares of Series B-2 Preferred Stock. 
 (ii) Borrower’s Response.
Upon receipt or deemed receipt by the Borrower of a copy of an Exchange Notice from a Lender, the Borrower (I) shall as soon as practicable send, via electronic mail, a confirmation of receipt of such Exchange Notice to such Lender and the
Borrower’s designated transfer agent (the “Transfer Agent”), if applicable, which confirmation shall constitute an instruction to any such Transfer Agent to process such Exchange Notice in accordance with the terms herein and
(II) within the Standard Settlement Period following the date of receipt or deemed receipt by the Borrower of such Exchange Notice (the “Share Delivery Date”), (A) in respect of the number Option Exchange Shares (if any)
comprised of shares of Common Stock, credit such aggregate number of shares of Common Stock to which such Lender shall be entitled in connection with such Exchange Notice, to the account of the Lender’s prime broker with DTC through its
Deposit/Withdrawal at Custodian (DWAC) system, or (B) in respect of the number of Option Exchange Shares comprised of Series B-2 Preferred Shares (if any), issue and deliver to the address specified in
the Exchange Notice, a stock certificate, registered in the name of the Lender (or 

 
its nominee) or such other persons as designated by the Lender, for the number of Series B-2 Preferred Shares to which the Lender shall be entitled in
connection with such Exchange Notice. Provided that the Lender to which Option Exchange Shares are to be issued represents that (x) as of the date of delivery of the applicable Exchange Notice it is not, and for a period of three
(3) months prior to such date has not been, an “affiliate” (as such term is used in Rule 144 under the Securities Act) of the Borrower, and (y) the Note being converted has not been held by such an affiliate within the six
(6)-month period immediately preceding the date of such Exchange Notice, the Option Exchange Shares shall not be subject to restrictions on transfer, and shall not bear any legend or be subject to any stop transfer or similar instruction. For the
avoidance of doubt, by delivering an Exchange Notice, a Lender shall be deemed to have made the representations contemplated by the immediately preceding sentence, unless the applicable Lender otherwise indicates in such Exchange Notice. All
interest in respect of the principal amount of the Exchange Notes to which an Exchange Notice relates that has accrued and is unpaid through the date the applicable Option Exchange Shares are delivered hereunder shall be paid by the Borrower in kind
by adding the amount of such interest to the then outstanding principal amount of the Note to which the applicable Exchange related. 

(iii) Dispute Resolution. In the case of a dispute between the Borrower and a Lender as to the determination of the
Exchange Price or the arithmetic calculation of the Exchange Rate, the Borrower shall issue, or instruct the Transfer Agent to issue, as applicable, to such Lender the number of Option Exchange Shares that is not disputed and shall transmit an
explanation of the disputed determinations or arithmetic calculations to such Lender via facsimile and email within two (2) Business Days of receipt or deemed receipt of such Lender’s Exchange Notice or other date of determination. If such
Lender and the Borrower are unable to agree upon the determination of the Exchange Price or arithmetic calculation of the Exchange Rate within one (1) Business Day of such disputed determination or arithmetic calculation being transmitted to
such Lender, then the Borrower shall promptly (and in any event within two (2) Business Days) submit via facsimile or email (A) the disputed determination of the Exchange Price to an independent, reputable investment banking firm agreed to
by the Borrower and the Lender to which such dispute relates, or (B) the disputed arithmetic calculation of the Exchange Rate to the Borrower’s independent registered public accounting firm, as the case may be. The Borrower shall use
commercially reasonable best efforts to direct the investment bank or the accounting firm, as the case may be, to perform the determinations or calculations and notify the Borrower and the Lender to which such dispute relates of the results no later
than two (2) Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accounting firm’s determination or calculation, as the case may be, shall be binding upon all parties to such
dispute absent manifest error. The fees and expenses of such investment bank or accounting firm shall be paid by the Borrower. 

 (iv) Record Holder. The person or persons entitled to receive the
Option Exchange Shares issuable upon an Exchange of a Note (or portion thereof) hereunder shall be treated for all purposes as the legal and record holder or holders of such Option Exchange Shares upon delivery of the Exchange Notice in respect of
such Exchange, or in the case of Option Exchange Shares the issuance of which is subject to a bona fide dispute that is subject to and being resolved pursuant to, and in compliance with the time periods and other provisions of, the dispute
resolution provisions of Section 2(c)(iii) of this Annex I, the first Business Day after the resolution of such bona fide dispute; provided that the principal amount of the Notes subject to such dispute shall
continue to bear interest until the date such Option Exchange Shares are actually issued to the applicable Lender. 
 (v)
Borrower’s Failure to Timely Exchange. 
 (A) Cash Damages. If, on or before the Share Delivery Date, the Borrower shall
fail to issue and deliver to the applicable Lender in accordance with Section 2(c)(ii) of this Annex I the number of Option Exchange Shares (free of any restrictive legend or stop transfer instructions) to which such Lender
is entitled upon its Exchange of any Exchange Amount, then in addition to all other available remedies that such Lender may pursue hereunder, then the Borrower shall pay as partial liquidated damages to such Lender for each 30-day period (prorated for any partial period) after the Share Delivery Date such Exchange is not timely effected an amount equal to one percent (1%) of the Exchange Amount. Notwithstanding anything to the contrary
contained herein (and in addition to the remedies set forth herein), to the extent that the Borrower shall fail to issue and deliver Option Exchange Shares to the applicable Lender prior to the applicable Share Delivery Date, the principal amount of
the Notes to which such failure relates shall continue to bear interest until the date such Option Exchange Shares are actually issued to the applicable Lender. If the Borrower fails to pay the additional damages set forth in this
Section 2(c)(v)(A) of this Annex I or interest that accrues in accordance with the immediately preceding sentence or Section 2(c)(iv), in each case, within five (5) Business Days of the date
incurred, then the Lender entitled to such payments shall have the right at any time, so long as the Borrower continues to fail to make such payments, to require the Borrower, upon written notice, to immediately issue, in lieu of such damages or
interest payments described herein, the number of shares of Common Stock equal to the quotient of (X) the aggregate amount of the damages payments described in this Section 2(c)(v)(A) of this Annex I divided by
(Y) the Common Stock Exchange Price in effect on such Exchange Date. 
 (B) Void Exchange Notice. If for any reason a Lender has
not received all of the Option Exchange Shares prior to the tenth (10th) Business Day after the Share Delivery Date (a “Exchange Failure”), then such Lender, upon written notice to the Borrower (a “Void Exchange
Notice”) delivered prior to the receipt of such Option Exchange Shares, may void such applicable Exchange with respect to, and retain or have returned, as the case may be, any portion of the Notes that have not been exchanged pursuant to
the applicable Exchange Notice; provided, that the voiding of such Exchange shall not affect the Borrower’s obligations to make any payments that have accrued prior to the date of such notice pursuant to
Section 2(c)(v)(A) of this Annex I or otherwise. 
 (d) Taxes. The Borrower shall pay any and all taxes
(excluding income taxes, franchise taxes or other taxes levied on gross earnings, profits or the like of each Lender) that may be payable with respect to the issuance and delivery of Option Exchange Shares upon the Exchange of Notes (or any portion
thereof) hereunder. 

 (e) Limitations on Exchange. 

(i) Option Beneficial Ownership Cap. The Borrower shall not issue to a Lender, and a Lender may not acquire, a number of
shares of Common Stock upon Exchange of such Lender’s Notes pursuant to this Annex I to the extent that, upon such Exchange, the number of shares of Common Stock then beneficially owned by such Lender and its Affiliates and any other Persons or
entities whose beneficial ownership of the Common Stock would be aggregated with such Lender for the purposes of Section 13(d) of the Exchange Act (including shares held by any “group” of which such Lender is a member, but excluding
shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth in this Section 2(e)(i)) would exceed
4.985% of the total number of the shares of the Common Stock then issued and outstanding (the “Option Beneficial Ownership Cap”); provided, that the Option Beneficial Ownership Cap shall not apply to the extent that shares of Common
Stock are not deemed to constitute “equity securities” pursuant to Rule 13d-1(i) under the Exchange Act. Each Lender hereby agrees that delivery by a Lender of an Exchange Notice that provides for
the exchange of a Note (or any portion thereof) for Common Stock shall constitute a representation by such Lender that the issuance of shares of Common Stock in accordance with such Exchange Notice will not cause such Lender (together with such
Lender’s Affiliates, and any other Person whose beneficial ownership of Common Stock would be aggregated with such Lender’s for purposes of Section 13(d) of the Exchange Act and the applicable regulations of the Commission) to
beneficially own a number of shares of Common Stock in excess of the Option Beneficial Ownership Cap. For purposes of the foregoing representation, the number of shares of Common Stock beneficially owned by such Lender and its Affiliates shall
include the number of shares of Common Stock issuable upon exchange of the Note (or portion thereof) subject to the Exchange Notice with respect to which such representation is being made, but shall exclude the number of shares of Common Stock which
are issuable upon (A) exchange pursuant to this Annex I of the remaining, unexchanged Notes beneficially owned by such Lender and (B) exercise, conversion or exchange of the unexercised, unconverted or unexchanged portion of any shares of
Series B-1 Preferred Stock or Series B-2 Preferred Stock or any other securities of the Borrower subject to a limitation on conversion, exercise or exchange analogous to
the limitation contained herein (including any warrants) beneficially owned by such Lender or any of its Affiliates. Except as set forth in the preceding sentence, for purposes hereof, beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. In addition, a determination as to any “group” status as contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. For purposes hereof, in determining the number of outstanding shares of Common Stock, a Lender may rely on the number of outstanding

 
shares of Common Stock as stated in the Borrower’s most recent quarterly or annual report filed with the Commission, or any current report filed by the Borrower with the Commission
subsequent thereto. In addition, if in response to a request by a Lender (which may be via electronic mail), the Borrower confirms in writing via electronic mail to such Lender the number of shares of Common Stock then outstanding, each Lender shall
be entitled to rely upon such confirmation. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to any actual conversion, exercise or exchange of securities of the Borrower, including shares of
Series B-1 Preferred Stock or Series B-2 Preferred Stock, by such Lender or its Affiliates since the date as of which such number of outstanding shares of Common Stock
was last publicly reported or reported to such Lender by the Borrower in accordance with the foregoing, whichever is later. 

(ii) Pro Rata Exchange Limit. Notwithstanding anything to the contrary contained herein, the Notes shall not be
exchangeable by a Lender pursuant to this Annex I, and the Borrower shall not issue Option Exchange Shares to such Lender upon any Exchange pursuant to this Annex I, to the extent that the number of shares of Common Stock to be issued in such
Exchange, and/or the number of Underlying Shares in respect of the Series B-2 Preferred Stock to be issued in such Exchange (as applicable), to such Lender, would exceed such Lender’s Pro Rata Exchange
Limit (provided, for the avoidance of doubt, that the Borrower shall exchange the maximum amount of Notes set forth in the applicable Exchange Notice that may be exchanged into Option Exchange Shares without so exceeding such Lender’s Pro Rata
Exchange Limit, subject, in the case of Option Exchange Shares comprised of Common Stock, to the Option Beneficial Ownership Cap, as applicable). Notwithstanding anything to the contrary contained herein, the aggregate number of shares of Common
Stock issued as, or issuable upon conversion of, the Option Exchange Shares issued in all Exchanges under this Annex I shall not exceed the Option Exchange Share Cap. 

3. Assignment. The rights of the Lenders under this Annex I shall not be assignable by any Lender without the prior written consent of
the Borrower, except that a Lender may assign its rights under this Annex I, in whole or in part, without the consent of the Borrower to an Affiliate of such Lender to which it transfers or assigns all or any portion of such Lender’s Notes,
provided that (a) such Lender agrees in writing with the transferee or assignee to assign such rights, and such assignee or transferee agrees in writing to accept such rights subject to, and to be bound by, the terms of this Annex I, and a copy
of such agreement is furnished to the Borrower after such transfer or assignment; and (b) the Borrower is, after such transfer or assignment, furnished with written notice of (i) the name and address of such transferee or assignee and
(ii) the portion of such Lender’s Pro Rata Exchange Limit with respect to which such rights are being transferred or assigned. Upon any such assignment or transfer, the definition of “Pro Rata Exchange Limit” shall be
appropriately adjusted and Schedule A-1 shall be appropriately updated to reflect such assignment. 

 Schedule A-1 

 

			
	 Lender
	  	 Pro Rata Exchange Limit

		
	Deerfield Private Design Fund III, L.P.	  	23,699,179 shares of Common Stock
		
	Deerfield Special Situations Fund, L.P.	  	4,739,836 shares of Common Stock
		
	Total	  	28,439,015 shares of Common Stock

 Exhibit A 

EXCHANGE NOTICE 

Reference is made to (i) the Senior Secured Convertible Notes (the “December 2019 Notes”) of KEMPHARM, INC., a
Delaware corporation (the “Company”), originally issued on December 18, 2019, (ii) the Amended and Restated Senior Secured Convertible Note issued pursuant to the Facility Agreement, dated as of June 2, 2014, as amended and
restated pursuant to the December 2019 Exchange Agreement and Amendment to Facility Agreement, Senior Secured Convertible Notes and Warrants, dated as of December 17, 2019 among the Company, Deerfield Private Design Fund III, L.P., Deerfield Special
Situations Fund, L.P. and Delaware Street Capital Master Fund, L.P., together with any Senior Secured Convertible Note issued in replacement or substitution therefor (the “FA Note” and, together with the December 2019 Notes, the
“Notes”), and (iii) the Amendment to September 2019 Exchange Agreement and Amendment to Facility Agreement (the “Exchange Agreement”), dated as of December 17, 2019, among the Company, Deerfield Private Design
Fund III, L.P. and Deerfield Special Situations Fund, L.P. In accordance with and pursuant to the Exchange Agreement, the undersigned hereby elects to exchange the Exchange Amount (as defined in Annex I to the Exchange Agreement) of Notes indicated
below for shares of the Company, as of the date specified below. 
 Date of Exchange:
                         

Aggregate Exchange Amount to be exchanged at the Exchange Price (as defined in the Exchange Agreement): 

 

                          
               
 For shares of Common Stock:
                                         
        
 For shares of Series B-2 Preferred Stock:
                                         
        
 Please confirm the following information: 

Exchange Price: 
 For the
portion being exchanged for Common Stock:
                                        

 For the portion being exchanged for Series B-2 Preferred Stock: $1,000 

Number of shares of to be issued: 

Common Stock:
                                         
                        

Series B-2 Preferred Stock:
                                         
        

 Please issue the shares of Common Stock and/or Series B-2 Preferred
Stock for which the Notes are being exchanged in the following name and to the following address: 
  

	 	☐	 Deposit/Withdrawal at Custodian (“DWAC”) system; or 

 

	 	☐	 Physical Certificate 

Issue to:
                                         
                                         
                                         
                                      

DTC Participant Number and Name (if through DWAC):
                                         
                                         
                   
 Account Number (if
through DWAC):
                                         
                                         
                                         
      
 Unless otherwise indicated below, by delivering this Exchange Notice the undersigned represents that (i) it is not
as of the date hereof (the “Exchange Date”), and for a period of three (3) months prior to the Exchange Date has not been, an “affiliate” (as such term is used in Rule 144 under the Securities Act of 1933, as amended)
of the Company, and (ii) the Notes being exchanged hereby have not been held by such an affiliate within the six (6)-month period immediately preceding the Exchange Date. 

                          
                                         
                                         
                                         
                                         
   

                          
                                         
                                         
                                         
    

                          
                                         
                                         
                                         
                                         
   

                          
                                         
                                         
                                         
    
 [HOLDER] 

 Exhibit B 

Amendment to Series B-2 Certificate of Designation 

[Included as Exhibit 3.1 to the Company’s Current Report on Form 8-K as filed on December 18, 2019]EX-10.3

 EXHIBIT 10.3 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT. 

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR U.S. FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD
TO MATURITY WITH RESPECT TO THIS NOTE MAY BE OBTAINED BY WRITING TO THE COMPANY AT THE FOLLOWING ADDRESS: 1180 CELEBRATION, FL., SUITE 103, ATTENTION: R. LADUANE CLIFTON, FAX NUMBER: 321-250-3698. 
 SENIOR SECURED CONVERTIBLE NOTE 

 

			
	 Issuance Date: December 18, 2019
	  	Principal: U.S. $[______]

 FOR VALUE RECEIVED, KEMPHARM, INC., a Delaware corporation (the “Company”),
hereby promises to pay to [______] or its registered assigns (the “Holder”), the principal amount of [______] ($[______]) pursuant to, and in accordance with, the terms of that certain Facility Agreement, dated as of June 2,
2014, by and among the Company and the Lenders party thereto (together with all exhibits and schedules thereto and as may be amended, restated, modified and supplemented from time to time, the “Facility Agreement”). The Company
hereby promises to pay accrued and unpaid Interest (as defined below) and premium, if any, on the Principal on the dates, at the rates and in the manner provided for in the Facility Agreement. All capitalized terms used and not otherwise defined
herein shall have the respective meanings set forth in the Facility Agreement. 
 Except as set forth herein, the Company has no right, but
under certain circumstances may have an obligation, to make payments of Principal prior to the due date for such payments set forth in Section 2.3(b) of the Facility Agreement. At any time an Event of Default exists, the Principal of this Note,
together with all accrued and unpaid Interest and any applicable premium due, if any, may be declared, or shall otherwise become, due and payable in the manner, at the price and with the effect provided in the Facility Agreement. 

1. Definitions. 
 (a) Certain
Defined Terms. For purposes of this Note, the following terms shall have the following meanings: 
 (i) “Affiliate”
means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities
Act (“Rule 144”). With respect to a Holder, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Holder will be deemed to be an Affiliate of such Holder. 

 

 (ii) “Applicable Value” means (i) at any time that the Company is
subject to the reporting requirements under the Exchange Act, (A) the product of (x) the number of issued and outstanding shares of Common Stock on the date the Company delivers the Major Transaction Notice (as defined in
Section 3(b)) multiplied by (y) the per share closing price of the Common Stock on such date plus (B) the amount of the Company’s debt as shown on the latest financial statements filed with the SEC (the
“Current Financial Statements”) plus (C) the aggregate liquidation preference of each class of the Company’s preferred stock less (D) the amount of cash and cash equivalents of the Company as shown on the Current
Financial Statements; and (ii) at any time that the Company is not subject to the reporting requirements under the Exchange Act, the book value of the Company’s assets as shown on the most recent financial statements of the Company. 

(iii) “Bylaws” means the Amended and Restated Bylaws of the Company, as amended from time to time. 

(iv) “Cash-Out Major Transaction” means a Major Transaction in which the
consideration payable to holders of capital stock in connection with the Major Transaction (whether paid directly or in liquidation of the Company following such Major Transaction) consists solely of cash (whether or not subject to escrows,
holdbacks or other contingencies). 
 (v) Intentionally Deleted. 

(vi) “Common Stock” means the common stock, par value $0.0001 per share, of the Company. 

(vii) “Conversion Amount” means the sum of (A) the Principal to be converted, redeemed or otherwise exchanged with
respect to which this determination is being made and (B) the amount of all accrued and unpaid Interest on the Principal to be converted, redeemed or otherwise exchanged with respect to which this determination is being made (the
“Interest Amount”). 
 (viii) “Conversion Price” means, as of any Conversion Date or other date of
determination, $17.11 per share of Common Stock, subject to adjustment as provided herein. 
 (ix) “Dollars” or
“$” means United States Dollars. 
 (x) “Eligible Market” means the New York Stock Exchange, Inc., the
NYSE American, the NASDAQ Capital Market, the NASDAQ Global Market, or the NASDAQ Global Select Market (or, in each case, any successor thereto). 

(xi) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 

  
 2 

 (xii) “Fair Market Value” means the fair market value as mutually
determined by the Company and Required Note Holders, subject to the dispute resolution provisions set forth in Section 2(c)(iii) below. 

(xiii) “Initial Holder” means [______]. 

(xiv) “Interest” means any interest (including any default interest) accrued on the Principal pursuant to the terms of this
Note and the Facility Agreement. 
 (xv) Intentionally Deleted. 

(xvi) Intentionally Deleted. 

(xvii) “Issuance Date” means December 18, 2019, regardless of any exchange or replacement hereof. 

(xviii) “Major Transaction” means any of the following events: 

(A) a consolidation, merger, exchange of shares, recapitalization, reorganization, business combination or other similar event,
(1) following which the holders of shares of voting stock immediately preceding such consolidation, merger, exchange, recapitalization, reorganization, combination or event either (a) no longer hold a majority of the shares of voting stock
of the Company or (b) no longer have the ability to elect a majority of the board of directors of the Company, or (2) as a result of which Shares or shares of the Company’s voting stock shall be changed into (or the holders of Shares
or shares of the Company’s voting stock become entitled to receive) the same or a different number of shares of the same or another class or classes of stock or securities of another entity, other than such an event undertaken to adopt a
holding company structure without otherwise changing the relative holdings of capital stock (any event following which or resulting in the conditions described in the foregoing clauses (1) or (2), collectively, a “Change of Control
Transaction”); 
 (B) the sale or transfer in one transaction or a series of related transactions of (i) all or substantially
all of the assets of the Company to any Person or (ii) assets of the Company for a purchase price equal to more than 50% of the Applicable Value; 

(C) a third-party purchase, tender or exchange offer made to the holders of outstanding Conversion Shares or shares of any class(es) or series
capital stock, such that following such purchase, tender or exchange offer a Change of Control Transaction shall have occurred; 
 (D) the
liquidation, bankruptcy, insolvency, dissolution or winding-up (or the occurrence of any analogous proceeding) affecting the Company; 

(E) at any time after March 31, 2021 the shares of Common Stock are not listed on an Eligible Market; 

(F) the shares of Common Stock cease to be registered under Section 12 of the Exchange Act; or 

  
 3 

 (G) an “Event of Liquidation” under the Company’s certificate of
incorporation, as in effect on June 2, 2014. 
 provided, however, that a Major Transaction or Change of Control shall not be deemed to have occurred
solely as a result of the transfer of ownership of any shares of capital stock of the Company without the consent or agreement of the Company; provided that such proviso shall not apply to an event specified in subsection (G) of the definition
of Major Transaction. 
 (xix) Intentionally Deleted. 

(xx) “Note” means this Senior Secured Convertible Note (including all Senior Secured Convertible Notes issued in exchange,
transfer or replacement hereof, and as may be amended, restated or supplemented from time to time). 
 (xxi) “Notes” means
this Note, the other December 2019 Notes and the Senior Secured Convertible Notes issued pursuant to Section 2.2(a) of the Facility Agreement (including all Senior Secured Convertible Notes issued in exchange, transfer or replacement thereof,
and as may be amended, restated or supplemented from time to time). 
 (xxii) “Parent Entity” of a Person means an entity
that, directly or indirectly, controls the applicable Person, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest enterprise value as of the date of consummation of a Major Transaction. 

(xxiii) Intentionally Deleted. 

(xxiv) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, any other entity and a government or any department or agency thereof. 
 (xxv) “Principal”
means the outstanding principal amount of this Note as of any date of determination. 
 (xxvi) “Publicly Traded Successor
Entity” means a Successor Entity that is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. 

(xxvii) Intentionally Deleted. 

(xxviii) Intentionally Deleted. 

(xxix) “Required Note Holders” means, as of any date of determination, holders of at least 50% of the aggregate outstanding
principal amount of the Notes. 
 (xxx) “Securities Act” means the Securities Act of 1933, as amended. 

  
 4 

 (xxxi) Intentionally Deleted. 

(xxxii) Intentionally Deleted. 

(xxxiii) “Shares” means shares of Common Stock. 

(xxxiv) “Standard Settlement Period” means the standard settlement period for equity trades effected by U.S. broker-dealers,
expressed in a number of Trading Days, as in effect on the date the applicable Conversion Notice (as defined below) is received or deemed received by the Company. 

(xxxv) “Successor Entity” means any Person purchasing the Company’s assets sold in a Major Transaction or a majority of
the Company’s capital stock in a Major Transaction, or any successor entity resulting from such Major Transaction, or if the Note is to be convertible for shares of capital stock of its Parent Entity (as defined above), its Parent Entity. 

(xxxvi) “Trading Day” means any day on which trading occurs on the principal securities exchanges or other securities markets
in the United States. 
 2. Conversion Rights. This Note may be converted into shares of Common Stock on the terms and conditions set
forth in this Section 2. 
 (a) Conversion at Option of the Holder. At any time, the Holder shall be
entitled to convert all or any part of the Principal (and the Interest Amount thereon) or any Interest accrued hereunder into fully paid and nonassessable shares of Common Stock (the “Conversion Shares”) in accordance with this
Section 2 at the Conversion Rate (as defined in Section 2(b)). The Company shall not issue any fraction of a Share upon any conversion. If the issuance would result in the issuance of a fraction of
a Share, then the Company shall round such fraction of a Share up or down to the nearest whole share (with 0.5 rounded up). 
 (b)
Conversion Rate. The number of Conversion Shares issuable upon a conversion of any portion of this Note pursuant to this Section 2 shall be determined according to the following formula (the “Conversion
Rate”): 
  

					
		 	 Conversion Amount
	 	
		 	Conversion Price	 	

 (c) Mechanics of Conversion. The conversion of this Note shall be conducted in the following manner:

 (i) Holder’s Delivery Requirements. To convert a Conversion Amount into Conversion Shares on any date (the
“Conversion Date”), the Holder shall (A) transmit by facsimile or electronic mail (or otherwise deliver), for receipt on or prior to 5:00 p.m. New York City time on such date, a copy of an executed conversion notice in the form
attached hereto as Exhibit A (the “Conversion Notice”) to the offices of the Company, 1180 Celebration Blvd., Suite 103, Celebration, FL 34747 (Attention: Chief Financial Officer, Fax: (321) 250-3698, Email: lclifton@kempharm.com), or such other address, facsimile number or 

  
 5 

 
email address as the Company may designate in writing, and (B) if required by Section 2(c)(vi), surrender to a common carrier for delivery to the Company, no later
than three (3) Business Days after the Conversion Date, the original Note being converted (or an indemnification undertaking in customary form with respect to this Note in the case of its loss, theft or destruction). 

(ii) Company’s Response. Upon receipt or deemed receipt by the Company of a copy of a Conversion Notice, the
Company (I) shall as soon as practicable send, via facsimile or electronic mail, a confirmation of receipt of such Conversion Notice to the Holder and the Company’s designated transfer agent (the “Transfer Agent”), if
applicable, which confirmation shall constitute an instruction to any such Transfer Agent to process such Conversion Notice in accordance with the terms herein and (II) on or before the second
(2nd) Trading Day (or, if earlier, the last day of the Standard Settlement Period) following the date of receipt or deemed receipt by the Company of such Conversion Notice (the “Share
Delivery Date”), issue and deliver to the address as specified in the Conversion Notice or otherwise specified by the Holder, a stock certificate, registered in the name of the Holder or its designee, for the number of Conversion Shares to
which the Holder shall be entitled. If this Note is submitted for conversion, as may be required by Section 2(c)(vi), and the Principal represented by this Note is greater than the Principal being converted, then the
Company shall, as soon as practicable and in no event later than two (2) Trading Days after receipt of this Note (the “Note Delivery Date”) and at its own expense, issue and deliver to the Holder a new Note representing the
Principal not converted and cancel this Note. 
 (iii) Dispute Resolution. In the case of a dispute as to the determination of the
Conversion Price or the Major Transaction Note Early Termination Price (including any determination as to Fair Market Value) or the arithmetic calculation of the Conversion Rate, the Company shall issue, or instruct the Transfer Agent to issue, as
applicable, to the Holder the number of Conversion Shares that is not disputed and shall transmit an explanation of the disputed determinations or arithmetic calculations to the Holder via facsimile within two (2) Business Days of receipt or
deemed receipt of the Holder’s Conversion Notice or other date of determination. If the Holder and the Company are unable to agree upon the determination of the Conversion Price, Major Transaction Note Early Termination Price or arithmetic
calculation of the Conversion Rate within one (1) Business Day of such disputed determination or arithmetic calculation being transmitted to the Holder, then the Company shall promptly (and in any event within two (2) Business Days) submit
via facsimile or email (A) the disputed determination of the Conversion Price or Major Transaction Note Early Termination Price to an independent, reputable investment banking firm agreed to by the Company and the Required Note Holders, or
(B) the disputed arithmetic calculation of the Conversion Rate to the Company’s independent registered public accounting firm, as the case may be. The Company shall use commercially reasonable best efforts to direct the investment bank or
the accounting firm, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than two (2) Business Days from the time it receives the disputed determinations or
calculations. Such investment bank’s or accounting firm’s determination or calculation, as the case may be, shall be binding upon all parties absent manifest error. 

  
 6 

 (iv) Record Holder. The person or persons entitled to receive the Conversion Shares
issuable upon a conversion of this Note shall be treated for all purposes as the legal and record holder or holders of such Shares as of immediately following the delivery of the Conversion Notice applicable to such conversion, or in the case of
Conversion Shares the issuance of which is subject to a bona fide dispute that is subject to and being resolved pursuant to, and in compliance with the time periods and other provisions of, the dispute resolution provisions of
Section 2(c)(iii), the first Business Day after the resolution of such bona fide dispute and the fees and expenses of such investment bank or accountant shall be paid by the Company. 

(v) Company’s Failure to Timely Convert. 

(A) Cash Damages. If, on or before the Share Delivery Date, the Company shall fail to issue and deliver a certificate to the Holder for
the number of Conversion Shares (free of any restrictive legend, subject to the terms of Section 2(e) hereof) to which the Holder is entitled upon the Holder’s conversion of any Conversion Amount, or if the Company fails to issue and
deliver a new Note representing the Principal to which such Holder is entitled on or before the Note Delivery Date pursuant to Section 2(c)(ii), then in addition to all other available remedies that the Holder may pursue
hereunder and under the Facility Agreement, the Company shall pay additional damages to the Holder for each 30-day period (prorated for any partial period) after the Share Delivery Date such conversion is not
timely effected and/or each day after the Note Delivery Date such Note is not delivered in an amount equal to (x) in the case of a failure to deliver a certificate for the Conversion Shares, one percent (1%) of the Conversion Amount or
(y) in the case of a failure to deliver a new Note, one percent (1%) of the outstanding balance of the new Note. If the Company fails to pay the additional damages set forth in this Section 2(c)(v)(A) within five
(5) Business Days of the date incurred, then the Holder entitled to such payments shall have the right at any time, so long as the Company continues to fail to make such payments, to require the Company, upon written notice, to immediately
issue, in lieu of such damages payments described herein, the number of Shares equal to the quotient of (X) the aggregate amount of the damages payments described in this Section 2(c)(v)(A) divided by (Y) the
lower of (i) the Conversion Price in effect on such Conversion Date as specified by the Holder in the Conversion Notice and (ii) the Fair Market Value Price per Conversion Share on the date of the Conversion Notice. 

(B) Void Conversion Notice. If for any reason the Holder has not received all of the Conversion Shares prior to the tenth (10th) Business Day after the Share Delivery Date (a “Conversion Failure”), then the Holder, upon written notice to the Company (a “Void Conversion Notice”)
delivered prior to the receipt of such Conversion Shares, may void such applicable conversion with respect to, and retain or have returned, as the case may be, any portion of this Note that has not been converted pursuant to such notice;
provided, that the voiding of such conversion shall not affect the Company’s obligations to make any payments that have accrued prior to the date of such notice pursuant to Section 2(c)(v)(A), 2(c)(v)(C)
or otherwise. 
 (C) Event of Default. A Conversion Failure shall constitute an Event of Default under the Facility Agreement and
entitle the Lenders to all payments and remedies provided under the Facility Agreement upon the occurrence of an Event of Default. 

  
 7 

 (vi) Book-Entry. Notwithstanding anything to the contrary set forth herein, upon
conversion or redemption of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless all of the Principal is being converted or redeemed. The Holder and the Company shall
maintain records showing the Principal converted or redeemed and the dates of such conversions or redemptions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note
upon any such partial conversion or redemption. Notwithstanding the foregoing, if this Note is converted or redeemed as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Company,
whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder may request, representing in the aggregate the remaining Principal represented by this Note. The Holder and any
assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion or redemption of any portion of this Note, the Principal of this Note may be less than the principal amount stated
on the face hereof. 
 (d) Taxes. The Company shall pay any and all taxes (excluding income taxes, franchise taxes or other taxes
levied on gross earnings, profits or the like of the Holder) that may be payable with respect to the issuance and delivery of Conversion Shares upon the conversion of this Note. 

(e) Legends; Delivery of Electronic Shares. 

(i) Unless the Holder is an Affiliate of the Company as of the Issuance Date, neither this Note nor any note issued in
substitution or replacement of this Note (or portion thereof) shall contain or be subject to, any legend, stop transfer instruction or similar notation, in each case, restricting the transfer hereof or thereof. Provided the Holder to which
Conversion Shares are to be issued represents that it is not as of the applicable Conversion Date, and for a period of three (3) months prior to the applicable Conversion Date has not been, an “affiliate” (as such term is used in Rule
144 under the Securities Act) of the Company, upon each conversion of this Note (in whole or in part) the Conversion Shares shall be issued and delivered without (and without being subject to) any legend, stop transfer instruction or similar
notation, in each case, restricting the transfer hereof or thereof. For the avoidance of doubt, by delivering a Conversion Notice, the Holder shall be deemed to have made the representations contemplated by the immediately preceding sentence as of
the applicable Conversion Date, unless the applicable Holder otherwise indicates in such Conversion Notice. The Company shall use best efforts to cause its counsel to issue a legal opinion to the Transfer Agent, if required by the Transfer Agent to
issue certificates evidencing the Conversion Shares without restrictive legends (and without being subject to any stop transfer instruction or similar notation) in accordance with this Agreement. 

  
 8 

 (ii) Holder agrees that the issuance of Conversion Shares without any
restrictive legends is predicated upon the Company’s reliance that the Holder will sell such Conversion Shares pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or
an exemption therefrom, and that if such securities are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein. 

(iii) Delivery of Electronic Shares. In lieu of delivering physical certificates representing the Common Stock issuable upon
conversion, or representing Conversion Shares, upon written request of Holder, the Company shall cause its Transfer Agent to electronically transmit the Conversion Shares issuable upon conversion of this Note to the Holder by crediting the account
of Holder’s prime broker with the Depository Trust Company through its Deposit/Withdrawal at Custodian (DWAC) system. The time periods for delivery and penalties described herein shall apply to the electronic transmittals described herein. Any
delivery not effected by electronic transmission shall be effected by delivery of physical certificates. 
 (f) Adjustments to Conversion
Price.  
 (i) Adjustment of Conversion Price upon Issuance of Common Stock, Options, Convertible Securities, Etc. 

(A) If at any time after the Issuance Date for so long as this Note is outstanding, the Company (x) issues or sells any Common Stock,
Convertible Securities, warrants, or Options or (y) directly or indirectly effectively reduces the conversion, exercise or exchange price for any Convertible Securities or Options which are currently outstanding, at or to an effective Per Share
Selling Price (as defined below) which is less than the greater of (I) the closing sale price per share of the Common Stock on the principal securities exchange, trading market or quotation system on which shares of Common Stock are then
traded, listed or quoted on the Trading Day immediately preceding such issue or sale (“Fair Market Price”), or (II) the Conversion Price, then in each such case the Conversion Price in effect immediately prior to such issue or
sale date, as applicable, shall be automatically reduced effective concurrently with such issue or sale to an amount determined by multiplying the Conversion Price then in effect by a fraction, (x) the numerator of which shall be the sum of
(1) the number of shares of Common Stock outstanding immediately prior to such issue or sale, plus (2) the number of shares of Common Stock which the aggregate consideration received by the Company for such additional shares would purchase
at such Fair Market Price or Conversion Price, as the case may be, and (y) the denominator of which shall be the number of shares of Common Stock of the Company outstanding immediately after such issue or sale. The foregoing provision shall not
apply to any issuances or sales of (i) Common Stock or Convertible Securities (A) pursuant to any Convertible Securities or Options outstanding on the Issuance Date in accordance with the terms of such Convertible Securities in effect on
the Issuance Date provided that such securities have not been amended since the date hereof to directly or indirectly effectively reduce the conversion, exercise or exchange price for any Convertible Securities or Options which are currently
outstanding, (B) to a Lender in connection with the conversion or exchange of any Notes (as defined in the Facility Agreement) or the conversion or exchange of any Convertible Security or Options issued to a Lender pursuant to any such
conversion or exchange of Notes, or (ii) any Common Stock issued or issuable upon exercise of any options to employees, officers, directors, consultants and advisors (and any individuals who have accepted an offer of employment), in each case
in connection with any Approved Stock Plan (defined below). 

  
 9 

 Notwithstanding anything herein to the contrary, nothing in this Section 2(f)(i)(A) shall result in the
Conversion Price of this Note, or any other Note, equaling a price per share less than $0.38 (subject to adjustment as provided herein (the “Floor Price”)). 

Notwithstanding anything to the contrary contained in the immediately preceding paragraph, if the Company issues or sells any Common Stock, Convertible
Securities, warrants, or Options in a firm commitment underwritten public offering (an “Underwritten Public Offering”), then for purposes of determining any adjustment to the Conversion Price under this
Section 2(f)(i)(A) in respect of such Underwritten Public Offering the Fair Market Price shall be the closing sale price per share of the Common Stock on the principal securities exchange, trading market or quotation system
on which shares of Common Stock are then traded, listed or quoted on the date of execution of the underwriting agreement (the “Offering Effective Date”) between the Company and the underwriters in such offering, provided,
that (x) if the Offering Effective Date is not a Trading Day, then the Fair Market Price shall be the closing sale price per share of the Common Stock on the principal securities exchange, trading market or quotation system on which shares of
Common Stock are then traded, listed or quoted on the Trading Day immediately preceding the Offering Effective Date and (y) if the underwriting agreement in such offering is executed prior to closing of trading on the principal securities
exchange, trading market or quotation system on which shares of Common Stock are then traded, listed or quoted on a given date, then the Fair Market Price shall be the closing sale price per share of the Common Stock on such principal securities
exchange, trading market or quotation system on the Trading Day immediately preceding such date. 
 Notwithstanding anything to the contrary contained
herein, this Section 2(f)(i)(A) shall not apply to any issuance or sale of Common Stock by the Company if such issuance or sale is made in an “at the market offering” (as defined in Rule 415 under the
Securities Act) at a Per Share Selling Price equal to or greater than the then applicable Conversion Price, provided that, if the Company makes any such sale of Common Stock at a Per Share Selling Price less than the then applicable Conversion Price
then (x) this Section 2(f)(i)(A) shall apply, but (y), for purposes of calculating any adjustment of the Conversion Price hereunder, the Fair Market Price for such sale shall be the price per share at which shares of
Common Stock are sold in such “at the market offering.” 
 Notwithstanding anything to the contrary contained herein, this
Section 2(f)(i)(A) shall not apply to any issuance or sale of Common Stock, Convertible Securities or Options by the Company if such issuance or sale is made pursuant to the terms of (x) that certain Purchase
Agreement, dated February 28, 2019, by and between the Company and Lincoln Park Capital Fund, LLC, (y) that certain Common Stock Sales Agreement, dated as of September 4, 2018, by and between the Company and RBC Capital Markets, LLC,
or (z) that certain September 2019 Exchange Agreement and Amendment to Facility Agreement, dated as of September 3, 2019, by and among the Company, Deerfield Private Design Fund III, L.P. and Deerfield Special Situations Fund, L.P. (as
amended as of the Issuance Date). 

  
 10 

 For the purposes of the foregoing adjustments, in the case of the issuance of any Convertible Securities or
Options, the maximum number of shares of Common Stock issuable upon exercise, exchange or conversion of such Convertible Securities or Options shall be deemed to be outstanding, provided that no further adjustment shall be made upon the actual
issuance of Common Stock upon exercise, exchange or conversion of such Convertible Securities or Options, and provided further that to the extent such Convertible Securities or Options expire or terminate unconverted or unexercised, then at such
time the Conversion Price shall be readjusted as if such portion of such Convertible Securities or Options had not been issued. 
 For purposes of this
Section 2(f), if an event occurs that triggers more than one of the above adjustment provisions, then only one adjustment shall be made and the calculation method which yields the greatest downward adjustment in the
Conversion Price shall be used. 
 (B) Record Date. If the Company takes a record of the holders of Shares for the purpose of
entitling them (1) to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (2) to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such
record date will be deemed to be the date of the issue or sale of the Shares deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription
or purchase, as the case may be. 
 (C) Certain Definitions. For purposes of this Section 2(f), the
following terms have the respective meanings set forth below: 
 (I) “Approved Stock Plan” means any employee benefit plan
which has been duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of
non-employee directors established for such purpose, pursuant to which the Company’s securities may be issued to any employee, consultant, advisor, officer or director (or any individual who has accepted
an offer of employment) for services provided to the Company, and in all cases, providing for a Conversion Price that is at or above the fair market value (as defined in such Approved Stock Plan). 

(II) “Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible into or
exchangeable or exercisable for shares of Common Stock. 
 (III) “Exempt Issuances” shall mean: the issuance of
(a) any Common Stock issued or issuable upon exercise of any options to employees, officers, directors, consultants and advisors (and any individuals who have accepted an offer of employment), in each case in connection with any Approved Stock
Plan, up to a maximum amount of Common Stock not to exceed in any one calendar year 5% of the total number of outstanding shares of the Company (as of the beginning of such calendar year), (b) securities upon the exercise, exchange of, conversion or
redemption of, or payment of interest or liquidated or similar damages on, any Common Stock issued hereunder, (c) other securities exercisable, exchangeable for, convertible into, or redeemable for shares of Common Stock issued and outstanding
on the date of this Note, provided that such securities have not been amended since the date of this Note to directly or indirectly increase the number of such securities or to decrease 

  
 11 

 
the exercise, exchange or conversion price of such securities (and including any issuances of securities pursuant to the anti-dilution provisions of any such securities), and (d) the
issuance of Common Stock, Options, Convertible Securities, stock appreciation rights, phantom stock rights or other rights with equity features (collectively, “Management Incentives”) issued or granted to employees, officers,
directors, consultants and advisors (and individuals who have accepted an offer of employment), which Management Incentives have been approved by the Required Note Holders. 

(IV) “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities. 
 (V) “Per Share Selling Price” shall include the amount actually paid by third parties for each share of
Common Stock in a sale or issuance by the Company. In the event a fee is paid by the Company in connection with such transaction directly or indirectly to such third party or its affiliates, any such fee shall be deducted from the selling price pro
rata to all shares sold in the transaction to arrive at the Per Share Selling Price, provided that, for the avoidance of doubt, if a fee is paid to a placement agent, sales agent or party operating in a similar capacity for sales made in an
“at the market offering” (as defined in Rule 415 under the Securities Act), such fee shall not be deducted from the selling price for purposes of determining the Per Share Selling Price hereunder. A sale of shares of Common Stock shall
include the sale or issuance of Convertible Securities or Options, and in such circumstances the Per Share Selling Price of the Common Stock covered thereby shall also include the exercise, exchange or conversion price thereof (in addition to the
consideration received by the Company upon such sale or issuance less the fee amount as provided above). In case of any such security issued in a transaction in which the purchase price or the conversion, exchange or exercise price is directly or
indirectly subject to adjustment or reset based on a future date, future trading prices of the Common Stock, specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock, or
otherwise (but excluding standard stock split anti-dilution provisions or weighted-average anti-dilution provisions similar to that set forth herein, provided that any actual reduction of such price under any such security pursuant to such
weighted-average anti-dilution provision shall be included and cause an adjustment hereunder), the Per Share Selling Price shall be deemed to be the lowest conversion, exchange, exercise or reset price at which such securities are converted,
exchanged, exercised or reset or might have been converted, exchanged, exercised or reset, or the lowest adjustment, as the case may be, over the life of such securities. If shares are issued for a consideration other than cash, the Per Share
Selling Price shall be the fair value of such consideration as determined in good faith by independent certified public accountants mutually acceptable to the Company and the Holder. In the event the Company directly or indirectly effectively
reduces the conversion, exercise or exchange price for any Convertible Securities or Options which are currently outstanding, then the Per Share Selling Price shall equal such effectively reduced conversion, exercise or exchange price. 

(ii) Adjustment of Conversion Price and Floor Price upon Subdivision or Combination of Shares. If the Company at any time on or after
the Issuance Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) outstanding Shares into a greater number of Shares, each of the Conversion Price and Floor Price in effect immediately prior to such subdivision will be
proportionately reduced. If the Company at any time on or after the Issuance Date combines (by combination, reverse stock split or otherwise) its outstanding Shares into a lesser number of Shares, each of the Conversion Price and Floor Price in
effect immediately prior to such combination will be proportionately increased. 

  
 12 

 (iii) Adjustment of Conversion Price and Floor Price upon a Distribution of Assets.
If the Company at any time on or after the Issuance Date shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Shares, by way of return of capital or otherwise (including any
distribution of cash, stock or other securities, property or options by way of a dividend, spin-off, reclassification, corporate rearrangement or other similar transaction (a “Distribution”)),
then, in each such case, the applicable Conversion Price and Floor Price in effect immediately prior to the close of business on the date fixed for the determination of holders of Shares entitled to receive the Distribution shall be reduced,
effective as of the close of business on such date, to a price determined by multiplying such applicable Conversion Price and Floor Price by a fraction of which (A) the numerator shall be the Fair Market Value of one Share immediately preceding
such date minus the Fair Market Value of the Distribution applicable to one Share, and (B) the denominator shall be the Fair Market Value of one Share on the Trading Day immediately preceding such date. 

(iv) Recapitalization or Reclassification. In the event of any reclassification, recapitalization, reorganization, or change affecting
the Shares, or any automatic or mandatory conversion of all of the outstanding shares of the class or series of capital stock for which this Note is then convertible, this Note shall become convertible for the kind and amount of shares of stock and
other securities and property receivable in connection with such reclassification, reorganization, change or conversion by a holder of the same number of Conversion Shares as were purchasable by the Holder pursuant to conversion hereof immediately
prior to such reclassification, reorganization, change or conversion. In any such case, appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with
respect to any shares of stock or other securities and property deliverable upon conversion hereof, and appropriate adjustments shall be made to the Conversion Price payable hereunder and the applicable Floor Price, provided the aggregate Conversion
Price shall remain the same. 
 (v) Adjustment for Tax Purposes. The Company shall be entitled to make such reductions in the
Conversion Price, in addition to those otherwise required by this Section 2(f), as the Company’s Board of Directors in its discretion shall determine to be advisable in order that any stock dividends, subdivisions of
shares, distribution of rights to purchase stock or securities, or any distribution of securities convertible into or exchangeable for stock, made after the Issuance Date by the Company to its stockholders shall not be taxable. 

(vi) Other Events. If any event occurs of the type contemplated by the provisions of this Section 2(f) but
not expressly provided for by such provisions (including the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the
Conversion Price and the Floor Price so as to protect the rights of the Holder; provided that no such adjustment will increase the Conversion Price or the Floor Price as otherwise determined pursuant to this
Section 2(f). 

  
 13 

 (vii) Notices. Promptly upon any adjustment of the Conversion Price, the Company
will give written notice thereof to the Holder, setting forth in reasonable detail, and certifying, the calculation of such adjustment. The Company will give written notice to the Holder at least ten (10) Business Days prior to the date on
which the Company closes its books or takes a record (I) with respect to any dividend or distribution upon the Common Stock or the Shares, (II) with respect to any pro rata subscription offer to holders of Common Stock or Shares or
(III) for determining rights to vote with respect to any Major Transaction, provided that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder. The Company will also
give written notice to the Holder with respect to any Major Transaction as provided under Section 3(b) below. 

(g) Intentionally Deleted. 
 (h)
Intentionally Deleted. 
 (i) Limitations on Conversion. Notwithstanding anything herein to the contrary, the Company shall not issue
to the Holder, and the Holder may not acquire, a number of Conversion Shares upon conversion of this Note to the extent that, upon such exercise, the number of shares of Common Stock then beneficially owned by the Holder and its Affiliates and any
other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act (including shares held by any “group” of which the Holder is a member,
but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) would exceed
[4.985%/19.985%] of the total number of the shares of Common Stock then issued and outstanding (the “[4.985% Cap/19.985% Cap]”); provided that the [4.985%/19.985%] Cap shall not apply to the extent that shares of
Common Stock are not deemed to constitute “equity securities” pursuant to Rule 13d-1(i) under the Exchange Act and, provided further, that the [4.985%/19.985%] Cap shall not apply to an exercise
effected following receipt of a Major Transaction Notice (as defined below) in respect of a Major Transaction described in clause (A) of the definition of Major Transaction above in which the Company will not be the surviving entity, until
consummation or abandonment of such Major Transaction. For the avoidance of doubt, a conversion hereunder (whether at the election of the Holder or the Company) shall be null and void to the extent the issuance of shares upon such conversion would
violate this subsection (i). 
 3. Rights Upon Major Transaction. Notwithstanding anything contained herein or in the Facility
Agreement to the contrary, in the event that a Major Transaction occurs, then the Holder, at its option, may require the Company to redeem all or any portion of the Principal (and the Interest Amount thereon) outstanding on the Holder’s Notes
for cash in accordance with Section 3(b) below. In the event the Holder shall not have exercised any of its rights under the immediately preceding sentence within the applicable time periods set forth herein, then the Major
Transaction shall be treated as an Assumption (as defined below) in accordance with Section 3(a) below unless the Holder waives its rights under this Section 3 with respect to such Major
Transaction. For the avoidance of doubt, the Holder may waive the above provisions of this Section 3 with respect to any Major Transaction and, without limitation, may elect to convert this Note in accordance with the other
terms hereof prior to any Major Transaction. 

  
 14 

 (a) Assumption. The Company shall not enter into or be party to a Major Transaction
that is to be treated as an Assumption pursuant to this Section 3, unless any Successor Entity assumes in writing all of the obligations of the Company under this Note and provides (a) registration rights that are
comparable to those provided to the initial Holder under the Investor Rights Agreement, if the Successor Entity is not a Publicly Traded Successor Entity, or (b) resale registration rights reasonably acceptable to the Holder, if the Successor
Entity is a Publicly Traded Successor Entity, in accordance with the provisions of this Section 3(a) pursuant to written agreements and instruments in form and substance reasonably satisfactory to the Holder and approved by
the Holder prior to such Major Transaction (not to be unreasonably withheld or delayed), including a security of the Successor Entity evidenced by a written instrument (a “Replacement Note”) substantially similar in form and
substance to this Note, including, without limitation, representing the appropriate number of shares of the Successor Entity, having similar conversion rights as this Note (including but not limited to a similar Conversion Price and similar
Conversion Price adjustment provisions based on the price per share or conversion ratio, and taking into account any cash consideration, to be received by the holders of Conversion Shares in the Major Transaction) and providing for conversion into
the shares of the Successor Entity into or for which shares of the same class and series as the Shares are to be converted or exchanged (“Successor Conversion Shares”). Upon the occurrence of any Major Transaction, but only if a
Replacement Note has not been delivered to the Holder in connection therewith, any Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Major Transaction, the provisions of this Note referring to the
“Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note with the same effect as if such Successor Entity had been
named as the Company herein. Upon consummation of the Major Transaction, but only if a Replacement Note has not been delivered to the Holder in connection therewith, any Successor Entity shall deliver to the Holder confirmation that there shall be
issued upon conversion or redemption of this Note at any time after the consummation of the Major Transaction, in lieu of the Conversion Shares (or other securities, cash, assets or other property) issuable upon the conversion of this Note prior to
such Major Transaction, such Successor Conversion Shares in accordance with the provisions of this Note. The provisions of this Section shall apply similarly and equally to successive Major Transactions and shall be applied without regard to any
limitations on the conversion of this Note, including any applicable beneficial ownership limitations. Any assumption of Company obligations under this paragraph shall be referred to herein as an “Assumption.” 

(b) Notice; Major Transaction Early Termination Right. At least fifteen (15) days prior to the consummation of any Major
Transaction, but, in any event, within five (5) Business Days following the first to occur of (y) the date of the public announcement of such Major Transaction if such announcement is made before 4:00 p.m., New York City time, and
(z) the day following the public announcement of such Major Transaction if such announcement is made on and after 4:00 p.m., New York City time, the Company shall deliver written notice thereof via facsimile and overnight courier to the Holder
(a “Major Transaction Notice”). At any time during the period beginning after the Holder’s receipt of a Major Transaction Notice and ending five (5) Trading Days prior to the consummation of such Major Transaction (the
“Early Termination Period”), the Holder may require the Company to redeem (an “Early Termination Upon Major Transaction”) all or any portion of the outstanding portion of this Note (without regard to any ownership
limitations) by delivering written notice thereof (“Major  

  
 15 

 
Transaction Early Termination Notice”) to the Company, which Major Transaction Early Termination Notice shall indicate the portion (the “Early Termination Portion”)
of this Note that the Holder is electing to have so redeemed. The Early Termination Portion shall be redeemed by the Company at a price (the “Major Transaction Note Early Termination Price”) payable in cash equal to the greater of
(1) the Principal amount of the Early Termination Portion and the Interest Amount thereon (additionally including, for this purpose, any interest that would have accrued on such Principal amount from the date of the Major Transaction until the
then applicable maturity date of the Note were such Principal amount on the Note outstanding throughout such period), and (2) the amount of cash payable or distributable per Conversion Share plus the Fair Market Value of any property (other
than cash) payable or distributable per Conversion Share (or the shares of Common Stock into which such Conversion Shares are then convertible, if greater), in each case, pursuant to the terms of the Company’s certificate of incorporation, as
it may be amended from time to time, in connection with such Major Transaction. 
 (c) Payment of Major Transaction Note Early
Termination Price. Following the receipt of a Major Transaction Early Termination Notice from the Holder, the Company shall not effect a Major Transaction that is being treated as an early termination unless it obtains the written agreement of
any Successor Entity that payment of the Major Transaction Note Early Termination Price shall be made to the Holder prior to or concurrently with consummation of such Major Transaction (subject to any holdbacks or escrows applicable to such payment
pursuant to the applicable acquisition agreement and subject to standard non-material conditions on such payment imposed by such Successor Entity, such as surrender of this Note and delivery of a letter of
transmittal and an applicable IRS Form W-9 or applicable W-8, if applicable), and such payment shall be a condition precedent or concurrent to consummation of such Major
Transaction.  
 (d) Injunction. Following the receipt of a Major Transaction Early Termination Notice from the Holder, in the
event that the Company attempts to consummate a Major Transaction without the Major Transaction Note Early Termination Price being paid to the Holder prior to or concurrently with the consummation of such Major Transaction in accordance with
Section 3(c) above, or obtaining any written agreement of the Successor Entity required by Section 3(c) above, the Holder shall have the right to apply for an injunction in any state or federal
courts sitting in the City of New York, borough of Manhattan to prevent the closing of such Major Transaction until the Major Transaction Note Early Termination Price is paid to the Holder, in full. 

Any payment determined pursuant to clause (1) of Section 3(b) in connection with an early termination shall
have priority to payments to holders of capital stock in connection with a Major Transaction and to the extent an early termination required by this Section 3 is deemed or determined by a court of competent jurisdiction to
be prepayments of this Note by the Company, such early termination shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 3, until the Major Transaction Note Early Termination
Price is paid in full (excluding any amount subject to escrows or holdbacks and any other contingent consideration that has not accrued), this Note may be converted, in whole or in part, by the Holder into Shares, or in the event the Conversion Date
is after the consummation of a Major Transaction, Successor Conversion Shares pursuant to this Section 3. 

  
 16 

 
The parties hereto agree that in the event of the early termination of any portion of the Note under this Section 3, the Holder’s damages would be uncertain and
difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any premium due under this
Section 3 is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty. 

4. Amendment; Waiver. The terms and provisions of this Note shall not be amended or waived except in a writing signed by the Company and
the Required Note Holders. Any amendment so approved shall bind all holders of the Notes, provided that such amendment applies to all of the Notes on substantially the same basis. 

5. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be
cumulative and in addition to all other remedies available under this Note, the Facility Agreement, at law or in equity (including a decree of specific performance and/or other injunctive relief). No remedy contained herein shall be deemed a waiver
of compliance with the provisions giving rise to such remedy, and nothing herein shall limit the Holder’s right to pursue actual damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder
that, except as may be set forth in the Facility Agreement, there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the
like (and the computation thereof) shall be the amounts to be received by the Holder thereof and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the
Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. 

6. Specific Shall Not Limit General; Construction. No specific provision contained in this Note shall limit or modify any more general
provision contained herein. This Note shall be deemed to be jointly drafted by the Company and all purchasers of this Note pursuant to the Facility Agreement and shall not be construed against any Person as the drafter hereof. 

7. Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. 

8. Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in
accordance with Section 4.1 of the Facility Agreement. 

  
 17 

 9. Restrictions on Transfer. 

(a) Intentionally Deleted. 
 (b)
Assignment. Subject to Section 6.5 of the Facility Agreement, the Holder may sell, transfer, assign, pledge, hypothecate or otherwise dispose (collectively, “Transfer”) of this Note, in whole or in part. Holder shall
deliver a written notice to Company, substantially in the form of the Assignment attached hereto as Exhibit B, indicating the Person or Persons to whom the Note shall be Transferred and the respective principal amount of this Note to be
Transferred to each assignee. The Company shall effect the Transfer within three (3) Business Days (the “Transfer Delivery Period”), and shall deliver to the assignee(s) designated by Holder a Note or Notes of like tenor and
terms for the appropriate principal amount. This Note and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Holder. The provisions of this Note are intended to be for the benefit of all
Holders from time to time of this Note, and shall be enforceable by any such Holder. 
 10. Payment of Collection, Enforcement and Other
Costs. If (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding; or (b) an attorney is retained to represent the Holder in any bankruptcy,
reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action,
including reasonable attorneys’ fees and disbursements. 
 11. Cancellation. After all Principal, Interest and other amounts at
any time owed under, or on account of, this Note have been paid in full or converted into Shares in accordance with the terms hereof, this Note shall automatically be deemed cancelled, shall be surrendered to the Company for cancellation and shall
not be reissued. 
 12. Registered Note. This Note may be transferred only upon notation of such transfer on the Register, and no
assignment thereof shall be effective until recorded therein. 
 13. Waiver of Notice. To the extent permitted by law, the Company
hereby waives demand, notice, presentment, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Facility Agreement. 

14. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by
and construed and enforced in accordance with the laws of the State of New York applicable to contracts made and to be performed in such State. All legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Note (whether brought against a party or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City 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 

  
 18 

 
improper or is an inconvenient venue for such proceeding. 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 via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note 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 other manner permitted by law. The parties hereby waive all rights to a trial by jury. 

15. Interpretative Matters. Unless the context otherwise requires, (a) all references to Sections or Exhibits are to Sections or
Exhibits contained in or attached to this Note, (b) each accounting term not otherwise defined in this Note has the meaning assigned to it in accordance with GAAP, (c) 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 and (d) the use of the word “including” in this Note shall be by way of example rather than limitation. If a stock
split, stock dividend, stock combination or other similar event occurs during any period over which an average price is being determined, then an appropriate adjustment will be made to such average to reflect such event. 

16. Execution. A facsimile, telecopy, PDF or other reproduction of this Note may be delivered by the Company, and an executed copy of
this Note may be delivered by the Company by facsimile, e-mail or other similar electronic transmission device pursuant to which the signature of or on behalf of the Company can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes. The Company hereby agrees that it shall not raise the execution of facsimile, PDF or other reproduction of this Note, or the fact that any signature was transmitted by
facsimile, e-mail or other similar electronic transmission device, as a defense to the Company’s execution of this Note. Notwithstanding the foregoing, the Company shall be required to deliver an
originally executed Note to the Holder. 
  

  
 19 

 IN WITNESS WHEREOF, the Company has caused this Senior Secured Convertible Note to be duly
executed as of the date first set forth above. 
  

			
	COMPANY:
	
	KEMPHARM, INC.
		
	By:	 	
                     
        

 Exhibit A 

CONVERSION NOTICE 

Reference is made to the Senior Secured Convertible Note (the “Note”) of KEMPHARM, INC., a Delaware corporation (the
“Company”), in the original principal amount of $[______]. In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares
of the Company, as of the date specified below. 
 Date of Conversion:
                     
 Aggregate
Conversion Amount to be converted at the Conversion Price (as defined in the Note): 
  

                       
                                         
     
  

	
	 Principal, applicable thereto, to be converted:
                                         
                                   

  

	
	 Interest, applicable thereto, to be converted:
                                         
                                         

 Please confirm the following information: 
  

	
	 Conversion Price:
                                         
                                         
                                         
         

  

	
	 Number of shares of
[                         ] to be issued:
                                         
                                     

 Please issue the
[                         ] into which the Note is being converted in the following name and to the following address: 

☐ Deposit/Withdrawal at Custodian (“DWAC”) system; or 

☐ Physical Certificate 
  

	
	 Issue to:
                                         
                                         
                                         
                                         

  

	
	 Facsimile Number:
                                         
                                         
                                         
                       

  

	
	 DTC Participant Number and Name (if through DWAC):
                                         
                                         
   

  

	
	 Account Number (if through DWAC):
                                         
                                         
                                  

  

	
	 Authorization:             
                                         
       

	 By:         
                                         
                    

	 Title:
                                         
                         

	
	 Dated:
                                         
                       

 ACKNOWLEDGMENT 

The Company hereby acknowledges this Conversion Notice and hereby directs [TRANSFER AGENT] to issue the above indicated number of shares of
Common Stock in accordance with the Irrevocable Transfer Agent Instructions dated [______], 2019 from the Company and acknowledged and agreed to by [TRANSFER AGENT]. 

 

			
	KEMPHARM, INC.
		
	By:	 	
                     
                

	Name:	 	  

	Title:	 	  

 Exhibit B 

ASSIGNMENT 
 (To be
executed by the registered holder 
 desiring to transfer the Note) 

FOR VALUE RECEIVED, the undersigned holder of the attached Senior Secured Convertible Note (the “Note”) hereby sells, assigns and transfers
unto the person or persons below named the right to receive the principal amount of $__________ from KEMPHARM, INC., a [___________] corporation, evidenced by the attached Note and does hereby irrevocably constitute and appoint __________ attorney
to transfer the said Note on the books of the Company, with full power of substitution in the premises. 
  

			
	 Dated:
                                         
   
	  	
		  	 Signature

  

	
	 Fill in for new registration of Note:

	
	  

	Name
	  

	Address
	  

	 Please print name and address of assignee

	 (including zip code number)

 NOTICE 
 The signature to the
foregoing Assignment must correspond to the name as written upon the face of the attached Note in every particular, without alteration or enlargement or any change whatsoever. 

 Schedule of Noteholders 

 

					
	 Noteholder
	  	
Principal Amount of Notes
	 
	 Deerfield Private Design Fund III, L.P.
	  	$	52,567,366.96	 
	 Deerfield Special Situations Fund, L.P.
	  	$	10,513,675.50	 
	 Delaware Street Capital Master Fund, L.P.
	  	$	8,336,968.75	 
		  	  
	  
	 
	 Total:
	  	$	71,418,011.21

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