Document:

ex_165063.htm

Exhibit 10.1

 

 

February 8, 2021

 

KemPharm, Inc.

1180 Celebration Blvd.

Suite 103

Celebration, FL 34747

Fax: [Intentionally Omitted]

E-mail: [Intentionally Omitted]

Attention: R. LaDuane Clifton, Chief Financial Officer

 

 

            Re:      Payoff Letter

 

Ladies and Gentlemen:

 

Reference is made to (i) the Facility Agreement, dated as of June 2, 2014 (as amended, restated, supplemented or otherwise modified to date, the “Credit Agreement”), between KemPharm, Inc., a Delaware corporation (the “Borrower” or a “Credit Party”), and Deerfield Private Design Fund III, L.P., a Delaware limited partnership (the “DPDF Lender”), Deerfield Special Situations Fund, L.P., a Delaware limited partnership (“DSS”), Delaware Street Capital Master Fund, L.P., a Cayman Islands limited partnership (“DSCM”), and the other lenders from time to time party thereto (the “Other Lenders”; the Other Lenders together with the DPDF Lender, DSS and DSCM, collectively, the “Lenders”, individually each a “Lender”), and (ii) the other Transaction Documents (as defined in the Credit Agreement) and all other documents and instruments relating thereto (together with the Credit Agreement, collectively, the “Credit Documents”).  The Lenders understand that at the Payoff Effective Time (as hereinafter defined), the Borrower expects to repay in full all of the Obligations of the Borrower and the other Credit Parties to the Lenders under or in respect of the Credit Documents (other than Surviving Obligations (as hereinafter defined)).  All undefined capitalized terms used herein shall have the meanings set forth in the Credit Agreement.

 

Upon written confirmation by the Lenders or their counsel (which may be by email) of each Lender’s receipt (or, in the case of clause (ii) below, receipt by the Deerfield Lenders’ outside counsel) on February 8, 2021 (the “Payoff Date”) before 3:00 p.m. New York City time of (i) a federal funds wire transfer to the accounts of each Lender specified on Schedule I hereto in the amount set forth opposite such Lender’s name on such Schedule I (collectively, the “Payoff Amount”; provided, in the event any Lender has not received payment of its Pro Rata Share of the Payoff Amount by 3:00 p.m. New York City time on the Payoff Date, the Payoff Amount shall be increased by an amount equal to $1,476.73 (representing per diem interest and fees) for each day the Payoff Amount remains unpaid (including the Payoff Date if such payment is not received by 3:00 p.m. New York City time on such date) and each Lender shall receive its Pro Rata Share of such increased amount), which amount represents all Obligations outstanding under or in respect of the Credit Documents, (ii) a federal funds wire transfer to the account of Katten Muchin Rosenman LLP, counsel to the Deerfield Lenders specified on Schedule I hereto in the amount of $13,432.50 (the “Legal Fees”), which amount represents the estimated legal fees and expenses of the Lenders’ outside counsel as of the date hereof, and (iii) a fully executed counterpart of this letter agreement (this “Agreement”) signed by the Borrower and each other Credit Party (the time at which all of the conditions in the foregoing clauses (i), (ii) and (iii) shall first be satisfied is herein referred to as the “Payoff Effective Time”), the Payoff Effective Time shall occur.  If the Payoff Effective Time has not occurred on or prior to 3:00 p.m. on February 12, 2021 (the “Expiration Time”), this Agreement shall be of no further force and effect.

 

 

 

 

The Borrower hereby represents, warrants, acknowledges and agrees that it has previously publicly disclosed any material non-public information (if any) that had been provided or made available to any Lender (or any Lender’s agents or representatives) on or prior to the date hereof, including all material information regarding the payoff of the Obligations as contemplated hereby. Notwithstanding anything contained in this Agreement to the contrary, and without implication that the contrary would otherwise be true, the Borrower expressly acknowledges and agrees that no Lender nor any affiliate of any Lender has or shall have (unless expressly agreed to by such particular Lender after the date hereof in a written definitive and binding agreement executed by the Borrower and such particular Lender or customary oral (confirmed by e-mail) “wall cross” agreement (it being understood and agreed that no Lender may bind any other Lender with respect thereto)), any duty of trust or confidence with respect to, or a duty not to trade in any securities while aware of, any information regarding the Borrower.    

 

As used herein, the term “Surviving Obligations” means (i) those obligations under the Credit Documents (including contingent reimbursement obligations and indemnity obligations) which, by their express terms, survive termination of the Credit Agreement or such other Credit Documents, as the case may be, (ii) to the extent not paid at or prior to the Payoff Effective Time, the reasonable and documented out-of-pocket fees and expenses of outside counsel to the Lenders in connection with the termination of the Credit Documents and release of all liens thereunder and (iii) the obligations of the Borrower pursuant to the December 2020 Exchange Agreement (as defined in the Credit Agreement), the A&R Certificate of Designation (as defined the December 2020 Exchange Agreement), the Exchange Warrants (as defined in the December 2020 Exchange Agreement) and the Warrants (as defined in the Credit Agreement) together with together with any and all other obligations of the Borrower in respect of the Exchange Warrants, the Warrants, the Series B-2 Preferred Stock of the Borrower and any shares of Common Stock issuable upon the exercise or conversion thereof.

 

Upon the Payoff Effective Time, the Lenders (i) agree and acknowledge that (A) all outstanding indebtedness (including, without limitation, principal, interest and fees) and other obligations (including the Obligations) of the Borrower or the other Credit Parties under or relating to the Credit Documents (other than the Surviving Obligations), including, for the avoidance of doubt, all Notes, shall be paid and satisfied in full and irrevocably discharged in full, terminated and released, (B) all security interests and other Liens granted to or held by the Lenders in any Property as security for such indebtedness shall be forever and irrevocably satisfied, released and discharged, (C) the Credit Documents shall terminate and be of no further force or effect other than those provisions therein that specifically survive termination and (D) the Borrower and the other Credit Parties (or their respective designees) shall be automatically authorized to file the UCC termination statements attached hereto as Exhibit A and subject to the Collateral Agent’s review and comment, prepare and file intellectual property releases and other instruments, releases and documents evidencing the release of the Lenders’ security interests and other Liens in all of the assets and property of the Borrower and the other Credit Parties that secure the Obligations under the Credit Documents (the “Property”).  Further, upon and after the Payoff Effective Time, the Lenders agree to take all reasonable additional steps requested by the Borrower as may be necessary to release its security interests in the Property and execute and deliver any additional instruments, releases  or documents reasonably requested by the Borrower to evidence such release and discharge.  The Borrower agrees to pay the Collateral Agent and the Lenders for all out-of-pocket costs and expenses incurred by the Lenders in connection with the matters referred to in the previous sentence, and acknowledges that the Collateral Agent’s and the Lenders’ execution of and/or delivery of any documents releasing any security interest or claim in any Property of the Borrower or the other Credit Parties as set forth herein is made without recourse, representation, warranty or other assurance of any kind by the Collateral Agent or such Lender as to the Lenders’ rights in any collateral security for amounts owing under the Credit Documents, the condition or value of any Collateral, or any other matter. 

 

2

 

 

The Borrower hereby agrees not to request additional Loans under the Credit Agreement on or after the date hereof through the Expiration Time.  Furthermore, the Borrower hereby confirms that the commitments of the Lenders to make Loans under the Credit Documents are terminated as of the Payoff Effective Time, and, as of the Payoff Effective Time, none of the Lenders shall have any further obligation under the Credit Documents to make Loans to the Borrower or any other Credit Party.  Notwithstanding anything to the contrary contained herein or in any of such releases or other documents, the obligations and liabilities of the Borrower and the other Credit Parties to the Lenders and the Collateral Agent under or in respect of the Credit Documents insofar as such obligations and liabilities, by their express terms, survive termination of the Credit Documents shall continue in full force and effect in accordance with their terms.

 

Notwithstanding any terms of this Agreement or the Credit Documents to the contrary, if any of the Lenders determines after the Payoff Effective Time that an amount that was due and payable under the Credit Documents was mistakenly excluded from the Payoff Amount, the Borrower agrees to promptly pay such amount after such Lender provides evidence that such amount is due and payable.

 

If at any time on or after the Payoff Effective Time, all or any portion of the Payoff Amount paid to any of the Lenders is voided or rescinded or must otherwise be returned by any of the Lender upon the Borrower’s or any other Credit Party’s insolvency, bankruptcy or reorganization or otherwise, all as though such payment had not been made, the obligation to pay such amount so voided, rescinded or returned shall be reinstated.

 

3

 

 

In addition, the Borrower and the other Credit Parties agree that, upon the Payoff Effective Time, such Credit Parties release the Collateral Agent and each of the Lenders and their respective affiliates and subsidiaries and their respective officers, directors, employees, shareholders, agents, attorneys and representatives as well as their respective successors and assigns from any and all claims, obligations, rights, causes of action, and liabilities, of whatever kind or nature, whether known or unknown, whether foreseen or unforeseen, arising on or before the date hereof, which such Credit Parties ever had, now have or hereafter can, shall or may have for, upon or by reason of any matter, cause or thing whatsoever, which are based upon, arise under or are related to the Credit Documents (other than obligations of the Lenders expressly set forth in this Agreement) (collectively, the “Released Matters”).  Without limiting the generality of the foregoing, the Borrower hereby waives the provisions of any statute or doctrine to the effect that a general release does not extend to claims which a releasing party does not know or suspect to exist in its favor at the time of executing the release, which if known by such releasing party would have materially affected the releasing party’s settlement with the party being released. The Borrower acknowledges that the agreements in this paragraph are intended to be in full satisfaction of all or any alleged injuries or damages arising in connection with the Released Matters.  The Borrower acknowledges that the release contained herein constitutes a material inducement to the Lenders to enter into this Agreement and that the Lenders would not have done so but for the Lenders’ expectation that such release is valid and enforceable in all events.

 

This Agreement shall be governed by the internal laws of the State of New York.  No party may assign its rights, duties or obligations under this Agreement without the prior written consent of the other parties.  This Agreement may be executed in any number of separate counterparts (including by electronic means, such as a “.pdf” or “.tif” attachment), each of which shall, collectively and separately, constitute one agreement.  The undersigned parties have signed below to indicate their consent to be bound by the terms and conditions of this Agreement.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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If you need additional information, please do not hesitate to contact us.

 

Very truly yours,

 

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

Its: 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

Its: Authorized Signatory

 

DELAWARE STREET CAPITAL MASTER FUND, L.P.

 

By: /s/ Andrew Bluhm      

Name: Andrew Bluhm

Title:   Principal

 

M. KINGDON OFFSHORE MASTER FUND, LP

 

By: KINGDON CAPITAL MANAGEMENT, LLC, as an agent and investment advisor

 

By: /s/ William Walsh      

Name: William Walsh

Title:   Chief Financial Officer

 

5

 

 

ACCEPTED and AGREED:

 

KEMPHARM, INC.

By:       /s/ R. LaDuane Clifton              

Name: R. LaDuane Clifton

Title: Chief Financial Officer

 

6

 

Schedule I

 

Payoff Amount as of the Payoff Date

 

	
			Lender

				
			Principal 

				
			Interest 

				
			Prepayment

			Premium 

				
			Accrued

			Expenses

				
			Total

			Payoff

			Amount as

			of the

			Payoff Date

				
			Wire Instructions

			
	
			Deerfield Private

			Design Fund III,

			L.P.

				
			$5,364,314.58

				
			$26,784.83

				
			$269,554.97

				
			-

				
			$5,660,654.38

				
			[Intentionally Omitted]

			
	
			Deerfield

			Special

			Situations Fund,

			L.P.

				
			$906,517.01

				
			$4,526.38

				
			$45,552.17

				
			-

				
			$956,595.56

				
			[Intentionally Omitted]

			
	
			Delaware Street

			Capital Master

			Fund, L.P.

				
			$979,165.58

				
			$4,889.12

				
			$49,202.74

				
			-

				
			$1,033,257.44

				
			[Intentionally Omitted]

			
	
			M. Kingdon

			Offshore Master

			Fund, LP

				
			$355,038.38

				
			$1,772.76

				
			$17,840.56

				
			-

				
			$374,651.70

				
			[Intentionally Omitted]

			

 

 

The Legal Fees referred to in the Payoff Letter should be sent by federal funds wire transfer to [Intentionally Omitted].

 

7

 

 

Exhibit A

 

UCC Terminations

 

See attached

 

8Document

Exhibit 4.6

DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

As of the date of the Annual Report on Form 10-K of which this exhibit is a part, Carrier Global Corporation (the “Company,” “Carrier,” “we,” “us,” and “our”) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our common stock, par value $0.01 per share.

Common Stock
The following briefly summarizes certain terms of Carrier’s common stock. This summary does not describe every aspect of our common stock and is subject, and is qualified in its entirety by reference, to all the provisions of our amended and restated certificate of incorporation and our amended and restated bylaws. 

Carrier’s common stock is listed on the New York Stock Exchange under the symbol “CARR.” 

Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of shareowners. 

Holders of common stock are entitled to share equally in the dividends, if any, that may be declared by Carrier’s board of directors out of funds that are legally available to pay dividends, but only after payment of any dividends required to be paid on outstanding preferred stock. Upon any voluntary or involuntary liquidation, dissolution or winding up of Carrier, the holders of common stock will be entitled to share ratably in all assets of Carrier remaining after we pay:

•all of our debts and other liabilities and
•any amounts we may owe to the holders of our preferred stock.

Holders of common stock do not have any preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of any series of preferred stock that we may designate and issue.

Delaware law and our amended and restated bylaws permit us to issue uncertificated shares of common stock. 

The rights, preferences and privileges of common shareowners may be affected by the rights, preferences and privileges granted to holders of preferred stock. The Carrier board of directors has the authority, without further action by the shareowners, to issue shares of preferred stock in one or more series, and to fix the rights, preferences and privileges (including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences) of each series, which may be greater than the rights of the common stock. It is not possible to state the actual effect of the issuance of any additional series of preferred stock upon the rights of 

common shareowners until the board of directors determines the specific rights of the holders of that series. However, the effects might include, among other things (1) restricting dividends on the common stock, (2) diluting the voting power of the common stock, (3) impairing the liquidation rights of the common stock or (4) delaying or preventing a change in control of Carrier without further action by the shareowners.

At each annual meeting of shareowners, the entire Carrier board of directors is elected for a term of one year. Carrier’s amended and restated bylaws provide that the board of directors may, from time to time, designate the number of directors; however, the number may not be less than five nor more than 14. Vacancies on the board (except in an instance where a director is removed by holders of common stock and the resulting vacancy is filled by holders of common stock) may be filled by a vote of the majority of the directors then in office, even if less than a quorum.

Carrier’s amended and restated bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election of directors, other than nominations made by or at the direction of Carrier’s board of directors. Eligible shareowners will be permitted to include their own director nominees in Carrier’s proxy materials under the circumstances set forth in the amended and restated bylaws. Generally, a stockholder or a group of up to 20 shareowners, who has maintained continuous qualifying ownership of at least 3% of Carrier’s outstanding common stock for at least three years, will be permitted to include director nominees constituting up to 20% of the board of directors in the proxy materials for an annual meeting of shareowners if such stockholder or group of shareowners complies with the other requirements set forth in the proxy access provision. 

Carrier’s amended and restated bylaws include an exclusive forum provision. This provision provides that, unless Carrier consents in writing to the selection of an alternative forum, the sole and exclusive forum for various types of suits will be a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware). Such suits include (1) any derivative action or proceeding brought on behalf of Carrier, (2) any action asserting a claim of breach of a fiduciary duty owed by any current or former director or officer or other employee of Carrier to the company or to Carrier’s shareowners, (3) any action asserting a claim against Carrier or any current or former director or officer or other employee of Carrier arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”) or Carrier’s amended and restated certificate of incorporation or amended and restated bylaws (as either may be amended from time to time), (4) any action asserting a claim against Carrier or any director or officer or other employee of Carrier governed by the internal affairs doctrine or (5) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL.  Under Carrier’s amended and restated bylaws, to the fullest extent permitted by law, this exclusive forum provision applies to state and federal law claims, including claims under the federal securities laws, including the Exchange Act, although Carrier shareowners will not be deemed to have waived Carrier’s compliance with the federal securities laws and the rules and regulations thereunder.  The enforceability of exclusive forum provisions in other companies’ organizational documents has been challenged in legal proceedings, and it is possible that, in connection with 
-2-

claims subject to exclusive federal jurisdiction, a court could find the exclusive forum provision contained in Carrier’s amended and restated bylaws to be inapplicable or unenforceable. 

Carrier’s amended and restated certificate of incorporation and amended and restated bylaws provide that any action permitted to be taken at an annual or special meeting of shareowners may be effected by the written consent of shareowners if shareowners representing 25% of the outstanding voting power of Carrier capital stock have requested a record date for such action and certain other conditions are satisfied in accordance with Carrier’s amended and restated certificate of incorporation and amended and restated bylaws.

Carrier’s amended and restated certificate of incorporation and amended and restated bylaws provide that special meetings of shareowners may be called only by the board of directors, the chairman of the board of directors, or the Chief Executive Officer. The Secretary may also call a special meeting of shareowners in response to a written request of a stockholder or a group of shareowners who has maintained continuous qualifying ownership of at least 15% of Carrier’s outstanding common stock for at least one year, subject to the provisions and conditions set forth in Carrier’s amended and restated certificate of incorporation and amended and restated bylaws.

Under Delaware law, the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation’s certificate of incorporation or bylaws, unless a corporation’s certificate of incorporation or bylaws, as the case may be, requires a greater percentage.

Certain of the provisions of Carrier’s amended and restated certificate of incorporation and amended and restated bylaws discussed above and below could discourage a proxy contest or the acquisition of control of a substantial block of our stock. These provisions could also have the effect of discouraging a third party from making a tender offer or otherwise attempting to obtain control of Carrier, even though an attempt to obtain control of Carrier might be beneficial to Carrier and its shareowners.

Carrier’s amended and restated certificate of incorporation includes provisions eliminating the personal liability of our directors for monetary damages resulting from breaches of their fiduciary duty to the extent permitted by Delaware law. The amended and restated bylaws include provisions indemnifying our directors and officers to the fullest extent permitted by Delaware law, including under circumstances in which indemnification is otherwise discretionary. The amended and restated bylaws additionally include provisions permitting the Chief Executive Officer or the Chief Legal Officer and the Chief Financial Officer acting together to reimburse the expenses of our current and former employees, agents and fiduciaries in advance of the final disposition of any such proceeding.

Section 203 of the DGCL, under certain circumstances, may make it more difficult for a person who is an “Interested Stockholder,” as defined in Section 203, to effect various business combinations with a corporation for a three-year period. Under Delaware law, a corporation’s certificate of incorporation or bylaws may exclude a corporation from the restrictions imposed by 
-3-

Section 203. However, Carrier’s amended and restated certificate of incorporation and amended and restated bylaws do not exclude us from these restrictions, and these restrictions apply to us.

-4-

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