Item 1.01
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Entry into a Material Definitive Agreement.
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Amendment to Facility Agreement with Deerfield
Pursuant to a prior amendment to the Facility Agreement, dated July 1, 2013 (as amended, the Facility Agreement), between MannKind Corporation
(the Company), MannKind LLC, the Companys wholly owned subsidiary, and Deerfield Private Design Fund II, L.P. and Deerfield Private Design International II, L.P. (collectively, Deerfield), the Companys obligation
to repay $10,000,000 in principal amount of its outstanding 9.75% Senior Convertible Notes due 2019 (the Tranche 4 Notes) was deferred until January 15, 2018 and the notes were amended to allow conversion into shares of the
Companys common stock at Deerfields election and subject to the terms of the amendment. Through January 15, 2018, a total of $5,592,749.50 in principal amount of the Tranche 4 Notes were converted into common stock pursuant to the
amendment and $4,407,250.50 remained payable on January 15, 2018. On January 18, 2018, the Company and MannKind LLC entered into an Exchange and Sixth Amendment to Facility Agreement (the Sixth Deerfield Amendment) with
Deerfield, pursuant to which, among other things, the Company agreed to issue to Deerfield an aggregate of 1,267,972 shares of its common stock, par value $0.01 per share (the Exchange Shares), in exchange for $3,157,251 of the Tranche 4
Notes. In addition, the payment date for the remaining $1,250,000 in remaining principal amount of the Tranche 4 Notes (the Remaining Payment) that was previously due to be repaid on January 15, 2018 was extended to May 6,
2018.
The Company and Deerfield also amended the outstanding Tranche 4 Notes, the Amended and Restated 9.75% Senior Secured Convertible Note due 2019
under the Facility Agreement (the A&R Notes) and the 8.75% Senior Secured Convertible Note due 2019 under the Facility Agreement (the Tranche B Notes, together with the Tranche 4 Notes and the A&R Notes, the
Deerfield Notes) to provide that Deerfield may, subject to the terms of the Sixth Deerfield Amendment, convert principal amounts of the Deerfield Notes from time to time into an aggregate of up to 10,000,000 shares of the Companys
common stock (excluding the Exchange Shares). The conversion price will be the greater of (i) the average of the volume weighted average price per share of the Companys common stock for the three trading day period immediately preceding
the date of any election by Deerfield to convert principal amounts of the Deerfield Notes and (ii) $2.75 per share, subject to adjustment under certain circumstances described in the Deerfield Notes. Any conversions of principal by Deerfield under
the Deerfield Notes will be applied first to reduce the Remaining Payment, and thereafter to reduce other principal payments due under the Deerfield Notes.
In connection with the Sixth Deerfield Amendment, the Company also entered into a Second Amendment to Escrow Agreement, dated January 18, 2018, with
Deerfield and US Bank, pursuant to which the parties extended the period of the escrow established thereunder to May 6, 2018, corresponding to the extended payment date under the Facility Agreement.
Previously, the Company and Deerfield entered into a Fifth Amendment to Facility Agreement (the Fifth Deerfield Amendment) to extend a payment
date for the Tranche 4 Notes from January 15, 2018 (previously deferred from October 31, 2017) to January 19, 2018, and a First Amendment to Escrow Agreement, with U.S. Bank National Association to extend the period of the escrow
established thereunder from January 15, 2018 to January 19, 2018.
The foregoing description of the amendments to the Facility Agreement and the
Deerfield Notes does not purport to be complete and is qualified in its entirety by reference to the Fifth Deerfield Amendment and the Sixth Deerfield Amendment, copies of which are attached as Exhibits 99.1 and 99.2 to this report, respectively;
the Facility Agreement, a copy of which is attached as Exhibit 99.1 to the Companys Current Report on Form
8-K
filed with the Securities and Exchange Commission (the SEC) on July 1,
2013; the First Amendment to Facility Agreement and Registration Rights Agreement, dated as of February 28, 2014, a copy of which is attached as Exhibit 10.39 to the Companys Annual Report on Form
10-K
filed with the SEC on March 3, 2014; the Second Amendment to Facility Agreement and Registration Rights Agreement, dated as of August 11, 2014, a copy of which is attached as Exhibit 4.14 to the
Companys Quarterly Report on Form
10-Q
filed with the SEC on November 10, 2014; the Exchange and Third Amendment to Facility Agreement, dated as of June 29, 2017, a copy of which is attached as
Exhibit 99.2 to the Companys Current Report on Form
8-K
filed with the SEC on June 29, 2017; and the Fourth Amendment to Facility Agreement, dated as of October 23, 2017, a copy of which is
attached as Exhibit 99.1 to the Companys Current Report on Form
8-K
filed with the SEC on October 23, 2017.