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AMENDMENT NO. 3 CREDIT AND SECURITY AGREEMENT
This AMENDMENT NO. 3 TO CREDIT AND SECURITY AGREEMENT (this Agreement ) is made as of this 30th day of November, 2020, by and among MANNKIND CORPORATION, a Delaware corporation ( MannKind ), as a Borrower, MANNKIND LLC, a Delaware limited liability
company ( MannKind LLC ), as a Borrower, MIDCAP FINANCIAL TRUST, as Agent (in such capacity, together with its successors and assigns, Agent ) and the financial institutions or other entities from
time to time parties to the Credit Agreement referenced below, each as a Lender.
A. Agent, Lenders and Borrower have entered into that certain Credit and Security Agreement, dated as of August 6, 2019 (as amended by
that certain Amendment No. 1 to Credit and Security Agreement, dated as of December 18, 2019, that certain Amendment No. 2 to Credit and Security Agreement, dated as of August 21, 2020 and as further amended, supplemented or
otherwise modified from time to time prior to the date hereof, the Existing Credit Agreement and, as the same is amended hereby and as it may be further amended, modified, supplemented and restated from time to time, the
Credit Agreement ), pursuant to which the Lenders have agreed to make certain advances of money and to extend certain financial accommodations to Borrower in the amounts and manner set forth in the Credit Agreement.
B. Borrower has requested, and Agent and Lenders have agreed, on and subject to the terms and conditions set forth in this Agreement, the
Credit Agreement and the other Financing Documents, to among other things (a) amend the financial covenants set forth in Article 9 of the Credit Agreement, (b) to amend certain provisions of Credit Facility Schedules for Credit Facility #2
and Credit Facility #3, including the Commitment Termination Dates and certain Applicable Funding Conditions #3, (c) to extend the Amortization Start Date on the Amortization Schedule, and (d) amend certain other provisions of the Existing
Credit Agreement in relation to the foregoing.
NOW, THEREFORE, in consideration of the foregoing, the terms and conditions set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Agent, Lenders and Borrower hereby agree as follows:
Recitals. This Agreement shall constitute a Financing Document and the Recitals and each reference to the Credit Agreement, unless otherwise expressly noted, will be deemed to reference the Credit Agreement as amended hereby. The
Recitals set forth above shall be construed as part of this Agreement as if set forth fully in the body of this Agreement and capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement
(including those capitalized terms used in the Recitals hereto).
2. Amendment to Existing Credit Agreement. Subject to the
terms and conditions of this Agreement, including, without limitation, the conditions to effectiveness set forth in Section 4 below, the Existing Credit Agreement is hereby amended as follows:
(a) The second sentence of Section 2.3(a) of the Existing Agreement is hereby deleted in its entirety and replaced with the following:
For any Credit Extension requested under a Credit Facility (other than a Credit Extension on the Closing Date and any Credit
Extension in respect of Credit Facility #2), Agent must receive the completed Credit Extension Form by 12:00 noon (New York time) ten (10) Business Days prior to the date the Credit Extension is to be funded (other than a Credit Extension on
the Closing Date and any Credit Extension in respect of Credit Facility #2).
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(b) Section 9.1 of the Existing Credit Agreement is hereby deleted and replaced in its
entirety with the following:
9.1 Minimum Afrezza Net Revenue. Borrower shall not permit Afrezza Net Revenue for the twelve
month period immediately preceding (and ending on) each Testing Date to be less than the minimum amount set forth opposite such Testing Date on the Minimum Afrezza Net Revenue Schedule. A breach of a financial covenant contained in this
Section 9.1 shall be deemed to have occurred as of any date of determination by Agent or as of the applicable Testing Date, regardless of when the financial statements reflecting such breach are delivered to Agent.
(c) Section 9.2 of the Existing Credit Agreement is hereby deleted and replaced in its entirety with the following:
9.2 Minimum Cash. Borrower shall not permit Borrower Unrestricted Cash to be less than Thirty Million Dollars ($30,000,000) at
(d) The following shall be added as a new Section 9.4 to the Existing Credit Agreement:
9.4 Tre-T Marketing. At all times following any funding of the Credit Extensions under
Credit Facility #3, Borrower shall ensure that United Therapeutics, or another pharmaceutical company reasonably acceptable to Agent, shall be actively marketing and, (after the first commercial sale) generating revenue from commercial sales of,
Treprostinil Technosphere for its approved indication(s) in the United States.
(e) Section 15 of the Existing Credit Agreement is
hereby amended by adding the following defined terms in the appropriate alphabetical order therein:
Amendment means that certain Amendment No. 3 to Credit and Security Agreement, dated as of November 30, 2020, by and among the Borrower, the Lenders, and Agent.
Third Amendment Effective Date means November 30, 2020.
(f) The Applicable Prepayment Fee section in Credit Facility #1 Schedule in the Existing Credit Agreement is hereby deleted and
replaced in its entirety with the following:
Applicable Prepayment Fee: means the following amount, calculated as of the
date (the Accrual Date ) that the Applicable Prepayment Fee becomes payable in the case of prepayments required under the Financing Documents or the date any voluntary prepayment is made: (a) for an Accrual Date on or after
the Closing Date through and including June 30, 2021, two percent (2.0%) multiplied by the amount of the outstanding principal of the Credit Extension prepaid or required to be prepaid (whichever is greater), (b) for an Accrual Date on or after
July 1, 2021 through and including June 30, 2022, four percent (4.0%) multiplied by the amount of the outstanding principal of the Credit Extension prepaid or required to be prepaid (whichever is greater); (c) for an Accrual Date
MidCap / MannKind / Amendment No. 3
on or after July 1, 2022 through and including June 30, 2023, three percent (3.0%) multiplied by the amount of the outstanding principal of the Credit Extension prepaid or required to
be prepaid (whichever is greater); and (d) for an Accrual Date after June 30, 2023 through and including the date immediately preceding the Maturity Date, two percent (2.0%) multiplied by the amount of the outstanding principal of the
Credit Extension prepaid or required to be prepaid (whichever is greater).
(g) The Credit Facility #2 Schedule to the
Existing Credit Agreement hereby deleted and replaced in its entirety with the Credit Facility #2 Schedule attached hereto as Exhibit 1.
(h) The Credit Facility #3 Schedule to the Existing Credit Agreement hereby deleted and replaced in its entirety with the Credit
Facility #3 Schedule attached hereto as Exhibit 2.
(i) The Amortization Schedule (For Each Credit Facility)
attached to the Exiting Credit Agreement is hereby deleted and replaced in its entirety with the Amortization Schedule (For Each Credit Facility) attached hereto as Exhibit 3.
(j) The Minimum Afrezza Net Revenue Covenant attached to the Existing Credit Agreement is hereby deleted and replaced in its entirety
with the Minimum Afrezza Net Revenue Covenant attached hereto as Exhibit 4.
(k) The Existing Credit Agreement hereby
amended by deleting the Tranche 3 Afrezza Net Revenue Schedule in its entirety.
3. Representations and Warranties;
Reaffirmation of Security Interest. Borrower hereby confirms that all of the representations and warranties set forth in the Credit Agreement are true and correct in all material respects (without duplication of any materiality
qualifier in the text of such representation or warranty) with respect to Borrower as of the date hereof except to the extent that any such representation or warranty relates to a specific date in which case such representation or warranty shall be
true and correct as of such earlier date. Nothing herein is intended to impair or limit the validity, priority or extent of Agent s security interests in and Liens on the Collateral. Borrower acknowledges and agrees that the Credit Agreement,
the other Financing Documents and this Agreement constitute the legal, valid and binding obligation of Borrower, and are enforceable against Borrower in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws relating to the enforcement of creditors rights generally and by general equitable principles.
Conditions to Effectiveness. This Agreement shall become effective as of the date on which each of the following conditions has been satisfied, as determined by Agent in its sole discretion:
(a) Agent shall have received (including by way of facsimile or other electronic transmission) a duly authorized, executed and delivered
counterpart of the signature page to this Amendment from Borrower, Agent and the Lenders;
(b) all representations and warranties of
Borrower contained herein shall be true and correct in all material respects (without duplication of any materiality qualifier in the text of such representation or warranty) as of the date hereof except to the extent that any such representation or
warranty relates to a specific date in which case such representation or warranty shall be true and correct as of such earlier date (and such parties delivery of their respective signatures hereto shall be deemed to be its certification
(c) prior to and after giving effect to the agreements set forth herein, no Default or Event of Default shall exist under any
of the Financing Documents;
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(d) Agent shall have received an irrevocable Credit Extension Request Form in respect of the
Credit Extensions to be made under Credit Facility #2; and
(e) Agent shall have received such other documents, information, certificates,
and information as Agent may reasonably request in connection with this Agreement.
5. Post-Closing Covenants. By the date
that is thirty (30) days following the Third Amendment Effective Date (or such later date as Agent may agree in writing) Borrower shall deliver to Agent evidence of the termination of any Liens (other than Permitted Liens) recorded against the
assets of any Credit Party. Borrower hereby agrees that failure to comply with the requirements set forth in this Section 5 shall constitute an immediate and automatic Event of Default.
6. Release. In consideration of the agreements of Agent and Lenders contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, Borrower, voluntarily, knowingly, unconditionally and irrevocably, with specific and express intent, for and on behalf of itself and all of its respective parents,
subsidiaries, affiliates, members, managers, predecessors, successors, and assigns, and each of its respective current and former directors, officers, shareholders, agents, and employees, and each of its respective predecessors, successors, heirs,
and assigns (individually and collectively, the Releasing Parties ) does hereby fully and completely release, acquit and forever discharge each of Agent, Lenders, and each their respective parents, subsidiaries, affiliates,
members, managers, shareholders, directors, officers and employees, and each of their respective predecessors, successors, heirs, and assigns (individually and collectively, the Released Parties ), of and from any and all actions,
causes of action, suits, debts, disputes, damages, claims, obligations, liabilities, costs, expenses and demands of any kind whatsoever, at law or in equity, whether matured or unmatured, liquidated or unliquidated, vested or contingent, choate or
inchoate, known or unknown that the Releasing Parties (or any of them) has against the Released Parties or any of them (whether directly or indirectly), based in whole or in part on facts, whether or not now known, existing on or before the date
hereof, that relate to, arise out of or otherwise are in connection with: (i) any or all of the Financing Documents or transactions contemplated thereby or any actions or omissions in connection therewith or (ii) any aspect of the dealings
or relationships between or among any Borrower, on the one hand, and any or all of the Released Parties, on the other hand, relating to any or all of the documents, transactions, actions or omissions referenced in clause (i) hereof, in each
case, based in whole or in part on facts, whether or not now known, existing before the First Amendment Effective Date. Borrower acknowledges that the foregoing release is a material inducement to Agent s and each Lender s decision to
enter into this Agreement and agree to the modifications contemplated hereunder, and has been relied upon by Agent and Lenders in connection therewith.
7. No Waiver or Novation. The execution, delivery and effectiveness of this Agreement shall not, except as expressly
provided in this Agreement, operate as a waiver of any right, power or remedy of Agent, nor constitute a waiver of any provision of the Credit Agreement, the Financing Documents or any other documents, instruments and agreements executed or
delivered in connection with any of the foregoing. Nothing herein is intended or shall be construed as a waiver of (a) any existing Defaults or Events of Default under the Credit Agreement or the other Financing Documents or any of Agent s
rights and remedies in respect of such Defaults or Events of Default. Except as expressly provided herein, nothing in this Agreement shall be construed as an amendment to or waiver of any condition precedent to any funding of Credit Extensions by
the Lenders under the Credit Agreement, including those conditions set forth in Section 3.2 of the Credit Agreement. This Agreement (together with any other document executed in connection herewith) is not intended to be, nor shall it be
construed as, a novation of the Credit Agreement.
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8. Affirmation. Except as specifically amended pursuant to the terms