Sec Form 13D Filing - CPMG Inc filing for Apollo Endosurgery Inc. (APEN) - 2020-09-10

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	SCHEDULE 13D
CUSIP No.:  03767D108		Page 3 of 6 Pages

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Item 1 of the Schedule 13D is hereby amended and supplemented as follows:

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	SCHEDULE 13D
CUSIP No.:  03767D108		Page 5 of 6 Pages

(b) The Reporting Persons have shared voting power and shared dispositive power with regard to the 5,138,505 Shares reported as beneficially owned in this Schedule 13D.

(c) The response to Item 4 of this Amendment No. 4 is incorporated by reference herein.  In addition, on July 1, 2020, the Company paid the semi-annual interest payment on the Convertible Debt by increasing the principal amount of the Convertible Debt owned by the Reporting Persons, in the aggregate, by $208,125, which represents an additional 64,039 Shares obtainable upon conversion of the Convertible Debt, without regard to the 19.99% Blocker.  The interest payment increased the principal of the Convertible Debt held for the accounts of the CPMG Funds as follows: (i) Curlew Fund earned $13,875 in interest, representing approximately 4,269 Shares; (ii) Killdeer Fund earned $55,500 in interest, representing approximately 17,077 Shares; and (iii) Roadrunner Fund earned $138,750 in interest, representing approximately 42,693 Shares, each without regard to the 19.99% Blocker.

Item 7 of the Schedule 13D is hereby amended and supplemented as follows:

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	R. KENT MCGAUGHY, JR.
	/s/ R. Kent McGaughy, Jr.
		Name: John Bateman
		Title:   Chief Operating Officer

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Apollo Endosurgery, Inc.

1120 S. Capital of Texas Hwy

Bldg 1, Suite 300

Austin, TX 78746

September 9, 2020

 

Curlew Fund, LP

Killdeer Fund, LP

Roadrunner Fund, LP

c/o CPMG, Inc.

2000 McKinney Ave, Suite 2125

Dallas, Texas 75201

Re:	Securities Purchase Agreement, dated as of August 7, 2019

Ladies and Gentlemen:

Reference is made to those certain 6.0% convertible debentures due 2024 (each a “CPMG Debenture” and collectively, the “CPMG Debentures”) purchased by Curlew Fund, LP, Killdeer Fund, LP and Roadrunner Fund, LP (each a “CPMG Entity,” and collectively, the “CPMG Entities”), as set forth on Exhibit A hereto, pursuant to that certain Securities Purchase Agreement, dated as of August 7, 2019 (the “Purchase Agreement”), by and among Apollo Endosurgery, Inc. (the “Company”) and each purchaser identified on the signature pages thereto. Capitalized terms used herein without definition shall have the meanings assigned thereto in the CPMG Debentures.

Notwithstanding anything to the contrary contained in the CPMG Debentures, the Company and each of the CPMG Entities acknowledge and agree that the Company shall not effect any conversion of any of the CPMG Debentures, and each of the CPMG Entities shall not have the right to convert any portion of any of the CPMG Debentures, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion, the applicable CPMG Entity (together with such CPMG Entity’s Affiliates, and any other Persons acting as a group together with the applicable CPMG Entity or any of such CPMG Entity’s Affiliates (such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the applicable CPMG Entity and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of the applicable CPMG Debenture with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of such CPMG Debenture owned by the applicable CPMG Entity or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation

on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other 6.0% convertible debentures due 2024 issued pursuant to the Purchase Agreement) owned by the applicable CPMG Entity or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  To the extent that the limitation contained in this paragraph applies, the determination of whether the applicable CPMG Debenture is convertible (in relation to other securities owned by the applicable CPMG Entity together with any Affiliates and Attribution Parties) and of which principal amount of the applicable CPMG Debenture is convertible shall be in the sole discretion of the applicable CPMG Entity, and the submission of a Notice of Conversion shall be deemed to be the applicable CPMG Entity’s determination of whether such CPMG Debenture may be converted (in relation to other securities owned by the applicable CPMG Entity together with any Affiliates or Attribution Parties) and which principal amount of this CPMG Debenture is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the applicable CMPG Entity will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination.  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 of this paragraph, in determining the number of outstanding shares of Common Stock, the applicable CPMG Entity may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of any CPMG Entity, the Company shall within one Trading Day confirm orally and in writing to the applicable CPMG Entity the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the applicable CPMG Debenture, by the applicable CPMG Entity or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 19.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of the Debenture held by the applicable CPMG Entity.  Each of the CPMG Entities, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this paragraph, provided that any increase in the Beneficial Ownership Limitation will not be effective until the 61^st day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to any successor holder of any of the CPMG Debentures.

This letter agreement and any claim, counterclaim or dispute of any kind or nature whatsoever arising out of or in any way relating to this letter agreement, directly or indirectly, shall be governed by, and construed and enforced in accordance with, the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.

This letter agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  Counterparts may be delivered via facsimile, electronic mail (including in “.pdf” format or any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

If the foregoing correctly sets forth the understanding between the Company and the CPMG Entities, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and the CPMG Entities.

 [Signature Pages Follow]

	Very truly yours,
	APOLLO ENDOSURGERY, INC.
	By:	/s/ Stefanie Cavanaugh
		Name: Stefanie Cavanaugh
		Title:   Chief Financial Officer

Acknowledged and agreed:

CURLEW FUND, LP

 

 

 

 

KILLDEER FUND, LP

 

 

 

 

ROADRUNNDER FUND, LP

 

 

 

EXHIBIT A

CPMG DEBENTURES