As filed with the Securities and Exchange Commission on October 21, 2010
Registration No. 333-168504
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HORIZON PHARMA, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 2834 | 27-2179987 | ||
| (State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
1033 Skokie Boulevard, Suite 355 Northbrook, Illinois 60062
(224) 383-3000
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
Timothy P. Walbert
Chairman, President and Chief Executive Officer
Horizon Pharma, Inc.
1033 Skokie Boulevard, Suite 355 Northbrook, Illinois 60062
(224) 383-3000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
| Lynda Kay Chandler, Esq. Barbara L. Borden, Esq. Cooley LLP 4401 Eastgate Mall San Diego, California 92121 (858) 550-6000 |
Cheston J. Larson, Esq. Divakar Gupta, Esq. Matthew T. Bush, Esq. Latham & Watkins LLP 12636 High Bluff Drive Suite 400 San Diego, California 92130 (858) 523-5400 |
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), check the following box. ¨
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer ¨ |
Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ | |||
| (Do not check if a smaller reporting company) | ||||||
CALCULATION OF REGISTRATION FEE
| Title of each class of securities to be registered |
Proposed maximum aggregate offering price(1) |
Amount of registration fee |
||||||
| Common Stock, $0.0001 par value per share |
$ | 86,250,000 | $ | 6,149.63 | (2) | |||
| (1) | Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended. Includes the offering price of shares that the underwriters have the option to purchase to cover overallotments, if any. |
| (2) | Previously paid. |
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Explanatory Note
Horizon Pharma, Inc. has prepared this Amendment No. 3 to the Registration Statement on Form S-1 (File No. 333-168504) for the purpose of filing Exhibit 3.5 and re-filing Exhibits 10.7, 10.8, 10.10, 10.11, 10.12, 10.14, 10.16, 10.17, 10.19, 10.21, 10.25 and 10.26 to the Registration Statement and updating Item 16 of the Registration Statement and the Exhibit Index accordingly. This Amendment No. 3 does not modify any provision of the Prospectus that forms a part of the Registration Statement and accordingly such Prospectus has not been included herein.
Part II
Information not Required in Prospectus
Item 13. Other expenses of issuance and distribution.
The following table sets forth all costs and expenses, other than underwriting discounts and commissions, paid or payable by us in connection with the sale of the common stock being registered. All amounts shown are estimates except for the Securities and Exchange Commission, or SEC, registration fee, the Financial Industry Regulatory Authority, Inc., or FINRA, filing fee and the listing fee for The NASDAQ Global Market.
| Amount Paid or to be Paid |
||||
| SEC registration fee |
$ | 6,150 | ||
| FINRA filing fee |
9,125 | |||
| The NASDAQ Global Market listing fee |
125,000 | |||
| Blue sky qualification fees and expenses |
* | |||
| Printing and engraving expenses |
* | |||
| Legal fees and expenses |
* | |||
| Accounting fees and expenses |
* | |||
| Transfer agent and registrar fees and expenses |
* | |||
| Miscellaneous expenses |
* | |||
| Total |
$ | * | ||
| * | to be provided by amendment |
Item 14. Indemnification of directors and officers.
We are incorporated under the laws of the State of Delaware. Section 145 of the Delaware General Corporation Law provides that a Delaware corporation may indemnify any persons who are, or are threatened to be made, parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person was an officer, director, employee or agent of such corporation, or is or was serving at the request of such person as an officer, director, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may indemnify any persons who are, or are threatened to be made, a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses which such officer or director has actually and reasonably incurred. Our amended and restated certificate of incorporation and amended and restated bylaws, each of which will become effective upon the completion of this offering, provide for the indemnification of our directors and officers to the fullest extent permitted under the Delaware General Corporation Law.
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Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director, except for liability for any:
| • | transaction from which the director derives an improper personal benefit; |
| • | act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
| • | unlawful payment of dividends or redemption of shares; or |
| • | breach of a director’s duty of loyalty to the corporation or its stockholders. |
Our amended and restated certificate of incorporation and amended and restated bylaws include such a provision. Expenses incurred by any officer or director in defending any such action, suit or proceeding in advance of its final disposition shall be paid by us upon delivery to us of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified by us.
Section 174 of the Delaware General Corporation Law provides, among other things, that a director who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption may be held liable for such actions. A director who was either absent when the unlawful actions were approved, or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts.
As permitted by the Delaware General Corporation Law, we have entered into indemnity agreements with each of our directors and executive officers, that require us to indemnify such persons against any and all expenses (including attorneys’ fees), witness fees, damages, judgments, fines, settlements and other amounts incurred (including expenses of a derivative action) in connection with any action, suit or proceeding, whether actual or threatened, to which any such person may be made a party by reason of the fact that such person is or was a director, an officer or an employee of Horizon or any of its affiliated enterprises, provided that such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to our best interests and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder.
At present, there is no pending litigation or proceeding involving any of our directors or executive officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.
We have an insurance policy covering our officers and directors with respect to certain liabilities, including liabilities arising under the Securities Act of 1933, as amended, or the Securities Act, or otherwise.
We have entered into an underwriting agreement which provides that the underwriters are obligated, under some circumstances, to indemnify our directors, officers and controlling persons against specified liabilities, including liabilities under the Securities Act.
Reference is made to the following documents filed as exhibits to this registration statement regarding relevant indemnification provisions described above and elsewhere herein:
| Exhibit Document |
Number | |||
| Form of Underwriting Agreement. |
1.1 | |||
| Form of Amended and Restated Certificate of Incorporation to be effective upon completion of this offering. |
3.3 | |||
| Form of Amended and Restated Bylaws to be effective upon completion of this offering. |
3.5 | |||
| Form of Indemnity Agreement. |
10.1 | |||
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Item 15. Recent sales of unregistered securities.
The following list sets forth information regarding all securities sold by us in the three years preceding the filing of this Registration Statement:
| (1) | In December 2007, Horizon Pharma USA, Inc. entered into a loan and security agreement with Comerica Bank, or Comerica, and Hercules Technology Growth Capital, Inc., or Hercules, pursuant to which it issued warrants to purchase 38,959 shares of its Series C preferred stock, with an initial exercise price of $14.22 per share. In April 2010, in connection with our recapitalization, these warrants became exercisable for 51,813 shares of our Series A preferred stock at an exercise price of $10.692 per share. Upon completion of this offering, these warrants will become exercisable for 51,813 shares of common stock at an exercise price of $10.692 per share. |
| (2) | In July 2007, Horizon Pharma USA entered into a Series C Preferred Stock Purchase Agreement pursuant to which it issued and sold to accredited investors an aggregate of 2,109,706 shares of Series C preferred stock at a purchase price of $14.22 per share, for net proceeds of approximately $29.9 million. Of these 2,109,706 shares of Series C preferred stock issued, 17,580 shares were converted into Special preferred stock of Horizon Pharma USA in connection with the Series D financing described below. The remaining 2,092,126 shares of Series C preferred stock were converted into 2,782,448 shares of our Series A preferred stock, 555,080 shares of which are currently held in escrow, in connection with our recapitalization. Upon completion of this offering, those shares of Series A preferred stock will convert into an equal number of shares of our common stock. All of the 17,580 shares of Special preferred stock were converted into an equal number of shares of our common stock in connection with the recapitalization. |
| (3) | Between October 2008 and November 2009, Horizon Pharma USA sold $17.0 million in aggregate principal amount of convertible promissory notes, or the bridge notes, and issued warrants, or the bridge warrants, exercisable for shares of Horizon Pharma USA’s capital stock to accredited investors in four tranches. The bridge notes accrued interest at 8% per year and were convertible into shares of Horizon Pharma USA’s preferred stock in the event Horizon Pharma USA completed a preferred stock financing of at least $25.0 million, or convertible in the event of the sale of Horizon Pharma USA or in certain other circumstances. The bridge warrants were exercisable for a number of shares of capital stock of Horizon Pharma USA determined based on the number and type of shares into which the bridge notes were to be converted, with an initial exercise price of $5.201 per share. In connection with the Series D financing described below, the bridge notes converted into an aggregate of 3,440,463 shares of Series D preferred stock of Horizon Pharma USA and the bridge warrants became exercisable for an aggregate of 490,290 shares of Series D preferred stock of Horizon Pharma USA. These shares were converted into 3,440,463 shares of our Series A preferred stock, 686,349 shares of which are currently held in escrow, in connection with the recapitalization. In April 2010, in connection with our recapitalization, the bridge warrants became exercisable for 490,290 shares of our Series A preferred stock at an exercise price of $5.201 per share. Upon completion of this offering, these warrants will become exercisable for 490,290 shares of common stock at an exercise price of $10.692 per share. |
| (4) | In November 2008, as consideration for increasing the loan amount under the loan and security agreement with Comerica and Hercules, Horizon Pharma USA issued warrants to purchase shares of its Series C preferred stock, with an initial exercise price of $14.22 per share. In April 2010, in connection with our recapitalization, these warrants became exercisable for an aggregate of 10,363 shares of our Series A preferred stock at an exercise price of $10.692 per share. Upon completion of this offering, these warrants will become exercisable for 10,363 shares of common stock at an exercise price of $10.692 per share. |
| (5) | In December 2009, Horizon Pharma USA entered into a Series D Preferred Stock Purchase Agreement pursuant to which it issued and sold to accredited investors, in a series of closings between December 2009 and January 2010, an aggregate of 4,978,674 shares of Series D preferred stock at a purchase price of $5.201 per share, for net proceeds of approximately $25.8 million. Of these 4,978,674 shares of Series D preferred stock issued, 3,440,463 shares were issued pursuant to the conversion of the bridge notes. All of the 4,978,674 shares of Series D preferred stock were converted into an equal number of shares of our Series A preferred stock, 993,211 shares of which are currently held in escrow, in connection with our recapitalization. Upon completion of this offering, these shares will convert into 4,978,674 shares of common stock. |
| (6) | In April 2010, we completed our recapitalization and acquired Nitec Pharma AG, or Nitec (now Horizon Pharma AG), pursuant to a Share Exchange Agreement with Nitec, Horizon Pharma USA, Horizon MergerSub, Inc., the |
II-3
| shareholders of Nitec and their representative and certain stockholders of Horizon Pharma USA and their representative. In connection with the Nitec acquisition, we issued an aggregate of 2,035,494 shares of our common stock and an aggregate of 11,211,413 shares of our Series A preferred stock to Nitec shareholders in exchange for all of the capital stock of Nitec. In connection with our recapitalization, we issued an aggregate of 1,503,089 shares of our common stock and an aggregate of 11,239,887 shares of our Series A preferred stock to Horizon Pharma USA stockholders upon conversion of all outstanding shares of capital stock of Horizon Pharma USA. Upon completion of this offering, these shares will represent 25,989,883 shares of common stock. |
| (7) | In April 2010, and concurrently with the recapitalization and Nitec acquisition, we entered into a Series B Preferred Stock and Subordinated Convertible Note Purchase Agreement pursuant to which we issued and sold to accredited investors, in a first closing, an aggregate of 2,510,040 shares of our Series B preferred stock at a purchase price of $7.968 per share, for aggregate consideration of approximately $20.0 million. Upon completion of this offering, these shares will convert into 2,510,040 shares of common stock. |
| (8) | In April 2010, we issued a warrant to Kreos Capital III (UK) Limited, or Kreos, to purchase 118,496 shares of our Series A preferred stock at an initial exercise price of $0.01 per share, pursuant to a loan facility Nitec originally entered into with Kreos and which was subsequently amended in connection with the recapitalization and Nitec acquisition. Upon completion of this offering, the warrant will become exercisable for an aggregate of 118,496 shares of our common stock at an exercise price equal to $0.01 per share. |
| (9) | In April 2010, in connection with a loan and security agreement we entered into with Silicon Valley Bank, Kreos, Horizon Pharma USA and Horizon Pharma AG, we issued a warrant to each of Silicon Valley Bank and Kreos to purchase 75,301 shares of our Series B preferred stock at an initial exercise price of $0.01 per share. Upon completion of this offering, the warrants will become exercisable for an aggregate of 150,602 shares of our common stock at an exercise price equal to $0.01 per share. |
| (10) | In July 2010, pursuant to the Series B Preferred Stock and Subordinated Convertible Note Purchase Agreement we issued $10.0 million in aggregate principal amount of convertible promissory notes, or the 2010 notes, to accredited investors. The 2010 notes accrue interest at 10% per year. In the event the 2010 notes are not converted into shares of our Series B preferred stock or new equity securities prior to the completion of this offering, then the 2010 notes may be converted into 1,271,520 shares of common stock upon completion of this offering at the lesser of (i) the price per share to the public of our common stock sold in this offering or (ii) $7.968. |
| (11) | From January 1, 2007 to June 30, 2010, we, along with Horizon Pharma USA, granted stock options under our 2005 Stock Plan to purchase 3,145,866 shares of common stock (net of expirations and cancellations) to our employees, directors and consultants, having exercise prices ranging from $2.19 to $12.14 per share. Of these, no options to purchase shares of common stock have been exercised through June 30, 2010. |
The offers, sales and issuances of the securities described in paragraphs (1), (2), (3), (4), (5), (7), (8), (9) and (10) were deemed to be exempt from registration under the Securities Act in reliance on Rule 506 of Regulation D in that the issuance of securities to the accredited investors did not involve a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited investor under Rule 501 of Regulation D.
The offers, sales and issuances of the securities described in paragraph (6) were deemed to be exempt from registration under the Securities Act in reliance on Rule 506 of Regulation D in that the issuance of securities to the accredited investors did not involve a public offering and Regulation S in that the issuance of securities to non-U.S. persons were made pursuant to an offshore transaction, and no directed selling efforts were made in the United States. Each of the recipients of securities in these transactions was an accredited investor under Rule 501 of Regulation D who acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, or a non-U.S. person under Rule 902 of Regulation S. Appropriate legends were affixed to the securities issued in the transaction.
The offers, sales and issuances of the securities described in paragraph (11) were deemed to be exempt from registration under the Securities Act in reliance on Rule 701 in that the transactions were under compensatory benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of such securities were our employees, directors or bona fide consultants and received the securities under our 2005 Stock Plan. Appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions had adequate access, through employment, business or other relationships, to information about us.
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Item 16. Exhibits and financial statement schedules.
(a) Exhibits.
| Exhibit |
Description of Document | |||
| 1.1† | Form of Underwriting Agreement. | |||
| 2.1(1) | Share Exchange Agreement, dated April 1, 2010, among the Registrant, Nitec Pharma AG, Horizon Therapeutics, Inc., Horizon MergerSub, Inc., the shareholders of Nitec Pharma AG and their representative and certain stockholders of Horizon Therapeutics, Inc. and their representative. | |||
| 3.1(1) | Amended and Restated Certificate of Incorporation, as currently in effect. | |||
| 3.2(1) | Certificate of Amendment to Amended and Restated Certificate of Incorporation, as currently in effect. | |||
| 3.3† | Form of Amended and Restated Certificate of Incorporation to be effective upon completion of this offering. | |||
| 3.4(1) | Bylaws, as currently in effect. | |||
| 3.5 | Form of Amended and Restated Bylaws to be effective upon completion of this offering. | |||
| 4.1† | Form of Common Stock Certificate. | |||
| 4.2(1) | Form of Warrant issued by Registrant to bridge financing investors. | |||
| 4.3(1) | Warrant issued by Registrant on December 18, 2007 to Comerica Bank. | |||
| 4.4(1) | Warrant issued by Registrant on December 18, 2007 to Hercules Technology Growth Capital, Inc. | |||
| 4.5(1) | Warrant issued by Registrant on November 21, 2008 to Comerica Bank. | |||
| 4.6(1) | Warrant issued by Registrant on November 21, 2008 to Hercules Technology Growth Capital, Inc. | |||
| 4.7(1) | Warrant issued by Registrant on April 1, 2010 to Kreos Capital III Limited. | |||
| 4.8(1) | Warrant issued by Registrant on April 1, 2010 to Kreos Capital III Limited. | |||
| 4.9(1) | Warrant issued by Registrant on April 1, 2010 to Silicon Valley Bank. | |||
| 4.10(1) | Investors’ Rights Agreement, dated April 1, 2010, by and among the Registrant and certain of its stockholders. | |||
| 5.1† | Opinion of Cooley LLP. | |||
| 10.1(1) | Form of Indemnity Agreement. | |||
| 10.2+(1) | 2005 Stock Plan and Form of Stock Option Agreement thereunder. | |||
| 10.3+† | 2010 Equity Incentive Plan and Form of Stock Option Agreement thereunder. | |||
| 10.4+† | 2010 Employee Stock Purchase Plan and Form of Offering Document thereunder. | |||
| 10.5(1) | Loan and Security Agreement, dated April 1, 2010, among the Registrant, Horizon Pharma AG, Kreos Capital III (UK) Limited and Silicon Valley Bank. | |||
| 10.6(1) | Agreement for the Provision of a Loan Facility of up to Euro 7,500,000, dated August 15, 2008, by and between Horizon Pharma AG and Kreos Capital III (UK) Limited. | |||
| 10.7 | First Amendment to Agreement for the Provision of a Loan Facility of up to Euro 7,500,000, dated April 1, 2010, by and between Horizon Pharma AG and Kreos Capital III (UK) Limited. | |||
| 10.8* | Development and License Agreement, dated August 20, 2004, by and among Horizon Pharma AG, Jagotec AG and SkyePharma AG. | |||
| 10.9*(1) | Amendment to Development and License Agreement, dated August 3, 2007, by and among Horizon Pharma AG, Jagotec AG and SkyePharma AG. | |||
| 10.10* | Manufacturing and Supply Agreement, dated August 3, 2007, by and between Horizon Pharma AG and Jagotec AG. | |||
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| Exhibit |
Description of Document | |
| 10.11* | Technology Transfer Agreement, dated August 2, 2004, by and among Horizon Pharma AG, Horizon Pharma GmbH and Merck KgaA. | |
| 10.12* | Transfer, License and Supply Agreement, dated December 19, 2006, by and among Horizon Pharma AG, Horizon Pharma GmbH and Merck Serono GmbH. | |
| 10.13*(1) | Amendment to Transfer, License and Supply Agreement, dated December 17, 2008, by and among Horizon Pharma AG, Horizon Pharma GmbH and Merck Serono GmbH. | |
| 10.14* | Transfer, License and Supply Agreement, dated March 26, 2009, by and among Horizon Pharma AG, Horizon Pharma GmbH and Merck GesmbH. | |
| 10.15+(1) | Form of Employee Proprietary Information and Inventions Agreement. | |
| 10.16* | Manufacturing and Supply Agreement, dated March 24, 2009, by and between Horizon Pharma AG and Mundipharma Medical Company. | |
| 10.17* | Exclusive Distribution Agreement, dated March 24, 2009, by and between Horizon Pharma AG and Mundipharma International Corporation Limited. | |
| 10.18(1) | Amendment to Exclusive Distribution Agreement, dated July 7, 2009 by and between Horizon Pharma AG and Mundipharma International Corporation Limited. | |
| 10.19* | Technical Transfer Agreement, dated November 9, 2009, by and between Horizon Pharma USA, Inc. and sanofi-aventis U.S. LLC. | |
| 10.20*(1) | Sublease, dated April 21, 2009, by and between Horizon Pharma USA, Inc. and Advanced Personnel, Inc., as amended. | |
| 10.21* | Lease Agreement, dated December 22, 2004, by and between Horizon Pharma GmbH and Alters- und Hinterbliebenen-Versorgungsstelle der Technischen Überwachungsvereine der VvaG, Essen FRG regarding Josef-Meyer-Str. 13-15, Mannheim FRG, and amendments thereto. | |
| 10.22+(1) | Amended and Restated Executive Employment Agreement, dated July 27, 2010, by and between Horizon Pharma, Inc., Horizon Pharma USA, Inc. and Timothy P. Walbert. | |
| 10.23+(1) | Amended and Restated Executive Employment Agreement, dated July 27, 2010, by and between Horizon Pharma, Inc., Horizon Pharma USA, Inc. and Robert J. De Vaere. | |
| 10.24+(1) | Amended and Restated Executive Employment Agreement, dated July 27, 2010, by and between Horizon Pharma, Inc., Horizon Pharma USA, Inc. and Jeffrey W. Sherman, M.D. FACP. | |
| 10.25* | Packaging and Supply Agreement, dated September 29, 2008, by and between Horizon Pharma AG and Catalent Schorndorf GmbH. | |
| 10.26* | Master Services Agreement, dated September 11, 2008, by and between Horizon Pharma USA, Inc. and Pharmaceutics International, Inc. | |
| 10.27+(1) | Severance Benefit Plan. | |
| 10.28+† | Non-Employee Director Compensation Policy. | |
| 10.29*(1) | Sales Contract, dated July 1, 2010, by and between Horizon Pharma USA, Inc. and BASF Corporation. | |
| 21.1(1) | Subsidiaries of the Registrant. | |
| 23.1(1) | Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm. | |
| 23.2(1) | Consent of Ernst & Young Ltd, independent registered public accounting firm. | |
| 23.3 | Consent of Cooley LLP. Reference is made to Exhibit 5.1. | |
| 24.1(1) | Power of Attorney. | |
| 24.2(1) | Power of Attorney. | |
| † | To be filed by amendment. |
| + | Indicates management contract or compensatory plan. |
| * | Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission. |
| (1) | Previously filed. |
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(b) Financial statement schedule.
No financial statement schedules are provided because the information called for is not required or is shown either in the consolidated financial statements or notes.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, or Securities Act, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
| (1) | For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. |
| (2) | For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
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Signatures
Pursuant to the requirements of the Securities Act of 1933, as amended, or the Securities Act, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 21st day of October, 2010.
| HORIZON PHARMA, INC. | ||
| By: | /s/ TIMOTHY P. WALBERT | |
| Timothy P. Walbert | ||
| Chief Executive Officer | ||
Pursuant to the requirements of the Securities Act this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature |
Title |
Date | ||
| /s/ TIMOTHY P. WALBERT Timothy P. Walbert |
Chairman, President and Chief (Principal Executive Officer) |
October 21, 2010 | ||
| /s/ ROBERT J. DE VAERE Robert J. De Vaere |
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
October 21, 2010 | ||
| /s/ JEFFREY BIRD, M.D., PH.D.* Jeffrey Bird, M.D., Ph.D. |
Director | October 21, 2010 | ||
|
/s/ HUBERT BIRNER, PH.D.* Hubert Birner, Ph.D. |
Director | October 21, 2010 | ||
| /s/ LOUIS C. BOCK* Louis C. Bock |
Director | October 21, 2010 | ||
| /s/ JEAN-FRANÇOIS FORMELA, M.D.* Jean-François Formela, M.D. |
Director | October 21, 2010 | ||
| /s/ JEFF HIMAWAN, PH.D.* Jeff Himawan, Ph.D. |
Director | October 21, 2010 | ||
| /s/ PETER JOHANN* Peter Johann, Ph.D. |
Director | October 21, 2010 | ||
* Pursuant to Power of Attorney
| BY: | /s/ TIMOTHY P. WALBERT | |
| Timothy P. Walbert | ||
| Attorney-in-Fact |
Exhibit Index
| Exhibit |
Description of Document | |||
| 1.1† | Form of Underwriting Agreement. | |||
| 2.1(1) | Share Exchange Agreement, dated April 1, 2010, among the Registrant, Nitec Pharma AG, Horizon Therapeutics, Inc., Horizon MergerSub, Inc., the shareholders of Nitec Pharma AG and their representative and certain stockholders of Horizon Therapeutics, Inc. and their representative. | |||
| 3.1(1) | Amended and Restated Certificate of Incorporation, as currently in effect. | |||
| 3.2(1) | Certificate of Amendment to Amended and Restated Certificate of Incorporation, as currently in effect. | |||
| 3.3† | Form of Amended and Restated Certificate of Incorporation to be effective upon completion of this offering. | |||
| 3.4(1) | Bylaws, as currently in effect. | |||
| 3.5 | Form of Amended and Restated Bylaws to be effective upon completion of this offering. | |||
| 4.1† | Form of Common Stock Certificate. | |||
| 4.2(1) | Form of Warrant issued by Registrant to bridge financing investors. | |||
| 4.3(1) | Warrant issued by Registrant on December 18, 2007 to Comerica Bank. | |||
| 4.4(1) | Warrant issued by Registrant on December 18, 2007 to Hercules Technology Growth Capital, Inc. | |||
| 4.5(1) | Warrant issued by Registrant on November 21, 2008 to Comerica Bank. | |||
| 4.6(1) | Warrant issued by Registrant on November 21, 2008 to Hercules Technology Growth Capital, Inc. | |||
| 4.7(1) | Warrant issued by Registrant on April 1, 2010 to Kreos Capital III Limited. | |||
| 4.8(1) | Warrant issued by Registrant on April 1, 2010 to Kreos Capital III Limited. | |||
| 4.9(1) | Warrant issued by Registrant on April 1, 2010 to Silicon Valley Bank. | |||
| 4.10(1) | Investors’ Rights Agreement, dated April 1, 2010, by and among the Registrant and certain of its stockholders. | |||
| 5.1† | Opinion of Cooley LLP. | |||
| 10.1(1) | Form of Indemnity Agreement. | |||
| 10.2+(1) | 2005 Stock Plan and Form of Stock Option Agreement thereunder. | |||
| 10.3+† | 2010 Equity Incentive Plan and Form of Stock Option Agreement thereunder. | |||
| 10.4+† | 2010 Employee Stock Purchase Plan and Form of Offering Document thereunder. | |||
| 10.5(1) | Loan and Security Agreement, dated April 1, 2010, among the Registrant, Horizon Pharma AG, Kreos Capital III (UK) Limited and Silicon Valley Bank. | |||
| 10.6(1) | Agreement for the Provision of a Loan Facility of up to Euro 7,500,000, dated August 15, 2008, by and between Horizon Pharma AG and Kreos Capital III (UK) Limited. | |||
| 10.7 | First Amendment to Agreement for the Provision of a Loan Facility of up to Euro 7,500,000, dated April 1, 2010, by and between Horizon Pharma AG and Kreos Capital III (UK) Limited. | |||
| 10.8* | Development and License Agreement, dated August 20, 2004, by and among Horizon Pharma AG, Jagotec AG and SkyePharma AG. | |||
| 10.9*(1) | Amendment to Development and License Agreement, dated August 3, 2007, by and among Horizon Pharma AG, Jagotec AG and SkyePharma AG. | |||
| Exhibit |
Description of Document | |
| 10.10* | Manufacturing and Supply Agreement, dated August 3, 2007, by and between Horizon Pharma AG and Jagotec AG. | |
| 10.11* | Technology Transfer Agreement, dated August 2, 2004, by and among Horizon Pharma AG, Horizon Pharma GmbH and Merck KgaA. | |
| 10.12* | Transfer, License and Supply Agreement, dated December 19, 2006, by and among Horizon Pharma AG, Horizon Pharma GmbH and Merck Serono GmbH. | |
| 10.13*(1) | Amendment to Transfer, License and Supply Agreement, dated December 17, 2008, by and among Horizon Pharma AG, Horizon Pharma GmbH and Merck Serono GmbH. | |
| 10.14* | Transfer, License and Supply Agreement, dated March 26, 2009, by and among Horizon Pharma AG, Horizon Pharma GmbH and Merck GesmbH. | |
| 10.15+(1) | Form of Employee Proprietary Information and Inventions Agreement. | |
| 10.16* | Manufacturing and Supply Agreement, dated March 24, 2009, by and between Horizon Pharma AG and Mundipharma Medical Company. | |
| 10.17* |
Exclusive Distribution Agreement, dated March 24, 2009, by and between Horizon Pharma AG and Mundipharma International Corporation Limited. | |
| 10.18(1) | Amendment to Exclusive Distribution Agreement, dated July 7, 2009 by and between Horizon Pharma AG and Mundipharma International Corporation Limited. | |
| 10.19* | Technical Transfer Agreement, dated November 9, 2009, by and between Horizon Pharma USA, Inc. and sanofi-aventis U.S. LLC. | |
| 10.20*(1) | Sublease, dated April 21, 2009, by and between Horizon Pharma USA, Inc. and Advanced Personnel, Inc., as amended. | |
| 10.21* | Lease Agreement, dated December 22, 2004, by and between Horizon Pharma GmbH and Alters- und Hinterbliebenen-Versorgungsstelle der Technischen Überwachungsvereine der VvaG, Essen FRG regarding Josef-Meyer-Str. 13-15, Mannheim FRG, and amendments thereto. | |
| 10.22+(1) | Amended and Restated Executive Employment Agreement, dated July 27, 2010, by and between Horizon Pharma, Inc., Horizon Pharma USA, Inc. and Timothy P. Walbert. | |
| 10.23+(1) | Amended and Restated Executive Employment Agreement, dated July 27, 2010, by and between Horizon Pharma, Inc., Horizon Pharma USA, Inc. and Robert J. De Vaere. | |
| 10.24+(1) | Amended and Restated Executive Employment Agreement, dated July 27, 2010, by and between Horizon Pharma, Inc., Horizon Pharma USA, Inc. and Jeffrey W. Sherman, M.D. FACP. | |
| 10.25* | Packaging and Supply Agreement, dated September 29, 2008, by and between Horizon Pharma AG and Catalent Schorndorf GmbH. | |
| 10.26* | Master Services Agreement, dated September 11, 2008, by and between Horizon Pharma USA, Inc. and Pharmaceutics International, Inc. | |
| 10.27+(1) | Severance Benefit Plan. | |
| 10.28+† | Non-Employee Director Compensation Policy. | |
| 10.29*(1) | Sales Contract, dated July 1, 2010, by and between Horizon Pharma USA, Inc. and BASF Corporation. | |
| 21.1(1) | Subsidiaries of the Registrant. | |
| 23.1(1) | Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm. | |
| 23.2(1) | Consent of Ernst & Young Ltd, independent registered public accounting firm. | |
| 23.3 | Consent of Cooley LLP. Reference is made to Exhibit 5.1. | |
| 24.1(1) | Power of Attorney. | |
| 24.2(1) | Power of Attorney. | |
| † | To be filed by amendment. |
| + | Indicates management contract or compensatory plan. |
| * | Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission. |
| (1) | Previously filed. |
Exhibit 3.5
AMENDED AND RESTATED BYLAWS
OF
HORIZON PHARMA, INC.
(A DELAWARE CORPORATION)
TABLE OF CONTENTS
| PAGE | ||||
| ARTICLE I |
OFFICES | 1 | ||
| Section 1. |
Registered Office | 1 | ||
| Section 2. |
Other Offices | 1 | ||
| ARTICLE II |
CORPORATE SEAL | 1 | ||
| Section 3. |
Corporate Seal | 1 | ||
| ARTICLE III |
STOCKHOLDERS’ MEETINGS | 1 | ||
| Section 4. |
Place Of Meetings | 1 | ||
| Section 5. |
Annual Meetings | 1 | ||
| Section 6. |
Special Meetings | 6 | ||
| Section 7. |
Notice Of Meetings | 7 | ||
| Section 8. |
Quorum | 8 | ||
| Section 9. |
Adjournment And Notice Of Adjourned Meetings | 8 | ||
| Section 10. |
Voting Rights | 8 | ||
| Section 11. |
Joint Owners Of Stock | 9 | ||
| Section 12. |
List Of Stockholders | 9 | ||
| Section 13. |
Action Without Meeting | 9 | ||
| Section 14. |
Organization | 9 | ||
| ARTICLE IV |
DIRECTORS | 10 | ||
| Section 15. |
Number And Term Of Office | 10 | ||
| Section 16. |
Powers | 10 | ||
| Section 17. |
Classes of Directors | 10 | ||
| Section 18. |
Vacancies | 11 | ||
| Section 19. |
Resignation | 11 | ||
| Section 20. |
Removal | 11 | ||
| Section 21. |
Meetings | 11 | ||
| Section 22. |
Quorum And Voting | 12 | ||
| Section 23. |
Action Without Meeting | 13 | ||
| Section 24. |
Fees And Compensation | 13 | ||
| Section 25. |
Committees | 13 | ||
| Section 26. |
Duties of Chairman of the Board of Directors | 14 | ||
| Section 27. |
Organization | 14 | ||
i.
TABLE OF CONTENTS
CONTINUED
| PAGE | ||||
| ARTICLE V |
OFFICERS | 15 | ||
| Section 28. |
Officers Designated | 15 | ||
| Section 29. |
Tenure And Duties Of Officers | 15 | ||
| Section 30. |
Delegation Of Authority | 17 | ||
| Section 31. |
Resignations | 17 | ||
| Section 32. |
Removal | 17 | ||
| ARTICLE VI |
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED BY THE CORPORATION | 17 | ||
| Section 33. |
Execution Of Corporate Instruments | 17 | ||
| Section 34. |
Voting Of Securities Owned By The Corporation | 17 | ||
| ARTICLE VII |
SHARES OF STOCK | 18 | ||
| Section 35. |
Form And Execution Of Certificates | 18 | ||
| Section 36. |
Lost Certificates | 18 | ||
| Section 37. |
Transfers | 18 | ||
| Section 38. |
Fixing Record Dates | 18 | ||
| Section 39. |
Registered Stockholders | 19 | ||
| ARTICLE VIII |
OTHER SECURITIES OF THE CORPORATION | 19 | ||
| Section 40. |
Execution Of Other Securities | 19 | ||
| ARTICLE IX |
DIVIDENDS | 20 | ||
| Section 41. |
Declaration Of Dividends | 20 | ||
| Section 42. |
Dividend Reserve | 20 | ||
| ARTICLE X |
FISCAL YEAR | 20 | ||
| Section 43. |
Fiscal Year | 20 | ||
| ARTICLE XI |
INDEMNIFICATION | 20 | ||
| Section 44. |
Indemnification of Directors, Officers, Employees and Other Agents | 20 | ||
| ARTICLE XII |
NOTICES | 24 | ||
| Section 45. |
Notices | 24 | ||
| ARTICLE XIII |
AMENDMENTS | 25 | ||
| Section 46. |
Amendments | 25 | ||
| ARTICLE XIV |
LOANS TO OFFICERS | 25 | ||
| Section 47. |
Loans To Officers | 25 | ||
ii.
AMENDED AND RESTATED BYLAWS
OF
HORIZON PHARMA, INC.
(A DELAWARE CORPORATION)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of Horizon Pharma, Inc. (the “Corporation”) in the State of Delaware shall be in the City of Wilmington, County of New Castle.
Section 2. Other Offices. The Corporation shall also have and maintain an office or principal place of business at such place as may be fixed by the Board of Directors of the Corporation (the “Board of Directors”), and may also have offices at such other places, both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal. The Board of Directors may adopt a corporate seal. Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE III
STOCKHOLDERS’ MEETINGS
Section 4. Place Of Meetings. Meetings of the stockholders of the Corporation may be held at such place, either within or without the State of Delaware, as may be determined from time to time by the Board of Directors. The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided under the Delaware General Corporation Law (“DGCL”).
Section 5. Annual Meetings.
(a) The annual meeting of the stockholders of the Corporation, for the purpose of election of directors and for such other business as may lawfully come before it, shall be held on such date and at such time as may be designated from time to time by the Board of Directors. Nominations of persons for election to the Board of Directors of the Corporation and the
1.
proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders only: (i) pursuant to the Corporation’s notice of meeting of stockholders (with respect to business other than nominations); (ii) brought specifically by or at the direction of the Board of Directors; or (iii) by any stockholder of the Corporation who was a stockholder of record at the time of giving the stockholder’s notice provided for in Section 5(b) below, who is entitled to vote at the meeting and who complied with the notice procedures set forth in Section 5. For the avoidance of doubt, clause (iii) above shall be the exclusive means for a stockholder to make nominations and submit other business (other than matters properly included in the Corporation’s notice of meeting of stockholders and proxy statement under Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the “1934 Act”)) before an annual meeting of stockholders.
(b) At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 5(a) of these Bylaws, (i) the stockholder must have given timely notice thereof in writing and in proper form to the Secretary of the Corporation, (ii) such other business must be a proper matter for stockholder action under Delaware law and (iii) the stockholder of record and the beneficial owner, if any, on whose behalf any such proposal or nomination is made, must have acted in accordance with the representations set forth in the Solicitation Statement required by these Bylaws. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90th) day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period for the giving of a stockholder’s notice as described in this Section 5(b). To be in proper form, such stockholder’s notice shall:
(A) as to each person whom the stockholder proposes to nominate for election as a director (1) set forth the name, age, business address and residence address of such nominee, (2) set forth the principal occupation or employment of such nominee, (3) set forth the class and number of shares of each class of capital stock of the Corporation which are owned of record and beneficially by such nominee, (4) set forth the date or dates on which such shares were acquired and the investment intent of such acquisition, (5) with respect to each proposed nominee, include a completed and signed questionnaire, representation and agreement required by Section 5(c), (6) set forth such other information concerning such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the election of such nominee as a director in an election contest (even if an election contest is not involved), or that is otherwise required pursuant to Regulation 14A under the 1934 Act and the rules and regulations promulgated thereunder (including such proposed nominee’s written consent to being named as a nominee and to serving as a director if elected) and (7) set forth the information required by Section 5(b)(C). The Corporation may require any proposed nominee to furnish such other
2.
information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such proposed nominee, and the impact that such service would have on the ability of the Corporation to satisfy the requirements of laws, rules, regulations and listing standards applicable to the Corporation or its directors;
(B) as to any other business that the stockholder proposes to bring before the meeting, set forth (1) a brief description of the business desired to be brought before the meeting, (2) the text of the proposal or business (including the text of any resolutions proposed for consideration and if such business includes a proposal to amend these Bylaws, the text of the proposed amendment), (3) the reasons for conducting such business at the meeting, (4) any material interest (including any anticipated benefit of such business to any Proponent (as defined below) other than solely as a result of its ownership of the Corporation’s capital stock, that is material to any Proponent individually, or to the Proponents in the aggregate) in such business of any Proponent and (5) the information required by Section 5(b)(C); and
(C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (each, a “Proponent” and collectively, the “Proponents”) (1) the name and address of each Proponent (including, if applicable, the name and address that appear on the Corporation’s books), (2) the class or series and number of shares of the Corporation that are owned beneficially and of record by each Proponent, (3) a description of any agreement, arrangement or understanding (whether oral or in writing) with respect to the nomination or proposal between or among any Proponent and any of its affiliates or associates, and any others (including their names) acting in concert, or otherwise under the agreement, arrangement or understanding, with any of the foregoing, (4) a representation that the Proponents are holders of record or beneficial owners, as the case may be, of shares of the Corporation entitled to vote at the meeting and intend to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, (5) a representation as to whether the Proponents intend to deliver a proxy statement and form of proxy to holders of a sufficient number of the Corporation’s voting shares to elect such nominee or nominees or to carry such proposal, (6) to the extent known by any Proponent, the name and address of any other stockholder supporting the proposal on the date of such stockholder’s notice and (7) a description of all Derivative Transactions (as defined below) by each Proponent during the previous twelve (12) month period, including the date of any such Derivative Transaction and the class, series and number of securities involved in, and the material economic terms of, any such Derivative Transaction.
For purposes of this Section 5, a “Derivative Transaction” means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proponent or any of its affiliates or associates, whether record or beneficial:
(i) the value of which is derived in whole or in part from the value of any class or series of shares or other securities of the Corporation,
(ii) which otherwise provides any direct or indirect opportunity to gain or share in any gain derived from a change in the value of securities of the Corporation,
3.
(iii) the effect or intent of which is to mitigate loss, manage risk or benefit of security value or price changes, or
(iv) which provides the right to vote or increase or decrease the voting power of, such Proponent, or any of its affiliates or associates, with respect to any securities of the Corporation, which agreement, arrangement, interest or understanding may include, without limitation, any option, warrant, debt position, note, bond, convertible security, swap, stock appreciation right, short position (for purposes hereof, a person or entity shall be deemed to have a short position in a security of the Corporation if such person or entity, directly or indirectly, through any contract, arrangement, relationship, understanding or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of such security), profit interest, hedge, right to dividends, voting agreement, performance-related fee or arrangement to borrow or lend shares (whether or not subject to payment, settlement, exercise or conversion in any such class or series), and any proportionate interest of such Proponent in the securities of the Corporation held, directly or indirectly, by any general or limited partnership, or any limited liability company, of which such Proponent is a general partner or managing member or, directly or indirectly, beneficially owns an interest in such general partner or managing member.
(c) To be eligible to be a nominee for election as a director of the Corporation, such nominee or a person on his or her behalf must deliver (in the case of a nomination under clause (iii) of Section 5(a), in accordance with the time periods prescribed for delivery of notice under Section 5(b)) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such nominee (and in the case of a nomination under clause (iii) of Section 5(a), the background of any other person or entity on whose behalf the nomination is being made), which questionnaire shall be provided by the Secretary promptly upon written request, and a written representation and agreement, in the form provided by the Secretary promptly upon written request, that such person (A) is not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation in the questionnaire or (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law; (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director of the Corporation that has not been disclosed therein; and (C) except as otherwise disclosed in the questionnaire, would be in compliance, if elected as a director of the Corporation, and will comply with, all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.
(d) A stockholder providing the written notice required by Section 5(b) shall update and supplement such notice in writing, if necessary, so that the information provided or required to be provided in such notice is true and correct in all material respects as of (A) the record date for the meeting and (B) as of the date that is five (5) business days prior to the date of the meeting and, in the event of any adjournment or postponement thereof, five (5) business days
4.
prior to the date to which such meeting is adjourned or postponed (or such lesser number of days prior to the date of such adjourned or postponed meeting as is reasonably practicable under the circumstances). In the case of an update and supplement pursuant to clause (A) of this Section 5(d), such update and supplement shall be received by the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for the meeting. In the case of an update and supplement pursuant to clause (B) of this Section 5(d), such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than two (2) business days prior to the date of the meeting, and, in the event of any adjournment or postponement thereof, two (2) business days prior to the date to which such meeting is adjourned or postponed (or such lesser number of days prior to the date of such adjourned or postponed meeting as is reasonably practicable under the circumstances).
(e) Notwithstanding anything in the third sentence of Section 5(b) to the contrary, if the number of directors in an Expiring Class is increased effective at the annual meeting and the public announcement by the Corporation naming the nominees for the additional directorships is not made by the close of business on the one hundredth (100th) day prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 5 shall also be considered timely, but only with respect to nominees for any new positions in such Expiring Class created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation. For purposes of this Bylaw, an “Expiring Class” shall mean a class of directors whose term shall expire at the next annual meeting of stockholders.
(f) General.
(i) Only persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible to be elected as directors at an annual or special meeting of stockholders and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 5 or Section 6, as applicable. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposal or nomination shall not be presented for stockholder action at the meeting and shall be disregarded. Notwithstanding anything in these Bylaws to the contrary, unless otherwise required by law (including without limitation Rule 14a-8 of the 1934 Act), if a stockholder intending to make a nomination for the election to the Board of Directors or to propose business at a meeting pursuant to Section 5 does not provide the information in the stockholder’s notice required under Section 5(b), as applicable, within the applicable time periods specified in this Section 5 (including any update and supplement required under Section 5(d)), or the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed
5.
business shall not be transacted, notwithstanding that proxies in respect of such nominations or such business may have been solicited or received by the Corporation.
(ii) For purposes of Section 5 and Section 6, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.
(iii) Notwithstanding the foregoing provisions of this Section 5, a stockholder who seeks to have any proposal included in the Corporation’s proxy materials shall also comply with all applicable requirements of the 1934 Act and the rules and regulations thereunder with respect to the matters set forth in this Section 5. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to applicable rules and regulations under the 1934 Act, including without limitation Rule 14a-11; provided, however, that any references in these Bylaws to the 1934 Act or the rules and regulations thereunder are not intended to and shall not limit the requirements applicable to proposals and/or nominations to be considered pursuant to Section 5(a)(iii) of these Bylaws.
(iv) For purposes of Sections 5 and 6, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act.
Section 6. Special Meetings.
(a) Special meetings of the stockholders of the Corporation may be called, for any purpose as is a proper matter for stockholder action under Delaware law, by only (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer, or (iii) the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption).
(b) The Board of Directors shall determine the time and place, if any, of such special meeting. Upon determination of the time and place, if any, of the meeting, the Secretary shall cause a notice of meeting to be given to the stockholders entitled to vote, in accordance with the provisions of Section 7 of these Bylaws. No business may be transacted at such special meeting otherwise than specified in the Corporation’s notice of meeting.
(c) Only such business shall be conducted at a special meeting of stockholders as shall have been set forth in the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board of Directors or (ii) provided that the Board of Directors has determined
6.
that directors shall be elected at such meeting, by any stockholder of the Corporation who is entitled to vote at the meeting, who complies with the notice procedures set forth in Section 6(c) and who is a stockholder of record at the time such written notice is delivered to the Secretary of the Corporation setting forth the information required by Section 5(b). In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any stockholder entitled to vote in such election may nominate such number of persons for election to such position(s) as are specified in the Corporation’s notice of meeting, if the stockholder’s notice as required by this Section 6(c) shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting is first made by the Corporation. The stockholder shall also update and supplement such information on a timely basis as set forth in Section 5(d). In no event shall the public announcement of an adjournment or a postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(d) Notwithstanding the foregoing provisions of this Section 6, a stockholder who seeks to have any proposal included in the Corporation’s proxy materials shall also comply with all applicable requirements of the 1934 Act and the rules and regulations thereunder with respect to the matters set forth in this Section 6. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to applicable rules and regulations under the 1934 Act, including without limitation Rule 14a-11; provided, however, that any references in these Bylaws to the 1934 Act or the rules and regulations thereunder are not intended to and shall not limit the requirements applicable to nominations for the election to the Board of Directors to be considered pursuant to Section 6(c) of these Bylaws.
Section 7. Notice Of Meetings. Except as otherwise provided by law, notice, given in writing or by electronic transmission, of each meeting of stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, such notice to specify the place, if any, date and hour, in the case of special meetings, the purpose or purposes of the meeting, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at any such meeting. If mailed, notice is deemed given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation. If sent via electronic transmission, notice is deemed given as of the sending time recorded at the time of transmission. Notice of the time, place, if any, and purpose of any meeting of stockholders may be waived in writing, signed by the person entitled to notice thereof, or by electronic transmission by such person, either before or after such meeting, and will be waived by any stockholder by his attendance thereat in person, by remote communication, if applicable, or by proxy, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.
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Section 8. Quorum. At all meetings of stockholders, except where otherwise provided by statute or by the Certificate of Incorporation, or by these Bylaws, the presence, in person, by remote communication, if applicable, or by proxy duly authorized, of the holders of a majority of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business. In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairman of the meeting or by vote of the holders of a majority of the shares represented thereat, but no other business shall be transacted at such meeting. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Except as otherwise provided by statute or by applicable stock exchange rules, or by the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of a majority of shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote generally on the subject matter shall be the act of the stockholders. Except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, directors shall be elected by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote generally on the election of directors. Where a separate vote by a class or classes or series is required, except where otherwise provided by the statute or by the Certificate of Incorporation or these Bylaws, a majority of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, shall constitute a quorum entitled to take action with respect to that vote on that matter. Except where otherwise provided by statute or by the Certificate of Incorporation or these Bylaws, the affirmative vote of the majority (plurality, in the case of the election of directors) of shares of such class or classes or series present in person, by remote communication, if applicable, or represented by proxy at the meeting shall be the act of such class or classes or series.
Section 9. Adjournment And Notice Of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the chairman of the meeting or by the vote of a majority of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time and place, if any, thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
Section 10. Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the Corporation on the record date, as provided in Section 12 of these Bylaws, shall be entitled to vote at any meeting of stockholders. Every person entitled to vote shall have the right to do so either in person, by remote communication, if applicable, or by an agent or agents authorized by a proxy granted in accordance with Delaware law. An agent so appointed need not be a stockholder. No proxy shall be voted after three (3) years from its date of creation unless the proxy provides for a longer period.
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Section 11. Joint Owners Of Stock. If shares or other securities having voting power stand of record in the names of two (2) or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two (2) or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) if only one (1) votes, his act binds all; (b) if more than one (1) votes, the act of the majority so voting binds all; (c) if more than one (1) votes, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or may apply to the Delaware Court of Chancery for relief as provided in the DGCL, Section 217(b). If the instrument filed with the Secretary shows that any such tenancy is held in unequal interests, a majority or even-split for the purpose of subsection (c) shall be a majority or even-split in interest.
Section 12. List Of Stockholders. The Secretary shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. The list shall be open to examination of any stockholder during the time of the meeting as provided by law.
Section 13. Action Without Meeting. No action shall be taken by the stockholders except at an annual or special meeting of stockholders called in accordance with these Bylaws, and no action shall be taken by the stockholders by written consent or by electronic transmission.
Section 14. Organization.
(a) At every meeting of stockholders, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the President, or, if the President is absent, a chairman of the meeting chosen by a majority in interest of the stockholders entitled to vote, present in person or by proxy, shall act as chairman. The Secretary, or, in his or her absence, an Assistant Secretary directed to do so by the President, shall act as secretary of the meeting.
(b) The Board of Directors of the Corporation shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in
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such meeting to stockholders of record of the Corporation and their duly authorized and constituted proxies and such other persons as the chairman shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number And Term Of Office. The authorized number of directors of the Corporation shall be fixed in accordance with the Certificate of Incorporation. Directors need not be stockholders unless so required by the Certificate of Incorporation. If for any cause, the directors shall not have been elected at an annual meeting, they may be elected as soon thereafter as convenient at a special meeting of the stockholders called for that purpose in the manner provided in these Bylaws.
Section 16. Powers. The powers of the Corporation shall be exercised, its business conducted and its property controlled by the Board of Directors, except as may be otherwise provided by statute or by the Certificate of Incorporation.
Section 17. Classes of Directors. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, the directors shall be divided into three classes designated as Class I, Class II and Class III, respectively. The Board of Directors is authorized to assign members of the Board of Directors already in office to such classes at the time the classification becomes effective. At the first annual meeting of stockholders following the initial classification of the Board of Directors, the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual meeting of stockholders following such initial classification, the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of stockholders following such initial classification, the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.
Notwithstanding the foregoing provisions of this Bylaw, each director shall serve until his successor is duly elected and qualified or until his earlier death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
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Section 18. Vacancies.
(a) Unless otherwise provided in the Certificate of Incorporation, and subject to the rights of the holders of any series of Preferred Stock, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director, and not by the stockholders, provided, however, that whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected, and not by the stockholders. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified. A vacancy in the Board of Directors shall be deemed to exist under this Bylaw in the case of the death, removal or resignation of any director.
Section 19. Resignation. Any director may resign at any time by delivering his or her notice in writing or by electronic transmission to the Secretary, such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the pleasure of the Board of Directors. If no such specification is made, it shall be deemed effective at the pleasure of the Board of Directors. When one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each Director so chosen shall hold office for the unexpired portion of the term of the Director whose place shall be vacated and until his successor shall have been duly elected and qualified.
Section 20. Removal.
(a) Subject to the rights of any series of Preferred Stock to elect additional directors under specified circumstances, neither the Board of Directors nor any individual director may be removed without cause.
(b) Subject to any limitation imposed by law, any individual director or directors may be removed with cause by the affirmative vote of the holders of at least 66-2/3% of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally at an election of directors.
Section 21. Meetings.
(a) Regular Meetings. Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board of Directors may be held at any time or date and at
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any place within or without the State of Delaware which has been designated by the Board of Directors and publicized among all directors, either orally or in writing, by telephone, including a voice-messaging system or other system designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means. No further notice shall be required for regular meetings of the Board of Directors.
(b) Special Meetings. Unless otherwise restricted by the Certificate of Incorporation, special meetings of the Board of Directors may be held at any time and place within or without the State of Delaware whenever called by the Chairman of the Board, the Chief Executive Officer or a majority of the directors then in office.
(c) Meetings by Electronic Communications Equipment. Any member of the Board of Directors, or of any committee thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.
(d) Notice of Special Meetings. Notice of the time and place of all special meetings of the Board of Directors shall be orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at least twenty-four (24) hours before the date and time of the meeting. If notice is sent by United States mail, it shall be sent by first class mail, charges prepaid, at least three (3) days before the date of the meeting. Notice of any meeting may be waived in writing, or by electronic transmission, at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
(e) Waiver of Notice. The transaction of all business at any meeting of the Board of Directors, or any committee thereof, however called or noticed, or wherever held, shall be as valid as though it had been transacted at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present who did not receive notice shall sign a written waiver of notice or shall waive notice by electronic transmission. All such waivers shall be filed with the corporate records or made a part of the minutes of the meeting.
Section 22. Quorum And Voting.
(a) Unless the Certificate of Incorporation requires a greater number, and except with respect to questions related to indemnification arising under Section 44 for which a quorum shall be one-third of the exact number of directors fixed from time to time, a quorum of the Board of Directors shall consist of a majority of the exact number of directors fixed from time to time by the Board of Directors in accordance with the Certificate of Incorporation; provided, however, at any meeting whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board of Directors, without notice other than by announcement at the meeting.
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(b) At each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Certificate of Incorporation or these Bylaws.
Section 23. Action Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and such writing or writings or transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 24. Fees And Compensation. Directors shall be entitled to such compensation for their services as may be approved by the Board of Directors, including, if so approved, by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, for attendance at each regular or special meeting of the Board of Directors and at any meeting of a committee of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.
Section 25. Committees.
(a) Executive Committee. The Board of Directors may appoint an Executive Committee to consist of one (1) or more members of the Board of Directors. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board of Directors shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any Bylaw of the Corporation.
(b) Other Committees. The Board of Directors may, from time to time, appoint such other committees as may be permitted by law. Such other committees appointed by the Board of Directors shall consist of one (1) or more members of the Board of Directors and shall have such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event shall any such committee have the powers denied to the Executive Committee in these Bylaws.
(c) Term. The Board of Directors, subject to any requirements of any outstanding series of Preferred Stock and the provisions of subsections (a) or (b) of this Section 25, may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his death or voluntary resignation from the committee or from the Board of
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Directors. The Board of Directors may at any time for any reason remove any individual committee member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise provide, regular meetings of the Executive Committee or any other committee appointed pursuant to this Section 25 shall be held at such times and places as are determined by the Board of Directors, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place which has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon notice to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of notice to members of the Board of Directors of the time and place of special meetings of the Board of Directors. Notice of any special meeting of any committee may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless otherwise provided by the Board of Directors in the resolutions authorizing the creation of the committee, a majority of the authorized number of members of any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of such committee.
Section 26. Duties of Chairman of the Board of Directors. The Chairman of the Board of Directors, when present, shall preside at all meetings of the stockholders and the Board of Directors. The Chairman of the Board of Directors shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time.
Section 27. Organization. At every meeting of the directors, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the Chief Executive Officer (if a director), or, if a Chief Executive Officer is absent, the President (if a director), or if the President is absent, the most senior Vice President (if a director), or, in the absence of any such person, a chairman of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in his absence, any Assistant Secretary or other officer or director directed to do so by the President, shall act as secretary of the meeting.
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ARTICLE V
OFFICERS
Section 28. Officers Designated. The officers of the Corporation shall include, if and when designated by the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the President, one or more Vice Presidents, the Secretary, the Chief Financial Officer, the Treasurer and the Controller. The Board of Directors may also appoint one or more Assistant Secretaries, Assistant Treasurers, Assistant Controllers and such other officers and agents with such powers and duties as it shall deem necessary. The Board of Directors may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the Corporation at any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the Corporation shall be fixed by or in the manner designated by the Board of Directors.
Section 29. Tenure And Duties Of Officers.
(a) General. All officers shall hold office at the pleasure of the Board of Directors and until their successors shall have been duly elected and qualified, unless sooner removed. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors.
(b) Duties of Chief Executive Officer. The Chief Executive Officer shall preside at all meetings of the stockholders and at all meetings of the Board of Directors, unless the Chairman of the Board of Directors has been appointed and is present. Unless some other officer has been appointed Chief Executive Officer of the Corporation, the President shall be the chief executive officer of the Corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the Corporation. To the extent that a Chief Executive Officer has been appointed and no President has been appointed, all references in these Bylaws to the President shall be deemed references to the Chief Executive Officer. The Chief Executive Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time.
(c) Duties of President. The President shall preside at all meetings of the stockholders and at all meetings of the Board of Directors, unless the Chairman of the Board of Directors or the Chief Executive Officer has been appointed and is present. Unless another officer has been appointed Chief Executive Officer of the Corporation, the President shall be the chief executive officer of the Corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the Corporation. The President shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time.
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(d) Duties of Vice Presidents. The Vice Presidents may assume and perform the duties of the President in the absence or disability of the President or whenever the office of President is vacant. The Vice Presidents shall perform other duties commonly incident to their office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or, if the Chief Executive Officer has not been appointed or is absent, the President shall designate from time to time.
(e) Duties of Secretary. The Secretary shall attend all meetings of the stockholders and of the Board of Directors and shall record all acts and proceedings thereof in the minute book of the Corporation. The Secretary shall give notice in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the Board of Directors and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in these Bylaws and other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time. The President may direct any Assistant Secretary or other officer to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
(f) Duties of Chief Financial Officer. The Chief Financial Officer shall keep or cause to be kept the books of account of the Corporation in a thorough and proper manner and shall render statements of the financial affairs of the Corporation in such form and as often as required by the Board of Directors or the President. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the Corporation. The Chief Financial Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time. To the extent that a Chief Financial Officer has been appointed and no Treasurer has been appointed, all references in these Bylaws to the Treasurer shall be deemed references to the Chief Financial Officer. The President may direct the Treasurer, if any, or any Assistant Treasurer, or the Controller or any Assistant Controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer and each Controller and Assistant Controller shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
(g) Duties of Treasurer. Unless another officer has been appointed Chief Financial Officer of the Corporation, the Treasurer shall be the chief financial officer of the Corporation and shall keep or cause to be kept the books of account of the Corporation in a thorough and proper manner and shall render statements of the financial affairs of the Corporation in such form and as often as required by the Board of Directors or the President, and, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the Corporation. The Treasurer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
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Section 30. Delegation Of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.
Section 31. Resignations. Any officer may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the President or to the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the Corporation under any contract with the resigning officer.
Section 32. Removal. Any officer may be removed from office at any time, either with or without cause, by the affirmative vote of a majority of the directors in office at the time, or by the unanimous written consent of the directors in office at the time, or by any committee or by the Chief Executive Officer or by other superior officers upon whom such power of removal may have been conferred by the Board of Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED
BY THE CORPORATION
Section 33. Execution Of Corporate Instruments. The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the Corporation any corporate instrument or document, or to sign on behalf of the Corporation the corporate name without limitation, or to enter into contracts on behalf of the Corporation, except where otherwise provided by law or these Bylaws, and such execution or signature shall be binding upon the Corporation.
All checks and drafts drawn on banks or other depositaries on funds to the credit of the Corporation or in special accounts of the Corporation shall be signed by such person or persons as the Board of Directors shall authorize so to do.
Unless authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
Section 34. Voting Of Securities Owned By The Corporation. All stock and other securities of other corporations owned or held by the Corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairman of the Board of Directors, the Chief Executive Officer, the President, or any Vice President.
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ARTICLE VII
SHARES OF STOCK
Section 35. Form And Execution Of Certificates. The shares of the Corporation shall be represented by certificates, or shall be uncertificated if so provided by resolution or resolutions of the Board of Directors. Certificates for the shares of stock of the Corporation, if any, shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock represented by certificate in the Corporation shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman of the Board of Directors, the Chief Executive Officer or the President or any Vice President and by the Chief Financial Officer, Treasurer or Assistant Treasurer or the Secretary or Assistant Secretary, certifying the number of shares owned by him in the Corporation. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.
Section 36. Lost Certificates. A new certificate or certificates shall be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The Corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owner’s legal representative, to agree to indemnify the Corporation in such manner as it shall require or to give the Corporation a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen, or destroyed.
Section 37. Transfers.
(a) Transfers of record of shares of stock of the Corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and, in the case of stock represented by certificate, upon the surrender of a properly endorsed certificate or certificates for a like number of shares.
(b) The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
Section 38. Fixing Record Dates.
(a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date
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shall, subject to applicable law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
Section 39. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 40. Execution Of Other Securities. All bonds, debentures and other corporate securities of the Corporation, other than stock certificates (covered in Section 35), may be signed by the Chairman of the Board of Directors, the Chief Executive Officer, the President or any Vice President, or such other person as may be authorized by the Board of Directors, and the corporate seal impressed thereon or a facsimile of such seal imprinted thereon and attested by the signature of the Secretary or an Assistant Secretary, or the Chief Financial Officer or Treasurer or an Assistant Treasurer; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the Corporation or such other person as may be authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate
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security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the Corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the Corporation.
ARTICLE IX
DIVIDENDS
Section 41. Declaration Of Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation and applicable law, if any, may be declared by the Board of Directors pursuant to law at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation and applicable law.
Section 42. Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Board of Directors shall think conducive to the interests of the Corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
Section 43. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 44. Indemnification of Directors, Officers, Employees and Other Agents.
(a) Directors and Officers. The Corporation shall indemnify its directors and officers to the extent not prohibited by the DGCL or any other applicable law; provided, however, that the Corporation may modify the extent of such indemnification by individual contracts with its directors and officers; and, provided, further, that the Corporation shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Corporation, (iii) such indemnification is provided by the Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the DGCL or any other applicable law or (iv) such indemnification is required to be made under subsection (d).
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(b) Employees and Other Agents. The Corporation shall have power to indemnify its employees and other agents as set forth in the DGCL or any other applicable law. The Board of Directors shall have the power to delegate the determination of whether indemnification shall be given to any such person to such officers or other persons as the Board of Directors shall determine.
(c) Expenses. The Corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer, of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or officer in connection with such proceeding provided, however, that if the DGCL requires, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to paragraph (e) of this Bylaw, no advance shall be made by the Corporation to an officer of the Corporation (except by reason of the fact that such officer is or was a director of the Corporation in which event this paragraph shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made (i) by a majority vote of directors who were not parties to the proceeding, even if not a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or such directors so direct, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Corporation.
(d) Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors or officers under this Bylaw shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the Corporation and the director or officer. Any right to indemnification or advances granted by this Bylaw to a director or officer shall be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. To the extent permitted by law, the claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting the claim. In connection with any claim for indemnification, the Corporation shall be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it permissible under the DGCL or any other applicable law
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for the Corporation to indemnify the claimant for the amount claimed. In connection with any claim by an officer of the Corporation (except in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such officer is or was a director of the Corporation) for advances, the Corporation shall be entitled to raise a defense as to any such action clear and convincing evidence that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Corporation, or with respect to any criminal action or proceeding that such person acted without reasonable cause to believe that his conduct was lawful. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because the director or officer has met the applicable standard of conduct set forth in the DGCL or any other applicable law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by a director or officer to enforce a right to indemnification or to an advancement of expenses hereunder, the burden of proving that the director or officer is not entitled to be indemnified, or to such advancement of expenses, under this Bylaw or otherwise shall be on the Corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any person by this Bylaw shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding office. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL, or by any other applicable law.
(f) Survival of Rights. The rights conferred on any person by this Bylaw shall continue as to a person who has ceased to be a director or officer, employee or other agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(g) Insurance. To the fullest extent permitted by the DGCL or any other applicable law, the Corporation, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Bylaw.
(h) Amendments. Any repeal or modification of this Bylaw shall only be prospective and shall not affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the Corporation.
(i) Saving Clause. If this Bylaw or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer to the full extent not prohibited by any applicable portion of this Bylaw that shall not have been invalidated, or by any other applicable law. If this Bylaw
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shall be invalid due to the application of the indemnification provisions of another jurisdiction, then the Corporation shall indemnify each director and officer to the full extent under any other applicable law.
(j) Certain Definitions. For the purposes of this Bylaw, the following definitions shall apply:
(i) The term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.
(ii) The term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.
(iii) The term the “corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Bylaw with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.
(iv) References to a “director,” “officer,” “employee,” or “agent” of the Corporation shall include, without limitation, situations where such person is serving at the request of the Corporation as, respectively, a director, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.
(v) References to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Bylaw.
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ARTICLE XII
NOTICES
Section 45. Notices.
(a) Notice To Stockholders. Written notice to stockholders of stockholder meetings shall be given as provided in Section 7 herein. Without limiting the manner by which notice may otherwise be given effectively to stockholders under any agreement or contract with such stockholder, and except as otherwise required by law, written notice to stockholders for purposes other than stockholder meetings may be sent by United States mail or nationally recognized overnight courier, or by facsimile, telegraph or telex or by electronic mail or other electronic means.
(b) Notice To Directors. Any notice required to be given to any director may be given by the method stated in subsection (a), as otherwise provided in these Bylaws, or by overnight delivery service, facsimile, telex or telegram, except that such notice other than one which is delivered personally shall be sent to such address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known post office address of such director.
(c) Affidavit Of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the Corporation or its transfer agent appointed with respect to the class of stock affected, or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.
(d) Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.
(e) Notice To Person With Whom Communication Is Unlawful. Whenever notice is required to be given, under any provision of law or of the Certificate of Incorporation or Bylaws of the Corporation, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
(f) Notice to Stockholders Sharing an Address. Except as otherwise prohibited under the DGCL, any notice given under the provisions of the DGCL, the Certificate
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of Incorporation or the Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Such consent shall have been deemed to have been given if such stockholder fails to object in writing to the Corporation within sixty (60) days of having been given notice by the Corporation of its intention to send the single notice. Any consent shall be revocable by the stockholder by written notice to the Corporation.
ARTICLE XIII
AMENDMENTS
Section 46. Amendments. Subject to the limitations set forth in Section 44(h) of these Bylaws or the provisions of the Certificate of Incorporation, the Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the Amended and Restated Bylaws of the corporation by the Board of Directors shall require the approval of a majority of the authorized number of Directors. The stockholders also shall have power to adopt, amend or repeal the Bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by the Certificate of Incorporation, such action by stockholders shall require the affirmative vote of the holders of at least 66-2/3% of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
ARTICLE XIV
LOANS TO OFFICERS
Section 47. Loans To Officers. Except as otherwise prohibited by applicable law, the Corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the Corporation or of its subsidiaries, including any officer or employee who is a director of the Corporation or its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit the Corporation. The loan, guarantee or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the Corporation. Nothing in these Bylaws shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the Corporation at common law or under any statute.
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Exhibit 10.7
FIRST AMENDMENT TO AGREEMENT FOR THE PROVISION
OF A LOAN FACILITY OF UP TO EURO 7,500,000
This First Amendment To Agreement For The Provision Of A Loan Facility Of Up To Euro 7,500,000 (“Amendment”) is made and entered into as of April 1, 2010, by and between Nitec Pharma AG, a company incorporated in Switzerland with number CH-280.3.007.771-0/ (“Borrower”), and Kreos Capital III (UK) Limited, a company incorporated in England and Wales whose company number is 05981165 (“Lender”).
Recitals
A. Borrower and Lender have entered into that certain Agreement for the Provision of a Loan Facility of up to Euro 7,500,000 dated August 15, 2008 (the “Loan Agreement”) pursuant to which Lender has agreed to extend and make available to Borrower certain advances of money.
B. Borrower desires that Lender amend the Loan Agreement and the Security Documents (as defined therein) upon the terms and conditions more fully set forth herein.
C. Subject to the representations and warranties of Borrower herein and upon the terms and conditions set forth in this Amendment, Lender is willing to so amend the Loan Agreement and the Security Documents.
Agreement
Now, Therefore, in consideration of the foregoing recitals and the mutual covenants herein set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, Borrower and Lender hereby agree to amend the Loan Agreement and the Security Documents as follows:
| 1. | Definitions. Unless otherwise defined herein, all terms defined in the Loan Agreement have the same meaning when used herein. |
| 2. | Consent to Acquisition of Borrower by Horizon Pharma, Inc. Lender hereby consents to the transactions contemplated under that Share Exchange Agreement dated on or about the date hereof by and among Borrower, Horizon Therapeutics, Inc., a Delaware corporation, Horizon Pharma, Inc., the shareholders of Borrower, certain stockholders of Horizon Therapeutics, Inc., and a representative of the stockholders of Horizon Therapeutics, Inc. pursuant to which immediately following the consummation of such transactions, the existing stockholders of Horizon Therapeutics, Inc. will own approximately 51% of Horizon Pharma, Inc. on a fully-diluted basis and the existing shareholders of Borrower will own approximately 49% of Horizon Pharma, Inc. on a fully-diluted basis, and Horizon Pharma, Inc. will own 100% of the capital stock of Horizon Therapeutics, Inc. and 100% of the capital stock of Borrower. Lender further acknowledges and agrees that such transaction is permitted notwithstanding that it constitutes a “change of control” as defined in Clause 9.1.12 of the Loan Agreement. Without limiting the foregoing, Lender agrees that the completion of such transaction shall not constitute an Event of Default under the Loan Agreement or give rise to the consequences set forth in Clauses 9.2.1 and 9.2.2 of the Loan Agreement. |
| 3. | Amendments to Loan Agreement. |
3.1 Clause 3.7.3 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“Upon the loan being discharged in full and the Lender under no further obligation to make any financial accommodation or loan facility to the Borrower under this Loan Agreement or upon the closing of a firmly underwritten public offering pursuant to an effective registration statement under the United States Securities Act of 1933, as amended, covering the offer and sale of common stock of the holding company of the Borrower, for at least US $50,000,000 before deducting underwriting discounts and commissions and other offering expenses (the “Qualified IPO”), the Pledged Assets (as defined in the Pledge Agreement) shall be released to the Borrower or such other Party as designated by the Borrower.”
3.2 Clause 5.2 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“The Borrower shall pay accrued interest only on the outstanding principal balance of the Loan on the first Business Day of each calendar month amounting to €50,000 per calendar month, commencing on May 1, 2010 and ending on December 1, 2010. Thereafter, the Borrower shall repay the outstanding principal balance of the Loan in 35 equal monthly payments of principal, each such payment in the amount shown on Schedule 5.2 attached hereto at Exhibit A, together with accrued and unpaid interest thereon, amounting to €184,000 per month to be paid to the Lender on the first Business Day of the 35 calendar months, commencing on January 1, 2011. Any amount repaid or prepaid may not be redrawn.”
3.3 Clause 7.1.12 of the Loan Agreement is hereby amended by deleting the phrase “and each date of repayment” contained therein.
3.4 Clause 8.1.6 of the Loan Agreement is amended (i) by deleting “Company” in the eighth line thereof and substituting “Borrower” therefor and (ii) by deleting “proposed to be” in the fourteenth line thereof.
3.5 Clause 8.1.7 of the Loan Agreement is amended by deleting “each Group Company” in the third line thereof and substituting “its parent holding company on a consolidated basis” therefor.
3.6 Clause 8.1.9 of the Loan Agreement is amended by adding the following language to the end thereof:
“subject to exclusion of access to proprietary information, confidential information relating to employees (including compensation), and other information as reasonably necessary to preserve the attorney-client privilege.”
3.7 Clause 8.1.11 of the Loan Agreement is amended by deleting the second sentence thereof that begins “In addition, upon the occurrence of a default…” and substituting the following therefor:
“In addition, upon the occurrence of an Event of Default and during the continuance thereof, the Lender shall be entitled to have a representative to attend all meetings of the Borrower’s board of directors in a non-voting observer capacity, subject to exclusion of access to proprietary information, confidential information relating to employees (including compensation), and other information as reasonably necessary to preserve the attorney-client privilege.”
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3.8 Clause 8.1.15 of the Loan Agreement is hereby amended (i) by deleting “or” at the end of clause 8.1.15.2 and (ii) by adding the following new clauses 8.1.15.4 and 8.1.15.5 to read as follows:
“8.1.15.4 under the Loan and Security Agreement dated as of April 1, 2010 by and among Horizon Pharma, Inc., Lender, and Silicon Valley Bank, as the same may be amended or amended and restated from time to time; or
8.1.15.5 those certain subordinated convertible promissory notes, in an aggregate principal amount of up to US $10,000,000 (the “Subordinated Notes”), as may be issued by Horizon Pharma, Inc. from time to time pursuant to the terms of that certain Series B Preferred Stock and Subordinated Convertible Note Purchase Agreement dated on or about April 1, 2010 by and among Horizon Pharma, Inc. and the Purchasers listed on the Schedule of Purchasers thereto (the “Purchase Agreement”), as the Subordinated Notes and Purchase Agreement may be amended from time to time;”
3.9 Clause 8.1.19 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“8.1.19 Clauses 8.1.3, 8.1.4, 8.1.17 and 8.1.18 do not apply to:
8.1.19.1 Security provided to the Lender under the Loan Agreement or any Security Document;
8.1.19.2 Security provided to Lender and Silicon Valley Bank under the Loan and Security Agreement referred to in clause 8.1.15.4;
8.1.19.3 any netting or set-off arrangement entered into by any Group Company in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;
8.1.19.4 any lien arising by operation of law and in the ordinary course of trading, including liens of carriers, warehousemen, suppliers, or other persons that are possessory in nature and liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations;
8.1.19.5 any lien for taxes, fees, assessments or other government charges or levies, either not due and payable or being contested in good faith and for which the Borrower or other Group Company (as the case may be) maintains adequate reserves on its books; provided that no notice of any such lien has been filed or recorded by any government authority; and
8.1.19.6 liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of setoff or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution;
8.1.19.7 Clauses 8.1.3, 8.1.4, 8.1.17, 8.1.18, and 8.1.22 do not apply to non-exclusive or exclusive licenses granted by the Borrower or any Group Company to Borrower or a Group Company or a third party over any of its Intellectual Property rights provided that (i) such licenses are granted for full market value and (ii) such licenses are granted in arms’ length transactions in the ordinary course of business for the development, manufacture, marketing, distribution and/or commercialization of DUEXA and/or LODOTRA. In addition, clauses 8.1.3, 8.1.4, 8.1.17, 8.1.18, and 8.1.22, insofar as they apply to the Pledged Assets (as such term is defined in the Pledge Agreement), shall no longer have any force and effect, and shall be deemed to be automatically deleted from this Loan Agreement, upon the later of the completion by the holding company of the
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Borrower of a Qualified IPO or the issuance by the FDA of marketing approval for either DUEXA or LODOTRA.
3.10 Clause 9.1.12 of the Loan Agreement is hereby amended (i) until the later of the completion by the holding company of the Borrower of a Qualified IPO or the issuance by the FDA of marketing approval for either DUEXA or LODOTRA, by inserting the phrase “except for exclusive licenses permitted by the first sentence of clause 8.1.19.7” immediately before the words “the exclusive license” in the thirteenth line thereof and (ii) upon the later of the completion by the holding company of the Borrower of a Qualified IPO or the issuance by the FDA of marketing approval for either DUEXA or LODOTRA, by deleting the phrase “or the exclusive license of all or a material portion of the Borrower’s intellectual property, to any other entity or person, other than a wholly-owned subsidiary of the Borrower”.
| 4. | Amendment to Pledge Agreement. |
4.1 Clause 3.2 of the Pledge Agreement is hereby amended by adding the following language to the end thereof:
“or such licenses are granted in arms’ length transactions in the ordinary course of business for the development, manufacture, marketing, distribution and/or commercialization of DUEXA and/or LODOTRA. In addition, this clause 3.2 shall no longer have any force and effect, and shall be deemed to be automatically deleted from this Agreement, upon the later of the completion by the holding company of the Borrower of a Qualified IPO or the issuance by the FDA of marketing approval for either DUEXA or LODOTRA”
4.2 Clause 3.3 of the Pledge Agreement is hereby amended by adding the following language to the end thereof:
“or such licenses are granted in arms’ length transactions in the ordinary course of business for the development, manufacture, marketing, distribution and/or commercialization of DUEXA and/or LODOTRA. In addition, this clause 3.3 shall no longer have any force and effect, and shall be deemed to be automatically deleted from this Agreement, upon the later of the completion by the holding company of the Borrower of a Qualified IPO or the issuance by the FDA of marketing approval for either DUEXA or LODOTRA”
4.3 Clause 5.1 of the Pledge Agreement is hereby amended and restated in its entirety to read as follows:
“Upon the Secured Liabilities being discharged in full and the Pledgee being under no further actual or contingent obligation to make any financial accommodation or loan facility to the Pledgor under the Loan Agreement, or upon the closing of a firmly underwritten public offering pursuant to an effective registration statement under the United States Securities Act of 1933, as amended, covering the offer and sale of common stock of the holding company of the Pledgor, for at least US $50,000,000 before deducting underwriting discounts and commissions and other offering expenses, the Pledged Assets or any remainder thereof shall be released at the request of the Pledgor, to the Pledgor or such other party as designated by the Pledgor.”
| 5. | Amendment to Receivables Assignment Agreement. |
5.1 Clause 5.1 of the Receivables Assignment Agreement is hereby amended and restated in its entirety to read as follows:
4
“Upon the Secured Liabilities being discharged in full and the Assignee being under no further obligation to make any financial accommodation or loan facility to the Assignor under the Loan Agreement, the assigned Receivables shall be released and re-assigned at the request of the Assignor, to the Assignor or such other party as designated by the Assignor.”
| 6. | Ratification and Reaffirmation of Liens. Borrower hereby ratifies and reaffirms the validity and enforceability of all of the liens and security interests heretofore granted pursuant to the Security Documents, as collateral security for the Secured Liabilities (as defined therein), and acknowledges that all of such liens and security interests, and all Charged Assets heretofore pledged as security for the Secured Liabilities continue to be and remain subject to the Security Documents from and after the date hereof until released as provided in the Loan Agreement and the Security Documents. |
| 7. | Representations And Warranties. Borrower represents and warrants that its representations and warranties in the Loan Agreement and the Security Documents continue to be true and complete in all material respects as of the date hereof after giving effect to this Amendment and that the execution, delivery and performance of this Amendment are duly authorized, do not require the consent or approval of any governmental body or regulatory authority and are not in contravention of or in conflict with any law or regulation or any term or provision of any other agreement entered into by Borrower. |
| 8. | Full Force And Effect; Entire Agreement. Except to the extent expressly provided in this Amendment, the terms and conditions of the Loan Agreement and the Security Documents shall remain in full force and effect. This Amendment, the Security Documents, and the Option Agreement among Borrower, Lender, and Kreos Capital III Limited executed on or about September 9, 2008 constitute and contain the entire agreement of the parties hereto and supersede any and all prior agreements, negotiations, correspondence, understandings and communications between the parties, whether written or oral, respecting the subject matter hereof. The parties hereto further agree that the Loan Agreement, the Security Documents, and said Option Agreement comprise the entire agreement of the parties thereto and supersede any and all prior agreements, negotiations, correspondence, understandings and other communications between the parties thereto, whether written or oral respecting the extension of credit by Lender to Borrower. |
| 9. | Counterparts; Effectiveness. This Amendment may be executed in any number of counterparts, each of which when so delivered shall be deemed an original, but all such counterparts taken together shall constitute but one and the same instrument. This Amendment shall be deemed effective as of the date first written above |
| 10. | Option Agreement and Warrant. In consideration of this Amendment and in connection with the acquisition of the Borrower referenced in Section 2 of this Amendment (the “Acquisition”), Borrower, Lender and Kreos Capital III Limited agree that certain Option Agreement dated September 10, 2008 issued by Borrower to Lender and Kreos Capital III Limited (as may have been amended from time to time, the “Existing Option”) shall, as of the date of this Amendment, |
5
| be exchanged for a warrant to purchase Series A Preferred Stock of Horizon Pharma, Inc., the parent of Borrower, in the form attached hereto as Exhibit B (the “Warrant”). Upon the execution and delivery of the Warrant to Lender and to Kreos Capital III Limited, the Existing Option shall be deemed cancelled and terminated effective as of the closing of the Acquisition. Each of Lender and Kreos Capital III Limited hereby waives any right to notice it may have under the Existing Option with respect to the Acquisition and each of Lender and Kreos Capital III Limited hereby releases and forever discharges Borrower, its parent, subsidiaries, affiliates and agents from any and all claims, demands, liabilities and obligations of any kind, known or unknown, arising under or related to the Existing Option. |
11. Governing Law. This Amendment shall be governed by the laws of England and the parties accept the non-exclusive jurisdiction of the courts of England
[signature page to follow]
6
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be executed and delivered by its duly authorized officer as of the date first written above.
| BORROWER: | ||
| NITEC PHARMA AG | ||
| By: | /s/ Anders Härfstrand | |
| Name: | Anders Härfstrand | |
| Title: | CEO EVP | |
| LENDER: | ||
| KREOS CAPITAL III (UK) LIMITED | ||
| By: |
| |
| Name: | ||
| Title: | ||
| (solely for purposes of Clause 10 of the Amendment:) | ||
| KREOS CAPITAL III LIMITED | ||
| By: |
| |
| Name: | ||
| Title: |
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be executed and delivered by its duly authorized officer as of the date first written above.
| BORROWER: | ||
| NITEC PHARMA AG | ||
| By: |
| |
| Name: | ||
| Title: | ||
| LENDER: | ||
| KREOS CAPITAL III (UK) LIMITED | ||
| By: | /s/ Maurizio Petit Bon | |
| Name: | Maurizio Petit Bon | |
| Title: | Director | |
| (solely for purposes of Clause 10 of the Amendment:) | ||
| KREOS CAPITAL III LIMITED | ||
| By: |
| |
| Name: | ||
| Title: |
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be executed and delivered by its duly authorized officer as of the date first written above.
| BORROWER: | ||
| NITEC PHARMA AG | ||
| By: |
| |
| Name: | ||
| Title: | ||
| LENDER: | ||
| KREOS CAPITAL III (UK) LIMITED | ||
| By: |
| |
| Name: | ||
| Title: | ||
| (solely for purposes of Clause 10 of the Amendment:) | ||
| KREOS CAPITAL III LIMITED | ||
| By: | /s/ Ross Ahlgren | |
| Name: | Ross Ahlgren | |
| Title: |
EXHIBIT A
SCHEDULE 5.2
All amounts stated are in Euros
| Due Date |
Repayment Amount | |
| 01-May-10 |
50,000.00 | |
| 01-Jun-10 |
50,000.00 | |
| 01-Jul-10 |
50,000.00 | |
| 01-Aug-10 |
50,000.00 | |
| 01-Sep-10 |
50,000.00 | |
| 01-Oct-10 |
50,000.00 | |
| 01-Nov-10 |
50,000.00 | |
| 01-Dec-10 |
50,000.00 | |
| 01-Jan-11 |
184,000.00 | |
| 01-Feb-11 |
184,000.00 | |
| 01-Mar-11 |
184,000.00 | |
| 01-Apr-11 |
184,000.00 | |
| 01-May-11 |
184,000.00 | |
| 01-Jun-11 |
184,000.00 | |
| 01-Jul-11 |
184,000.00 | |
| 01-Aug-11 |
184,000.00 | |
| 01-Sep-11 |
184,000.00 | |
| 01-Oct-11 |
184,000.00 | |
| 01-Nov-11 |
184,000.00 |
10
| 01-Dec-11 |
184,000.00 | |
| 01-Jan-12 |
184,000.00 | |
| 01-Feb-12 |
184,000.00 | |
| 01-Mar-12 |
184,000.00 | |
| 01-Apr-12 |
184,000.00 | |
| 01-May-12 |
184,000.00 | |
| 01-Jun-12 |
184,000.00 | |
| 01-Jul-12 |
184,000.00 | |
| 01-Aug-12 |
184,000.00 | |
| 01-Sep-12 |
184,000.00 | |
| 01-Oct-12 |
184,000.00 | |
| 01-Nov-12 |
184,000.00 | |
| 01-Dec-12 |
184,000.00 | |
| 01-Jan-13 |
184,000.00 | |
| 01-Feb-13 |
184,000.00 | |
| 01-Mar-13 |
184,000.00 | |
| 01-Apr-13 |
184,000.00 | |
| 01-May-13 |
184,000.00 | |
| 01-Jun-13 |
184,000.00 | |
| 01-Jul-13 |
184,000.00 | |
| 01-Aug-13 |
184,000.00 | |
| 01-Sep-13 |
184,000.00 | |
| 01-Oct-13 |
184,000.00 |
11
| 01-Nov-13 |
184,000.00 |
12
EXHIBIT B
FORM OF WARRANT AGREEMENT
13
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED PURSUANT TO REGULATION S OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE THEREWITH, PURSUANT TO A REGISTRATION UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. IN ADDITION, NO HEDGING TRANSACTION MAY BE CONDUCTED WITH RESPECT TO THESE SECURITIES UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE ACT.
HORIZON PHARMA, INC.
WARRANT TO PURCHASE SERIES A PREFERRED STOCK [SERIES A FOR THE
REPLACEMENT WARRANT; SERIES B FOR THE NEW KREOS AND SVB WARRANTS UNDER THE
NEW LOAN]
| No. PAW- |
April , 2010 |
Void After April , 2020
[NOTE: THIS FORM OF WARRANT IS INTENDED TO SERVE TWO PURPOSES: (1) TO BE THE REPLACEMENT WARRANT FOR THE EXISTING KREOS OPTION, FOR WHICH IT WILL BE A SERIES A PREFERRED WARRANT, AND (2) TO BE THE FORM OF SERIES B WARRANT FOR BOTH KREOS AND SVB]
THIS CERTIFIES THAT, for value received, Kreos Capital III Limited, with its principal office at 47 Esplanade, St-Helier, Jersey or assigns (the “Holder”), is entitled to subscribe for and purchase at the Exercise Price (defined below) from HORIZON PHARMA, INC., a Delaware corporation, with its principal office at 1033 Skokie Boulevard, Suite 355, Northbrook, Illinois 60062 (the “Company”) up to [ ( )] shares of the Series A Preferred Stock of the Company (the “Series A Stock”) or if the outstanding Series A Preferred Stock is converted into Common Stock of the Company, then the number of shares of Common Stock of the Company (the “Common Stock”) into which such Series A Stock would have been converted had the Warrant been exercised immediately prior to the conversion of the outstanding Series A Preferred Stock into Common Stock.
1. DEFINITIONS. As used herein, the following terms shall have the following respective meanings:
(a) “Current Market Price” as of a specified date shall mean: (i) if the Warrant is exercisable for Common Stock and the Common Stock is publicly traded on such date, the average closing price per share over the preceding five trading days (or, if less than five days, the average closing price per share of all trading days since the stock became publicly traded) as reported on the principal stock exchange or quotation system on which the stock is listed or quoted; or (ii) if the Series A Stock (as adjusted herein) is not publicly traded on such
1.
date, the Board of Directors of the Company shall determine Current Market Price in its reasonable good faith judgment.
(b) “Exercise Period” means the period commencing with the date hereof and ending on April , 2020, unless sooner terminated as provided below.
(c) “Exercise Price” means U.S.$0.01 per share, subject to adjustment pursuant to Section 6 below. If the outstanding Series A Stock converts into Common Stock at a conversion rate that is more or less than one share for one share, then the per share Exercise Price shall be adjusted by dividing the aggregate Exercise Price of all of the Exercise Shares immediately prior to the conversion by the number of Exercise Shares immediately following the conversion.
(d) “Exercise Shares” means as applicable the shares of the Series A Stock or shares of Common Stock issuable upon exercise of this Warrant, subject to adjustment pursuant to the terms herein, including but not limited to adjustment pursuant to Section 6 below.
(e) “United States” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.
(f) “U.S. Person” means (i) any natural person resident in the United States, (ii) any partnership or corporation organized or incorporated under the laws of the United States (iii) any estate of which any executor or administrator is a U.S. Person, (iv) any trust of which any trustee is a U.S. Person, (v) any agency or branch of a foreign entity located in the United States, (vi) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person, (vii) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States, and (viii) any partnership or corporation if: (1) organized or incorporated under the laws of any foreign jurisdiction; and (2) formed by a U.S. Person principally for the purpose of investing in securities not registered under the Act (as defined below), unless it is organized or incorporated, and owned, by accredited investors (as defined in Regulation D under the Act) who are not natural persons, estates or trusts, provided, however, the following are not “U.S. Persons”: (i) any discretionary account or similar account (other than an estate or trust) held for the benefit or account of a non-U.S. Person by a dealer or other professional fiduciary organized, incorporated, or (if an individual) resident in the United States, (ii) any estate of which any professional fiduciary acting as executor or administrator is a U.S. Person if: (1) an executor or administrator of the estate who is not a U.S. Person has sole or shared investment discretion with respect to the assets of the estate; and (2) the estate is governed by foreign law, (iii) any trust of which any professional fiduciary acting as trustee is a U.S. Person, if a trustee who is not a U.S. Person has sole or shared investment discretion with respect to the trust assets, and no beneficiary of the trust (and no settler if the trust is revocable) is a U.S. Person, (iv) an employee benefit plan established and administered in accordance with the law of a country other than the United States and customary practices and documentation of such country, (v) any agency or branch of a U.S. Person located outside the United States if: (1) the agency or branch operates for valid business reasons; and (2) the agency or branch is engaged in the business of insurance or banking and is subject to substantive insurance or banking regulation, respectively, in the jurisdiction where
2.
located; and (vi) the International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the United Nations, and their agencies, affiliates and pension plans, and any other similar international organizations, their agencies, affiliates and pension plans.
2. EXERCISE OF WARRANT. The rights represented by this Warrant may be exercised in whole or in part at any time during the Exercise Period, by delivery of the following to the Company at its address set forth above (or at such other address as it may designate by notice in writing to the Holder):
(a) An executed Notice of Exercise in the form attached hereto;
(b) Payment of the Exercise Price either (i) in cash or by check, (ii) by cancellation of indebtedness, or (iii) as provided in Section 2.1; and
(c) This Warrant.
Upon the exercise of the rights represented by this Warrant, a certificate or certificates for the Exercise Shares so purchased, registered in the name of the Holder or persons affiliated with the Holder, if the Holder so designates, shall be issued and delivered to the Holder within a reasonable time after the rights represented by this Warrant shall have been so exercised.
The person in whose name any certificate or certificates for Exercise Shares are to be issued upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Exercise Price was made, irrespective of the date of delivery of such certificate or certificates, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.
2.1 Net Exercise. Notwithstanding any provisions herein to the contrary, if the fair market value of one share of the Series A Stock (or as applicable one share of Common Stock) is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Series A Stock or Common Stock computed using the following formula:
| X = Y (A-B) | ||||||
| A | ||||||
| Where | X = | the number of shares of Series A Stock to be issued to the Holder | ||||
| Y = | the number of shares of Series A Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) | |||||
3.
| A | = | Current Market Price (at the date of such calculation) | ||||
| B | = | Exercise Price (as adjusted to the date of such calculation) | ||||
2.2 Automatic Exercise. Notwithstanding any provisions herein to the contrary, if the Holder of this Warrant has not elected to exercise this Warrant prior to expiration of this Warrant pursuant to Section 8, then this Warrant shall automatically (without any act on the part of the Holder) be exercised pursuant to Section 2.1 effective immediately prior to the expiration of the Warrant to the extent such net issue exercise would result in the issuance of Exercise Shares unless Holder shall earlier provide written notice to the Company that the Holder desires that this Warrant expire unexercised. If this Warrant is automatically exercised, the Company shall notify the Holder of the automatic exercise as soon as reasonably practicable, and the Holder shall surrender the Warrant to the Company in accordance with the terms hereof.
3. COVENANTS OF THE COMPANY.
3.1 Covenants as to Exercise Shares. The Company covenants and agrees that all Exercise Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the Exercise Period, have authorized and reserved, free from preemptive rights, a sufficient number of shares of its Series A Stock and Common Stock to provide for the exercise of the rights represented by this Warrant and the conversion of the Series A Stock into Common Stock. If at any time during the Exercise Period the number of authorized but unissued shares of Series A Stock or Common Stock, as applicable, shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Series A Stock or Common Stock to such number of shares as shall be sufficient for such purposes.
3.2 Rights under the Investor Rights Agreement. The Holder shall be entitled to registration rights with respect to the Exercise Shares, or the Common Stock issuable upon conversion thereof, as set forth in that certain Investors’ Rights Agreement, dated as of April 1, 2010, a true and complete copy of which is attached hereto as Appendix I (the “Investor Rights Agreement”), as such may from time to time be amended, for purposes of Sections 1 (with the exception of Section 1.2) and 3 only. The Exercise Shares shall also be deemed “Registrable Securities” as that term is defined in the Investor Rights Agreement, and the Holder shall be deemed a “Holder,” subject to all of the rights and obligations thereunder, in each case only for the purposes of those sections listed above. The Holder shall perform such steps as are required by the Company to make it a party to the Investor Rights Agreement as described in this Section 3.2. The Company agrees that no amendments will be made to the Investor Rights Agreement which would have an adverse impact on Holder’s registration rights thereunder different from the impact on the rights of other Holders (as defined in the Rights Agreement) of the Company’s stock without the consent of Holder. By acceptance of this Warrant, Holder shall be deemed to be a party to the Investor Rights Agreement solely for the purposes of the above-mentioned registration rights.
4.
4. REPRESENTATIONS OF HOLDER.
4.1 Acquisition of Warrant for Personal Account.
(a) The Holder represents and warrants that it is acquiring the Warrant and the Exercise Shares solely for its account for investment, not as a nominee or agent, and not for the account or benefit of, a U.S. Person, and not with a view to or for sale or distribution of said Warrant or Exercise Shares or any part thereof in the United States or to a U.S. Person. The Holder also represents that the entire legal and beneficial interests of the Warrant and Exercise Shares the Holder is acquiring is being acquired for, and will be held for, its account only.
(b) The Holder represents and warrants that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person in the United States or to a U.S. Person, or any hedging transaction with any third person in the United States or to a United States resident, with respect to the Warrant or any of the Exercise Shares.
(c) The Holder is a person or entity that is not a U.S. Person.
(d) The Holder understands that it could lose its entire investment in the Company.
4.2 Securities Are Not Registered.
(a) The Holder understands that the Warrant and the Exercise Shares have not been registered under the Securities Act of 1933, as amended (the “Act”), on the basis that the issuance of the Warrant and the Exercise Shares are exempt from registration under the Act pursuant to Regulation S thereof. The Holder realizes that the basis for the exemption may not be present if, notwithstanding its representations, the Holder has a present intention of acquiring the securities for a fixed or determinable period in the future, selling (in connection with a distribution or otherwise), granting any participation in, or otherwise distributing the securities. The Holder has no such present intention.
(b) The Holder recognizes that the Warrant and the Exercise Shares must be held indefinitely unless they are subsequently registered under the Act in accordance with the provisions of Regulations S, or an exemption from such registration is available. The Holder recognizes that the Company has no obligation to register the Warrant or the Exercise Shares of the Company, or to comply with any exemption from such registration.
(c) The Holder is aware that neither the Warrant nor the Exercise Shares may be sold pursuant to Rule 144 adopted under the Act unless certain conditions are met, including, among other things, the existence of a public market for the shares, the availability of certain current public information about the Company, the resale following the required holding period under Rule 144 and the number of shares being sold during any three month period not exceeding specified limitations. Holder is aware that the conditions for resale set forth in Rule 144 have not been satisfied and that the Company presently has no plans to satisfy these conditions in the foreseeable future.
5.
4.3 Disposition of Warrant and Exercise Shares.
(a) The Holder will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) this Warrant or any of the Exercise Shares except in compliance with the Act, applicable blue sky laws, and the rules and regulations promulgated thereunder. The Holder further agrees not to engage in hedging transactions with regard to such securities unless in compliance with the Act.
(b) The Holder further agrees not to make any disposition of all or any part of the Warrant or Exercise Shares in any event unless and until:
(i) The Company shall have received a letter secured by the Holder from the Securities and Exchange Commission stating that no action will be recommended to the Commission with respect to the proposed disposition;
(ii) There is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with said registration statement, or pursuant to an exemption from registration; or
(iii) The Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and if reasonably requested by the Company, the Holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, for the Holder to the effect that such disposition will not require registration of such Warrant or Exercise Shares under the Act or any applicable state securities laws.
(c) The Holder understands and agrees that all certificates evidencing the shares to be issued to the Holder may bear the following legend (in addition to any legend required under applicable state or foreign securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED PURSUANT TO REGULATION S OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD, MORTGAGED OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE WITH REGULATION S, PURSUANT TO A REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE SECURITIES LAWS.
5. REPRESENTATIONS OF COMPANY. The Company represents and warrants to the Holder that:
6.
5.1 Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Warrant, the performance of all obligations of the Company hereunder and the authorization, issuance (or reservation for issuance), sale and delivery of the Exercise Shares has been taken, and this Warrant, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally or (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
5.2 Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own its properties and assets, to carry on its business as presently conducted or as proposed to be conducted.
6. ADJUSTMENT OF EXERCISE PRICE, ETC.
6.1 Adjustments for Reclassification, Exchange or Substitution, etc. In the event of changes in the outstanding Series A Stock or as applicable the outstanding Common Stock of the Company by reason of stock dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of shares, separations, reorganizations, liquidations, or the like, the number and class of shares available under the Warrant in the aggregate and the Exercise Price shall be correspondingly adjusted to give the Holder of the Warrant, on exercise for the same aggregate Exercise Price, the total number, class, and kind of shares as the Holder would have owned had the Warrant been exercised prior to the event and had the Holder continued to hold such shares until after the event requiring adjustment; provided, however, that such adjustment shall not be made with respect to, and, except as otherwise provided in Section 2.2 above, this Warrant shall terminate if not exercised prior to, the events set forth in Section 8 below. The form of this Warrant need not be changed because of any adjustment in the number of Exercise Shares subject to this Warrant.
7. FRACTIONAL SHARES. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then current fair market value of an Exercise Share by such fraction.
8. EARLY TERMINATION. If after the date hereof the Company shall enter into any Reorganization (as hereinafter defined), then, as a condition of such Reorganization, lawful provisions shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall thereafter have the right to purchase, at a total price not to exceed that payable upon the exercise of this Warrant in full, the kind and amount of shares of stock and other securities and property receivable upon such
7.
Reorganization by a holder of the number of shares of Series A Stock which might have been purchased by the Holder immediately prior to such Reorganization, and in any such case appropriate provisions shall be made with respect to the rights and interest of the Holder to the end that the provisions hereof (including without limitation, provisions for the adjustment of the Exercise Price and the number of shares issuable hereunder and the provisions relating to the net issue election) shall thereafter be applicable in relation to any shares of stock or other securities and property thereafter deliverable upon exercise hereof. For the purposes of this Section 8, the term "Reorganization" shall include without limitation any reclassification, capital reorganization or change of the Series A Stock (other than by reason of stock dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of shares, separations, reorganizations, liquidations, or the like provided for in Section 6 hereof), or any consolidation of the Company with, or merger of the Company into, another corporation or other business organization (other than a merger in which the Company is the surviving corporation and which does not result in any reclassification or change of the outstanding Series A Stock), or any sale or conveyance to another corporation or other business organization of all or substantially all of the assets of the Company.
9. MARKET STANDOFF. [FOR KREOS’ SERIES A REPLACEMENT WARRANT AND KREOS’ SERIES B WARRANT: Holder agrees, in connection with the Company’s sale of its Common Stock in a firm underwritten public offering pursuant to a registration statement under the Act, Holder agrees to consider a request by the Company and its underwriters that (i) the Holder enter into an agreement that it shall not sell, make any short sale of, loan, grant any option for the purchase of, enter into any hedging or similar transaction with the same economic effect as a sale, or otherwise dispose of any of the Company’s capital stock (or any securities convertible into the Company’s capital stock) held by Holder, however or whenever acquired (other than those included in the registration or purchased subsequent to the initial public offering) without the prior written consent of Company or such underwriters, as the case may be, for such period of time (not to exceed one hundred and eighty (180) days, but subject to such extension or extensions as may be required by the underwriters in order to publish research reports while complying with the Rule 2711 of the National Association of Securities Dealers, Inc., such extension or extensions not to exceed thirty-four (34) days after the expiration of such 180-day period) from the effective date of such registration statement as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the Company’s initial public offering and (ii) that Holder provide such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Act.]
[FOR THE SVB SERIES B WARRANT: Holder shall not sell, make any short sale of, loan, grant any option for the purchase of, enter into any hedging or similar transaction with the same economic effect as a sale, or otherwise dispose of any of the Company’s capital stock (or any securities convertible into the Company’s capital stock) held by Holder, however or whenever acquired (other than those included in the registration or purchased subsequent to the initial public offering) without the prior written consent of Company or such underwriters, as the case may be, for such period of time (not to exceed one hundred and eighty (180) days, but subject to such extension or extensions as may be required by the underwriters in order to publish research reports while complying with the Rule 2711 of the National Association of
8.
Securities Dealers, Inc., such extension or extensions not to exceed thirty-four (34) days after the expiration of such 180-day period) from the effective date of such registration statement as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the Company’s initial public offering. Holder agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter that are consistent with the Holder’s obligations under this Section 9 or that are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of the Company’s capital stock (or other securities) of the Company, Holder shall provide, within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. In order to enforce the foregoing covenants, the Company may impose stop-transfer instructions with respect to such capital stock (or other securities) until the end of such period. The underwriters of the Company’s stock are intended third party beneficiaries of this Section 9 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.]
10. NOTIFICATION OF CERTAIN EVENTS. Prior to the expiration of this Warrant pursuant to Section 8, in the event that the Company shall authorize:
(a) the issuance of any dividend or other distribution on the capital stock of the Company (other than (i) dividends or distributions otherwise provided for in Section 6, (ii) repurchases of common stock issued to or held by employees, officers, directors or consultants of the Company or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right of said repurchase; (iii) repurchases of common stock issued to or held by employees, officers, directors or consultants of the Company or its subsidiaries pursuant to rights of first refusal or first offer contained in agreements providing for such rights; or (iv) repurchases of capital stock of the Company in connection with the settlement of disputes with any stockholder), whether in cash, property, stock or other securities;
(b) the voluntary liquidation, dissolution or winding up of the Company;
(c) any transaction resulting in the expiration of this Warrant pursuant to Section 8; or
(d) receipt by the Company of any request for registration made pursuant to Section 1.2 or 1.4 of the Investor Rights Agreement;
the Company shall send to the Holder of this Warrant at least ten (10) days prior written notice of the date on which a record shall be taken for any such dividend or distribution specified in clause (a) or the expected effective date of any such other event specified in clause (b), (c) or (d), as applicable. The notice provisions set forth in this section may be shortened or waived prospectively or retrospectively with the consent of the Holder. In addition, the Company shall deliver to the Holder copies of any proxy or information statements or other communications delivered to shareholders generally.
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11. NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company.
12. TRANSFER OF WARRANT. Subject to applicable laws and the restriction on transfer set forth on the first page of this Warrant, this Warrant and all rights hereunder are transferable, by the Holder in person or by duly authorized attorney, upon delivery of this Warrant and the form of assignment attached hereto to any transferee designated by Holder. The transferee shall sign an investment letter in form and substance satisfactory to the Company.
13. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.
14. NOTICES, ETC. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at the address listed on the signature page and to Holder at the addresses listed for Holder above or at such other address as the Company or Holder may designate by ten (10) days advance written notice to the other parties hereto.
15. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.
16. GOVERNING LAW. This Warrant and all rights, obligations and liabilities hereunder shall be governed by the laws of the State of Delaware.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer as of , 2010.
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11.
NOTICE OF EXERCISE
TO: HORIZON PHARMA, INC.
(1) ¨ The undersigned hereby elects to purchase shares of the Series A Preferred Stock of Horizon Pharma, Inc. (the “Company”) pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
¨ The undersigned hereby elects to purchase shares of the Series A Preferred Stock of the Company pursuant to the terms of the net exercise provisions set forth in Section 2.1 of the attached Warrant, and shall tender payment of all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing said shares of Series A Preferred Stock in the name of the undersigned or in such other name as is specified below:
(Name)
(Address)
(3) The undersigned hereby restates and reaffirms the representations and covenants in Section 4 of the Warrant with respect to the Exercise Shares to be received pursuant to this Notice of Exercise.
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ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form
and supply required information. Do not use this
form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
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NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.
Exhibit 10.8
***Text Omitted and Filed Separately
with the Securities and Exchange Commission.
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80(b)(4)
and 230.406.
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DATED 20 AUGUST 2004
JAGOTEC AG
and
SKYEPHARMA AG
and
NITEC PHARMA AG
DEVELOPMENT & LICENCE AGREEMENT
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THIS DEVELOPMENT and LICENCE AGREEMENT (this “Agreement”) is made on 20 August 2004 by and between:
| (1) | JAGOTEC AG, a Swiss corporation having its place of business at Eptingerstrasse 5 1, CH-4 132 Muttenz, Switzerland (hereinafter referred to as “Jagotec”); |
| (2) | SKYEPHARMA AG, a Swiss corporation having its place of business at Eptingersttasse 5 1, CH-4 132 Muttenz, Switzerland (hereinafter referred to as “SkyePharma”; and SkyePharma and Jagotec hereinafter sometimes collectively referred to as “Skye”), and |
| (3) | NITEC PHARMA AG, a Swiss corporation, having a place of business at Röschenzerstrasse 9, CH-4153 Reinach, Switzerland (hereinafter referred to as “Nitec”). |
WITNESSES AS FOLLOWS:
| A. | By an agreement effective as of 18th day of August 1998, Skye and Merck KGaA, a German corporation, having a place of business Frankfurterstrasse 250, D-64271 Darmstadt, Germany (hereinafter referred to as “Merck) entered into an agreement relating to the development of the product, Prednisone using certain proprietary technology and know-how owned by Jagotec relating to pharmaceutical systems for the controlled and/or modified release of active substances, including but not limited to, Jagotec’s patented GEOMATRIX® Technology (as defined below) (hereinafter called the “Merck Agreement”). |
| B. | By an agreement between Merck and Nitec signed by Merck on 14 July 2004 and by Nitec on 2 August 2004 (the “Technology Transfer Agreement”), Merck assigned the Merck Agreement to Nitec, effective as of the Effective Date of this Agreement. |
| C. | Skye has consented to the assignment of the Merck Agreement pursuant to the Technology Transfer Agreement, provided that certain modifications agreed between the Parties (as defined below) are made to the contractual arrangements under the Merck Agreement. |
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| D. | On signature of this Agreement, the provisions of the Merck Agreement shall be terminated and replaced in their entirety with the terms and conditions set out below. |
NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements contained in this Agreement and intending to be legally bound by it, the Parties hereby agree as follows:
| 1 | Definitions |
For purposes of this Agreement, the terms defined in this Section 1 shall have the following meanings:
| 1.1 | “Active Drug” shall mean each of the substances Prednisone, Prednisolone and Methylprednisolone of a quality suitable for the manufacture of Product meeting the Specifications; |
| 1.2 | “Affiliate” shall mean, any corporation, partnership or other entity controlled by, controlling or under common control with, either Party, with “control” meaning (i) with respect to either Party direct or indirect beneficial ownership of more than 50% of the voting power of, or more than 50% of ownership interest in, such corporation, partnership or other entity and for the avoidance of doubt, Jagotec and SkyePharma shall be regarded as Affiliates; |
| 1.3 | “Background IP” shall mean any intellectual property owned by the respective Parties on the Effective Date of this Agreement in respect of the Nitec Know-How or the Skye Know-How which is or may be used under this Agreement and in the case of Nitec shall include all relevant rights intellectual property owned or used by Merck under the Merck Agreement necessary or desirable for use under this Agreement; |
| 1.4 | “Commercially Reasonable Efforts” means those efforts and resources that would be used by an established pharmaceutical company were it developing, manufacturing, promoting and detailing its own pharmaceutical products which are of similar market potential as the Product, taking into account product labelling, market potential, past performance, economic return, the regulatory |
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| environment and competitive market conditions in the therapeutic area, all as measured by the facts and circumstances at the time such efforts are due. |
| 1.5 | “Confidential Information” shall mean any and all of the Skye Know-How and the Nitec Know-How, as well as any and all information developed during the course of this Agreement, including, but not limited to, materials and techniques, analytical and testing methods, chemical formulae and specifications, product design criteria and test data, and technical information relating to product production and commercial plans; |
| 1.6 | “Development Costs” shall mean all reasonable out-of-pocket costs (except those resulting from any breach by Skye hereunder) of the Development Programme performed by Jagotec hereunder; |
| 1.7 | “Development Programme” shall mean the programme of work to be carried out by the Parties attached hereto as Exhibit C as may be amended by the Parties in writing acting in good faith within thirty (30) days of the signature of this Agreement and thereafter as may be amended in writing by the Parties from time to time and “Development” shall be construed accordingly; |
| 1.8 | “Dose Strength” shall mean with respect to Product each of the formulations containing 1, 2, 5 and 10 mg of Active Drug, respectively; |
| 1.9 | “Effective Date” shall mean the date of signature of this Agreement; |
| 1.10 | “FDA” shall mean the U.S. Federal Food and Drug Administration and any successor agency thereof; |
| 1.11 | “First Launch” shall mean the first commercial sale of the Product in any country of the Territory to any unaffiliated third party in commercial quantities following receipt of all applicable pricing and reimbursement approvals; |
| 1.12 | “Foreground IP” shall mean any intellectual property that arises or is developed by either party arising out of this Agreement; |
| 1.13 |
“GEOMATRIX® Technology” shall mean all of Skye’s oral controlled and/or modified drug release delivery and related technologies together with all improvements thereon and thereto; |
| 1.14 | “Intellectual Property” shall mean any patent, including patent applications, divisional, continuation or continuation-in-part applications, re-issues, registered |
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| design copyright, database right, design right, topography right, trademark, service mark application to register any of such rights, trade secret, right in unpatented know-how and any other intellectual or industrial property right of any nature whatsoever in any part of the world; |
| 1.15 | “Jagotec Manufacturing Agreement” shall mean the Manufacturing and Supply Agreement to be negotiated in good faith at the appropriate time by and between Jagotec or any of its Affiliates and Nitec or any of its Affiliates on the manufacturing and supply of Product; |
| 1.16 | “Licence” shall mean the licence granted to Nitec as set out in Section 5.1; |
| 1.17 | “Mutual Recognition Procedure” shall mean the decentralized procedure to obtain a marketing authorisation for prescription drugs in EU countries; |
| 1.18 | “Net Sales” shall mean, with respect to any Product, the invoiced sales price of such Product in finished package form invoiced by Nitec and/or its Affiliates and/or its sub-licensee(s) to any independent customer other than Nitec Affiliates or sub-licensee(s), less only (a) sales, use, value added and other direct taxes (but excluding any income tax) actually incurred and paid by Nitec and/or its Affiliates and/or its sub-licensee(s); and (b) customs duties, surcharges and other governmental charges incurred by Nitec and/or its Affiliates and/or its sublicensee(s) in connection with the exportation or importation of such Product in final form, and (c) a lump sum deduction of […***…] for all trade discounts, rebates, commissions, retroactive price reductions, amounts repaid or credited by reason of rejections, returns, and the like; |
| 1.19 | “Nitec Know-How” shall mean all of Nitec’s and/or its Affiliates’ information and data (including, without limitation, information and data of Merck under the Merck Agreement), which are not generally known including, but not limited to, patent claims and related information not yet disclosed to the public, formulae, procedures, protocols, techniques and results of experimentation and testing which relate to Active Drug, and/or are useful and/or necessary to develop, make, use or sell any product containing Active Drug; |
| 1.20 | “Nitec Manufacturing Licence” shall mean the licence to Nitec granted pursuant to the option set out in Section 5.2; |
| 1.21 | “Party” or “Parties” shall mean SkyePharma, Jagotec and Nitec or any of them; |
***Confidential Treatment Requested
4.
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| 1.22 | “Patents” shall mean all patents and patent applications heretofore or hereafter filed or having legal force in any country owned by or licensed to Skye and/or its Affiliates relating to the Product, which claim the GEOMATRIX® Technology or the process of manufacture by use of, or the use of, the GEOMATRIX® Technology and are set out in the attached Exhibit A. Exhibit A is hereby deemed to be amended to include any and all patent applications relating to the subject matter of this Agreement eventually to be filed by or owned by or licensed to Skye or its Affiliates after the Effective Date, together with any and all corresponding foreign patents and patent applications which issue therefrom, and all divisionals, continuations, continuations-in-part, reissues, renewals, extensions, substitutions, confirmations or additions to any such patents or patent applications; |
| 1.23 | “Phase III Clinical Study” shall mean a large scale clinical trial in patients suffering from rheumatoid arthritis, the primary goal of which is to establish Product efficacy (and chronic safety) according to Regulatory Authority registration rules or regulations; |
| 1.24 | “Product” shall mean the pharmaceutical orally-administered controlled-release formulation (intended to exhibit a lag phase of at least one hour, with substantially all of the drug release immediately thereafter) containing Prednisone, Prednisolone and/or Methylprednisolone, presented as a compressed tablet developed pursuant to this Agreement and using the GEOMATRIX® Technology, and shall include all Dose Strengths unless otherwise explicitly stated; |
| 1.25 | “Registration” shall mean the granting of any and all approvals and registrations of Product by any Regulatory Authority, including without limitation price approval, which are required and/or necessary under any applicable law, rule, regulation or other governmental order to manufacture, market, distribute and sell Product in any country of the Territory; |
| 1.26 | “Regulatory Authority” shall mean the FDA and any equivalent competent regulatory authority in the other countries of the Territory; |
| 1.27 | “Skye Know-How” shall mean all of Skye’s and/or its Affiliates’ information and data, which are not generally known including, but not limited to, patent |
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| claims and related information not yet disclosed to the public, formulae, procedures, protocols, techniques and results of experimentation and testing, which relate to the GEOMATRIX® Technology and/or are useful and/or necessary to develop, make, use or sell Products using the GEOMATRIX® Technology; |
| 1.28 | “Specifications” shall mean the preliminary specifications of the Product set forth in Exhibit B attached hereto to be updated from time to time by mutual agreement of the Parties; |
| 1.29 | “Technical Agreement” shall mean the additional contract to be entered into by Nitec as contract giver and Jagotec as contract acceptor, allocating the respective pharmaceutical responsibilities relating to the manufacture and control of Products; |
| 1.30 | “Territory” shall mean all countries and territories in the world. |
| 2 | Development Preamble and further Development Programme |
| 2.1 | Jagotec has, prior to the execution of this Agreement, developed the Product under the Development and Licence Agreement with Merck, which shows some promising results. In particular, the Parties have agreed to use the results as the basis of further development under this Agreement, the terms of which are hereby incorporated into this Agreement as set out below. |
| 2.2 | Jagotec and Nitec undertake to conduct the further development of the Product in rheumatoid arthritis (and such other indications (e.g. asthma, IBD) as may be agreed between the Parties in writing from time to time) in accordance with the Development Programme in an efficient and professional manner, and shall apply generally accepted Good Laboratory, Good Clinical and Good Manufacturing Practices (each as applicable to pharmaceutical products for human use in the European Union and similar regulations applicable in other territories),. The Development shall also comply with the current guidelines of the European Union (e.g. Note for guidance on quality of modified release products). Nitec shall actively support Jagotec regarding the development and studies to be executed by Jagotec under this Agreement as may be reasonably required by Jagotec from time to time. In particular, Nitec shall provide information |
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| reasonably requested by Jagotec relating to the Active Drug for the purposes of carrying out this development, including, but not limited to physico-chemical characteristics, safe-handling instructions, in-vitro analytical methods, degradation products and standards and analytical methods therefore, all to the extent that any such information has not been delivered to Jagotec under the development and Licence Agreement with Merck. Any costs and expenses incurred by Nitec in connection with such support shall be borne by Nitec. |
| 2.3 | Jagotec shall use all Active Drug supplied to it by Nitec hereunder solely and exclusively in connection with the Development. |
| 2.4 | Due to the nature and complexity of the development and the respective studies as set forth in this Agreement, the Parties recognize and acknowledge that problems and delays might render the timeframe of the development difficult or impossible to accomplish. The Parties agree that they shall immediately inform each other in writing in the event that significant problems or delays are encountered or envisaged during the course of the development and shall discuss such problems and delays in order to mutually agree on Commercially Reasonable Efforts to resolve such problems or delays. Nothing under this Section 2.4 shall affect the timelines set out in Section 3 except to the extent of delays resulting directly from the breach of its obligations under this Agreement by Jagotec. |
| 2.5 | Nitec acknowledges and agrees that Jagotec’s obligations under this Agreement shall be strictly limited to the development steps and tasks explicitly listed and described in the Development Programme, and that any amendment, change and alteration to, or extension of, any such development steps and tasks shall require the mutual agreement by the Parties. |
| 2.6 | Nitec shall bear all Development Costs. Nitec and Jagotec shall have the right to approve any additional activities not listed in Exhibit C which are proposed by Jagotec or Nitec. |
| 2.7 | Nitec shall reimburse Jagotec on a quarterly basis any and all Development Cost incurred by Jagotec hereunder upon receipt of the respective invoices pursuant to Section 2.9 below. |
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| 2.8 | During the term of this Agreement, Jagotec shall provide Nitec on a quarterly basis with an overview of the work intended by Jagotec to be performed according to the Development Programme during the following three (3) months (hereinafter the “Quarterly Workplan”). Each such Quarterly Workplan shall contain information regarding the steps to be performed by Jagotec hereunder together with an estimate of the man-hours expected to be spent on such steps and the anticipated Development Costs. Upon receipt of any such Quarterly Workplan, Nitec may comment thereon or disapprove certain steps included therein by written notice within five (5) business day after receipt of each such Quarterly Workplan, provided that each Quarterly Workplan shall be deemed approved by Nitec if no such written notice is received by Jagotec within such five (5) business days, and provided further that Jagotec shall have no responsibility for any delay in the Development Programme caused by or resulting from any such notice from Nitec. |
| 2.9 | Jagotec shall issue quarterly a report (“Quarterly Report”) reasonably detailing all development steps performed during the preceding three (3) month period, and Jagotec shall, simultaneously with each such Quarterly Report, issue an invoice covering all cost and expenses incurred by Jagotec hereunder in accordance with the terms of this Agreement including any Development Costs over the period covered by such Quarterly Report applying a rate of […***…] per man-hour spent. Any excess of the aggregate amount of development fees paid by Nitec over the aggregate amount(s) invoiced by Jagotec shall be credited by Jagotec against future invoices hereunder. |
| 2.10 | Nitec undertakes to settle each invoice so issued, which shows a balance in favour of Jagotec, within […***…] as of the respective invoice date. |
| 3 | Responsibilities |
| 3.1 | Nitec will use all Commercially Reasonable Efforts to perform at its sole cost and expense, the following: |
| (a) | all clinical studies, including without limitation: |
***Confidential Treatment Requested
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| (i) | commence the Phase III Clinical Study in Rheumatoid Arthritis as agreed with the German authority February, 17th 2004 within […***…] of the Effective Date; |
| (ii) | complete the above mentioned (3.1(a)(i) Phase III Clinical Study within […***…] of commencing the Phase III Clinical Study, and; |
| (iii) | other development steps and tasks (other than those which are assigned to Jagotec as may be agreed between the parties from time to time) which are required and/or necessary and/or deemed reasonable to be performed pursuant to all applicable law, statute or regulation, in order to apply for, and subsequently receive, Registrations for Product in at least one major European market and eventually other countries of the Territory; |
| (b) | apply for and diligently pursue, in Nitec’s (or its Affiliates’) own name; Registrations for Product in Rheumatoid Arthritis with the Regulatory Authorities in at least one major European market within […***…] of the completion of the Phase III clinical studies, and eventually other countries of the Territory; |
| (c) | apply for and diligently pursue (except where the primary obligation for doing so is placed on Jagotec under relevant legislation) any and all approvals required by any applicable law, statute or regulation to manufacture Product at the manufacturing site as set forth in the Jagotec Manufacturing Agreement or any other facility to subsequently manufacture Product; |
| (d) | within […***…] of the receipt of first Registration for Product in the reference member state, being such country referred to in Section 3.1(b), to start and thereafter diligently pursue the Mutual Recognition Procedure or other procedure to obtain Registration in at least three other countries of the Territory; and |
| (e) | launch or have launched the Product in at least three European Union countries within […***…] following receipt of Registration in those countries of the European Union. |
***Confidential Treatment Requested
9.
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| 3.2 | Nitec may decide at its own discretion and according to its business strategy, in which country of the Territory to first apply for Registration of Product and initiate and pursue the steps required to be performed for successful Registration of Product. |
| 3.3 | In the event that Nitec does not in any material respect meet any of its obligations pursuant to Section 3.1 above, Skye may thereafter call a meeting with Nitec at which Skye will determine, at Jago’s sole option, either to (i) allow Nitec a further […***…] to complete such obligation, or (ii) Skye to terminate the Agreement in which case the terms of Section 10.4 (c) shall apply. |
| 3.4 | Jagotec agrees to provide such technical assistance and consultation in addition to the tasks assigned to Jagotec pursuant to this Agreement as may be reasonably required by Nitec in connection with the development, testing, performance of clinical studies, applications for Registrations or similar services, provided that Nitec shall pay to Jagotec an amount of […***…] spent by Jagotec personnel in providing such additional assistance and consultation. In addition to such fee, Nitec undertakes to reimburse Jagotec for all cost and expenses incurred in connection with travel and accommodation of Jagotec personnel providing upon specific request by Nitec any such assistance and consultation at locations remote from their usual working location to the extent separately agreed upon. |
| 3.5 | Jagotec shall have no responsibility whatsoever in respect of the availability or quality of the results of the development steps to be performed by Nitec pursuant to Section 3.1 above, unless otherwise agreed upon by the Parties in writing with respect to any specified development step or part thereof to be performed by Jagotec in accordance with Section 3.4 above. |
| 3.6 | Nitec undertakes to provide to Jagotec upon availability with all information on any of the development steps performed by Nitec under Section 2.1 above in reasonable detail or as reasonably required by Jagotec to perform its obligation under this Agreement. In particular, but without limitation, Nitec shall provide Jagotec upon availability with results, data, reports and similar information obtained by any of the studies, testing, Registration procedures or the like performed by Nitec under this Agreement. Any and all such information provided by Nitec to Jagotec shall be treated by Jagotec as Confidential Information and |
***Confidential Treatment Requested
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| remain subject to the confidentiality and non-use obligations contained in Section 8 below. |
| 3.7 | In the event that the Parties shall deem the results of any of the development steps to be performed by Nitec under this Section 3, including without limitation, the results of any clinical study (including Phase III Clinical Study) performed hereunder, to be unsatisfactory for any reason, the Parties may mutually agree to abandon the development of the Product under this Agreement and terminate this Agreement with immediate effect. |
| 3.8 | The allocation of all technical and pharmaceutical responsibilities shall be included in the Technical Agreement which the Parties shall negotiate in good faith within thirty (30) days of the Effective Date. |
| 4 | Proprietary Rights and Patents |
| 4.1 | Rights to Foreground IP |
| (a) | Any Foreground IP relating specifically and exclusively to the GEOMATRIX® Technology or the process of manufacture by use of, or the use of the GEOMATRIX® Technology, including the formulation of any compound (including Active Drug) with GEOMATRIX® Technology shall vest in and be owned absolutely by Jagotec, irrespective which party has created or developed such Foreground IP or its contribution to it (hereinafter referred to as “Skye IPR”). |
| (b) | Any Foreground IP relating specifically and exclusively to the Product containing Active Drug, any use of the Active Drug, or any attribute or property of the Active Drug, shall vest in and be owned absolutely by Nitec, irrespective which party has created or developed such Foreground IP or its contribution to it (hereinafter referred to as “Nitec IPR”). |
| (c) | All Foreground IP other than that set out in Section 4.1(a) and (b) will be owned (i) by the Party developing or discovering it; or (ii) if jointly developed or discovered, shall be owned jointly (together, “Other IP”) all as determined in accordance with the legislation applying in the country or jurisdiction where such development or discovery shall take place. |
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| 4.2 | Rights to Background IP |
| (a) | All Background IP is and shall remain the exclusive property of the party owning it (or if applicable from the third party from whom its rights to use the Background IP has derived). |
| (b) | In case the Foreground IP of either party is dependent on any or all Background IP of the other party, the parties agree to the following: |
| (i) | in case Skye IPR or Other IP is dependent on any or all Background IP of Nitec (hereinafter referred to as “Dependent Skye IPR”), Nitec shall grant to Jagotec a non-exclusive, perpetual, royalty-free right to use such Background IP with a right to grant sublicenses to the extent necessary for Jagotec and its licensees and sublicensees to make unrestricted use of its Foreground IP; |
| (ii) | in case Nitec IPR or Other IP is dependent on any or all Background IP of Jagotec (hereinafter referred to as “Dependent Nitec IPR”), Jagotec shall grant to Nitec a non-exclusive, perpetual, royalty-free right to use such Background IP with a right to grant sublicenses to the extent necessary for Nitec and its licensees and sublicensees to make unrestricted use of its Foreground IP. |
| 4.3 | Confirmation by Jagotec |
Jagotec hereby confirms that neither it nor any of its Affiliates currently own any patent or patent application not included in the term “Patents”, which is reasonably necessary or useful to develop, manufacture, sell or otherwise dispose of a Product under this Agreement. Future Skye IPR which may be necessary to develop, manufacture, sell or otherwise dispose of a Product under this Agreement will be deemed added to Exhibit A on filing.
| 4.4 | Prosecution of Patent Applications |
| (a) | During the term of this Agreement, Jagotec shall use all Commercially Reasonable Efforts, at its own cost, to prepare, prosecute and maintain all patent applications and patents constituting Patents, and shall keep Nitec fully and promptly informed on any developments or changes relating thereto. If Jagotec decides not to further prosecute or not to maintain any patent application constituting Patents, Jagotec shall promptly inform Nitec of such decision in writing, and the Parties shall, upon Nitec’s written request, meet to discuss any |
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| appropriate action taking into due consideration Nitec’s interests under this Agreement. |
| (b) | Nitec shall be responsible for and shall use all Commercially Reasonable Efforts to control, at its own cost, the preparation, prosecution and maintenance of all Nitec IPR and shall keep Jagotec fully and promptly informed on any developments or changes relating thereto. During the term of this Agreement, Nitec shall, at its sole cost, take all steps necessary to prosecute and maintain all Nitec IPR to the extent Nitec deems commercially reasonable. If Nitec intends not to further prosecute and/or maintain any of the Nitec IPR, Nitec shall promptly inform Jagotec of such intention in writing, and Jagotec shall meet with Nitec to discuss any appropriate action taking into due consideration Jagotec’s interests under this Agreement. |
| 4.5 | Notification of Infringement |
| (a) | If Nitec becomes aware of (i) any product or activity of any kind that involves or may involve an infringement or violation of Skye IPR, or (ii) any third-party action, claim or dispute (including, but not limited to, actions for declaratory judgment alleging the invalidity or non-infringement) based upon or arising out of Skye IPR, then Nitec shall promptly notify Jagotec in writing of any such infringement, violation, action, claim or dispute. |
| (b) | If Jagotec becomes aware of (i) any product or activity of any kind that involves or may involve an infringement or violation of Skye IPR with respect to Product or of Nitec IPR, or (ii) any third-party action, claim or dispute (including, but not limited to, actions for declaratory judgment alleging the invalidity or non-infringement) based upon or arising out of Skye IPR with respect to Product or of Nitec IPR, then Jagotec shall promptly notify Nitec in writing of any such infringement, violation, action, claim or dispute. |
| 4.6 | Enforcement of Skye IPR |
| (a) | Jagotec, at its sole expense, shall have the right, but not the obligation, (1) to determine the appropriate course of action to enforce, or otherwise abate the infringement of, or defend third-party actions regarding, Skye IPR and its Background IP to the extent necessary for the Dependent Nitec IPR (hereinafter referred to as “Skye IPR plus Background”), (ii) to take, or refrain from taking, |
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| appropriate action to enforce, or defend third-party actions regarding, Skye IPR plus Background, (iii) to control any litigation or other enforcement action regarding Skye IPR plus Background, and (iv) to enter into, or permit, the settlement of any such litigation or other enforcement action regarding Skye IPR plus Background. Notwithstanding anything contained in the preceding sentence, Jagotec shall not settle any suit or action or otherwise consent to an adverse judgement in such suit or action without Nitec’s prior written consent, which consent shall not be withheld unreasonably. Jagotec shall keep Nitec informed on a regular basis on its taking or refraining from taking, and the development of, any of the foregoing actions, and shall consider, in good faith, the interests of Nitec under this Agreement when taking any of the foregoing actions. Nitec shall, at its own cost, fully cooperate with Jagotec in the planning and execution of any suit or other action to enforce, or defend third-party actions regarding, Skye IPR plus Background to the extent affecting Product and as reasonably required by Jagotec. |
| (b) | If Jagotec does not within […***…], or any shorter delay imposed by any applicable law or regulation or court or authority having jurisdiction, after receiving notice of any infringement or violation of Skye IPR plus Background which may adversely affect Product, or of any third-party action, claim or dispute based upon or arising out of Skye IPR plus Background which may adversely affect Product, commence or take an action to enforce, or otherwise abate such infringement, or defend against such third-party action, then the Parties shall, upon Nitec’s written request, promptly meet to discuss any appropriate action with regard to such enforcement of Skye IPR plus Background which may adversely affect Product. |
| (c) | Nitec, upon its written request and at its sole expense, shall be made an additional, not controlling party in any such suit or other action where necessary to obtain complete relief regarding the subject infringement or violation. |
| 4.7 | Enforcement of Nitec IPR |
| (a) | Nitec, at its sole expense, shall have the right, but not the obligation, (i) to determine the appropriate course of action to enforce, or otherwise abate the infringement of, or defend third-party actions regarding, Nitec IPR and its |
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| Background IP to the extent necessary for the Dependent Skye IPR (hereinafter referred to as “Nitec IPR plus Background”), (ii) to take, or refrain from taking, appropriate action to enforce, or defend third-party actions regarding, Nitec IPR plus Background, (iii) to control any litigation or other enforcement action regarding Nitec IPR plus Background, and (iv) to enter into, or permit, the settlement of any such litigation or other enforcement action regarding Nitec IPR plus Background. Notwithstanding anything contained in the preceding sentence, Nitec shall not settle any suit or action or otherwise consent to an adverse judgment in such suit or action without the prior written consent of Jagotec, which consent shall not be withheld unreasonably. Nitec shall keep Jagotec informed on a regular basis on its taking or refraining from taking, and the development of, any of the foregoing actions, and shall consider, in good faith, the interests of Jagotec under this Agreement and in Skye IPR, when taking any of the foregoing actions. Jagotec shall, at its own cost, fully cooperate with Nitec in the planning and execution of any suit or other action to enforce, or defend third-party actions regarding, Nitec IPR plus Background to the extent affecting Product and as reasonably required by Nitec. |
| (b) | If Nitec does not, within […***…], or any shorter delay imposed by any applicable law or regulation or court or authority having jurisdiction, after receiving notice of any infringement or violation of Nitec IPR plus Background, or of any third-party action, claim or dispute based upon or arising out of Nitec IPR plus Background, commence or take an action to enforce, or otherwise abate such infringement, or defend against such third-party action, then the Parties shall, upon Jagotec’s written request, promptly meet to discuss any appropriate action with regard to such enforcement of Nitec IPR plus Background which may adversely affect Product |
| (c) | Jagotec, upon its written request and at its sole expense, shall be made an additional, not controlling party in any such suit or other action where necessary to obtain complete relief regarding the subject infringement or violation. |
| 4.8 | Application of Monies Recovered |
All monies recovered upon the final judgment or settlement of any suit or other action under these Sections 3.6 or 3.7 above shall be applied as follows:
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| (i) | firstly, to cover any and all costs and expenses (including attorney’s fees) incurred by the Party controlling such suit or other action; |
| (ii) | secondly, to cover any and all costs and expenses (including attorney’s fees) reasonably, or upon request of the controlling Party, incurred by the other Party in connection with such suit or other action, if any; |
| (iii) | finally, the remainder, if any, to the Party controlling any such suit or other action. |
| 5 | Licence Grant |
| 5.1 | Jagotec hereby grants to Nitec the royalty bearing exclusive and sub-licensable right and licence to market, distribute, sell, offer for sale and use the Product in the Territory and to use the Patents, GEOMATRIX® Technology and Skye Know How exclusively for that purpose. |
| 5.2 | Furthermore, subject to the provisions of Section 6.2, Jagotec hereby grants to Nitec the option (the “Option”) to acquire the exclusive and sublicenseable right and licence (hereinafter referred to as the “Nitec Manufacturing Licence “) to make or have made Product in the Territory and to use the Patents, GEOMATRIX® Technology and Skye Know How exclusively for that purpose at any time on twenty four month notice to expire no earlier than five years after the First Launch of the Product in the Territory. The Option may be exercised in accordance with Section 6.2 below. For the avoidance of doubt, no royalty in addition to that set out in Section 7 shall be payable by Nitec to Jagotec in respect of the Nitec Manufacturing Licence. The Nitec Manufacturing Licence shall be co-terminus with the licence granted under Section 5.1. |
| 5.3 | Subject to the provisions of Section 5.5, the rights of Nitec to grant any sub-license under the Licence and/or the Nitec Manufacturing Licence, as the case may be, in any part of the Territory shall not require Nitec to receive the written approval of Jagotec. |
| 5.4 | In any event, Nitec shall be responsible for any and all acts, deeds and undertakings of its sub-licensee(s) and shall continue to be bound by all terms and provisions under this Agreement throughout its term. In case that Nitec sub- |
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| licenses rights and/or the Licence and/or the Nitec Manufacturing Licence, as the case may be, to any sub-licensee(s), such sub-licensee(s) shall agree in writing to any and all of Nitec’s obligations and undertakings under this Agreement, including but not limited to its confidentiality obligations set out below. Furthermore, Nitec undertakes that any and all sub-licence agreements shall provide for inspection and audit provisions identical to the provisions set forth below in order to enable Jagotec to control and audit and receive any and all Royalties due as provided in this Agreement. Nitec shall provide Jagotec promptly with appropriate information on its sub-licensee(s) and, subject to applicable confidentiality restrictions, copies of all agreements with such sub-licensee(s). |
| 6 | Manufacturing and Product Liability |
| 6.1 | Subject to the exercise by Nitec of its rights under Section 6.2, Jagotec shall exclusively manufacture, package and supply, or have manufactured, packaged and supplied by an Affiliate, Product in bulk in accordance with the terms and conditions to be agreed upon in the Jagotec Manufacturing Agreement, which Jagotec Manufacturing Agreement shall contain provisions (i) that Nitec shall supply to Jagotec or its Affiliate free of charge all Active Drug in quantities required for such manufacturing of Product, and (ii) on manufacture and packaging of Product in bulk and reimbursement of cost at […***…] of Jago’s fully allocated manufacturing cost therefore (calculated in substantially the same manner as Jago’s other manufactured products of similar production process, run and complexity) as required by the Parties. If Jagotec wants to have the product manufactured, packed and supplied by an affiliate other than SkyePharma SAS, the costs of the manufacturing site change to such an affiliate (including but not limited to technical transfer, process validation, bioequivalence study and regulatory expenses) shall be borne by Skye. Furthermore, the Jagotec Manufacturing Agreement shall contain provisions on lead times, order quantity and supply and purchase obligations of such quantities ordered (or part thereof), as may be mutually agreed upon by the Parties and in the event of a failure by the Parties to agree by 31 March, 2005, each Party shall submit the matter to be resolved by an expert, to be appointed by |
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| a single arbitrator appointed under ICC Rules. With the exception of the principles applied in calculating the fully allocated manufacturing cost referred to above, in relation to any particular proposed clause of the Jagotec Manufacturing Agreement on which the Parties are unable to agree, each Party shall propose terms, only one of which, subject to such amendments specified by the expert as shall be required to ensure that the Jagotec Manufacturing Agreement operates as a whole, shall be selected by the expert as the relevant clause of the Jagotec Manufacturing Agreement binding on the Parties. In the case of the principles applied in calculating the fully allocated manufacturing cost referred to above, the expert shall not be bound only to select terms proposed by one Party or the other as described above but shall be free to make such amendments to proposed terms as the expert shall think fit. |
| 6.2 | In the event that Nitec wishes to manufacture the Product under the Nitec Manufacturing Licence rather then having Jagotec manufacture the Product under the Jagotec Manufacturing Agreement, then Nitec shall exercise its Option under Section 5.2 above by serving notice on Jagotec to that effect in writing. Subject to the proviso to this sentence, the right of Nitec under Section 5.2 shall not take effect for a period of […***…] from the date of notice and during such period, (i) all pending orders for Product shall be satisfied by Jagotec in accordance with the Jagotec Manufacturing Agreement, and (ii) the Parties will agree the terms of the royalty free Manufacturing Licence to include such provisions as are customary in the circumstances, failing which either Party may refer the matter to an expert for determination. Jagotec agrees that it shall provide technical assistance in connection with such transfer to a third party manufacturer as set out in Section 3.4. The costs of the manufacturing site change (including but not limited to technical transfer, process validation, bioequivalence study and regulatory expenses) shall be born by Nitec. Notwithstanding anything to the contrary contained herein, following exercise of the Option, the Manufacturing License shall be an irrevocable worldwide, fully paid-up, royalty-free license, pursuant to which Nitec and its licensees shall have a right of sublicense. |
| 6.3 | Nitec shall indemnify, defend and hold Jagotec and its Affiliates, directors, officers and shareholders harmless from and against any losses, claims, liabilities, |
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| costs and expenses (including reasonable attorney’s fees) that may be imposed upon or asserted against Jagotec and/or its Affiliates, directors, officers and shareholders as a result of the manufacture of Product under the Manufacturing License, or the marketing, distribution, use or sale of Product under the License by or on behalf of Nitec, its Affiliates, agents or sub-licensee(s), except for those claims, liabilities, costs and expenses arising from negligence or intentional misconduct on the part of Jagotec or its Affiliates and except for claims to the extent any relate to the Patents, GEOMATRIX® Technology and Skye Know How. |
| 6.4 | In the event that Jagotec wishes to cease to manufacture the Product under the Jagotec Manufacturing Agreement, Jagotec shall be permitted to do so by serving notice on Nitec to that effect in writing. The termination under this Section 6.4 shall not take effect for a period of twenty four (24) months from the date of notice and in any event no earlier than five years after the First Launch of the Product in the Territory and during such period all pending orders for Product shall be satisfied by Jagotec in accordance with the Jagotec Manufacturing Agreement. Jagotec agrees that it shall provide technical assistance in connection with transfer of manufacturing rights to a third party manufacturer as set out in Section 3.4. The costs of the manufacturing site change (including but not limited to technical transfer, process validation, bioequivalence study and regulatory expenses) shall be born by Nitec. |
| 7 | Royalties |
| 7.1 | In consideration of the License granted by Jagotec to Nitec hereunder, the royalty (the “Royalty”) payable by Nitec to Jagotec shall be: |
| 7.1.1 | in the case of all countries of the Territory (other than North America): |
| (a) | […***…] of Net Sales of Product in the Territory (other than North America), and |
| (b) | […***…] of sublicensing income in the Territory (other than North America) being any payment not calculated based on Net Sales (to include, without limitation, licence fees, lump sums and milestone payments.). |
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| 7.1.2 | in the case of North America: |
| (a) | […***…] of Net Sales of Product in North America, and |
| (b) | […***…] of sublicensing income in North America being any payment not calculated based on Net Sales (to include, without limitation, licence fees, lump sums and milestone payments.). |
| 7.2 | All Royalties shall be payable on a quarterly basis. Nitec shall remit to Jagotec within […***…] days after the end of each calendar quarter the amount of Royalties, if any, due in respect of the preceding quarter, beginning with the calendar quarter in which the First Launch takes place. Nitec shall deliver to Jagotec, along with such remittance of Royalty payments a detailed statement (hereinafter referred to as the “Royalty Report’) of Net Sales of Product and sublicensing income received on a country-by-country basis to which the Royalty payment relates. |
| 7.3 | All Royalty Reports shall be prepared in accordance with generally accepted accounting principles consistently applied from applicable period to period and shall be certified by an officer of Nitec as being so prepared, true, accurate and correct. |
| 7.4 | Unless otherwise agreed by the Parties in writing, all payments of Royalties shall be made in EURO and to such place or account as Jagotec reasonably requests from time to time in writing. Any conversions into EURO from the currency in which the corresponding Net Sales for such Royalties and sublicensing income were made, are to be calculated by using the average closing buying rate for such currency quoted in the continental terms method of quoting exchange rates (local currency per EURO 1) published by the Financial Times on the last business day of the applicable reporting period covered by such Royalty Report. |
| 7.5 | In the event that Nitec is required to withhold any tax to the tax or revenue authorities in the Territory regarding any payment to Jagotec, such amount shall be deducted from the payment to be made by Nitec, and Nitec shall promptly notify Jagotec of such withholding and, within a reasonable amount of time after making such deduction, furnish Jagotec with copies of any tax certificate or other documentation evidencing such withholding. Each Party agrees to cooperate |
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| with the other Party in claiming exemptions from such deductions or withholdings under any agreement or treaty from time to time in effect. |
| 8 | Inspection and Audit |
| 8.1 | During the term of this Agreement and during a period of twelve (12) months after its expiration or termination for any reason, upon the written request of Jagotec and not more than once each calendar year, Nitec shall permit an independent certified public accountant of internationally recognized standing selected by Jagotec, to have access during regular business hours to such of the records of Nitec and its Affiliates and sub-licensee(s), if any, as may be reasonably necessary to verify the accuracy of the Royalty Reports for any year ending not more than twenty-four (24) months prior to the date of such request. The accounting firm shall disclose to Jagotec only whether the Royalty Reports and records of Nitec and its Affiliates and sub-licensee(s), if any, and the amount of Royalties, if any, actually paid are correct or not and the specific details concerning any discrepancies; no other information shall be shared. The Parties agree to accept such written audit report as final and binding upon them. |
| 8.2 | If such independent accounting firm correctly concludes that additional Royalties were owed during any such period audited, Nitec shall pay such additional Royalties within thirty (30) days of the date Jagotec delivers to Nitec such accounting firm’s written report so concluding. The fees and expenses charged by such accounting firm with respect to such audit shall be paid by Jagotec, provided however, if any such audit discloses that Royalties payable by Nitec for the audited period are more than […***…] of the Royalties actually paid for such period, then Nitec shall pay all reasonable fees and expenses charged by such accounting firm with respect to such audit. |
| 8.3 | Jagotec shall treat all financial information subject to review under this Section 7 as confidential and subject to the confidentiality obligations in Article 8 below. |
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| 9 | Confidentiality |
| 9.1 | During the term of this Agreement and in the course of the development work by Jagotec, it may be necessary for each Party to disclose to the other Party, orally or in writing, certain of its Confidential Information, which each Party considers to be confidential and proprietary. Each Party agrees to hold in strict confidence and not to use, except for purposes of this Agreement, all Confidential Information obtained from the other Party during the term of this Agreement. |
| 9.2 | The obligations of confidentiality and non-use contained in this Section 8 shall not extend and apply to Confidential Information that: |
| (i) | is in or enters the public domain without breach of this Agreement; or |
| (ii) | can be shown to have been known to the receiving Party prior to disclosure under this Agreement; or |
| (iii) | is disclosed to the receiving Party, without restriction, by a third party having the right to disclose the same; or |
| (iv) | is required to be disclosed by a judicial or administrative authority of competent jurisdiction or by law after maximum practical notice to the originally disclosing Party. |
| 9.3 | Confidential Information of the other Party shall be disclosed or made available by the receiving Party only to those employees of the receiving Party who have a need to know such Confidential Information for the purposes of this Agreement. Furthermore, the Parties may also disclose Confidential Information to consultants hired by one or both of the Parties, provided the receiving Party’s consultant has a need to know such Confidential Information for purposes of this Agreement and has previously signed a written confidentiality agreement or has otherwise agreed to such confidentiality obligation with the receiving Party which contains substantially the same obligations of confidentiality and non-use as set forth in this Section 8, and which is broad enough to cover disclosures of Confidential Information from the originally disclosing Party. |
| 9.4 | In the event of termination or expiration of this Agreement for whatsoever reason, each Party shall immediately return to the other all of the other Party’s Confidential Information furnished in connection with this Agreement, including |
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| every and all copies made thereof save for one copy of each item of Confidential Information, which may be retained in the legal department or lodged with the legal advisers of the receiving Party exclusively in order to provide a record of Confidential Information disclosed and to so determine each receiving Party’s continuing obligations hereunder. |
| 9.5 | The obligations of confidentiality and non-use contained in this Section 8 shall survive the expiration or termination of this Agreement for any reason for a period of five (5) years commencing upon the effective date of such termination or expiration. |
| 10 | Term and Termination |
| 10.1 | Term and Expiration |
| (a) | This Agreement shall terminate on the later of ten (10) years from the Effective Date or on the expiry on a country-by-country basis upon the expiration of the last to expire of the Patents in each country of the Territory, unless earlier terminated in accordance with Sections 10.2 and 10.3 below. |
| (b) | Upon the expiration of this Agreement in each country of the Territory pursuant to Section 10.1 (a) above and payment of all Royalties and Manufacturing Royalties, if any, due under this Agreement, the License and the Manufacturing License, if applicable, shall be deemed to be a perpetual, fully paid-up and royalty-free license for Product in each such country of the Territory. |
| 10.2 | Termination for Cause |
During the entire term of this Agreement either Party may terminate this Agreement by giving to the other Party written notice to that effect, if any of the following events occur:
| (a) | the other Party is in default or in breach of a term or provision hereof and such default or breach is material and continues and is not remedied within […***…] upon the other Party’s written request to remedy such default or breach; |
| (b) | the other Party shall commit a material breach of any of the confidentiality provisions of Section 9 above; or |
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| (c) | the other Party goes into liquidation, voluntarily or otherwise, other than for the sole purpose of reorganization, or goes into bankruptcy or makes an assignment for the benefit of creditors, or in the event of a receiver being appointed of the other Party’s property or parts thereof). |
| 10.3 | Termination prior to Registration |
In addition and not in limitation to Section 3.7 above, as from the Effective Date throughout the term until the first Registration for Product is granted by any Regulatory Authority in any country of the Territory, this Agreement may be terminated as follows:
| (a) | by either Party, if such Party reasonably considers based on a determination, in accordance with sound scientific, pharmaceutical and medical judgment, of the results achieved with respect to the Product during the development phase, and that Party can demonstrate that there is a technical, pharmaceutical or medical problem regarding the Product, which would make the Product unapprovable in all of the following countries, USA, UK and Germany, with […***…] prior notice, provided that such terminating Party, prior to having the right to terminate this Agreement in accordance herewith, has in all detail disclosed such determination and the underlying reasons to the other Party and has taken in due consideration any comments of the other Party on such determination; and |
| (b) | by Nitec, if the first application for Registration of Product or any material part thereof is finally rejected or denied, or if any Regulatory Authority in the country, where the first Registration of Product is applied for, imposes restrictions on or conditions for the commercialization of the Product which have a material negative impact on the marketability of the Product, or if all Registrations of Product in all countries are withdrawn or cancelled by the competent Regulatory Authorities, with […***…] prior written notice. |
| 10.4 | Effect of Termination |
| (a) | The termination of this Agreement shall be without prejudice to any rights and obligations of either Party accrued prior to the effective date of such termination. Nitec shall forthwith make all payments due and outstanding to Jagotec at the date of termination. Except as explicitly otherwise stated in this Agreement, |
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| Jagotec shall not be obliged to refund upon termination of this Agreement to Nitec any payments made by Nitec to Jagotec prior to such termination pursuant to the provisions of this Agreement. |
| (b) | In the event of termination of this Agreement pursuant to Sections 10.2 and 10.3 above, then this Agreement (and any agreements entered into in connection with it) shall immediately be terminated and, except as provided herein, Nitec shall immediately refrain from using directly or indirectly in any way the Patents, GEOMATRIX® Technology and Skye Know-How. Upon termination of this Agreement, except as provided herein, Jagotec shall immediately refrain from using directly or indirectly in any way all Nitec IPR as well as Nitec Know-How. Furthermore, each Party shall return to the other Party all Confidential Information (other than that relating to the Foreground IP of the other) received from or belonging to the other Party, together with all copies thereof in such other Party’s possession or under its control, all free of any charge. Either Party shall have the right, but not the obligation, to use, at its sole discretion, any and all such material for its own purposes. |
| (c) | Subject to any rights of Merck under the Technology Transfer Agreement, in the event of termination by Jagotec under the terms of Section 3.3, the terms of Section 10.4 (b) shall not apply and the Agreement (and any agreements entered into in connection with it) shall immediately be terminated and Nitec shall immediately refrain from using directly or indirectly in any way the Patents, GEOMATRIX® Technology and Skye Know-How. At the same time, subject to any rights of Merck under the Technology Transfer Agreement, Nitec shall grant to Jagotec the exclusive royalty free and, sublicenseable right and license to the Nitec IPR and the Nitec Know-How and any confidential information necessary or desirable for use with the Product in the Territory and shall provide at no additional cost to Jagotec such information and documentation as shall be reasonably requested by Jagotec in that regard. |
| (d) | The termination for cause of this Agreement pursuant to Section 10.2 above by either Party shall not limit remedies which are or may be otherwise available in law or equity to either Party. |
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| 11 | Representations and Warranties |
| 11.1 | Jagotec represents and warrants that it shall carry out and undertake the development work until approval of the Product in the Territory in a careful and diligent manner. Jagotec agrees to carefully choose, instruct and supervise any employees, officers, Affiliates or third parties to be chosen by it pursuant to this Agreement, who are involved in the Development of the Product. Nothing in this Agreement shall be construed as a representation made, or warranty given, by Jagotec that any development performed by or for Jagotec under this Agreement will be successful in whole or in part, or that any product, including Product, which may be developed, will be successful in the commercial marketplace. Furthermore, except as provided herein, Jagotec makes no representation or warranty, express or implied, with respect to GEOMATRIX® Technology and/or Skye Know-How, including without limitation, any warranty of completeness, accuracy, merchantability or fitness for a particular purpose. |
| 11.2 | Jagotec represents and warrants that it has all rights regarding Patents, GEOMATRIX® Technology and Skye Know-How necessary to grant the Licence and the Option and the Nitec Manufacturing Licence hereunder. Notwithstanding the preceding sentence but subject to the following sentence, Jagotec does not assume any responsibility and makes no warranty that the performance of this Agreement and any product developed hereunder, including the Product, do not infringe any third party’s patents, patent applications or other intellectual property rights. Notwithstanding the preceding sentence, Jagotec represents and warrants that, as of the Effective Date, it is not aware and has no knowledge of any such infringement of any third party rights. If however, during the course of this Agreement either Party discovers that the Product infringes or may infringe any third party’s intellectual property rights, it shall promptly inform the other Party thereof and the Parties shall meet to discuss the course of action to be taken with regard thereto. |
| 11.3 | Nothing in this Agreement shall be construed as a representation made, or warranty given by Jagotec that any patent will issue based upon any pending patent application encompassed by the term Patents, and that any patent encompassed by the term Patents which issues will be valid or enforceable. |
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| 11.4 | Except as provided for in the Jagotec Manufacturing Agreement to be agreed upon in due time as referred to in Section 5.1 above, Jagotec assumes no liability or responsibility for any damages caused to Nitec, third parties, and/or the environment by the manufacturing, marketing, distribution, sale or use of the Product or the Active Drug contained therein, except to the extent that any of the above are attributable to the negligence or wilful misconduct of Jagotec in performing its obligations hereunder. |
| 11.5 | Nitec represents and warrants to strictly adhere at all times in all material respects to any and all laws, rules, regulations and conditions imposed by any competent authority on the marketing, distribution and sale of Product, and Nitec shall during the entire term of this Agreement be solely and fully responsible for the compliance with all such laws, rules, regulations and conditions when marketing, distributing and selling Product under the Licence. |
| 11.6 | Subject to the specific representations and warranties given and specific disclaimers of representations and warranties included in this Article 10, and further subject to anything to the contrary contained in this Agreement, either Party shall, as to third parties, be indemnified and held harmless by the other Party from and against any and all losses, liabilities and damages arising from any claim, action or other proceeding by any third party relating to any acts or omissions of the other Party, its directors, officers, employees or agents, or the gross negligence or wilful misconduct of such other Party, its directors, officers, employees or agents in performing any of its obligations under this Agreement. |
| 11.7 | Any liability, warranty and undertaking contained herein shall be limited to the payment by either Party for direct damages to the other Party and in any event, neither Party shall be liable to the other Party for any special, indirect, punitive or consequential damages and/or loss of profits or anticipated profits, respectively. |
| 11.8 | Nitec shall, at its own expense, purchase from an insurance company of its choice and shall maintain during the entire term of this Agreement and during […***…] after its expiration or termination an appropriate and customary policy of general liability and product liability insurance covering its responsibilities, including in particular but without any limitation, Nitec’s development responsibilities under Section 2 above, regarding Product developed, |
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| manufactured, marketed, sold and used under this Agreement and the Active Drug contained therein and the use thereof. Upon request, Nitec shall provide Jagotec with evidence that such insurances are existing and are maintained. |
| 11.9 | Nitec represents and warrants that, to the best of its knowledge and belief, having made due and careful investigation, it has acquired from Merck all relevant rights, including but not limited to all relevant intellectual property rights of Merck in connection with the Merck Agreement to allow Nitec to carry out its obligations hereunder. Nitec shall indemnify Jagotec in respect of any breach thereof. |
| 11.10 | Without prejudice and subject to the other terms of this Agreement, if Nitec determines that it requires a licence from a third party in order to manufacture, use, sell, offer for sale or import the Product, including, without limitation, avoid infringement of any third party patent or in connection with settlement of any actual or threatened patent infringement claim, or if Nitec shall be subject to an order or ruling of any court of competent jurisdiction requiring the payment of a royalty or other payment to a third party patent holder in respect of the manufacture, use, sale, offer for sale or import of the Product, then all such payments shall be made at Nitec’s sole cost and expense. |
| 12 | Miscellaneous Provisions |
| 12.1 | Waivers: A waiver of a breach or default under this Agreement shall not be a waiver of any other or subsequent breach or default. The failure or delay by either Party in enforcing compliance with any term or condition of this Agreement shall not constitute waiver of such term or condition, unless such term or condition is expressly waived in writing. |
| 12.2 | Headings: The titles and headings used in this Agreement are intended for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. |
| 12.3 | Force Majeure: Neither Party shall be held in breach of this Agreement by any reason of acts or omissions caused by any Act of God or other causes beyond the reasonable control of the affected Party. The affected Party shall use due |
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| diligence to remove any such causes and to resume performance under this Agreement as soon as it is reasonably feasible. |
| 12.4 | Assignment: Except as otherwise expressly stated herein, this Agreement and the rights and obligations hereunder shall not be assignable by either Party without the prior written consent of the other Party, provided however, that either Party may, without such consent, assign this Agreement and its rights and obligations hereunder to an Affiliate of such Party, and in connection with the transfer or sale of all or substantially all of its business, or in the event of its merger, consolidation, change in control or similar transaction. Any permitted assignee shall assume all obligations of its assignor under this Agreement so long as such assignee remains liable on a joint and several basis for its obligations. |
| 12.5 | Separate Entities: Nothing in this Agreement shall constitute or be deemed to constitute a partnership between the Parties hereto or constitute or be deemed to constitute either Party as an agent of the other for any purpose whatsoever, and neither Party shall have the authority or power to bind the other Party, or to contract in the name of and create a liability against the other Party in any way or for any purpose, unless explicitly instructed in writing to do so. |
| 12.6 | Notices: All notices, reports and other writings which are required to be given or submitted pursuant to this Agreement shall be in writing and delivered personally or sent by international courier service, or by confirmed facsimile transmission, to the addresses set forth below or to such other address as Jagotec or Nitec may from time to time notify to the other Party. Any and all notices sent to the other Party in accordance with this Section 11.6 shall become effective as of receipt thereof by the other Party. |
If to Skye, SkyePharma or Jagotec:
Jagotec AG
Eptingerstrasse 51
CH-4132 Muttenz, Switzerland
Attn.: CEO
Fax: ++41-61-467-5574
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with copy to:
SkyePharma PLC
105 Piccadilly
London W1J 7NJ
United Kingdom
Attn.: General Counsel
Tel.: +44-(0)20-7491-1777
Fax: +44-(0)20-7491-3338
If to Nitec:
Nitec Pharma AG
Röschenzerstrasse 9
CH-4153 Reinach, Switzerland
Attn.:Verwaltungsrat
Fax: +41 61 711 46 39
| 12.7 | Severability: Each Party hereby acknowledges that it does not intend to violate any public policy, statutory or common laws, rules, regulations, treaty or decision of any government agency or executive body thereof of any country or community or association of countries. Should one or more provisions of this Agreement be or become invalid, the Parties hereto shall substitute, by mutual consent, valid provisions for such invalid provisions which valid provisions in their economic effect are sufficiently similar to the invalid provisions that it can be reasonably assumed that the Parties would have entered into this Agreement with such provisions. In case such provisions cannot be agreed upon, the invalidity of one or several provisions of this Agreement shall not affect the validity of this Agreement as a whole, unless the invalid provisions are of such essential importance to this Agreement that it is to be reasonably assumed that |
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| the Parties would not have entered into this Agreement without the invalid provisions. |
| 12.8 | Interest: In the event any amount due and payable under this Agreement is not paid by the due date, then the Party owing such amount shall pay to the creditor, without being requested by the other Party, interest on the total outstanding amount at the rate equal to the London Interbank Offered Rate (LIBOR), as published by the Financial Times on the date that such payment falls due, increased by […***…] in EURO and adjusted on the first day of every calendar quarter. |
| 12.9 | Entire Agreement: This Agreement, together with the Exhibits referred to herein and attached hereto, represents the entire understanding of the Parties with respect to the subject matter hereof; and supersede all proposals or agreements, oral or written, and all other communications between the Parties related to the subject matter of this Agreement, including without limitation any representations or warranties made by either Party hereto or its representatives. This Agreement may not be amended or modified except in a writing duly executed by the Parties. |
| 13 | Governing Law and Jurisdiction |
| 13.1 | The Parties hereto agree that this Agreement, including without limitation, all transactions affected hereunder, its validity and enforceability and all relationships between the Parties in this connection shall be construed under and be governed in all respects by the laws of Switzerland without reference to the principles of conflicts of laws thereof and shall not be governed by the United Nations Convention on Contracts for the International Sale of Goods (the Vienna Convention of April 11, 1980). |
| 13.2 | The Parties hereby agree that any and all disputes arising out of or in connection with this Agreement shall exclusively be submitted to and settled by the courts in Zurich, Switzerland and the Parties hereby submit to such exclusive jurisdiction. |
***Confidential Treatment Requested
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This Agreement has been executed by Nitec and by Skye, by their duly authorized representatives, in three (3) originals effective as of the Effective Date.
| SKYEPHARMA AG | ||||||||
| By: | /s/ Francesco Patalano | By: | /s/ Tessa Chapman | |||||
| Name: | Francesco Patalano | Name: | Tessa Chapman | |||||
| Title: | Director | Title: | Director | |||||
| JAGOTEC AG | ||||||||
| By: | /s/ Francesco Patalano | By: | /s/ Tessa Chapman | |||||
| Name: | Francesco Patalano | Name: | Tessa Chapman | |||||
| Title: | Director | Title: | Director | |||||
| NITEC PHARMA AG: | ||||||||
| By: | /s/ Dr. Hubertus Ludwig | |||||||
| Name: | Dr. Hubertus Ludwig | |||||||
| Title: | Verwaltungsrat | |||||||
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Exhibit A
Patents
[…***…]
| Country |
Application date |
Application no. | Publication no. |
Grant date |
K & S Ref: |
SkypePharma Ref: | ||||||
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***Confidential Treatment Requested
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***Confidential Treatment Requested
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***Confidential Treatment Requested
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***Confidential Treatment Requested
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***Confidential Treatment Requested
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***Confidential Treatment Requested
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39.
EXECUTION COPY
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40.
EXECUTION COPY
Exhibit B
Preliminary Specifications for Product
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Specifications and Requirements | |
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Exhibit C
Development Programme
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***Confidential Treatment Requested
41.
EXECUTION COPY
Exhibit D
[…***…]
***Confidential Treatment Requested
42.
Exhibit 10.10
***Text Omitted and Filed Separately
with the Securities and Exchange Commission.
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80(b)(4)
and 230.406.
MANUFACTURING & SUPPLY AGREEMENT
This MANUFACTURING & SUPPLY AGREEMENT (“Agreement”), effective as of 3 August 2007, is entered into between NITEC PHARMA AG, a Swiss corporation having a place of business at Kägenstrasse 17, CH-4153 Reinach, Switzerland (hereinafter referred to as “NITEC”), and JAGOTEC AG, a Swiss corporation having a place of business at Eptingerstrasse 51, CH-4132 Muttenz, Switzerland (hereinafter referred to as “JAGOTEC”; (NITEC and JAGOTEC hereinafter sometimes referred to as “Party” or “Parties”). JAGOTEC is a 100% owned subsidiary of SkyePharma plc and SkyePharma AG is a 100% owned subsidiary of SkyePharma plc.
WHEREAS, the Parties and SkyePharma AG signed a Development and Licence Agreement on 20 August 2004 (“DLA”); and
WHEREAS, NITEC is a company engaged directly or through its affiliate Nitec Pharma GmbH in the manufacture, distribution and licensing of pharmaceutical products, including the Product (as defined below), and is interested in JAGOTEC manufacturing Product for use, marketing, distribution and sale by itself, Nitec Pharma GmbH or a third party in the Territory (as defined below) under the terms and conditions of this Agreement; and
WHEREAS, JAGOTEC is a company engaged and specialised directly or through its affiliate SkyePharma SAS - inter alia - in the manufacturing of pharmaceutical products and is interested to manufacture Product for NITEC for use, marketing, distribution and sale by itself or a third party in the Territory under the terms and conditions of this Agreement.
NOW, THEREFORE, for and in consideration of the premises, mutual covenants and agreements contained herein, and intending to be legally bound hereby, the Parties hereby agree as follows:
| 1. | Definitions |
For purposes of this Agreement, the terms defined in this Artide 1 shall have the following meanings:
| 1.1 | “Active Ingredient” shall mean prednisone in a form meeting the Specifications and the Quality Agreement and ordered by NITEC from a third party in accordance with Section 5. |
| 1.2 | “Affiliate” shall have the meaning given to it in the DLA. |
| 1.3 | “Auxiliary Materials” shall mean any and all material, ingredients and components required and/or necessary for the manufacturing of Product under |
1.
| and pursuant to the Manufacturing Process and procured by JAGOTEC from third parties in accordance with Section 5, but excluding the Active Ingredient. |
| 1.4 | “Batch” shall mean a production lot containing theoretically […***…] units of Product of the same dosage strength (“Theoretical Quantity”) and, at a lower actual limit, the Lower Quantity. |
| 1.5 | “Business Day” shall mean a day on which commercial banks are open for business in Lyon, France. |
| 1.6 | “Capacity Plan” shall have the meaning given to it in Section 6.1. |
| 1.7 | “Commercially Reasonable Efforts” shall have the meaning given to it in the DLA. |
| 1.8 | “Committee Members” shall have the meaning given to it in Section 6.1. |
| 1.9 | “Contract Year” shall mean each twelve (12) months period from 1st January through 31st December during the term of this Agreement. |
| 1.10 | “GMP” shall mean Current Good Manufacturing Practice in accordance with rules governing medicinal products in the European Community and the US good manufacturing practices (CFR 210&211) and/or becoming applicable during the term of this Agreement. |
| 1.11 | “Delivery” shall mean delivery of the Product Ex Works (Incoterms 2000) by JAGOTEC to NITEC in accordance with Section 6.9. |
| 1.12 | “Delivery Day” shall mean the day when the Product is Delivered to NITEC or its nominee. |
| 1.13 | “Effective Date” shall mean the date first written herein above. |
| 1.14 | “Euro” shall mean the single currency of participating members states of the EU. |
| 1.15 | “Finished Product” shall mean the Product packaged by or on behalf of NITEC for commercial release and sale. |
| 1.16 | “First Launch” shall mean the first commercial sale to a third party customer of the Finished Product in a Major Country. |
| 1.17 | “Forecast” shall have the meaning given to it in Section 6.2 |
| 1.18 | “Joint Product Committee” shall mean a committee established and conducted in accordance with the procedures as set forth in Section 6.1. |
***Confidential Treatment Requested
2.
| 1.19 | “Launch Period” shall mean the period of manufacturing Product for First Launch and for the next Contract Year after said First Launch. |
| 1.20 | “Lower Quantity” shall mean […***…] per Batch or if more than one batch is ordered at one time, the average of all such Batches ordered of the same strength. |
| 1.21 | “Major Capital Expenditure” shall mean the investment by JAGOTEC at the Manufacturing Site including in equipment, zoning and any utilities, totalling in excess of […***…] for the expansion of overall capacity for the manufacture of Product (as opposed to mere replacement). |
| 1.22 | “Major Country” shall mean France, Germany, Italy, Spain, the United Kingdom or the United States of America. |
| 1.23 | “Manufacturing Costs” shall mean with respect to Product JAGOTEC’s fully allocated manufacturing costs applied by JAGOTEC to the Product calculated in accordance with generally accepted accounting principles in Switzerland, and shall include but not be limited to […***…]. Manufacturing Costs shall not include costs for Auxiliary Materials and Active Ingredient. |
| 1.23 | “Manufacturing Process” shall mean the process for the manufacturing of Product as submitted in the request for registration of Product to any Regulatory Authority in the Territory attached hereto as part of the Quality Agreement. |
| 1.24 | “Manufacturing Site” shall mean the facilities designated by JAGOTEC for manufacturing Product under this Agreement, which facilities are operated by JAGOTEC’s Affiliate SkyePharma Production S.A.S. and which are located at 55 rue de Montmurier, BP 45, 38291 Saint Quentin-Fallavier Cedex, France. |
| 1.25 | “Marketing Authorization” shall mean with respect to any country that the applicable health authority has approved Finished Product for marketing in such country. |
| 1.26 | “Minimum Commercial Yield” shall mean the minimum yield in % of a Batch manufactured according to the Manufacturing Process for market purposes as set forth in Section 8. |
| 1.27 | “Non-Compliant/Non-Compliance” shall have the meaning given to it in 6.14. |
| 1.28 | “Quality Agreement” shall mean the agreement dated as of the Effective Date on cGMP which agreement shall be attached hereto as Annex 5. |
***Confidential Treatment Requested
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| 1.29 | “Price Per Unit” shall mean the price per unit of Product manufactured and supplied hereunder composed of the […***…] of the Manufacturing Costs plus […***…] of the costs of the Auxiliary Materials. Costs of the Active Ingredient are not included. The Price per Unit shall be as set out in Annex 4 for the period referred to therein. |
| 1.30 | “Product” shall mean the pharmaceutical formulation named Lodotra containing the Active Ingredient manufactured and supplied hereunder by JAGOTEC in accordance with the Quality Agreement including the Manufacturing Process and the Specifications, which have been approved for marketing and sale by Regulatory Authorities in the Territory or which are intended to use for commercialisation purposes or clinical trials. Product is offered in the presentation according to Annex 1. |
| 1.31 | “Regulatory Approvals” shall mean all approvals, price approvals or approvals for reimbursements, product and/or establishment licenses, registrations, permits, or authorizations (including Marketing Authorizations) of any federal, state or local regulatory agency, department, bureau or other governmental entity or Regulatory Authority, necessary for the manufacture, packaging, distribution, use, storage, importation, export, transport, marketing and sale of the Products and/or Finished Products for therapeutic use in humans in a country of the Territory. |
| 1.32 | “Regulatory Authority/(ies)” shall mean any governmental authority in any country or group of countries of the Territory competent to approve pharmaceutical products for manufacturing, marketing, distribution and sale in any country(ies) of the Territory and/or to approve the price for pharmaceutical products to be sold in any country(ies) of the Territory, including without limitation the FDA and EMEA, and any successor agency thereof. |
| 1.33 | “Regulatory Standards” shall mean all standards, rules and regulations promulgated by a Regulatory Authority and applicable to the product and the manufacture thereof, including without limitation cGMP. |
| 1.34 | “Release” shall mean release of the Product by the Qualified Person pursuant to the Quality Agreement. |
| 1.35 | “Shelf Life” shall mean in relation to the Product have the meaning given to it in the Quality Agreement/shall mean in respect of each Batch a defined period of months (“Shelf Life Period”) as per Annex 2a which will be updated from time to time by NITEC) from the date of first contact between the Active Ingredient and Auxiliary Material. |
| 1.36 | “Specifications” shall mean the specifications for the Product as contained in Annex 2. |
***Confidential Treatment Requested
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| 1.37 | “Technical Support” shall mean reasonable assistance provided by JAGOTEC to NITEC strictly limited to providing technical support to an alternative supplier of Product in connection with (a) the training of their staff, (b) cross-validation of the analytical methods and its production of three consecutive validation Batches (of one strength only) complying with the Specifications. All other technical support, including but not limited to regulatory support, stability programs and any in vivo study work, is specifically excluded. |
| 1.38 | “Territory” shall mean collectively each country or group of countries of the world, in which a Regulatory Authority has granted Regulatory Approval. |
| 2. | Subject Matter and Grant of License |
NITEC hereby instructs JAGOTEC, and JAGOTEC hereby agrees under the terms and conditions contained in this Agreement, to manufacture at the Manufacturing Site and supply to NITEC Product in bulk form for use in the Finished Product for sale to the pharmaceutical trade. JAGOTEC shall manufacture and deliver Product exclusively to NITEC. JAGOTEC shall delegate its responsibilities hereunder to its Affiliate SkyePharma SAS, provided that JAGOTEC remains solely liable to NITEC for the same. The use, marketing, distribution and sale of the Finished Product may at NITEC’s option also be carried out by NITEC’s affiliate Nitec Pharma GmbH and NITEC may delegate any other responsibilities under this Agreement to Nitec Pharma GmbH so long as NITEC remains solely liable to JAGOTEC for the same.
| 3. | Manufacturing of Product |
| 3.1 | JAGOTEC shall manufacture the Product for marketing and sale by NITEC in the Manufacturing Site in strict compliance with the Specifications and the approved Manufacturing Process and in accordance with the Quality Agreement. Furthermore, JAGOTEC shall only use such equipment and personnel which are appropriate or duly qualified for the manufacturing of Product in accordance with the provisions of this Agreement and the Quality Agreement. It is acknowledged and agreed between the parties that the final dissolution specification for the Product is not approved by the regulatory authorities at signing this contract but will be approved by the regulatory authorities during the approval process. Therefore, JAGOTEC shall only be liable for failing to manufacture the Product in accordance with such preliminary dissolution specification (as per annex 2) until agreement of the Joint Product Committee as set out below. After approval by the regulatory authorities of a final dissolution specification, JAGOTEC shall use Commercially Reasonable Best Efforts to implement such final dissolution specification such that the Product may be manufactured at the Manufacturing Site in accordance therewith. If, having used such efforts, JAGOTEC is able to manufacture in accordance with such final dissolution specification, it shall notify the Joint Product Committee. Upon the unanimous agreement of the Joint Product Committee that such final dissolution specification has been implemented, the Specifications and/or the |
5.
| Quality Agreement shall be amended to incorporate such final dissolution specification and JAGOTEC agrees that the campaigns following such amendment shall be manufactured in accordance therewith. If, having used Commercially Reasonable Best Efforts to do so, Jagotec is unable to manufacture Product in accordance with such final dissolution specification within a reasonable period of time following approval, it shall continue to manufacture in accordance with the Specifications at the date hereof, shall not be in breach of this Agreement and shall have no liability to NITEC in connection with such failure. In this clause, “Commercially Reasonable Best Efforts” shall mean those efforts and resources that would be used by an established pharmaceutical company in its capacity as a contract manufacturer (taking into all relevant factors including but not limited to product labelling, stage in the relevant product life, market potential, past performance, availability of resource, economic return, the regulatory environment and competitive market conditions in the therapeutic area), utilizing sound and reasonable scientific and business practice and judgment and its manufacturing expertise, in a diligent and timely manner, all as measured by the facts and circumstances at the time such efforts are due; it being understood however for the avoidance of any doubt that such efforts shall not include, nor shall be deemed to include, (a) the commitment by JAGOTEC to any Major Capital Expenditure and (b) any obligation on JAGOTEC to manufacture and supply the Product at less than a reasonable margin. |
| 3.2 | JAGOTEC shall permit duly authorized representatives of (a) NITEC or (b) any third party contracted by NITEC to have an official responsibility for the release of the Finished Product to the market according to applicable laws and regulations applying in countries of the Territory (so long as such third party has signed a confidentiality agreement on terms acceptable to JAGOTEC) during Business Days and hours and upon reasonable prior written notice to inspect once a year (or more often if reasonably requested by NITEC on its own behalf or on behalf of its third party contractor) the Manufacturing Site - including but not limited to manufacturing, testing, warehousing and/or storing and generation and/or disposal of waste - used for the manufacturing of Product and to inspect and take reasonable quantities of Active Ingredient, Auxiliary Materials, intermediate product and Product manufactured for examination purposes to verify JAGOTEC’s compliance with the Manufacturing Process, the Specifications and its obligations under this Agreement including the Quality Agreement. Furthermore, JAGOTEC will supply copies to NITEC (on NITEC’s request and at NITEC’s cost) of any and all records relating to manufacturing and testing of the Product. NITEC shall be promptly informed in writing and by fax or email if and when an inspection by a Regulatory Authority occurs or is scheduled to occur at the Manufacturing Site which in any way involves inspection of the production of Product or any other feature of JAGOTEC’s actions in connection with Product of the performance of this Agreement. NITEC shall be entitled to send a representative to attend any such |
6.
| inspection of the Manufacturing Site. The findings of any such inspection at the Manufacturing Site or of any other inspections including self inspections carried out in relation to production at the Manufacturing Site of JAGOTEC for the Product shall promptly be made known in their entirety in writing to NITEC insofar and to the extent that they may potentially impact the commercialization, manufacture (including but not limited to quality and testing) and Delivery of the Product under this Agreement. |
| 3.3 | JAGOTEC undertakes to use any and all Active Ingredient exclusively for the performance of its obligations hereunder and JAGOTEC shall, upon receipt of any supply of Active Ingredient and Auxiliary Materials, promptly perform the quality and quantity control procedures as provided for in the Quality Agreement. In the event that any Active Ingredient and Auxiliary Materials to be used solely in the manufacture of the Product, or any part thereof, do not meet with the Specifications and/or quality requirements as set forth in the Quality Agreement, then JAGOTEC shall reject such materials and shall promptly notify NITEC thereof in writing - including a specific description of the deviation from the Specifications—(a) in every case in relation to Active Ingredient and (b) where such rejection is reasonably likely to impact upon the manufacture of the Product in relation to Auxiliary Materials. The cost of any rejected Auxiliary Materials, the quality control and related rejection for Auxiliary Materials shall be borne by Jagotec or its suppliers subject to the terms of existing supply agreements between Jagotec and its suppliers of Auxiliary Materials. The cost of any rejected Active Ingredient, quality control and rejection for Active Ingredient shall be borne by NITEC or its selected supplier subject to the terms of any existing supply agreement between NITEC and the Active Ingredient supplier unless this failure is caused by a failure of JAGOTEC during the quality control process for the Active Ingredient. |
| 3.4 | JAGOTEC shall store all Active Ingredient, Auxiliary Materials, intermediate product and all Product manufactured hereunder, in a suitable warehouse under suitable conditions as set forth in the Quality Agreement preventing the deterioration, theft or damage of Active Ingredient, Auxiliary Materials, intermediate products and Product until the agreed Delivery Day to NITEC, and JAGOTEC shall insure against such risks all Active Ingredient, Auxiliary Materials, intermediate products and all Product manufactured hereunder until Delivery. |
The Active Ingredient ordered by NITEC for the purposes of manufacturing of Product shall remain NITEC property but shall be stored by JAGOTEC under JAGOTEC’s sole responsibility.
JAGOTEC shall report to NITEC at least once a month on the level of stocks of Active Ingredient, and Product manufactured, including a differentiation of the status of the Product manufactured, such as “under quarantine”, “released”, “rejected”). The report frequency may be modified by decision of the Joint Product Committee.
7.
Should Auxiliary Materials ordered exclusively for NITEC need to be re-analysed after being stored by JAGOTEC in compliance with the Quality Agreement for a period in excess of its intended shelf-life, NITEC shall cover the cost of such analysis. Should Active Ingredient or Auxiliary Materials require re-analysis due to failure to comply with the storage provisions of the Quality Agreement, or where such re-analysis is carried out by JAGOTEC for its own internal purposes, then JAGOTEC shall cover the cost of such analysis.
| 3.5 | JAGOTEC hereby agrees to guarantee NITEC, upon two week’s prior written notice, free and full access to any know-how relating to the manufacture of the Product necessary to enable NITEC to obtain or maintain any Regulatory Approval in the Territory, to perform the Batch release, to ensure that the finished Product is in line with the Regulatory Approval and all other (local) applicable laws and regulations and to enable qualified NITEC personnel to fulfil NITEC’s legal and regulatory obligations. |
Each change in the Product or in the Manufacturing Process proposed by either Party, shall be communicated to the other Party in advance, to enable the other Party to comment on such intended changes before implementation. Any changes proposed by JAGOTEC shall only be implemented with NITEC’s prior written consent, which consent shall not be unreasonably withheld or delayed. The Joint Product Committee shall discuss any benefit generated by the implementation of changes proposed by JAGOTEC and decide which party shall bear which proportion of the costs thereof. NITEC shall bear or reimburse JAGOTEC for all of JAGOTEC’s costs (including without limitation any regulatory costs) associated with any change initiated by NITEC or required by a Regulatory Authority and related specifically to the Product. Further details regarding the change control procedure will be set forth in the separate Quality Agreement.
| 3.6 | Quality control of Product is under the sole responsibility of NITEC. Therefore JAGOTEC will not analyze the Product in order to determine its suitability for quality control under this Agreement or applicable requirements of a Regulatory Authority or with any applicable Regulatory Approval. All in-process controls are under the sole responsibility of JAGOTEC. JAGOTEC will not change the in- process controls as set forth in the Regulatory Approval and the Quality Agreement without the written consent of NITEC. |
JAGOTEC shall provide NITEC with the results of the in-process controls after occurrence and with samples of Product to perform the quality control testing within 3 working days of the final press-coating step. NITEC shall inform JAGOTEC on the results of such analysis also within 3 working days of completion.
In the event that JAGOTEC agrees to the implementation of the analytical method (quality control)for Product at JAGOTEC, NITEC shall reimburse
8.
JAGOTEC for all of JAGOTEC’s reasonable costs associated with such analytical method transfer, to the extent JAGOTEC has notified NITEC in advance of the estimated amount of such costs. Otherwise, each Party shall bear its own costs related to such analytical method transfer.
| 3.7 | Without prejudice to Section 3.6, JAGOTEC shall perform all in-process control tests and confirm the GMP-compliant manufacture of the Product pursuant to the terms of the Quality Agreement. |
| 3.8 | JAGOTEC agrees to provide sufficient manufacturing capacity subject to the terms hereof to fulfil NITEC’s requirements for the Product as bulk tablets, to the extent that these requirements of NITEC are reflected in NITEC’s Forecast per Section 6.2 and in JAGOTEC’s Capacity Plan per Section 6.1. |
| 4. | Obligations of NITEC |
| 4.1 | NITEC shall be responsible, at its own cost and expense, for maintaining and updating from time to time, if needed, any and all Regulatory Approvals. |
| 4.2 | NITEC shall appoint a supplier of Active Ingredient and shall ensure that such supplier supplies Active Ingredient in a timely manner which meets with the Specifications and/or quality requirements as set forth in the Quality Agreement. NITEC agrees that for the avoidance of any shortfalls during the Launch Period it will order […***…] of the Active Ingredient required for the manufacturing of Product (as recommended by JAGOTEC pursuant to clause 5.1, firmly ordered by NITEC). |
| 4.3 | NITEC shall be responsible for the qualification of the supplier of the Active Ingredient as set forth in the Quality Agreement. |
| 4.4 | NITEC shall contract with such supplier, be responsible for all dealings with, and settle all invoices of such supplier. NITEC shall negotiate with each such qualified supplier prices, annual amounts and lead times for the supply of the Active Ingredient. NITEC shall inform JAGOTEC in writing of the relevant parts of the agreements between NITEC and the suppliers of the Active Ingredient. |
| 4.5 | NITEC shall ensure that such supply of Active Ingredient shall be in compliance with the Specifications and the requirements set forth in the Quality Agreement, and shall be delivered DDP (Incoterms 2000 ICC) to the Manufacturing Site. |
| 4.6 | NITEC shall notify JAGOTEC of any matter of which it becomes aware which is reasonably likely to impact upon the delivery or quality of the Active Ingredient to JAGOTEC. |
***Confidential Treatment Requested
9.
| 5. | Obligations and Responsibilities of JAGOTEC |
| 5.1 | JAGOTEC undertakes to recommend a supplier of the Auxiliary Materials which JAGOTEC shall contract with and from which JAGOTEC shall order the same for the purposes hereof. |
| 5.2 | JAGOTEC shall be responsible for the qualification of the supplier of the Auxiliary Materials as set forth in the Quality Agreement. |
| 5.3 | JAGOTEC shall negotiate with each such qualified supplier prices, annual amounts and lead times for the supply of the Auxiliary Materials. JAGOTEC shall inform NITEC in writing of the agreements between JAGOTEC and the suppliers of the Auxiliary Materials. |
| 5.4 | JAGOTEC shall be responsible for the keeping of the contract with the supplier and the usage of Auxiliary Materials for manufacturing of Product which meet with the Specifications and/or quality requirements as set forth in the Quality Agreement. |
For the avoidance of any shortfalls during the Launch Period JAGOTEC shall order […***…] of the Auxiliary Materials required for the manufacturing of Product firmly ordered by NITEC. JAGOTEC shall ensure that such supply of Auxiliary Materials shall be in compliance with the requirements set forth in the Quality Agreement, and shall be delivered DDP (Incoterms 2000 ICC) to the Manufacturing Site.
| 5.5 | Any change in the supplier or the specification of the Auxiliary Materials shall require the prior written consent of NITEC. |
| 5.6 | JAGOTEC shall notify NITEC of any matter of which it becomes aware which is reasonably likely to impact upon the Delivery Day or otherwise on JAGOTEC’s ability to fully and timely perform its obligations under this Agreement. |
| 5.7 | JAGOTEC may provide support in relation to technology transfer other than Technical Support to NITEC upon agreement by NITEC to the payment of such costs of providing such support as are agreed. |
| 6. | Order and Supply of Product |
| 6.1 | The parties shall establish a “Joint Product Committee” consisting of four (4) individuals (“Committee Members”); two of whom shall be nominated by JAGOTEC and two of whom shall be nominated by NITEC. The Committee Members may be replaced by notice to the other Party and shall be appropriately qualified and experienced in order to make a meaningful contribution to the Joint Product Committee meetings. The Joint Product |
***Confidential Treatment Requested
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| Committee shall meet at least once per quarter to review NITEC’s Forecast (as defined in Section 6.2) for the Product, which shall reflect NITEC’s realistically anticipated up-side scenario for its requirements for Product. JAGOTEC shall provide to NITEC, at the beginning of each quarter for the following eight quarters with a capacity plan for the Product (“Capacity Plan”). The Joint Production Committee shall compare the Capacity Plan to NITEC’s Forecast. Each member of the Committee shall have one vote in relation to matters discussed by it and save as otherwise set out herein votes shall be carried by a majority. Initial members of the Committee shall be set out in Annex 9. |
| 6.2 | NITEC shall issue, for the first time on the date of signature hereof, and thereafter during the term of this Agreement at the beginning of each quarter in accordance with Section 6.3, a rolling forecast (“Forecast”) for the upcoming […***…] estimating NITEC’s requirements of Product for (a) distribution and sale and (b) for clinical studies in the Territory, which forecasts shall be used by JAGOTEC for production planning purposes. The submission of each Forecast shall constitute a binding order for the quantity of Product set forth in […***…] for Delivery at the latest […***…] after the submission thereof save that the quantities set forth in […***…] of the first Forecast issued on the date of signature of this Agreement shall not be binding on the parties unless agreed between them. In each Forecast, […***…] shall be (i) within +/- […***…] of the quantities of the Product set out in […***…] in the Forecast immediately preceding the most recent Forecast and (ii) within +/- […***…] of the quantities set out in […***…] in the forecast immediately preceding the Forecast referred to in (i). Save as set out herein, it is mutually agreed between the Parties that the Forecast is only a non-binding estimate of NITEC’s requirements of the Product and that in particular in case of any foreseeable launches in a Major Country such Forecast may be adequately adjusted by mutual agreement of the parties. |
| 6.3 | Any purchase order (to be sent out by NITEC on a monthly basis) shall be confirmed by JAGOTEC within 5 working days and shall be binding upon JAGOTEC, provided that the requested Delivery Day is not earlier than […***…] after the receipt of such purchase order and provided that such order shall correspond with the binding element of the Forecast for the month in question. It is JAGOTEC’s obligation to negotiate with the Auxiliary Materials supplier lead times for the supply of the Auxiliary Materials in quantities and of quality sufficient for timely manufacturing of Product in accordance with any […***…] Forecast. JAGOTEC shall recommend to NITEC and its Active Ingredient supplier (a) the quantity of Active Ingredient and (b) the dates of delivery of the same which would, in JAGOTEC’s reasonable opinion based on Forecasts, be required in order for JAGOTEC to timely manufacture Product in accordance with any […***…] Forecast. Further JAGOTEC shall inform NITEC at the same time about the existing stock of Active Ingredient held by JAGOTEC. JAGOTEC shall not be responsible for any other dealings with such |
***Confidential Treatment Requested
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| supplier nor shall it be liable for the failure of such supplier to supply Active Ingredient in a timely manner or that does not meet with the Specifications and/or quality requirements as set forth in the Quality Agreement. JAGOTEC shall inform NITEC immediately in writing of any deviation from the aforementioned […***…] lead time. |
| 6.4 | Notwithstanding anything contained herein, NITEC may always request supply of Product in excess of the quantity set out in Section 6.3 but any such request shall not be considered a firm order binding upon JAGOTEC unless and to the extent confirmed by JAGOTEC in writing, provided that JAGOTEC shall at all times employ its Commercially Reasonable Efforts to comply with any request of NITEC for Product. |
| 6.5 | If (a) in any three consecutive Forecasts, the quantity forecast in respect of […***…] thereof would, in JAGOTEC’s sole opinion, require Major Capital Expenditure in order for JAGOTEC to manufacture such quantity (JAGOTEC basing such opinion upon it deciding in its sole discretion that the quantity forecast exceeds the quantity that it could provide on the date of each such Forecast by […***…] of the maximum available capacity for NITEC as per Capacity Plan would be required), and (b) in the third such consecutive Forecast, the quantity forecast in respect of […***…] thereof would so require Major Capital Expenditure, JAGOTEC within […***…] of receipt of the third such consecutive Forecast shall notify NITEC and decide, whether or not to commence such Major Capital Expenditure. If JAGOTEC commences such Major Capital Expenditure NITEC agrees and acknowledges that such Major Capital Expenditure is likely to take […***…] to complete |
| 6.6 | If JAGOTEC decides, upon receiving the third such consecutive Forecast as set out in Section 6.5 above, not to commence Major Capital Expenditure it shall notify NITEC of its decision and any subsequent […***…] Forecast shall only become binding as to the quantity that JAGOTEC is able to manufacture without such Major Capital Expenditure. Upon such decision not to commence Major Capital Expenditure, NITEC shall be entitled to qualify one second manufacturing site on the foregoing conditions. NITEC may, from the date upon which the third consecutive […***…] forecast becomes a […***…] Forecast, as set out in Section 6.5, use such second manufacturing site to fulfil in any subsequent quarter only such amount of orders as exceed those which JAGOTEC is unable to manufacture as a result of not commencing Major Capital Expenditure. JAGOTEC shall in such circumstance provide Technical Support to NITEC at NITEC’s cost. |
| 6.7 | Each order under Section 6.2 above shall consist of not less than […***…] Batches of Product covering all dosage strengths (save that in the first two years following First Launch Jagotec agrees to accept individual orders of less than […***…], without prejudice to the minimum order obligation in the following sentence. NITEC shall order the minimum quantities set out and according to Annex 3 (the “Minimum Quantities”). The firm order for launch |
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| stock is at least 1 Batch of Product per dosage strength. NITEC will place orders of Product in units of whole Batches. |
| 6.8 | It is agreed and understood between the parties that the quantities ordered by NITEC shall be based upon the fact that each Batch (or the average of a number of Batches where more than one Batch is ordered at any one time) may contain […***…] of units and such Lower Quantity would be, if Delivered, sufficient to satisfy its requirements and NITEC shall supply Forecasts accordingly. |
| 6.9 | JAGOTEC shall supply Product firmly ordered by NITEC in accordance with this Agreement at the applicable and agreed Delivery Day upon the preceding and following conditions; (a) Any Batch (or number of Batches on average as set out in Section 6.8) of Product may not fall short of the Lower Quantity; and (b) All Products shall be Delivered to NITEC Ex Works (Incoterms 2000) the Manufacturing Site. Together with any such shipment of Product, JAGOTEC shall provide NITEC with the documents and samples specified in the Quality Agreement. JAGOTEC shall be responsible for ensuring that each Delivery of Product shall be delivered to NITEC as soon as possible (and in any event within 3 months) after its manufacture. |
| 6.10 | Delivery performance and failures. Orders are considered as orders fulfilled on time if the Products meet the standards set out in the Quality Agreement and not properly rejected on the terms hereof and if the Delivery Day set out in an order acceptance is met by […***…]. In the case that JAGOTEC does not reach the on time targets above, JAGOTEC shall use all Commercially Reasonable Efforts to fulfil such orders and NITEC shall, in addition to any other remedy (including under Section 8 in any case in which the Minimum Commercial Yield is not achieved), be entitled to reduce the Price Per Unit of late batches by […***…] of delay but to a maximum of […***…] |
If JAGOTEC produces a Batch or Batches (on average as above) containing less than the Lower Quantity JAGOTEC shall immediately inform NITEC in writing. NITEC will thereafter be entitled to place an additional order (not defined as or part of any Minimum Orders) and JAGOTEC agrees to use Commercially Reasonable Efforts to accept and fulfil this order within such a shortened lead time as is reasonably practicable (and to within five days provide NITEC with a Delivery Day therefor) provided that such quantities of Active Ingredient and Auxiliary Materials are on stock in order to do so. To avoid any shortfalls during the Launch Period the Parties hereby agree (in Sections 4.2 and 5.4) to order […***…] of Active Ingredient and Auxiliary Materials respectively of the amount firmly ordered by NITEC during such Launch Period.
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NITEC shall then be obliged to pay the following amounts in respect of the additionally ordered Batches as set out above;
| (a) | in respect of units up to the total Minimum Commercial Yield ordered – the Price Per Unit; |
| (b) | in respect of the balance of supplied units (i.e. in excess of the Minimum Commercial Yield ordered) – the Price Per Unit […***…] |
JAGOTEC shall not keep Product on stock except for the purpose of retaining samples as defined in the quality agreement or as required for analysis in case of a dispute pursuant to clause 6.17 or otherwise.
| 6.11 | JAGOTEC shall notify NITEC of the Delivery Date for a Delivery at least five (5) days prior of the same and NITEC undertakes to accept Delivery of all Product Delivered by JAGOTEC on such Delivery Date. JAGOTEC will package and label Product in accordance with the provisions of the Quality Agreement including at least code number, name of product, batch number, order number, quantity of supplied Product per package and date of manufacture. |
| 6.12 | If following completion of Major Capital Expenditure NITEC does not order quantities equal to (a) those in the Forecasts which triggered such Major Capital Expenditure […***…] and (b) that forecast in respect of […***…] in the subsequent Forecast, the Price Per Unit of quantities actually ordered will be adjusted as follows; |
Where the amounts ordered by NITEC are less than […***…] but more than […***…], of maximum available capacity: Price Per Unit […***…]
Where the amounts ordered by NITEC are […***…] or less, but more than […***…] of maximum available capacity: Price Per Unit […***…] […***…]
Where the amounts ordered by NITEC are […***…] or less of maximum available capacity: Price Per Unit […***…]
The maximum available capacity for the purposes of this Section 6.12 shall be that available for NITEC as per Capacity Plan at the date upon which JAGOTEC notified NITEC of the need for Major Capital Expenditure under Section 6.5.
Any amounts in respect of an increase in prices due under this Section 6.12 shall be invoiced at the end of the twelve month period following completion of Major Capital Expenditure. Payment terms shall be as per order to reflect the price adjustment for the previous twelve month; payment term for this invoice will be as per Annex 4.
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| 6.13 | NITEC shall bear the cost of bulk, quality control and rejection of spoiled, damaged, contaminated or defective Active Ingredient provided that such Active Ingredient’s damage, contamination or defect could not have been discovered by JAGOTEC with standard sampling or analytical procedures as defined in the Quality Agreement. |
| 6.14 | If any shipment of Product or any portion thereof is spoiled, damaged, contaminated or defective upon Delivery or fails to meet the Specifications or the quality standards set out in the Quality Agreement (together “Non- Compliant”), then NITEC shall have the right to reject such shipment or the portion affected thereby by giving written notice to JAGOTEC within […***…] following the Delivery of such shipment of Product, sufficiently specifying the alleged Non-Compliance and the quantities affected. Any shipment or portion thereof so rejected by NITEC shall be held at JAGOTEC’s disposal for examination. JAGOTEC shall investigate such issue and provide a written report to NITEC as soon as possible after notification. JAGOTEC shall not be liable for any Non-Compliance of the Product arising out of the shipment, storage or handling of Product by NITEC or its representatives, agents or customers. |
| 6.15 | In the event that any shipment of Product or any portion thereof is rightly rejected by NITEC in accordance with Section 6.14 above, then JAGOTEC undertakes to take back and, at NITEC’s request, destroy such Non-Compliant Product, and to replace such Non-Compliant shipment or portion thereof with an identical quantity of Product as soon as reasonably possible. |
| 6.16 | In any case of Non-Compliance, NITEC shall pay for the Non-Compliant Product, provided that such payment shall not be deemed to be a waiver of NITEC of any of its rights on account of such Non-Compliance. |
Should the Non-Compliance be due to JAGOTEC, such replacement shall be effected at JAGOTEC’s own cost and expense which includes but is not limited the corresponding amount of Active Ingredient and Auxiliary Materials in the Non-Compliant Batch or part thereof and the Manufacturing Costs.
The Non-Compliant Product shall, at JAGOTEC’s cost and expense, be returned to JAGOTEC.
NITEC shall pay for the replacement of Product in accordance with the payment provisions of this Agreement, provided that Product supplied by JAGOTEC conforms with quality standards as of Annex 5.
Should the Non-Compliance be due to NITEC (including for the avoidance of doubt in situations where the Active Ingredient is contaminated and such Active Ingredient contamination could not be discovered by JAGOTEC with standard sampling or analytical procedures as defined in the Quality Agreement), NITEC shall pay for the replacement of Product in accordance with the payment provisions of this Agreement.
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| 6.17 | In the event of any dispute between the Parties regarding the question whether a shipment of Product or any part thereof timely rejected by NITEC was actually Non-Compliant, and/or where responsibility for such Non-Compliance, under the terms hereof, lies the Parties agree to have an independent mutually acceptable (each Party acting reasonably) laboratory or expert perform such tests and analysis on the rejected Product as deemed necessary and/or required to establish the defect alleged by NITEC and the reasons therefore. The result of such independent laboratory or expert shall be binding upon the Parties, and the cost of such examination shall be borne by the losing Party. |
| 6.18 | In cases in which the resolution of a dispute or investigations is anticipated to take more than 2 weeks, JAGOTEC shall upon NITEC’s request and as soon as practicable after notification of the rejection deliver replacement Products for the Products under dispute in order to ensure continuity of supply. |
| 6.19 | Together with any shipment of Product, JAGOTEC shall issue a respective invoice for such shipment, applying the then valid Price Per Unit, multiplied by the number of units of Product actually supplied. NITEC undertakes to pay any and all such invoices within […***…] as of the delivery date of the respective shipment of Product (“Payment Date”). In the event of late payment JAGOTEC may charge interest on the outstanding amount at a rate of […***…] and such interest shall be calculated and payable in respect of the period from Payment Date until the date payment in full is received by JAGOTEC. |
| 7. | Calculation and Adjustment of Price Per Unit |
| 7.1 | The Price per Unit does not include any Value Added Taxes (VAT), turnover taxes or similar charges in any country, which are to be added and paid by NITEC as applicable. The Price Per Unit of this Agreement shall remain applicable for all supplies of Product during the term from the Effective Date until 31 Dec 2007. |
| 7.2 | Thereafter, the Price per Unit contained in Annex 4 hereto may be adjusted by JAGOTEC once each Contract Year in the month of October calculated as follows: |
| (a) | Adjustments to Manufacturing Costs shall be calculated on the basis of […***…]; |
| (b) | Adjustments to costs of Auxiliary Materials shall be calculated by reference to actual changes to the costs thereof, without any mark up added by JAGOTEC |
In no Contract Year may any increase be in excess of […***…] of the then current Price Per Unit save by mutual agreement of the parties. Such adjusted Price
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per Unit shall be attached hereto as new Annex 3 each year and shall remain in force for supplies of Product during the next Contract Year.
| 7.3 | NITEC shall have the right, through its employees and/or its independent auditing representatives and upon reasonable notice, to audit, during normal business hours, all records and accounts of JAGOTEC as may under recognised accounting practices contain information bearing upon the Price per Unit. Such audit shall be carried out at NITEC’s expense unless it reveals that a Price Per Unit quoted by JAGOTEC to NITEC prior to the audit exceeded the Price per Unit calculated in accordance with this Agreement by […***…] or more, in which case JAGOTEC shall, forthwith reimburse NITEC for the cost of audit and an amount equal to the overpayment. |
| 8. | Minimum Commercial Yield |
JAGOTEC commits itself to attaining the Minimum Commercial Yield of the Product as set out in Annex 6 (or as may otherwise be amended on the terms hereof). The Commercial Yield shall be calculated as follows:
(a +b)/c
| a = | number of units delivered by JAGOTEC |
| b = | number of sample units necessary for control purposes and retaining samples |
| c = | theoretical quantity of units per Batch of Product in bulk Tablets |
If the actual yield of Product, calculated for a maximum of one (1) year, is below the Minimum Commercial Yield, JAGOTEC shall reimburse NITEC for a proportionate amount of the cost of Active Ingredient.
This Minimum Yield shall be reviewed annually to allow for possible improvements in the Manufacturing Process.
| 9. | Delivery Conditions: |
JAGOTEC will deliver Product packaged and labelled in accordance with the Quality Agreement and the defined “Logistics” under Annex 7.
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| 10. | Term and Termination |
| 10.1 | According to the DLA this Agreement shall commence as of the Effective Date and shall continue in full force and effect until the end of the 5th year after First Launch (“Minimum Term”). It shall be automatically extended on a yearly basis unless terminated by one Party by giving to the other at least (subject to the Section 10.2 below) twenty four (24) months’ written notice to expire not before the end of the Minimum Term. |
| 10.2 | In the event of the payment of Major Capital Expenditure the notice period for any termination by either party to occur within […***…] years of such Major Capital Expenditure shall be […***…] months. |
| 10.3 | Notwithstanding anything contained in Section 10.1 above, and except as otherwise explicitly provided in this Agreement, this Agreement may be terminated at any time with immediate effect by giving written notice to that effect, as follows: |
| a) | by either Party, if the other Party is materially in default or in material breach of a term or provision hereof and such default or breach continues “and” if curable, is not cured or remedied within […***…] upon the other Party’s written request to cure or remedy such default or breach; or |
| b) | by either Party, if the other Party becomes insolvent or goes into liquidation, voluntarily or otherwise, other than for the sole purpose of reorganisation, or goes into bankruptcy or makes an assignment for the benefit of creditors, or in the event of a receiver being appointed of the other Party’s property or parts thereof. |
| 10.4 | Upon the termination or expiry of this Agreement, regardless of the reason therefor, JAGOTEC shall at NITEC’s written request continue the supply of Product to NITEC until such time as NITEC has an alternative manufacturing site approved by appropriate Regulatory Authorities for the supply of Product save that it shall be under no obligation to continue such supply for a period exceeding 24 months from the date of such termination notice. Upon notice of termination or expiry, NITEC shall seek such an alternative manufacturing site with reasonable speed and JAGOTEC shall provide Technical Support to NITEC in relation to technical transfer issues relating to Product to the alternative manufacturing site chosen by NITEC. If this Agreement is terminated by NITEC for JAGOTEC’s breach of this Agreement, the costs of the Technical Support shall be born by JAGOTEC. In all other circumstances the costs of the Technical Support shall be borne by NITEC. |
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| 11. | Effects of Termination |
| 11.1 | In the event of termination or expiry of this Agreement by either Party, no compensation or indemnity shall be payable to or may be claimed by either Party from the other Party as a result of such termination other than as set forth in this Agreement. Notwithstanding the preceding sentence, the termination of this Agreement by either Party shall not relieve the Parties of any obligation accruing prior to the effective date of such termination. |
| 11.2 | In the event of termination of this Agreement by JAGOTEC under Section 10.2 above, NITEC shall, upon JAGOTEC’s request together with the respective termination notice take also delivery of any and all Auxiliary Materials in stock and firmly ordered by JAGOTEC on the basis NITEC’s Forecast against payment of the net procurement price for such Auxiliary Materials paid by JAGOTEC to third party suppliers (plus Value Added Tax, turnover tax or similar charges, as applicable). All such Auxiliary Material and Active Ingredient shall be collected by NITEC from the Manufacturing Site. |
| 11.3 | The Parties agree that in the event of termination of this Agreement for whatsoever reason, Sections 11, 12, 13 and 17 shall remain in full force and effect in accordance with such respective provisions. |
| 11.4 | Except as otherwise explicitly provided in this Agreement, nothing contained in this Section 10 shall in any way limit, and shall be without any prejudice to, any other rights or remedies which may be available to either Party. |
| 12. | Indemnity and Insurance |
| 12.1 | JAGOTEC does not assume any liability or gives any representation or warranty, whether express nor implied, for the merchantability or fitness for a particular purpose of Product or Finished Product manufactured and/or supplied hereunder except to the extent that such liability arise from the gross negligence or wilful misconduct of JAGOTEC, its Affiliates or any of its or their respective employees. |
| 12.2 | In no event shall JAGOTEC be liable for any direct, indirect, incidental, commercial or other damage, costs, fees, expenses or costs (“Damages”) caused by Product and/or the Active Ingredient and/or the Auxiliary Materials to NITEC or any third party except to the extent that such Damages arise from the negligence or wilful misconduct of JAGOTEC, its Affiliates or any of its or their respective employees. |
| 12.3 | JAGOTEC assumes no liability vis a vis third parties, including without limitation, product liability, with respect to any and all Product or Finished Product marketed, distributed, sold or used, directly or indirectly, and the |
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| Active Ingredient and Auxiliary Materials contained in any such Product or Finished Product. NITEC shall indemnify JAGOTEC from and against any and all losses, liabilities, damages and expenses (including reasonable attorney’s fees and reasonable costs) that JAGOTEC suffers as a result of any claim, demand, action or other proceeding by any third party arising from or relating to NITEC’s actions regarding the manufacturing, marketing, distribution, safe or use of Product, the Active Ingredient and/or Auxiliary Materials and/or Finished Product, or resulting from any breach of any of NITEC’s obligations and/or responsibilities and/or representations and warranties hereunder, except to the extent that any such losses, liabilities, damages and expenses arise from the gross negligence or wilful misconduct of JAGOTEC. |
| 12.4 | Each of NITEC and JAGOTEC shall maintain, during the term of this Agreement and for a period of not less than five (5) years after its termination for what so ever reason, liability insurance, including in the case of NITEC, product liability insurance, with respect to and covering their respective obligations contained in this Section 12, in such amount as is customary for companies undertaking similar activities as the respective Party with products similar to Product. |
| 13. | Confidentiality |
| 13.1 | Each Party has disclosed to the other party prior to the Effective Date, and will during the term of this Agreement continue to disclose, proprietary, confidential and non-public information, including without limitation the Manufacturing Process, price calculations and other business and trade secrets (hereinafter, all collectively referred to as “Confidential Information”). |
| 13.2 | Each Party as recipient (the “Receiving Party”) of Confidential Information of the other Party (the “Disclosing Party”) hereby undertakes to maintain in confidence all Confidential Information of the Disclosing Party and shall not use, disclose or grant or permit the use of any of the Confidential Information of the Disclosing Party except on a need-to-know basis to its directors, officers, employees, agents, consultants, clinical investigators or other permitted contractors, to the extent such disclosure is reasonably necessary in connection with the activities of the Receiving Party as expressly authorized by this Agreement. To the extent that disclosure is authorized by this Agreement, prior to disclosure, the Receiving Party shall obtain agreement in writing of any such person to hold in confidence and not make use of the Confidential Information of the Disclosing Party for any purpose other than authorized by this Agreement. Each Receiving Party shall notify the Disclosing Party promptly upon the discovery of the unauthorized use or disclosure of any such Confidential Information of the Disclosing Party. |
| 13.3 | The obligations of confidentiality and non-use contained in Section 13.2 above shall not apply to the extent that (a) a Receiving Party (i) is required to |
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| disclose the Confidential Information by law, regulation or order of a governmental agency or a court of competent jurisdiction, or (ii) is required to disclose Confidential Information of the Disclosing Party to any Regulatory Authority for purposes of obtaining or maintaining registration for Product and/or Finished Product, provided that the Receiving Party shall request confidential treatment thereof (where available), or (b) the Receiving Party can demonstrate by written or other tangible evidence that (i) the disclosed information of the Disclosing Party was public knowledge at the time of such disclosure to it, or thereafter became public knowledge, other than as a result of actions of the Receiving Party, its directors, officers and employees in violation hereof; or (ii) the disclosed information was rightfully known by the Receiving Party (as shown by its written records) prior to the date of disclosure to it by the Disclosing Party; or (iii) the disclosed information was developed or acquired by the Receiving Party independently of any knowledge or use of the Confidential Information of the Disclosing Party (as shown by its written records); or (iv) the Confidential Information was previously legally provided to the Receiving Party by a third party without any obligations of confidentiality to the Disclosing Party. |
| 13.4 | The confidentiality obligations under this Section 13 shall be effective during the term of this Agreement and for a period of ten (10) years after the termination hereof for any reason. Each Disclosing Party shall be entitled to injunctive remedies and relief against the Receiving Party and any third parties for any breach or threatened breach of the confidentiality obligations under this Section 13 with respect to any of the Confidential Information of the Disclosing Party. |
| 14. | Exclusivity |
During the term of this Agreement, JAGOTEC undertakes (a) not to engage in any production of Product for or on behalf of any third party and (b) to supply to NITEC all of NITEC requirements for the Product subject to the terms hereof. NITEC agrees to order all its requirements for the Product from JAGOTEC (save as is otherwise provided herein).
| 15. | Miscellaneous Provisions |
| 15.1 | Entire Agreement: The terms, covenants, conditions and provisions contained in this Agreement, including the Annexes referred to herein which are agreed to form an integral part hereof, constitute the total and complete agreement of the Parties regarding the subject matter hereof and supersede all prior understandings and agreements hereto made, and there are no other representations, understandings or agreements relating to the subject matter hereof. The provisions of this Agreement may not be waived, altered, amended |
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or repealed in whole or in part except by the written consent of both of the Parties to this Agreement.
| 15.2 | Assignment: Save as set out below, this Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred by either Party without the prior written consent of the other Party. Either Party may assign in full all its rights and obligations hereunder to an Affiliate of that party (and only for so long as the assignee remains an Affiliate) and if the assigning party remains fully liable to the other party for the full and timely performance of this Agreement by the party receiving assignment and any of such parties direct or indirect successors in interest. |
Any permitted assignee shall assume all obligations of its assignor under this Agreement or under the respective rights or obligations actually assigned.
| 15.3 | Notices: Any consent, notice or report required or permitted to be given or made under this Agreement by one Party to the other shall be in English and in writing, delivered personally or by international courier service or by facsimile (promptly confirmed by personal delivery or international courier service) addressed to the other Party at its address indicated below, or to such other address as shall have been notified in writing to the sending Party by the receiving Party from time to time, and shall take effect upon receipt by the addressee. |
| If to NITEC: | NITEC PHARMA AG | |
| Kägenstrasse 9 | ||
| CH 4153 Reinach | ||
| Switzerland | ||
| attn.: Jochen Mattis | ||
| Tel: ++ 41 61 715.20.40 | ||
| Fax: ++ 41 61 715.20.49 | ||
| Email: jochen.mattis@nitecpharma.com | ||
| If to JAGOTEC: | JAGOTEC AG | |
| Eptingerstrasse 51 | ||
| CH-4132 Muttenz, | ||
| Switzerland | ||
| attn.: Francesco Patalano | ||
| Fax No: ++41 61 467 55 74 | ||
| With copy to: | SkyePharma Plc | |
| 105 Piccadilly | ||
| London W1J 7NJ | ||
| Great Britain | ||
| attn.: Group Counsel | ||
| Fax No: ++44 20 7491 3338 | ||
| 15.4 | Independent Contractors: It is expressly agreed that the Parties shall be independent contractors and that the relationship between the Parties shall not |
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| constitute a partnership, joint venture or agency. Neither Party shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party to do so. |
| 15.5 | NITEC warranty: NITEC warrants that it owns one hundred percent of the shares of Nitec Pharma GmbH. |
| 15.6 | Severability: Each Party hereby acknowledges that it does not intend to violate any public policy, statutory or common laws, rules, regulations, treaty or decision of any government agency or executive body thereof of any country or community or association of countries. Should one or more provisions of this Agreement be or become invalid, the Parties hereto shall substitute, by mutual consent, valid provisions for such invalid provisions which valid provisions in their economic effect are sufficiently similar to the invalid provisions that it can be reasonably assumed that the Parties would have entered into this Agreement with such valid provisions. |
| 15.7 | Force Majeure: Neither Party hereto shall be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement when such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party including but not limited to fire, floods, embargoes, war, acts of war (whether war be declared or not), insurrections, riots, civil commotions, strikes, lockouts or other labour disturbances, acts of God or acts, omissions or delays in acting by any governmental authority or the other Party hereto. |
| 15.8 | Headings: The titles and headings used in this Agreement are intended for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. |
| 15.9 | Waiver: The waiver by either Party hereto of any right hereunder or the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by said other Party whether of a similar nature or otherwise. |
| 16. | Dispute Resolution and Jurisdiction |
| 16.1 | In the event of any dispute arising between the Parties concerning this Agreement, the Parties agree that in the first place they shall meet for good faith discussions in an attempt to negotiate an amicable solution. |
| 16.2 | For any dispute arising between the Parties out of or in connection with this Agreement, or the interpretation, breach or enforcement thereof, which cannot be amicably resolved pursuant to Section 16.1 above within two (2) months as from the first appearance of such dispute, the Parties agree and irrevocably |
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| submit to arbitration under the Rules of Arbitration of the International Chamber of Commerce (the “Rules”) by three (3) arbitrators appointed in accordance with the Rules. The seat of arbitration shall be Basel, Switzerland, and any such arbitration shall be conducted in the English language. Any judgment upon the award rendered by the arbitrators shall be final and binding upon the parties and may be entered in any court having jurisdiction thereof. |
| 16.3 | Notwithstanding anything contained in this Section 16, either Party may seek preliminary or injunctive measures or relief in any competent court having jurisdiction. |
| 17. | Applicable Law |
The Parties hereto agree that this Agreement shall be construed under and be governed by the laws of Switzerland, without reference to the principles of conflict of laws thereof, and shall not be governed by the United Nations Convention on Contracts for the International Sale of Goods (the Vienna Convention of April 11, 1980).
IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the Effective Date.
| For and on behalf of JAGOTEC AG |
||||||||
| /s/ Francesco PATALANO |
[Illegible Signature] | |||||||
| by: | Francesco PATALANO | by: | ||||||
| its: | Director ,3 Aug 07 | its: | Director 3 Aug 07 | |||||
| For and on behalf of NITEC PHARMA AG |
||||||||
| /s/ Jochen Mattis 3.8.07 |
3 Aug 2007 /s/ Dr. Achim Schäffler | |||||||
| by: | Jochen Mattis | by: | Dr. Achim Schäffler | |||||
| its: | Managing Director | its: | EVP RD and Manufacturing | |||||
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List of Annexes:
| Annex 1: | Presentations | |
| Annex 2: | Specifications | |
| Annex 2a: | Shelf Life Period | |
| Annex 3: | Minimum Orders | |
| Annex 4: | Prices | |
| Annex 5: | Quality Agreement | |
| Annex 6: | Commercial Yield | |
| Annex 7: | Logistics | |
| Annex 8: | Hygiene, Safety and Working conditions and Protection of the environment | |
| Annex 9: | Initial Members of the Committee | |
| Annex 10: | Statement of Storage Conditions | |
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MANUFACTURING & SUPPLY AGREEMENT
BETWEEN NITEC and JAGOTEC
Annex 1
| PRESENTATION |
| – | Lodotra |
| – | DOSAGE : 1,2,5 mg |
| – | Bulk tablets stored 30 L plastic drum |
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MANUFACTURING & SUPPLY AGREEMENT
BETWEEN NITEC and JAGOTEC
Annex 2a
| Shelf Life Period |
[…***…]
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MANUFACTURING & SUPPLY AGREEMENT
BETWEEN NITEC and JAGOTEC
Annex 2
| Specifications |
| – | […***…] |
| – | […***…] |
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[…***…] |
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| […***…] | […***…] | |||||
| […***…] | […***…] | |||||
| […***…] | […***…] | |||||
| […***…] |
[…***…] | […***…] | […***…] | |||
| […***…] |
[…***…] |
***Confidential Treatment Requested
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| […**…] | […***…] |
***Confidential Treatment Requested
30.
MANUFACTURING & SUPPLY AGREEMENT
BETWEEN NITEC and JAGOTEC
Annex 3
| MINIMUM ORDERS- for the 1st calendar year after Product approval and launch in the first Major Country |
[…***…]
| MINIMUM ORDERS- starting from the second calendar year after Product approval and launch in 3 out of 5 Major Countries |
[…***…]
***Confidential Treatment Requested
31.
MANUFACTURING & SUPPLY AGREEMENT
BETWEEN NITEC and JAGOTEC
Annex 4
| PRICES |
| 1. | The following prices relate to the packaged Product delivered Ex Works by JAGOTEC |
[…***…]
| 2. | Payment shall be made in Euros by bank transfer within […***…] of the invoice date, unless otherwise agreed between the parties. Bank transfer shall be made to such account as Jagotec shall notify to Nitec. |
***Confidential Treatment Requested
32.
MANUFACTURING & SUPPLY AGREEMENT
BETWEEN NITEC and JAGOTEC
Annex 5
| QUALITY AGREEMENT |
A Quality Agreement will be signed at the latest after manufacturing of the first campaign of the Product.
33.
MANUFACTURING & SUPPLY AGREEMENT
BETWEEN NITEC and JAGOTEC
Annex 6
| MINIMUM COMMERCIAL YIELD |
For active ingredient ordered by JAGOTEC on behalf of NITEC, the minimum commercial yield is as follows:
| […***…] |
composed of yield […***…]
***Confidential Treatment Requested
34.
MANUFACTURING & SUPPLY AGREEMENT
BETWEEN NITEC and JAGOTEC
Annex 7
Distribution Specifications
| LOGISTICS |
Introduction:
In order to facilitate transfer, storage, distribution and shipment of products which are the subject of the present contract, the following recommendations must be applied as from delivery of the first batch, failing this, JAGOTEC undertakes to apply these recommendations within a period agreed with NITEC.
1 - Packaging:
Tablets of Product are packed as bulk tablets for shipment in containers of 20(±3) kg in drums with PE in-liner. The packaging material is defined in the Quality Agreement. For printing batch number and the expiration date ink based technique must be used instead of embossing which is less readable.
2 - Grouping cartons:
The quantity shall be defined in the Quality Agreement (see annex 5).
This quantity will be defined by NITEC in agreement with JAGOTEC.
Identification of each drum will be carried out according to the provisions in the Quality Agreement (see annex 5).
3 - Pallets:
Type 1’200 x 800, five tiers, total high including pallet must not exceed 1’250 mm.
Any variation from this norm must be agreed in writing by NITEC.
Consigned pallets are not accepted. NITEC can supply pallets to JAGOTEC if necessary.
It is recommended to identify each pallet with similar label to those stuck on the drums.
Pallets will be wrapped in a transparent film. A cover must be placed on incomplete pallets before wrapping.
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4 - Transport:
If product delivery to NITEC is paid by JAGOTEC, it must use a carrier agreed by itself and only use sheet metal trailers. The carrier must be designed for transporting medicines.
Documents necessary for a good reception must be joined: delivery notes, analysis certificates…
JAGOTEC shall inform NITEC and NITEC’s partner for packaging by fax of all details concerning the load as soon as possible before the truck departure.
5 - Modifications:
Any modifications of points one to four above must be agreed by NITEC Distribution. At the very least the NITEC Distribution must be informed at the time of the start up of the first Batch concerned, if it relates to a modification of regulations.
Each pallet of the modified first Batch must undergo a supplementary special identification mentioning the type of modification.
6 - Detailed log book:
NITEC can provide by simple request JAGOTEC a detailed log book.
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MANUFACTURING & SUPPLY AGREEMENT
BETWEEN NITEC and JAGOTEC
Annex 8
Hygiene, Safety and Working conditions and Protection of the environment
| 1. | Hygiene, Safety and Working conditions: |
| 1.1 | JAGOTEC is held to know all the relevant legislative, regulatory or conventional requirements relating to hygiene, safety and working conditions, which it is required to satisfy by reason of its activities hereunder. It undertakes to comply strictly with these at all times with regard to the provisions foreseen in the present contract. |
To this effect, JAGOTEC declares that it has received from NITEC the information which the latter has available concerning:
| – | The particular hazards of the Active Ingredient or preparations thereof which are the subject of the present contract, as well as the procedures necessary for their use or their manufacture |
| – | The provisions to take to provide against these hazards, notably the particular precautions necessary to take with regard to handling, use and, should the case arise, storage |
| – | The rules for packaging and labelling which are applicable to them |
| – | The action to take in case of an accident |
This information is founded on existing scientific and technical knowledge, to which NITEC may have had reasonable access.
| 1.2 | JAGOTEC must, with the least delay and by all means at its disposal, keep NITEC informed of: |
| – | All incidents or accidents occurring on the occasion of carrying out the provisions foreseen in the present contract, which causes harm to, or may cause harm to the health and safety of workers |
| – | The emergency measures which, should the case arise, have been taken by itself or by the competent administrative authority |
According to the same terms JAGOTEC will bring to the knowledge of NITEC:
All new facts in its actual knowledge concerning:
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| – | the hazardous properties of substances or dangerous preparations which are the subject of the present contract, which result from the improvement of scientific or technical understanding, or result from the observation of the effects of these products on the health of workers or the environment; |
| – | The possible modification of physicochemical or toxicological properties of these same substances or preparations, by reason notably of a change in the nature or concentration of the impurities which they contain; |
in each case having applied reasonable care to become aware of developments and changes to the same.
In a reciprocal fashion NITEC will, with the least delay and by all means at its disposal bring to the knowledge of JAGOTEC all information of the same type of which comes to be in possession
| 1.3 | The parties will meet as often as necessary to examine together the conditions, and possibly the difficulties in the application of: |
| – | The legislative, regulatory or conventional dispositions relating to hygiene, safety and working conditions to which the provisions of the present contract are subjected |
| – | The procedure for reciprocal exchange of information instituted in section 1.2 above |
Furthermore, each party will have the right to request of the other the holding of an ad hoc technical meeting in order to resolve all questions that particularly relate to hygiene or to industrial safety, or to deal with an emergency situation, whatever the cause. The date and duration of this ad hoc technical meeting will be agreed jointly.
| 2. | Protection of the environment |
| 2.1 | JAGOTEC recognises expressly that, in order to have been duly authorised by the competent administrative authority or to have been so declared to it, all the installations necessary for the execution of the provisions foreseen in the present contract comply with the legislative or regulatory dispositions to which they are subject with regard to the protection of the environment. |
In consequence, it undertakes to maintain this situation during the full duration of the contract and to be in a position to justify this at any time to NITEC.
| 2.2 | JAGOTEC will comply strictly, for all the provisions foreseen in the present contract, with all the legislative or regulatory dispositions relating to the disposal of waste, the term “disposal” describing the operations of collection, transport, storage, sorting and treatment so as to avoid all harm to the environment, including in the long term. |
In particular JAGOTEC undertakes that it will ensure or get assurance that the waste which results from the provisions foreseen in the present contract is treated only in installations duly authorised or accepted to this effect by the
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competent administrative authority. It will be in a position to justify this at any time to NITEC.
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ANNEX 9
INITIAL MEMBERS OF THE COMMITTEE
NITEC
Achim Schäffler
Jochen Mattis
JAGOTEC
Ken Cunningham
Jean-Marc Chevalier
***Confidential Treatment Requested
40.
ANNEX 10
Statement on the storage condition of Lodotra® tablets
This statement clarifies the requirements of temperature-sensitive materials involved in the production of Lodotra bulk tablets (manufacturing site: SkyePharma Production SAS, France), with regard to in-house storage and handling and shall prevail over any contrary provision in this Agreement
For all batches of Product manufactured up to September 2007, the agreed storage conditions are and shall be at room temperature in accordance with USP.
For all batches of Product manufactured after September 2007, the nominal storage condition of temperature-sensitive materials, i.e.
– […***…],
including samples of these materials (e.g. batch release samples), shall be between […***…] Compliance with this temperature range (subject to the following) has to be ensured continuously throughout the presence of the above mentioned materials at the manufacturing site (Monitoring). Proof of this compliance has to be provided by SkyePharma (e.g. temperature curves). Deviations from the nominal temperature range always require written documentation.
After September 2007 the nominal storage condition will not be exceeded by more than […***…]
The exceptions in the foregoing paragraph do not render temperature monitoring and documentation of deviations from the nominal storage condition unnecessary. Correspondingly, Certificates of Compliance have to be supplemented by deviation reports and temperature monitoring data, if deviations occur.
Nitec proposes the following measures to ensure and/or prove appropriate storage of the materials at the manufacturing site:
| – | attachment of temperature loggers to the temperature-sensitive materials |
| – | use of mobile (validated) temperature container for storage |
***Confidential Treatment Requested
41.
Exhibit 10.11
***Text Omitted and Filed Separatel