Delaware | 2834 | 90-0136863 | ||
(State or other jurisdiction
of
incorporation or organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification No.) |
William D.
Freedman, Esq.
Michael J. Shef, Esq. Troutman Sanders LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 (212) 704-6000 |
Steven D. Singer, Esq.
Stuart R. Nayman, Esq. Wilmer Cutler Pickering Hale and Dorr LLP 399 Park Avenue New York, New York 10022 (212) 230-8800 |
The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.
|
Underwriting
|
||||||
Price to
|
Discounts and
|
Proceeds to
|
||||
Public
|
Commissions
|
Biodel
|
||||
Per Share
|
$ | $ | $ | |||
Total
|
$ | $ | $ |
MORGAN STANLEY
|
BANC OF AMERICA SECURITIES LLC | |
|
||
LEERINK SWANN & COMPANY
|
NATEXIS BLEICHROEDER INC. |
i
Table of Contents
VIAject
tm
,
a proprietary injectable formulation of recombinant human
insulin designed to be absorbed into the blood faster than the
currently marketed rapid-acting insulin analogs, for which we
are currently conducting pivotal Phase III clinical trials
in patients with Type 1 and Type 2 diabetes; and
VIAtab
tm
,
a sublingual, or below the tongue, tablet formulation of
insulin, for which we are currently conducting a Phase I
clinical trial in patients with diabetes.
VIAmass
tm
,
a sublingual, rapid-acting formulation of parathyroid hormone
1-34; and
VIAcal
tm
,
a sublingual rapid-acting formulation of salmon calcitonin.
1
Table of Contents
obtain regulatory approval for
VIAject
tm
;
commercialize our product candidates by self-funding clinical
trials and partnering late-stage programs through strategic
commercial collaborations, while seeking to retain
co-commercialization rights;
2
Table of Contents
employ our proprietary
VIAdel
tm
technology to reformulate approved peptide hormone drugs that
address large markets;
focus on the Section 505(b)(2) regulatory approval pathway,
which may facilitate more rapid and less costly product
development; and
aggressively continue the development of our pipeline of product
candidates.
3
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shares
shares
shares
We estimate that the net proceeds from this offering will be
approximately $ million,
assuming an initial public offering price of
$ per share and after
deducting estimated underwriting discounts and commissions and
offering expenses payable by us.
We expect to use the net proceeds from this offering to fund
clinical development, preclinical testing and other research and
development activities and for working capital and other general
corporate purposes. See Use of Proceeds.
You should read the Risk Factors section of this
prospectus for a discussion of the factors to consider carefully
before deciding to purchase any shares of our common stock.
BIOD
1,652,697 shares of common stock issuable upon the exercise
of stock options outstanding as of March 15, 2007, at a
weighted average exercise price of $4.13 per share;
5,251,849 shares of common stock issuable upon the exercise
of warrants outstanding as of March 15, 2007, at a weighted
average exercise price of $3.78 per share;
3,047,303 shares of common stock reserved for future
issuance upon exercise of stock options granted after
March 15, 2007 under our 2004 Stock Incentive Plan, as
amended and restated upon the closing of this offering;
1,300,000 shares of common stock reserved for future
issuance under our 2005 Employee Stock Purchase Plan upon the
closing of this offering; and
500,000 shares of common stock reserved for future issuance
under our 2005 Non-Employee Directors Stock Option Plan
upon the closing of this offering.
no exercise of the outstanding options or warrants described
above;
the conversion of all outstanding shares of our preferred stock
into an aggregate of 9,043,179 shares of our common stock
upon the closing of this offering; and
no exercise by the underwriters of their option to purchase up
to shares
of our common stock to cover over-allotments.
4
Table of Contents
December 3,
December 3,
2003
2003
(inception) to
Three months ended
(inception) to
September 30,
Year ended September 30,
December 31
December 31,
2004
2005
2006
2005
2006
2006
(restated)
(in thousands except share and per share data)
$
$
$
$
$
$
580
2,573
5,960
923
2,493
11,606
193
517
1,450
395
1,264
3,424
773
3,090
7,410
1,318
3,757
15,030
(9
)
(182
)
(1
)
(190
)
(381
)
78
3
78
627
627
(773
)
(3,081
)
(7,933
)
(1,320
)
(3,567
)
(15,354
)
1
2
10
3
13
$
(774
)
$
(3,083
)
$
(7,943
)
$
(1,323
)
$
(3,567
)
$
(15,367
)
$
(0.10
)
$
(0.41
)
$
(1.05
)
$
(0.17
)
$
(0.47
)
7,500,000
7,512,442
7,562,779
7,560,408
7,564,820
$
(0.68
)
$
(0.27
)
11,647,415
13,211,736
As of December 31,
2006
Pro Forma
Balance sheet data:
Actual
as Adjusted
(in thousands)
$
14,563
11,902
15,843
(15,367
)
13,160
5
Table of Contents
continue our ongoing Phase III clinical trials of
VIAject
tm
in which we plan to treat 400 patients with Type 1 diabetes
and 400 patients with Type 2 diabetes over a six-month
period;
continue our ongoing Phase I clinical trial of
VIAtab
tm
and subsequently initiate Phase II and Phase III
clinical trials;
continue the research and development of our preclinical product
candidates,
VIAmass
tm
and
VIAcal
tm
,
and advance those product candidates into clinical development;
seek regulatory approvals for our product candidates that
successfully complete clinical trials;
establish a sales and marketing infrastructure to commercialize
products for which we may obtain regulatory approval; and
add operational, financial and management information systems
and personnel, including personnel to support our product
development efforts and our obligations as a public company.
6
Table of Contents
the progress and results of our clinical trials of
VIAject
tm
and
VIAtab
tm
;
the scope, progress, results and costs of preclinical
development, laboratory testing and clinical trials for
VIAmass
tm
,
VIAcal
tm
and other potential product candidates;
the costs, timing and outcome of regulatory review of our
product candidates;
the costs of commercialization activities, including product
marketing, sales and distribution;
the costs of preparing, filing and prosecuting patent
applications and maintaining, enforcing and defending
intellectual property-related claims;
the emergence of competing technologies and products and other
adverse market developments;
the effect on our product development activities of actions
taken by the FDA or other regulatory authorities;
our degree of success in commercializing
VIAject
tm
and our other product candidates; and
our ability to establish and maintain collaborations and the
terms and success of the collaborations, including the timing
and amount of payments that we might receive from potential
strategic collaborators.
7
Table of Contents
successful completion of preclinical development and clinical
trials;
our ability to identify and enroll patients who meet clinical
trial eligibility criteria;
receipt of marketing approvals from the FDA and similar
regulatory authorities outside the United States;
establishing commercial manufacturing arrangements with
third-party manufacturers;
launching commercial sales of the products, whether alone or in
collaboration with others;
acceptance of the products by patients, the medical community
and third-party payors in the medical community;
competition from other products; and
a continued acceptable safety profile of the products following
approval.
8
Table of Contents
ultimately be unable to commercialize our product
candidates.
our preclinical tests or clinical trials may produce negative or
inconclusive results, and we may decide, or regulators may
require us, to conduct additional preclinical testing or
clinical trials or we may abandon projects that we had expected
to be promising;
the number of patients required for our clinical trials may be
larger than we anticipate, enrollment in our clinical trials may
be slower than we currently anticipate, or participants may drop
out of our clinical trials at a higher rate than we anticipate,
any of which would result in significant delays;
our third-party contractors may fail to comply with regulatory
requirements or meet their contractual obligations to us in a
timely manner;
we might have to suspend or terminate our clinical trials if the
participants are being exposed to unacceptable health risks;
regulators or institutional review boards may require that we
hold, suspend or terminate clinical research for various
reasons, including noncompliance with regulatory requirements;
the cost of our clinical trials may be greater than we
anticipate;
the supply or quality of our product candidates or other
materials necessary to conduct our clinical trials may be
insufficient or inadequate; and
the effects of our product candidates may not be the desired
effects or may include undesirable side effects or the product
candidates may have other unexpected characteristics.
be delayed in obtaining marketing approval for our product
candidates;
not be able to obtain marketing approval;
9
Table of Contents
obtain approval for indications that are not as broad as
intended; or
have the product removed from the market after obtaining
marketing approval.
a change in the labeling statements or withdrawal of FDA or
other regulatory approval of the product;
a change in the way the product is administered; or
the need to conduct additional clinical trials.
healthcare payors and others in the medical
community.
the willingness and ability of patients and the healthcare
community to adopt our technology;
the ability to manufacture our product candidates in sufficient
quantities with acceptable quality and to offer our product
candidates for sale at competitive prices;
the perception of patients and the healthcare community,
including third-party payors, regarding the safety, efficacy and
benefits of our product candidates compared to those of
competing products or therapies;
10
Table of Contents
the convenience and ease of administration of our product
candidates relative to existing treatment methods;
the pricing and reimbursement of our product candidates relative
to existing treatments; and
marketing and distribution support for our product candidates.
purchased or used and our revenues and prospects for
profitability will suffer.
a covered benefit under its health plan;
safe, effective and medically necessary;
appropriate for the specific patient;
cost-effective; and
neither experimental nor investigational.
11
Table of Contents
commercialization of any products that we may
develop.
decreased demand for any product candidates or products that we
may develop;
injury to our reputation;
withdrawal of clinical trial participants;
costs to defend the related litigation;
substantial monetary awards to trial participants or patients;
loss of revenue; and
the inability to commercialize any products that we may develop.
12
Table of Contents
significantly greater financial, technical and human resources
than we have and may be better equipped to discover, develop,
manufacture and commercialize product candidates;
more extensive experience in preclinical testing and clinical
trials, obtaining regulatory approvals and manufacturing and
marketing pharmaceutical products;
product candidates that have been approved or are in late-stage
clinical development; or
collaborative arrangements in our target markets with leading
companies and research institutions.
13
Table of Contents
sufficient quantities of our product candidates or such
quantities at an acceptable cost, and clinical development and
commercialization of our product candidates could be delayed,
prevented or impaired.
reliance on the third party for regulatory compliance and
quality assurance;
the possible breach of the manufacturing agreement by the third
party because of factors beyond our control; and
the possible termination or nonrenewal of the agreement by the
third party, based on its own business priorities, at a time
that is costly or inconvenient for us.
14
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commercialization of our products could be delayed, producing
additional losses and depriving us of potential product
revenue.
receiving patent protection for our product candidates;
maintaining our trade secrets;
15
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not infringing on the proprietary rights of others; and
preventing others from infringing our proprietary rights.
patents that would be expensive and
time-consuming.
16
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17
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18
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experience unanticipated problems with our products, when and if
any of them are approved.
restrictions on such products manufacturers or
manufacturing processes;
restrictions on the marketing of a product;
warning letters;
withdrawal of the products from the market;
refusal to approve pending applications or supplements to
approved applications that we submit;
recall of products;
fines, restitution or disgorgement of profits or revenue;
suspension or withdrawal of regulatory approvals;
refusal to permit the import or export of our products;
product seizure;
injunctions; or
imposition of civil or criminal penalties.
19
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20
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establish a classified board of directors such that not all
members of the board are elected at one time;
allow the authorized number of our directors to be changed only
by resolution of our board of directors;
limit the manner in which stockholders can remove directors from
the board;
establish advance notice requirements for stockholder proposals
that can be acted on at stockholder meetings and nominations to
our board of directors;
require that stockholder actions must be effected at a duly
called stockholder meeting and prohibit actions by our
stockholders by written consent;
limit who may call stockholder meetings;
authorize our board of directors to issue preferred stock
without stockholder approval, which could be used to institute a
poison pill that would work to dilute the stock
ownership of a potential hostile acquirer, effectively
preventing acquisitions that have not been approved by our board
of directors; and
require the approval of the holders of at least 75% of the votes
that all our stockholders would be entitled to cast to amend or
repeal certain provisions of our charter or bylaws.
21
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22
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results of clinical trials of our product candidates or those of
our competitors;
regulatory or legal developments in the United States and other
countries;
variations in our financial results or those of companies that
are perceived to be similar to us;
developments or disputes concerning patents or other proprietary
rights;
the recruitment or departure of key personnel;
changes in the structure of healthcare payment systems;
market conditions in the pharmaceutical and biotechnology
sectors and issuance of new or changed securities analysts
reports or recommendations;
general economic, industry and market conditions; and
the other factors described in this Risk Factors
section.
dividends in the foreseeable future.
significantly, even if our business is doing well.
23
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24
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our ability to secure FDA approval for our product candidates
under Section 505(b)(2) of the FFDCA;
our ability to market, commercialize and achieve market
acceptance for product candidates developed using our
VIAdel
tm
technology;
the progress or success of our research, development and
clinical programs, the initiation and completion of our clinical
trials, the timing of the interim analyses and the timing or
success of our product candidates, particularly
VIAject
tm
and
VIAtab
tm
;
our ability to secure patents for
VIAject
tm
and our other product candidates;
our ability to protect our intellectual property and operate our
business without infringing upon the intellectual property
rights of others;
our estimates for future performance;
our ability to enter into collaboration arrangements for the
commercialization of our product candidates;
the rate and degree of market acceptance and clinical utility of
our products;
our commercialization, marketing and manufacturing capabilities
and strategy; and
our estimates regarding anticipated operating losses, future
revenues, capital requirements and our needs for additional
financing.
25
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| approximately $ million to fund clinical development of VIAject tm ; and | |
| the balance, if any, to fund research and development, working capital, capital expenditures and other general corporate purposes, which may include acquiring additional technologies. |
26
on an actual basis;
on a pro forma basis to give effect to the conversion of all
outstanding shares of our preferred stock into an aggregate of
9,043,179 shares of our common stock upon the closing of
this offering; and
on a pro forma as adjusted basis to give further effect to the
issuance and sale by us
of shares
of common stock in this offering at an assumed initial public
offering price of $ per share,
which is the midpoint of the price range listed on the cover
page of this prospectus, after deducting estimated underwriting
discounts and commissions and offering expenses to be paid by us.
As of December 31, 2006
Pro Forma
Actual
Pro Forma
as Adjusted
(unaudited)
(unaudited)
(in thousands, except share data)
$
14,563
an 8% non-cumulative dividend
6
62
76
28,383
(15,367
)
$
13,160
(1)
A $1.00 increase (decrease) in the
assumed initial public offering price of
$ per share would increase
(decrease) each of cash and cash equivalents and marketable
securities, additional paid-in capital and total capitalization
by approximately $ million,
assuming that the number of shares offered by us, as set forth
on the cover page of this prospectus, remains the same and after
deducting estimated underwriting discounts and commissions.
1,562,697 shares of common stock issuable upon the exercise
of stock options outstanding as of December 31, 2006, at a
weighted average price of $3.85 per share;
27
Table of Contents
5,251,849 shares of common stock issuable upon the exercise
of warrants outstanding as of December 31, 2006, with a
weighted average exercise price of $3.78 per share;
3,137,303 shares of common stock reserved for future
issuance upon exercise of stock options granted after
December 31, 2006 under our 2004 Stock Incentive Plan, as
amended and restated upon the closing of this offering;
1,300,000 shares of common stock reserved for future
issuance under our 2005 Employee Stock Purchase Plan upon the
closing of this offering; and
500,000 shares of common stock reserved for future issuance
under our 2005 Non-Employee Directors Stock Option Plan
upon the closing of this offering.
28
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29
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Shares Purchased
Total Consideration
Average Price
Number
Percent
Amount
Percent
Per Share
%
$
%
$
%
$
%
$
100
%
$
100
%
1,562,697 shares of common stock issuable upon the exercise
of stock options outstanding as of December 31, 2006, at a
weighted average exercise price of $3.85 per share;
5,251,849 shares of common stock issuable upon the exercise
of warrants outstanding as of December 31, 2006, at a
weighted average exercise price of $3.78 per share;
3,137,303 shares of common stock reserved for future
issuance upon exercise of stock options granted after
December 31, 2006 under our 2004 Stock Incentive Plan, as
amended and restated effective upon the closing of this offering;
1,300,000 shares of common stock reserved for future
issuance under our 2005 Employee Stock Purchase Plan upon the
closing of this offering; and
500,000 shares of common stock reserved for future issuance
under our 2005 Non-Employee Directors Stock Option Plan
upon the closing of this offering.
the percentage of shares of common stock held by existing
stockholders will decrease to approximately % of the
total number of shares of our common stock outstanding after
this offering; and
the pro forma as adjusted number of shares held by new investors
will be increased
to ,
or approximately %, of the total pro forma as
adjusted number of shares of our common stock outstanding after
this offering.
30
Table of Contents
32
December 3,
December 3,
2003
2003
(inception) to
(inception) to
September 30,
Year ended September 30,
Three months ended December 31
December 31,
Statement of operations
data:
2004
2005
2006
2005
2006
2006
(restated)
$
$
$
$
$
$
580
2,573
5,960
923
2,493
11,606
193
517
1,450
395
1,264
3,424
773
3,090
7,410
1,318
3,757
15,030
(9
)
(182
)
(1
)
(190
)
(381
)
78
3
78
627
627
(773
)
(3,081
)
(7,933
)
(1,320
)
(3,567
)
(15,354
)
1
2
10
3
13
$
(774
)
$
(3,083
)
$
(7,943
)
$
(1,323
)
$
(3,567
)
$
(15,367
)
$
(0.10
)
$
(0.41
)
$
(1.05
)
$
(0.17
)
$
(0.47
)
7,500,000
7,512,442
7,562,779
7,560,408
7,564,820
$
(0.68
)
$
(0.27
)
11,647,415
13,211,736
31
Table of Contents
As of
As of September 30,
December 31,
2004
2005
2006
2006
(restated)
(in thousands)
$
221
$
368
$
17,539
$
14,563
194
(98
)
15,307
11,902
611
1,195
18,659
15,843
(774
)
(3,857
)
(11,800
)
(15,367
)
581
654
16,348
13,160
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
33
Table of Contents
external research and development expenses incurred under
agreements with third-party contract research organizations and
investigative sites, third-party manufacturing organizations and
consultants;
employee-related expenses, which include salaries and benefits
for the personnel involved in our preclinical and clinical drug
development and manufacturing activities; and
facilities, depreciation and other allocated expenses, which
include direct and allocated expenses for rent and maintenance
of facilities, depreciation of leasehold improvements and
equipment and laboratory and other supplies.
December 3,
December 3,
2003
2003
(inception) to
Year ended
Three months ended
(inception) to
September 30,
September 30,
December 31
December 31,
2004
2005
2006
2005
2006
2006
(restated)
(in thousands)
$
495
$
1,214
$
1,561
$
291
$
302
$
3,572
13
241
1,264
53
598
2,116
72
1,118
3,135
579
1,593
5,918
$
580
$
2,573
$
5,960
$
923
$
2,493
$
11,606
the progress and results of our clinical trials of
VIAject
tm
and
VIAtab
tm
;
the scope, progress, results and costs of preclinical
development, laboratory testing and clinical trials for
VIAmass
tm
,
VIAcal
tm
and other potential product candidates;
the costs, timing and outcome of regulatory review of our
product candidates;
the costs of commercialization activities, including product
marketing, sales and distribution;
the costs of preparing, filing and prosecuting patent
applications and maintaining, enforcing and defending
intellectual property-related claims;
the emergence of competing technologies and products and other
adverse market developments;
the effect on our product development activities of actions
taken by the FDA or other regulatory authorities;
our degree of success in commercializing
VIAject
tm
and our other product candidates; and
34
Table of Contents
our ability to establish and maintain collaborations and the
terms and success of those collaborations, if any, including the
timing and amount of payments that we might receive from
potential strategic partners.
we expect to incur increased general and administrative expenses
to support our research and development activities, which we
expect to expand as we continue the development of our product
candidates;
we expect to incur additional expenses as we advance discussions
and negotiations in connection with strategic collaborations for
the commercialization of our product candidates;
we may also begin to incur expenses related to the sales and
marketing of our product candidates as we approach the
commercial launch of any product candidates that receive
regulatory approval; and
we expect our general and administrative expenses to increase as
a result of increased payroll, expanded infrastructure and
higher consulting, legal, accounting and investor relations fees
associated with being a public company.
35
Table of Contents
fees paid to contract research organizations in connection with
preclinical and toxicology studies and clinical trials;
fees paid to investigative sites in connection with clinical
trials;
fees paid to contract manufacturers in connection with the
production of clinical trial materials; and
professional service fees.
36
Table of Contents
remain private;
go public;
undertake a strategic sale; and
dissolve.
our actual operating performance;
a review of our progress in our product research and development
and clinical trial activities and of other events that may or
may not lead to the commercialization of our products;
our projected operating performance and the risks inherent in
our business including the risks related to receiving FDA
approvals for our product candidates;
issuances of preferred stock, common stock and warrants,
including the prices paid and the rights and preferences
thereof; and
the likelihood of achieving liquidity through an initial public
offering or a sale of our business and the proceeds that would
be allocated to holders of our common stock and the amounts
contractually due to holders of our preferred stock.
the potential of an initial public offering at various stages of
our product development and stage of clinical trials;
the potential for collaboration with partners or our sale as
part of the process of commercializing our product
candidates; and
the need for and probability of securing the funding required to
complete our clinical trials and achieve commercialization.
37
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38
Table of Contents
39
Table of Contents
40
Table of Contents
41
Table of Contents
the progress and results of our clinical trials of
VIAject
tm
and
VIAtab
tm
;
the scope, progress, results and costs of preclinical
development and laboratory testing and clinical trials for
VIAmass
tm
,
VIAcal
tm
and other potential product candidates;
the costs, timing and outcome of regulatory reviews of our
product candidates;
the costs of commercialization activities, including product
marketing, sales and distribution;
the costs of preparing, filing and prosecuting patent
applications and maintaining, enforcing and defending
intellectual property-related claims;
the emergence of competing technologies and products and other
adverse market developments;
the effect on our product development activities of actions
taken by the FDA or other regulatory authorities;
our degree of success in commercializing
VIAject
tm
and our other product candidates; and
our ability to establish and maintain collaborations and the
terms and success of those collaborations, including the timing
and amount of payments that we might receive from potential
strategic partners.
Less than
More than
Total
1 Year
1-3 Years
4-5 Years
5 Years
$
266
$
76
$
190
$
$
$
266
$
76
$
190
$
$
42
Table of Contents
43
Table of Contents
44
Table of Contents
Obtain Regulatory Approval for
VIAject
tm
. Our
current focus is to complete the clinical development of
VIAject
tm
and seek regulatory approval for this product candidate in the
major world markets. If our current Phase III trials for
VIAject
tm
are successful, we expect to submit our NDA to the FDA in 2008.
Commercialize our Product Candidates Through Strategic
Collaborations.
Our product candidates target
large primary care markets. To maximize the commercial potential
of our product candidates, we intend to:
Self-fund Clinical Trial Programs.
We
intend to fund our clinical trial programs into late stage or
through completion of clinical development by ourselves. By
retaining the rights to our product candidates through most or
all of the clinical development process, we believe that we will
be able to secure more favorable economic terms when we do seek
a commercialization partner.
Partner Late-stage Programs with Major Pharmaceutical
Companies.
We intend to selectively enter into
strategic arrangements with leading pharmaceutical or
biotechnology companies for the commercialization of our product
candidates late in or upon completion of clinical development.
Because we are focusing on therapeutic indications in large
markets, we believe that these larger companies have the
marketing, sales and financial resources to maximize the
commercial potential of our products.
Retain Co-commercialization Rights.
In
entering into collaborative relationships, our goal will be to
retain co-promotion or co-commercialization rights in the United
States and potentially other markets. This will allow us to
begin to develop our own specialized sales and marketing
organization.
Employ our Proprietary
VIAdel
tm
Technology to Reformulate Approved Peptide Hormone Drugs
that Address Large Markets.
Our
VIAdel
tm
technology consists of techniques that we have developed to
study the interaction between peptide hormones and small
molecules. We use these techniques to reformulate existing
peptide drugs with small molecule ingredients so as to improve
their therapeutic effect and their method of administration. To
date, we have developed all of our product candidates utilizing
our proprietary
VIAdel
tm
technology. We are focused on diabetes and osteoporosis, both of
which are indications that represent large markets with
significant unmet medical needs. We intend to continue to employ
our proprietary
VIAdel
tm
technology to develop additional peptide hormone product
candidates that address large markets.
Focus on the Section 505(b)(2) Regulatory Approval
Pathway.
Using our
VIAdel
tm
technology, we seek to reformulate existing drugs with
ingredients that are generally regarded as safe by the FDA. We
believe that this approach to drug development will allow us to
use the abbreviated development pathway of
Section 505(b)(2) of the FFDCA, which can result in
substantially less time and cost in bringing a new drug to
market. We intend to continue to focus our efforts on
reformulating new product candidates for which we will be able
to seek regulatory approval pursuant to Section 505(b)(2)
NDAs.
Aggressively Continue the Development of our Pipeline of
Product Candidates.
In addition to our
Phase III clinical trials for
VIAject
tm
,
we are currently conducting a Phase I clinical trial of
VIAtab
tm
,
our oral insulin
45
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product candidate. We are also conducting preclinical studies on
VIAmass
tm
and
VIAcal
tm
,
our osteoporosis product candidates. Our goal is to submit INDs
and commence Phase I clinical trials for these preclinical
product candidates in 2008.
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Better Management of Blood Glucose
Levels.
Based on our clinical trials to date, we
believe that
VIAject
tm
can improve the management of blood glucose levels in patients
with diabetes. Specific observations include the following:
In our Phase I clinical trial in volunteers without
diabetes, and in our Phase II clinical trial in patients
with Type 1 diabetes,
VIAject
tm
reached the blood and exerted blood glucose lowering activity
more rapidly than the rapid-acting insulin analog,
Humalog
®
,
and the regular human recombinant insulin,
Humulin
®
R. Accordingly, we believe
VIAject
tm
more closely mimics the first-phase insulin release of healthy
individuals at the beginning of a meal, which reduces the risk
of hyperglycemia.
Our clinical trials also indicate that
VIAject
tm
may allow for a lower dose of insulin to adequately cover a meal
than
Humulin
®
R and
Humalog
®
.
As a result, we believe the use of
VIAject
tm
may reduce the amount of insulin that remains in the blood
several hours after a meal. This may, in turn, reduce the risk
of hypoglycemia. Consequently, we believe that
VIAject
tm
may be safer than any other meal-time insulin products, and
patients using
VIAject
tm
may have fewer hypoglycemic episodes resulting in fewer
emergency room visits.
Commercialization of
VIAject
tm
. Our
VIAject
tm
technologys ability to stabilize delicate peptides to
yield a longer shelf life may provide a commercialization
advantage. Unlike currently approved injectable insulin
products,
VIAject
tm
does not require a refrigerated supply line. As a result, we
believe this will increase our market reach and collaboration
opportunities with pharmaceutical partners who lack refrigerated
supply lines.
maximum GIR;
time to maximum GIR; and
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time to 50% of maximum GIR.
Minutes to 50% of
Maximum GIR
Humulin
®
R 12 IU
66
Humalog
®
12 IU
51
VIAject
tm
12 IU
33
VIAject
tm
6 IU
35
VIAject
tm
3 IU
31
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Pharmacokinetic and
VIAject
TM
Humulin
®
R
p-Value
99
154
0.0015
33
97
<0.0001
8
32
<0.0001
patients receive injections of
Humulin
®
R prior to a standardized meal at the dose that the patient
determines on the first treatment day is the insulin requirement
to cover the standard meal;
patients receive injections of
VIAject
tm
prior to a standardized meal at the dose that the patient
determines on the first treatment day is the insulin requirement
to cover the standard meal;
patients receive injections of
Humalog
®
prior to a standardized meal at the dose that the patient
determines on the first treatment day is the insulin requirement
to cover the standard meal; and
patients receive injections of
VIAject
tm
prior to a standardized meal at 50% of the dose that the patient
determines on the first treatment day is the insulin requirement
to cover the standard meal.
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Hypoglycemic Events
per Treatment
Humulin
®
R
Humalog
®
VIAject
tm
0
7
4
13
11
4
13
18
8
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completion of extensive nonclinical laboratory tests, animal
studies and formulation studies, all performed in accordance
with the FDAs Good Laboratory Practice, or GLP,
regulations;
submission to the FDA of an IND which must become effective
before human clinical trials may begin;
for some products, performance of adequate and well-controlled
human clinical trials in accordance with the FDAs
regulations, to establish the safety and efficacy of the product
candidate for each proposed indication;
satisfactory completion of an FDA preapproval inspection of the
manufacturing facilities at which the product is produced to
assess compliance with cGMP regulations; and
FDA review and approval of the NDA prior to any commercial
marketing, sale or shipment of the drug.
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Phase I clinical trials typically involve the initial
introduction of the product candidate into healthy human
volunteers. In Phase I clinical trials, the product
candidate is typically tested for safety, dosage tolerance,
absorption, metabolism, distribution, excretion and
pharmacodynamics.
Phase II clinical trials are conducted in a limited patient
population to gather evidence about the efficacy of the product
candidate for specific, targeted indications; to determine
dosage tolerance and optimal dosage; and to identify possible
adverse effects and safety risks.
Phase III clinical trials are undertaken to evaluate
clinical efficacy and to test for safety in an expanded patient
population at geographically dispersed clinical trial sites. The
size of Phase III clinical trials depends upon clinical and
statistical considerations for the product candidate and
disease, but sometimes can include several thousand patients.
Phase III clinical trials are intended to establish the
overall risk-benefit ratio of the product candidate and provide
an adequate basis for physician labeling.
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record-keeping requirements;
reporting of adverse experiences with the drug;
providing the FDA with updated safety and efficacy information;
reporting on advertisements and promotional labeling;
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drug sampling and distribution requirements; and
complying with electronic record and signature requirements.
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three pending United States patent applications and
corresponding foreign and international patent applications
relating to our
VIAdel
tm
,
VIAject
tm
and
VIAtab
tm
technology;
one pending United States patent application and corresponding
foreign patent applications relating to our technology for
enhancing delivery of drugs in a form for absorption through the
skin into the blood, a process known as transdermal drug
delivery;
two pending United States patent applications and corresponding
foreign patent applications relating to sublingual
and/or
oral
delivery devices that can be used to deliver the
VIAdel
tm
product; and
one pending United States patent application and a corresponding
international patent application relating to a device for mixing
injectable drugs.
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II-4
69
Chairman, President and Chief
Executive Officer
55
Chief Financial Officer and
Treasurer
45
Vice President, Research
41
Vice President, Operations
72
Vice President, Patent and
Intellectual Property
47
Chief Medical Officer
70
Corporate Secretary and General
Counsel
34
Director
31
Director
64
Director
59
Director
75
Director
48
Director
47
Director
52
Director
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our research and development programs;
the design and implementation of our clinical trials;
our patent and publication strategies;
market opportunities from a clinical perspective;
commercialization strategies related to our technology;
new technologies relevant to our research and development
programs; and
specific scientific and technical issues relevant to our
technology.
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Professor at Johns Hopkins
University
Consultant, former Vice President
of Research at Carter-Wallace, Inc.
President and Medical Director of
Institute for Clinical Research and Development
Chief Executive Officer and Head
of Business Development for the Profil Institute for Metabolic
Research, Ltd.
Director of the Cardiovascular
Center at the New York Presbyterian Hospital-Cornell Medical
Center
Medical Director of the Diabetes
Control Foundation, Diabetes Care & Information Center
Professor of Medicine at the
University of California, San Diego
Founder of Institute for Clinical
Research and Development
the class I directors will be David Kroin, Dr. Albert
Cha and Dr. Samuel Wertheimer, and their term will expire at the
annual meeting of stockholders to be held in 2008;
the class II directors will be Dr. Charles Sanders,
Dr. Daniel Lorber and Paul Sekhri, and their term will
expire at the annual meeting of stockholders to be held in
2009; and
the class III directors will be Dr. Solomon
S. Steiner, Dr. Ira Lieberman and Scott Weisman, and
their term will expire at the annual meeting of stockholders to
be held in 2010.
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evaluating the independent registered public accounting
firms qualifications, independence and performance;
engaging the independent registered public accounting firm;
approving the retention of the independent registered public
accounting firm to perform any proposed permissible non-audit
services;
monitoring the rotation of partners of the independent
registered public accounting firm on our engagement team as
required by law;
reviewing our financial statements;
reviewing our critical accounting policies and estimates;
discussing with management and the independent registered public
accounting firm the results of the annual audit and the review
of our quarterly unaudited financial statements;
reviewing and evaluating, at least annually, the performance of
the audit committee and its members, including compliance of the
audit committee with its charter;
meeting regularly with the independent registered public
accounting firm and our internal financial personnel who have
unrestricted access to the audit committee; and
functioning independently and, when applicable, functioning in
compliance with the requirements of Sarbanes-Oxley Act of 2002
and the Securities and Exchange Commission.
reviewing and recommending policies relating to compensation and
benefits of our officers and employees;
reviewing and approving corporate goals and objectives relevant
to compensation of our chief executive officer and other senior
officers, evaluating the performance of these officers in light
of those goals and objectives, and setting compensation based on
such evaluations;
administering our benefit plans and the issuance of stock
options and other awards under our stock plans;
reviewing and establishing appropriate insurance coverage for
our directors and executive officers;
recommending the type and amount of compensation to be paid or
awarded to members of our board of directors; and
reviewing and evaluating, at least annually, the performance of
the compensation committee and its members, including compliance
of the compensation committee with its charter.
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planning for succession with respect to the position of chief
executive officer and other senior executives;
reviewing and recommending nominees for election as directors;
assessing the performance of the board of directors and
monitoring committee evaluations;
suggesting, as appropriate, ad hoc committees of the board of
directors;
developing guidelines for board composition; and
reviewing and evaluating, at least annually, the performance of
the nominating and corporate governance committee and its
members, including compliance of the nominating and corporate
governance committee with its charter.
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Long-Term
Compensation
Annual Compensation(1)
Securities
All Other
Year
Salary
Bonus
Underlying Options
Compensation
2006
$
250,000
(2)
$
400,000
(3)
75,000
Chairman of the Board of
Directors and President
2006
150,000
11,250
15,000
2006
100,000
18,750
20,000
(1)
In accordance with the rules of the
Securities and Exchange Commission, the compensation described
in this table does not include medical, group life insurance or
other benefits which are available generally to all of our
salaried employees and certain perquisites and other personal
benefits received which do not exceed the lesser of $50,000 or
10% of any named executive officers salary and bonus
disclosed in this table.
(2)
Includes $62,500 that was earned
during the year ended September 30, 2006 but has been
voluntarily deferred by Dr. Steiner.
(3)
Includes $250,000 that was earned
during the year ended September 30, 2006 but has been
voluntarily deferred by Dr. Steiner. Pursuant to our
employment agreement with Dr. Steiner, SV is entitled to receive
this bonus.
Potential Realizable
Value at
Assumed Annual
Percentage of
Rates of
Number of
Total Options
Stock Price
Securities
Granted to
Exercise
Appreciation for
Underlying Options
Employees in
Price Per
Expiration
Option Term(1)
Granted
Fiscal Year
Share
Date
5%
10%
75,000
11.5
%
$
4.00
12/15/2013
15,000
2.3
%
$
4.00
12/15/2013
20,000
3.1
%
$
4.00
12/15/2013
(1)
The dollar amounts under these
columns are the result of calculations at rates set by the
Securities and Exchange Commission and, therefore, are not
intended to forecast possible future appreciation, if any, in
the price of the underlying common stock. The potential
realizable values are calculated using the assumed initial
public offering price of $ per
share and assuming that the market price appreciates from this
price at the indicated rate for the entire term of each option
and that each option is exercised and sold on the last day of
its term at the assumed appreciated price.
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Fiscal Year and Fiscal Year-End Option Values
Number of Securities
Value of Unexercised
Underlying Unexercised
In-the-Money
Shares
Options at
Options at
Acquired
September 30,
September 30,
on
Value
2006
2006
Exercise (#)
Realized
Exercisable
Unexercisable
Exercisable
Unexercisable
$
18,750
131,250
15,000
20,000
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annual base salary earned through the termination date;
in the event Mr. Steiner satisfied the performance criteria
for an annual bonus prior to termination, a portion of the
annual bonus based on the number of days worked during the year;
if the performance criteria were not achievable, an average of
the bonus paid to Mr. Steiner over the last three fiscal years,
or the average annual bonus;
any compensation previously deferred by Mr. Steiner and any
accrued paid time-off;
annual base salary for a period of 18 months following the
date of termination, subject to Mr. Steiner entering into a
release agreement with us;
health insurance and, under certain circumstances, life,
disability and other insurance benefits for a period of
18 months or until Mr. Steiner qualifies for similar
benefits from another employer;
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150% of the average annual bonus;
acceleration of all outstanding options; and
extension of the exercisability of options.
any transaction that results in a person or group acquiring
beneficial ownership of 50% or more of our voting stock, other
than by us, one of our employee benefit plans, Dr. Steiner
or any other entity in which Dr. Steiner holds a majority
of the beneficial interests;
our merger, consolidation or reorganization in which our
stockholders immediately prior to the transaction hold less than
50% of the voting power of the surviving entity following the
transaction, subject to certain limitations;
a transaction in which we sell all or substantially all of our
assets, subject to certain limitations;
our liquidation; or
any reorganization of our board of directors in which
Messrs. Steiner, Lieberman, Lorber, Weisman and Sekhri
cease for any reason to constitute a majority of our board of
directors.
annual base salary earned through the termination date;
in the event Mr. Steiner satisfied the performance criteria
for an annual bonus prior to termination, a portion of the
annual bonus based on the number of days worked during the year;
if the performance criteria were not achievable, the average
annual bonus;
any compensation previously deferred by Mr. Steiner and any
accrued paid time-off;
annual base salary for a period of 18 months following the
date of termination, subject to Mr. Steiner entering into a
release agreement with us;
health insurance and, under certain circumstances, life,
disability and other insurance benefits for a period of
18 months or until Mr. Steiner qualifies for similar
benefits from another employer;
150% of the average annual bonus;
acceleration of all outstanding options; and
extension of the exercisability of options.
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74
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100,000 shares; or
1% of the total number of shares of our common stock outstanding
on that date.
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76
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for any breach of their duty of loyalty to us or our
stockholders;
for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law;
for any act related to unlawful stock repurchases, redemptions
or other distributions or payment of dividends; or
for any transaction from which the director derived an improper
personal benefit.
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Number of
Shares of Series A
Convertible
Aggregate
Preferred Stock
Purchase Price
20,000
$
100,000
Number of
Shares of
Series B
Convertible
Common Stock
Preferred Stock
Warrants
Issued in
Issued in
Number
Repayment
Repayment of the
Aggregate
of Units
of the Units
Units
Purchase Price
12
95,238
72,370
$
300,000
4
31,746
24,123
100,000
4
31,746
24,123
100,000
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Number of
Shares of
Series B
Warrants
Convertible
to Purchase
Aggregate
Preferred Stock
Common Stock
Purchase Price
1,776,650
1,350,051
$
7,000,000.00
1,505,178
1,155,334
5,930,400.00
17,665
1,853
69,600.00
1,185,717
901,024
4,671,724.98
443,957
337,378
1,749,190.58
146,976
111,649
579,085.44
38,071
28,930
150,000.00
(1)
Mr. Kroin, one our directors, is a co-founder and managing
director of Great Point Partners I, L.P. and may be deemed
to beneficially own these shares.
(2)
Dr. Cha, one of our directors, is a managing partner of
Vivo Ventures Fund V, L.P. and may be deemed to beneficially own
these shares.
(3)
Affiliate of Vivo Ventures Fund V, L.P.
(4)
Affiliate of OrbiMed Advisors, LLC. Mr. Wertheimer, one of
our directors, is a principal of OrbiMed Advisors, LLC and may
be deemed to beneficially own these shares.
Warrants
Warrants
to Purchase
to Purchase
Series A
Series B
Warrants
Convertible
Convertible
to Purchase
Preferred
Preferred
Common
Stock
Stock
Stock
Cash
22,360
59,650
45,328
$
699,500
(1)
33,540
89,475
67,991
(1)
Consists of $279,500 paid in connection with the Series A
convertible preferred stock financing, $70,000 paid in
connection with the Bridge financing and $350,000 paid in
connection with the Series B convertible preferred stock
financing. Does not include $15,000 paid as reimbursement for
expenses incurred in connection with the Series A
convertible preferred stock financing.
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Percentage of
Percentage of
Number of
Shares
Shares
Shares
Beneficially
Beneficially
Beneficially
Owned
Owned
Owned
Before Offering
After Offering
3,126,701
(1)
17.4
%
Greenwich, CT 06824
3,126,701
(2)
17.4
%
New York, NY 10017
2,680,030
(3)
15.0
%
Suite 201
Palo Alto, CA 94301
6,129,543
(4)
36.7
%
3,127,151
(5)
17.4
%
3,127,151
(6)
17.4
%
2,680,480
(7)
15.0
%
872,851
(8)
5.2
%
349,628
(9)
2.1
%
348,378
(10)
2.1
%
60,400
(11)
*
39,500
(12)
*
30,225
(13)
*
12,500
(14)
*
17,065,932
(15)
81.4
%
*
Less than 1% of outstanding shares.
(1)
Includes a warrant to purchase
1,350,051 shares of our common stock.
(2)
Consists of
(i) 1,185,717 shares of our common stock and a warrant
to purchase 901,024 shares of our common stock held by
Caduceus Private Investments II LP,
(ii) 443,957 shares of our common stock and a warrant
to purchase 337,378 shares of our common stock held by
Caduceus Private Investments II (QP), and (iii) LP,
146,976 shares of common stock and a warrant to purchase
111,649 shares of our common stock held by UBS Juniper
Crossover Fund, L.L.C.
(3)
Consists of
(i) 1,505,178 shares of our common stock and a warrant
to purchase 1,155,334 shares of our common stock held by
Vivo Ventures Fund V, L.P. and (ii) 17,665 shares
of our common stock and a warrant to purchase 1,853 shares
of our common stock held by Vivo Ventures V Affiliates Fund, L.P.
(4)
Consists of
(i) 5,971,993 shares of our common stock owned by SV,
of which Dr. Steiner is the sole managing member,
(ii) warrants to purchase 101,300 shares of our common
stock, and (iii) options to purchase 56,250 shares of
our common stock which are exercisable within 60 days of
March 15, 2007. Dr. Steiner and his wife jointly own
52% of SV with the balance split equally among their four adult
children, including Erik Steiner.
(5)
Includes (i) 1,776,650 shares
of our common stock and (ii) a warrant to purchase
1,350,051 shares of our common stock held by Great Point
Partners I, L.P. Mr. Kroin is a co-founder and
managing director of Great Point Partners I, L.P. and may
be deemed to beneficially own these shares.
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(6)
Includes
(i) 1,185,717 shares of our common stock and a warrant
to purchase 901,024 shares of our common stock held by
Caduceus Private Investments II LP,
(ii) 443,957 shares of our common stock and a warrant
to purchase 337,378 shares of our common stock held by
Caduceus Private Investments II (QP), LP, and
(iii) 146,976 shares of common stock and a warrant to
purchase 111,649 shares of our common stock held by UBS
Juniper Crossover Fund, L.L.C. Mr. Wertheimer is a
principal of OrbiMed Advisors, LLC and may be deemed to
beneficially own these shares.
(7)
Includes
(i) 1,505,178 shares of our common stock and a warrant
to purchase 1,155,334 shares of our common stock held by
Vivo Ventures Fund V, L.P. and (ii) 17,665 shares
of our common stock and a warrant to purchase 1,853 shares
of our common stock held by Vivo Ventures V Affiliates Fund,
L.P. Dr. Cha is a managing partner of Vivo Ventures Fund V,
L.P. and may be deemed to beneficially own these shares.
(8)
Includes warrants to purchase
337,228 shares of common stock, and options to purchase
38,750 shares of our common stock which are exercisable
within 60 days of March 15, 2007.
(9)
Includes options to purchase
5,000 shares of our common stock which are exercisable
within 60 days of March 15, 2007.
(10)
Includes options to purchase
3,750 shares of our common stock which are exercisable
within 60 days of March 15, 2007.
(11)
Includes options to purchase
30,000 shares of our common stock which are exercisable
within 60 days of March 15, 2007.
(12)
Includes options to purchase
35,000 shares of our common stock which are exercisable
within 60 days of March 15, 2007.
(13)
Includes options to purchase
30,000 shares of our common stock which are exercisable
within 60 days of March 15, 2007.
(14)
Includes options to purchase
12,500 shares of our common stock which are exercisable
within 60 days of March 15, 2007.
(15)
Includes warrants to purchase
4,295,817 shares of common stock, and options to purchase
299,375 shares of our common stock which are exercisable
within 60 days of March 15, 2007.
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7,575,063 shares of common stock outstanding held by 18
stockholders of record;
569,000 shares of Series A convertible preferred stock
that are convertible into 2,845,000 shares of common
stock; and
6,198,179 shares of Series B convertible preferred
stock that are convertible into 6,198,179 shares of common
stock;
options to purchase 1,652,697 shares of common stock at a
weighted average exercise price of $4.13 per share;
warrants to purchase an aggregate of 4,823,224 shares of
common stock at an exercise price of $3.94 per share;
warrants to purchase an aggregate of 149,125 shares of
Series B convertible preferred stock at an exercise price
of $3.94 per share; and
warrants to purchase an aggregate of 55,900 shares of
Series A convertible preferred stock at an exercise price
of $5.00 per share.
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1% of the number of shares of our common stock then outstanding,
which will equal
approximately shares
immediately after the offering; and
the average weekly trading volume of our common stock on the
Nasdaq Global Market during the four calendar weeks preceding
the date of filing of a Notice of Proposed Sale of Securities
Pursuant to Rule 144 with respect to the sale.
the person is not our affiliate and has not been our affiliate
at any time during the three months preceding the sale; and
the person has beneficially owned the shares proposed to be sold
for at least two years, including the holding period of any
prior owner other than our affiliates.
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Number of
Shares
Per
Total
Share
Full Exercise
$
$
$
$
$
$
$
$
$
90
Table of Contents
offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any
shares of common stock or any securities convertible into or
exercisable or exchangeable for shares of common stock, except
that under certain circumstances they may make gifts and
testamentary disposition;
file any registration statement with the Securities and Exchange
Commission relating to the offering of any shares of common
stock or any securities convertible into or exercisable or
exchangeable for common stock, except we may file a
Form S-8
under certain circumstances; or
enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences
of ownership of the common stock.
the sale of shares to the underwriters; or
transactions by any person other than us relating to shares of
common stock or other securities acquired in open market
transactions after the completion of the offering of the shares.
during the last 17 days of the 180 day restricted
period we issue an earnings release or material event relating
to us occurs, or
prior to the expiration of the 180 day restricted period,
we announce that we will release earnings results during the
16 day period beginning on the last day of the 180 day
period,
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as to which the date is March 21, 2007
F-2
Table of Contents
(A Development Stage Company)
F-3
Table of Contents
December 3,
December 3,
2003
2003
(inception) to
(inception) to
September 30,
Year ended September 30,
Three months ended December 31
December 31,
2004
2005
2006
2005
2006
2006
(restated)
(unaudited)
(unaudited)
(unaudited)
$
$
$
$
$
$
580
2,573
5,960
923
2,493
11,606
193
517
1,450
395
1,264
3,424
773
3,090
7,410
1,318
3,757
15,030
(9
)
(182
)
(1
)
(190
)
(381
)
78
3
78
627
627
(773
)
(3,081
)
(7,933
)
(1,320
)
(3,567
)
(15,354
)
1
2
10
3
13
$
(774
)
$
(3,083
)
$
(7,943
)
$
(1,323
)
$
(3,567
)
$
(15,367
)
$
(0.10
)
$
(0.41
)
$
(1.05
)
$
(0.17
)
$
(0.47
)
7,500,000
7,512,442
7,562,779
7,560,408
7,564,820
$
(0.68
)
$
(0.27
)
11,647,415
13,211,736
F-4
Table of Contents
Series A preferred
Series B preferred
Common stock
stock
stock
Deficit accumulated
$.01 Par Value
$.01 Par Value
$.01 Par Value
Additional
during the
Total stockholders
Shares
Amount
Shares
Amount
Shares
Amount
paid-in capital
development stage
equity
September 30, 2004
750
$
$
$
$
$
$
7,499,250
75
(75
)
1,146
1,146
208
208
(774
)
(774
)
7,500,000
75
1,279
(774
)
580
514
514
53
53
60,200
1
60
61
569,000
6
2,460
2,466
63
63
(3,083
)
(3,083
)
7,560,200
76
569,000
6
4,429
(3,857
)
654
1,007
1,007
5,380,711
54
19,351
19,405
817,468
8
3,194
3,202
5,700
23
23
(7,943
)
(7,943
)
7,565,900
76
569,000
6
6,198,179
62
28,004
(11,800
)
16,348
348
348
4,163
26
26
5,000
5
5
(3,567
)
(3,567
)
7,575,063
$
76
569,000
$
6
6,198,179
$
62
$
28,383
$
(15,367
)
$
13,160
F-5
Table of Contents
December 3,
December 3,
2003
2003
(inception) to
Year ended
Three months ended
(inception) to
September 30,
September 30,
December 31,
December 31,
2004
2005
2006
2005
2006
2006
(restated)
(unaudited)
(unaudited)
$
(774
)
$
(3,083
)
$
(7,943
)
$
(1,323
)
$
(3,567
)
$
(15,367
)
21
189
241
58
86
537
208
63
271
45
175
24
228
448
19
902
276
145
1,066
627
627
41
41
(3
)
(22
)
21
7
(18
)
30
33
1,295
78
128
1,486
1
2
10
13
187
63
63
250
134
706
106
247
1,087
257
691
4,019
626
841
5,808
(517
)
(2,392
)
(3,924
)
(697
)
(2,726
)
(9,559
)
(357
)
(551
)
(180
)
(14
)
(274
)
(1,362
)
(10
)
(44
)
(161
)
(36
)
(28
)
(243
)
(41
)
(41
)
(408
)
(595
)
(341
)
(50
)
(302
)
(1,646
)
5
5
154
(154
)
(190
)
(14
)
(190
)
1,146
514
1,660
2,466
2,466
2,575
500
2,575
19,205
47
19,252
1,146
3,134
21,436
486
52
25,768
221
147
17,171
(261
)
(2,976
)
14,563
221
368
368
17,539
$
221
$
368
$
17,539
$
107
$
14,563
$
14,563
$
$
$
9
$
$
$
9
1
2
2
$
$
$
50
$
$
$
50
3,202
3,202
150
150
F-6
Table of Contents
(A Development Stage Company)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
1.
Business
and Basis of Presentation
F-7
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
2.
Summary
of Significant Accounting Policies
F-8
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
F-9
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
F-10
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
Year ended
September 30,
Three months ended December 31,
2005
2006
2005
2006
(unaudited)
5.25
5.25
5.25
5.25
40
%
40
%
40
%
40
%
0
%
0
%
0
%
0
%
3.62% - 3.88
%
3.77% - 4.90
%
4.30% - 4.44
%
4.48% - 4.83
%
$
.08
$
.56
$
1.22
$
7.09
F-11
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
Previously
Reported
As Restated
$
5,764
$
5,960
882
1,450
7,179
7,943
Previously
Reported
As Restated
$
27,240
$
28,004
(11,036
)
(11,800
)
3.
Net Loss
per Share
F-12
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
Period from
December 3,
2003
(inception) to
Three months ended
September 30,
Year ended September 30,
December 31,
2004
2005
2006
2005
2006
(unaudited)
4,823,224
4,823,224
279,500
279,500
279,500
279,500
149,125
149,125
544,000
1,110,500
946,500
1,562,697
F-13
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
Period from
December 3, 2003
(inception) to
Three months ended
September 30,
Year ended September 30,
December 31,
2004
2005
2006
2005
2006
(unaudited)
$
(774
)
$
(3,083
)
$
(7,943
)
$
(1,323
)
$
(3,567
)
7,500,000
7,512,442
7,562,779
7,560,408
7,564,820
1,070,165
4,084,636
2,845,000
5,646,916
7,500,000
8,582,607
11,647,415
10,405,408
13,211,736
$
(0.10
)
$
(0.36
)
$
(0.68
)
$
(0.13
)
$
(0.27
)
F-14
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
4.
Property
and equipment
September 30,
December 31,
2005
2006
2006
(unaudited)
$
64
$
77
$
96
483
539
599
273
352
357
0
0
103
88
120
207
908
1,088
1,362
209
444
528
$
699
$
644
$
834
5.
Related
Party Transactions
F-15
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
F-16
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
6.
Commitments
F-17
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
$
76
79
83
28
$
266
7.
Income
Taxes
F-18
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
September 30,
2005
2006
(restated)
$
1,444
$
4,374
96
313
98
156
1,638
4,843
1,638
4,843
$
$
8.
Stockholders
Equity
F-19
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
F-20
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
F-21
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
2,200,000
4,500,000
450,000
10,563,432
17,713,432
F-22
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
Weighted
Weighted
Weighted
Average
Number of
Average
Average
Intrinsic
Options
Exercise
Fair Value
Value per
Grants Made During Quarter
Ended
Granted
Price
per Share
Share
426,000
$
1.00
$
0.59
$
118,000
1.00
0.59
412,500
4.00
3.32
55,000
4.00
3.32
184,000
4.00
6.66
2.66
532,197
7.09
8.95
1.86
90,000
8.95
8.95
Weighted average
Number
Exercise Price
544,000
$
1.00
544,000
1.00
651,500
4.00
85,000
2.41
1,110,500
2.29
532,197
7.09
5,000
1.00
75,000
4.00
1,562,697
$
3.85
419,375
1.83
F-23
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
Weighted
Weighted
Weighted
average
average
average
Range of
Number
remaining
exercise
Number
exercise
Outstanding
Contractual Life
Price
Exercisable
Price
$
1.00
539,000
78 Months
$
1.00
303,750
$
1.00
$
4.00
491,500
89 Months
$
4.00
115,625
$
4.00
$
8.95
532,197
95 Months
$
7.09
$
7.09
Total
1,562,697
84 Months
$
3.85
419,375
$
1.23
9.
Bridge
Financing Units
F-24
Table of Contents
(A Development Stage Company)
Notes to Financial Statements (Continued)
(in thousands, except share and per share amounts)
Financial information as of December 31, 2006
and for the three month periods ended
December 31, 2005 and 2006 is unaudited
10.
Employee
Benefit Plan
F-25
Table of Contents
Table of Contents
Item 13.
Other
Expenses of Issuance and Distribution.
Amount
$
9,228.75
9,125.00
*
*
*
*
*
*
*
$
*
*
To be filed by amendment
Item 14.
Indemnification
of Directors and Officers.
II-1
Table of Contents
any transaction from which the director derives an improper
personal benefit;
acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
unlawful payment of dividends or unlawful stock purchases or
redemptions of shares; or
any breach of a directors duty of loyalty to the
corporation or its stockholders.
Item 15.
Recent
Sales of Unregistered Securities.
II-2
Table of Contents
Item 16.
Exhibits
and Financial Statement Schedules.
(a)
Exhibits.
Exhibit
1
.1*
Form of Underwriting Agreement.
3
.1**
Registrants Amended and
Restated Certificate of Incorporation.
3
.2**
Registrants Certificate of
Designation, Preferences and Rights of Series A convertible
preferred stock.
3
.3**
Registrants Certificate of
Designation, Preferences and Rights of Series B convertible
preferred stock.
3
.4
Form of registrants Second
Amended and Restated Certificate of Incorporation, to be
effective upon completion of the offering.
3
.5**
Registrants By-Laws.
3
.6
Form of registrants Amended
and Restated Bylaws, to be effective upon completion of the
offering.
4
.1
Specimen Common Stock Certificate.
4
.2**
Form of Warrant issued to the
institutional investors to purchase shares of common stock dated
July 19, 2006.
4
.3**
Form of Warrant issued to former
Unit holders with registration rights to purchase shares of
common stock dated July 19, 2006.
II-3
Table of Contents
Exhibit
4
.4**
Form of Warrant issued to former
Unit holders without registration rights to purchase shares of
common stock dated July 19, 2006.
4
.5**
Form of Warrant issued to Scott
Weisman and McGinn Smith Holdings, LLC to purchase shares of
Series A convertible preferred stock.
4
.6**
Form of Warrant issued to Scott
Weisman and McGinn Smith Holdings, LLC to purchase shares of
Series B convertible preferred stock and shares of common
stock dated July 19, 2006.
4
.7**
Form of Subscription and Rights
Agreement by and among the registrant and the holders of the
Series A convertible preferred stock.
4
.8**
Amended and Restated Registration
Rights Agreement, dated September 19, 2006, by and among
the registrant and other parties named therein.
5
.1*
Opinion of Troutman Sanders LLP.
10
.1**
Form of Indemnification Agreement
entered into between the registrant and each of Albert Cha,
Robert Feldstein, David Kroin, Daniel Lorber, Ira Lieberman,
Charles Sanders, Roderike Pohl, Solomon Steiner, Paul Sekhri,
Erik Steiner, Samuel Wertheimer, R. Timmis Ware, Andreas
Pfützner, and Scott Weisman.
10
.2**
2004 Stock Incentive Plan, as
amended.
10
.3
Amended and Restated 2004 Stock
Incentive Plan, to be effective upon completion of the offering.
10
.4
2005 Employee Stock Purchase Plan,
to be effective upon the completion of the offering.
10
.5
2005 Non-Employee Directors
Stock Option Plan, to be effective upon the completion of the
offering.
10
.6
Amended and Restated Employment
Agreement, dated March 20, 2007, between the registrant and
Solomon S. Steiner.
10
.7
Amended and Restated Employment
Agreement, dated March 20, 2007, between the registrant and
Roderike Pohl.
10
.8
Amended and Restated Employment
Agreement, dated March 20, 2007, between registrant and
F. Scott Reding.
10
.9**
Consulting Agreement, dated
April 1, 2005, between the registrant and Dr. Andreas
Pfützner.
10
.10
Supply Agreement made on
April 4, 2005 by and between Diosynth B.V. and the
registrant.
10
.11
Manufacturing Agreement, dated
December 20, 2005 between the registrant and Cardinal
Health PTS, LLC.
10
.12**
Change of Control Agreement
entered into between the registrant and certain of its executive
officers.
10
.13**
Executive Severance Agreement
entered into between the registrant and certain of its executive
officers.
10
.14
Lease Agreement, dated
February 2, 2004, between the registrant and Mulvaney
Properties, LLC and amendment thereto dated September 29,
2006.
10
.15
Lease Agreement, dated
October 19, 2006, between the registrant and Mulvaney
Properties, LLC.
23
.1
Consent of BDO Seidman, LLP,
Independent Registered Public Accounting Firm.
23
.2*
Consent of Troutman Sanders, LLP
(included in Exhibit 5.1).
23
.3
Consent of American Appraisal
Associates, Inc.
24
.1**
Powers of Attorney.
*
To be filed by
amendment.
**
Previously filed.
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.
Table of Contents
(b)
Financial
Statement Schedules.
Item 17.
Undertakings.
II-5
Table of Contents
By:
II-6
Table of Contents
Director
March 27, 2007
Director
March 27, 2007
*By:
Attorney-in-Fact
II-7
Table of Contents
Exhibit
1
.1*
Form of Underwriting Agreement.
3
.1**
Registrants Amended and
Restated Certificate of Incorporation.
3
.2**
Registrants Certificate of
Designation, Preferences and Rights of Series A convertible
preferred stock.
3
.3**
Registrants Certificate of
Designation, Preferences and Rights of Series B convertible
preferred stock.
3
.4
Form of registrants Second
Amended and Restated Certificate of Incorporation, to be
effective upon completion of the offering.
3
.5**
Registrants By-Laws.
3
.6
Form of registrants Amended
and Restated Bylaws, to be effective upon the completion of the
offering.
4
.1
Specimen Common Stock Certificate.
4
.2**
Form of Warrant issued to the
institutional investors to purchase shares of common stock dated
July 19, 2006.
4
.3**
Form of Warrant issued to former
unit holders with registration rights to purchase shares of
common stock dated July 19, 2006.
4
.4**
Form of Warrant issued to former
Unit holders without registration rights to purchase shares of
Common Stock dated July 19, 2006.
4
.5**
Form of Warrant issued to Scott
Weisman and McGinn Smith Holdings LLC to Purchase Shares of
Series A convertible preferred stock.
4
.6**
Form of Warrant issued to Scott
Weisman and McGinn Smith Holdings, LLC to purchase shares of
Series B Convertible preferred stock and shares of common
stock dated July 19, 2006.
4
.7**
Form of Subscription and Rights
Agreement by and among the registrant and the holders of the
Series A convertible preferred stock.
4
.8**
Amended and Restated Registration
Rights Agreement, dated September 19, 2006, by and among
the registrant and other parties named therein.
5
.1*
Opinion of Troutman Sanders LLP.
10
.1**
Form of Indemnity Agreement
entered into between the registrant and each of Albert Cha,
Robert Feldstein, David Kroin, Daniel Lorber, Ira Lieberman,
Charles Sanders, Roderike Pohl, and Solomon Steiner, Paul
Sekhri, Erik Steiner, Samuel Wertheimer, R. Timmis Ware, Andreas
Pfützner, and Scott Weisman.
10
.2**
2004 Stock Incentive Plan, as
amended.
10
.3
Amended and Restated 2004 Stock
Incentive Plan, to be effective upon completion of the offering.
10
.4
2005 Employee Stock Purchase Plan,
to be effective upon the completion of the offering.
10
.5
2005 Non-Employee Directors
Stock Option Plan, to be effective upon the completion of the
offering.
10
.6
Amended and Restated Employment
Agreement, dated March 20, 2007, between the registrant and
Solomon S. Steiner.
10
.7
Amended and Restated Employment
Agreement, dated March 20, 2007, between the registrant and
Roderike Pohl.
10
.8
Amended and Restated Employment
Agreement, dated March 20, 2007, between registrant and
F. Scott Reding.
10
.9**
Consulting Agreement, dated
April 1, 2005, between the registrant and Dr. Andreas
Pfützner.
10
.10
Supply Agreement made on
April 4, 2005 by and between Diosynth B.V. and the
registrant.
10
.11
Manufacturing Agreement, dated
December 20, 2005 between the registrant and Cardinal
Health PTS, LLC.
10
.12**
Change of Control Agreement
entered into between the registrant and certain of its executive
officers.
Table of Contents
Exhibit
10
.13**
Executive Severance Agreement
entered into between the registrant and certain of its executive
officers.
10
.14
Lease Agreement, dated
February 2, 2004, between the registrant and Mulvaney
Properties, LLC and amendment thereto dated September 29,
2006.
10
.15
Lease Agreement, dated
October 19, 2006, between the registrant and Mulvaney
Properties, LLC.
23
.1
Consent of BDO Seidman, LLP,
Independent Registered Public Accounting Firm.
23
.2*
Consent of Troutman Sanders LLP
(included in Exhibit 5.1).
23
.3
Consent of American Appraisal
Associates, Inc.
24
.1**
Powers of Attorney.
*
To be filed by
amendment.
**
Previously filed.
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.
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Solomon S. Steiner, Ph.D.
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Chairman of the Board and Chief
|
||
Executive Officer
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STOCK CERTIFICATE CUSIP: 09064M 10 5 |
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BIODEL INC. | ||||
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By: | /s/ F. Scott Reding | ||
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Name: F. Scott Reding
Title: Chief Financial Officer and Treasurer |
||||
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||||
|
||||
/s/ Solomon S. Steiner | ||||
Solomon S. Steiner |
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BIODEL INC.
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By: | /s/ Solomon S. Steiner | |||
Name: | Solomon S. Steiner | |||
Title: | Chairman, President and Chief Financial Officer | |||
/s/ Roderike Pohl | ||||
Roderike Pohl | ||||
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BIODEL INC. | ||||
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By: | /s/ Solomon S. Steiner | ||
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Name: Solomon S. Steiner
Title: Chairman, President and Chief Financial Officer |
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/s/ F. Scott Reding | ||||
F. Scott Reding |
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*** TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED |
1.1 | Diosynth herewith agrees to supply BIODEL and BIODEL herewith agrees to purchase from Diosynth recombinant human insulin (hereinafter referred to as Substance) as further described and specified in Appendix A hereto attached. |
2
1.2 | During the development of the insulin formulation by BIODEL, Diosynth will supply BIODEL with the Substance in such quantities as BIODEL shall order and estimated not to exceed the following: | |
[...***...]
[...***...] |
||
1.3 | In case the insulin formulation(s) are developed successfully and in the event BIODEL wishes to sell its insulin formulation on a commercial basis, Diosynth will supply BIODEL with the Substance in such quantities as BIODEL shall order. It is foreseen that BIODEL will indicate the following quantities as its estimated commercial needs for the product: | |
[...***...]
[...***...] [...***...] [...***...] |
||
1.4 | During the term of this Agreement, Diosynth agrees to keep and maintain a Drug Master File for the Substance in the United States of America, and to authorize BIODEL to incorporate by reference all information and documentation contained therein. |
3.1 | Diosynth will deliver all orders for supply which are within the forecast given according to Article 2 herein within the date stipulated in the order. Diosynth will use its best commercial efforts to deliver as soon as possible any quantities in excess of the purchase order as determined in Article 1.3. |
3.2 | Diosynth will deliver the Product to BIODEL within the date stipulated in the firm purchase order. |
3
3.3 | Delivery of each batch of each Substance shall be effectuated DDP BIODELs or its designees manufacturing facility (INCOTERMS 2000). Each batch of the Substance shall be accompanied by a certificate of analysis and an invoice. | |
3.4 | Upon dispatch samples of each batch shall be taken at random and sealed by Diosynth and thereupon shall be stored for reference by Diosynth for a period of 24 (twenty-four) months. |
4.1 | All batches of Substance delivered by Diosynth to BIODEL shall comply with the specifications as set forth in Appendix A and shall be manufactured according to applicable regulations of Good Manufacturing Practices. | |
4.2 | Within thirty (30) days of delivery of the batches of Substance, BIODEL shall inform Diosynth of any non-conformance of the delivered batch(es) with the specifications set out in Appendix A. In the event it appears that such non-conformance is due to faulty manufacture of the relevant batch(es) of Substance, which fact shall be established on basis of the corresponding sealed samples retained by Diosynth, Diosynth shall replace such batches free of charge. In the event BIODEL does not notify Diosynth of any non-conformance within said period, the relevant batches shall be deemed to be in conformance with the specifications and BIODEL shall then have no right to reject the same. | |
4.3 | If the parties fail to agree on whether a batch is defective or on the responsibility therefor, the matter shall be finally determined by an expert to be nominated by agreement between the parties, or failing agreement, by an expert, to be nominated by the President of the International Chamber of Commerce. The said expert shall act as an expert and not as an arbitrator, but his opinion shall be binding upon the parties and his fees and expenses shall be borne by the party against which his decision is rendered. |
5.1 | The purchase price of the Substance for the year 2005 shall be [...***...], whereas for supply of the quantities in 2006 the purchase price will be [...***...]. | |
5.2 | Diosynth is willing to accept [...***...] as the commercial market price in the year 2004. In this respect commercial market price is considered to be the price for annual quantities greater than [...***...]. This commercial market price in the year 2004 will be used as a basis for the determination of the commercial market price in subsequent years. To that end, on or before September 30 of each calendar year, parties will in good faith determine the commercial market price for the product for the following calendar year. In any case this price will not increase, on a year by year basis, with more than the increase of the labor cost index in the Netherlands, as published by the C.B.S. (Central Bureau voor de Statistiek). Diosynth will not offer the Substance to other customers at a lower price, provided the quality and the quantity of the Substance to that other customer is |
4
substantially comparable with the quantity and quality of the Substance supplied to Biodel. |
5.3 | Payment shall be made by BIODEL within thirty (30) days of the date of Diosynths invoice. |
(a) | All Substance manufactured by Diosynth for BIODEL shall be manufactured in compliance with the specifications as set forth in Annex A hereto; | ||
(b) | All Substance manufactured by Diosynth for BIODEL shall be manufactured in compliance with all applicable laws and regulations including, but not limited to, the applicable Good Manufacturing Practices for bulk pharmaceutical ingredients; | ||
(c) | All Substance supplied by Diosynth to BIODEL shall be manufactured at Diosynths plants in Oss, the Netherlands and Gisors, France. | ||
(d) | All Substance manufactured by Diosynth for supply to BIODEL shall be manufactured in compliance with Diosynths Drug Master File filed with the United States Food and Drug Administration`. |
6.2 | EXCEPT AS EXPRESSLY PROVIDED HEREIN, DIOSYNTH MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, AS TO THE QUALITY OR FITNESS FOR PURPOSE OF THE SUBSTANCE SUPPLIED HEREUNDER. |
8.1 | As manufacturer of the finished products, BIODEL shall be liable for and BIODEL shall indemnify and hold Diosynth harmless from and against all damages, claims, causes of action, settlement costs, including reasonable attorneys fees, losses or liabilities of any kind asserted by third persons which arise from the manufacture sale and/or use of finished products, unless such damages, claims, causes of action, settlement costs, losses or liabilities arise out of or are attributable to any defect in the Substance due to faulty manufacture by Diosynth. | |
8.2 | Diosynth shall indemnify and hold BIODEL harmless from and against all damages, claims, causes of action, settlement costs, including reasonable attorneys fees, losses or liabilities of any kind asserted by third persons which arise out of or are attributable to any defect in the Substance due to faulty manufacture by Diosynth. |
5
8.3 | Neither party shall be liable to the other under this Agreement for any indirect or consequential loss or damage suffered or incurred by the other party. |
9.1 | This Agreement shall be effective as of the date first written above and shall continue to be in force until terminated as provided herein. |
9.2 | Notwithstanding the preceding paragraph, this Agreement may be terminated forthwith by registered or certified mail: |
(a) | by both parties for any reason or no reason with a two year written notice; or | ||
(b) | by either party in the event of any material breach by the other party of any of the terms of this Agreement, unless the other party corrects such breach within said sixty (60) days period; | ||
(c) | forthwith by either party, in the event of the other partys liquidation, bankruptcy or state of insolvency | ||
(d) | by BIODEL, with 30 days written notice if a controlling regulatory authority either fails to approve or withdraws approval of the insulin formulation(s). In that event, BIODEL will responsible for full payment for all API delivered to BIODEL and for all API quantities on order. In the event that the product is withdrawn by regulatory decree in a portion, but not all of the market, then BIODEL shall have the right to reduce the minimum quantities with 30 days written notice. |
9.3 | [...***...] |
10.1 | It is recognized by both BIODEL and Diosynth that during the term of this Agreement, both BIODEL and Diosynth may disclose certain information which is confidential and proprietary. Both parties agrees that they shall keep such Confidential Information confidential and shall not disclose such Confidential information to any third party and shall not use such Confidential Information for other purposes than as required to perform its obligations under this Agreement. For purposes of this Agreement, Confidential Information shall include all information disclosed hereunder in writing and clearly marked as Confidential, except any portion thereof which: |
(a) | is known to either party before receipt thereof under this Agreement; | ||
(b) | is disclosed in good faith to either party after acceptance of this Agreement by a third party lawfully in possession of such information and not under an obligation of non-disclosure; | ||
(c) | is or becomes part of the public domain through no fault of either party; or | ||
(d) | is required by law to be disclosed. |
10.2 | The obligations of both parties relating to Confidential Information shall expire upon ten (10) years after expiration of termination of this Agreement. |
6
11.1 | Any delay or failure in their performance of any of the duties or obligations of either party hereto (except the payment of money) shall not be considered a breach of this Agreement and the time required for performance shall be extended for a period equal to the period of such delay, provided that such delay has been caused by or is the result of any acts of god, acts of the public enemy, insurrections, riots, embargoes, labor disputes, including strikes, lockouts, job actions or boycotts, fires, explosions, floods, shortages of material or energy or other unforeseeable causes beyond the control and without the fault or negligence of the party so affected. | |
11.2 | The party so affected shall give prompt notice to the other party of such cause and shall take whatever reasonable steps are necessary to relieve the effect of such cause as rapidly as possible. |
14.1 | The validity, construction and performance of this Agreement shall be governed by and construed in accordance with the internal laws of the state of New York in the United States of America. | |
14.2 | The parties shall attempt in good faith to resolve promptly any dispute arising out of or relating to this Agreement by negotiation. If the matter can not be resolved in the normal course of business any interested party shall give the other party written notice of any such dispute not resolved, after which the dispute shall be referred to more senior executives of both parties, who shall likewise attempt to resolve the dispute. |
7
14.3 | If the dispute has not been resolved by negotiation within forty-five (45) days of the disputing partys written notice, or if the parties fail to meet within twenty (20) days as from such notice, the parties shall endeavor to settle the dispute by mediation under the supervision of and in accordance with the CPR Model Mediation Procedure for Business Dispute in Europe. Unless otherwise agreed, both parties or each individual party may request the CPR to appoint an independent mediator. The language of mediation shall be English and the seat of mediation shall be agreed upon by both parties and, in the event parties do not timely agree, the seat will be determined by the mediator. |
14.4 | If the dispute has not been resolved by non-binding means as provided in 14.3 hereof within ninety (90) days of the initiation of such procedure, the dispute shall be finally and exclusively settled by arbitration in The Hague, or any other mutually agreed upon venue under the Uncitral Arbitration Rules by three (3) independent arbitrators appointed in accordance with said Rules. The appointing authority shall be The London Court of International Arbitration in London, England. The language of the arbitration shall be English. The arbitration shall be in lieu of any other remedy and the award shall be final, binding and enforceable by any court having jurisdiction for that purpose. |
14.5 | This Article shall, however, not be construed to limit or to preclude either party from bringing any action in any court of competent jurisdiction for injunctive or other provisional relief as necessary or appropriate. |
15.1 | All stipulations contained in this Agreement shall be so construed as not to infringe the provisions of any applicable law or regulation. To the extent, and only to the extent that any stipulation does infringe any such provisions, the same shall be deemed to be void and shall be replaced by a stipulation conforming to the said provision and reflecting the original purpose of the infringing stipulation as much as possible. | |
15.2 | No modification of this Agreement shall be binding unless it is in writing and signed by the parties hereto. | |
15.3 | The failure by any party at any time to enforce any of the terms, provisions or conditions of this Agreement or to exercise any right hereunder shall not constitute a waiver of the same or affect that partys right thereafter to enforce or exercise the same right. | |
15.4 | All notices and other communications hereunder shall be in writing and will be deemed to have been duly given if delivered or mailed (registered mail where specifically required according to this Agreement) as follows: |
|
As to Diosynth: | Diosynth B.V. | ||
|
Kloosterstraat 6 | |||
|
P.O. Box 20 | |||
|
5340 BH Oss | |||
|
The Netherlands | |||
|
Attention: Adriaan Sanders, API Operations Manager | |||
|
Telephone: 31 412 662058 | |||
|
Facsimile: 31 412 652311 |
8
As to BIODEL:
Biodel Inc.
6 Christopher Columbus Ave.
Danbury CT 06810
Attention: Solomon Steiner, Chairman and CEO
Telephone: 203-798-3600
Facsimile: 203-798-3601
15.5
The relationship of Diosynth to BIODEL established by this Agreement is that of an
independent contractor. Nothing contained in this Agreement shall be construed to constitute
Diosynth as a partner, agent or joint venturer with BIODEL or as a participant in a joint or
common undertaking with BIODEL.
15.6
Neither party shall without the prior written consent of the other party refer to the other
party in any promotional material.
15.7
This Agreement and its Appendices set forth the entire agreement between the parties
concerning the subject matter hereof and supersedes all written or oral prior agreements or
understandings with respect thereto. Neither partys general conditions of sale or purchase
shall be applicable.
Oss, | Danbury, | |||||||
Diosynth BV | Biodel Inc. | |||||||
|
||||||||
/s/
|
A. Sanders | /s/ | Solomon S. Steiner | |||||
|
||||||||
By:
|
Adriaan Sanders | By: | Solomon S. Steiner, Ph.D. | |||||
Title:
|
API Operations Manager | Title: | Chief Executive Officer | |||||
|
||||||||
/s/
|
G. de Lavalette | |||||||
|
||||||||
By:
|
Gert Jan Renardel de Lavalette | |||||||
Title:
|
Marketing and Sales Manager |
9
QTE-2005-0299 | Page 2 of 21 |
1.1 | Project. For purposes of this Quotation, the products and services to be provided by Cardinal Health pursuant to this Quotation shall be the Project . |
1.2 | Project Instructions. The Project Instructions applicable to the Project ( Project Instructions ) are the following: |
| This Quotation, |
| Cardinal Healths Standard Operating Procedures in effect at the Facility, |
| The Master Batch Record, as approved by both parties. |
1.2 | Specifications. The Specifications applicable to the Project shall be as set forth in the Project Instructions ( Specifications ). |
2.1 | Cardinal Healths Responsibilities. |
2.1.1 | cGMP Facility. Cardinal Health will provide an establishment which is designed and built in accordance with applicable US laws, rules and regulations, including without limitation, applicable current Good Manufacturing Practices |
2.1.2 | Records. Cardinal Health will provide all administration, supervision and record keeping, as required by applicable law and in accordance with Cardinal Healths standard operating procedures and practices. |
2.1.3 | Master Batch Record. Cardinal Health will provide labor and materials for preparation and approval of the Master Batch Record and any subsequent revisions thereto. |
2.1.4 | Materials. Cardinal Health will provide the following raw materials: |
| The following cGMP released components: |
[***] |
| [***] | ||
| Vial labels: Standard Black and White Label | ||
| Carton: Standard Two Pack Carton | ||
| Standard Cardinal Health shippers. |
[***] |
| [***] | ||
| Vial labels: Standard Black and White Label | ||
| Carton: Standard Two Pack Carton |
| Standard Cardinal Health shippers. |
| The following tested and released excipients: |
| [***] |
2.1.5 | API Receiving Tests. Cardinal Health will conduct the following API receiving tests in accordance with the test requirements, methods and specifications provided and/or approved by Client: | ||
[***] |
| [***] |
2.1.6 | In Process Tests. Cardinal Health will conduct the following in process tests in accordance with the test requirements, methods and specifications provided and/or approved by Client: | ||
[***] |
2.1.7 | Manufacture, Inspection and Packaging. Cardinal Health will provide manufacture, inspection and packaging, in accordance with a Master Batch Record approved by the parties, as follows: | ||
[***] |
2.1.8 | Finished Product Tests. Cardinal Health will conduct the following finished Product tests in accordance with the test requirements, methods and specifications provided and/or approved by Client: | ||
[***] |
2.1.9 | Cleaning. Following batch manufacture, Cardinal Health will clean the applicable Facilities and Equipment in accordance with Cardinal Healths standard operating procedures. |
2.1.10 | Waste Disposal. Cardinal Health will engage a contractor to dispose of all Product related waste in accordance with applicable laws, rules and regulations. |
2.1.11 | Post-Manufacture Review. Following manufacture of the Product as provided above, Cardinal Health will review and approve the lot specific batch records prior to Clients final release of product. |
2.1.12 | Batch Records. Cardinal Health will provide Client with a copy of each lot specific Batch Record. |
2.1.13 | Samples. Cardinal Health will maintain up to 10 retention samples, as requested by Client. |
2.1.14 | Validation Support. Cardinal Health will provide validation support as defined in the quotation below. |
2.1.15 | Storage. Cardinal Health will store the API and Product in accordance with storage specifications provided by Client. Cardinal Health will store finished Product for up to two (2) weeks following finished Product release by Cardinal Health. If Cardinal Health consents to store the Product for a longer period of time, Cardinal Health will charge storage fees in accordance with this Quotation and Client will be required to provide Cardinal Health with a letter confirming the following: (i) Client has made a fixed commitment to purchase such Product, (ii) risk of ownership for such Product passes to Client, (iii) such Product shall be on a bill and hold basis for legitimate business purposes, (iv) if no delivery date is determined at the time of billing, Cardinal Health shall have the right to ship the Product to Client within four months after billing, and (v) Client will be responsible for any decrease in market value of such Product that relates to factors and circumstances outside of Cardinal Healths control. |
2.1.16 | Delivery. Cardinal Health will bulk pack the Product using standard Cardinal Health shippers. These shippers are not validated for Client Product. If requested by Client or if otherwise necessary, Cardinal Health will palletize the Product for delivery to Client or its designated recipient. All shipments shall be F.O.B. Cardinal Healths shipping docks. If Client has not specifically designated a preferred carrier, Cardinal Health will select the carrier for shipment. |
2.2 | Clients Responsibilities |
2.2.1 | Project Instructions . Client will: |
| Provide manufacturing instructions to enable Cardinal Health to prepare the master batch record. |
| Review and approve the master batch record and any subsequent revisions. |
| Provide test requirements, specifications, and methods as provided below. |
2.2.2 | Test Requirements, Methods & Specifications. Client will provide (i) test requirements, (ii) validated or reproducible analytical methods and related documentation, and (iii) applicable Specifications for the following: |
| API Receiving Tests |
| Raw Material Testing (as necessary) |
| In Process Testing |
| Finished Product Testing |
2.2.3 | Materials. Client will supply the following materials and items to Cardinal Health: |
| [***] |
2.2.4 | Safety Information. Client will provide all known safety information relating to the Product, API and other raw materials supplied by Client under this Quotation, including without limitation Material Safety Data Sheets (MSDS) applicable to each such item. |
| [***] |
2.2.5 | Artwork. If Cardinal Health is labeling the Product, Client will provide approved artwork that meets all applicable regulatory requirements. |
2.2.6 | Samples. Client will maintain all retention samples and stability samples required by applicable laws, rules and regulations. | ||
2.2.7 | Cleaning. Client will provide cleaning methods. |
3.1 | Project Pricing . All of the pricing stated throughout this quotation is valid through [***]. |
[***] Life Sciences Activity | Estimated Price | |
[***]
|
||
|
[***] | |
[***]
|
$ [***] | |
Vendor Assessment Audit (does not include airfare, travel
and per diem which will be charged at the actual expenses)
|
||
Requirements Specification
|
||
21 CFR Assessment, if required
|
||
[***]
|
$ [***] | |
Subtotal
|
$ TBD |
[***] Life Sciences Activity | Price | Deliverable/Other Comments | ||
[***]
|
$ [***] | Report | ||
[***]
|
$ [***] | Report | ||
[***]
|
$ [***] | Report | ||
[***]
|
$ [***] | Report | ||
[***]
|
$ [***] | Report | ||
Subtotal
|
$ [***] |
[***] Life Sciences Activity | Price | Deliverable/Other Comments | ||
[***] Batch(es)
|
$ [***] | [***] | ||
Manufacture up to [***] of finished drug product.
|
Per batch | |||
Includes:
|
||||
[***]
|
||||
Process Validation: [***]
|
$ [***] | |||
Includes:
|
$ [***] | |||
[***]
|
$ [***] | |||
|
$ [***] | |||
|
||||
[***]
|
$ [***] | [***] | ||
|
$ [***] | |||
|
$ [***] | |||
|
$ [***] | |||
|
||||
[***] Life Sciences Activity | Price | Deliverable/Other Comments | ||
|
$ [***] | [***] | ||
[***] Batch(es)
|
||||
Manufacture up to [***] of finished drug product.
|
||||
[***]
|
$ [***] | [***] | ||
Process Validation: [***]
|
$ [***] | |||
Includes
|
$ [***] | |||
[***]
|
$ [***] | |||
|
$ [***] | [***] | ||
|
$ [***] | |||
|
$ [***] | |||
|
$ [***] | |||
|
||||
[***] Life Sciences Activity | Price | Deliverable/Other Comments | ||
[***]
|
$ [***] per | [***] | ||
|
formulation | |||
|
$ [***]
$ [***]
$ [***]
$ [***]
Report
$ [***]
Report
$ [***]
Report
$ [***]
Report
$ [***]
Report
$ [***]
Report
$ [***]
Report
$ [***]
[***] Life Sciences Activity | Price | Deliverable/Other Comments | ||
[***]
|
$ [***] | Report | ||
|
$ [***] | |||
|
||||
Regulatory Assistance/Consulting
|
$[***] to $[***] per hour depending on the personnel utilized |
[***] | [***] | Interval [***] | ||||||||||||||||||||||||||||||||||
[***] | [***] | [***] | [***] | [**] | [***] | [***] | [***] | |||||||||||||||||||||||||||||
[**]
|
| [**] | | | | | | | | |||||||||||||||||||||||||||
[**]
|
[**] | | [**] | [**] | [**] | [**] | [**] | [**] | ||||||||||||||||||||||||||||
|
[**] | | [**] | [**] | [**] | [**] | [**] | [**] | [**] | |||||||||||||||||||||||||||
[**]
|
[**] | | [**] | [**] | [**] | | | | | |||||||||||||||||||||||||||
|
[**] | | [**] | [**] | [**] | | | | |
Interval | Activity | Estimated Cost ($)4 | ||
[***] | [***] | [***] |
[***] | [***] | [***] | ||
[***] | [***] | [***] | ||
[***] | [***] | [***] | ||
[***] | [***] | [***] | ||
[***] | [***] | [***] | ||
[***] | [***] | [***] | ||
[***] | [***] | [***] | ||
[***]
|
||||
Total Estimated [***] Study Cost
|
||||
([***])
|
[***] |
[**] | [**] | Interval [**] | ||||||||||||||||||||||||||||||||||
[**] | [**] | [**] | [**] | [**] | [**] | [**] | [**] | |||||||||||||||||||||||||||||
[**]
|
| [**] | | | | | | | | |||||||||||||||||||||||||||
[**]
|
[**] | | [***] | [**] | [**] | [**] | [**] | [**] | [**] | |||||||||||||||||||||||||||
[**]
|
[**] | | [**] | [**] | [**] | [**] | [**] | [**] | [**] | |||||||||||||||||||||||||||
[***]
|
Corresponding [***] Interval at which the [***] Studies are | Total [***] Studies Cost | |
Initiated | ([***]) ($)[***] | |
[***] | [***] | |
[***] | [***] | |
[***] | [***] | |
[***] | [***] | |
[***] | [***] | |
[***] | [***] | |
Total Estimated Cost for [***] Studies ([***]) | [***] |
Activity | Cost per Analysis | |
[***] | [***] | |
[***] | [***] | |
[***] | [***] | |
[***] | [***] for the first sample/[***] or each additional sample | |
[***] | [***]for first sample/[***] or each additional sample | |
[***] | [***] | |
[***] | [***] | |
[***] | [***] |
Storage Condition | Interval [***] | |||
[***] | [***] | |||
[***] | [***] | | ||
[***] | | [***] |
Interval | Activity | Estimated Cost | ||
[***] | | | ||
[***] | [***] | [***] | ||
[***]
|
[***] | |||
Total Estimated [***] Study Cost ([***])
|
[***] |
Activity | Price | |
Out-of-Specification Investigations
|
Cardinal Health will conduct Out-of-specification (OOS) investigations, without prior approval from the Client. All OOS investigations will be reviewed and approved by the Client and Cardinal Health. If an OOS investigation indicates that Cardinal Health is responsible for the OOS result, Cardinal Health will not charge Client for the investigation cost. If an OOS investigation does not indicate that Cardinal Health is responsible for the assignable cause of an OOS result, the cost of the investigation will be invoiced to Client at $[***]/hour. | |
|
||
Consulting/Assistance of
development, technical and
engineering staff including, but
not limited to Product manufacture
support, telephone consultation
and meetings.
|
Billed at $[***] to $[***] per hour depending on the person involved, plus materials. | |
|
||
Cardinal Healths reasonable
travel costs will be billed at
Cardinal Healths actual cost and
shall include airfare, hotel,
transportation, and per diem.
|
To Be Determined, per trip | |
|
||
Miscellaneous Dedicated Equipment
& Supplies Tanks, HPLC Columns,
etc. if required
|
Vendor cost to Cardinal Health plus shipping, handling and [***] handling fee. | |
|
||
Shipping
|
All Product and samples are shipped FOB Cardinal Healths WAREHOUSE. | |
|
||
Product Storage
|
[***] | |
|
||
Charges for Cancellation or
Postponement of Batch Manufacture
|
The Fee for cancellation or postponement of a batch shall be the greater of (i) total time and materials expended up to date of cancellation or postponement or (ii) a percentage of the total batch fee as follows: |
Notification prior to fill date | ||
as agreed by both parties | Percentage of batch fee | |
30 to 60 days
|
[***] | |
15 to 29 days
|
[***] | |
8 to 14 days
|
[***] | |
Less than 8 days
|
[***] |
|
Client will not be allowed to postpone a batch more than 30 days prior to filling the batch. | |
|
||
Charges for Cancellation or
Postponement of services other
than Batch Manufacture
|
[***] |
3.2 | Revisions to Pricing. In addition to any reasons for price changes expressly set forth in Exhibit 1, Cardinal Health may revise the prices provided in this Quotation if reasonably unforeseeable circumstances affect the work required to complete the Project. Cardinal Health will notify Client immediately if the costs to complete the Project exceed the prices stated in this Quotation. Cardinal Health will not commence work involving charges in |
excess of those stated in this Quotation without Client approval unless such advance notice was not possible due to the circumstances. |
Action Items | Due Date | |
Client to provide sample requirements
|
2 weeks prior to scheduled manufacture date | |
Client to approve Master Batch Record, and all
subsequent revisions
|
At least 2 weeks prior to manufacture start date or project start date | |
Client to approve art work for labeling and packaging
|
4 weeks prior to scheduled manufacture date | |
Client to approve Packaging Batch Record
|
1 week prior to product manufacture | |
Client to provide shipping instructions (destination)
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2 weeks after lot manufacture |
5.1 | Standard Terms and Conditions. The Standard Terms and Conditions attached to this Quotation as Exhibit 1 are an integral part of this Quotation and are incorporated herein by reference. In the event of a conflict between the terms of this Quotation and the attached Standard Terms and Conditions, the Standard Terms and Conditions shall govern. In the event of a conflict between the terms and conditions of this Quotation and any purchase order or other documentation submitted by Client, this Quotation shall govern. |
5.2 | Invoicing and Payment Terms. Cardinal Health will invoice for batch manufacture upon the earlier of (i) release of the batch by Cardinal Health, or (ii) thirty-five (35) days following shipment of samples to a third party for testing, if test results are not completed by such time. For all work other than batch manufacture, Cardinal Health will invoice upon completion of the work, unless the work is to take longer than four weeks, in which case, Cardinal Health will invoice on a monthly basis for work performed in the preceding month. Client shall pay each invoice within 45 days of receipt. | |
5.3 | Initial Batches. [***] |
5.4 | Unlabeled Product. If Cardinal Health is to provide Client with Product which is not labeled, Client represents and warrants that it will comply with all applicable regulations, including without limitation 21 CFR § 201.150. |
5.5 | Termination. Client may terminate this Quotation upon 15 days notice, subject to payment of any cancellation fees as provided in Section 3. Either party may terminate this Quotation: (i) effective upon sixty (60) days prior written notice to the other party, if the other party commits a material breach of this Quotation and fails to cure such breach by the end of such sixty (60) day period; provided, however, that failure to pay amounts due under this Quotation within fifteen (15) days after such payments are due shall |
constitute cause for immediate termination of this Quotation, or at Cardinal Healths discretion, Cardinal Health shall be relieved of any further obligation to perform under this Quotation until all outstanding payments are brought current, or (ii) effective upon written notice to the other party, if the other party becomes insolvent or admits in writing its inability to pay its debts as they become due, files a petition for bankruptcy, makes an assignment for the benefit of its creditors or has a receiver, trustee or other court officer appointed for its properties or assets. |
Biodel Inc.
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Cardinal Health PTS, LLC | |
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/s/ Solomon S. Steiner
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/s/ Charles M. Proby | |
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Signature
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Signature | |
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Solomon S. Steiner
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Charles M. Proby | |
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Printed Name
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Printed Name | |
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Chairman and CEO
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Vice President, Business Development | |
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Title
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Title | |
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December 31, 2005
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December 1, 2005 | |
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Date
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Date |
Name:
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Department:
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Telephone No.:
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Address:
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Mail or fax the proposal acceptance sheet to:
Manufacturing |
Cardinal Health PTS, LLC Contract | |
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Attention: Renée Toy | |
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4401 Alexander Blvd. NE | |
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Albuquerque, NM 87107 | |
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(505) 923-1431 (fax ) |
Wire payment to: | Overnight mail payment to: | Regular mail payment to: | ||||
Bank:
City/State: ABA #: Account #: FBO: Ref: |
First Union Bank
Charlotte, NC 053000219 2000002932213 Cardinal Health, Inc. Cardinal Health PTS, LLC |
PNC Bank
1200 E. Campbell Road Box #676457 Richardson, TX 75081 505-923-1251 (phone) |
Cardinal Health PTS, LLC
P.O. Box 676457 Dallas, TX 75267-6457 |
1. | PREMISES: Landlord has leased, and does hereby lease, to Tenant, subject to all of the terms, covenants, conditions and provisions of this Lease, the premises situated at 6 West Kenosia Avenue, Danbury, Connecticut and more particularly described on Exhibit A attached hereto (the Leased Premises). Landlord and Tenant hereby acknowledge and agree that for the purposes of this Lease and the calculation(s) of Basic Rental and all Additional Rental (as hereinafter defined) payable hereunder, the Leased Premises shall be deemed to contain 7,200 rentable square feet. The structure on the Leased Premises is herein referred to as the Building. | |
2. | TERM: The term of this Agreement shall be for the period of three years, from March 1, 2004 (the commencement date), until midnight on February 28, 2007 (the termination date). | |
3. | RENT: Tenant shall pay to the Landlord, without demand, set-off or abatement of any kind minimum guaranteed annual rent (Basic Rent), during the term of this Lease, the sum of FIFTY-FIVE THOUSAND EIGHT HUNDRED and 00/100 ($55,800.00) DOLLARS payable in monthly installments of $4,650.00 on the 1 st day of each month, commencing on March 1, 2004. | |
4. | USE: Tenant agrees to use the Leased Premises for offices, laboratories, research, development and light manufacturing. Any other unrelated use is prohibited without the written approval of the Landlord, which shall not be unreasonably withheld or delayed. Tenant agrees that it shall not do anything which shall, in any way, materially impair or interfere with any of the Buildings services to be supplied by Landlord or the proper and economical heating, cleaning, air conditioning or other service of the Building or Leased Premises or seriously impair or interfere with the use of the Building or Premises or annoyance to Landlord. Tenant will not allow for an unreasonable length of time any debris belonging to it to remain in the Leased Premises and it will remove from the Leased Premises all debris to a proper place of disposal. | |
5. | CONDITIONS OF PREMISES: Tenant and Landlord acknowledge that the premises are in good order and repair, unless otherwise indicated herein. (a) The Tenant shall make no alteration, addition or improvement in the premises without the prior written consent of Landlord which shall not be unreasonably withheld or delayed and except as provided in Exhibit B attached hereto. Landlord shall it expense make all the alterations and improvements set forth in Schedule C prior to the commencement date. (b) The |
necessity for and adequacy of repairs, replacements and renewals to the Leased Premises shall be measured by the standard which is appropriate for improvements of similar construction and class, provided that Tenant shall in any event make all non structural repairs necessary to comply with the building, health and fire codes of Danbury, Connecticut throughout the term of this Lease and for so long as the Tenant or its assigns shall occupy said premises, (c) Landlord represents that the Leased Premises presently comply with the building, health and fire codes of Danbury, Connecticut. (d) Upon the last day or sooner termination of the term hereof, Tenant shall surrender to Landlord the Leased Premises in broom clean condition. Specific areas of said premises, i.e. sidewalks, driveways, parking lots, lawns and shrubbery are to be returned to substantially the same condition existing at the commencement of this Lease normal wear and tear excepted. Any modification of this state of return will require written confirmation from the Landlord. | ||
6. | PAYMENT OF ADDITIONAL RENTAL: |
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7. | SECURITY: No security deposit shall be required of Tenant. | |
8. | UTILITIES: The Tenant shall pay directly or reimburse the Landlord as additional rent for all separately metered utility charges furnished to or used by Tenant in the use of the Building including, but not limited to, electric , water , gas , heat , and telephone charges ,. Landlord shall not be under any responsibility or liability in any way whatsoever for the quality, impairment, interruption, stoppage, or other interference with service involving water, heat, gas, electric current for light and power, telephone, or any other service by any utility not arising out of the Landlords conduct or neglect. | |
9. | REPAIRS AND MAINTENANCE: |
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10. | PARKING FACILITIES AND GENERAL AREAS: |
11. | ORDINANCES AND STATUES: Tenant shall use reasonable commercial efforts to comply with all statutes, ordinances and requirements of all municipal, state and federal authorities now in force, or which may hereafter be in force, pertaining to the Leased Premises, occasioned by or affecting the use thereof by Tenant provided the same do not prohibit Tenant from using the Leased Premises for the purposes specified in paragraph 4. The Landlord shall comply with the same. | |
12. | FIXTURES AND ALTERATIONS: |
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13. | SIGNS: Tenant shall have the right to install, signage (including exterior signage on the Building) in conformance with all applicable laws. The Tenant shall not display any sign, picture, advertisement, awning, merchandise or notice except as shall conform to the requirements of any governmental agencies having jurisdiction thereof. | |
14. | CHANGES OR ALTERATIONS BY LANDLORD: |
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15. | COVENANTS BY TENANT: |
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16. | LIABILITY AND INDEMNITY: |
17. | BANKRUPTCY OR INSOLVENCY: To more effectually secure the Landlord against loss of the rent and other payments herein provided to be made by the Tenant, it is agreed as a further condition of this Lease that the filing of any petition of bankruptcy or insolvency by or against the Tenant, or the adjudication in Bankruptcy of the Tenant, or the appointment of a Receiver for Tenant by any court, or Tenants assignment of its property for the benefit of creditors shall be deemed to constitute a breach of this Lease, if said petition is not dismissed or Receiver discharged within sixty (60) days after the filing or appointment, and thereupon without entry or other action by the Landlord, this Lease shall, at the option of the Landlord, become and be terminated; and not withstanding any other provisions of this Lease, the Landlord shall forthwith upon any such termination be entitled to recover the rent reserved in this Lease for the residue of the term hereof less the fair rental value of the Premises for the residue of said term. | |
18. | LITIGATION: In the event the Landlord or its agents, without fault on its/their part, or default under the terms of this Lease, become involved, through or on account of the occupancy of the Leased Premises by the Tenant, or the conduct of Tenants business upon the Leased Premises, in any controversy or litigation, with any third party, the Tenant shall upon notice from Landlord or its agent, immediately take all necessary steps, and do whatever may be necessary to remove said Landlords connection with, or liability under such controversy or litigation, and particularly if such controversy or litigation throws any cloud or encumbrance upon the title of said Landlord to its real estate; provided, that if the Tenant believes it has a good and valid defense, or claim, in such controversy or litigation which Tenant desires to set up and maintain by and throughout court procedure and litigation, the Tenant shall have the right to do so, |
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provided it first executes and delivers to the Landlord an indemnifying bond with surety, and discharges any and all final judgments, liens, costs, damages, expenses and obligations of Landlord whatsoever, in or arising out of the controversy or litigation involving the Landlord or its agents, including all costs, expenses and reasonable attorneys fees incurred by Landlord or its agents in protecting their interest or defending themselves in such controversy or litigation. | ||
19. | ARBITRATION: Any and all controversies, disputes or claims arising out of or related to this Lease, or the breach hereof, shall, so far as the law may allow, be resolved and settled by Arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (AAA). |
20. | ATTORNEYS FEES: The Tenant shall pay and indemnify the Landlord against all legal costs and charges, including counsel fees lawfully and reasonable incurred, in obtaining possession of the Leased Premises after a default of the Tenant or after the Tenants default in surrendering possession upon the expiration or earlier termination of the term of the Lease or enforcing any covenant of the Tenant herein contained. In the event of litigation between Landlord and Tenant, the prevailing party shall be entitled to legal fees and costs. |
21. | HAZARDOUS SUBSTANCES: The Tenant agrees that it shall be responsible for all costs, damages, or liability that may be incurred in connection with any hazardous waste discharge, spillage, or any other violation of any law in connection with the storage or use of hazardous waste materials or petroleum products; provided, however, that such discharge, spillage or other violation is as a result of or caused by Tenants occupancy, business, or other related activities, or of or by its employees, customers, agents, or visitors. In no case does this apply to any condition that may have existed prior to Tenants occupancy, or by the actions and occurrences on adjacent properties. Landlord acknowledges that Tenant has advised Landlord that Tenant may store hazardous waste materials or petroleum products. Tenant agrees to notify Landlord of the storage of any hazardous waste materials or petroleum products on the site. The Tenant further agrees to notify Landlord within twenty-four (24) hours of any hazardous waste or petroleum products discharge or violation of this paragraph known to Tenaant. The Tenant agrees that the storage or use of any hazardous waste or petroleum product materials shall be in compliance with all Federal, State and local laws or regulations. | |
The Tenant further agrees that it shall be responsible for all costs, damages, or liability that may be incurred in connection with any hazardous waste discharge, spillage, or any other violation of any law in connection with the storage or use of hazardous waste materials or petroleum products; provided, however that such discharge, spillage or other violation is as a result of or caused by Tenants occupancy, business, or other related activities, or of or by its employees, customers, agents, or visitors. In the event of any hazardous waste discharge or spillage, the Tenant shall immediately have said soil tested by a firm specializing in said work and enter into a contract for the removal of said soils and replacing of soils with clean fill and for the replacing of any areas disturbed because |
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of said discharge or spillage. All of said work shall take place within a reasonable period from the day of knowledge of said discharge or spillage. | ||
In the event Tenant fails to perform said work as set forth in this paragraph, then, in such event, the Landlord may cause the same to be completed and the Tenant shall be responsible for the payment of same within thirty (30) days after presentation of bill to Tenant for the work performed, together with all reasonable costs incurred by Landlord in the performance of said work and repairing any damage to the entire premises and including any reasonable attorneys fee incurred. Any monies paid by Landlord in connection herewith shall be repaid to Landlord together with interest at the rate of nine percent (9%) per annum until paid. | ||
22. | ASSIGNMENT, MORTGAGING AND SUBLEASE: |
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subtenant on said covenants, agreements, terms, provisions and conditions set forth in the notice to Landlord referred to above, provided, however, that Landlord shall not in any event be obligated to consent to any such proposed assignment or subletting. | ||
23. | SUBORDINATION: This Lease is subject and subordinate to all mortgages which may now or hereafter affect such Lease or the real property of which the Premises form a part, and to all renewals, modifications, consolidations replacements and extensions thereof provided such mortgages provide that so long as the Tenant is not in default under the terms and conditions of this Lease, Tenants use, occupation and possession of the premises and all rights of Tenant under this Lease shall not be affected or disturbed by the bringing of any action to foreclose or otherwise enforce any such mortgage. This clause shall be self-operative and not further instrument of subordination shall be required by any mortgage. In confirmation of such subordination, Tenant shall execute promptly any certificate that Landlord may reasonably request. | |
24. | INSURANCE: |
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other thereof and of the amount of the extra cost, and the other party, at its election, may pay the same, but shall not be obligated to do so. | ||
25. | DESTRUCTION OF PREMISES: In the event of a partial destruction of the premises during the term hereof, from any cause, Landlord shall forthwith make the structural and exterior repairs and Tenant shall forthwith make the interior repairs, provided that such repairs can be made within sixty (60) days under existing governmental laws and regulations, but such partial destruction shall not terminate this lease, except that Tenant shall be entitled to a proportionate reduction of rent while such repairs are being made, based upon the extent to which the making of such repairs shall interfere with the business of Tenant and on the use of the Leased Premises. If such repairs cannot be made within said sixty (60) days, this Lease may be terminated at the option of either party. A total destruction of the Building shall terminate this lease. |
26. | ENTRY AND INSPECTION: The Landlord, its servants and agents, including representatives of the insurance company or companies carrying insurance on the Building, shall have the right to enter upon the said premises at any time for repairs to building or equipment or in an emergency or to take preventive measures to protect and preserve the property of the Landlord. Tenant shall permit Landlord or Landlords agents to enter upon the premises at reasonable times and upon reasonable notice, for the purpose of inspecting the same, and will permit Lessor at any time within ninety (90) days prior to the expiration of this Lease, to place upon the premises any usual To Let or For Lease signs, and permit persons desiring to lease the same to inspect the premises thereafter. All entry and inspection shall be done at times agreeable to Tenant and in a manner so as to conserve the confidentiality of the work done by Tenant on the Leased Premises and to minimize interference with Tenants business. |
27. | EMINENT DOMAIN: If the Leased Premises or any part thereof or any estate therein, materially affecting Tenants use of the Leased Premises, shall be taken by eminent domain, this Lease shall terminate on the date when title vests pursuant to such taking. The rent, and any additional rent and operating expense, shall be apportioned as of the termination date, and any rent paid for any period beyond that date shall be repaid to Tenant. Tenant shall not be entitled to any part of the award for such taking or any payment in lieu thereof, but nothing herein shall preclude Tenant from seeking its own damages or award for such taking. |
28. | QUIET ENJOYMENT: Landlord covenants and agrees with Tenant that it has good right to lease said Leased Premises, and upon Tenant paying all Basic Rent, additional rent and all other charges which may become due under this Lease and observing and performing all of the terms, covenants and conditions on Tenants part to be observed and performed, Tenant may peaceably and quietly have, hold, occupy and enjoy the Leased Premises and all rights under this Lease without hindrance or disturbance by Landlord or anyone claiming by, through or under Landlord. | |
29. | DEFAULT BY TENANT: |
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30. | WAIVERS: The failure of either party to insist, in any one or more instances, upon a strict performance of any of the covenants of this Lease, or to exercise any option herein contained, shall not be construed as a waiver or a relinquishment for the future of such covenant or option, but the same shall continue and remain in full force and effect. The receipt by Landlord of Basic Rent and/or additional rent with knowledge of the breach of any covenant hereof shall not be deemed a waiver of such breach and no waiver by the Landlord of any provision hereof shall be deemed to have been made unless expressed in writing and signed by the Landlord. |
31. | ABANDONMENT: If Tenant shall abandon or vacate said Leased Premises before the end of the term or otherwise default under any other provision of this Lease, Landlord may take possession of said Leased Premises and re-let the same, without such action being deemed an acceptance of a surrender of this Lease, or in any way terminating the Tenants liability hereunder, and the Tenant shall remain liable for payment of the Basic Rent and additional rent herein reserved, less the net amount realized by the Landlord from reletting, after deduction of any expenses incident to such repossession and reletting. |
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32. | HOLDOVER: If the Tenant shall occupy the Premises with the consent of the Landlord, after the expiration of this Lease, and/or Landlord and Tenant are negotiating in good faith for the extension or renewal of this Lease, and rent is accepted from said Tenant, such occupancy and payment shall be construed as an extension of this Lease for the term of one month only from the date of such expiration, and occupation thereafter shall operate to extend the term of this Lease for but one month at a time unless other terms of such extension are endorsed hereon in writing and signed by the parties hereto. In such event if either Landlord or Tenant desires to terminate said occupancy at the end of any month after the termination of this Lease, the party so desiring to terminate the same shall give the other party at least thirty (30) days written notice to that effect. Failure on the part of the Tenant to give such notice shall obligate it to pay rent for an additional calendar month, following the month in which the Tenant has vacated the demised premises. If such occupancy continues without the consent of the Landlord, Tenant shall pay to Landlord, as liquidated damages, one and one-half times the amount of Basic Rent and additional rent at the highest rate specified in this Lease for the time Tenant retains possession of the Premises or any part thereof after termination of the term by lapse of time or otherwise. |
33. | NOTICES: Any notice required to be given hereunder shall be deemed duly given if mailed in any Post Office by registered or certified mail, or sent by commercial overnight delivery addressed to the Landlord at 4 West Kenosia Avenue, Danbury, Connecticut 06810, and addressed to the Tenant at 6 W. Kenosia Avenue, Danbury, Connecticut 06810 or at such other address as either party may give to the other in writing. |
34. | EFFECT: Except as otherwise provided herein, terms and provisions of this Lease shall be binding on and inure to the benefit of the parties hereto and their respective heirs, representatives, executors, administrators, successors and permitted assigns. This Lease constitutes the entire agreement between the parties and may not be changed except by a writing signed by the party or parties against whom enforcement of any waiver, change, modification, extension, estoppel or discharge is sought. Whenever used, the singular number shall include the plural, the plural the singular and the use of any gender shall be applicable to all genders, as the circumstances require. This Lease shall be construed under the laws of the State of Connecticut excluding conflict of laws principles. The Landlord and Tenant hereby agree that any claims, disputes or litigation arising out of the terms, conditions and covenants of this Lease not settled by arbitration pursuant to paragraph 19. shall be adjudicated in the State of Connecticut, and the parties further hereby consent to the jurisdiction of the State of Connecticut over any such claims, disputes or litigation. It is agreed that if any provision of this Lease shall be determined to be void by any Court of competent jurisdiction, then such determination shall not affect any other provision of this Lease, all of which other provisions of this Lease shall remain in full force and effect; and it is the intention of the parties hereto that if any provision of this Lease is capable of two constructions, one of which would render the provision valid, then the provision shall have the meaning which renders it valid. At the request of either party, Landlord and Tenant shall execute, acknowledge and deliver to each other a recordable Notice of Lease pursuant to Connecticut statutes to give notice of Tenants lease. At the termination of this Lease, whether by lapse of time or otherwise, |
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Tenant shall execute, acknowledge and deliver to Landlord a quitclaim or other appropriate document in recordable form to evidence that this Lease has ended. | ||
35. | LATE CHARGE: If a rental payment is not received by Landlord by the 10 th day of the month, there shall be assessed against the Tenant at the Landlords option in addition to the Landlords other remedies named herein, a late charge for rent not received by the Landlord by the end of ten (10) days after the date it is due in the amount of Five (5%) of said payment. |
36. | BROKER: Each party represents that it used no broker in connection with this Lease and agrees to hold harmless the other party from any broker claiming through it. |
37. | OPTION TO RENEW: Provided (i) that at the time of option to extend or renew hereunder, Tenant shall not be in default under the terms, covenants and provisions of this lease beyond the applicable grace period; (ii) that Tenant shall notify Landlord in writing not later than 180 days prior to the expiration of the lease or the expiration of the first renewal term that Tenant desires an extension of this lease; (iii) that such extension shall be upon the same terms, covenants and provisions as are contained in the lease as then extended, except for the option set forth herein, and except as modified by the provisions of this paragraph, Landlord hereby grants the Tenant the privilege of extending the term of this lease for one (1) three (3) year term. It is understood and agreed that the provisions (i) and (ii) above are conditions precedent to the extension of this lease and in the event that Tenant fails to comply with them at the time Tenant exercises this extension, this privilege shall have no force or effect. |
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/s/ Janette Blockstone
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BY: | /s/ George Mulvaney | ||||||
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Witness
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Signature of Landlord | |||||||
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/s/ Erik Steiner
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George Mulvaney, Managing Member | |||||||
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Witness
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MULVANEY PROPERTIES, LLC | |||||||
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/s/ Janette Blockstone
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BY: | /s/ Solomon S. Steiner | ||||||
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Witness
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Signature of Tenant | |||||||
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/s/ Erik Steiner
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. | |||||||
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Witness
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Solomon S. Steiner, Ph.D. | |||||||
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Chief Executive Officer & Chairman | |||||||
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Global Positioning Group LTD |
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/s/ Janette Blockstone
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BY: | /s/ George Mulvaney | ||||||
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Witness
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Signature of Landlord | |||||||
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George Mulvaney, Managing Member | |||||||
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Witness
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MULVANEY PROPERTIES, LLC | |||||||
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BY: | |||||||
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Witness
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Signature of Tenant | |||||||
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/s/ R. Timmis Ware
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/s/ Solomon S. Steiner | |||||||
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Witness
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Solomon S. Steiner, Ph.D. | |||||||
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Chief Executive Officer & Chairman | |||||||
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Biodel, Inc. |
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1. | PREMISES: Landlord has leased, and does hereby lease, to Tenant, subject to all of the terms, covenants, conditions and provisions of this Lease, the premises situated at 8 Christopher Columbus Avenue, Danbury, Connecticut and more particularly described on Exhibit A attached hereto (the Leased Premises). Landlord and Tenant hereby acknowledge and agree that for the purposes of this Lease and the calculation(s) of Basic Rental and all Additional Rental (as hereinafter defined) payable hereunder, the Leased Premises shall be deemed to contain 2,500 rentable square feet. The structure on the Leased Premises is herein referred to as the Building. | |
2. | TERM: The term of this Agreement shall be for the period of thirty-nine (38) months, from December 1, 2006 (the commencement date), until midnight on January 31, 2010 (the termination date). | |
3. | RENT: Tenant shall pay to the Landlord, without demand, set-off or abatement of any kind minimum guaranteed annual rent (Basic Rent), during the term of this Lease, the sum of Twenty-Seven Thousand and 00/100 ($27,000.00) DOLLARS payable in monthly installments of $2,250.00 on the 1st day of each month, commencing on December 1, 2006. | |
4. | USE: Tenant agrees to use the Leased Premises for offices, laboratories, research, development and light manufacturing. Any other unrelated use is prohibited without the written approval of the Landlord, which shall not be unreasonably withheld or delayed. Tenant agrees that it shall not do anything which shall, in any way, materially impair or interfere with any of the Buildings services to be supplied by Landlord or the proper and economical heating, cleaning, air conditioning or other service of the Building or Leased Premises or seriously impair or interfere with the use of the Building or Premises or annoyance to Landlord. Tenant will not allow for an unreasonable length of time any debris belonging to it to remain in the Leased Premises and it will remove from the Leased Premises all debris to a proper place of disposal. | |
5. | CONDITIONS OF PREMISES: Tenant and Landlord acknowledge that the premises are in good order and repair, unless otherwise indicated herein. (a) The Tenant shall make no alteration, addition or improvement in the premises without the prior written consent of Landlord which shall not be unreasonably withheld or delayed and except as provided in Exhibit B attached hereto. Landlord shall at its expense make all the alterations and improvements set forth in Schedule C prior to the commencement date. (b) The necessity |
for and adequacy of repairs, replacements and renewals to the Leased Premises shall be measured by the standard which is appropriate for improvements of similar construction and class, provided that Tenant shall in any event make all non structural repairs necessary to comply with the building, health and fire codes of Danbury, Connecticut throughout the term of this Lease and for so long as the Tenant or its assigns shall occupy said premises, (c) Landlord represents that the Leased Premises presently comply with the building, health and fire codes of Danbury, Connecticut. (d) Upon the last day or sooner termination of the term hereof, Tenant shall surrender to Landlord the Leased Premises in broom clean condition. Specific areas of said premises, i.e. sidewalks, driveways, parking lots, lawns and shrubbery are to be returned to substantially the same condition existing at the commencement of this Lease normal wear and tear excepted. Any modification of this state of return will require written confirmation from the Landlord. | ||
6. | PAYMENT OF ADDITIONAL RENTAL: |
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7. | SECURITY: No security deposit shall be required of Tenant. | |
8. | UTILITIES: The Tenant shall pay directly or reimburse the Landlord as additional rent for all separately metered utility charges furnished to or used by Tenant in the use of the Building including, but not limited to, electric, water, gas, heat, and telephone charges,. Landlord shall not be under any responsibility or liability in any way whatsoever for the quality, impairment, interruption, stoppage, or other interference with service involving water, heat, gas, electric current for light and power, telephone, or any other service by any utility not arising out of the Landlords conduct or neglect. | |
9. | REPAIRS AND MAINTENANCE: |
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employees, licensees or contractors. In the event such repairs are necessitated by the act, default or negligence of Tenant, or that of its agents, servants, employees, licensees or contractors, Landlord may first notify Tenant of repair Landlord deems necessary for Tenant to make and give Tenant reasonable time to respond. If Tenant fails to respond in a timely fashion, herein defined as two weeks, Landlord may make or cause the same to be made, but shall not be obligated to do so, and Tenant agrees to pay the Landlord promptly upon Landlords demand, as Additional Rental, the full cost of such repairs, if made. In the event Landlord elects not to make such repairs caused by the act, default or negligence of Tenant, or that of its agents, servants, employees, licensees or contractors, Landlord may require Tenant to promptly make such repairs at Tenants sole cost and expense. | ||
10. | PARKING FACILITIES AND GENERAL AREAS: |
11. | ORDINANCES AND STATUTES: Tenant shall use reasonable commercial efforts to comply with all statutes, ordinances and requirements of all municipal, state and federal authorities now in force, or which may hereafter be in force, pertaining to the Leased Premises, occasioned by or affecting the use thereof by Tenant provided the same do not prohibit Tenant from using the Leased Premises for the purposes specified in paragraph 4. The Landlord shall comply with the same. | |
12. | FIXTURES AND ALTERATIONS: |
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13. | SIGNS: Tenant shall have the right to install, signage (including exterior signage on the Building) in conformance with all applicable laws. The Tenant shall not display any sign, picture, advertisement, awning, merchandise or notice except as shall conform to the requirements of any governmental agencies having jurisdiction thereof. | |
14. | CHANGES OR ALTERATIONS BY LANDLORD: |
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15. | COVENANTS BY TENANT: |
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damages arising out of or from such damage or defective condition. Nothing, however, in this paragraph is intended to relieve Landlord from its negligence or intentional misconduct. | ||
16. | LIABILITY AND INDEMNITY: |
17. | BANKRUPTCY OR INSOLVENCY: To more effectually secure the Landlord against loss of the rent and other payments herein provided to be made by the Tenant, it is agreed as a further condition of this Lease that the filing of any petition of bankruptcy or insolvency by or against the Tenant, or the adjudication in Bankruptcy of the Tenant, or the appointment of a Receiver for Tenant by any court, or Tenants assignment of its property for the benefit of creditors shall be deemed to constitute a breach of this Lease, if said petition is not dismissed or Receiver discharged within sixty (60) days after the filing or appointment, and thereupon without entry or other action by the Landlord, this Lease shall, at the option of the Landlord, become and be terminated; and not withstanding any other provisions of this Lease, the Landlord shall forthwith upon any such termination be entitled to recover the rent reserved in this Lease for the residue of the term hereof less the fair rental value of the Premises for the residue of said term. |
18. | LITIGATION: In the event the Landlord or its agents, without fault on its/their part, or default under the terms of this Lease, become involved, through or on account of the occupancy of the Leased Premises by the Tenant, or the conduct of Tenants business upon the Leased Premises, in any controversy or litigation, with any third parry, the Tenant shall upon notice from Landlord or its agent, immediately take all necessary steps, and do whatever may be necessary to remove said Landlords connection with, or liability under such controversy or litigation, and particularly if such controversy or litigation throws any cloud or encumbrance upon the title of said Landlord to its real estate; provided, that if the Tenant believes it has a good and valid defense, or claim, in such controversy or litigation which Tenant desires to set up and maintain by and throughout court procedure and litigation, the Tenant shall have the right to do so, provided it first executes and delivers to the Landlord an indemnifying bond with surety, and discharges any and all final judgments, liens, costs, damages, expenses and obligations of Landlord whatsoever, in or arising out of the controversy or litigation involving the Landlord or its agents, including all costs, expenses and reasonable attorneys fees incurred by Landlord or its agents in protecting their interest or defending themselves in such controversy or litigation. |
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19. | ARBITRATION: Any and all controversies, disputes or claims arising out of or related to this Lease, or the breach hereof, shall, so far as the law may allow, be resolved and settled by Arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (AAA). |
20. | ATTORNEYS FEES: The Tenant shall pay and indemnify the Landlord against all legal costs and charges, including counsel fees lawfully and reasonable incurred, in obtaining possession of the Leased Premises after a default of the Tenant or after the Tenants default in surrendering possession upon the expiration or earlier termination of the term of the Lease or enforcing any covenant of the Tenant herein contained. In the event of litigation between Landlord and Tenant, the prevailing party shall be entitled to legal fees and costs. |
21. | HAZARDOUS SUBSTANCES: The Tenant agrees that it shall be responsible for all costs, damages, or liability that may be incurred in connection with any hazardous waste discharge, spillage, or any other violation of any law in connection with the storage or use of hazardous waste materials or petroleum products; provided, however, that such discharge, spillage or other violation is as a result of or caused by Tenants occupancy, business, or other related activities, or of or by its employees, customers, agents, or visitors. In no case does this apply to any condition that may have existed prior to Tenants occupancy, or by the actions and occurrences on adjacent properties. Landlord acknowledges that Tenant has advised Landlord that Tenant may store hazardous waste materials or petroleum products. Tenant agrees to notify Landlord of the storage of any hazardous waste materials or petroleum products on the site. The Tenant further agrees to notify Landlord within twenty-four (24) hours of any hazardous waste or petroleum products discharge or violation of this paragraph known to Tenant. The Tenant agrees that the storage or use of any hazardous waste or petroleum product materials shall be in compliance with all Federal, State and local laws or regulations. | |
In the event of any hazardous waste discharge or spillage, the Tenant shall immediately have said soil tested by a firm specializing in said work and enter into a contract for the removal of said soils and replacing of soils with clean fill and for the replacing of any areas disturbed because of said discharge or spillage. All of said work shall take place within a reasonable period from the day of knowledge of said discharge or spillage. | ||
In the event Tenant fails to perform said work as set forth in this paragraph, then, in such event, the Landlord may cause the same to be completed and the Tenant shall be responsible for the payment of same within thirty (30) days after presentation of bill to Tenant for the work performed, together with all reasonable costs incurred by Landlord in the performance of said work and repairing any damage to the entire premises and including any reasonable attorneys fee incurred. Any monies paid by Landlord in connection herewith shall be repaid to Landlord together with interest at the rate of nine percent (9%) per annum until paid. |
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22. | ASSIGNMENT, MORTGAGING AND SUBLEASE: |
23. | SUBORDINATION: This Lease is subject and subordinate to all mortgages which may now or hereafter affect such Lease or the real property of which the Premises form a part, and to all renewals, modifications, consolidations replacements and extensions thereof provided such mortgages provide that so long as the Tenant is not in default under the terms and conditions of this Lease, Tenants use, occupation and possession of the premises and all rights of Tenant under this Lease shall not be affected or disturbed by the bringing of any action to foreclose or otherwise enforce any such mortgage. This clause shall be self-operative and not further instrument of subordination shall be |
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required by any mortgage. In confirmation of such subordination, Tenant shall execute promptly any certificate that Landlord may reasonably request. | ||
24. | INSURANCE: |
25. | DESTRUCTION OF PREMISES: In the event of a partial destruction of the premises during the term hereof, from any cause, Landlord shall forthwith make the structural and exterior repairs and Tenant shall forthwith make the interior repairs, provided that such repairs can be made within sixty (60) days under existing governmental laws and regulations, but such partial destruction shall not terminate this lease, except that Tenant shall be entitled to a proportionate reduction of rent while such repairs are being made, based upon the extent to which the making of such repairs shall interfere with the business of Tenant and on the use of the Leased Premises. If such repairs cannot be made within said sixty (60) days, this Lease may be terminated at the option of either parry. A total destruction of the Building shall terminate this lease. |
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26. | ENTRY AND INSPECTION: The Landlord, its servants and agents, including representatives of the insurance company or companies carrying insurance on the Building, shall have the right to enter upon the said premises at any time for repairs to building or equipment or in an emergency or to take preventive measures to protect and preserve the property of the Landlord. Tenant shall permit Landlord or Landlords agents to enter upon the premises at reasonable times and upon reasonable notice, for the purpose of inspecting the same, and will permit Lessor at any time within ninety (90) days prior to the expiration of this Lease, to place upon the premises any usual To Let or For Lease signs, and permit persons desiring to lease the same to inspect the premises thereafter. All entry and inspection shall be done at times agreeable to Tenant and in a manner so as to conserve the confidentiality of the work done by Tenant on the Leased Premises and to minimize interference with Tenants business. |
27. | EMINENT DOMAIN: If the Leased Premises or any part thereof or any estate therein, materially affecting Tenants use of the Leased Premises, shall be taken by eminent domain, this Lease shall terminate on the date when title vests pursuant to such taking. The rent, and any additional rent and operating expense, shall be apportioned as of the termination date, and any rent paid for any period beyond that date shall be repaid to Tenant. Tenant shall not be entitled to any part of the award for such taking or any payment in lieu thereof, but nothing herein shall preclude Tenant from seeking its own damages or award for such taking. |
28. | QUIET ENJOYMENT: Landlord covenants and agrees with Tenant that it has good right to lease said Leased Premises, and upon Tenant paying all Basic Rent, additional rent and all other charges which may become due under this Lease and observing and performing all of the terms, covenants and conditions on Tenants part to be observed and performed, Tenant may peaceably and quietly have, hold, occupy and enjoy the Leased Premises and all rights under this Lease without hindrance or disturbance by Landlord or anyone claiming by, through or under Landlord. | |
29. | DEFAULT BY TENANT: |
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30. | WAIVERS: The failure of either party to insist, in any one or more instances, upon a strict performance of any of the covenants of this Lease, or to exercise any option herein contained, shall not be construed as a waiver or a relinquishment for the future of such covenant or option, but the same shall continue and remain in full force and effect. The receipt by Landlord of Basic Rent and/or additional rent with knowledge of the breach of any covenant hereof shall not be deemed a waiver of such breach and no waiver by the Landlord of any provision hereof shall be deemed to have been made unless expressed in writing and signed by the Landlord. |
31. | ABANDONMENT: If Tenant shall abandon or vacate said Leased Premises before the end of the term or otherwise default under any other provision of this Lease, Landlord may take possession of said Leased Premises and re-let the same, without such action being deemed an acceptance of a surrender of this Lease, or in any way terminating the Tenants liability hereunder, and the Tenant shall re main liable for payment of the Basic Rent and additional rent herein reserved, less the net amount realized by the Landlord from reletting, after deduction of any expenses incident to such repossession and reletting. |
32. | HOLDOVER: If the Tenant shall occupy the Premises with the consent of the Landlord, after the expiration of this Lease, and/or Landlord and Tenant are negotiating in good faith for the extension or renewal of this Lease, and rent is accepted from said Tenant, such occupancy and payment shall be construed as an extension of this Lease for the term of one month only from the date of such expiration, and occupation thereafter shall operate to extend the term of this Lease for but one month at a time unless other terms of such extension are endorsed hereon in writing and signed by the parties hereto. In such event if either Landlord or Tenant desires to terminate said occupancy at the end of any month after the termination of this Lease, the party so desiring to terminate the same shall give the other party at least thirty (30) days written notice to that effect. Failure on the part of the Tenant to give such notice shall obligate it to pay rent for an additional calendar month, following the month in which the Tenant has vacated the demised premises. If such occupancy continues without the consent of the Landlord, Tenant shall pay to Landlord, as liquidated damages, one and one-half times the amount of Basic Rent and additional rent at the highest rate specified in this Lease for the time Tenant retains possession of the Premises or any part thereof after termination of the term by lapse of time or otherwise. |
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33. | NOTICES: Any notice required to be given hereunder shall be deemed duly given if mailed in any Post Office by registered or certified mail, or sent by commercial overnight delivery addressed to the Landlord at 4 Christopher Columbus Avenue, Danbury, Connecticut 06810, and addressed to the Tenant at 6 Christopher Columbus Avenue, Danbury, Connecticut 06810 or at such other address as either party may give to the other in writing. |
34. | EFFECT: Except as otherwise provided herein, terms and provisions of this Lease shall be binding on and inure to the benefit of the parties hereto and their respective heirs, representatives, executors, administrators, successors and permitted assigns. This Lease constitutes the entire agreement between the parties and may not be changed except by a writing signed by the parry or parties against whom enforcement of any waiver, change, modification, extension, estoppel or discharge is sought. Whenever used, the singular number shall include the plural, the plural the singular and the use of any gender shall be applicable to all genders, as the circumstances require. This Lease shall be construed under the laws of the State of Connecticut excluding conflict of laws principles. The Landlord and Tenant hereby agree that any claims, disputes or litigation arising out of the terms, conditions and covenants of this Lease not settled by arbitration pursuant to paragraph 19. shall be adjudicated in the State of Connecticut, and the parties further hereby consent to the jurisdiction of the State of Connecticut over any such claims, disputes or litigation. It is agreed that if any provision of this Lease shall be determined to be void by any Court of competent jurisdiction, then such determination shall not affect any other provision of this Lease, all of which other provisions of this Lease shall remain in full force and effect; and it is the intention of the parties hereto that if any provision of this Lease is capable of two constructions, one of which would render the provision valid, then the provision shall have the meaning which renders it valid. At the request of either party, Landlord and Tenant shall execute, acknowledge and deliver to each other a recordable Notice of Lease pursuant to Connecticut statutes to give notice of Tenants lease. At the termination of this Lease, whether by lapse of time or otherwise, Tenant shall execute, acknowledge and deliver to Landlord a quitclaim or other appropriate document in recordable form to evidence that this Lease has ended. |
35. | LATE CHARGE: If a rental payment is not received by Landlord by the 10 th day of the month, there shall be assessed against the Tenant at the Landlords option in addition to the Landlords other remedies named herein, a late charge for rent not received by the Landlord by the end of ten (10) days after the date it is due in the amount of Five (5%) of said payment. |
36. | BROKER: Each party represents that it used no broker in connection with this Lease and agrees to hold harmless the other party from any broker claiming through it. |
37. | OPTION TO RENEW: Provided (i) that at the time of option to extend or renew hereunder, Tenant shall not be in default under the terms, covenants and provisions of this lease beyond the applicable grace period; (ii) that Tenant shall notify Landlord in writing not later than 180 days prior to the expiration of the lease or the expiration of the first renewal term that Tenant desires an extension of this lease; (iii) that such extension shall be upon the same terms, covenants and provisions as are contained in the lease as |
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/s/ Janette Blockstone
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BY: | /s/ George Mulvaney | ||||||
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Witness
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Signature of Landlord | |||||||
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George Mulvaney, Managing Member | |||||||
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Witness
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MULVANEY PROPERTIES, LLC | |||||||
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BY: | |||||||
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Witness
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Signature of Tenant | |||||||
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/s/ R. Timmis Ware
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/s/ Solomon S. Steiner | |||||||
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Witness
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Solomon S. Steiner, Ph.D. | |||||||
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Chief Executive Officer & Chairman | |||||||
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Biodel, Inc. |
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Atlanta
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Milwaukee | |
Boston
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Minneapolis | |
Buffalo
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New Orleans | |
Charlotte
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New York | |
Chicago
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Oak Lawn | |
Cincinnati
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Philadelphia | |
Dallas
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Pittsburgh | |
Denver
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Princeton | |
Detroit
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Schaumburg | |
Houston
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St. Louis | |
Irvine
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San Francisco | |
Jacksonville
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Seattle | |
Los Angeles
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Brazil
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Mexico | |
Canada
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Morocco | |
China
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Philippines | |
Croatia
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Portugal | |
Czech Republic
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Russia | |
England
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Spain | |
Germany
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Taiwan | |
Greece
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Thailand | |
Hong Kong
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Turkey | |
Hungary
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Venezuela | |
Italy
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Japan
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By
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/s/ Richard L. Kelsey | |||
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Richard L. Kelsey | |||
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Senior Vice President |