þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
(State or other jurisdiction of incorporation or organization) |
13-3607736
(I.R.S. Employer Identification No.) |
|
28903 North Avenue Paine
Valencia, California (Address of principal executive offices) |
91355
(Zip Code) |
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2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
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40
41
42
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands except share data)
June 30, 2011
December 31, 2010
$
24,770
$
66,061
497
4,370
674
1,593
2,849
26,860
73,954
200,383
202,356
885
629
230
317
$
228,358
$
277,256
$
1,600
$
3,294
19,958
14,840
21,558
18,134
209,979
209,335
242,203
235,319
473,740
462,788
1,309
1,278
1,614,018
1,587,858
38
74
(1,860,747
)
(1,774,742
)
(245,382
)
(185,532
)
$
228,358
$
277,256
Table of Contents
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Cumulative period
from February 14,
1991 (date of
Three months ended
Six months ended
inception) to
June 30,
June 30,
June 30,
2011
2010
2011
2010
2011
$
$
93
$
50
$
93
$
3,131
30,296
26,160
56,585
56,651
1,322,677
8,890
11,196
20,652
21,306
360,253
19,726
151,428
39,186
37,356
77,237
77,957
1,854,084
(39,186
)
(37,263
)
(77,187
)
(77,864
)
(1,850,953
)
47
(1,257
)
1,397
(2,047
)
(1,220
)
(2,509
)
(2,523
)
(4,985
)
(4,625
)
(22,436
)
(2,834
)
(1,211
)
(5,247
)
(2,421
)
(23,100
)
2
3
17
6
36,988
(44,480
)
(42,251
)
(86,005
)
(86,951
)
(1,860,721
)
(26
)
(44,480
)
(42,251
)
(86,005
)
(86,951
)
(1,860,747
)
(22,260
)
(952
)
$
(44,480
)
$
(42,251
)
$
(86,005
)
$
(86,951
)
$
(1,883,959
)
$
(0.37
)
$
(0.37
)
$
(0.71
)
$
(0.77
)
121,708
113,116
121,385
113,105
Table of Contents
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Cumulative
Period from
February 14,
1991 (Date of
Six months ended
Inception) to
June 30,
June 30,
2011
2010
2011
$
(86,005
)
$
(86,951
)
$
(1,860,747
)
8,023
8,607
104,486
4,701
8,005
118,123
3,018
(63
)
23,512
(191
)
19,726
151,428
347
873
9
(6
)
1,113
418
1,066
(885
)
1,256
1,221
7
87
(230
)
(447
)
(3,810
)
1,255
4,574
(3,313
)
18,503
(2
)
(67,447
)
(74,834
)
(1,420,011
)
(796,779
)
3,828
796,393
(6,109
)
(4,052
)
(326,360
)
63
347
(2,218
)
(4,052
)
(326,399
)
10,424
1,527
1,229,504
50,000
15,000
3,900
(1,028
)
623
4,220
1,742
18,000
77,000
340,000
(70,000
)
3,460
(1,667
)
207,050
(50
)
(1,302
)
(11,624
)
28,374
77,225
1,771,180
$
(41,291
)
$
(1,661
)
$
24,770
66,061
30,019
$
24,770
$
28,358
$
24,770
$
$
$
26
10,136
6,131
42,285
(952
)
3,331
171,154
2,758
(2,949
)
1,921
50,000
4,296
(5,248
)
1,039
459
1,039
11,116
27,797
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(A Development Stage Company)
(Unaudited)
Table of Contents
June 30, 2011
December 31, 2010
Carrying
Estimated
Carrying
Estimated
value
fair value
value
fair value
$
113.6
$
65.7
$
113.3
$
69.1
$
96.4
$
77.3
$
96.0
$
134.1
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June 30,
December 31,
2011
2010
Gross
Gross
Unrealized
Cost
Unrealized
Fair
Cost Basis
Gain
Fair Value
Basis
Gain
Value
$
467
$
30
$
497
$
4,295
$
75
$
4,370
June 30,
December 31,
2011
2010
$
8,720
$
5,624
727
668
4,873
4,993
264
149
5,374
3,406
$
19,958
$
14,840
Three months ended
Six months ended
June 30,
June 30,
2011
2010
2011
2010
$
1,993
$
4,256
$
4,701
$
8,005
Table of Contents
Three months ended
Six months ended
June 30,
June 30,
2011
2010
2011
2010
$
(44,480
)
$
(42,251
)
$
(86,005
)
$
(86,951
)
(52
)
273
(45
)
286
4
(3
)
9
(6
)
$
(44,528
)
$
(41,981
)
$
(86,041
)
$
(86,671
)
Workforce
Reduction
$
6,659
(5,482
)
(287
)
$
890
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Estimated
Useful
Life
June 30,
December 31,
(Years)
2011
2010
$
5,273
$
5,273
39-40
54,948
54,948
5-40
113,489
113,489
3-15
73,609
73,812
5-10
5,369
5,369
3
16,332
16,306
53
53
19,809
14,496
288,882
283,746
(88,499
)
(81,390
)
$
200,383
$
202,356
Three months ended
Six months ended
June 30,
June 30,
2011
2010
2011
2010
$
3,580
$
4,170
$
7,379
$
8,342
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June 30
December 31
2011
2010
$
115,000
$
115,000
(1,423
)
(1,699
)
113,577
113,301
$
100,000
$
100,000
(3,598
)
(3,966
)
96,402
96,034
$
209,979
$
209,335
Table of Contents
Three months ended
Six months ended
June 30,
June 30,
2011
2010
2011
2010
$
324
$
133
$
644
$
265
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continue the clinical development of AFREZZA and new inhalation systems for the treatment
of diabetes;
seek regulatory approval to sell AFREZZA in the United States and other markets;
seek development and commercialization collaborations for AFREZZA;
seek development collaborations for our cancer immunotherapy and cancer drug programs;
and
develop additional applications of our proprietary Technosphere platform technology for
the pulmonary delivery of other drugs.
Table of Contents
Three months ended
June 30,
2011
2010
$ Change
% Change
$
6,175
$
6,897
$
(722
)
(10
%)
21,131
12,849
8,282
64
%
2,525
4,055
(1,530
)
(38
%)
(157
)
(198
)
41
(21
%)
622
2,557
(1,935
)
(76
%)
$
30,296
$
26,160
$
4,136
16
%
Six months ended
June 30,
2011
2010
$ Change
% Change
$
12,624
$
13,826
$
(1,202
)
(9
%)
35,460
30,835
4,625
15
%
6,738
7,634
(896
)
(12
%)
(256
)
(433
)
177
(41
%)
2,019
4,789
(2,770
)
(58
%)
$
56,585
$
56,651
$
(66
)
0
%
Table of Contents
Three months ended
June 30,
2011
2010
$ Change
%Change
$
7,519
$
9,497
$
(1,978
)
(21
%)
1,371
1,699
(328
)
(19
%)
$
8,890
$
11,196
$
(2,306
)
(21
%)
Six months ended
June 30,
2011
2010
$ Change
%Change
$
17,970
$
18,090
$
(120
)
(1
%)
2,682
3,216
(534
)
(17
%)
$
20,652
$
21,306
$
(654
)
(3
%)
Table of Contents
Table of Contents
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Item 1A.
Risk Factors
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the rate of progress and costs of our clinical trials and research and development
activities, including costs of procuring clinical materials and operating our manufacturing
facilities;
our success in establishing strategic business collaborations and the timing and amount
of any payments we might receive from any collaboration we are able to establish;
actions taken by the FDA and other regulatory authorities affecting our products and
competitive products;
our degree of success in commercializing AFREZZA;
the emergence of competing technologies and products and other adverse market
developments;
the timing and amount of payments we might receive from potential licensees;
the costs of preparing, filing, prosecuting, maintaining and enforcing patent claims and
other intellectual property rights or defending against claims of infringement by others;
the level of our legal expenses, including those expenses associated with the securities
class actions and derivative lawsuits filed against us and certain of our executive officers
and directors and any settlement or damages payments associated with litigation;
the costs of discontinuing projects and technologies; and
the costs of decommissioning existing facilities, if we undertake such activities.
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the rate of progress, costs and results of our clinical trial and research and
development activities, which will be impacted by the level of proficiency and experience of
our clinical staff;
our ability to identify and enroll patients who meet clinical trial eligibility criteria;
our ability to access sufficient, reliable and affordable supplies of components used in
the manufacture of our product candidates, including insulin and other materials for
AFREZZA;
the costs of expanding and maintaining manufacturing operations, as necessary;
the extent of scheduling conflicts with participating clinicians and clinical
institutions;
the receipt of approvals by our competitors and by us from the FDA and other regulatory
agencies;
our ability to enter into sales and marketing collaborations for AFREZZA; and
other actions by regulators.
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safety and efficacy results for AFREZZA obtained in our nonclinical and previous clinical
testing may be inconclusive or may not be predictive of results that we may obtain in our
future clinical trials or following long-term use, and we may as a result be forced to stop
developing AFREZZA;
the data collected from clinical trials of AFREZZA or our other product candidates may
not reach statistical significance or otherwise be sufficient to support FDA or other
regulatory approval;
after reviewing test results, we or any potential collaborators may abandon projects that
we previously believed were promising; and
our product candidates may not produce the desired effects or may result in adverse
health effects or other characteristics that preclude regulatory approval or limit their
commercial use if approved.
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claims for which FDA approval can be obtained, including superiority claims;
perceived advantages and disadvantages of competitive products;
willingness of the healthcare community and patients to adopt new technologies;
ability to manufacture the product in sufficient quantities with acceptable quality and
cost;
perception of patients and the healthcare community, including third-party payers,
regarding the safety, efficacy and benefits compared to competing products or therapies;
convenience and ease of administration relative to existing treatment methods;
pricing and reimbursement relative to other treatment therapeutics and methods; and
marketing and distribution support.
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product design, development, manufacture and testing;
product labeling;
product storage and shipping;
pre-market clearance or approval;
advertising and promotion; and
product sales and distribution.
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the progress and results of our clinical trials;
general economic, political or stock market conditions;
legislative developments;
announcements by us or our competitors concerning clinical trial results, acquisitions,
strategic alliances, technological innovations, newly approved commercial products, product
discontinuations, or other developments;
the availability of critical materials used in developing and manufacturing AFREZZA or
other product candidates;
developments or disputes concerning our patents or proprietary rights;
the expense and time associated with, and the extent of our ultimate success in, securing
regulatory approvals;
announcements by us concerning our financial condition or operating performance;
changes in securities analysts estimates of our financial condition or operating
performance;
general market conditions and fluctuations for emerging growth and pharmaceutical market
sectors;
the issuance and sale of our common stock pursuant to the Seaside purchase agreement and
the Mann purchase agreement over the terms of these agreements;
sales of large blocks of our common stock, including sales by our executive officers,
directors and significant stockholders;
the status of litigation against us and certain of our executive officers and directors;
the existence of, and the issuance of shares of our common stock pursuant to, the share
lending agreement and the short sales of our common stock effected in connection with the
recently-completed sale of our 5.75% convertible notes due 2015; and
discussion of AFREZZA, our other product candidates, competitors products, or our stock
price by the financial and scientific press, the healthcare community and online investor
communities such as chat rooms. In particular, it may be difficult to verify statements
about us and our investigational products that appear on interactive websites that permit
users to generate content anonymously or under a pseudonym and statements attributed to
company officials may, in fact, have originated elsewhere.
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ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
ITEM 4.
(REMOVED AND RESERVED)
ITEM 5.
OTHER INFORMATION
Table of Contents
Exhibit
Number
Description of Document
Amended and Restated Certificate of Incorporation.
Certificate of Amendment of Amended and Restated Certificate of Incorporation.
Certificate of Amendment of Amended and Restated Certificate of Incorporation.
Certificate of Amendment of Amended and Restated Certificate of Incorporation.
Amended and Restated Bylaws.
Indenture, by and between MannKind and Wells Fargo Bank, N.A., dated November 1, 2006.
First Supplemental Indenture, by and between MannKind and Wells Fargo Bank, N.A., dated December 12, 2006.
Form of 3.75% Senior Convertible Note due 2013.
Form of common stock certificate.
Registration Rights Agreement, dated October 15, 1998, by and among CTL ImmunoTherapies Corp., Medical
Research Group, LLC, McLean Watson Advisory Inc. and Alfred E. Mann, as amended.
Indenture, by and between MannKind and Wells Fargo Bank, N.A., dated August 24, 2010.
Form of 5.75% Senior Convertible Note due 2015.
2004 Equity Incentive Plan, as amended.
Employment Agreement, dated June 27, 2011, between MannKind and Dr. Peter C. Richardson
Letter Agreement, dated June 24, 2011, between MannKind and N.V. Organon
Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities
Exchange Act of 1934, as amended.
Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities
Exchange Act of 1934, as amended.
Certifications of the Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) or
15d-14(b) of the Securities Exchange Act of 1934, as amended and Section 1350 of Chapter 63 of Title 18
of the United States Code (18 U.S.C. § 1350).
Interactive Data Files pursuant to Rule 405 of Regulation S-T.
*
Indicates management contract or compensatory plan.
**
MannKind has requested confidential treatment with respect to certain portions of this
exhibit.
(1)
Incorporated by reference to MannKinds registration statement on Form S-1 (File No.
333-115020), filed with the SEC on April 30, 2004, as amended.
(2)
Incorporated by reference to MannKinds quarterly report on Form 10-Q (File No. 000-50865),
filed with the SEC on August 9, 2007.
(3)
Incorporated by reference to MannKinds current report on Form 10-Q (File No. 000-50865),
filed with the SEC on August 2, 2010.
(4)
Incorporated by reference to MannKinds current report on Form 8-K (File No. 000-50865),
filed with the SEC on November 19, 2007.
(5)
Incorporated by reference to MannKinds registration statement on Form S-3 (File No.
333-138373), filed with the SEC on November 2, 2006.
Table of Contents
(6)
Incorporated by reference to MannKinds current report on Form 8-K (File No. 000-50865),
filed with the SEC on December 12, 2006.
(7)
Incorporated by reference to MannKinds current report on Form 8-K (File No. 000-50865),
filed with the SEC on August 24, 2010.
(8)
Incorporated by reference to MannKinds current report on Form 8-K (File No. 000-50865),
filed with the SEC on June 8, 2011.
Table of Contents
Dated: August 4, 2011
MANNKIND CORPORATION
By:
/s/ Matthew J. Pfeffer
Matthew J. Pfeffer
Corporate Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
MannKind Corporation
|
||||
By: | /s/ David Thomson | |||
David Thomson | ||||
Corporate Vice President, General Counsel and Secretary |
1
a. | Payment of the following accrued obligations (the Accrued Obligations) which shall occur on the Employees last date of employment (Date of Termination): |
2
(i) | Employees then current annual base salary through the Date of Termination to the extent not theretofore paid; and | ||
(ii) | Payment as follows: |
(a) | if the performance criteria for earning the annual bonus for the full fiscal year of termination have been fully satisfied as of the Date of Termination (excluding any requirement that the Employee be employed by the Company at the end of the fiscal year), the product of (x) the amount of the annual bonus for that year and (y) a fraction the numerator of which is the number of days in the current fiscal year through the Date of Termination and the denominator of which is three hundred sixty-five (365); | ||
(b) | if the performance criteria for earning the annual bonus for the full fiscal year of termination have not been fully satisfied as of the Date of Termination then no bonus shall be deemed earned. Employee shall not be entitled to any pro-rata or partial bonus. |
b. | If the Date of Termination occurs prior to the expiry of the Term, the Company shall continue to pay Employees annual base salary in accordance with the Companys regular payroll processes so that Employee will receive his salary for a total of twenty four (24) months from the initial date of this Agreement. | ||
c. | If the Date of Termination occurs prior to the expiry of the Term, so that Employee will have coverage for a total of twenty four (24) months after the initial date of this Agreement or until the Employee qualifies for comparable medical and dental insurance benefits from another employer, whichever occurs first, the Company shall pay the Employees premiums for: |
(i) | health insurance benefit continuation for the Employee and his family members, if applicable, that the Company provides to the |
3
Employee under the provisions of the federal Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA), to the extent that the Company would have paid such premiums had the Employee remained employed by the Company (such continued payment is hereinafter referred to as COBRA Continuation); and | |||
(ii) | additional health coverage (such as Exec-U-Care), life, accidental death and disability and other insurance programs for the Employee and his family members, if applicable, to the extent Employee was eligible for such programs and such programs existed on the Date of Termination. |
d. | The specified period of time under any equity grant, agreement or plan in which any outstanding, vested stock option issued to the Employee is deemed to terminate after the termination of employment shall be extended until eighteen (18) months after the Date of Termination, except that nothing herein shall extend any such vested option beyond its original term or shall affect its termination for any reason other than termination of employment. | ||
e. | Employees entitlement to any and all compensation and benefits under the foregoing Sections 5.b, c, d and e, is expressly conditioned on Employees execution and delivery to the Company (and the expiration of any revocation period) of a general release and settlement agreement substantially in the form of Exhibit B hereto (Release Part II) within the time period set forth therein (but in no event later than twenty-one (21) days after the Date of Termination), which shall be material to the Companys obligation to provide any such compensation and benefits. |
4
a. | A refusal to carry out any material lawful duties of the Employee or any directions or instructions of the Board or Executive Leadership Team of the Company reasonably consistent with those duties; | ||
b. | The Employees gross negligence, willful misconduct or breach of his fiduciary duty to the Company; | ||
c. | Failure to perform satisfactorily any lawful duties of the Employee or any directions or instructions of the Board or senior management reasonably consistent with those duties; provided, however, that the Employee has been given notice and has failed to correct any such failure within ten (10) days thereafter (unless any such correction by its nature cannot be |
5
done in ten (10) days, in which event the Employee will have a reasonable time to correct failures), and provided further that the Company shall have no obligation to give notice and the Employee will have no such opportunity to correct more than two times in any twelve (12) calendar month period; | |||
d. | Violation by the Employee of a local, state or federal law involving the commission of a crime, other than minor traffic violations, or any other criminal act involving moral turpitude; | ||
e. | Current abuse by the Employee of alcohol or controlled substances; deception, fraud, misrepresentation or dishonesty by the Employee; or any incident materially compromising the Employees reputation or ability to represent the Company with investors, customers or the public; | ||
f. | Any other material violation of any provision of this Agreement by the Employee not described above, subject to the same notice and opportunity to correct provisions as are set forth in (c) above. |
6
a. | Nondisclosure. Except as required by his employment with the Company, the Employee will not, at any time during the term of employment with the Company, or at any time thereafter, directly, |
7
indirectly or otherwise, use, communicate, disclose, disseminate, lecture upon or publish articles relating to any confidential, proprietary or trade secret information of the Company or any third party provided to the Company in confidence, without the prior written consent of the Company. The Employee understands that the Company will be relying on this covenant in continuing the Employees employment, paying him compensation, granting him any promotions or raises, or entrusting him with any information that helps the Company compete with others. | |||
b. | Return of Materials. All documents, records, notebooks, notes, memoranda, drawings, computer files or other documents, in any form or media (whether paper, electronic or otherwise), made, compiled or received by the Employee at any time while employed by the Company, or otherwise in his possession, including any and all copies thereof, shall be the property of the Company and shall be held by the Employee in trust and solely for the benefit of the Company, and shall be delivered to the Company by the Employee upon termination of employment or at any other time upon request by the Company. | ||
c. | Nonsolicitation. For a period of two (2) years from the Date of Termination, the Employee shall not, directly or indirectly, solicit any employees of the Company or its Affiliates to accept employment from any other person or entity. Affiliate is defined as any entity controlling, controlled by or under common control with the Company within the meaning of Rule 405 of the Securities and Exchange Commission under the Securities Act of 1933. |
8
If to the Employee:
|
Address on file with Human Resources | |
|
||
If to the Company:
|
MannKind Corporation
Attn: President 28903 North Avenue Paine Valencia, CA 91355 |
9
10
11
MANNKIND CORPORATION | EMPLOYEE | |
By: /s/ Hakan Edstrom
|
/s/ Peter Richardson | |
|
||
Name: Hakan Edstrom
Title: President and COO |
Peter Richardson |
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1. | In consideration of the compensation and benefits the Company will provide to Employee as provided in the Employee Agreement between the Employee and the Company dated June __, 2011 (the Agreement), Employee does forever release and discharge the Company and all its parent, subsidiary and affiliated entities and all their past, present and future directors, officers, agents, employees, and representatives, successors and assigns from all claims, causes of action, damages, liabilities, and demands of whatever kind and character up to the date he signs below (Disputes), including, but not limited to, arising out of or in any way related to any of the circumstances of Employees employment or termination of employment with the Company. | ||
2. | This general release includes, but is not limited to: (a) all claims arising out of or in any way related to Employees employment with the Company or the termination of that employment; (b) all claims related to Employees compensation or benefits, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other equity interests in the Company; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Age Discrimination in Employment Act (as amended) (the ADEA), the California Labor Code, and the California Fair Employment and Housing Act (as amended). Employee represents that he has no lawsuits, claims or actions pending in his name, or on behalf of any other person or entity, against the Company or any other person or entity subject to the release granted in this paragraph. | ||
The parties intend that the Disputes released herein be construed as broadly as possible. | |||
3. | This Release extends to all disputes by Employee against the Company whether known or unknown, suspected or unsuspected, past or present, and whether or not they arise out of or are attributable to the circumstances of Employees employment or termination of employment with the Company. Specifically, Employee hereby expressly waives any and all rights under Section 1542 of the California Civil Code, which reads in full as follows: |
Section 1542. General Release. A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. |
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4. | Employee further understands and agrees that neither the payment nor the execution of this Release, or any part of it, shall constitute or be construed as an admission of any alleged liability or wrongdoing whatsoever by the Company. The Company expressly denies it has committed any alleged liability or wrongdoing. | ||
5. | Employee agrees not to seek reemployment with the Company or any of its affiliates, successors or assigns following the Term. | ||
6. | This Release shall be governed by the substantive law of the State of California. In the event of any dispute concerning the interpretation, breach or enforcement of this Release, such dispute(s) shall be resolved pursuant to the Arbitration provisions of Paragraph 27 of the Agreement. | ||
7. | If any provision of this Release is determined to be invalid or unenforceable, all of the other provisions shall remain valid and enforceable notwithstanding, unless the provision found to be unenforceable is of such material effect that this Release cannot be performed in accordance with the intent of the parties in the absence thereof. | ||
8. | No promise or agreement other than that expressed herein has been made. This Agreement constitutes a single integrated contract expressing the entire agreement of the parties hereto. There are no other agreements, written or oral, express or implied, between the parties concerning the subject matter hereof, except the provisions set forth in this Release. This Agreement supersedes all previous agreements and understandings regarding the subject matters hereof, whether written or oral, except as expressly provided herein. This Release can be amended, modified or terminated only by a writing executed by both Employee and the President of the Company. | ||
9. | In compliance with the ADEA, Employee acknowledges that he has been given twenty-one (21) days to review this Release before signing it. Employee also understands his waiver and release do not apply to any rights or claims that arise after the date he signs this Release, that he may revoke this Release within seven (7) days after he signs it, and that it is not enforceable or effective until the seven (7) day revocation period has expired. Employee understands that the benefits to which he is receiving are in addition to benefits to which he is otherwise entitled. Additionally, Employee has been advised in this writing to consult with an attorney before executing this Release. | ||
10. | THE EMPLOYEE STATES THAT HE IS IN GOOD HEALTH AND FULLY COMPETENT TO MANAGE HIS BUSINESS AFFAIRS, THAT HE HAS CAREFULLY READ THIS GENERAL RELEASE AND SETTLEMENT AGREEMENT, THAT HE FULLY UNDERSTANDS ITS FINAL AND BINDING EFFECT, THAT THE ONLY PROMISES MADE TO HIM TO SIGN THIS RELEASE ARE THOSE STATED AND CONTAINED IN THIS RELEASE, |
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AND THAT HE IS SIGNING THIS AGREEMENT KNOWINGLY AND VOLUNTARILY. |
MANNKIND CORPORATION | EMPLOYEE | |||||||
By:
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Title: President and COO |
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1. | In consideration of the ongoing severance benefits the Company will provide to Employee as provided in the Employee Agreement between the Employee and the Company dated June __, 2011 (the Agreement), Employee does forever release and discharge the Company and all its parent, subsidiary and affiliated entities and all their past, present and future directors, officers, agents, employees, and representatives, successors and assigns from all claims, causes of action, damages, liabilities, and demands of whatever kind and character up to the date he signs below (Disputes), including, but not limited to, arising out of or in any way related to any of the circumstances of Employees employment or termination of employment with the Company. | ||
2. | This general release includes, but is not limited to: (a) all claims arising out of or in any way related to Employees employment with the Company or the termination of that employment; (b) all claims related to Employees compensation or benefits, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other equity interests in the Company; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Age Discrimination in Employment Act (as amended) (the ADEA), the California Labor Code, and the California Fair Employment and Housing Act (as amended). Employee represents that he has no lawsuits, claims or actions pending in his name, or on behalf of any other person or entity, against the Company or any other person or entity subject to the release granted in this paragraph. | ||
The parties intend that the Disputes released herein be construed as broadly as possible. | |||
3. | This Release extends to all disputes by Employee against the Company whether known or unknown, suspected or unsuspected, past or present, and whether or not they arise out of or are attributable to the circumstances of Employees employment or termination of employment with the Company. Specifically, Employee hereby expressly waives any and all rights under Section 1542 of the California Civil Code, which reads in full as follows: |
Section 1542. General Release. A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. |
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4. | Employee further understands and agrees that neither the payment nor the execution of this Release, or any part of it, shall constitute or be construed as an admission of any alleged liability or wrongdoing whatsoever by the Company. The Company expressly denies it has committed any alleged liability or wrongdoing. | ||
5. | Employee agrees not to seek reemployment with the Company or any of its affiliates, successors or assigns following the Term. | ||
6. | This Release shall be governed by the substantive law of the State of California. In the event of any dispute concerning the interpretation, breach or enforcement of this Release, such dispute(s) shall be resolved pursuant to the provisions of Paragraph 27 of the Agreement. | ||
7. | If any provision of this Release is determined to be invalid or unenforceable, all of the other provisions shall remain valid and enforceable notwithstanding, unless the provision found to be unenforceable is of such material effect that this Release cannot be performed in accordance with the intent of the parties in the absence thereof. | ||
8. | No promise or agreement other than that expressed herein has been made. This Agreement constitutes a single integrated contract expressing the entire agreement of the parties hereto. There are no other agreements, written or oral, express or implied, between the parties concerning the subject matter hereof, except the provisions set forth in this Release. This Agreement supersedes all previous agreements and understandings regarding the subject matters hereof, whether written or oral, except as expressly provided herein. This Release can be amended, modified or terminated only by a writing executed by both Employee and the President of the Company. | ||
9. | In compliance with the ADEA, Employee acknowledges that he has been given twenty-one (21) days to review this Release before signing it. Employee also understands his waiver and release do not apply to any rights or claims that arise after the date he signs this Release, that he may revoke this Release within seven (7) days after he signs it, and that it is not enforceable or effective until the seven (7) day revocation period has expired. Employee understands that the benefits to which he is receiving are in addition to benefits to which he is otherwise entitled. Additionally, Employee has been advised in this writing to consult with an attorney before executing this Release. | ||
10. | THE EMPLOYEE STATES THAT HE IS IN GOOD HEALTH AND FULLY COMPETENT TO MANAGE HIS BUSINESS AFFAIRS, THAT HE HAS CAREFULLY READ THIS GENERAL RELEASE AND SETTLEMENT AGREEMENT, THAT HE FULLY UNDERSTANDS ITS FINAL AND BINDING EFFECT, THAT THE ONLY PROMISES MADE TO HIM TO SIGN THIS RELEASE ARE THOSE STATED AND CONTAINED IN THIS RELEASE, |
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28903 North Avenue Paine, Valencia, California 91355 USA
61 South Paramus Road, Paramus, New Jersey 07652 USA One Casper Street, Danbury, Connecticut 06810 USA www.mannkindcorp.com |
1. | Interpretation | |
Capitalised terms used but not defined in this Letter Agreement shall have the meaning given to them in the Supply Agreement. | ||
2. | Effect of this Letter Agreement | |
The Parties hereby agree that this Letter Agreement shall immediately be fully and effectively binding on them. | ||
3. | Payment, Delivery and Acceptance | |
3.1 | The Supply Agreement is terminated. Notwithstanding such termination, the provisions of the Supply Agreement explicitly referred to herein, as well as all provisions designated to survive termination pursuant to Section 11.5 of the Supply Agreement, shall survive this termination and remain in effect. | |
3.2 | MannKind shall pay to Organon the total sum of US$16 million, divided into two installments payable by way of bank transfer as follows: | |
(a) the amount of US$8 million to be paid within two days of MannKinds receipt of the First Shipment (as defined in Section 3.3(a) below); And | ||
(b) the amount of US$8 million to be paid within two days of MannKinds receipt of the Second Shipment (as defined in Section 3.3(b) below). |
3.3 | Organon shall manufacture and supply to MannKinds Danbury, Connecticut facility a total of [...***...] of Product manufactured in accordance with the shelf life requirements of the Supply Agreement and divided into two shipments deliverable as follows: | |
(a) A shipment of approximately [...***...] of Product to arrive at MannKinds Danbury, Connecticut Facility on 28 June 2011 (the First Shipment); and | ||
(b) A shipment of the balance of the total of [...***...] of Product to be shipped from Organons facility in France as soon as practicable following Organons receipt of the payment from MannKind pursuant to Section 3.2(a) above (the Second Shipment). Organon shall deliver the Second Shipment to MannKinds Danbury, Connecticut facility as soon as practicable following such Second Shipments having received all regulatory, customs, or FDA clearances required for shipment into and within the United States, provided, however, that Organon shall provide MannKind reasonable notice in advance of the planned delivery date and provided further that such delivery date shall be extended as necessary to ensure that delivery does not occur on any statutory holiday, a weekend, a Monday or a Friday. To facilitate Organons delivery obligations under this Section 3.3(b), MannKind hereby agrees to provide Organon with a Letter of Intended Use in the form attached hereto as Schedule A and revised by MannKind as may be necessary in order to meet government/regulatory requirements. For the avoidance of doubt, it shall be MannKinds obligation to provide a Letter of Intended Use that satisfies all government/regulatory requirements. | ||
3.4 | Organon shall bear the risk of loss for the Product until delivery to such designated facility at which time title to the Product and the risk of loss shall pass to MannKind. | |
3.5 | Each shipment of the Product shall be accompanied by accurate and complete documents including, but not limited to, relevant certificates of analysis and certificates of compliance. | |
3.6 | The provisions of clause 6.4 (Inspection, Acceptance and Rejection) and clause 6.5 (Expert) of the Supply Agreement shall apply to each delivery of Product under this Letter Agreement. | |
3.7 | Product supplied by Organon hereunder shall conform to the Specification set forth in Exhibit A to the Supply Agreement and the warranty set forth in clause 3.8 of this Letter Agreement. Organon shall perform quality control testing and quality oversight on the Product to be delivered to MannKind hereunder. | |
3.8 | Organon represents and expressly warrants that the Product provided under this Letter Agreement shall conform to the Specifications, including the Quality/Technical Agreement, shall be in compliance with all applicable laws and regulations, and free from defect, claim, encumbrance or lien. If and to the extent the corresponding event is not governed by clause 3.6 of this Letter Agreement, upon any breach of the warranty Organon shall at Organons sole expense promptly (and in no event longer than ninety (90) calendar days) correct, at no cost to MannKind, and at MannKinds request, any such breach by replacement of the Product that did not conform to such warranty and shall provide technical assistance to MannKind to address the Product non-conformity issues. Any replacement shall be considered a new Product for purposes of this clause 3.8. | |
Organon represents and warrants that it has and shall at all times throughout the term of this Agreement have, whether by right, title, interest, including by license or otherwise, the Intellectual Property Rights that are required to use, manufacture, market, offer to sell, sell, import and export the Product in accordance with the terms of this Letter Agreement and that this Letter Agreement shall not infringe third party rights. |
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EXCEPT AS EXPRESSLY PROVIDED HEREIN, ORGANON MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, AS TO THE QUALITY OR FITNESS FOR PURPOSE OF THE PRODUCT SUPPLIED TO MANNKIND. | ||
3.9 | MannKind shall only use the Product for End Product in the Territory. | |
4. | Release | |
This Letter Agreement is in full and final settlement of, and each party hereby releases and forever discharges, all and/or any actions, claims, rights, demands and set-offs, whether in this jurisdiction or any other, whether or not presently known to the parties or to the law, and whether in law or equity, that it, its parent, subsidiaries, assigns, transferees, representatives, principals, agents, officers and directors or any of them ever had, may have or hereafter can, shall or may have against the other party or any other of its parent, subsidiaries, assigns, transferees, representatives, principals, agents, officers or directors arising out of or connected with: | ||
(a) the Dispute; | ||
(b) the underlying facts relating to the Dispute; | ||
(c) any agreement between or act by the parties, their parents, subsidiaries, assigns, transferees, representatives, principals, agents, officers or directors, or any of them; and | ||
(d) any other matter arising out of or connected with the relationship between the parties (including the Supply Agreement). | ||
(Collectively the Released Claims ). | ||
5. | Agreement Not to Sue | |
Except as necessary to enforce its rights under this Letter Agreement, each Party agrees, on behalf of itself and on behalf of its parent, subsidiaries, assigns, transferees, representatives, principals, agents, officers or directors, not to sue, commence, voluntarily aid in any way, prosecute or cause to be commenced or prosecuted against the other party or its parent, subsidiaries, assigns, transferees, representatives, principals, agents, officers or directors, any action, suit or other proceeding concerning the Released Claims, in this jurisdiction or any other. | ||
6. | Costs | |
The Parties shall each bear their own costs (including but not limited to legal costs) in relation to the Dispute and this Letter Agreement. | ||
7. | Warranties and Authority | |
7.1 | Each Party warrants and represents that it has not sold, transferred, assigned or otherwise disposed of its interest in the Released Claims. | |
7.2 | Each Party warrants and represents to the other with respect to itself that it has the full right, power and authority to execute, deliver and perform this Letter Agreement. | |
8. | Indemnities | |
Each Party hereby indemnifies, and shall keep indemnified, the other party against all costs and damages (including the entire legal expenses of the parties) incurred in all future actions, claims and proceedings in respect of any of the Released Claims which they may bring against the other party or its parent, subsidiaries, assigns, transferees, representatives, principals, agents, officers or directors. |
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9. | No Admission | |
This Letter Agreement is entered into in connection with the compromise of disputed matters and in the light of other considerations. It is not, and shall not be represented or construed as, an admission of liability or wrongdoing on the part of either Party to this Letter Agreement or any other person or entity. | ||
10. | Severability | |
If any provision of this Letter Agreement is found to be void or unenforceable, that provision shall be deemed to be deleted from this Letter Agreement and the remaining provisions of this Letter Agreement shall continue in full force and effect and the Parties shall use their respective reasonable endeavours to procure that any such provision is replaced by a provision which is valid and enforceable, and which gives effect to the spirit and intent of this Letter Agreement. | ||
11. | Entire Agreement | |
This Letter Agreement, together with the provision of the Supply Agreement and Quality Agreement referenced herein, constitutes the entire understanding and agreement between the Parties in relation to the subject matter of this Letter Agreement. | ||
Each Party acknowledges that it has not entered into this Letter Agreement in reliance wholly or partly on any representation or warranty made by or on behalf of the other party (whether orally or in writing) other than as expressly set out in this Letter Agreement. | ||
12. | Confidentiality | |
The terms of this Letter Agreement, and the substance of all negotiations in connection with it, are confidential to the Parties and their advisers, who shall not disclose them to, or otherwise communicate them to, any third party other than: | ||
(a) to the Parties respective auditors, insurers and lawyers on terms which preserve confidentiality; | ||
(b) pursuant to an order of a court of competent jurisdiction or pursuant to any proper order or demand made by any competent authority or body where they are under a legal or regulatory obligation to make such a disclosure; and | ||
(c) as far as necessary to implement and enforce any of the terms of this Letter Agreement. | ||
The Parties are entitled to confirm the fact of, but not the terms of, settlement of the Dispute. | ||
13. | Governing Law and Dispute Resolution | |
13.1 This Letter Agreement shall be governed by, and construed in accordance with English law. | ||
13.2 Any controversy or claim arising out of or relating to this Letter Agreement, or the breach thereof, shall be settled by arbitration by a sole arbitrator administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Such arbitration shall be conducted in the English language in New York City. | ||
14. | Contracts (Rights of Third Parties) Act 1999 | |
No other person who is not a party to this Letter Agreement shall have any rights, whether under the Contract (Rights of Third Parties) Act 1999 or otherwise, to enforce any terms of this Letter Agreement. |
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15. | Co-operation | |
The Parties shall deliver or cause to be delivered such instruments and other documents at such times and places as are reasonably necessary or desirable, and shall take any other action reasonably requested by the other Party for the purpose of putting this Letter Agreement into effect, including MannKinds provision of appropriate purchase orders and a Letter of Intended Use in the form attached hereto as Schedule A, revised by MannKind as may be necessary to allow the Product to receive customs/FDA or other regulatory clearance. The parties shall fully cooperate with each other to provide feedback, comments, questions or other communications, if any, received from any governmental agency or authority with respect to any documents or requirements necessary for importation of the Product into the United States and shipment within the United States. | ||
16. | Counterparts | |
This Letter Agreement may be signed in any number of counterparts, each of which, when executed and delivered, shall be an original and all of which together evidence the same Letter Agreement. | ||
17. | Variation | |
Any variation of this Letter Agreement shall be in writing and signed by or on behalf of each party. |
N.V. Organon | MannKind Corporation | |||||
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By:
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/s/ Dr. Ir. Jan Smook | By: | /s/ Hakan Edstrom | |||
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Name: Dr. Ir. Jan Smook | Name: Hakan Edstrom | ||||
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Title: Vice President Manufacturing | Title: President & COO | ||||
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Date: 24 June 2011 | Date: 6/23/2011 | ||||
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By:
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/s/ J.H.M. Pluymen
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Name: J.H.M. Pluymen | |||||
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Title: Chairman of the Board | |||||
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Date: 24 June 2011 |
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Date: August 4, 2011 | /s/ Alfred E. Mann | |||
Alfred E. Mann | ||||
Chief Executive Officer
(Principal Executive Officer) |
Date: August 4, 2011 | /s/ Matthew J. Pfeffer | |||
Matthew J. Pfeffer | ||||
Chief Financial Officer
(Principal Financial Officer) |
/s/ Alfred E. Mann
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/s/ Matthew J. Pfeffer | |||
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Alfred E. Mann
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Matthew J. Pfeffer | |||
Chief Executive Officer
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Chief Financial Officer |