Attached files
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EX-99.1 - EX-99.1 - EMISPHERE TECHNOLOGIES INC | b81235exv99w1.htm |
EX-10.1 - EX-10.1 - EMISPHERE TECHNOLOGIES INC | b81235exv10w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 4, 2010
Emisphere Technologies, Inc.
Delaware | 000-17758 | 13-3306985 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
240 Cedar Knolls Road, Suite 200 Cedar Knolls, NJ |
07927 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: 973-532-8000
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
Novartis Agreement
On
June 4, 2010, Emisphere Technologies, Inc. (the Company or Emisphere) announced that it has
entered into an agreement with Novartis Pharma AG (Novartis) as described below pursuant to which
Novartis has cancelled the Companys Convertible Promissory Note (the Note) and interest accrued
thereon. The Note was originally issued to Novartis on December 1, 2004 with an original principal
amount of $10 million in connection with the Research Collaboration and Option License Agreement
between the parties also of that date and was originally due December 1, 2009. Previously, Novartis
had agreed to extend the maturity date of the Note to June 4, 2010.
In connection with the cancellation of the Note, the Company and Novartis on June 4, 2010, entered
into a Master Agreement and Amendment (the Novartis Agreement) providing for certain reductions
to the royalty payments and modifications to schedule of milestone payments due to Emisphere under
the Research Collaboration and Option Agreement, dated as of December 3, 1997, as amended on
October 20, 2000, and the License Agreement, dated as of March 8, 2000, for the development of an
oral salmon calcitonin product for the treatment of osteoarthritis and osteoporosis. Additionally,
the Company has granted Novartis the right to evaluate the feasibility of using Emispheres
Eligen® Technology with two new compounds to assess the potential for new product
development opportunities. If Novartis chooses to develop oral formulations of these new compounds
using the Eligen® Technology, the parties will negotiate additional agreements. In that
case, Emisphere could be entitled to receive development milestone and royalty payments in
connection with the development and commercialization of these potentially new products.
Agreement with MHR
In connection with Emispheres entry into the Novartis Agreement, on June 4, 2010, MHR
Institutional Partners IIA LP (together with its affiliates, as applicable, MHR), the secured
party under that certain Senior Secured Term Loan Agreement by and between MHR and Emisphere and
that certain Pledge and Security Agreement by and between MHR and Emisphere, each dated September
26, 2005 (the Loan and Security Agreement), entered into an agreement with Novartis and
Emisphere (the MHR Agreement). MHR is the holder of the Companys 11% Senior Secured Convertible
Note and beneficially owns approximately 39.9% of the Companys common stock, par value $.01 per
share (the Common Stock) assuming conversion and exercise by MHR of all convertible securities,
warrants and options held, including the Warrants (as defined below).
MHR has agreed pursuant to the MHR Agreement to limit certain rights and courses of action that it
would have available to it as a secured party under certain circumstances as provided for therein.
Novartis required that the execution by MHR of the MHR
Agreement be a condition to Novartis execution of, and the effectiveness of, the Novartis
Agreement.
In connection with MHRs consent to Emispheres entering into the Novartis Agreement, which consent
is required under the Loan and Security Agreement, MHRs agreement to enter into the MHR Agreement,
as well as MHRs agreement to enter into a comparable agreement to the MHR Agreement in connection
with another potential Company transaction (the Other MHR Agreement), the Company entered into a
Letter Agreement with MHR on the same date, as amended and restated on June 8, 2010 (the Letter
Agreement) pursuant to which the Company agreed to issue to MHR the Warrants (as defined below)
and the Reimbursement Notes (as defined below), in each case as described below. Attached hereto
as Exhibit 10.1 is the Letter Agreement, which is incorporated herein by reference.
Warrants
Pursuant to the Letter Agreement, the Company agreed to issue new warrants to MHR to purchase an
aggregate of 865,000 shares of Common Stock (the Warrants). The Warrants shall be exercisable at
an exercise price of $2.90 per share (such price being equal to the average closing price of the
Companys Common Stock on The Over-the-Counter Bulletin Board during the 20 day period ending on
and including June 3, 2010) and will expire on August 21, 2014. Attached hereto as Exhibit 4.1 is
the form of the Warrants, which is incorporated herein by reference.
Reimbursement Notes
The Company has also agreed to reimburse MHR for its legal fees incurred in connection with the MHR
Agreement, the Letter Agreement and related matters, by issuing MHR a promissory note in the
principal amount of up to $500,000 (the Reimbursement Note). The Company has also agreed to
reimburse MHR, by issuing a second Reimbursement Note, for up to an additional $100,000 in legal
fees, if and when incurred, for the negotiation and execution by MHR of the Other MHR Agreement
(the Second Reimbursement Note together with the Reimbursement Note, the Reimbursement Notes).
The Reimbursement Notes provide for no interest prior to maturity and are payable upon the earlier
of June 4, 2012 and the date on which the Company has received at least $20,000,000 in aggregate
payments in connection with its licensing agreements with Novartis and any licensing agreement
entered into in connection with such other potential Company transaction. The Reimbursement Notes
may also be accelerated upon the occurrence of certain extraordinary transactions involving the
Company. The form of Reimbursement Note and Second Reimbursement Note to be issued to MHR are
attached hereto as Exhibits 10.2 and 10.3 respectively and are incorporated by reference herein.
The foregoing descriptions of the Letter Agreement, the Reimbursement Notes and the Warrants do not
purport to be complete and are qualified in their entirety by reference to Exhibits 10.1, 10.2,
10.3 and 4.1, respectively.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance
Sheet Arrangement of a Registrant
The disclosures concerning the Companys reimbursement to MHR in the form of the Reimbursement
Notes is set forth in Item 1.01 of this Current Report on Form 8-K are hereby incorporated by
reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The disclosures concerning the Warrants set forth in Item 1.01 of this Current Report on Form 8-K
are hereby incorporated by reference into this Item 3.02.
For the issuance of the Warrants, the Company is relying on the exemption from federal registration
under Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder, based on the
Companys belief that the offer and sale of the Warrants have and will not involve a public
offering, as each purchaser of such securities was an accredited investor and no general
solicitation has been involved in connection with the Letter Agreement.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description | |
4.1
|
Form of Emisphere Technologies, Inc. Warrant (attached as Exhibit A to the Letter Agreement attached hereto as Exhibit 10.1). | |
10.1
|
Letter Agreement by and between Emisphere Technologies, Inc. and MHR Institutional Partners IIA LP, dated June 8, 2010.1 | |
10.2
|
Form of Emisphere Technologies, Inc. Reimbursement Note (attached as Exhibit D to the Letter Agreement attached hereto as Exhibit 10.1). | |
10.3
|
Form of Emisphere Technologies, Inc. Second Reimbursement Note (attached as Exhibit E to the Letter Agreement attached hereto as Exhibit 10.1). | |
99.1
|
Press Release dated June 4, 2010. |
1 | Confidential treatment has been requested for the redacted portions of this agreement. A complete copy of this agreement, including the redacted portions, has been filed separately with the Securities and Exchange Commission. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
Emisphere Technologies, Inc. |
||||
June 8, 2010 | By: | /s/ Michael R. Garone | ||
Name: | Michael R. Garone | |||
Title: | Chief Financial Officer |
Exhibit Index
Exhibit No. | Description | |
4.1
|
Form of Emisphere Technologies, Inc. Warrant (attached as Exhibit A to the Letter Agreement attached hereto as Exhibit 10.1). | |
10.1
|
Letter Agreement by and between Emisphere Technologies, Inc. and MHR Institutional Partners IIA LP, dated June 8, 2010.2 | |
10.2
|
Form of Emisphere Technologies, Inc. Reimbursement Note (attached as Exhibit D to the Letter Agreement attached hereto as Exhibit 10.1) | |
10.3
|
Form of Emisphere Technologies, Inc. Second Reimbursement Note (attached as Exhibit E to the Letter Agreement attached hereto as Exhibit 10.1). | |
99.1
|
Press Release dated June 4, 2010. |
2 | Confidential treatment has been requested for the redacted portions of this agreement. A complete copy of this agreement, including the redacted portions, has been filed separately with the Securities and Exchange Commission. |