Strongbridge Biopharma plc
Annual Report 2017

Plain-text annual report

Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K (Mark One) ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2017 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-37569 STRONGBRIDGE BIOPHARMA plc(Exact name of Registrant as specified in its charter) Ireland98-1275166(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.) 900 Northbrook DriveSuite 200Trevose, PA 19053+1 610‑254‑9200(Address of principal executive offices) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registeredOrdinary shares, par value $0.01 per share The NASDAQ Global Select Market Securities registered or to be registered pursuant to Section 12(g) of the Act:None(Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. ☐ Yes ☒ No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past90 days. ☒ Yes ☐ No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrantwas required to submit and post such files). ☒ Yes ☐ No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not becontained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. ☒ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growthcompany. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of theExchange Act. Large Accelerated Filer ☐Accelerated Filer ☒Non-Accelerated Filer ☐Smaller reporting company ☐ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No The aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant, as of June 30, 2017, the last business day of the Registrant’smost recently completed second fiscal quarter, was approximately $216,524,867. Solely for purposes of this disclosure, shares of common stock held by executiveofficers and directors of the Registrant as of such date have been excluded because such persons may be deemed to be affiliates. This determination of executiveofficers and directors as affiliates is not necessarily a conclusive determination for any other purposes. 45,504,848 ordinary shares were issued and outstanding as of March 1, 2018.DOCUMENTS INCORPORATED BY REFERENCE: NONE Table of ContentsStrongbridge Biopharma plcTable of Contents Page Cautionary Statement Regarding Forward-Looking Statements and Market Data 3Part I. Item 1. Business 4Item 1A Risk Factors 38Item 1B. Unresolved Staff Comments 73Item 2. Properties 73Item 3. Legal Proceedings 73Item 4. Mine Safety Disclosures 73Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases ofEquity Securities 74Item 6. Selected Financial Data 76Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 77Item 7A. Quantitative and Qualitative Disclosures About Market Risk 91Item 8. Financial Statements and Supplementary Data 92Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 92Item 9A. Controls and Procedures 92Item 9B. Other Information 93Part III. Item 10. Directors, Executive Officers and Corporate Governance 93Item 11. Executive Compensation 96Item 12. Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters 106Item 13 Certain Relationships and Related Transactions, and Director Independence 109Item 14. Principal Accountant Fees and Services 110Part IV. Item 15. Exhibits, Financial Statement Schedules 111Item 16. Form 10-K Summary 113 SIGNATURES 114 2 Table of ContentsCAUTIONARY STATEMENT REGARDING FORWARD‑LOOKING STATEMENTS AND MARKET DATAThis Annual Report on Form 10-K (“Annual Report”) contains forward‑looking statements that involve substantialrisks and uncertainties. All statements, other than statements of historical facts, contained in this Annual Report, includingstatements regarding our future results of operations and financial position, business strategy, prospective products, productapprovals, research and development costs, size of market or patient population, timing and likelihood of success, plans andobjectives of management for future operations, and future results of current and anticipated products, are forward‑lookingstatements. These statements relate to future events or to our future financial performance and involve known and unknownrisks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially differentfrom any future results, performance or achievements expressed or implied by the forward‑looking statements. The words“anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,”“might,” “objective,” “plan,” “potential,” “predict,” “project,” “positioned,” “seek,” “should,” “target,” “will,” “would,” orthe negative of these terms or other similar expressions are intended to identify forward‑looking statements, although not allforward‑looking statements contain these identifying words. These forward‑looking statements are based on currentexpectations, estimates, forecasts and projections about our business and the industry in which we operate and management’sbeliefs and assumptions, are not guarantees of future results, performance or developments and involve known and unknownrisks, uncertainties and other factors that may cause our actual results or developments to differ materially from theexpectations contained in the forward-looking statements. Such risks and uncertainties include those described throughoutthis Annual Report and particularly in “Risk Factors” in Part I, Item 1A of this Annual Report. Given these risks anduncertainties, readers are cautioned not to place undue reliance on such forward‑looking statements. Readers are urged tocarefully review and consider the various disclosures made in this Annual Report and in other documents we file from time totime with the Securities and Exchange Commission (the “SEC”) that disclose risks and uncertainties that may affect ourbusiness. The forward‑looking statements included in this Annual Report do not reflect the potential impact of any futureacquisitions, mergers, dispositions, joint ventures or investments we may make. In addition, the forward-looking statementsin this Annual Report are made as of the date of this filing, and we do not undertake, and expressly disclaims any duty, toupdate such statements, whether as a result of new information, new developments or otherwise, except to the extent thatdisclosure may be required by law.Solely for convenience, the trademarks and trade names in this Annual Report are referred to without the and ™symbols, but absence of such references should not be construed as any indicator that their respective owners will not assert,to the fullest extent under applicable law, their rights thereto. The trademarks, trade names and service marks appearing inthis Annual Report are the property of their respective owners.Unless the context requires otherwise, references in this Annual Report to “Strongbridge,” “we,” “us” and “our” referto Strongbridge Biopharma plc. 3 ®Table of ContentsPART I ITEM 1. BUSINESSOverviewWe are a global commercial-stage biopharmaceutical company focused on the development and commercializationof therapies for rare diseases with significant unmet needs.Our first commercial product is Keveyis (dichlorphenamide), the first and only treatment approved by the U.S. Foodand Drug Administration (the “FDA”) for hyperkalemic, hypokalemic, and related variants of primary periodic paralysis(“PPP”), a group of rare hereditary disorders that cause episodes of muscle weakness or paralysis.Our second commercial product, Macrilen (macimorelin) is an oral growth hormone secretagogue receptor agonist,and is the first and only oral drug approved by the FDA for the diagnosis of patients with adult growth hormone deficiency(“AGHD”). We expect to launch Macrilen in the United States in mid-2018.In addition to our two commercial products, we have two clinical-stage product candidates for rare endocrinediseases, Recorlev and veldoreotide. Recorlev (levoketoconazole) is a cortisol synthesis inhibitor currently being studied forthe treatment of endogenous Cushing's syndrome. Veldoreotide is a next-generation somatostatin analog being investigatedfor the treatment of acromegaly and potential additional applications in other conditions amenable to somatostatin receptoractivation. Both Recorlev and veldoreotide have received orphan designation from the FDA and the European MedicinesAgency (“EMA”).Given the well-identified and concentrated prescriber base addressing our target markets, we intend to continue touse a small, focused sales force to market Keveyis, Macrilen and any future products, in the United States, the EuropeanUnion and other key global markets. We believe that our ability to execute on our strategy is enhanced by the significantcommercial and clinical development experience of key members of our management team. Since the introduction of our new management team in August 2014, we have been building a rare disease,franchise-based business model focused on expansion through a disciplined in-licensing and acquisition strategy. In pursuitof our growth strategy, we have raised over $275 million in equity and debt financings since December 2014. We willcontinue to identify and evaluate the acquisition of products and product candidates for licensing or acquisition that wouldbe complementary to our existing rare neuromuscular and endocrine franchises or that would form the basis for new raredisease franchises. We believe this approach will enable us to maximize our commercial potential by further leveraging ourexisting resources and expertise.Our Products and Product Candidates ·Keveyis (dichlorphenamide), an oral carbonic anhydrase inhibitor and the only therapy approved in theUnited States to treat hyperkalemic, hypokalemic and related variants of PPP. PPP is a rare genetic,neuromuscular disorder that can cause extreme muscle weakness and/or paralysis; some forms are alsocommonly associated with myotonia or muscle stiffness. It often interferes with daily activities and, as patientsget older, it can lead to permanent muscle weakness. The two most common forms of this disorder are“hyperkalemic” and “hypokalemic” periodic paralysis. Keveyis was approved by the FDA in August 2015, andhas orphan drug exclusivity status in the United States through August 7, 2022. From May 2016 to December2016, Taro Pharmaceuticals Industries Ltd. and its affiliates (“Taro”), supplied Keveyis on a non-commercialbasis to patients through a single specialty pharmacy in the United States. We acquired the U.S. marketingrights to Keveyis in December 2016 and we launched Keveyis in the United States in April 2017.·Macrilen (macimorelin), an oral growth hormone secretagogue receptor agonist, is indicated for the diagnosisof AGHD. Macrilen has been granted orphan-drug designation by the FDA for use in evaluating growthhormone deficiency (“GHD”). On December 20, 2017, the FDA granted marketing approval for4 Table of ContentsMacrilen, an oral growth hormone secretagogue (GHS) receptor agonist, to be used in the diagnosis of patientswith AGHD, which affects approximately 60,000 adults in the United States and Canada. We acquired the U.S.and Canadian marketing rights to Macrilen from Aeterna Zentaris GmbH in January 2018 and we intend tolaunch Macrilen in the United States in mid-2018.·Recorlev (levoketoconazole), a cortisol synthesis inhibitor, is in Phase 3 clinical development for the treatmentof endogenous Cushing’s syndrome. Endogenous Cushing’s syndrome is a rare endocrine disordercharacterized by sustained elevated cortisol levels that most commonly result from a benign tumor of thepituitary gland. We believe that Recorlev, which is the isolated, “left-handed” mirror image, or enantiomer, ofketoconazole, has the potential to become the new standard of care for the drug therapy of endogenousCushing’s syndrome. In July 2017, we completed enrollment of 94 patients in SONICS, a pivotal, multinationalPhase 3 clinical trial for Recorlev. We anticipate that top-line data for the primary efficacy analysis will beavailable in mid-2018. In addition, we have initiated LOGICS, a second pivotal Phase 3 clinical trial ofRecorlev for the treatment of endogenous Cushing's syndrome. The LOGICS study will supplement the long-term efficacy and safety data from the ongoing SONICS trial via a randomized, double-blind, placebo-controlled design that will randomize approximately 35 patients, of which up to approximately one-half willhave completed the SONICS study. Enrollment in the LOGICS study is anticipated to begin in the first quarterof 2018, and top-line data are expected in the first quarter of 2019. Upon completion of the clinical development program, we intend to file for marketing authorizations in theUnited States and elsewhere. Following consultations with the FDA, we have determined that the 505(b)(2)approval pathway, which permits a New Drug Application (“NDA”) applicant to rely on data from studies thatwere not conducted by or for the applicant and for which the applicant has not obtained a right of reference, isthe appropriate pathway for a Recorlev NDA. Because NDA approval can rely in part on data already acceptedby the FDA or otherwise publicly available, an abbreviated and reduced development program may be possible.We intend to rely on published literature and the FDA’s prior findings concerning the safety and/oreffectiveness of ketoconazole in our NDA for Recorlev. A similar marketing authorization pathway is availablein most of the rest of the world, and we anticipate that the studies supporting U.S. approval will likewise supportapprovals to market Recorlev elsewhere, including in the European Union. ·Veldoreotide modified-release, a novel multi-receptor targeted somatostatin analog (SSA) that was previouslyin Phase 2 development as an immediate release formulation. Based on the differentiated activation pattern ofsomatostatin receptor subtypes (“SSTRs”) and the preclinical and clinical profile of immediate-releaseveldoreotide, we believe that modified-release veldoreotide may offer an improved efficacy and safety profilerelative to existing drug therapies for acromegaly and other conditions that are modifiable through activationof somatostatin receptors, such as Cushing’s disease and neuroendocrine tumors. Veldoreotide has been grantedorphan drug designation by the FDA and the EMA for treatment of acromegaly. The lead formulation forveldoreotide modified-release is based upon PLGA microspheres. PLGA is a well-known polymer, which hasbeen widely applied in modified-release formulations due to its biocompatibility, biodegradability, andfavorable release kinetics. We expect to initiate a series of pre-clinical studies that seek to determine additionaldifferentiating features of veldoreotide in both endocrine and non-endocrine conditions.Product SalesProduct sales for Keveyis in 2017 accounted for 100% of our total revenues as it was our only commercial productsold in 2017. We operate in one operating reporting segment. We sell Keveyis to one specialty pharmacy provider, who is theexclusive distributor of Keveyis in the United States. The specialty pharmacy subsequently resells Keveyis to patients, whichare covered by payors that may provide for government-mandated or privately negotiated rebates with respect to thepurchase of Keveyis (see Note 3 of our consolidated financial statements).5 Table of ContentsOur StrategyOur goal is to transform the lives of patients by building a leading franchise‑based, commercially orientedbiopharmaceutical company addressing rare diseases with significant unmet medical needs. We are focused on developing,in‑licensing, acquiring and eventually commercializing products and product candidates that target rare diseases acrosstherapeutic areas.To achieve our goal, we are pursuing the following strategies:·Focus on rare diseases. We are selling or developing treatments for rare diseases, initially PPP, AGHD andendogenous Cushing’s syndrome. Rare diseases typically have a high unmet need for innovative treatmentoptions. Drug development for the treatment of rare diseases often requires smaller clinical trials than forcommon diseases. Product candidates focused on rare diseases also often qualify for orphan drug designation,which in the United States provides for seven years of market exclusivity and in the European Union providesfor 10 years of market exclusivity after regulatory approval to market has been granted.·Independently commercialize Keveyis, Macrilen and other products in the United States and the EuropeanUnion. We have commercialized Keveyis in the United States and intend to market Macrilen in the UnitedStates and Canada. Our other rare disease product candidates, if approved, may be marketed in the UnitedStates, the European Union, and, selectively, in other key global markets. Given the relatively small prescriberbases for Keveyis, Macrilen and our two product candidates, we believe we can use a relatively small, focusedsales force to effectively promote our products. We have established sales, marketing, market access and patientservice capabilities in the United States to market Keveyis. We believe that some of the activities involved inour commercialization of Keveyis and Macrilen will provide synergies to our commercialization of Recorlev ifsuccessful. We believe that our ability to execute on this strategy is enhanced by the significant priorcommercial experience of key members of our management team. Prior to joining our company, members of ourmanagement team were involved in the launch or commercialization of over 20 pharmaceutical products.·Expand our portfolio through a disciplined in‑licensing and acquisition strategy. We plan to source newproduct candidates by in‑licensing or acquiring them. Our management team seeks to mitigate the potentialrisks of this strategy by adhering to our disciplined criteria of focusing on in‑licensing or acquisition ofproducts that are already commercially available or that have human clinical data that we believe suggest arelatively high probability of success for development and an attractive potential return on investment. As aresult of our management team’s experience in sourcing, selecting, in‑licensing and acquiring products andproduct candidates, we were successful in acquiring the U.S. rights to Keveyis and the U.S. and Canadian rightsto Macrilen, as well as augmenting our rare endocrine franchise by adding veldoreotide to our productpipeline. ·Utilize a franchise model built on rare disease therapeutic areas. We intend to build our company byin‑licensing and acquiring products and product candidates that target rare diseases in therapeutically alignedfranchises with significant commercial opportunity. We believe that complementary products and productcandidates will allow us to significantly leverage our expertise as well as our development and commercialinfrastructure. For example, Keveyis serves as the basis of our rare neuromuscular franchise, and Macrilen andRecorlev, if approved, will serve as the basis for our rare endocrine franchise.·Expand indications of products and product candidates within our franchises. In addition to identifyingproducts and product candidates that can form the basis of new rare disease franchises, we also intend toleverage opportunities to develop potential products and product candidates for additional indications withintheir respective therapeutic franchises. We believe that this approach will enable us to maximize ourcommercial potential by further leveraging our existing resources and expertise.6 Table of ContentsOur Product Candidate PipelineThe following table illustrates our product candidates by stage:Our Rare Neuromuscular FranchiseIn December 2016, we initiated our rare neuromuscular franchise by acquiring the U.S. marketing rights to Keveyis(dichlorphenamide) from Taro Pharmaceuticals North America, Inc., a subsidiary of Taro Pharmaceutical Industries Ltd.Keveyis is the first and only therapy approved in the United States to treat hyperkalemic, hypokalemic and related variants ofPPP, a group of rare hereditary disorders that cause episodes of muscle weakness or paralysisOverview of PPP and Keveyis PPP is a rare, genetic, neuromuscular disorder related to a defect in muscle ion channels with multiple variants andsubtypes. The disease is characterized by episodes of muscle weakness and paralysis. It often interferes with daily activitiesand, as patients get older, it can lead to permanent muscle weakness. PPP may be localized (“focal”) or more widespread(“generalized”), and it often goes underdiagnosed and/or undertreated. Types of periodic paralysis are differentiated bycriteria including underlying genetic mutations and changes in blood potassium during an episode. The two most commonforms of PPP are hypokalemic, when episodes can be induced by low blood levels of potassium, and hyperkalemic, whenepisodes are associated with elevated levels of blood potassium. We believe, based on our market research, that there areapproximately 4,000 to 5,000 patients in the United States diagnosed with PPP.Keveyis is an oral carbonic anhydrase inhibitor that was approved by the FDA in the United States in August 2015to treat hyperkalemic, hypokalemic and related variants of PPP. The exact mechanism(s) through which oral carbonicanhydrase inhibitors, and Keveyis in particular, decrease the frequency and severity of periodic paralysis attacks isunknown. However, it is believed that their effects are mediated both locally (i.e. in muscle) and systemically. It is notknown whether their effects are disease-modifying. Keveyis has received orphan drug exclusivity status in the United Statesthrough August 7, 2022. Following FDA approval in August 2015, Keveyis was marketed by Taro. In May 2016, Taro announced thecessation of their commercial sales and related promotional activities for Keveyis. Taro supplied Keveyis to patients on anon-commercial basis through a single specialty pharmacy in the United States from May 2016 until our acquisition of theU.S. marketing rights to Keveyis in December 2016. We continued to supply Keveyis to patients on a non-commercial basisuntil launching Keveyis in April 2017. After acquiring the U.S. marketing rights for Keveyis, we established sales, marketing,market access and patient service capabilities.We launched Keveyis using 12 experienced sales representatives, and in the fourth quarter of 2017 expanded7 Table of Contentsour sales force to 24 individuals consisting of three regional business directors and 21 sales representatives. Because a largepercentage of the people who suffer from PPP remain undiagnosed or inadequately treated, we developed programs toeducate the medical community and patients about this illness. In addition, we established a field-based force of medicalscience liaisons. We use a single, specialty pharmacy to provide reimbursement, clinical and distribution support forKeveyis and to develop cost-sharing and patient assistance programs to support qualified, commercially insured patients,federal- and state-insured patients, and uninsured or under-insured patients. We also donate money to independent charitablefoundations dedicated to this cause. Our ultimate goal is to ensure that no PPP patient is denied access to Keveyis forfinancial reasons.Clinical Development of Keveyis The efficacy of KEVEYIS was evaluated in two clinical studies, Study 1 and Study 2.Study 1Study 1 was a 9-week, double blind, randomized, placebo-controlled, multi-center study. Study 1 consisted of twosubstudies: a substudy in patients with hypokalemic periodic paralysis (n=44), and a substudy in patients with hyperkalemicperiodic paralysis (n=21). The primary efficacy endpoint in both substudies was the average number of self-reported attacksof muscle weakness per week over the final 8 weeks of the trial. Withdrawal from the study for acute severe worsening wasalso assessed as an endpoint.In Study 1, the tested dose of Keveyis was 50 mg b.i.d. for treatment-naïve patients. Patients already receivingdichlorphenamide prior to the study continued on the same dose if randomized to Keveyis during the study. In patientstaking acetazolamide prior to the study, the daily dose of Keveyis was set at 20% of the daily acetazolamide dose. Dosereduction for tolerability was permitted.In the hypokalemic periodic paralysis substudy, median age of patients was 45 years and 73% of patients were male.Patients treated with Keveyis (n=24) had 2.2 fewer attacks per week than patients (n=20) treated with placebo (p=0.02). Noneof the patients randomized to Keveyis reached the endpoint of acute worsening, vs. five patients randomized to placebo. Themean dose of Keveyis at Week 9 was 94 mg/day.In the hyperkalemic periodic paralysis substudy, median age of patients was 43 years and 43% of patients weremale. During the double-blind treatment period, patients treated with Keveyis (n=12) had 3.9 fewer attacks per week thanpatients treated with placebo (n=9) (p=0.08). None of the patients randomized to Keveyis reached the endpoint of acuteworsening, vs. two patients randomized to placebo. The mean dose of Keveyis at Week 9 was 82 mg/day.Study 2Study 2 was a 35-week, double blind, placebo-controlled, randomized, multi-center, two-period crossover study.Study 2 also consisted of two substudies: a substudy in patients with hypokalemic periodic paralysis (n=42), and a substudyin patients with hyperkalemic periodic paralysis (n=31), including patients with Paramyotonia Congenita (together termedpotassium-sensitive periodic paralysis or PSPP). The primary endpoint in the hypokalemic periodic paralysis substudy wasthe incidence of acute intolerable worsening (based on attack frequency or severity) necessitating withdrawal. The primaryendpoint in the hyperkalemic periodic paralysis substudy was the average number of self-reported attacks of muscleweakness per week. Dosing was determined similarly to Study 1.In the hypokalemic periodic paralysis substudy, mean age of patients was 38 years and 79% of patients were male.Acute intolerable worsening was observed in 2 patients on Keveyis vs. 11 patients on placebo (p=0.02). The mean dose ofKeveyis at the end of the study was 96 mg/day.In the hyperkalemic periodic paralysis substudy, mean age of patients was 37 years and 58% of patients were male.Patients treated had 2.3 fewer attacks per week on Keveyis than on placebo (p=0.006). The mean dose of Keveyis at the endof the study was 73 mg/day.8 Table of ContentsOur Rare Endocrine FranchiseOur rare endocrine franchise consists of Macrilen, Recorlev and veldoreotide. Macrilen is the first and only oral drugapproved by the FDA for the diagnosis of patients with AGHD. Recorlev is being developed for the treatment of endogenousCushing’s syndrome, and veldoreotide is being developed for the treatment of acromegaly and potential additionalapplications in other conditions amenable to somatostatin receptor activation. Overview of Adult Growth Hormone Deficiency (AGHD) and MacrilenAGHD is a condition that is associated with premature mortality, as well as cardiovascular, neuromuscular,metabolic, nervous system, and skeletal abnormalities. The clinical features are nonspecific; growth hormone stimulationtesting is required to diagnose AGHD. Growth hormone is produced by the pituitary gland and secreted in pulses, so randommeasurements of growth hormone levels in the blood are not useful for establishing a diagnosis of AGHD. Growth hormonestimulation testing provokes the pituitary gland to release levels of growth hormone above resting levels to determine thegrowth hormone release potential in a patient suspected of having AGHD.On December 20, 2017, the FDA granted marketing approval for Macrilen, an orally available, peptidomimeticgrowth hormone secretagogue receptor agonist (or ghrelin receptor, GHSR-1a, agonist), to be used in the diagnosis ofpatients with AGHD, which affects approximately 60,000 adults in the U.S. and Canada. We acquired the U.S. and Canadianmarketing rights to Macrilen from Aeterna Zentaris GmbH in January 2018 and we intend to launch Macrilen in mid-2018.Macrilen is the first and only oral drug approved by the FDA for the diagnosis of patients with AGHD.Clinical Development of Macrilen The diagnostic efficacy of the Macrilen test was established in a randomized, open-label, single-dose, cross-overstudy. The objective of the study was to compare the level of agreement between Macrilen test results and insulin tolerancetest (“ITT”) results in adult patients with different pre-test probabilities of AGHD, including with healthy controlsubjects. The four groups of individuals evaluated were:·Group A: Adults with a high likelihood of growth hormone deficiency (GHD)oStructural hypothalamic or pituitary lesions and low insulin-like growth factor 1 (IGF-1), and/oroThree or more pituitary hormone deficiencies and low IGF-1, oroChildhood onset GHD with structural lesions and low IGF-1.·Group B: Adults with an intermediate likelihood of GHDoEligible subjects not qualifying for either high or low likelihood.·Group C: Adults with a low likelihood of GHDoOne risk factor for GHD only, such as history of distant traumatic brain injury or one pituitary hormonedeficiency only with otherwise normal pituitary function, oroIsolated idiopathic childhood onset GHD without additional pituitary deficits.·Group D: Healthy adult controlsoHealthy subjects matching Group A subjects by sex, age ± 5 years, body mass index (BMI ± 2 kg/m), and estrogen status (females only).For both the ITT and the Macrilen test, serum concentrations of growth hormone were measured at 30, 45, 60, and 90minutes after drug administration. The test was considered positive (i.e., AGHD diagnosed) if the maximum serum growthhormone level observed anytime after stimulation was less than the pre-specified cut point value of 2.8 ng/mL for theMacrilen test or 5.1 ng/mL for the ITT.The level of negative and positive agreement between the results of the ITT and the Macrilen test was used toevaluate the performance of the Macrilen test. In the study, the ITT test results were used as the benchmark (i.e., a negativeITT indicated absence of the disease and a positive ITT indicated presence of the disease). Negative agreement was theproportion of subjects with a negative ITT (i.e., those who did not have GHD per the ITT) who also had a negative Macrilen 9 2Table of Contentstest. The results showed a high level of negative agreement, demonstrating that the Macrilen test will not wrongly diagnosean individual without GHD (per the ITT) as having GHD. Positive agreement was the proportion of subjects with a positiveITT (i.e., those who had GHD per the ITT) who also had a positive Macrilen test. The results showed a high level of positiveagreement, demonstrating that the Macrilen test will not wrongly diagnose an individual with GHD (per the ITT) as nothaving GHD. The agreement measures between the two tests are defined mathematically below (see Table 2). Table 2: Definition of Agreement between ITT and Macrilen Insulin Tolerance TestTotal+-Macrilen+aba+bPositive Agreement (%)=100%x a/(a+c)-cdc+dNegative Agreement (%)=100%x d/(b+d)Totala+cb+da+b+c+dOverall Agreement (%)=100% x(a+d)/(a+b+c+d) One hundred and fifty-seven subjects underwent at least one of the two tests in this study, 59% were male, 41%female, and 86% of white origin. The median age was 41 years (range: 18 – 66 years) and body mass index 27.5 kg/m(range: 16 – 40 kg/m). The study relied on a cross-over design and each participant was to undergo the two diagnostic testsand serve as his or her own control. Data on both tests were available for 140 subjects; 38 (27%) in Group A, 37 (26%) inGroup B, 40 (29%) in Group C, and 25 (18%) in Group D. One out of 154 Macrilen tests (0.6%) performed failed due to atechnical error and 27 out of 157 ITTs (17.2%) performed failed because induction of severe hypoglycemia (i.e., the stimulus)could not be achieved.Two-by-two tables presenting the pre-specified primary analysis results for the ITT and Macrilen test are shownbelow for all subjects (Groups A, B, C, and D combined) and for each group separately (see Table 3). The estimates fornegative and positive agreement between Macrilen and the ITT in the overall study population were 94% and 74% withlower 95% confidence interval bounds 85% and 63%, respectively. Negative and positive agreement between Macrilen andthe ITT in subjects with intermediate or low risk (Groups B and C) were 93% and 61% with lower 95% confidence intervalbounds 80% and 43%, respectively. These results are based on peak growth hormone values (maximum growth hormoneconcentrations across all measurement timepoints).Table 3: Diagnostic Outcomes for Macrilen and the ITT in all Subjects (Groups A, B, C, and D) and in Each GroupSeparately All SubjectsInsulin Tolerance TestTotalAgreement Between+-ITT and MacrilenMacrilen+55459Positive74%-196281Negative94%Total7466140Overall84%Group A High likelihood ofAGHDInsulin Tolerance TestTotal+-Macrilen+33033Positive89%-415Negative100%Total37138Overall89%10 22Table of ContentsGroup BIntermediatelikelihood of AGHDInsulin Tolerance TestTotal+-Macrilen+20121Positive67%-10616Negative86%Total30737Overall70%Group CLow likelihood ofAGHDInsulin Tolerance TestTotal+-Macrilen+224Positive33%-43236Negative94%Total63440Overall85%Group DHealthy controlInsulin Tolerance TestTotal+-Macrilen+011Positive0%-12324Negative96%Total12425Overall92% Repeatability was tested in a subset of 34 subjects who underwent two Macrilen tests. Agreement between the resultof the first test and the second test was observed in 31 cases (91.2%).Overview of Endogenous Cushing’s Syndrome and RecorlevOverview of Endogenous Cushing’s SyndromeThere are two variants of Cushing’s syndrome: exogenous, which is caused by factors outside the body (e.g.,corticosteroid or cortisol-like medications) and endogenous, which is caused by factors within the body. The signs andsymptoms may be the same in both forms. The more common form is exogenous Cushing’s syndrome, which is often found inpeople taking cortisol‑like medications for long periods of time or for shorter periods of time using very potent forms.Cortisol‑like medications are often used to treat inflammatory disorders such as asthma and rheumatoid arthritis. Unlikeendogenous Cushing’s syndrome, exogenous Cushing’s syndrome may be alleviated by withdrawing the incitingmedication.Endogenous Cushing’s syndrome is a rare endocrine disorder characterized by sustained elevated blood cortisol.Cortisol is a hormone produced in the adrenal gland and is naturally secreted as an end-product of the activity of thehypothalamic‑pituitary‑adrenal axis. Corticotropin‑releasing‑hormone (“CRH”) is secreted from the hypothalamus andstimulates the secretion and release of adrenocorticotropin (“ACTH”) from the pituitary gland, which in turn stimulatescortisol (and other hormone) secretion from the adrenal gland. Cortisol itself exerts negative feedback control on both CRHin the hypothalamus and ACTH in the pituitary gland, thereby reducing CRH and ACTH secretion, keeping cortisol levels ina normal range.The most common form of endogenous Cushing’s syndrome is called Cushing’s disease, which is typically causedby a benign pituitary tumor that secretes ACTH autonomously. Cushing’s disease represents approximately 70% to 80% ofpatients with endogenous Cushing’s syndrome. Other causes of endogenous ACTH-dependent Cushing’s syndrome includeextrapituitary tumors producing ACTH, known as ectopic ACTH, or less often CRH (ectopic CRH). The source of ectopicACTH/CRH secretion is most often small‑cell carcinoma of the lung or bronchial carcinoid tumors but neuroendocrinetumors found in many different organs can also be sources. In a smaller number of cases, approximately 20%, endogenousCushing’s syndrome is ACTH‑independent, meaning that it does not arise through11 Table of Contentstumor secretion of ACTH but rather results from excess secretion of cortisol itself in the adrenal gland by adrenocorticaltumors, either benign or malignant, or by non‑malignant enlargement of the adrenal glands called hyperplasia.In patients with endogenous Cushing’s syndrome, the normal feedback mechanisms of thehypothalamic‑pituitary‑adrenal axis are disrupted as a result of a tumor autonomously secreting ACTH, CRH or cortisol. Thiscauses chronic exposure to high circulating cortisol levels that give rise to the clinical state of Cushing’s syndrome. Themost common signs and symptoms of the syndrome include: weight gain, especially in the upper body with a rounded face(“moon face”) and extra fat on the upper back and above the collarbones; high blood sugar or diabetes mellitus; high bloodpressure or hypertension; thin bones or osteoporosis; muscle loss or sarcopenia; thin, fragile skin that bruises easily;purple‑red stretch marks called striae, usually over the abdomen and under the arms; depression and difficulty thinkingclearly; too much facial hair, or hirsutism, usually noticed only in women; irregular or absent menstrual periods andinfertility; reduced sex drive or libido; and in children, poor height growth.An estimated 25,000 patients in the United States and 40,000 patients in Europe are diagnosed with endogenousCushing’s syndrome. When first diagnosed, patients are most commonly adults aged 20 to 50 and five times more oftenwomen than men. However, endogenous Cushing’s syndrome is believed to be underdiagnosed due to lack of diseaserecognition, which often leads to a delay in diagnosis of six years on average. Endogenous Cushing’s syndrome patients arebelieved to have a mortality risk two to three times that of the age-and-gender-matched general population, withcardiovascular disease, venous thrombosis and infections being the primary causes of death.Overview of RecorlevRecorlev (levoketoconazole) is a cortisol synthesis inhibitor that we are developing for the treatment of endogenousCushing’s syndrome, a rare endocrine disorder characterized by excessive production of the stress hormone cortisol. Inendogenous Cushing’s syndrome, elevated circulating cortisol gives rise to a severe disease with variable clinical signs andsymptoms, including weight gain, characteristic changes in fat distribution, diabetes mellitus, hypertension, osteoporosis,muscle loss and depression. The active pharmaceutical ingredient in Recorlev, levoketoconazole exerts its therapeutic effectby blocking the synthesis of cortisol in the adrenal glands, leading to the reduction and, ideally, the normalization of bloodcortisol. Recorlev has been granted orphan drug designation by the FDA and the EMA and is being developed using a doseregimen of twice daily oral administration. Ketoconazole, used off‑label in the United States, is the most frequently prescribed drug therapy for endogenousCushing’s syndrome. It is used to reduce blood cortisol and ameliorate comorbidities associated with Cushing’s syndrome.Molecules of ketoconazole form as mirror images, referred to as enantiomers. Manufactured ketoconazole consists of twoenantiomers, 2R,4S‑ketoconazole and 2S,4R‑ketoconazole, that are found in equal amounts, and is therefore referred to as aracemate. Recorlev is a pure form of one (2S,4R‑ketoconazole) of the two enantiomers of ketoconazole. Single‑enantiomerdrugs, like Recorlev, may offer safety and efficacy advantages over racemates because one of the enantiomers in a racematecan have safety issues or be less effective in the treatment of the disorder or disease. The more therapeutically favorableenantiomer may be known as the eutomer. We believe that levoketoconazole is the eutomer of ketoconazole with respect tocortisol synthesis inhibition and treatment of endogenous Cushing’s syndrome.Recorlev inhibits the cortisol synthesis pathway at several points. In light of the shared mechanism of action withketoconazole and the data from Phase 2 clinical trials, which were conducted in diabetes patients without Cushing’ssyndrome, we believe Recorlev may have a similar beneficial impact on the reduction of significant comorbidities ofendogenous Cushing’s syndrome, including those associated with cardiovascular disease risk, such as diabetes, weight gain,hypertension and elevation in LDL-cholesterol. In addition, based on preclinical data and human pharmacokinetics, webelieve that Recorlev may offer an improved safety profile relative to existing approved drug therapies for endogenousCushing’s syndrome. Therefore, we believe that Recorlev has the potential to become a new standard of care for the chronicdrug therapy of endogenous Cushing’s syndrome.12 Table of ContentsCurrent Treatment Landscape and Limitations on Current Treatment OptionsTreatment of endogenous Cushing’s syndrome varies depending on the cause of the disease. For patients withCushing’s disease, initial treatment is almost always the attempted surgical removal of the pituitary tumor. In anticipation ofsurgery and when surgery is not effective or not feasible, drug or radiation therapy, or both, is used to suppress excessivecortisol production and the accompanying clinical symptoms. A typical approach to drug therapy is to inhibit cortisol synthesis through the oral administration of an inhibitor ofenzymes that regulate adrenal cortisol synthesis. Ketoconazole acts in this way and is the most widely used drug therapy forendogenous Cushing’s syndrome in the United States. Although approved in the European Union for this indication,ketoconazole is not approved for this indication by the U.S. FDA and is therefore prescribed “off-label”. The percentage ofendogenous Cushing’s syndrome patients treated with ketoconazole monotherapy who achieve normalized levels of cortisol,assessed by measuring urinary free cortisol (“UFC”) has been reported from retrospective, uncontrolled studies, with varyingdefinitions of normalization, to be between 33% and 100%. Data from a recent retrospective study of 200 patients in 14French centers solely treated with ketoconazole for endogenous Cushing’s syndrome between 1995 and 2012 suggested thatketoconazole controlled cortisol in approximately 50% of patients and likewise improved clinical symptoms. Also,beneficial effects of oral ketoconazole on clinical symptoms and signs that drive the morbidity and mortality of endogenousCushing’s syndrome have been reported including reduction in high blood pressure, improvement of diabetes, andnormalization of hypokalemia, or low potassium blood levels. However, some patients treated with ketoconazole experiencetolerability issues and, in some cases, liver injury (also known as hepatotoxicity). As a result of the hepatotoxicity risk theFDA has issued a boxed warning to prescribers concerning the use of ketoconazole to treat fungal infections, the onlyapproved indication for ketoconazole in the United States. Although elevations in liver enzymes associated withketoconazole are generally mild to moderate and reversible upon cessation of drug, in rare cases, severe hepatotoxicity mayoccur (estimated as one in every 10,000 to 15,000 patients). In extremely rare cases, ketoconazole-related liver injury may beirreversible and result in death or require liver transplantation. In July 2013, the Committee for Medical Products for HumanUse (“CHMP”) recommended that ketoconazole be withdrawn for use as an antifungal agent in the European Union. TheEMA adopted the CHMP recommendation in August 2013, and the recommendation was subsequently confirmed by theEuropean Commission. In September 2014, HRA Pharma received a recommendation of approval from the EMA forketoconazole for the treatment of endogenous Cushing’s syndrome, based on the well‑established use of ketoconazole inmedical practice as well as documentation from retrospective studies in the literature.An alternative medical approach to treating Cushing’s syndrome targets pituitary tumors that produce ACTH (i.e. inCushing’s disease). Among Cushing’s disease patients, the dopamine agonist cabergoline, which is not approved for use totreat Cushing’s disease in the United States, has been shown to achieve normalization of UFC levels, gold-standard evidenceof disease control, in about 30% of patients. The SSA pasireotide, which is marketed as Signifor® for the treatment ofCushing’s disease in the United States, has shown normalization of UFC levels with stable dosing in 15% of patients at adosage of 600 µg twice-daily and in 26% of patients at a dosage of 900 µg twice-daily over a 6-month period. Certain SSAs,including Signifor, are known to have undesirable side effects on glucose metabolism. Forty percent of patients withCushing’s disease treated with Signifor in its Phase 3 clinical trial reported the occurrence of hyperglycemia‑related adverseevents, and in the cohort receiving Signifor 900 µg twice-daily, glycated hemoglobin (HbA1c) increased from 5.8% atbaseline to 7.3% at Month 6.Another alternative, Korlym, or mifepristone, works by inhibiting the action of cortisol at the cortisol-receptor levelbut does not lower cortisol levels in the blood, which actually tend to increase during therapy. As a result of this mechanismof action, it is not possible to monitor response to Korlym by measuring UFC or cortisol levels (from blood or saliva), whichare the standard ways clinicians monitor disease progression and response to treatment. As a result, Korlym is usually titratedand monitored through use of clinical signs and symptoms improvements, e.g. blood sugar reductions. Korlym has beenapproved in the United States to control hyperglycemia secondary to hypercortisolism in patients with endogenousCushing’s syndrome. Korlym is contraindicated in pregnant women and in women with a history of unexplained vaginalbleeding, as its side effects include termination of pregnancy, endometrial thickening and vaginal bleeding.13 Table of ContentsWe believe that the efficacy and usage limitations and safety concerns associated with currently available drugtherapies for endogenous Cushing’s syndrome are an important reason why a significant unmet medical need exists amongendogenous Cushing’s syndrome patients with persistent or recurrent disease post-surgery. In a survey we commissioned in2014 of 89 U.S. physicians treating patients with Cushing’s syndrome, when asked, “Of your patients on medication tomanage cortisol levels, what percentage are well controlled?”, the physicians estimated that only approximately 37% of suchpatients were well controlled. A recent multicenter study of 230 Cushing’s disease patients followed for up to 27.5 years andtreated with any modality (i.e. surgery, radiation or drugs) found that only 49% had documented biochemical control. Webelieve that our potential addressable market for Recorlev includes diagnosed endogenous Cushing’s syndrome patients thatat any time are eligible for drug therapy, a figure that represents patients anticipating surgery, for whom surgery or radiationis not feasible, is contraindicated or has been unsuccessful. This unmet need may also be impacted by what we believe to bethe current lack of disease awareness among physicians and patients, resulting in a relatively low rate of diagnosis.Our Solution—RecorlevWe believe that Recorlev has the potential to become a new standard of care for the drug therapy of endogenousCushing’s syndrome because it may provide a favorable efficacy, safety and tolerability profile compared to current drugtherapies, including ketoconazole, believed to be the most commonly used drug therapy for the treatment of endogenousCushing’s syndrome in the United States. We believe Recorlev, based on its similar mechanism of action to that ofketoconazole, may reduce UFC and blood pressure, in contrast to Korlym, and may have an anti‑hyperglycemic effect, incontrast to Signifor. In addition, we believe Recorlev may have an improved safety profile compared with that ofketoconazole.Recorlev, like ketoconazole, is a cortisol synthesis inhibitor that inhibits the cortisol synthesis pathway at multiplepoints. The following graphic illustrates the cortisol synthesis pathway:Our preclinical and pharmacokinetic data suggest that Recorlev might have an efficacy profile at least as favorableas ketoconazole and might also confer less risk of liver injury:·In in vitro studies, Recorlev was found to have higher potency than ketoconazole and its mirror‑imageenantiomer, 2R,4S‑ketoconazole, in inhibiting the key enzymes in cortisol synthesis (CYP11B1, CYP17, andCYP 21). Thus, we believe Recorlev may have the same or improved efficacy compared to ketoconazole atlower dosages, which may in turn reduce relative drug exposure and potentially contribute to improved safetyand tolerability.·The pharmacokinetics of the enantiomers also suggest a potentially larger therapeutic index of Recorlevrelative to ketoconazole. The two enantiomers found within ketoconazole are present in equal amounts, but14 Table of Contentsin a Phase 1 clinical study in healthy subjects, it was observed that administration of ketoconazole resulted inintegrated blood concentrations (i.e., exposure) of the single enantiomer, 2S,4R‑ketoconazole (i.e., Recorlev)that exceeded those of the other enantiomer, 2R,4S‑ketoconazole, by approximately three times. Thisobservation suggests but does not prove that 2R,4S‑ketoconazole is extracted by the liver to a greater extentthan the other single enantiomer, 2S,4R‑ketoconazole (i.e., Recorlev), and may therefore contribute more thanRecorlev to the observed liver toxicity of ketoconazole.·Compared with ketoconazole, it was observed in in vitro studies that Recorlev is less potent than the otherenantiomer (i.e. its antipode, 2R,4S-ketoconazole) in inhibiting the activity of CYP7A. CYP7A is the first andrate‑limiting enzyme for production of bile acids in the liver. While a role of CYP7A in liver injury is notestablished, this finding suggests a possible differential effect of the ketoconazole enantiomers on metabolicand detoxifying enzymes in the liver contributing to reduced hepatotoxicity potential of Recorlev.Previously, levoketoconazole (then called DIO-902) was studied clinically for the treatment of type 2 diabetes.DiObex, our licensee from 2004 to 2008, initiated three clinical trials to investigate the use of levoketoconazole fortreatment of type 2 diabetes and two clinical studies in healthy volunteers. In the Phase 2a clinical trial of type 2 diabetespatients, levoketoconazole demonstrated a significant dose response to reduce mean blood concentration levels of C‑reactiveprotein (“CRP”), whereas for ketoconazole, an increase in CRP was observed. CRP tends to increase in the presence ofinflammation. Thus, we believe that Recorlev may be associated with a decrease in inflammatory processes compared toketoconazole. In the same study, levoketoconazole was also associated with dose-related reductions in cholesterol and bodyweight. Recorlev, with the same mechanism of action as ketoconazole to reduce blood cortisol, may also have beneficialeffects on cardiovascular risk markers in Cushing’s syndrome including weight loss, reduction in blood sugar, lowering ofcholesterol and reduction in blood pressure. Cardiovascular disease is the leading cause of excess mortality in endogenousCushing’s syndrome.Clinical and Preclinical Development of RecorlevIn the United States, Recorlev is considered a new molecular entity. Upon completion of the clinical developmentprogram, we intend to file for marketing authorizations in the United States and elsewhere. In the United States, an NDA,which is a prerequisite to marketing authorization, can be submitted under one of a number of approval paths defined in theFederal Food, Drug, and Cosmetic Act. Following consultations with the FDA, we determined that the 505(b)(2) approvalpathway, which permits an NDA applicant to rely on data from studies that were not conducted by or for the applicant and forwhich the applicant has not obtained a right of reference, is the appropriate pathway for a Recorlev NDA. Because a 505(b)(2) NDA approval can rely in part on data already accepted by the FDA or otherwise publicly available, an abbreviated andreduced development program may be possible. In the case of Recorlev, we intend to rely in our NDA on published literatureand FDA’s prior findings concerning the safety and/or effectiveness of ketoconazole. A similar marketing authorization pathis available in most of the rest of the world, and we anticipate that the studies supporting U.S. approval will likewise supportapprovals to market Recorlev elsewhere, including in the European Union. The FDA has acknowledged that no additionalpreclinical investigations will be required for Recorlev prior to an NDA filing. The EMA’s Committee for Medical Productsfor Human Use (“CHMP”), has requested a study of reproductive toxicity that may be completed prior to filing for marketingauthorization in Europe, pending further discussions.In July 2017, we completed enrollment of 94 patients in SONICS, a pivotal, multinational Phase 3 clinical trial forRecorlev investigating the safety and efficacy of Recorlev in subjects with endogenous Cushing’s syndrome. We anticipatetop-line data for the primary efficacy analysis will be available in the mid-2018. In addition, we have initiated LOGICS, asecond pivotal Phase 3 study of Recorlev for the treatment of endogenous Cushing's syndrome. The LOGICS study willsupplement the long-term efficacy and safety data from the ongoing SONICS study via a randomized, double-blind, placebo-controlled design that will randomize approximately 35 patients, of which up to approximately ½ will have completed theSONICS study. Enrollment in the LOGICS study is anticipated to begin in the first quarter of 2018 and top-line data areexpected in the first quarter of 2019.If SONICS can (1) demonstrate consistent and significant clinical benefit by meeting the primary endpoint of thetrial, specifically the responder rate measured as normalization of UFC levels at the 6-month time point without need15 Table of Contentsfor dose increase during the 6-month maintenance phase and (2) show consistent improvement of objectively quantifiablebiomarkers of endogenous Cushing’s syndrome comorbidities, such as blood glucose, blood lipids, blood pressure or weight,and improvement of other clinical signs and symptoms of endogenous Cushing’s syndrome, we believe this would beregarded by regulators as adequate proof of efficacy in this rare disease with a high unmet medical need. Therefore, weconsider LOGICS as a mechanism for providing independent evidence of efficacy of Recorlev, rather than serving as sole orprimary evidence of efficacy for Recorlev in endogenous Cushing’s syndrome. Furthermore, if successful, LOGICS has thepotential to provide adequate evidence of efficacy durability beyond one year of therapy in the subset of subjects who werepreviously enrolled in SONICS. Finally, we believe that the combination of SONICS and LOGICS will provide an adequatedemonstration of the long-term safety and tolerability of Recorlev in patients with endogenous Cushing’s syndrome. In totalover 100 unique subjects with this condition will have been treated with Recorlev during SONICS and LOGICS, and somesubjects will be treated with a therapeutic dose of Recorlev for at least 1.5 years at the time of first NDA submission. In addition to LOGICS, we intend to initiate a long-term open-label extension study with Recorlev to capture evenlonger-term safety, tolerability and efficacy data from subjects who complete either SONICS or LOGICS and who choose tocontinue therapy with Recorlev. The open-label extension, named OPTICS, is planned to begin enrollment in the secondhalf of 2018 and will continue to accrue data indefinitely, at least until the drug is first marketed. We expect that we mightbe required by the FDA and the EMA to collect additional safety data post‑approval. Phase 3 Clinical TrialsSONICS Phase 3 Clinical TrialWe enrolled 94 patients in our SONICS Phase 3 clinical trial in the United States, Canada, the European Union andthe Middle East. This clinical trial is being conducted pursuant to a U.S. IND for Recorlev for the treatment of endogenousCushing’s syndrome that took effect in May 2013. We plan to collect safety and efficacy data over a treatment period of atleast one year for all enrolled patients who complete the trial. If we are able to confirm a favorable safety profile of Recorlevin clinical use, we plan to discuss differentiated safety and tolerability labeling from ketoconazole with regulatoryauthorities.Following a screening phase, SONICS has three distinct treatment phases. During the dose titration phase, patientsstart at 150 mg twice daily dosing (300 mg total daily dose) and titrate in 150 mg increments up to a maximum 600 mg twicedaily dosing (1,200 mg total daily dose). Following the dose titration phase, once the therapeutic dose has been reached,patients enter the maintenance phase, during which the dose is fixed and cannot be changed other than for safety reasons,including loss of efficacy. At the end of the six-month maintenance phase, UFC levels are measured and the UFC responderrate, which is the primary endpoint of the clinical trial, is determined. Patients who have completed the maintenance phasemay enter the extended evaluation phase, which we expect will provide additional safety and efficacy data. Throughout theentire clinical trial, various measurements for safety and efficacy are taken.·The primary endpoint of the clinical trial is the proportion of subjects with UFC response to Recorlev, definedas a reduction in mean 24‑hour UFC levels to levels that are equal to or less than the upper level of normalrange following six months of treatment in the maintenance phase without a dose increase (during themaintenance phase).·Key secondary endpoints include the number of patients with at least a 50% decrease in UFC levels, as well aschanges in blood sugar, blood pressure, cholesterol and weight compared to baseline, and effects on clinicalsigns and symptoms of endogenous Cushing’s syndrome, quality of life measures obtained from theendogenous Cushing’s syndrome quality of life questionnaire and the severity of depression obtained from theBeck’s Depression Inventory II.·The clinical trial is also designed to investigate the pharmacokinetics of Recorlev in patients with endogenousCushing’s syndrome.16 Table of ContentsBelow is a diagram of the SONICS clinical trial design: Several elements of the SONICS clinical trial design were informed by the clinical development pathway ofcurrently approved drug therapies in the United States and the European Union. Additionally, we incorporated advice fromthe CHMP and FDA into the design of the clinical trial. The FDA recommended use of a concurrent control group in SONICS.However, SONICS utilizes an open‑label, single‑arm design because use of a placebo control in a parallel-arm monotherapydesign was considered unethical or infeasible to enroll, depending on the specific country or clinical trial site underconsideration. Studies lacking a concurrent control group are more likely to be subject to unanticipated variability in studyresults that can potentially lead to flawed conclusions because they do not allow for discrimination of patient outcomes. As aresult, even if we achieve the clinical trial’s endpoints, the FDA or other regulatory authorities could view our study results aspotentially biased. We have attempted to control for bias introduction in SONICS via the use of strict evidence of activedisease at baseline based on objective measures, an objectively measured primary endpoint with repeated longitudinalassessments and implementation of a strict data restriction plan that severely limits exposure to efficacy data at the Sponsor.LOGICS Phase 3 Clinical Trial Rather than alter the design of SONICS to facilitate regulatory authority requests for a concurrent control group withwhich to compare the efficacy and safety of Recorlev, we initiated LOGICS, a second Phase 3 pivotal study. LOGICS willinclude a concurrent comparison of Recorlev to matching placebo using a randomized, double-blind withdrawal design thatwe believe will be both feasible to enroll and ethical to conduct everywhere that SONICS is being conducted. LOGICS willrandomize approximately 35 subjects, of which up to approximately one-half will have previously completed the SONICSstudy.Following a screening phase, LOGICS has three distinct treatment phases for patients who did not participate inSONICS and two distinct phases for most of those who did participate in SONICS. The first phase, which is only intended forpatients new to levoketoconazole or for those who require re-establishment of a therapeutic dose, is dose titration andmaintenance. During the dose titration and maintenance phase, patients start at 150 mg twice daily dosing (300 mg totaldaily dose) and titrate in 150 mg increments up to a maximum 600 mg twice daily dosing (1,200 mg total daily dose) andremain at their individualized therapeutic dose. The total duration of this phase is approximately 14 weeks. SONICS-completers who are currently receiving a stable therapeutic dose skip dose titration and maintenance and proceed directly tothe second phase, where they are joined by those who progressed through the first phase. The second phase is randomized-withdrawal, during which patients are randomly assigned to either continue active treatment with levoketoconazole or beswitched to a matching placebo using the same tablet number. The primary efficacy endpoint comes at the end of therandomized-withdrawal period, which lasts no more than 9.5 weeks for each patient17 Table of Contents(and may end sooner if a “rescue” is needed). The primary endpoint is the proportion of patients with a loss of establishedUFC response in the placebo group compared with the proportion in the levoketoconazole group. The final phase ofLOGICS is the restoration phase, during which all patients once again receive active therapy; however, in order to concealthe therapy in the randomized-withdrawal phase, it was necessary to blind the therapy during recovery using twice thenumber of tablets (one active and one placebo). Throughout the entire clinical trial, various measurements for safety andefficacy are taken.Below is a diagram of the LOGICS clinical trial design: Clinical Trials in Type 2 DiabetesHistorically, levoketoconazole (then called DIO-902) was studied as a treatment for type 2 diabetes. An IND wasfiled in 2005 for investigation of the use of levoketoconazole in diabetes. DiObex, our licensee at the time, initiated threeclinical trials to investigate the use of levoketoconazole for type 2 diabetes and two studies in healthy volunteers. A total of159 subjects received at least one dose of levoketoconazole in these clinical trials, including 41 healthy subjects duringPhase 1 clinical trials, and 118 patients with type 2 diabetes during Phase 2 clinical trials. Doses of levoketoconazole wereadministered over the range of 200 mg to 600 mg once a day, or QD, and 400 mg twice a day, or BID, for a single patient forup to 14 days, and 150 mg to 450 mg QD for up to four months.The pharmacokinetics of levoketoconazole were studied in patients with type 2 diabetes and in normal volunteersin whom the effects of levoketoconazole on the pharmacokinetics of felodipine, a drug used to treat high blood pressure, andatorvastatin (Lipitor), a drug used to lower cholesterol, were evaluated. These drugs were chosen specifically as probes forinteraction, because they were intended to be frequently used concomitantly during treatment of type 2 diabetes. In thecompleted Phase 2a clinical trial, dose dependent reductions from baseline in cholesterol levels contained in lipoproteins, inthe form of low‑density lipoprotein-cholesterol (“LDL-chol”), and cholesterol incorporated into high‑density lipoprotein(“HDL-chol”), as well as total cholesterol were observed, but no differences in measures of glycemic control relative toplacebo were detected. A Phase 2b randomized, double-blind, placebo-controlled, study in diabetes (DIO-502) was initiatedto test doses of levoketoconazole up to 450 mg daily plus metformin as compared with atorvastatin 10 mg plus metformin incombination or placebo. Additionally, an open-label extension study (DIO-503) was started in parallel. However, in 2008, inlight of negative safety reports for other diabetes treatments such as Avandia, DiObex made the decision to voluntarilyterminate the development of levoketoconazole for the treatment of diabetes due to the perceived high regulatory andcommercial hurdles for its approval and use in type 2 diabetes and considering the emerging efficacy and safety profile oflevoketoconazole in type 2 diabetes (as described below).18 Table of ContentsThereafter, the IND was closed and DiObex terminated the two ongoing Phase 2 clinical trials. DiObex conducted thefollowing five clinical trials with Recorlev in type 2 diabetes pursuant to an IND filed by them in November 2005:Clinical TrialNumber Clinical Trial Description SubjectsEnrolled Year andStatus Location DoseDIO‑501 Phase 1/2a, Trial of Levoketoconazole orPlacebo in Patients with Type 2 DiabetesMellitus 37 2006/2007Completed. Studyreport issued. United States 200‑600 mg QD;400 mg BIDDIO‑502 Phase 2b Trial of Levoketoconazole orPlacebo in Addition to Metformin andAtorvastatin or Atorvastatin Placebo for Type 2Diabetes Mellitus 133 2007/2008Terminated early.Study report issued. United States,Australia, NewZealand 150‑450 mg QDDIO‑503 Phase 2 Open‑Label Trial andPharmacodynamic for 24‑Week Study withLevoketoconazole in Combination withMetformin and Atorvastatin in Patients withType 2 Diabetes Mellitus 13 2007/2008Terminated early.Study report issued. United States,Australia, NewZealand 150‑450 mg QDAA34509 Phase 1 Pharmacokinetic Drug Interaction Trialof Levoketoconazole with Felodipine inHealthy Adult Volunteers Under FastingConditions 18 2006/2007Completed. Studyreport issued. United States 400 mg QDAA34510 Phase 1 Pharmacokinetic Drug Interaction Trialof Levoketoconazole and Ketoconazole withAtorvastatin in Healthy Adult VolunteersUnder Fasting Conditions 24 2006/2007Completed. Studyreport issued. United States 400 mg QD Phase 2 Clinical TrialsDIO‑501 Clinical TrialThe DIO-501 clinical trial was a double‑blind, placebo‑controlled, parallel‑group clinical trial conducted in patientsaged 18 to 70 with a diagnosis of type 2 diabetes. A total of 35 patients were treated: 21 with levoketoconazole (10 at 200mg QD, six at 400 mg QD, four at 600 mg QD and one at 400 mg BID); eight with ketoconazole (400 mg QD); and six withplacebo. Trial drugs were administered for 14 days.In this clinical trial, the mean 12‑hour plasma cortisol area under the concentration‑time curve (“AUC”), levels weremodestly reduced in the levoketoconazole treatment groups at day 15 compared to baseline, which is consistent with theknown mechanism of action of levoketoconazole. However, counter‑regulation in diabetic patients with a normalhypothalamic pituitary adrenal axis may have limited the observed cortisol suppression. A small, nonsignificant effect onglycated hemoglobin (HbA1c), and fasting glucose levels was observed. Consistent with the known inhibitory effect ofketoconazole on cholesterol synthesis, total cholesterol, LDL-chol, and to a lesser extent HDL-chol levels, but nottriglycerides, were significantly decreased in a dose‑dependent manner by levoketoconazole. The mean change from baselinein total cholesterol, LDL-chol and HDL-chol at a dose of 400 mg QD was similar to those observed in 400 mg QDketoconazole and higher in the 600 mg QD levoketoconazole group. Also, for the levoketoconazole treatment groups, therewas a statistically significant dose response in the reduction in mean levels of CRP on day 15 compared with baseline, with ap-value of 0.027. In contrast, mean levels of CRP increased in the ketoconazole‑treated group and less so in the placebogroup. CRP is an indicator of systemic inflammation, including vascular inflammation. The reduction in cholesterol and CRPobserved in patients with type 2 diabetes may indicate a potential beneficial effect of levoketoconazole on cardiovascularrisk factors. Notably, patients with endogenous Cushing’s syndrome tend to have elevated circulating CRP.Plasma AUC and maximum concentration in blood (“Cmax”), increased in a non‑proportional manner over the doserange of 200 mg to 400 mg on days one and 14. Clearance values were similar for the 200 mg and 400 mg doses oflevoketoconazole, but significantly decreased at the 600 mg levoketoconazole dose, on days one and 14.19 Table of ContentsLevoketoconazole was generally well‑tolerated. Headache and nausea were the most frequently reported adverseevents, some of which were considered drug‑related. There were no serious adverse events, and no clinically meaningfulchanges in hematology, blood chemistry and urinalysis were noted in any treatment group. No treatment‑related changes inliver function tests (“LFTs”), were detected.DIO‑502 and DIO‑503 Clinical TrialsThe DIO-502 clinical trial was a four‑month, double‑blind, randomized, placebo‑controlled, dose‑ranging study oflevoketoconazole with concomitant with metformin and atorvastatin (or atorvastatin placebo) that enrolled 133 of a planned200 patients with type 2 diabetes, consisting of males and females between the ages of 18 and 70. Enrolled subjects werealready receiving metformin treatment with a minimum daily dose of 500 mg and had a glycated hemoglobin (HbA1c) levelof 7% to 10%. Additionally, all patients were treated with 10 mg atorvastatin or its placebo to evaluate the effect oflevoketoconazole on lipid profiles given cholesterol‑lowering drugs. Thus, patients were randomized into eight separatearms in the clinical trial: placebo or levoketoconazole at 150 mg; 300 mg; and 450 mg with either atorvastatin 10 mg oratorvastatin placebo; all received metformin concomitantly.The DIO-503 clinical trial was an open‑label, extension to DIO‑502 to evaluate safety, tolerability andpharmacodynamics after 24 weeks of dosing with levoketoconazole in combination with metformin, with and withoutatorvastatin in subjects with type 2 diabetes.DiObex terminated these clinical trials prior to their planned completion milestones. At the time of trial termination,a total of 133 patients were enrolled in the DIO‑502 and DIO‑503 trials, and 129 patients in total had been treated with astudy drug, of which 97 patients received at least one dose of levoketoconazole. The investigators subsequently elected todefer efficacy and pharmacokinetics inferences based on incomplete datasets. The frequency of adverse events reported wasgenerally similar across treatment arms. Diarrhea was the most frequently reported adverse event overall with administrationof levoketoconazole. No serious adverse events were reported in the terminated studies.A safety signal of elevated liver enzymes sufficiently abnormal to be classified as potentially clinically significantwas identified in 10 (7.7%) of the 129 treated patients in the DIO‑502 and DIO‑503 trials combined. With respect tolevoketoconazole treatment, in one of the ten, the LFT abnormality was first noted during placebo treatment, whereas in theother nine, the abnormality was first noted during active treatment. No case of Hy’s law (i.e., an increase of livertransaminases at or above three times the upper level of normal values; increase in total bilirubin at or above two times theupper level of the normal value; no or little sign of cholestasis; and absence of other reasons for liver injury, such as viralhepatitis) was observed. An observation of Hy’s Law would have indicated a high risk of potentially serious drug-relatedhepatotoxicity. Three of the treated patients were withdrawn from the clinical trials as required in the safety monitoring plan.In these three patients, LFT levels returned to normal after study drug was discontinued. In addition, three other patients hadmodest elevations in LFT levels. While these levels did not require termination by the trial protocol, the investigators electedto terminate these patients from the clinical trial. LFTs in these patients also returned to normal after the study drug wasdiscontinued. Four additional patients required close monitoring per the protocol, and had resolution of their LFTabnormalities while on the study drug. The first case of elevated liver enzymes occurred in a patient who admitted toexcessive alcohol consumption. The remaining cases developed over the following three months. An independent externalsafety review committee recommended continuation of the studies with no modifications.Due to the design of these clinical trials, the independent data safety monitoring board for the trials stated that it wasimpossible to interpret which of the two drugs, levoketoconazole or atorvastatin, was primarily associated with the side effectprofile observed (i.e. LFT abnormalities) in these trials. A more detailed analysis of the liver transaminase elevations in thisclinical trial by an expert panel showed that there was no correlation between the dose of levoketoconazole and abnormalliver transaminases.Phase 1 Clinical TrialsAA34509 Clinical TrialThe AA34509 clinical trial was designed primarily to evaluate the effect of levoketoconazole on thepharmacokinetics of concurrently administered felodipine. Healthy volunteers were administered 400 mg of20 Table of Contentslevoketoconazole or placebo QD for eight days. On the fifth day of the trial, subjects received a single 5 mg dose offelodipine. Beginning on day five, pharmacokinetics of levoketoconazole were monitored for 24 hours, andpharmacokinetics of felodipine were monitored for 72 hours. The trial was a cross‑over trial involving 18 subjects, 16 ofwhom completed the trial.AA34510 Clinical TrialThis clinical trial was designed primarily to evaluate the effect of concomitant administration of levoketoconazoleor ketoconazole on the pharmacokinetics of atorvastatin. Healthy volunteers were administered 400 mg of levoketoconazole,400 mg of ketoconazole or placebo daily for seven days. On day five, all subjects received a single 80 mg dose ofatorvastatin. After administration of the racemate, ketoconazole, pharmacokinetics of the two single enantiomers2R,4S‑ketoconazole and 2S,4R‑ketoconazole, were evaluated for 24 hours on day five using a chiral bioanalytical method,to distinguish the enantiomers in plasma (blood). Pharmacokinetics of atorvastatin were evaluated for 60 hours starting at thetime of administration on day five. The trial was a cross‑over trial involving 24 subjects, all of whom completed the clinicaltrial.Key Findings from the Clinical Trials of Recorlev (levoketoconazole)Phase 2 Efficacy and Safety Trials in Diabetic Patients:·AUC and Cmax values were approximately 50% higher with levoketoconazole in comparison withketoconazole at the same dose of 400 mg. All pharmacokinetic parameters were highly variable, in the sensethat they differed within and among subjects.·Following administration of ketoconazole, plasma levels (AUC or Cmax) of levoketoconazole (2S,4R-ketoconazole) were approximately three times those of the other enantiomer, 2R,4S‑ketoconazole. Possibleexplanations could be reduced absorption of 2R,4S-ketoconazole or decreased uptake and metabolism oflevoketoconazole in the liver compared to the other enantiomer.·Levoketoconazole produced a decrease in some lipid measures, or blood fat, including reduced totalcholesterol, LDL-chol and HDL-chol.·A significant dose‑related effect of levoketoconazole for reduction of CRP was observed.·Trends for reductions in serum cortisol, measured as AUC (0-12 hours), were found after 14 days of treatmentwith levoketoconazole in diabetic patients.·In the DIO‑501 clinical trial, headache and nausea were the most frequently reported adverse events. Notreatment related changes in LFTs were detected. In the DIO‑502/503 clinical trials, diarrhea was the mostfrequently reported adverse event.·LFTs were elevated in the DIO‑502/503 clinical trials in 10 out of the 129 patients treated with either thecombination of levoketoconazole and atorvastatin or levoketoconazole alone, in each case co‑administeredwith metformin. The independent data safety monitoring board for the trial stated that it was impossible tointerpret which of drugs was primarily associated with the side effect profile observed in the trial.Phase 1 Drug Interaction Clinical Trials in Normal Volunteers:·The AUC and the Cmax of felodipine were 10‑fold higher when taken with levoketoconazole compared withfelodipine alone.·The AUC of atorvastatin was increased by 50% when administered with levoketoconazole compared withatorvastatin alone.·A small, but statistically significant decrease of serum cortisol (AUC zero to six hours) was found forlevoketoconazole compared with placebo and ketoconazole.21 Table of Contents·Headache, nausea, dizziness and back pain were reported as the most frequent adverse events across the twostudies.·In the drug interaction study with atorvastatin, two subjects had elevated LFT values. The subjects had receivedlevoketoconazole plus atorvastatin or ketoconazole plus atorvastatin in the immediately previous studyperiods in this cross‑over study.Veldoreotide Modified-Release —a Novel Somatostatin AnalogueOverviewIn June 2015, we acquired veldoreotide, a novel multi‑receptor targeted SSA that was previously in Phase 2development as an immediate-release formulation and has the potential to provide a new and differentiated treatment optionfor patients with acromegaly and potential additional applications in other conditions amenable to somatostatin receptoractivation. We acquired veldoreotide as part of our strategy to build our rare endocrine franchise. At the time of acquisition,veldoreotide was in Phase 2 clinical development as a treatment for acromegaly in its original, immediate-releaseformulation. Acromegaly is a rare endocrine disorder that most commonly results from a benign tumor of the pituitary gland,leading to excess production of growth hormone and IGF‑1. The treatment goal is the normalization of growth hormone andIGF‑1, which is the main cause of the detrimental clinical signs and symptoms of acromegaly.SSAs are peptides that are administered as deep subcutaneous or intramuscular injections, typically as long-actingformulations for monthly injections. They are the most commonly used drug therapy for the treatment of acromegaly andwork by binding to specific subtypes of SSTRs that are expressed by the tumor. Binding of SSAs to these SSTRs leads to thebeneficial inhibition of growth hormone secretion but can also result in the unwanted inhibition of secretion of otherendocrine hormones such as insulin and glucagon in the pancreas and elsewhere. Like other SSAs, veldoreotide is a peptidethat we are developing for subcutaneous injection. In contrast to approved SSAs, veldoreotide activates a different subset ofSSTRs. Like pasireotide, it activates SSTR2 and SSTR5. However, in contrast to pasireotide, it possesses a similar affinity forSSTR2 than SSTR5. Veldoreotide is also the only SSA with a high affinity for SSTR4. Veldoreotide does not bind to SSTR3or the opiate receptor at pharmacological concentrations. Although the functional consequences of the binding of SSAs tothe opiate receptor are not fully understood, it has been suggested as a mechanism contributing to inhibition of insulinsecretion by SSAs and may also influence their effect on gastrointestinal motility. In vitro data suggest that a higher numberof adenomas are a target for growth hormone inhibition by veldoreotide as compared to octreotide, which is referred to as asingle receptor targeted SSA that binds and activates predominantly via SSTR2, potentially resulting in an increasedresponder rate. Preclinical data from animal studies, and clinical data in healthy subjects and patients with acromegaly,showed that insulin secretion was less inhibited, potentially resulting in reduced side effects on blood glucose and animproved safety and tolerability profile. Preclinical data further suggest a reduced effect on gallbladder motility, or flow fromthe gallbladder.Based on the differentiated activation pattern of immediate-release veldoreotide upon binding to SSTR subtypesand preclinical and clinical data, we believe that modified-release veldoreotide may offer an improved efficacy and safetyprofile relative to existing drug therapies for acromegaly and other conditions that are modifiable through activation ofsomatostatin receptors. In the five clinical studies of immediate-release veldoreotide completed to date outside the UnitedStates in healthy subjects and patients with acromegaly, a beneficial reduction of growth hormone was observed, and, whencompared with immediate-release subcutaneous octreotide, there was less blunting of insulin in response to a mixed meal ororal glucose load. Veldoreotide has been granted orphan drug designation for the treatment of acromegaly by the FDA andthe EMA.We have completed the screening of potential modified-release technologies for veldoreotide and have selected aformulation based upon PLGA microspheres. PLGA is a well-known polymer, which has been widely applied in modified-release formulations due to its biocompatibility, biodegradability, and favorable release kinetics. We are in the process ofsecuring intellectual property protection for the lead formulation, which could, if granted by the relevant patent authorities,extend the period of marketing exclusivity for the finished drug product. We expect to initiate a series of pre-clinical studiesthat seek to determine additional differentiating features of veldoreotide in both endocrine and non-endocrine conditions.Therefore, depending on the results of these studies, we may elect to pursue a development22 Table of Contentspathway for veldoreotide modified-release that includes a therapeutic use outside of endocrinology. Regardless ofindication(s) to be pursued, further development will require preclinical safety (toxicology) studies as well as manufacturingscale-up before the newly formulated product can enter clinical testing. We anticipate that preclinical studies, once begun,will take at least 18 months to complete.Completed Clinical TrialsFive clinical trials of veldoreotide have been performed to date: three in healthy male volunteers and two in patientswith acromegaly, all of which employed an immediate release, short‑acting formulation injected subcutaneously. At the time,the clinical trials described below were conducted, veldoreotide was named DG3173. These trials were conducted by AspireoPharmaceuticals Ltd., other than DG3173‑I‑001, which was conducted by Develogen AG.In four clinical trials with single subcutaneous injections or infusion and in one six‑day clinical trial, all of whichwere conducted with an immediate release formulation of veldoreotide in healthy subjects or patients with acromegaly,veldoreotide was observed to have a tolerability profile comparable to that of octreotide. However, unlike octreotide,subjects treated with veldoreotide were observed to have less or no reduction in peak insulin secretion after a meal. Webelieve these preliminary clinical findings corroborate the profile of veldoreotide observed in preclinical studies, whichsuggested inhibition of growth hormone secretion without detrimental effects on post‑meal insulin or glucose metabolism.These studies were too short to assess the effect on flow from the gallbladder. These preliminary findings contrast favorablywith the well‑described insulin and glucose perturbations caused by octreotide, lanreotide and pasireotide, and we intend toconduct additional clinical trials to evaluate the clinical profile of veldoreotide and its differentiation from existing SSAs.With the potentially superior efficacy, safety and tolerability profile suggested by preclinical studies and early clinical trials,we believe veldoreotide has the potential to become the standard‑of‑care SSA, with distinct therapeutic advantages relativeto currently approved SSAs as treatment of acromegaly.23 Table of ContentsThe following table summarizes these trials.Clinical TrialNumber Clinical Trial Descriptions SubjectsEnrolled Year and Status Location DoseDG3173‑II‑02 Phase 2 The Effect ofSubcutaneous Infusion of ThreeDoses of Veldoreotide onGrowth Hormone Levels inUntreated Acromegaly Patients 8 2013/2014 Completed.Bioanalytical reportissued. Ukraine 920‑5520 µgcontinuousinfusion over23 hoursDG3173‑II‑01 Phase 2 Trial of the Effect ofVeldoreotide and 300 µgOctreotide on Human GrowthHormone Levels in UntreatedAcromegaly Patients 20 2012 Completed. Studyreport issued. Ukraine 300‑1800 µg QDDG3173‑I‑003 Phase 1 Placebo‑Controlled,Phase 1 Trial to Assess thePharmacodynamics Effect onGlucose Metabolism of SingleDoses Compared toVeldoreotide Octreotide andPlacebo in Healthy MaleSubjects 8 2013 Completed. Studyreport issued. Switzerland 300‑1800 µg QDDG3173‑I‑002 Phase 1 Trial to Compare theSafety and PharmacologicActivity of Repeated Doses ofVeldoreotide andVeldoreotide Plus Octreotidewith Octreotide and Placebo andEstablish Their PharmacokineticInteraction in Healthy MaleSubjects 42 2012/2013 Completed.Study report issued. Switzerland 100‑1800 µg TIDDG3173‑I‑001 Phase 1 Double‑Blind Trial toInvestigate Safety, Tolerabilityand Pharmacokinetics of SingleEscalating Dosing ofVeldoreotide in Healthy MaleSubjects 72 2008 Completed. Studyreport issued. Germany 10‑2000 µg QD The clinical trials involved 122 healthy subjects in the Phase 1 trials and 28 patients with acromegaly in the Phase 2clinical trials. No serious adverse events were observed, and mostly mild adverse events typical for SSAs such as injectionsite reactions and gastrointestinal side effects were reported. There was no evidence that veldoreotide adversely affects theliver, kidneys or other organ systems, including the cardiovascular system. Data from the multiple ascending dose clinicaltrial in healthy subjects (Study I‑002) showed inhibition of growth hormone comparable to octreotide, but no or lessinhibition of insulin secretion and less effect on glucose levels. The single ascending dose trial in patients with acromegaly(Study II‑01) and the continuous infusion study in patients with acromegaly (Study II‑02) confirmed that veldoreotide alsosuppresses excessively produced growth hormone to a similar maximal extent as octreotide.Commercialization StrategyOur existing commercial infrastructure is limited and is focused on Keveyis. After acquiring the U.S. marketingrights for Keveyis in December 2016, we established sales, marketing, market access and patient service24 Table of Contentscapabilities. We believe, based on our market research, that there are approximately 4,000 to 5,000 patients in the UnitedStates diagnosed with PPP and we believe that we can address the market by targeting physicians who are managing patientswith PPP, including neuromuscular specialists, general neurologists and primary care physicians.With the recent acquisition of Macrilen in January 2018, we are in the process of expanding our commercialinfrastructure to support the planned product launch in mid-2018. We plan to build-out a separate and dedicated sales andmarketing team to support the launch and ongoing commercialization of Macrilen. Further, we plan to leverage our currentcommercial operations infrastructure to support Macrilen. Based on our current market research, we believe there areapproximately 50,000 adult growth hormone deficiency tests conducted per year. We plan to focus our launch activity ontargeted pituitary centers and select community-based endocrinologists. Given the current stage of product development of our product candidates, we do not have a commercializationinfrastructure for those product candidates, although we do plan to leverage our current commercial infrastructure whenpossible. As with Keveyis and Macrilen, we intend to independently commercialize our rare disease‑focused productcandidates, if approved, in the United States, the European Union and other key global markets. We believe that we canaddress the markets of our current product candidates by targeting endocrinologists that are focused on the diagnosis andtreatment of rare pituitary disorders primarily stemming from benign tumors. Given the relatively concentrated specialtyprescriber base, we plan to create a sales force of approximately 30 representatives in the United States as well in theEuropean Union to market our endocrine product candidates, if approved. In building our sales force, we intend to recruitrepresentatives with experience calling on endocrinologists and marketing orphan drug designated products.Our commercial strategy for our product candidates, if approved, will encompass promoting their unique benefits, aswell as a concerted effort to raise awareness about the underlying disease among the physician/patient community with thegoal of increasing the rate of diagnosis when the symptoms may otherwise be overlooked. We believe the combination of ourcommercial efforts and our product candidate profiles will facilitate our ability to successfully penetrate our target markets.ManufacturingWe do not have internal manufacturing capabilities and intend to continue to rely on third parties to produceKeveyis, Macrilen and our product candidates.We have a supply agreement with Taro to produce Keveyis. We are obligated to purchase certain annual minimumamounts of product totaling approximately $29 million over a six-year period from Taro. The supply agreement may extendbeyond the orphan exclusivity period unless terminated by either party pursuant to the terms of the agreement. If terminatedby Taro at the conclusion of the orphan exclusivity period, we have the right to manufacture the product on our own or havethe product manufactured by a third party on our behalf.We have an interim supply agreement with Aeterna Zentaris GmbH to purchase Macrilen materials (including drugsubstance, drug product, and finished goods) until such time that we can negotiate supply agreements directly with the thirdparties that manufacture these materials. We are obligated to purchase certain amounts of these Macrilen materials totalingapproximately $1.26 million over a nine-month period from Aeterna Zentaris GmbH.The manufacturing, packaging and distribution of Recorlev drug product for clinical trials following GoodManufacturing Practices (“GMPs”), is currently outsourced under contracts to experienced contract manufacturers. We expectto enter into similar arrangements for veldoreotide.Intellectual Property of our Products and Product Candidates in DevelopmentWe actively seek to protect the intellectual property and proprietary technology that we believe is important to ourbusiness, including seeking, maintaining, enforcing and defending patent rights for our product candidates and methods oftreatment, whether developed internally or licensed from third parties. Our success will depend on our ability to obtain andmaintain patent and other protection including data or market exclusivity for our product candidates and methods oftreatment, preserve the confidentiality of any know‑how and operate without infringing the valid and enforceable patentsand proprietary rights of third parties.25 Table of ContentsOur policy is to seek to protect our proprietary position generally by filing patent applications initially at theUSPTO. After this initial phase, patent applications claiming priority to the initial application are filed in various countries,including the United States, Europe and Canada. In each case, we determine the strategy and territories required afterdiscussion with our patent professionals with the goal of obtaining relevant coverage in territories that are commerciallyimportant to us and our product candidates. We will additionally rely on data exclusivity and patent term extensions whenavailable, including the relevant exclusivity through orphan drug designation. We also rely on trade secrets and know‑howrelating to our underlying product technologies. Prior to making any decision on filing any patent application, we considerwith our patent professionals whether patent protection is the most sensible strategy for protecting the invention concernedor whether the invention should be maintained as confidential.We own or license 53 granted patents, of which three are U.S. issued patents, and 7 pending patent applications, ofwhich 6 are U.S. patent applications and one allowed U.S. patent application.We have ten trademark registrations for Strongbridge Biopharma in the United States, Australia, Brazil, China,Europe, Israel, India, Japan, Mexico, and Turkey and one pending trademark application for Strongbridge Biopharma inCanada. We have five trademark registrations for Corynthia in Australia, China, Europe, Japan, Turkey and five pendingtrademark applications for Corynthia in the United States, Brazil, Canada, Israel and India. We have seven trademarkregistrations for Corynthia in Australia, China, Europe, India, Japan, Mexico and Turkey and four pending trademarkapplications for Recorlev in the United States, Brazil, Canada and Israel. We have one trademark registration for Normocortin Europe.KeveyisWe acquired U.S. marketing rights to Keveyis in late 2016. We are not aware of any issued patents or pendingpatent applications related to Keveyis. Although we intend to rely primarily on orphan exclusivity for Keveyis, we alsoexpect to explore additional life cycle management opportunities.MacrilenIn January 2018, we acquired the U.S. and Canadian rights to manufacture and commercialize Macrilen. We alsoobtained a license to three U.S. patents, one Canadian patent and one U.S. patent application, as well as to the Macrilentrademark. The Canadian patent expires in 2021 and two of the U.S. patents expire in 2022. The third U.S. patent expires in2027. RecorlevWe own 43 issued patents related to our product candidate, Recorlev. Issued claims in these patents are directed tomethods of treatment of various diseases or conditions associated with elevated cortisol levels or activity using Recorlev. The patents have been granted in major territories including Europe, China and Japan and expire in 2026 and 2027. We havefive pending U.S. patent applications and one allowed U.S. patent application directed to methods of treating a disease orcondition associated with elevated cortisol levels or activity, including Cushing’s syndrome, with Recorlev. The patent toissue from the allowed U.S. patent application will expire in 2026. We also have an issued patent in the United Statesdirected to reducing C-reactive protein levels and systemic inflammation through administration of a once-daily dose ofRecorlev that expires in 2030.VeldoreotideWhile we own granted patents related to our product candidate veldoreotide in the United States and other majorterritories, including Europe and Canada, the terms of these patents may not extend beyond the launch date of this productcandidate. We have also filed a PCT and U.S. application directed to various methods and formulations of veldoreotide. Tothe extent we are not able to obtain further patent exclusivity as a result of the PCT application or other future patent filings,we intend to rely on orphan and data/marketing exclusivity for veldoreotide.26 Table of ContentsLaws and Regulations Regarding Patent TermsThe term of individual patents depends upon the legal term of the patents in the countries in which they areobtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing a non‑provisionalapplication. In the United States, a patent term may be shortened if a patent is terminally disclaimed over another patent or asa result of delays in a patent prosecution by the patentee. A patent’s term may be lengthened by a patent term adjustment,which compensates a patentee for administrative delays by the USPTO in granting a patent. The patent term of a Europeanpatent is 20 years from its effective filing date, which, unlike in the United States, is not subject to patent term adjustments inthe same way as U.S. patents.The term of a patent that covers a FDA‑approved drug or biologic may also be eligible for patent term extension,which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process. TheDrug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch‑Waxman Act”) permits a patent term extensionof up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of timethe drug or biologic is under regulatory review. Patent extensions cannot extend the remaining term of a patent beyond atotal of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended.Similar provisions are available in Europe and other jurisdictions to extend the term of a patent that covers an approved drug,for example Supplementary Protection Certificates. In the future, if and when our products receive FDA approval, we expectto apply for patent term extensions on patents covering those products. We anticipate that some of our issued patents may beeligible for patent term extensions but such extensions may not be available and therefore our commercial monopoly may berestricted.CompetitionThe biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intensecompetition and a strong emphasis on proprietary products. While we believe that our scientific knowledge, technology, anddevelopment experience provide us with competitive advantages, we face potential competition from many different sources,including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions,governmental agencies and public and private research institutions. Any product candidates that we successfully developand commercialize will compete with existing products and new products that may become available in the future. Many ofour competitors, alone or with their strategic partners, have greater experience than we do in conducting preclinical studiesand clinical trials, and obtaining FDA, EMA and other regulatory approvals, and have substantially greater financial,technical and other resources than we do, such as larger research and development, clinical, marketing and manufacturingorganizations. As a result, these companies may obtain regulatory approval for competing products more rapidly than we areable and may be more effective in selling and marketing their products. Companies that complete clinical trials, obtainrequired regulatory authority approvals and commence commercial sale of their drugs before their competitors may achieve asignificant competitive advantage, and our commercial opportunity could be reduced or eliminated if competitors developand commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or areless expensive than any products that we may develop. Drugs resulting from our research and development efforts or from ourjoint efforts with collaboration partners therefore may not be commercially competitive with our competitors’ existingproducts or products under development.We are aware of several companies focused on developing or marketing therapies for rare neuromuscular andendocrine disorders. For our product candidates, the main competitors include:·Keveyis: Acetazolamide, another oral carbonic anhydrase inhibitor, is used frequently off-label for theprophylactic and sometimes acute treatment of PPP. Potassium supplements, are indicated for use inhypokalemic periodic paralysis in the United States and are frequently used either chronically or for emergencytreatment of episodes in that form of PPP. Several other types of drugs have been reported to have benefits forchronic or acute use in one or more than one PPP variant, including potassium-sparing diuretics, beta receptoragonists, mexelitine and other sodium channel blockers, and others. We are not aware of drugs currently indevelopment for prophylactic chronic treatment of PPP. A Phase 2 clinical study of bumetanide, a loop diuretic,is underway in England for acute treatment of paralytic attacks.27 Table of Contents·Macrilen: Measurement of blood levels of IGF-1, which is typically used as the first test when GHD issuspected. However, this test is not used to definitively diagnose GHD because many GHD patients shownormal IGF-1 levels. From a diagnostic performance perspective, the Insulin Tolerance Test (ITT) has historically been consideredthe reference standard for the evaluation of AGHD because of its high sensitivity and specificity. However, theITT is inconvenient to both patients and physicians, administered intravenously (IV), and contra-indicated incertain patients, such as patients with coronary heart disease or seizure disorder, because it requires the patientto experience hypoglycemia to obtain a result. Some physicians will not induce full hypoglycemia,intentionally compromising accuracy to increase safety and comfort for the patient. Furthermore, administrationof the ITT includes additional costs associated with the patient being closely monitored by a physician for thetwo- to four-hour duration of the test, and the test must be administered in a setting where emergency equipmentis available and where the patient may be quickly hospitalized. The ITT is not used for patients with co-morbidities, such as cardiovascular disease, seizure disorder or a history of brain cancer or for patients who areelderly and frail, due to safety concerns.The Glucagon Stimulation Test (“GST”) is considered relatively safe by endocrinologists. The mechanism ofaction for this test is unclear. Like the ITT, this test takes at least three and up to four hours to complete andrequires parenteral drug administration, typically intramuscular. It produces side effects in up to one-third of thepatients with the most common being nausea during and after the test; delayed hypoglycemia also occursuncommonly. The GST must be used in caution in the elderly as serious cardiovascular adverse effects havebeen reported. Interpretation of the GST is complicated by variability of the peak growth hormone response,which is strongly influenced by the patient’s body mass and glucose status (i.e. prediabetes, diabetes).The GHRH + ARG test (growth hormone releasing hormone-arginine stimulation) is an easier test to perform inan office setting and has a good safety profile. The drug components are typically more expensive than insulinor glucagon. GHRH + ARG is used in the EU and has been proposed to be the best alternative to ITT, but GHRHin the form of GEREF, a GHRH analog, is no longer marketed in the United States. This test is administeredintravenously (IV). ·Recorlev: A number of therapies are currently approved and in various stages of development for endogenousCushing’s syndrome. Currently, there are no therapies broadly marketed for the treatment of endogenousCushing’s syndrome patients in the United States. Two therapies have limited indications in Cushing’ssyndrome. Korlym (mifepristone) is a cortisol receptor blocker indicated to control hyperglycemia secondaryto hypercortisolism in adult patients with endogenous Cushing’s syndrome who have type 2 diabetes mellitusor glucose intolerance and have failed surgery or are not candidates for surgery. Signifor (pasireotide) marketedby Novartis in the United States is indicated for the treatment of adult patients with Cushing's disease (a subsetof Cushing’s syndrome) for whom pituitary surgery is not an option or has not been curative.Ketoconazole, metyrapone and mitotane are marketed by HRA Pharma in certain European countries. Novartishas submitted a NDA/MAA for Signifor (pasireotide) LAR in Cushing’s disease. Osilodrostat (LCI699), an 11β-HSD2 inhibitor, is currently in Phase 3 clinical development by Novartis in Cushing’s disease. Corcept isdeveloping relacorilant (CORT125134), a selective glucocorticoid receptor antagonist, currently in Phase 2 forCushing’s syndrome. HRA Pharma is developing metyrapone for the European market. Millendo is developingATR-101, a selective acyl-CoA:cholesterol acyltransferase 1 (ACAT) inhibitor, currently in Phase 2. TheUniversity of Oxford, in collaboration with AstraZeneca is studying the selective 11β-HSD1 inhibitor,AZD4017, now in Phase 2. Cedars-Sinai is developing R-roscovitine in Phase 2.·Veldoreotide: A number of acromegaly therapies are currently approved and in various stages ofdevelopment. There are currently three approved SSA therapies for acromegaly in the United States:Sandostatin LAR (octreotide) marketed by Novartis; Signifor LAR (pasireotide) marketed by Novartis; and28 Table of ContentsSomatuline Depot (lanreotide) marketed by Ipsen. There is one growth hormone receptor antagonist, Somavert(pegvisomant), marketed by Pfizer. Chiasma had filed an NDA in the United States for RG-3806 (Mycapssa®),an oral octreotide formulation in 2015, and received a Complete Response Letter wherein FDA stated that it didnot believe the company’s application had provided substantial evidence of efficacy to warrant approval, andadvised Chiasma that it would need to conduct another clinical trial in order to overcome this deficiency. Fouradditional therapies are in Phase 2 clinical development for acromegaly: octreotide long‑acting depot(CAM‑2029) developed by Novartis and Camurus; ITF‑2984 developed by Italfarmaco; BIM-23B065developed by Ipsen; and ATL-1103 developed by Antisense Therapeutics.Government RegulationProduct Approval ProcessThe safety, clinical testing, manufacturing, quality, labeling, storage, distribution, record keeping, advertising,promotion, import, export and marketing, among other things, of our product candidates are subject to extensive regulationby governmental authorities in the United States and other countries. The FDA under the Federal Food, Drug, and CosmeticAct regulates pharmaceutical products in the United States. The steps required before a drug may be approved for marketingin the United States generally include:·the completion of preclinical laboratory tests and animal tests conducted under Good Laboratory Practices,(“GLPs”), and other applicable regulations;·the submission to the FDA of an IND application for human clinical testing, which must be reviewed by theFDA and become effective before human clinical trials commence;·the successful performance of adequate and well‑controlled human clinical trials conducted in accordance withcGCP to establish the safety and efficacy of the product candidate for each proposed indication;·analysis of clinical trial data and preparation of submission to the FDA of an NDA;·the submission to the FDA of an NDA;·the FDA’s acceptance of the NDA;·satisfactory completion of an FDA inspection of the manufacturing facilities at which the product is made toassess compliance with cGMPs to assure that the facilities, methods and controls are adequate to preserve thedrug’s identity, strength, quality and purity;·satisfactory completion of FDA inspections of clinical trial sites and GLP toxicology studies; and·the FDA’s review and approval of an NDA prior to any commercial marketing or sale of the drug in the UnitedStates.The testing and approval process requires substantial time, effort and financial resources, and the receipt and timingof any approval is uncertain.Preclinical studies include laboratory evaluations of the product candidate, as well as animal studies to assess thepotential safety and efficacy of the product candidate. The results of the preclinical studies, together with manufacturinginformation, analytical data and a proposed clinical trial protocol, are submitted to the FDA as part of the IND, which mustbecome effective before clinical trials may be commenced. The IND will become effective automatically 30 days after receiptby the FDA, unless the FDA raises concerns or questions about the conduct of the clinical trials as outlined in the IND priorto that time and places the IND on clinical hold. In this case, the IND sponsor and the FDA must resolve any outstandingconcerns before clinical trials can proceed. A clinical hold may occur at any time during the life of an IND, due to safetyconcerns or non‑compliance, and may affect one or more specific studies or all studies conducted under the IND.29 Table of ContentsClinical trials involve the administration of the product candidates to healthy volunteers or patients with the diseaseto be treated under the supervision of a qualified principal investigator. Clinical trials are conducted under protocolsdetailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety, and theefficacy criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must besubmitted to the FDA as part of the IND. Further, each clinical trial must be reviewed and approved by an independentinstitutional review board (“IRB”), either centrally or individually at each institution at which the clinical trial will beconducted. The IRB will consider, among other things, ethical factors, the safety of human subjects and the possible liabilityof the institution. Progress reports detailing the status of the clinical trials must be submitted to the FDA annually. Sponsorsmust also report to the FDA serious and unexpected adverse reactions, any clinically important increase in the rate of aserious suspected adverse reaction over that listed in the protocol or investigation brochure, or any findings from otherstudies or animal or in vitro testing that suggest a significant risk in humans exposed to the drug. There are also requirementsgoverning the reporting of ongoing clinical trials and clinical trial results to public registries.Clinical trials are typically conducted in three sequential phases prior to approval, but the phases may overlap.These phases generally include the following:·Phase 1. Phase 1 clinical trials represent the initial introduction of a product candidate into human subjects,frequently healthy volunteers. In Phase 1, the product candidate is usually tested for safety, including adverseeffects, dosage tolerance, absorption, distribution, metabolism, excretion and pharmacodynamics.·Phase 2. Phase 2 clinical trials usually involve studies in a limited patient population to (1) evaluate theefficacy of the product candidate for specific indications, (2) determine dosage tolerance and optimal dosage,and (3) identify possible adverse effects and safety risks.·Phase 3. Phase 3 clinical trials are conducted to further demonstrate clinical efficacy, optimal dosage andsafety within an expanded patient population at geographically dispersed clinical trial sites, and to providesufficient data for the statistically valid evidence of safety and efficacy.Phase 4 clinical trials are conducted after approval to gain additional experience from the treatment of patients inthe intended therapeutic indication and to document a clinical benefit in the case of drugs approved under acceleratedapproval regulations, or when otherwise requested by the FDA in the form of post‑market requirements or commitments.Failure to promptly conduct any required Phase 4 clinical trials could result in withdrawal of approval. Clinical trials are inherently uncertain and any phase may not be successfully completed. A clinical trial may besuspended or terminated by the FDA, IRB or sponsor at any time on various grounds, including a finding that the subjects orpatients are being exposed to an unacceptable health risk. Additionally, some clinical trials are overseen by an independentgroup of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee.This group provides ongoing oversight and safety reviews to determine whether or not a clinical trial may move forward atdesignated check points based on access to certain data from the clinical trial. We may also suspend or terminate a clinicaltrial based on evolving business objectives and/or competitive climate.Sponsors have the opportunity to meet with the FDA at certain points during the development of a new drug to shareinformation about the data gathered to date and for the FDA to provide advice on the next phase of development. Thesemeetings may be held prior to the submission of an IND, at the end of Phase 2 and/or before an NDA is submitted. Meetingsmay be requested at other times as well.The results of preclinical studies and clinical trials, including negative or ambiguous results as well as positivefindings, together with detailed information on the manufacture, composition and quality of the product, proposed labelingand other relevant information are submitted to the FDA in the form of an NDA requesting approval to market the product.The NDA must be accompanied by a significant user fee payment. The FDA has substantial discretion in the approval processand may refuse to accept any application, for example if the NDA is not sufficiently complete, or decide that the data isinsufficient for approval and require additional preclinical, clinical or other studies.30 Table of ContentsIn addition, under the Pediatric Research Equity Act (“PREA”), an NDA or supplement to an NDA must contain datato assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations and tosupport dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA maygrant deferrals for submission of data or full or partial waivers. Unless otherwise required by regulation, PREA does not applyto any drug for an indication for which orphan drug designation has been granted. However, if only one indication for aproduct has orphan drug designation, a pediatric assessment may still be required for any applications to market that sameproduct for the non‑orphan indication(s).Once the NDA submission has been submitted, the FDA has 60 days after submission of the NDA to conduct aninitial review to determine whether it is sufficient to accept for filing. NDAs receive either a standard or priority review.Under the Prescription Drug User Fee Act, the FDA sets a goal date by which it plans to complete its review. For a standardreview, this is typically 10 months from the date of submission of the NDA application. The review process is often extendedby FDA requests for additional information or clarification. Before approving an NDA, the FDA will inspect the facilities atwhich the product is manufactured and will not approve the product unless the manufacturing facility complies with cGMPsand may also inspect clinical trial sites for integrity of data supporting safety and efficacy. The FDA may also convene anadvisory committee of external experts to provide input on certain review issues relating to risk, benefit and interpretation ofclinical trial data. The FDA is not bound by the recommendations of an advisory committee, but generally follows suchrecommendations in making its decisions. The FDA may delay approval of an NDA if applicable regulatory criteria are notsatisfied and/or the FDA requires additional testing or information. The FDA may require post‑marketing testing andsurveillance to monitor safety or efficacy of a product.After the FDA evaluates the NDA and conducts inspections of manufacturing facilities where the drug productand/or its API will be produced, it may issue an approval letter or a Complete Response Letter. An approval letter authorizescommercial marketing of the drug with specific prescribing information for specific indications. A Complete Response Lettergenerally outlines the deficiencies in the NDA submission and may require substantial additional clinical testing, such as anadditional pivotal Phase 3 clinical trial(s), clinical data, and/or other significant, expensive and time consumingrequirements related to clinical trials, preclinical studies or manufacturing. Even if such additional information is submitted,the FDA may ultimately decide that the NDA does not satisfy the criteria for approval.The FDA may approve the NDA with a Risk Evaluation and Mitigation Strategy (“REMS”), plan to mitigate risks,which could include medication guides, physician communication plans, or elements to assure safe use, such as restricteddistribution methods, patient registries and other risk minimization tools. The FDA also may condition approval on, amongother things, changes to proposed labeling, development of adequate controls and specifications, or a commitment toconduct one or more post‑market studies or clinical trials. Such post‑market testing may include Phase 4 clinical trials andsurveillance to further assess and monitor the product’s safety and effectiveness after commercialization.Orphan Drug DesignationUnder the Orphan Drug Act of 1983, the FDA may grant orphan drug designation to a drug or biological productintended to treat an orphan disease or condition, which is a disease or condition that affects fewer than 200,000 individualsin the United States, or if it affects more than 200,000 individuals in the United States, there is no reasonable expectation thatthe cost of developing and making a drug product available in the United States for this type of disease or condition will berecovered from sales of the product. Orphan product designation must be requested before submitting an NDA. After the FDAgrants orphan product designation, the identity of the therapeutic agent and its potential orphan use are disclosed publiclyby the FDA. Orphan product designation does not convey any advantage in or shorten the duration of the regulatory reviewand approval process.If a product that has orphan drug designation subsequently receives the first FDA approval for the disease orcondition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDAmay not approve any other applications to market the same drug or biological product for the same indication for sevenyears, except in limited circumstances, such as demonstrating clinical superiority to the product with orphan exclusivity. Thedesignation of such drug also entitles a party to financial incentives, such as opportunities for grant funding towards clinicaltrial costs, tax advantages and user‑fee waivers. Competitors, however, may receive approval of31 Table of Contentsdifferent products for the indication for which the orphan product has exclusivity or obtain approval for the same product butfor a different indication for which the orphan product has exclusivity. Orphan product exclusivity also could block theapproval of one of our products for seven years if a competitor obtains approval of the same drug or biological product asdefined by the FDA or if our product candidate is determined to be contained within the competitor’s product for the sameindication or disease. If a drug product designated as an orphan product receives regulatory approval for an indicationbroader than that for which it is designated, it may not be entitled to orphan product exclusivity. Orphan drug status in theEuropean Union has similar but not identical benefits in that jurisdiction.Post‑Approval RequirementsDrugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation bythe FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product distribution,advertising and promotion, and reporting of adverse experiences with the product. After approval, most changes to theapproved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval andmay require additional clinical trials and NDA submissions. There also are continuing, annual user fee requirements for anymarketed products and the establishments at which such products are manufactured, as well as new application fees forsupplemental applications with clinical data.In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugsare required to register their establishments with the FDA and state agencies, and are subject to periodic unannouncedinspections by the FDA and these state agencies for compliance with cGMP requirements. Changes to the manufacturingprocess are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also requireinvestigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon thesponsor and any third‑party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue toexpend time, money, and effort in the area of production and quality control to maintain cGMP compliance.Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements andstandards is not maintained, or if problems occur after the product reaches the market. Later discovery of previously unknownproblems with a product, including adverse events of unanticipated severity or frequency, with manufacturing processes, orfailure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safetyinformation, imposition of post‑market studies or clinical trials to assess new safety risks, or imposition of distribution orother restrictions under a REMS program. Other potential consequences include, but are not limited to:·restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from themarket or product recalls;·fines, warning letters or holds on post‑approval clinical trials;·refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation ofproduct license approvals;·product seizure or detention, or refusal to permit the import or export of products; or·injunctions or the imposition of civil or criminal penalties.The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market.Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label. TheFDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off‑label uses, and a companythat is found to have improperly promoted off‑label uses may be subject to significant liability.Moreover, the recently enacted federal Drug Supply Chain Security Act imposes new obligations on manufacturersof pharmaceutical products, among others, related to product tracking and tracing. Among the requirements of this newfederal legislation, manufacturers will be required to provide certain information regarding the drug product to individualsand entities to which product ownership is transferred, label drug product with a product32 Table of Contentsidentifier, and keep certain records regarding the drug product. Further, under this new legislation, manufacturers will havedrug product investigation, quarantine, disposition, and notification responsibilities related to counterfeit, diverted, stolen,and intentionally adulterated products, as well as products that are the subject of fraudulent transactions or which areotherwise unfit for distribution such that they would be reasonably likely to result in serious health consequences or death.Foreign RegulationIn order to market any product outside of the United States, we would need to comply with numerous and varyingregulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, amongother things, clinical trials, marketing authorization, commercial sales and distribution of our products. Whether or not weobtain FDA approval for a product, we would need to obtain the necessary approvals by the comparable foreign regulatoryauthorities before we can commence clinical trials or marketing of the product in foreign countries and jurisdictions.Although many of the issues discussed above with respect to the United States apply similarly in the context of the EuropeanUnion, the approval process varies between countries and jurisdictions and can involve additional product testing andadditional administrative review periods. The time required to obtain approval in other countries and jurisdictions mightdiffer from and be longer than that required to obtain FDA approval. Regulatory approval in one country or jurisdiction doesnot ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country orjurisdiction may negatively impact the regulatory process in others.Other Healthcare LawsIn addition to FDA restrictions on the marketing of pharmaceutical products, federal and state healthcare lawsrestrict certain business practices in the biopharmaceutical industry. Although we currently do not have any products on themarket, we may be subject, and once our product candidates are approved and we begin commercialization, will be subject toadditional healthcare laws and regulations enforced by the federal government and by authorities in the states and foreignjurisdictions in which we conduct our business. These laws include, but are not limited to, anti‑kickback, false claims, dataprivacy and security, and transparency statutes and regulations.The federal Anti‑Kickback Statute prohibits, among other things, knowingly and willfully offering, paying,soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in returnfor, purchasing, leasing, arranging for, ordering or recommending any good, facility, item or service for which payment ismade, in whole or in part, under Medicare, Medicaid or any other federal healthcare programs. The term “remuneration” hasbeen broadly interpreted to include anything of value, including for example, gifts, discounts, the furnishing of supplies orequipment, credit arrangements, payments of cash, waivers of payment, ownership interests and providing anything at lessthan its fair market value. The federal Anti‑Kickback Statute has been interpreted to apply to arrangements betweenpharmaceutical manufacturers on the one hand, and prescribers, purchasers and formulary managers on the other. Althoughthere are a number of statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution,the exceptions and safe harbors are drawn narrowly, and our future practices may not in all cases meet all of the criteria for astatutory exception or safe harbor protection. Practices that involve remuneration that may be alleged to be intended toinduce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safeharbor. Failure to meet all of the requirements of a particular applicable regulatory safe harbor does not make the conduct perse illegal under the federal Anti‑Kickback Statute. Instead, the legality of the arrangement will be evaluated on acase‑by‑case basis based on a cumulative review of all of its facts and circumstances. Several courts have interpreted thestatute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referralsof federal healthcare program covered business, the statute has been violated. Additionally, the Patient Protection andAffordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “PPACA”),amended the intent requirement under the Anti‑Kickback Statute and criminal healthcare fraud statutes (discussed below)such that a person or entity no longer needs to have actual knowledge of the statute or the specific intent to violate it in orderto have committed a violation. In addition, PPACA provides that the government may assert that a claim including items orservices resulting from a violation of the federal Anti‑Kickback Statute constitutes a false or fraudulent claim for purposes ofthe civil False Claims Act (discussed below). Due to the breadth of these federal and state anti‑kickback laws, and thepotential for33 Table of Contentsadditional legal or regulatory change in this area, it is possible that our current and future sales and marketing practicesand/or our future relationships with physicians might be challenged under these laws, which could cause harm to us.The civil monetary penalties statute imposes penalties against any person or entity who, among other things, isdetermined to have presented or caused to be presented a claim to a federal health program that the person knows or shouldknow is for an item or service that was not provided as claimed or is false or fraudulent.The federal false claims laws prohibit, among other things, any person or entity from knowingly presenting, orcausing to be presented, a false or fraudulent claim for payment or approval to the federal government or knowingly making,using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federalgovernment. As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes “anyrequest or demand” for money or property presented to the U.S. government. Recently, several pharmaceutical and otherhealthcare companies have been prosecuted under these laws for, among other things, allegedly providing free product tocustomers with the expectation that the customers would bill federal programs for the product. Other companies have beenprosecuted for causing false claims to be submitted because of the companies’ marketing of the product for unapproved, andthus non‑covered, uses.The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), created new federal criminal statutesthat prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud or obtain, by means of false orfraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of,any healthcare benefit program, including private third‑party payors, and knowingly and willfully falsifying, concealing orcovering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the deliveryof, or payment for, healthcare benefits, items or services.In addition, we may be subject to data privacy and security regulation by both the federal government and the statesin which we conduct our business. HIPAA, as amended by the Health Information Technology for Economic and ClinicalHealth Act (“HITECH”), and its implementing regulations, imposes certain requirements relating to the privacy, security andtransmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s securitystandards directly applicable to business associates—independent contractors or agents of covered entities that receive orobtain protected health information in connection with providing a service on behalf of a covered entity. HITECH alsocreated four new tiers of civil monetary penalties, and newly empowered state attorneys general with the authority to enforceHIPAA. In January 2013, the Office for Civil Rights of the U.S. Department of Health and Human Services issued the FinalOmnibus Rule under HIPAA pursuant to HITECH that makes significant changes to the privacy, security, and breachnotification requirements and penalties. The Final Omnibus Rule generally took effect in September 2013 and enhancescertain privacy and security protections, and strengthens the government’s ability to enforce HIPAA. The Final OmnibusRule also enhanced requirements for both covered entities and business associates regarding notification of breaches ofunsecured protected health information. In addition, state laws govern the privacy and security of health information incertain circumstances, many of which differ from each other in significant ways. These state laws may not have the sameeffect and often are not preempted by HIPAA, thus complicating compliance efforts.Additionally, PPACA also included the federal Physician Payments Sunshine Act, which requires certainmanufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaidor the Children’s Health Insurance Program (with certain exceptions) to report annually information related to certainpayments or other transfers of value made or distributed to physicians and teaching hospitals, or to entities or individuals atthe request of, or designated on behalf of, the physicians and teaching hospitals and to report annually certain ownership andinvestment interests held by physicians and their immediate family members. Failure to comply with required reportingrequirements could subject applicable manufacturers and others to substantial civil money penalties.Also, many states have similar healthcare statutes or regulations that apply to items and services reimbursed underMedicaid and other state programs, or, in several states, apply regardless of the payor. Certain states require pharmaceuticalcompanies to implement a comprehensive compliance program that includes a limit or outright ban on34 Table of Contentsexpenditures for, or payments to, individual medical or health professionals and/or require pharmaceutical companies totrack and report gifts and other payments made to physicians and other healthcare providers.Because we intend to commercialize products that could be reimbursed under federal and other governmentalhealthcare programs, we plan to develop a comprehensive compliance program that establishes internal controls to facilitateadherence to the rules and healthcare program requirements. Although compliance programs and adherence thereto maymitigate the risk of violation of and subsequent investigation and prosecution for violations of the above laws, the riskscannot be entirely eliminated. If our operations are found to be in violation of any of the health care laws or regulationsdescribed above or any other laws that apply to us, we may be subject to penalties, including potentially significant criminal,civil and/or administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion of products fromreimbursement under government programs, contractual damages, reputational harm, administrative burdens, diminishedprofits and future earnings and/or the curtailment or restructuring of our operations, any of which could adversely affect ourability to operate our business and our results of operations. To the extent that any of our products will be sold in a foreigncountry, we may be subject to similar foreign laws and regulations, which may include, for instance, applicablepost‑marketing requirements, including safety surveillance, fraud and abuse laws, and implementation of corporatecompliance programs and reporting of payments or transfers of value to healthcare professionals.Pharmaceutical Coverage, Pricing and ReimbursementIn both domestic and foreign markets, our sales of any future approved products, if and when commercialized, willdepend in part on the availability of coverage and adequate reimbursement from third‑party payors. Third‑party payorsinclude government authorities, managed care providers, private health insurers and other organizations. Patients who areprescribed treatments for their conditions and providers performing the prescribed services generally rely on third‑partypayors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products, if approved, unlesscoverage is provided and reimbursement is adequate to cover a significant portion of the cost of our products. Sales of ourproducts will therefore depend substantially, both domestically and abroad, on the extent to which the costs of our productswill be paid by third‑party payors. These third‑party payors are increasingly focused on containing healthcare costs bychallenging the price and examining the cost‑effectiveness of medical products and services.In addition, significant uncertainty exists as to the coverage and reimbursement status of newly approved healthcareproduct candidates. The market for our product candidates for which we may receive regulatory approval will dependsignificantly on access to third‑party payors’ drug formularies, or lists of medications for which third‑party payors providecoverage and reimbursement. The industry competition to be included in such formularies often leads to downward pricingpressures on pharmaceutical companies. Also, third‑party payors may refuse to include a particular branded drug in theirformularies or otherwise restrict patient access to a branded drug when a less costly generic equivalent or other alternative isavailable. Furthermore, third‑party payor reimbursement to providers for our product candidates may be subject to a bundledpayment that also includes the procedure administering our products. To the extent there is no separate payment for ourproduct candidates, there may be further uncertainty as to the adequacy of reimbursement amounts. Because each third‑partypayor individually approves coverage and reimbursement levels, obtaining coverage and adequate reimbursement is a timeconsuming, costly and sometimes unpredictable process. We may be required to provide scientific and clinical support forthe use of any product to each third‑party payor separately with no assurance that approval would be obtained, and we mayneed to conduct expensive pharmacoeconomic studies in order to demonstrate the cost‑effectiveness and/or medicalnecessity of our products. This process could delay the market acceptance of any product and could have a negative effect onour future revenues and operating results. We cannot be certain that our product candidates will be considered cost‑effectiveor medically necessary. Because coverage and reimbursement determinations are made on a payor‑by‑payor basis, obtainingacceptable coverage and reimbursement from one payor does not guarantee the Company will obtain similar acceptablecoverage or reimbursement from another payor. A payor’s decision to provide coverage for a product does not imply that anadequate reimbursement rate will be approved. If we are unable to obtain coverage of, and adequate reimbursement andpayment levels for, our product candidates from third‑party payors, physicians may limit how much or under whatcircumstances they will prescribe or administer them and patients may decline to purchase them. This in turn could affect ourability to successfully commercialize our products and impact our profitability, results of operations, financial condition andfuture success.35 Table of ContentsFurthermore, in many foreign countries, particularly the countries of the European Union, the pricing of prescriptiondrugs is subject to government control. In some non‑U.S. jurisdictions, the proposed pricing for a drug must be approvedbefore it may be lawfully marketed. The requirements governing drug pricing vary widely from country to country. Forexample, the European Union provides options for its member states to restrict the range of medicinal products for whichtheir national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirectcontrols on the profitability of the company placing the medicinal product on the market. We may face competition for ourproduct candidates from lower‑priced products in foreign countries that have placed price controls on pharmaceuticalproducts. In addition, there may be importation of foreign products that compete with our own products, which couldnegatively impact our profitability.Healthcare ReformIn the United States and foreign jurisdictions, there have been, and we expect there will continue to be, a number oflegislative and regulatory changes to the healthcare system that could affect our future business and operations if and whenwe begin to directly commercialize our products.In particular, there have been and continue to be a number of initiatives at the U.S. federal and state level that seekto reduce healthcare costs. Initiatives to reduce the federal deficit and to reform healthcare delivery are increasingcost‑containment efforts. We anticipate that Congress, state legislatures and the private sector will continue to review andassess alternative controls on healthcare spending through limitations on the growth of private health insurance premiumsand Medicare and Medicaid spending, the creation of large insurance purchasing groups, price controls on pharmaceuticalsand other fundamental changes to the healthcare delivery system. Any proposed or actual changes could limit or eliminateour spending on development projects and affect our ultimate profitability.In March 2010, PPACA was signed into law. PPACA has substantially changed the way healthcare is financed byboth governmental and private insurers. PPACA, among other things: established an annual, nondeductible fee on any entitythat manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entitiesaccording to their market share in certain government healthcare programs; revised the methodology by which rebates owedby manufacturers for covered outpatient drugs under the Medicaid Drug Rebate Program are calculated; increased thestatutory minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program; addressed anew methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated fordrugs that are inhaled, infused, instilled, implanted, or injected; extended the Medicaid Drug Rebate Program toprescriptions of individuals enrolled in Medicaid managed care organizations; required manufacturers to offer 50%point‑of‑sale discounts on negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gapperiod, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; and implementedpayment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians andother providers to improve the coordination, quality and efficiency of certain healthcare services through bundled paymentmodels. For years the U.S. Congress has been assessing new legislation designed to repeal and replace core sections of thePPACA. On December 22, 2017, for instance, the President signed into law the Tax Cuts and Jobs Act of 2017, whichrepealed the “individual mandate” of the PPACA. The repeal of the individual mandate is expected to cause millions fewerAmericans to be insured in 2027 and premiums in insurance markets may rise. The Trump Administration has also takenexecutive actions to undermine or delay implementation of the PPACA. In January 2017, the President signed an ExecutiveOrder directing applicable federal agencies to waive, defer, grant exemptions from, or delay the implementation of anyprovision of the PPACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, healthinsurers, or manufacturers of pharmaceuticals or medical devices.In the future, there may continue to be additional proposals relating to the reform of the U.S. healthcare system,some of which could further limit the prices we will be able to charge for our product candidates, or the amounts ofreimbursement available for our product candidates. If future legislation were to impose direct governmental price controlsand access restrictions, it could have a significant adverse impact on our business. Managed care organizations, as well asMedicaid and other government agencies, continue to seek price discounts. Some states have implemented, and other statesare considering, measures to reduce costs of the Medicaid program, and some states are considering implementing measuresthat would apply to broader segments of their populations that are not Medicaid‑eligible. Due to36 Table of Contentsthe volatility in the current economic and market dynamics, we are unable to predict the impact of any unforeseen orunknown legislative, regulatory, payor or policy actions, which may include cost containment and healthcare reformmeasures. Such policy actions could have a material adverse impact on our profitability.Segment and Geographical InformationFor the year ended December 31, 2017 revenue from product sales were derived entirely from the United States. Wedid not have revenue for the years ended December 31, 2016 or 2015.We held long-lived assets in Ireland with a carrying value of $35.2 million, $40.2 million, and $0 in 2017, 2016,and 2015, respectively. We held long-lived assets in the United States with a carrying value of $0, $0, and $5.2 million in2017, 2016, and 2015, respectively. We held long-lived assets in the Cayman Islands with a carrying value of $0, $20.7million, and $31.3 in 2017, 2016, and 2015, respectively. EmployeesAs of December 31, 2017, we had 66 full‑time employees, each of whom is working in the United States. Of thesefull‑time employees, 12 were engaged in research and development, 35 were engaged in commercial activities includingsales, marketing and market access, and 19 were engaged in other general and administrative activities. Corporate InformationStrongbridge Biopharma plc, an Irish public limited company, was established on May 26, 2015 under the nameCortendo plc. On September 4, 2015, Cortendo plc changed its name to Strongbridge Biopharma plc.Our principal executive offices are located at 900 Northbrook Drive, Suite 200, Trevose, Pennsylvania, 19053 andour telephone number is +1 610‑254‑9200. For the purposes of Irish law, our registered office is Arthur Cox Building, TenEarlsfort Terrace, Dublin 2, Ireland.Our website is www.strongbridgebio.com. The information on, or that can be accessed through, our website is notpart of and should not be incorporated by reference into this Annual Report.Available InformationWe file with the SEC annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K,proxy and information statements and amendments to reports filed or furnished pursuant to Sections 13(a), 14 and 15(d) ofthe Securities Exchange Act of 1934, as amended (the “Exchange Act”). Prior to becoming a domestic filer on January 1,2018, we also filed annual reports on Form 20-F and Reports on Form 6-K. The public may obtain copies of these filings atthe SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549 or by calling the SEC at 1-800-SEC-0330. TheSEC also maintains a website at http://www.sec.gov that contains reports, proxy and information statements and otherinformation regarding Strongbridge Biopharma plc and other companies that file materials with the SEC electronically. Assoon as practicable after filing with the SEC, we make copies of these reports available to the public, free of charge, throughthe investor relations tab on our web site, www.strongbridgebio.com. The information found on our website is not part of thisor any other report that we file with or furnish to the SEC. 37 Table of Contents ITEM 1A. RISK FACTORSCertain factors may have a material adverse effect on our business, financial condition and results ofoperations. You should carefully consider the risks and uncertainties described below, in addition to other informationcontained in this Annual Report, including our consolidated financial statements and related notes. Our business, financialcondition or results of operations could be materially and adversely affected if any of these risks occurs and, as a result, themarket price of our ordinary shares could decline and you could lose all or part of your investment. Additional risks anduncertainties not presently known to us or that we currently deem immaterial also may have similar adverse effects on us.Risks Related to Our Limited Operating HistoryWe have a limited operating history on which to assess our business, have incurred significant losses over the last severalyears, and anticipate that we will continue to incur losses until achieving sufficient revenues from Keveyis, Macrilen, orone or more of our product candidates, if approved.Until we acquired the U.S. marketing rights to Keveyis, in December 2016, we were a development-stagebiopharmaceutical company. We have a limited operating history and have not yet demonstrated an ability to successfullycomplete a large-scale, pivotal clinical trial, obtain regulatory approval, or manufacture and commercialize a productcandidate. Other than our limited commercial experience with Keveyis, which we launched in April 2017, we have nomeaningful prior commercial operations upon which to evaluate our business and predictions about our future success orviability may not be as accurate as they could be if we had a history of successfully developing and commercializingpharmaceutical products.Since inception, we have incurred significant operating losses. We have devoted substantially all of our financialresources to identifying, in-licensing, acquiring and developing our product candidates, conducting clinical trials,commercializing Keveyis, and providing general and administrative support for these operations. In January 2018, weacquired an exclusive license to the intellectual property rights relating to Macrilen in order to carry out the development,manufacturing, registration and commercialization of Macrilen, or any pharmaceutical product containing the activepharmaceutical ingredient in Macrilen, macimorelin acetate, in the United States and Canada, and ownership of all productregistrations related to Macrilen in these countries.To achieve commercial success of Keveyis, Macrilen and any product candidates that are approved, we will have toexpand our sales, marketing and supply capabilities or outsource these activities to a third party.To date, we have financed our operations primarily through private placements of equity securities, the proceedsfrom our initial public offering of ordinary shares in the United States in October 2015 and follow-on public offerings inOctober 2017 and January 2018, our at-the-market facility, and debt financings. The amount of our future net losses willdepend, in part, on whether we successfully commercialize Keveyis, Macrilen or one of our other product candidates, ifapproved, and the rate of our future expenditures as well as our ability to obtain funding through strategic collaborations orgrants. To become and remain profitable, we must successfully commercialize Keveyis, Macrilen or one or more of ourproduct candidates, if approved.We have never been, and may never be, profitable.We have only two products, Keveyis and Macrilen, approved for commercialization, and two product candidates indevelopment. We did not generate any revenue until we launched Keveyis in April 2017. Our ability to generate significantfuture revenue from product sales and become profitable depends heavily on our success in many areas, including, but notlimited to:·Integrating Keveyis and Macrilen and any other products or product candidates that we in-license or acquire, aswell as completing research, formulation and process development, and preclinical or clinical development, asapplicable, of those product candidates, including successfully completing clinical trials of those productcandidates;38 Table of Contents·obtaining regulatory approval of our product candidates;·maintaining supply and manufacturing relationships with third parties that can timely provide adequate, inamount and quality, products to support clinical development of our product candidates and the marketdemand for Keveyis and Macrilen and any other product candidates that are approved;·obtaining market acceptance of Keveyis and Macrilen and our product candidates, if approved, and persuadingadequate numbers of physicians to prescribe or utilize our products and other product candidates, if approved;·addressing any competing technological and market developments;·identifying, assessing, in-licensing, acquiring and/or developing new product candidates;·negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;·maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, tradesecrets and know-how; and·attracting, hiring and retaining adequate numbers of qualified sales and marketing personnel.We are currently advancing two product candidates through clinical development, Recorlev (levoketoconazole) andveldoreotide. Development of product candidates is expensive, and we expect our research and development expenses toincrease in connection with our ongoing activities, particularly as we continue our ongoing trials and initiate newnonclinical studies and clinical trials of Recorlev, veldoreotide and any other product candidates we may seek to develop.Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree ofrisk. It may be several years, if ever, before we receive regulatory approval and have a product candidate, other than Keveyisand Macrilen, approved for commercialization. Our future revenue from Keveyis and Macrilen and from any other productcandidates approved for commercialization will depend upon the size of the markets in which our product candidates aremarketed, or in which they may receive approval, and our ability to achieve market acceptance and adequate market share forour product candidates in those markets.Given the numerous risks and uncertainties associated with pharmaceutical product development andcommercialization, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will beable to achieve profitability. We expect to continue to incur significant expenses and operating losses until we successfullycommercialize Keveyis, Macrilen or one or more of our product candidates. We anticipate that our expenses will increasesubstantially if and as we:·continue to grow our sales, marketing and distribution infrastructure;·continue research and nonclinical and clinical development of our product candidates, including advancingour programs from preclinical development into clinical trials and increasing the number and size of our currentclinical trials and preclinical studies;·make up-front, milestone or other payments under any asset acquisition, supply, or license arrangements;·seek to identify, assess, in-license, acquire and develop additional product candidates;·change or add manufacturers or suppliers;·seek regulatory approvals for our product candidates that successfully complete clinical trials;39 Table of Contents·seek to maintain, protect and expand our intellectual property portfolio;·seek to attract and retain skilled personnel;·create additional infrastructure to support our operations as a U.S. listed company and our product developmentand commercialization efforts; and·experience any delays or encounter issues with any of the above, including, but not limited to, failedpreclinical studies or clinical trials, complex results, safety issues or other regulatory challenges that mayrequire either longer follow-up of existing preclinical studies or clinical trials or limitation of additionalpreclinical studies or clinical trials in order to pursue regulatory approval.Further, the net losses we incur may fluctuate significantly from quarter-to-quarter and year-to-year, such that aperiod-to-period comparison of our results of operations may not be a good indication of our future performance. Moreover,if we incur substantial losses, we could be liquidated, and the value of our shares might be significantly reduced or the sharesmight be of no value.We have incurred, and anticipate we will continue to incur, significant costs associated with commercializingKeveyis. We will incur additional costs related to our development, manufacturing, registration and commercialization ofMacrilen, as well as any of our other product candidates that are approved. Further, our revenue will be dependent, in part,upon the size of the markets in the territories for which we have received regulatory approval, the accepted price for theproduct, the ability to obtain coverage and adequate reimbursement, and whether we own the commercial rights for thatterritory. If the number of our addressable patients is not as significant as we estimate, the indication approved by regulatoryauthorities is narrower than we expect, or the treatment population is narrowed by competition, physician choice or treatmentguidelines, we may not generate significant revenue from sales of our product candidates. If we are not able to generatesufficient revenue from the sale of any of our approved products, we may never become profitable. Even if we do achieveprofitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to successfullyexecute any of the foregoing would decrease the value of our company and could impair our ability to raise capital, expandour business or continue our operations. A decline in the value of our company could cause you to lose all or part of yourinvestment.We expect that we will need substantial additional funding before we can expect to complete the development of our twoproduct candidates.We are currently advancing two product candidates through clinical development, Recorlev (levoketoconazole) andveldoreotide. Development of product candidates is expensive, and we expect our research and development expenses toincrease in connection with our ongoing activities, particularly as we continue our ongoing trials and initiate newnonclinical studies and clinical trials of Recorlev, veldoreotide and any other product candidates we may seek to develop.Although we believe the combination of our existing cash and cash equivalents and additional borrowings under our creditfacility is sufficient to fund planned operations at least through the regulatory approval and commercial launch of Recorlev,if successful, we expect that we will require additional capital to obtain regulatory approval for, and to commercialize, bothof our product candidates. Our future funding requirements will depend on many factors, including, but not limited to:·the amount of revenue that we receive from sales of Keveyis and Macrilen;·the cost of expanding our sales, marketing, distribution and administrative capabilities;·the scope, rate of progress, results and cost of our clinical trials, nonclinical testing, and other related activities;·the cost of formulation, process development, manufacturing of clinical supplies, and establishing commercialsupplies of our product candidates and any other product candidates that we may develop, in-license oracquire;40 Table of Contents·whether we borrow any additional amounts under our credit facility; ·the number and characteristics of product candidates that we pursue, including any additional productcandidates we may in-license or acquire;·the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;·the cost of defending potential intellectual property disputes, including patent infringement actions brought bythird parties against us or our product candidates;·the cost, timing and outcomes of regulatory approvals;·the terms and timing of any collaborative, licensing and other arrangements that we may establish, includingany required milestone and royalty payments thereunder; and·the emergence of competing technologies and their achieving commercial success before we do or otheradverse market developments.Any additional fundraising efforts may divert our management from their day-to-day activities, which maycompromise our ability to develop and commercialize our product candidates, if approved. In addition, we cannot guaranteethat future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of anyfinancing may adversely affect the holdings or the rights of our shareholders and the issuance of additional securities,whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our ordinary shares todecline.If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay ordiscontinue one or more of our research or development programs or the commercialization of any product or productcandidates that is approved, or be unable to expand our operations or otherwise capitalize on our business opportunities, asdesired.Raising additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rightsto our intellectual property or future revenue streams.Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs througha combination of product revenue, equity offerings, debt financings, grants, and license and development agreements inconnection with any collaborations. We have borrowed $85 million under our credit facility. An additional $15 million maybe borrowed if we satisfy certain product revenue and market capitalization conditions. We do not have any committedexternal source of funds. In the event we seek additional funds, we may raise additional capital through the sale of equity orconvertible debt securities. In such an event, the ownership interests of our current shareholders will be diluted, and the termsof these securities may include liquidation or other preferences that would adversely affect their rights as shareholders. Debtfinancing, if available, could result in increased fixed payment obligations and may involve agreements that includerestrictive covenants, such as limitations on our ability to incur additional debt, make capital expenditures, acquire, sell orlicense intellectual property rights or declare dividends, and other operating restrictions that could hurt our ability toconduct our business.Further, if we raise additional funds through collaborations, strategic alliances, or marketing, distribution orlicensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property or futurerevenue streams. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce orterminate our product development or future commercialization efforts, or grant rights to develop and market productcandidates that we would otherwise prefer to develop and market ourselves.41 Table of ContentsWe are expanding our organization and may experience difficulties in managing this growth, which could disrupt ouroperations.As our development, commercialization, in-licensing, and acquisition plans and strategies develop, and as wecommercialize Keveyis and Macrilen and advance the clinical and preclinical development of our product candidates, weexpect to experience significant growth in the number of our employees and the scope of our operations, particularly in theareas of managerial, operational, sales, marketing, financial, legal and other resources. To manage our anticipated futuregrowth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities,and continue to recruit and train additional qualified personnel. Our management may need to divert a disproportionateamount of its attention away from our day-to-day activities and devote a substantial amount of time to managing thesegrowth activities. Due to our limited financial resources, we may not be able to effectively manage the expansion of ouroperations, which may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, loss ofemployees and reduced productivity among remaining employees. Any such growth could require significant capitalexpenditures and may divert financial resources from other projects, such as the in-licensing, acquisition and development ofadditional product candidates. If our management is unable to effectively manage our growth, our expenses may increasemore than expected, our ability to generate or grow revenue could be reduced and we may not be able to implement ourbusiness strategy. Our future financial performance and our ability to compete effectively will depend, in part, on our abilityto effectively manage any future growth.In order to increase adoption and sales of Keveyis and Macrilen and other product candidates we may commercialize, wewill need to continue developing our commercial organization as well as recruit and retain qualified sales representatives.Part of our strategy is to continue to build a biopharmaceutical company to successfully execute thecommercialization of our products. We may not be able to successfully commercialize our products in the United States or inany other territories where we have commercial rights. Prior to our launch of Keveyis in April 2017, we had no experiencecommercializing products on our own. In order to successfully commercialize our approved products, we must continue tobuild our sales, marketing, distribution, managerial and other non-technical capabilities. Although we have established asales force consisting of approximately 21 orphan disease sales representatives focused on Keveyis, our resources are stilllimited compared to some of our competitors. For example, we will need to hire additional sales representatives to focus oncommercialization of Macrilen. The continued development of our commercial organization to market our products and anyadditional products we may acquire will be expensive and time-consuming. We also cannot be certain that we will be able tocontinue to successfully develop this capability.If we are unable to effectively train and equip our sales force, our ability to successfully commercialize our products will beharmed.The members of our sales force have limited experience promoting Keveyis and no experience promoting Macrilen,which we only recently acquired. We have expended significant time and resources to train our sales force to be effective intheir sales efforts for Keveyis and will need to devote significant additional time and resources to hire new individuals andtrain them with respect to Macrilen. For example, we must train our sales force to ensure that consistent and appropriatemessages about Keveyis and Macrilen are being delivered to our potential customers. Our sales representatives may alsoexperience challenges promoting Keveyis or Macrilen when we call on physicians and their office staff. We are likely toexperience turnover of the sales representatives that we have hired or will hire, requiring us to train new sales representatives.If we are unable to effectively train our sales force and equip them with effective materials, including medical and salesliterature to help them inform and educate physicians about the benefits of our products and their proper administration andlabel indication, as well as our patient access programs, our efforts to successfully commercialize our products could be putin jeopardy, which could have a material adverse effect on our financial condition, share price and operations.We may not be successful in executing our research programs or business development efforts.Research programs and business development efforts to identify new product candidates require substantialtechnical, financial and human resources. We may focus our efforts and resources on potential programs or product42 Table of Contentscandidates that ultimately prove to be unsuccessful. Our research programs, business development efforts or licensingattempts may fail to yield additional complementary or successful product candidates for clinical development andcommercialization for a number of reasons, including, but not limited to, the following:·our research or business development methodology or search criteria and process may be unsuccessful inidentifying potential product candidates with a high probability of success for development progression;·we may not be able or willing to assemble sufficient resources or expertise to in‑license, acquire or discoveradditional product candidates;·we may not be able to agree to acceptable terms with the licensor or owner of any product candidates we seek toin-license or acquire;·our product candidates may not succeed in preclinical studies or clinical trials;·we may not succeed in formulation or process development;·our product candidates may be shown to have harmful side effects or may have other characteristics that maymake the products unmarketable or unlikely to receive regulatory approval;·competitors may develop alternatives that render our product candidates obsolete or less attractive;·product candidates that we develop may be covered by third parties’ patents or other exclusive rights;·product candidates that we develop may not allow us to leverage our expertise and our development andcommercial infrastructure as currently expected;·the market for a product candidate may change during our program so that such a product may becomeunreasonable to continue to develop;·a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or atall; and·a product candidate may not be accepted as safe and effective by patients, the medical community orthird‑party payors.If any of these events occurs, we may not be successful in executing our growth strategy or our growth strategy maynot deliver the anticipated results.We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize onproduct candidates or indications that may be more profitable or for which there is a greater likelihood of success.We have limited financial and managerial resources. As a result, we may forego or delay pursuit of opportunitieswith other product candidates or for other indications that later prove to have greater commercial potential. Our resourceallocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Ourspending on current and future research and development programs and product candidates for specific indications may notyield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for aparticular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing orother royalty arrangements in cases in which it would have been more advantageous for us to retain sole development andcommercialization rights to such product candidate.If we acquire other businesses or in-license or acquire other product candidates and are unable to integrate themsuccessfully, our financial performance could suffer.If we are presented with appropriate opportunities, we may acquire other businesses or product candidates. We havehad limited experience integrating other businesses or product candidates, or in-licensing or acquiring other productcandidates. The recent acquisitions of the U.S. and Canadian marketing rights of Macrilen in January 2018 and the U.S.43 Table of Contentsmarketing rights of Keveyis in December 2016 are still being integrated into our business. The integration process followingthese or any future transactions may produce unforeseen operating difficulties and expenditures, and may absorb significantmanagement attention that would otherwise be directed to the ongoing development of our business. Also, in any future in-licensing or acquisition transactions, we may issue shares of stock that would result in dilution to existing shareholders, incurdebt, assume contingent liabilities or create additional expenses related to amortizing intangible assets, any of which mightharm our financial results and cause our stock price to decline. Any financing we might need for future transactions may beavailable to us only on terms that restrict our business or impose costs that reduce our net income.We are highly dependent on our key personnel, including our chief executive officer and chief medical officer, as well asour ability to recruit, retain and motivate additional qualified personnel.We are highly dependent on Matthew Pauls, our President and Chief Executive Officer, and Dr. Fredric Cohen, ourChief Medical Officer. Some members of our management team, including Mr. Pauls, have only been our employees sinceAugust 2014. As a result, they have limited experience working for us and working together as a team. Any member ofmanagement or employee can terminate his or her relationship with us at any time. Although we have included non-competeprovisions in their respective employment or consulting agreements, as the case may be, such arrangements might not besufficient for the purpose of preventing such key personnel from entering into agreements with any of our competitors. Theinability to recruit and retain qualified personnel, or the loss of Mr. Pauls or Dr. Cohen, could result in competitive harm aswe could experience delays in reaching our in-licensing, acquisition, development and commercialization objectives.We also depend substantially on highly qualified managerial, sales and technical personnel who are difficult to hireand retain. There is currently a shortage of skilled personnel in our industry, which is likely to continue. As a result,competition for skilled personnel is intense and the turnover rate can be high. We may not be able to attract and retainpersonnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies forindividuals with similar skill sets. In addition, failure to succeed in preclinical studies or clinical trials may make it morechallenging to recruit and retain qualified personnel. Recruiting and retaining other qualified employees, consultants andadvisors for our business, including scientific and technical personnel, will be critical to our success.Our business and operations would suffer in the event of system failures.Our computer systems, as well as those of our clinical research organizations (“CROs”), and other contractors andconsultants, are vulnerable to damage from computer viruses, unauthorized access, natural disasters, including hurricanes,terrorism, war and telecommunication and electrical failures. If such an event were to occur and cause interruptions in ouroperations, it could result in a material disruption of our product development programs. For example, the loss of preclinicalstudy or clinical trial data from completed, ongoing or planned preclinical studies or clinical trials could result in delays inour regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that anydisruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure ofpersonal, confidential or proprietary information, we could incur liability and the further development of our productcandidates could be delayed.Risks Related to Our BusinessWe depend entirely on the success of Keveyis, Macrilen and our two product candidates, which are still in clinicaldevelopment. If we do not successfully commercialize Keveyis or Macrilen or obtain regulatory approval for andsuccessfully commercialize one or more of our product candidates or we experience significant delays in doing so, we maynever become profitable.We currently have two products approved for sale, Keveyis and Macrilen, and two product candidates indevelopment. We have invested, and continue to expect to invest, a significant portion of our efforts and financial resourcesin the development of our two product candidates, which are still in clinical development. Our ability to generate productrevenues will depend heavily on our successful commercialization of Keveyis and Macrilen and our eventualcommercialization, if approved, of one or more of our product candidates currently in development. We are not44 Table of Contentspermitted to market or promote any product candidate before we receive regulatory approval from the FDA, EMA or anycomparable foreign regulatory agency, and we may never receive such regulatory approval for our product candidatescurrently in development. The success of Recorlev and veldoreotide will depend on several additional factors, including, butnot limited to, the following:·successfully completing clinical trials that demonstrate the efficacy and safety of our product candidates;·successfully completing formulation and process development activities;·acceptance of our product candidates by patients and the medical community;·a continued acceptable safety profile following approval;·obtaining and maintaining healthcare coverage and adequate reimbursement; and·competing effectively with other therapies, including with respect to the sales and marketing of our productcandidates, if approved.Many of these factors are beyond our control, including clinical development, the regulatory submission process,potential threats to our intellectual property rights and changes in the competitive landscape. If we do not achieve one ormore of these factors in a timely manner or at all, we could experience significant delays or an inability to successfullycomplete clinical trials or eventually commercialize our product candidates, if approved.Clinical trials are very expensive, time consuming and difficult to design and implement, and involve uncertain outcomes.Furthermore, results of earlier preclinical studies and clinical trials may not be predictive of results of future preclinicalstudies or clinical trials.To obtain the requisite regulatory approvals to market and sell any of our product candidates, we must demonstratethrough extensive preclinical studies and clinical trials that our products are safe and effective in humans. Clinical testing isexpensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time duringthe clinical trial process. The results of preclinical studies and earlier clinical trials may not be predictive of the results oflater-stage clinical trials. For example, the results generated to date in preclinical studies or clinical trials for our productcandidates do not ensure that later preclinical studies or clinical trials will demonstrate similar results. Further, we havelimited clinical data for each of our product candidates and have not completed Phase 3 clinical trials for any of our productcandidates. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despitehaving progressed through preclinical studies and initial clinical trials.Companies in the biopharmaceutical industry may suffer setbacks in advanced clinical trials due to lack of efficacyor adverse safety profiles, notwithstanding promising results in earlier clinical trials. For example, levoketoconazole waspreviously studied for the treatment of type 2 diabetes. In December 2005, prior to the initiation of the first clinical trial byDiObex, our licensee, the FDA placed a clinical hold relating to a safety concern for use of a dosage above 600 mg/day.DiObex modified the clinical trial protocol to limit the highest dose to 600 mg/day, and the clinical hold was lifted by theFDA in February 2006. Furthermore, levoketoconazole did not demonstrate a reduction in blood glucose levels in a smallPhase 2 clinical trial in patients with type 2 diabetes mellitus, the original indication for which it was being developed. Wemay experience delays in our ongoing or future preclinical studies or clinical trials, and we do not know whether futurepreclinical studies or clinical trials will begin on time, need to be redesigned, enroll an adequate number of subjects orpatients on time or be completed on schedule, if at all. Clinical trials may be delayed, suspended or terminated for a varietyof reasons, including delay or failure to:·obtain authorization from regulators or IRBs to commence a clinical trial at a prospective clinical trial site;·reach agreements on acceptable terms with prospective CROs and clinical trial sites, the terms of which can besubject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;45 Table of Contents·recruit and enroll a sufficient number of patients in clinical trials to ensure adequate statistical power to detectstatistically significant treatment effects;·address any noncompliance with regulatory requirements or safety concerns that arise during the course of aclinical trial;·have patients complete clinical trials or return for post‑treatment follow‑up;·have CROs or other third parties comply with regulatory requirements, adhere to the trial protocol or meetcontractual obligations in a timely manner or at all;·identify a sufficient number of clinical trial sites and initiate them within the planned timelines; and·manufacture sufficient quantities of the product candidate to complete clinical trials.Positive or timely results from preclinical or early stage clinical trials do not ensure positive or timely results in latestage clinical trials or regulatory approval by the FDA, EMA or any comparable foreign regulatory agency. In addition, manyof the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead tothe denial of regulatory approval of our product candidates. Preclinical and clinical data are often susceptible to varyinginterpretations and analyses. Many companies that believed their product candidates performed satisfactorily in preclinicalstudies and clinical trials have nonetheless failed to obtain regulatory approval for the product candidates. The FDA, EMAand any comparable foreign regulatory agency have substantial discretion in the approval process and in determining whenor whether regulatory approval will be obtained for any of our product candidates. Even if we believe the data collected fromclinical trials of our product candidates are promising, such data may not be sufficient to support approval by the FDA, EMAor any comparable foreign regulatory agency.In some instances, there can be significant variability in safety or efficacy results between different clinical trials ofthe same product candidate due to numerous factors, including changes in clinical trial procedures set forth in protocols,differences in the size and type of the patient populations, adherence to the administration regimen and other clinical trialprotocols, and the rate of dropout among clinical trial participants. In the case of our late stage clinical product candidates,results may differ in general on the basis of the larger number of clinical trial sites and additional countries involved inPhase 3 clinical trials. Different countries have different standards of care and different levels of access to care for patients,which in part drives the heterogeneity of the patient populations that enroll in our studies.In June 2015, we acquired veldoreotide and were not involved in and had no control over the preclinical andclinical development of this product candidate prior to such acquisition. As a result, we are dependent on the prior researchand development of veldoreotide having been conducted in accordance with the applicable protocol, legal, regulatory andscientific standards, the accuracy of reported results of all clinical trials conducted prior to our acquisition and the correctinterpretation of collected data from these clinical trials. These factors could result in increased costs and delays in thedevelopment of veldoreotide, which could hurt our ability to generate future revenues from this product candidate.The regulatory approval process of the FDA, EMA or any comparable foreign regulatory agency may be lengthy, timeconsuming and unpredictable.Our future success is dependent upon our ability to successfully develop, obtain regulatory approval for and thensuccessfully commercialize one or more of our product candidates. Although certain of our employees have prior experiencewith submitting marketing applications to the FDA, EMA and comparable foreign regulatory agencies, we, as a company,have not submitted such applications for our product candidates. We cannot be certain that any of our product candidateswill be successful in clinical trials or receive regulatory approval. Applications for any of our product candidates could fail toreceive regulatory approval for many reasons, including, but not limited to, the following:·the FDA, EMA or any comparable foreign regulatory agency may disagree with the design or implementation ofour clinical trials or our interpretation of data from nonclinical trials or clinical trials;46 Table of Contents·the population studied in the clinical program may not be sufficiently broad or representative to assure safety inthe full population for which we seek approval, including reliance on foreign clinical data;·the data collected from clinical trials of our product candidates may not be sufficient to support a finding thathas statistical significance or clinical meaningfulness or support the submission of a NDA or other submission,or to obtain regulatory approval in the United States or elsewhere;·we may be unable to demonstrate to the FDA, EMA or any comparable foreign regulatory agency that a productcandidate’s risk‑benefit ratio for its proposed indication is acceptable;·the FDA, EMA or any comparable foreign regulatory agency may fail to approve the manufacturing processes,test procedures and specifications or facilities of third‑party manufacturers with which we contract for clinicaland commercial supplies; and·the approval policies or regulations of the FDA, EMA or any comparable foreign regulatory agency maysignificantly change in a manner rendering our clinical data insufficient for approval.Any of our current or future product candidates could take a significantly longer time to gain regulatory approvalthan expected or may never gain regulatory approval. This could delay or eliminate any potential product revenue bydelaying or terminating the potential commercialization of our product candidates.Several elements of the SONICS Phase 3 clinical trial design for Recorlev were informed by the clinicaldevelopment pathway of currently approved drug therapies in the United States and the European Union. Additionally, weincorporated advice from the CHMP and FDA into the design of the clinical trial. In communication we had with the FDA,they recommended use of a concurrent control group in SONICS. However, SONICS utilizes an open-label, single-arm designbecause use of a placebo control in a parallel-arm monotherapy design was considered unethical or infeasible to enroll,depending on the specific country or clinical trial site under consideration. Studies lacking an active control group are morelikely to be subject to unanticipated variability in study results that can potentially lead to flawed conclusions because theydo not allow for discrimination of patient outcomes. As a result, even if we achieve the clinical trial's endpoints, the FDA orother regulatory authorities could view our study results as potentially biased.We intend to seek formal advice and guidance from the FDA and the EMA prior to advancing veldoreotide intofurther studies and pivotal clinical trials. If the feedback we receive is different from what we currently anticipate, this coulddelay the development and regulatory approval process for this product candidate.We generally plan to seek regulatory approval to commercialize our product candidates in the United States, theEuropean Union and other key global markets. To obtain regulatory approval in other countries, we must comply withnumerous and varying regulatory requirements of such other countries regarding safety, efficacy, chemistry, manufacturingand controls, clinical trials, commercial sales, pricing and distribution of our product candidates. Even if we are successful inobtaining approval in one jurisdiction, we cannot ensure that we will obtain approval in any other jurisdictions. Failure toobtain marketing authorization for our product candidates will result in our being unable to market and sell such products. Ifwe fail to obtain approval in any jurisdiction, the geographic market for our product candidates could be limited. Similarly,regulatory agencies may not approve the labeling claims that are necessary or desirable for the successful commercializationof our product candidates.If we or others identify previously unknown, serious side effects of Keveyis or Macrilen, we may be required to performlengthy additional clinical trials, change their labeling or withdraw them from the market.If we or others identify previously unknown, serious side effects of Keveyis or Macrilen:·regulatory authorities may withdraw their approvals;·we may be required to conduct additional clinical trials, make changes in labeling, implement changes to orobtain re-approvals of facilities that manufacture Keveyis or Macrilen;47 Table of Contents·we may experience a significant drop in the sales of Keveyis or Macrilen;·our reputation in the marketplace may suffer; and·we may become the target of lawsuits, including class action lawsuits.Any of these events could harm or prevent sales of Keveyis and Macrilen or could increase the costs and expenses ofcommercializing and marketing Keveyis and Macrilen.Physicians may accept Keveyis and/or Macrilen slowly or may never accept them, which would adversely affect ourfinancial results. Physicians will prescribe Keveyis only if they determine, based on experience, clinical data, side effect profiles andother factors, that it is preferable to other treatments, even if those products are not approved for PPP. Because PPP is rare,most physicians are inexperienced in the care of patients with the illness and it may be difficult to persuade them to prescribeKeveyis. Other factors that may affect the commercial success of Keveyis include:·the preference of some physicians for more familiar, long-standing, off-label treatments for PPP, such asacetazolamide;·competition from alternative therapies, such as potassium supplements, diuretics, beta receptor agonists,mexiletine and other sodium channel blockers;·the cost-effectiveness of Keveyis and the availability of third-party insurance coverage and reimbursement; and·the product labeling required by the FDA.Physicians will prescribe Macrilen only if they determine, based on experience, clinical data, side effect profiles andother factors, that it is preferable to other diagnostic methods, even if those methods are not approved for diagnosing AGHD.Because AGHD is rare, most physicians are inexperienced in the diagnosis of patients with the illness and it may be difficultto persuade them to prescribe Macrilen.·the preference of some physicians to utilize Arginine, an injectable product that is the only other FDA-approved product indicated for use in diagnosing AGHD, or one of several other products that are used off-labelto diagnose AGHD, of which the two most frequently prescribed products are the injectables glucagon andinsulin;·the cost-effectiveness of Macrilen and the availability of third-party insurance coverage and reimbursement;and·the product labeling required by the FDA.The failure of Keveyis and Macrilen to achieve commercial success could prevent us from generating sufficientrevenue to fully fund our commercial and development activities.If serious adverse, undesirable or unacceptable side effects are identified during the development of our productcandidates or following regulatory approval, if any, we may need to abandon our development of such product candidates.If our product candidates are associated with serious adverse, undesirable or unacceptable side effects, we may needto abandon their development or limit development to certain uses or sub-populations in which such side effects are lessprevalent, less severe or more acceptable from a risk-benefit perspective. Many compounds that initially showed promise inpreclinical or early stage testing have later been found to cause side effects that restricted their use and prevented furtherdevelopment of the compound for larger indications.48 Table of ContentsFor example, in our clinical trials of Recorlev to date, adverse events have included headache, nausea, back pain,dizziness, diarrhea and liver enzyme elevations. For veldoreotide, which is given by subcutaneous injections, adverse eventshave included injection site reaction such as swelling, itching and pain. In addition, headache and gastrointestinal effectssuch as nausea and diarrhea were observed for veldoreotide. These adverse events can be dose-dependent and may increase infrequency and severity if we increase the dose to increase efficacy. Occurrence of serious treatment-related side effects couldimpede clinical trial enrollment, require us to halt the clinical trial, and prevent receipt of regulatory approval from the FDA,EMA or any comparable foreign regulatory agency. They could also adversely affect physician or patient acceptance of ourproduct candidates.Discovery of previously unknown problems, or increased focus on a known problem, with an approved product mayresult in restrictions on its permissible uses, including withdrawal of the medicine from the market. Currently, ketoconazoleis required to include a "black box" warning on its label for use as an antifungal related to liver toxicity in the United States.Manufactured ketoconazole consists of two enantiomers, 2R,4S-ketoconazole and 2S,4R-ketoconazole, that are found inequal amounts, and is therefore referred to as a racemate mixture. Recorlev is a single-enantiomer drug, a pure form of one ofthe two enantiomers (2S,4R-ketoconazole) of ketoconazole. If Recorlev is required to include a similar "black box" warningon its label, it may limit our ability to commercialize the product, if approved.Additionally, if one or more of our product candidates receives regulatory approval, and we or others later identifyundesirable side effects caused by such product(s), a number of potentially significant negative consequences could result,including, but not limited to:·withdrawal by regulatory authorities of approvals of such product;·seizure of the product by regulatory authorities;·recall of the product;·restrictions on the marketing of the product;·requirement by regulatory authorities of additional warnings on the label, such as a black box warning;·requirement that we create a medication guide outlining the risks of such side effects for distribution topatients;·commitment to expensive additional safety studies prior to launch as a prerequisite of approval by regulatoryauthorities of such product;·commitment to expensive post‑marketing studies as a prerequisite of approval by regulatory authorities of suchproduct;·initiation of legal action against us claiming to hold us liable for harm caused to patients; and·harm to our reputation and resulting harm to physician or patient acceptance of our products.Any of these events could prevent us from achieving or maintaining market acceptance of the particular productcandidate, if approved, and could significantly harm our business, financial condition, and results of operations.We may find it difficult to enroll patients in our clinical trials given the limited number of patients who have the diseasesfor the treatment of which our product candidates are being studied. Difficulty in enrolling patients in our clinical trialscould delay or prevent clinical trials of our product candidates.Successful and timely completion of clinical trials will require that we enroll a sufficient number of patientcandidates. Clinical trials may be subject to delays as a result of patient enrollment taking longer than anticipated or patientwithdrawal. Patient enrollment depends on many factors, including the size and nature of the patient population, eligibilitycriteria for the clinical trial, the proximity of patients to clinical sites, the design of the clinical protocol, the availability ofcompeting clinical trials, the availability of new drugs approved for the indication the clinical trial is49 Table of Contentsinvestigating, and clinicians' and patients' perceptions as to the safety and potential advantages of the product candidatebeing studied in relation to other available therapies.Because we are focused on addressing rare diseases, there are limited patient pools from which to draw in order tocomplete our clinical trials in a timely and cost-effective manner. Delays in the completion of any clinical trial of our productcandidates will increase our costs, slow down our product candidate development and approval process, and delay orpotentially jeopardize our ability to commence product sales and generate revenue. In addition, many of the factors that maylead to a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatoryapproval of our product candidates.We may become exposed to costly and damaging liability claims, either in connection with the sale of Keveyis, Macrilen orother approved products or when testing our product candidates in the clinic, and our product liability insurance may notcover all damages from such claims.We are exposed to potential product liability and professional indemnity risks that are inherent in the research,development, manufacturing, marketing, and use of pharmaceutical products. The current and future use of productcandidates by us in clinical trials, and the sale of Keveyis and Macrilen and any approved products, may expose us toliability claims. These claims might be made by patients that use the product, healthcare providers, pharmaceuticalcompanies, or others selling such products. Any claims against us, regardless of their merit, could be difficult and costly todefend, and could compromise the market acceptance of Keveyis and Macrilen, our product candidates or any prospects forcommercialization of our product candidates, if approved.Although the clinical trial process is designed to identify and assess potential side effects, it is always possible that adrug, even after regulatory approval, may exhibit unforeseen side effects. If Keveyis, Macrilen or any of our productcandidates were to cause adverse side effects during clinical trials or after approval, we may be exposed to substantialliabilities. Physicians and patients may not comply with product instructions or may ignore warnings regarding potentialadverse effects and patients who should not use our products.We have limited product liability insurance that offers coverage we believe to be appropriate for a companymarketing a single pharmaceutical product and developing others. We intend to extend our product liability insurancecoverage to any product candidate for which we obtain marketing approval. However, this insurance may be prohibitivelyexpensive or may not fully cover our potential liabilities. Our inability to obtain adequate insurance coverage at anacceptable cost could prevent or inhibit the commercialization of Keveyis, Macrilen or other product candidates that areapproved, or result in meaningful underinsured or uninsured liability. Defending a lawsuit could be costly and significantlydivert management's attention from conducting our business. If we were sued successfully, our liability could exceed ourtotal assets.We may not be able to build an effective sales and marketing team.We currently have a very limited sales force and marketing and distribution capabilities. To achieve commercialsuccess of Keveyis, Macrilen and any product candidates that are approved, we will have to continue to develop and expandour sales and marketing capabilities or outsource these activities to a third party.Factors that may affect our ability to successfully commercialize Keveyis, Macrilen and our product candidates onour own include recruiting and retaining adequate numbers of effective sales and marketing personnel, obtaining access to orpersuading adequate numbers of physicians to prescribe our product candidates and other unforeseen costs associated withcreating an independent sales and marketing organization. Developing a sales and marketing organization requiressignificant investment and is time consuming. We may not be able to build an effective sales and marketing organization inthe United States, the European Union or other key global markets. If we are unable to establish effective sales and marketingcapabilities or to find suitable partners for the commercialization of Keveyis, Macrilen and our product candidates, we maynot generate revenues from them.50 Table of ContentsWe operate in a highly competitive and rapidly changing industry, which may result in our competitors discovering,developing or commercializing competing products before or more successfully than we do, or our entering a market inwhich a competitor has commercialized an established competing product, and we may not be successful in competing withthem.The development and commercialization of new drug products is highly competitive and subject to significant andrapid technological change. Our success is highly dependent upon our ability to in-license, acquire, develop and obtainregulatory approval for new and innovative drug products on a cost-effective basis and to market them successfully. In doingso, we face and will continue to face intense competition from a variety of businesses, including large, fully integrated, well-established pharmaceutical companies who already possess a large share of the market, specialty pharmaceutical companiesand biopharmaceutical companies, academic institutions, government agencies and other private and public researchinstitutions in Europe, the United States and other jurisdictions.Keveyis is an oral carbonic anhydrase inhibitor, that was approved in the United States to treat hyperkalemic,hypokalemic and related variants of PPP. Acetazolamide, another oral carbonic anhydrase inhibitor, is used frequently off-label for the prophylactic and sometimes acute treatment of PPP. Potassium supplements, are indicated for use inhypokalemic periodic paralysis in the United States and are frequently used either chronically or for emergency treatment ofepisodes in that form of PPP. Several other types of drugs have been reported to have benefits for chronic or acute use in oneor more than one PPP variant, including potassium-sparing diuretics, beta receptor agonists, mexelitine and other sodiumchannel blockers, and others. We are not aware of drugs currently in development for prophylactic chronic treatment of PPP.A Phase 2 clinical study of bumetanide, a loop diuretic, is underway in England for acute treatment of paralytic attacks.Macrilen is an orally available ghrelin agonist, approved in the United States December 20, 2017 for use in thediagnosis of patients with AGHD. Arginine, an injectable product, is the only other FDA approved product indicated for usein diagnosing AGHD. However, several other products are used off-label for this use also, of which the two most frequentlyprescribed products are the injectables glucagon and insulin. We are not aware of any drugs currently in development for usein diagnosing AGHD.We are currently aware of various companies that are marketing existing drugs that may compete with Recorlev suchas Corcept Therapeutics and Novartis. The treatment of endogenous Cushing's syndrome patients who fail or are ineligiblefor surgery in the United States and Europe are: Korlym (mifepristone) marketed by Corcept Therapeutics in the UnitedStates; Signifor (pasireotide) marketed by Novartis in the United States and European Union; and ketoconazole, metyraponeand mitotane marketed by HRA in the European Union. Novartis has submitted an NDA/MAA for Signifor (pasireotide) LARin Cushing's disease. Additionally, LCI-699 (osilodrostat) is currently in Phase 3 clinical development by Novartis inCushing's disease patients. Corcept is developing CORT125134, a second-generation glucorticoid receptor modulator;currently in Phase 2. HRA Pharma is developing metyrapone for the US market; currently in Phase 2. Millendo is developingATR-101, a selective acyl-CoA:cholesterol acyltransferase 1 (ACAT) inhibitor, currently in Phase 2. In addition,Ketoconazole is believed to be the most commonly prescribed drug therapy for the treatment of endogenous Cushing'ssyndrome, even though it is not approved for this use in the United States. Regulatory approval of ketoconazole in theUnited States for the treatment of endogenous Cushing's syndrome could significantly increase competition for Recorlev dueto their similar mechanisms of action.We are currently aware of various companies that are marketing existing drugs that may compete with veldoreotidesuch as Novartis, Ipsen and Pfizer. In addition, a number of acromegaly therapies are in various stages of development. Thereare currently three approved SSA therapies for acromegaly in the United States: Sandostatin LAR (octreotide) marketed byNovartis; Signifor LAR (pasireotide) marketed by Novartis; and Somatuline Depot (lanreotide) marketed by Ipsen. There isone growth hormone receptor antagonist, Somavert (pegvisomant), marketed by Pfizer. Chiasma had filed an NDA in theUnited States for RG-3806 (Mycapssa®), an oral octreotide formulation in 2015, and received a Complete Response Letterwherein FDA stated that it did not believe the company's application had provided substantial evidence of efficacy towarrant approval, and advised Chiasma that it would need to conduct another clinical trial in order to overcome thisdeficiency. Four additional therapies are in Phase 2 clinical development for acromegaly: octreotide long-acting depot(CAM-2029) developed by Novartis and Camurus; ITF-2984 developed by Italfarmaco; BIM-23B065 developed by Ipsen;and ATL-1103 developed by Antisense Therapeutics.51 Table of ContentsWe anticipate this competition to increase in the future as new companies enter the neuromuscular, endocrinologyand rare diseases markets. In addition, the health care industry is characterized by rapid technological change, and newproduct introductions or other technological advancements could make some or all of our products obsolete.The highly competitive nature of and rapid technological changes in the biotechnology and pharmaceuticalindustries could render our product candidates or our technology obsolete or non-competitive. Our competitors may, amongother things:·have similar or better product candidates or technologies;·possess greater financial and human resources as well as supporting clinical data;·develop and commercialize products that are safer, more effective, less expensive, or more convenient or easierto administer;·obtain regulatory approval more quickly;·establish superior proprietary positions;·have access to greater manufacturing capacity;·seek patent protection that competes with our product candidates;·implement more effective approaches to sales and marketing; or·enter into more advantageous collaborative arrangements for research, development, manufacturing andmarketing of products.Additional competitors could enter the market with generic versions of our products, which may result in a decline in salesof affected products.Under the Hatch-Waxman Act, a pharmaceutical manufacturer may file an abbreviated new drug application(“ANDA”), seeking approval of a generic copy of an approved innovator product. Under the Hatch-Waxman Act, amanufacturer may also submit an NDA under section 505(b)(2) that references the FDA's prior approval of the innovatorproduct. A 505(b)(2) NDA product may be for a new or improved version of the original innovator product. Hatch-Waxmanalso provides for certain periods of regulatory exclusivity, which preclude FDA approval, or, in some circumstances, FDAfiling and reviewing, of an ANDA or 505(b)(2) NDA. These include, subject to certain exceptions, the period during which anFDA-approved drug is subject to orphan drug exclusivity. Although Recorlev is being developed as a new chemical entity(“NCE”), we intend to rely on orphan drug exclusivity rather than NCE exclusivity for nonpatent protection of Recorlev. Inaddition to the benefits of regulatory exclusivity, an innovator NDA holder may have patents claiming the active ingredient,product formulation or an approved use of the drug, which would be listed with the product in the FDA publication,"Approved Drug Products with Therapeutic Equivalence Evaluations," known as the "Orange Book." If there are patentslisted in the Orange Book, a generic or 505(b)(2) applicant that seeks to market its product before expiration of the patentsmust include in the ANDA what is known as a "Paragraph IV certification," challenging the validity or enforceability of, orclaiming non-infringement of, the listed patent or patents. Notice of the certification must be given to the innovator, too, andif within 45 days of receiving notice the innovator sues to protect its patents, approval of the ANDA is stayed for 30 months,or as lengthened or shortened by the court.Accordingly, if Recorlev or any of our other product candidates is approved, competitors could file ANDAs forgeneric versions of our product candidates, or 505(b)(2) NDAs that reference our product candidates, respectively. If there arepatents listed for our product candidates in the Orange Book, those ANDAs and 505(b)(2) NDAs would be required to includea certification as to each listed patent indicating whether the ANDA applicant does or does not intend to challenge thepatent. We cannot predict whether any patents issuing from our pending patent applications will be eligible for listing in theOrange Book, how any generic competitor would address such patents, whether we would sue on any such patents or theoutcome of any such suit.52 Table of ContentsWe may not be successful in securing or maintaining proprietary patent protection for products and technologies wedevelop or license. Moreover, if any patents that are granted and listed in the Orange Book are successfully challenged byway of a Paragraph IV certification and subsequent litigation, the affected product could immediately face genericcompetition and its sales would likely decline rapidly and materially. Should sales decline, we may have to write off aportion or all of the intangible assets associated with the affected product and our ability to generate revenue could becompromised.The successful commercialization of our products and product candidates that are approved will depend in part on theextent to which governmental authorities and health insurers establish adequate coverage and reimbursement levels andpricing policies.The successful commercialization of Keveyis, Macrilen and our product candidates, if approved, will depend, inpart, on the extent to which coverage and reimbursement for our products will be available from government and healthadministration authorities, private health insurers and other third-party payors. To manage healthcare costs, manygovernments and third-party payors increasingly scrutinize the pricing of new therapies and require greater levels ofevidence of favorable clinical outcomes and cost-effectiveness before extending coverage and adequate reimbursement tosuch new technologies. In the United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003(the “Medicare Modernization Act”) changed the way Medicare covers and pays for pharmaceutical products. The legislationexpanded Medicare coverage for drug purchases by the elderly under a new Part D and introduced a new reimbursementmethodology based on average sale prices for physician-administered drugs. In addition, this legislation provided authorityfor limiting the number of drugs that will be covered in any therapeutic class. Cost-reduction initiatives and other provisionsof this legislation could decrease the coverage and reimbursement that we receive for any approved products. While theMedicare Modernization Act applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicarecoverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction inreimbursement that results from the Medicare Modernization Act may result in a similar reduction in payments from privatepayors. In light of such challenges to prices and increasing levels of evidence of the benefits and clinical outcomes of newtechnologies, we cannot be sure that coverage will be available for Keveyis, Macrilen and/or any product candidate that wecommercialize, and, if available, that the reimbursement rates will be adequate. If we are unable to obtain adequate levels ofcoverage and reimbursement for Keveyis, Macrilen and/or our product candidates, our ability to generate revenue will becompromised.Because each third-party payor individually approves coverage and reimbursement levels, obtaining coverage andadequate reimbursement is a time consuming, costly and sometimes unpredictable process. We may be required to providescientific and clinical support, medical necessity or both for the use of Keveyis, Macrilen or any product to each third-partypayor separately with no assurance that approval would be obtained, and we may need to conduct expensivepharmacoeconomic studies in order to demonstrate the cost-effectiveness, medical necessity or both of our products. Thisprocess could delay the market acceptance of any product and could have a negative effect on our future revenues andoperating results.Third-party payors may deny coverage and reimbursement status altogether of a given drug product, or cover theproduct, but may also establish prices at levels that are too low to enable us to realize an appropriate return on our investmentin product development. Because the rules and regulations regarding coverage and reimbursement change frequently, insome cases on short notice, even when there is favorable coverage and reimbursement, future changes may occur thatadversely impact such favorable coverage and reimbursement status. Further, the net reimbursement for drug products may besubject to additional reductions if there are changes to laws that presently restrict imports of drugs from countries where theymay be sold at lower prices than in the United States.The unavailability or inadequacy of third-party coverage and reimbursement could negatively affect the marketacceptance of Keveyis, Macrilen and our product candidates and the future revenues we may expect to receive from theseproducts. In addition, we are unable to predict what additional legislation or regulation relating to the healthcare industry orthird-party coverage and reimbursement may be enacted in the future, or what effect such legislation or regulation wouldhave on our business.53 Table of ContentsOur products may not gain market acceptance, in which case we may not be able to generate product revenues.Even if the FDA, EMA or any comparable foreign regulatory agency approves the marketing of any productcandidates that we develop, physicians, healthcare providers, patients or the medical community may not accept or use them.Efforts to educate the medical community and third-party payors on the benefits of our products or product candidates mayrequire significant resources and may not be successful. If Keveyis, Macrilen, Recorlev, veldoreotide or any other productcandidate that we develop does not achieve an adequate level of acceptance, we may not generate significant productrevenues or any profits from operations. The degree of market acceptance of Keveyis, Macrilen,Recorlev, veldoreotide or any other product candidates that are approved for commercial sale will depend on avariety of factors, including, but not limited to:·whether clinicians and potential patients perceive our products or product candidates to have better efficacy,safety and tolerability profile, and ease of use compared with alternative therapies;·the timing of market introduction;·the number of competing products;·our ability to provide acceptable evidence of safety and efficacy;·the prevalence and severity of any side effects;·relative convenience and ease of administration;·cost‑effectiveness;·patient diagnostics and screening infrastructure in each market;·marketing and distribution support; and·availability of coverage, reimbursement and adequate payment from health maintenance organizations andother third‑party payors, both public and private.In addition, the potential market opportunity for Keveyis, Macrilen, Recorlev, veldoreotide or any other productcandidate we may develop is difficult to estimate precisely. Our estimates of the potential market opportunity are predicatedon several key assumptions such as industry knowledge and publications, third-party research reports and other surveys.While we believe that our internal assumptions are reasonable, these assumptions may be inaccurate. If any of theassumptions proves to be inaccurate, then the actual market for Keveyis, Macrilen, Recorlev or our other product candidatescould be smaller than our estimates of the potential market opportunity. If the actual market for Keveyis, Macrilen, Recorlevor our other product candidates is smaller than we expect, or if the products fail to achieve an adequate level of acceptanceby physicians, health care payors and patients, our product revenue may be limited and we may be unable to achieve ormaintain profitability. Further, given the limited number of treating physicians, if we are unable to convince a significantnumber of such physicians of the value of our products or product candidates, we may be unable to achieve a sufficientmarket share to make our products profitable.The Orphan Drug designation for Keveyis, Macrilen and our product candidates may not prevent competition fromcompanies that develop other compounds for the treatment of the same condition. These companies may have significantlymore resources than we do. Competition from them could limit our revenue from the commercialization of Keveyis,Macrilen and/or our other product candidates.Although Keveyis, Macrilen and our product candidates have received Orphan Drug designation in the UnitedStates, and in the case of Recorlev and veldoreotide in Europe, we cannot be assured that we will realize the potentialbenefits of the designation. Even after an orphan drug is approved for its orphan indication, the FDA or EMA cansubsequently approve a different drug for the same condition if it concludes that the later drug is safer, more effective ormakes a major contribution to patient care. Upon expiration of the orphan drug exclusivity period, we may be subject tocompetition from manufacturers offering a generic form of Keveyis, Macrilen or our other products at a lower price, in54 Table of Contentswhich case our business could be harmed.For example, Corcept's Korlym has an Orphan Drug designation in the United States and is approved for the controlof hyperglycemia secondary to hypercortisolism in patients with endogenous Cushing's syndrome who have type 2 diabetesor glucose intolerance and have failed surgery or are not candidates for surgery. However, in 2012 Novartis received approvalin both the United States and the European Union (EU) to market its somatostatin analogue Signifor for adult patients withCushing's disease (a subset of Cushing's syndrome that accounts for approximately 70 percent of all Cushing's syndromepatients) for whom pituitary surgery is not an option or has not been curative.Laboratoire HRA Pharma (HRA) received Orphan Drug designation in the United States and the EU for the use ofmifepristone to treat a subtype of Cushing's syndrome. HRA began and terminated a Phase 2 clinical trial in Europe and theUnited States for this indication. Exelgyn Laboratories, which operates as a subsidiary of Medi Challenge (Pty) Ltd., receivedOrphan Drug designation for mifepristone to treat Cushing's syndrome in the EU, but it has stated that it has not yetconducted any clinical trials.The terms of our credit facility place restrictions on our operating and financial flexibility.Our term loan agreement with CRG includes affirmative and negative covenants applicable to us and anysubsidiaries we create in the future. The affirmative covenants include, among others, covenants requiring us to maintain ourlegal existence and governmental approvals necessary for us and our subsidiaries to perform our respective businesses andobligations under the term loan agreement, deliver certain financial reports to the lenders, maintain insurance coverage, andcomply with certain financial covenants. The negative covenants include, among others, restrictions on our transferringcollateral, changing our business, engaging in mergers or acquisitions, incurring additional indebtedness, paying dividendsor making other distributions, making investments, creating liens, or entering into transactions with affiliates, in each casesubject to certain exceptions.The term loan agreement also includes events of default, the occurrence and continuation of which could causeinterest to be charged at the rate that is otherwise applicable plus 4.0% and would provide the lenders holding more than50% of the aggregate commitments under the credit facility, and CRG, as collateral agent, with the right to exercise remediesagainst us and the collateral securing the credit facility, including foreclosure against our assets securing the credit facility,including our cash. These events of default include, among others, our failure to pay any amounts due under the term loanagreement, a breach of covenants under the term loan agreement, a material adverse change, our insolvency, the occurrenceof a default under any material agreement with a third party, and/or one or more judgments are rendered against us or oursubsidiaries in an amount greater than $250,000 individually or in the aggregate.Our ability to make scheduled payments on or to refinance our indebtedness depends on our future performance andability to raise additional sources of cash, which is subject to economic, financial, competitive and other factors beyond ourcontrol. If we are unable to generate sufficient cash to service our debt, we may be required to adopt one or more alternatives,such as selling assets, restructuring our debt or obtaining additional equity capital on terms that may be onerous or highlydilutive. If we desire to refinance our indebtedness, our ability to do so will depend on the capital markets and our financialcondition at such time. We may not be able to engage in any of these activities or engage in these activities on desirableterms, which could result in a default on our debt obligations.Risks Related to Our Reliance on Third PartiesWe have no manufacturing capabilities and currently depend on one supplier to manufacture Keveyis and a single set ofsuppliers to manufacture Macrilen. We also depend on a limited number of other suppliers to manufacture our productcandidates for use in clinical trials. If these suppliers are unable or unwilling to continue manufacturing for us and we areunable to contract quickly with alternative sources, or if these third-party manufacturers fail to comply with FDAregulations or otherwise fail to meet our requirements, our business will be harmed. Taro Pharmaceuticals North America, Inc. produces all of our requirements for Keveyis. We rely on a single set ofsuppliers to produce all of our requirements for Macrilen. We rely on other third-parties to manufacture our product55 Table of Contentscandidates for use in clinical trials. If any of these vendors is unable or unwilling to meet our future requirements, we may notbe able to manufacture our products in a timely manner. Our current arrangements with these manufacturers are terminable bysuch manufacturers, subject to certain notice provisions.The facilities used by our vendors to manufacture our product and product candidates must be approved by theFDA. We do not control the manufacturing processes of, and are completely dependent on, our contract manufacturingpartners for compliance with the regulatory requirements known as current good manufacturing practices (cGMPs). If ourcontract manufacturers cannot successfully manufacture material that conforms to our specifications and the strictrequirements of the FDA or others, they will not be able to maintain regulatory approval for their manufacturing facilities. Inaddition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, qualityassurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilitiesfor the manufacture of our products or if it withdraws any such approval, we may need to find alternative manufacturingfacilities, which would significantly hamper our ability to develop, obtain regulatory approval for or market our products. Inaddition, sanctions could be imposed on us, including fines, injunctions, civil penalties, failure of regulatory authorities togrant marketing approval of our product candidates, delays, suspension or withdrawal of approvals, seizures or recalls ofproducts, operating restrictions and criminal prosecutions, any of which could harm our business. If our suppliers fail tomanufacture Keveyis, Macrilen or our product candidates on a timely basis in the quantities that we require, or fail tomaintain manufacturing capabilities that meet FDA standards, we may exhaust our Keveyis and/or Macrilen inventory andnot be able to generate revenue, or clinical development programs may be delayed.We and our collaborators and contract manufacturers are subject to significant regulation with respect to themanufacturing of Keveyis, Macrilen and our product candidates. The manufacturing facilities on which we rely may notcontinue to meet regulatory requirements or may not be able to meet supply demands.All entities involved in the preparation of therapeutics for clinical trials or commercial sale, including our existingcontract manufacturers for our products and product candidates, are subject to extensive regulation. Components of afinished therapeutic product approved for commercial sale or used in late-stage clinical trials must be manufactured inaccordance with cGMP. These regulations govern manufacturing processes and procedures, including record keeping, andthe implementation and operation of quality systems to control and assure the quality of investigational products andproducts approved for sale. Poor control of production processes can lead to the introduction of contaminants or toinadvertent changes in the properties or stability of our product candidates that may not be detectable in final producttesting. We, our collaborators or our contract manufacturers must supply all necessary documentation in support of an NDAor foreign equivalent on a timely basis and must adhere to GLP and cGMP regulations enforced by the FDA and otherregulatory agencies through their facilities inspection program. Some of our contract manufacturers have never produced acommercially-approved pharmaceutical product and therefore have not obtained the requisite regulatory authority approvalsto do so. The facilities and quality systems of some or all of our collaborators and third-party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of our productcandidates or any of our other potential products. In addition, the regulatory authorities may, at any time, audit or inspect amanufacturing facility involved with the preparation of our product candidates or our other potential products or theassociated quality systems for compliance with the regulations applicable to the activities being conducted. Although weoversee the contract manufacturers, we cannot control the manufacturing process of, and are completely dependent on, ourcontract manufacturing partners for compliance with the regulatory requirements. If these facilities do not pass a pre-approvalplant inspection, regulatory approval of the products may not be granted or may be substantially delayed until anyviolations are corrected to the satisfaction of the regulatory authority, if ever.The regulatory authorities also may, at any time following approval of a product for sale, audit the manufacturingfacilities of our collaborators and third-party contractors. If any such inspection or audit identifies a failure to comply withapplicable regulations or if a violation of our product specifications or applicable regulations occurs independent of such aninspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly and/or timeconsuming for us or a third party to implement, and that may include the temporary or permanent suspension of a clinicaltrial or commercial sales or the temporary or permanent closure of a facility.56 Table of ContentsIf we, our collaborators or any of our third-party manufacturers fail to maintain regulatory compliance, the FDA oranother applicable regulatory authority could impose regulatory sanctions including, among other things, refusal to approvea pending application our product candidates, withdrawal of an approval or suspension of production.Additionally, if the supply from one approved manufacturer is interrupted, an alternative manufacturer would needto be qualified through an NDA supplement or equivalent foreign regulatory filing, which could result in further delay. Theregulatory agencies may also require additional studies if a new manufacturer is relied upon for commercial production.Switching manufacturers may involve substantial costs and is likely to result in a delay in our desired clinical andcommercial timelines.These factors could cause us to incur higher costs and could cause the delay or termination of clinical trials,regulatory submissions, required approvals or commercialization of our product candidates. Furthermore, if our suppliers failto meet contractual requirements and we are unable to secure one or more replacement suppliers capable of production at asubstantially equivalent cost, our clinical trials may be delayed or we could lose potential revenue.We rely on third parties to conduct our nonclinical and clinical trials and if these third parties perform in an unsatisfactorymanner, our business could be substantially harmed.We have relied upon and plan to continue to rely upon third-party CROs to conduct and monitor and manage datafor our ongoing nonclinical and clinical programs, and may not currently have all of the necessary contractual relationshipsin place to do so. Once we have established contractual relationships with such third-party CROS, we will have only limitedcontrol over their actual performance of these activities. Nevertheless, we are responsible for ensuring that each of our trials isconducted in accordance with the applicable protocol, legal, regulatory, environmental and scientific standards and ourreliance on the CROs does not relieve us of our regulatory responsibilities.We and our CROs and other vendors are required to comply with current Good Manufacturing Practices (“cGMP”),current Good Clinical Practices (“cGCP”), and Good Laboratory Practice (“GLP”), which are regulations and guidelinesenforced by the FDA, the Competent Authorities of the Member States of the European Union and any comparable foreignregulatory agency for all of our product candidates in nonclinical and clinical development. Regulatory authorities enforcethese regulations through periodic inspections of study sponsors, principal investigators, trial sites and other contractors. Ifwe or any of our CROs or vendors fail to comply with applicable regulations, the data generated in our nonclinical andclinical trials may be deemed unreliable and the FDA, EMA or any comparable foreign regulatory agency may require us toperform additional nonclinical and clinical trials before approving our marketing applications. We cannot assure you thatupon inspection by a given regulatory authority, such regulatory authority will determine that all of our clinical trialscomply with cGCP regulations. In addition, our clinical trials must be conducted with products produced under cGMPregulations. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay theregulatory approval process.Our business involves the controlled use of hazardous materials, chemicals, biologicals and radioactive compounds.Substantially all such use is outsourced to third-party CRO manufacturers and clinical sites. Although we believe that ourthird-party CROs safety procedures for handling and disposing of such materials comply with industry standards, there willalways be a risk of accidental contamination or injury. By law, radioactive materials may only be disposed of at certainapproved facilities. If liable for an accident, or if it suffers an extended facility shutdown, we or our CROs could incursignificant costs, damages or penalties.Our CROs are not our employees, and except for remedies available to us under our agreements with such CROs, wecannot control whether or not they devote sufficient time and resources to our ongoing nonclinical and clinical programs. Ifour CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to bereplaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols,regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated, and we may not beable to obtain regulatory approval for or successfully commercialize our product candidates. Our CROs may also generatehigher costs than anticipated. As a result, our results of operations and the commercial prospects for our product candidateswould be harmed, our costs could increase, and our ability to generate revenue could be delayed.57 Table of ContentsIf any of our relationships with these third-party CROs terminates, we may not be able to enter into arrangementswith alternative CROs or to do so on commercially reasonable terms. If we are able to replace a CRO, switching or addingadditional CROs involves additional cost and requires management time and focus and there is a natural transition periodwhen a new CRO commences work. As a result, delays could occur, which could hurt our ability to meet our desired clinicaldevelopment timelines. Though we carefully manage our relationships with our CROs, there can be no assurance that we willnot encounter similar challenges or delays in the future.Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor willdiscover them or that our trade secrets will be misappropriated or disclosed.Because we rely on third parties to develop and manufacture our product candidates, we must, at times, share tradesecrets with them. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, ifapplicable, material transfer agreements, collaborative research agreements, consulting agreements or other similaragreements with our collaborators, advisors, employees, and consultants prior to beginning research or disclosing proprietaryinformation. These agreements typically limit the rights of the third parties to use or disclose our confidential information,such as trade secrets. Despite the contractual provisions employed when working with third parties, the need to share tradesecrets and other confidential information increases the risk that such trade secrets become known by our competitors, areinadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given thatour proprietary position is based, in part, on our know-how and trade secrets, a competitor's discovery of our trade secrets orother unauthorized use or disclosure would impair our competitive position and may harm our business.Risks Related to Our Intellectual PropertyIf we or our licensors are unable to obtain and maintain effective patent or license rights for our technologies, productcandidates or any future product candidates, or if the scope of the patent or license rights obtained is not sufficientlybroad, we may not be able to compete effectively in our markets.In addition to the exclusivity provided for Keveyis, Macrilen and our product candidates with regulatory orphandrug status, we rely upon a combination of patents, trade secret protection, license rights and confidentiality agreements toprotect the intellectual property related to our technologies and product candidates. Our success depends in large part on ourand our licensors' ability to obtain and maintain patent and other intellectual property protection in the United States and inother countries, as well as license rights, with respect to our proprietary technology, products and product candidates.We have sought to protect our proprietary position by filing, where possible, patent applications in the UnitedStates and abroad related to our novel technologies and products that are important to our business. This process is expensiveand time consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at areasonable cost, in a timely manner or in all jurisdictions. It is also possible that we will fail to identify patentable aspects ofour research and development and manufacturing processes before it is too late to obtain patent protection. Moreover, insome circumstances, we do not have the right to control the preparation, filing and prosecution of patent applications, or tomaintain the patents, covering technology that we license from third parties. Therefore, these patents and applications maynot be prosecuted and enforced in a manner consistent with the best interests of our business.The patent position of biotechnology and pharmaceutical companies generally is highly uncertain and involvescomplex legal and factual questions for which legal principles remain unsolved. The patent applications that we own or in-license may fail to result in issued patents with claims that cover our products or product candidates in the United States or inforeign countries. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patentapplications in the United States and other jurisdictions remain confidential for a period of time after filing, and some remainso until issued. Therefore, we cannot be certain that we were the first to file any patent application related to our products orproduct candidates, or whether we were the first to make the inventions claimed in our owned patents or pending patentapplications, nor can we know whether those from whom we license patents were the first to make the inventions claimed orwere the first to file. As a result, the issuance, scope, validity, enforceability58 Table of Contentsand commercial value of our patent rights are highly uncertain. There is no assurance that all potentially relevant prior artrelating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuingfrom a pending patent application. Even if patents do successfully issue, and even if such patents cover our products orproduct candidates, third parties may challenge their validity, enforceability or scope, which may result in such patents beingnarrowed, found unenforceable or invalidated, which could allow third parties to commercialize our technology or productsand compete directly with us, without payment to us, or result in our inability to manufacture or commercialize productswithout infringing third-party patent rights. Furthermore, even if they are unchallenged, our patents and patent applicationsmay not adequately protect our intellectual property, provide exclusivity for our products or product candidates, preventothers from designing around our claims or provide us with a competitive advantage. Any of these outcomes could impairour ability to prevent competition from third parties.We and/or our licensors or partners have filed several patent applications covering various aspects of our productsand product candidates. We cannot offer any assurances about which, if any, patents will issue, the breadth of any suchpatent, or whether any issued patents will be found invalid and unenforceable or will be challenged by third parties. Anysuccessful opposition to these patents or any other patents owned by or licensed to us after patent issuance, or the loss orother impairment of any license rights relating to our products or product candidates, could deprive us of rights necessary forthe successful commercialization of any products or product candidates that we may develop. Further, if we encounter delaysin regulatory approvals, the period of time during which we could market a product or product candidate under patentprotection could be reduced.We may not have sufficient patent terms to effectively protect our products and business.Patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after it isfirst filed. Although various extensions may be available, the life of a patent, and the protection it affords, is limited. Giventhe amount of time required for the development, testing and regulatory review of new product candidates, patents protectingsuch candidates might expire before or shortly after such product candidates are commercialized. As a result, our owned andlicensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similaror identical to ours or otherwise provide us with a competitive advantage. Even if patents covering our products or productcandidates are obtained, once the patent life has expired for a product, we may be open to competition from genericmedications.Although patent term extensions in the United States and under supplementary protection certificates in theEuropean Union may be available to extend the patent exclusivity term for our products or product candidates, we cannotprovide any assurances that any such patent term extension will be obtained and, if so, for how long.Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patentapplications and the enforcement or defense of our issued patents.Changes in either the patent laws or interpretation of the patent laws in the United States and other countries maydiminish the value of our patents or narrow the scope of our patent protection. The laws of foreign countries may not protectour rights to the same extent as the laws of the United States. Assuming the other requirements for patentability are met, inthe United States prior to March 15, 2013, the first to invent the claimed invention is entitled to the patent, while outside theUnited States, the first to file a patent application is entitled to the patent. After March 15, 2013, under the Leahy-SmithAmerica Invents Act (the “AIA”), enacted on September 16, 2011, the United States has moved to a first inventor to filesystem. The AIA also includes a number of significant changes that affect the way patent applications will be prosecuted andmay also affect patent litigation. The effects of these changes are currently unclear as the United States Patent and TrademarkOffice (the “USPTO”) is still implementing various regulations, the courts have yet to address many of these provisions andthe applicability of the act and new regulations on specific patents discussed herein have not been determined and wouldneed to be reviewed. In general, the AIA and its implementation could increase the uncertainties and costs surrounding theprosecution of our patent applications and the enforcement or defense of our issued patents. In addition, recent U.S. SupremeCourt rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights ofpatent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in thefuture, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending onfuture actions by the U.S. Congress, the59 Table of Contentsfederal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that wouldweaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.Third-party claims of intellectual property infringement may expose us to substantial liability or prevent or delay ourdevelopment and commercialization efforts.Our commercial success depends in part on our ability to develop, manufacture, market and sell Keveyis, Macrilenand our product candidates, if approved, and use our proprietary technology without alleged or actual infringement,misappropriation or other violation of the patents and proprietary rights of third parties. There have been many lawsuits andother proceedings involving patent and other intellectual property rights in the biotechnology and pharmaceuticalindustries, including patent infringement lawsuits, interferences, oppositions and reexamination proceedings before theUSPTO, and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications,which are owned by third parties, exist in the fields in which we will market Keveyis and Macrilen and are developingproduct candidates. Some claimants may have substantially greater resources than we do and may be able to sustain the costsof complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition,patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us.As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our productsand product candidates may be subject to claims of infringement of the intellectual property rights of third parties.Third parties may assert that we are employing their proprietary technology without authorization. There may bethird-party patents or patent applications with claims to compositions, formulations, methods of manufacture or methods oftreatment related to the use or manufacture of Keveyis, Macrilen or our product candidates. We cannot be sure that we knowof each and every patent and pending application in the United States and abroad that is relevant or necessary to thecommercialization of Keveyis, Macrilen or our product candidates. Because patent applications can take many years to issue,there may be currently pending patent applications that may later result in issued patents upon which our products or productcandidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologiesinfringes upon these patents. If any third-party patents were held by a court of competent jurisdiction to cover themanufacturing process of any of our products or product candidates, any compositions formed during the manufacturingprocess or any final product itself, the holders of any such patents may be able to block our ability to commercialize suchproduct or product candidate unless we obtained a license under the applicable patents, or until such patents expire or arefinally determined to be invalid or unenforceable. Similarly, if any third-party patents were held by a court of competentjurisdiction to cover aspects of our compositions, formulations, or methods of treatment, prevention or use, the holders of anysuch patents may be able to block our ability to develop and commercialize the applicable product or product candidateunless we obtained a license or until such patent expires or is finally determined to be invalid or unenforceable. In eithercase, such a license may not be available on commercially reasonable terms, or at all. Even if we were able to obtain a license,it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block ourability to further develop and commercialize Keveyis, Macrilen or one or more of our product candidates, if approved.Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantialdiversion of employee resources from our business. In the event of a successful claim of infringement against us, we may haveto pay substantial damages, including treble damages and attorneys' fees for willful infringement, pay royalties, redesign ourinfringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time andmonetary expenditure.Although we are not currently involved in any litigation, we may be involved in lawsuits to protect or enforce our patentsor the patents of our licensors, which could be expensive, time consuming and unsuccessful. Competitors may infringe upon our patents or the patents of our licensors. Although we are not currently involvedin any litigation, if we or one of our licensing partners were to initiate legal proceedings against a third party to enforce apatent covering one of our products or product candidates, the defendant could counterclaim that the patent60 Table of Contentscovering our product or product candidate is invalid and/or unenforceable, or request declaratory judgment that there is noinfringement. In patent litigation in the United States, defendant counterclaims alleging invalidity, noninfringement and/orunenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of severalstatutory requirements, including lack of novelty, nonobviousness or non-lack of enablement. Grounds for anunenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld materialrelevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legalassertions of invalidity and unenforceability is unpredictable.Interference or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may benecessary to determine the priority of inventions with respect to our patents or patent applications or those of our licensors.An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from theprevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonableterms, or at all. Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantialcosts, and distract our management and other employees. In addition, the uncertainties associated with litigation couldcompromise our ability to successfully market Keveyis and/or Macrilen raise the funds necessary to continue our clinicaltrials, continue our research programs, and license necessary technology from third parties or enter into developmentpartnerships that would help us bring our product candidates to market, if approved.Furthermore, because of the substantial amount of discovery required in connection with intellectual propertylitigation, there is a risk that some of our confidential information could be compromised by disclosure during this type oflitigation. There could also be public announcements of the results of hearings, motions or other interim proceedings ordevelopments. If securities analysts or investors perceive these results to be negative, it could hurt the market price of ourordinary shares.Failure to secure or maintain adequate protection for our trademarks could adversely affect our business.We have filed a U.S., Canadian, Brazilian and International (Madrid Protocol) trademark application designatingAustralia, China, European Community, India, Israel, Japan, Mexico and Turkey for the mark, "Strongbridge Biopharma." Ifthe U.S. or any foreign trademark offices raise any objections, we may be unable to overcome such objections. In addition, inthe USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to opposepending trademark applications and to seek to cancel registered trademarks. Oppositions or cancellation proceedings havebeen filed and may in the future be filed against our trademarks, and our trademarks may not survive such proceedings.Furthermore, third parties may allege in the future, that a trademark or trade name that we elect to use for our productcandidates may cause confusion in the marketplace. We evaluate such potential allegations in the course of our business, andsuch evaluations may cause us to change our commercialization or branding strategy for our product candidates, which mayrequire us to incur additional costs. Moreover, any name we propose to use with our product candidate in the United Statesmust be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. The FDAtypically conducts a review of proposed product names, including an evaluation of potential for confusion with otherproduct names. If the FDA objects to any of our proposed proprietary product names, we may be required to expendsignificant additional resources in an effort to identify a suitable substitute name that would qualify under applicabletrademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to buildbrand identity and possibly leading to market confusion. Over the long term, if we are unable to establish name recognitionbased on our trademarks and trade names, then we may not be able to compete effectively and our business may be adverselyaffected. Our efforts to enforce or protect our proprietary rights related to trademarks, domain names or copyrights may beineffective and could result in substantial costs and diversion of resources.In addition, there could be potential trade name or trademark infringement claims brought by owners of otherregistered trademarks alleging that the use of a corporate name or logo, product names or other signs by which we61 Table of Contentsdistinguish our products and services are infringing their trademark rights. The outcome of such claims is uncertain and mayadversely affect our freedom to use our corporate name or other relevant signs. If litigation arises in this area, it may lead tosignificant costs and diversion of management and employee attention.We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosedconfidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets oftheir former employers.We may employ individuals who were previously employed at universities or other biotechnology orpharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that ouremployees, consultants and independent contractors do not use the proprietary information or know-how of others in theirwork for us, and we are not currently subject to any claims that our employees, consultants or independent contractors havewrongfully used or disclosed confidential information of third parties, we may in the future be subject to such claims.Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to payingmonetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defendingagainst such claims, litigation could result in substantial costs and be a distraction to management and other employees.We may be subject to claims challenging the inventorship of our patents and other intellectual property.Although we are not currently experiencing any claims challenging the inventorship of our patents or ownership ofour intellectual property, we may in the future be subject to claims that former employees, collaborators or other third partieshave an interest in our patents or other intellectual property as an inventor or co-inventor. For example, we may haveinventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our productcandidates. Litigation may be necessary to defend against these and other claims challenging inventorship. If we fail indefending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, suchas exclusive ownership of, or right to use, valuable intellectual property. Even if we are successful in defending against suchclaims, litigation could result in substantial costs and be a distraction to management and other employees.We may not be able to protect our intellectual property rights throughout the world.Filing, prosecuting and defending patents on our products or product candidates in all countries throughout theworld would be prohibitively expensive, and our intellectual property rights in some countries outside the United States canbe less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectualproperty rights to the same extent as federal and state laws in the United States. Further, licensing partners may not prosecutepatents in certain jurisdictions in which we may obtain commercial rights, thereby precluding the possibility of laterobtaining patent protection in these countries. Consequently, we may not be able to prevent third parties from practicing ourinventions in all countries outside the United States, or from selling or importing products made using our inventions in andinto the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have notobtained patent protection to develop their own products and may also export infringing products to territories where wehave patent protection, but enforcement is not as strong as that in the United States. These products may compete with ourproducts, and our patents or other intellectual property rights may not be effective or sufficient to prevent them fromcompeting.Many companies have encountered significant problems in protecting and defending intellectual property rights inforeign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor theenforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnologyproducts, which could make it difficult for us to stop the infringement of our patents or marketing of competing products inviolation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or notsuccessful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could putour patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and couldprovoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or otherremedies awarded, if any, may not be commercially meaningful.62 Table of ContentsAccordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain asignificant commercial advantage from the intellectual property that we develop or license.Risks Related to Government Oversight and RegulationWe will be subject to ongoing obligations and continued regulatory requirements, which may result in significantadditional expense.Keveyis, Macrilen and any of our product candidates that obtain regulatory approval will remain subject tocontinual regulatory review. Any regulatory approvals that we receive for our product candidates may be subject tolimitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, orcontain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials and surveillance tomonitor the safety and efficacy of the product candidate. In addition, if the FDA, the EMA or any comparable foreignregulatory authority approves any of our product candidates, we will be subject to ongoing regulatory obligations andoversight by regulatory authorities, including with respect to the manufacturing processes, labeling, packing, distribution,adverse event reporting, storage, advertising and marketing restrictions, and recordkeeping and, potentially, other post-marketing obligations, all of which may result in significant expense and limit our ability to commercialize such products.These requirements include submissions of safety and other post-marketing information and reports, registration, as well ascontinued compliance with cGMPs and cGCPs for any clinical trials that we conduct post-regulatory approval. Because ourtwo Phase 3 clinical trials of Recorlev will collect safety data for approximately 125 patients, we currently expect that wewould be required by the FDA and the EMA to collect additional safety data post-approval.In addition, approved products, manufacturers and manufacturers' facilities are subject to continual review andperiodic inspections. Later discovery of previously unknown problems with a product, including adverse events ofunanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to complywith regulatory requirements, may result in, among other things:·restrictions on the marketing or manufacturing of the product;·withdrawal of the product from the market, or voluntary or mandatory product recalls;·fines, disgorgement of profits or revenues, warning letters or holds on clinical trials;·refusal by the FDA to approve pending applications or supplements to approved applications filed by us;·suspension or revocation of product approvals;·product seizure or detention, or refusal to permit the import or export of products; and·injunctions or the imposition of civil or criminal penalties.If any of these events occurs, our ability to sell such product may be impaired, and we may incur substantialadditional expense to comply with regulatory requirements. The policies of the FDA, the EMA or any comparable foreignregulatory agency may change, and additional government regulations may be enacted that could prevent, limit or delayregulatory approval of our product candidates. If we are slow or unable to adapt to changes in existing requirements or theadoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose anyregulatory approval that we may have obtained, which would compromise our ability to achieve or sustain profitability.63 Table of ContentsAlthough we have obtained orphan drug designation for Keveyis, Macrilen and our key product candidates from the FDAand EMA, orphan drug designation may not ensure that we will enjoy market exclusivity in a particular market, and if wefail to obtain or maintain orphan drug exclusivity for Keveyis, Macrilen or our product candidates, we may be subject toearlier competition and our potential revenue will be reduced.Under the Orphan Drug Act of 1983, the FDA may designate a product as an orphan drug if it is intended to treat anorphan disease or condition, defined as a patient population of fewer than 200,000 in the United States, or a patientpopulation greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing thedrug will be recovered from sales in the United States. In the European Union, the EMA's Committee for Orphan MedicinalProducts grants orphan drug designation to promote the development of products that are intended for the diagnosis,prevention, or treatment of a life-threatening or chronically debilitating condition affecting not more than 5 in 10,000persons in the European Union. Additionally, designation is granted for products intended for the diagnosis, prevention ortreatment of a life-threatening, seriously debilitating or serious and chronic condition when, without incentives, it is unlikelythat sales of the drug in the European Union would be sufficient to justify the necessary investment in developing the drug orbiological product or where there is no satisfactory method of diagnosis, prevention or treatment, or, if such a method exists,the medicine must be of significant benefit to those affected by the condition.In the United States, orphan drug designation entitles a party to financial incentives, such as opportunities for grantfunding towards clinical trial costs, tax advantages and user-fee waivers. In addition, if a product receives the first FDAapproval for the indication for which it has orphan drug designation, the product is entitled to orphan drug exclusivity,which means the FDA may not approve any other application to market the same drug for the same indication for a period ofseven years, except in limited circumstances, such as a showing of clinical superiority over the product with orphanexclusivity or where the manufacturer is unable to assure sufficient product quantity. In the European Union, orphan drugdesignation entitles a party to financial incentives such as a reduction of fees or fee waivers and ten years of marketexclusivity following drug or biological product approval. This period may be reduced to six years if the orphan drugdesignation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justifymaintenance of market exclusivity.Keveyis has been granted orphan drug designation for the treatment of hyperkalemic, hypokalemic, and relatedvariants of PPP in the United States. Macrilen has been granted orphan drug designation for the diagnosis of AGHD. Recorlevhas been granted orphan drug designation for the treatment of endogenous Cushing's syndrome in the United States andEurope. Veldoreotide has been granted orphan drug designation for the treatment of acromegaly in the United States and inEurope. Even though we have obtained orphan drug designation for our key product candidates, we may not be the first toobtain regulatory approval for any particular orphan indication due to the uncertainties associated with developingbiopharmaceutical products. For example, ketoconazole was granted orphan drug exclusivity in Europe and is now beingmarketed for the treatment of endogenous Cushing's syndrome. Therefore, Recorlev will need to show significant benefitcompared to ketoconazole in order to be marketed in Europe prior to the expiration of the ketoconazole orphan drugexclusivity. Further, even though we have obtained orphan drug designation for our key product candidates, that exclusivitymay not effectively protect the product from competition because different drugs with different active moieties can beapproved for the same condition. Orphan drug designation neither shortens the development time or regulatory review timeof a drug nor gives the drug any advantage in the regulatory review or approval process.Enacted and future legislation may increase the difficulty and cost for us to obtain regulatory approval of andcommercialize our product candidates, and may affect the prices we may set.In the United States and the European Union, there have been a number of legislative, regulatory and proposedchanges regarding the healthcare system. These changes could prevent or delay regulatory approval of our productcandidates, restrict or regulate post-approval activities, and affect our ability to sell profitably any products for which weobtain regulatory approval and begin to commercialize.As a result of legislative proposals and the trend toward managed health care in the United States, third-party payorsare increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement of newdrugs. In the United States, the Medicare Modernization Act changed the way Medicare covers and pays for64 Table of Contentspharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly under a new Part Dand introduced a new reimbursement methodology based on average sale prices for physician-administered drugs. Inaddition, this legislation provided authority for limiting the number of drugs that will be covered in any therapeutic class.Cost-reduction initiatives and other provisions of this legislation could decrease the coverage and reimbursement that wereceive for any approved products. While the Medicare Modernization Act applies only to drug benefits for Medicarebeneficiaries, private payors often follow the Medicare coverage policy and payment limitations in setting their ownreimbursement rates. Therefore, any reduction in reimbursement that results from the Medicare Modernization Act may resultin a similar reduction in payments from private payors.In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by theHealth Care and Education Reconciliation Act, a sweeping law intended, among other things, to broaden access to healthinsurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add newtransparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry,and impose additional health policy reforms. PPACA, among other things: increased the statutory minimum Medicaidrebates a manufacturer must pay under the Medicaid Drug Rebate Program; addressed a new methodology by which rebatesowed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled,implanted or injected; and established a new Medicare Part D coverage gap discount program in which manufacturers mustprovide 50% point-of-sale discounts on negotiated prices of applicable brand drugs to eligible beneficiaries during theircoverage gap period as a condition for the manufacturer's outpatient drugs to be covered under Part D and implementedpayment system reforms, including a national pilot program on payment bundling to encourage hospitals, physicians andother providers to improve the coordination, quality and efficiency of certain healthcare services through bundled paymentmodels. Further, the PPACA imposed a significant annual nondeductible fee on entities that manufacture or import specifiedbranded prescription drug products and biologic agents, apportioned among these entities according to their market share incertain government healthcare programs. We expect that additional healthcare reform measures will likely be adopted in thefuture, any of which may increase our regulatory burdens and operating costs and limit the amounts that federal, state andforeign governments will reimburse for healthcare products and services, which could result in reduced demand for ourproducts, if approved, or additional pricing pressures.Moreover, other legislative changes have also been proposed and adopted in the United States since PPACA wasenacted. On August 2, 2011, the Budget Control Act of 2011, among other things, created measures for spending reductionsby Congress. A Joint Select Committee on Deficit Reduction tasked with recommending a targeted deficit reduction of atleast $1.2 trillion for the years 2013 through 2021 was unable to reach required goals, thereby triggering the legislation'sautomatic reduction to several government programs. This includes aggregate reductions to Medicare payments to providersof up to 2% per fiscal year, which went into effect on April 1, 2013 and will stay in effect through 2024 unless additionalCongressional action is taken. On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of2012, which, among other things, further reduced Medicare payments to several providers, including hospitals, imagingcenters and cancer treatment centers, and increased the statute of limitations period for the government to recoveroverpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and otherhealth care funding, which could compromise the ability of patients and third-party payors to purchase our productcandidates.In 2017, the U.S. Congress has been assessing new legislation designed to repeal and replace core sections of thePPACA. We expect the U.S. Congress to continue to review and assess this legislation, referred to as the American HealthCare Act (AHCA), along with other alternative health care reform proposals throughout 2017. Recent Congressional effortssuch as the AHCA proposal adds to the uncertainty of the legislative changes enacted as part of PPACA. These changes willlikely take time to unfold, and could have an impact on coverage and reimbursement for healthcare items and servicescovered by plans that were authorized by the PPACA. There is no assurance that the PPACA, as currently enacted or asamended in the future, will not adversely affect our business and financial results, and we cannot predict how future federal orstate legislative or administrative changes relating to healthcare reform will affect our business.In the European Union, proposed new clinical trial regulations will centralize clinical trial approval, whicheliminates redundancy, but in some cases this may extend timelines for clinical trial approvals due to potentially longer waittimes. Proposals to require specific consents for use of data in research, among other measures, may increase the65 Table of Contentscosts and timelines for our product development efforts. Austerity measures in certain European nations may also affect theprices we are able to seek if our products are approved, as discussed below.Both in the United States and in the European Union, legislative and regulatory proposals have been made toexpand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We do notknow whether additional legislative changes will be enacted, whether the regulations, guidance or interpretations will bechanged, or what the impact of such changes on the regulatory approvals of our product candidates, if any, may be.Pricing for pharmaceutical products has come under increasing scrutiny by governments, legislative bodies andenforcement agencies. These activities may result in actions that have the effect of reducing our revenue or harming ourbusiness or reputation.Pharmaceutical product pricing is subject to enhanced government and public scrutiny and calls for reform. Therehas recently been intense publicity regarding the pricing of pharmaceutical products generally, including publicity andpressure resulting from the prices charged for new products as well as price increases for older products that the governmentand public deem excessive. We may experience downward pricing pressure on the price of our products due to social orpolitical pressure to lower the cost of drugs, which could reduce our revenue and future profitability. Many companies in ourindustry have received governmental requests for documents and information relating to drug pricing and patient supportprograms. On December 19, 2017, we received letters from the offices of United States Senators Amy Klobuchar, SusanCollins and Tammy Baldwin, and Senator Claire McCaskill, Ranking member of Homeland Security and GovernmentalAffairs Committee, that request information relating to the marketing and sales of Keveyis. The letters request informationprincipally relating to the pricing of Keveyis, among other things. We are cooperating with these voluntary requests forinformation. We could incur significant expense and experience reputational harm as a result of these or other similar futureinquiries, as well as reduced market acceptance and demand for our products, which could harm our ability to market ourproducts in the future. These factors could also result in changes in our product pricing and distribution strategies, reduceddemand for our products and/or reduced reimbursement of products, including by federal health care programs such asMedicare and Medicaid and state health care programs. In addition, the Trump Administration has indicated an interest intaking measures pertaining to drug pricing, including potential proposals relating to Medicare price negotiations, andimportation of drugs from other countries. At this time, it is unclear whether any of these proposals will be pursued and howthey would impact our products or our future product candidates.Our relationships with customers, consultants and payors will be subject to applicable fraud and abuse, privacy andsecurity, transparency and other healthcare laws and regulations, which, if violated, could expose us to criminal sanctions,civil penalties, exclusion from government healthcare programs, contractual damages, reputational harm and diminishedprofits and future earnings.Healthcare providers, physicians and others play a primary role in the recommendation and prescription of anyproducts for which we may in the future obtain regulatory approval and commercialize. Our current and future arrangementswith third‑party payors, consultants, customers, physicians and others may expose us to broadly applicable fraud and abuseand other healthcare federal and state laws and regulations, including in the United States, that may constrain the business orfinancial arrangements and relationships through which we market, sell and distribute our products for which we obtainregulatory approval. Potentially applicable healthcare laws and regulations include, but are not limited to, the following:·the U.S. federal Anti‑Kickback Statute, which prohibits, among other things, persons or entities from knowinglyand willfully soliciting, offering, receiving or paying remuneration, directly or indirectly, overtly or covertly, incash or in kind, to induce or in return for, purchasing, leasing, ordering, arranging for, or recommending thepurchase, lease, or order of, any good, facility, item or service for which payment may be made under U.S.government healthcare programs such as Medicare and Medicaid;·the federal civil and criminal false claims laws and civil monetary penalties laws, including civil whistlebloweror qui tam actions, which prohibit, among other things, any person or entity from knowingly presenting, orcausing to be presented, a false or fraudulent claim for payment or approval to the federal66 Table of Contentsgovernment or knowingly making, using or causing to be made or used a false record or statement material to afalse or fraudulent claim to the federal government, or knowingly concealing or knowingly and improperlyavoiding or decreasing an obligation to pay or transmit money or property to the federal government;·the Privacy Rule or the Security Rule of HIPAA, as amended by HITECH, and its implementing regulations,which impose various obligations with respect to safeguarding the privacy, security and transmission ofindividually identifiable health information;·the health care fraud provisions of HIPAA, which impose criminal liability for, among other things, knowinglyand willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program,including private third‑party payors, or to obtain, by means of false or fraudulent pretenses, representations orpromises, any of the money or property owned by, or under the custody or control of, any healthcare benefitprogram, and knowingly and willfully falsifying, concealing or covering up a material fact or making anymaterially false, fictitious or fraudulent statement in connection with the delivery of, or payment for, healthcarebenefits, items or services;·the federal Physician Payments Sunshine Act under PPACA and its implementing regulations, which requirescertain manufacturers of drugs, devices, biologics and medical supplies to annually report to the Centers forMedicare & Medicaid Services information related to payments and other transfers of value made by suchmanufacturers to physicians and teaching hospitals, and ownership and investment interests held by physiciansor their immediate family members; and·analogous laws and regulations, such as state anti‑kickback and false claims laws, which may apply to sales ormarketing arrangements, research, distribution and claims involving healthcare items or services reimbursed bystate governmental and non‑governmental third‑party payors, including private insurers, state laws that requirepharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines andthe relevant compliance guidance promulgated by the federal government, and state requirements formanufacturers to report information related to payments to physicians and other health care providers ormarketing expenditures and other restrictions on drug manufacturer marketing practices.Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available underthe U.S. federal Anti-Kickback Statute and analogous state laws, it is possible that some of our current and future businessactivities could be subject to challenge under one or more of such laws. In addition, recent health care reform legislation hasstrengthened these laws. For example, PPACA, among other things, amends the intent requirement of the U.S. federal Anti-Kickback Statute and criminal healthcare fraud statutes. A person or entity no longer needs to have actual knowledge ofthese statutes or specific intent to violate them in order to be in violation. Moreover, PPACA provides that the governmentmay assert that a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statuteconstitutes a false or fraudulent claim for purposes of the federal False Claims Act.Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws andregulations will involve substantial costs. It is possible that governmental authorities will conclude that our businesspractices may not comply with current or future statutes, regulations, agency guidance or case law involving applicablehealthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmentalregulations that may apply to us, we may be subject to, without limitation, significant civil, criminal and administrativepenalties, damages, fines, exclusion from U.S. government funded healthcare programs, such as Medicare and Medicaid,imprisonment, disgorgement, enhanced government reporting and oversight, contractual damages, reputational harm,diminished profits and future earnings and/or the curtailment or restructuring of our operations. Any action against us forviolation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses or divertour management's attention from the operations of our business. If any of the physicians or other providers or entities withwhom we expect to do business are found to be not in compliance with applicable laws, they may be subject to similarpenalties, including, without limitation, criminal, civil or administrative sanctions, including exclusions from government-funded healthcare programs.67 Table of ContentsWe are subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws and anti-money laundering laws and regulations. Compliance with these legal standards could impair our ability to compete indomestic and international markets. We can face criminal liability and other serious consequences for violations whichcan harm our business.We are subject to export control and import laws and regulations, including the U.S. Export AdministrationRegulations, U.S. Customs regulations, various economic and trade sanctions regulations administered by the U.S. TreasuryDepartment's Office of Foreign Assets Controls, the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S.domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act and other state andnational anti-bribery and anti-money laundering laws in the countries in which we conduct activities. Anti-corruption lawsare interpreted broadly and prohibit companies and their employees, agents, contractors and other partners from authorizing,promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in thepublic or private sector. We may engage third parties for clinical trials outside of the United States, to sell our productsabroad once we enter a commercialization phase and/or to obtain necessary permits, licenses, patent registrations and otherregulatory approvals. We have direct or indirect interactions with officials and employees of government agencies orgovernment-affiliated hospitals, universities and other organizations. We can be held liable for the corrupt or other illegalactivities of our employees, agents, contractors and other partners, even if we do not explicitly authorize or have actualknowledge of such activities. Any violations of the laws and regulations described above may result in substantial civil andcriminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach ofcontract and fraud litigation, reputational harm and other consequences.Risks Related to Our Ordinary SharesThe price of our ordinary shares may be volatile and may fluctuate due to factors beyond our control.The market price of our ordinary shares may be volatile and subject to wide fluctuations in response to a variety offactors, many of which are beyond our control, including:·revenues from sales of Keveyis and Macrilen;·positive or negative results of testing and clinical trials by us, strategic partners or competitors;·delays in in‑licensing or acquiring additional complementary product candidates;·any delay in the commencement, enrollment and the ultimate completion of clinical trials;·technological innovations or commercial product introductions by us or competitors;·failure to successfully develop and commercialize any of our product candidates, if approved;·changes in government regulations;·developments concerning proprietary rights, including patents and litigation matters;·public concern relating to the commercial value or safety of any of our product candidates;·financing or other corporate transactions, or inability to obtain additional funding;·failure to meet or exceed expectations of the investment community;·announcements of significant licenses, acquisitions, strategic partnerships or joint ventures by us or ourcompetitors;·publication of research reports or comments by securities or industry analysts; or·general market conditions in the pharmaceutical industry or in the economy as a whole.68 Table of ContentsThe share price of publicly traded emerging biopharmaceutical and drug discovery and development companies hasbeen highly volatile and is likely to remain highly volatile in the future. In addition, the stock market in general hasexperienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operatingperformance of individual companies. Broad market and industry factors may hurt the market price of companies' stock,including ours, regardless of actual operating performance.If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about ourbusiness, the price of our ordinary shares and our trading volume could decline.The trading market for our ordinary shares depends in part on the research and reports that securities or industryanalysts publish about us or our business. If too few securities or industry analysts commence or continue coverage of ourcompany, the trading price for our ordinary shares would likely be negatively affected. In the event securities or industryanalysts initiate coverage, if one or more of the analysts who cover us downgrade our ordinary shares or publish inaccurate orunfavorable research about our business, the price of our ordinary shares would likely decline. If one or more of theseanalysts cease coverage of our company or fail to publish reports on us regularly, demand for our ordinary shares coulddecrease, which might cause the price of our ordinary shares and trading volume to decline.Future sales, or the possibility of future sales, of a substantial number of our ordinary shares could adversely affect theprice of our ordinary shares.Future sales of a substantial number of our ordinary shares, or the perception that such sales will occur, could cause adecline in the market price of our ordinary shares. We currently have 45,504,848 ordinary shares outstanding. We have alsofiled a Registration Statement on Form S-8, registering ordinary shares that we may issue under our equity compensationplans. These ordinary shares can be freely sold in the public market upon issuance, subject to volume limitations applicableto affiliates and the lock-up agreements. If a large number of our ordinary shares or securities convertible into our ordinaryshares are sold in the public market after they become eligible for sale, the sales could reduce the trading price of ourordinary shares and impede our ability to raise future capital.An active market in our ordinary shares may not be liquid enough for investors to resell our ordinary shares.The listing of our ordinary shares on the Nasdaq Global Select Market does not assure that a meaningful, consistentand liquid trading market exists. In general trading volume in our ordinary shares has been limited and an active tradingmarket for our shares may not be sustained. If an active market for our ordinary shares is not sustained, it may be difficult forinvestors to sell their shares without depressing the market price for the shares or at all.We have never paid cash dividends, do not expect to pay dividends in the foreseeable future and our ability to paydividends, or repurchase or redeem our ordinary shares, is limited by law.We have not paid any dividends since our inception and do not anticipate paying any dividends on our ordinaryshares in the foreseeable future. Even if future operations lead to significant levels of distributable profits, we currentlyintend that any earnings will be reinvested in our business and that dividends will not be paid until we have an establishedrevenue stream to support continuing dividends. The proposal to pay future dividends to shareholders will in additioneffectively be at the sole discretion of our board of directors after taking into account various factors our board of directorsdeems relevant, including our business prospects, capital requirements, financial performance and new product development.In addition, payment of future dividends is subject to certain limitations under the Irish Companies Act 2014 (the “IrishCompanies Act”). The Irish Companies Act, among other requirements, requires Irish companies to have distributablereserves available for distribution equal to or greater than the amount of the proposed dividend. Accordingly, investorscannot rely on dividend income from our ordinary shares and any returns on an investment in our ordinary shares will likelydepend entirely upon any future appreciation in the price of our ordinary shares.69 Table of ContentsWe believe we were classified as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes inpast years and we may be classified as a PFIC in future years , which could result in adverse U.S. federal income taxconsequences to U.S. Holders of our ordinary shares.A non-U.S. corporation generally will be classified as a PFIC for U.S. federal income tax purposes for any taxableyear if either (1) 75% or more of its gross income for such year consists of certain types of "passive" income or (2) 50% ormore of the value of its assets (determined on the basis of a quarterly average) during such year produce or are held for theproduction of passive income. For this purpose, "passive income" generally includes, among other items of income,dividends, interest, royalties, rents and gains from commodities and securities transactions and from the sale or exchange ofproperty that gives rise to passive income, and a non-U.S. corporation is treated as owning a proportionate share of the assetsand earning a proportionate share of the income of any other corporation in which such non-U.S. corporation owns, directlyor indirectly, more than 25% of the value of such other corporation's stock. Based on our income, assets and activities in pastyears, we believe that we were a PFIC in past years, and we may be classified as a PFIC for the current taxable year and forfuture years depending on the income, assets, and activities in such taxable years. A U.S. Holder that holds ordinary sharesduring any taxable year in which we are a PFIC would be subject to substantially increased U.S. federal income tax liability,including upon the receipt of any "excess distributions" from us and upon the sale or other disposition of our ordinary shares.Although certain elections may be available to mitigate the adverse impact of the PFIC rules, such elections may result in acurrent U.S. federal tax liability prior to any distribution on or disposition of our ordinary shares. Further, there can be noassurances that we will supply U.S. Holders with information that such U.S. Holders are required to report under the rulesgoverning such elections. Accordingly, the acquisition of our ordinary shares may not be an appropriate investment forcertain holders that are not tax-exempt organizations. U.S. Holders should consult their tax advisers regarding the applicationof the PFIC rules to an investment in our ordinary shares.As of January 1, 2018, we are required to comply with the Exchange Act's domestic reporting regime and Nasdaq'srequirements for domestic issuers, which may cause us to incur increased legal, accounting and other expenses.Prior to January 1, 2018, we were a foreign private issuer and were, therefore, not required to comply with theperiodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. As of the endof our second fiscal quarter in 2017, however, we determined that we no longer satisfied the eligibility requirements of aforeign private issuer. As a result, effective January 1, 2018 we are required to comply with all of the periodic disclosure andcurrent reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and are no longer eligible for certainexemptions from Nasdaq’s corporate governance requirements. The Exchange Act's disclosure and reporting requirements fordomestic issuers are generally more detailed and extensive than the requirements for foreign private issuers. To satisfy theserequirements, we may be required to make changes to our corporate governance practices to comply with SEC and stockexchange rules. The costs for us to comply with these regulatory requirements may be significantly higher than the costs wehave generally incurred as a foreign private issuer. Further, we are now subject to procedural requirements, including Nasdaqrules requiring shareholder approval for certain types of equity offerings, that may impede our ability to conduct certaintypes of financings or otherwise delay our ability to take corporate actions. We also expect that complying with the rules andregulations applicable to domestic issuers may make it more difficult and expensive for us to obtain director and officerliability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board ofdirectors.Our shareholder’s rights are governed by Irish law and differ from the rights of shareholders under U.S. law.We are a public limited company incorporated under the laws of Ireland. Therefore, the rights of holders of ordinaryshares are governed by Irish law and by our memorandum and articles of association. These rights differ from the typicalrights of shareholders in U.S. corporations. In certain cases, facts that, under U.S. law, would entitle a shareholder in a U.S.corporation to claim damages may not give rise to a cause of action under Irish law entitling a shareholder in an Irishcompany to claim damages. For example, the rights of shareholders to bring proceedings against us or against our directors orofficers in relation to public statements are more limited under Irish law than under the civil liability provisions of the U.S.securities laws.70 Table of ContentsOur shareholders may have difficulties enforcing, in actions brought in courts in jurisdictions located outside theUnited States, judgments obtained in the U.S. courts under the U.S. securities laws. In particular, if a shareholder sought tobring proceedings in Ireland based on U.S. securities laws, the Irish court might consider that:·it did not have jurisdiction;·it was not the appropriate forum for such proceedings;·applying Irish conflict of laws rules, U.S. laws (including U.S. securities laws) did not apply to the relationshipbetween you and us or our directors and officers; or·the U.S. securities laws were of a penal nature or violated Irish public policy and should not be enforced by theIrish court.Our shareholders should also be aware that Irish law does not allow for any form of legal proceedings directlyequivalent to the class action available in the United States.Because the PCAOB is not permitted to inspect registered public accounting firms in Ireland, you do not have the benefit ofsuch inspections to the extent our financial statements are audited by a registered public accounting firm in Ireland.Auditors of U.S. public companies, including our independent registered public accounting firm, are required by thelaws of the United States to undergo periodic PCAOB inspections to assess their compliance with U.S. law and professionalstandards in connection with performance of audits of financial statements filed with the SEC. The laws of certain EuropeanUnion countries, including Ireland, do not currently permit the PCAOB to conduct inspections of accounting firmsestablished and operating in such European Union countries. Accordingly, to the extent our financial statements will beaudited by a registered public accounting firm in Ireland, the PCAOB would be prevented from fully evaluating theeffectiveness of our independent registered public accounting firm's audit procedures or quality control procedures. Unlikeshareholders or potential shareholders of most U.S. public companies, our shareholders would be deprived of the possiblebenefits of such PCAOB inspections.A future transfer of our ordinary shares, other than one effected by means of the transfer of book-entry interests in DTC,may be subject to Irish stamp duty.The rate of Irish stamp duty, when applicable, on the transfer of shares in an Irish-incorporated company is 1% of theprice paid, or the market value of the shares acquired, whichever is greater. Payment of Irish stamp duty is generally a legalobligation of the transferee. We expect that most of our ordinary shares will be traded through the Depositary Trust Company(“DTC”), or through brokers who hold such shares on behalf of customers through DTC. As such, the transfer of ordinaryshares should be exempt from Irish stamp duty based on established practice of the Irish Revenue Commissioners. Wereceived written confirmation from the Irish Revenue Commissioners on June 22, 2015 that a transfer of our ordinary sharesheld through DTC and transferred by means of a book-entry interest would be exempt from Irish stamp duty. However, if youhold your ordinary shares directly of record, rather than beneficially through DTC, or through a broker that holds yourordinary shares through DTC, any transfer of your ordinary shares may be subject to Irish stamp duty. The potential for Irishstamp duty to arise could adversely affect the price and liquidity of our ordinary shares. In addition, the terms of oureligibility agreement with DTC requires us to provide certain indemnities relating to Irish stamp duty to third parties. Ifliability were to arise as a result of the indemnities provided under the terms of the eligibility agreement, we may facesignificant unexpected costs.Anti-takeover provisions in our Articles and under Irish law could make an acquisition of us more difficult, limit attemptsby our shareholders to replace or remove our current directors and management team, and limit the market price of ourordinary shares.Our Articles contain provisions that may delay or prevent a change of control, discourage bids at a premium over themarket price of our ordinary shares and adversely affect the market price of our ordinary shares and the voting71 Table of Contentsand other rights of the holders of our ordinary shares. These provisions include:·dividing our board of directors into three classes, with each class serving a staggered three‑year term;·permitting our board of directors to issue preference shares without shareholder approval, with such rights,preferences and privileges as they may designate;·provisions which allow our board of directors to adopt a shareholder rights plan upon such terms andconditions as it deems expedient and in our best interests;·establishing an advance notice procedure for shareholder proposals to be brought before an annual meeting,including proposed nominations of persons for election to our board of directors; and·the ability of our board of directors to fill vacancies on our board in certain circumstances.These provisions do not make us immune from takeovers. However, these provisions will apply even if the offer maybe considered beneficial by some shareholders. In addition, these provisions may frustrate or prevent any attempts by ourshareholders to replace or remove our current management team by making it more difficult for shareholders to replacemembers of our board of directors, which is responsible for appointing the members of our management.Irish law differs from the laws in effect in the United States with respect to defending unwanted takeover proposals andmay give our board of directors less ability to control negotiations with hostile offerors.We are subject to the Irish Takeover Rules. Under the Irish Takeover Rules, our board of directors is not permitted totake any action that might frustrate an offer for our ordinary shares once our board of directors has received an approach thatmay lead to an offer or has reason to believe that such an offer is or may be imminent, subject to certain exceptions.Potentially frustrating actions such as (1) the issue of shares, options, restricted share units or convertible securities,(2) material acquisitions or disposals, (3) entering into contracts other than in the ordinary course of business or (4) anyaction, other than seeking alternative offers, which may result in frustration of an offer, are prohibited during the course of anoffer or at any earlier time during which our board of directors has reason to believe an offer is or may be imminent. Theseprovisions may give our board of directors less ability to control negotiations with hostile offerors than would be the case fora corporation incorporated in the United States.We are an "emerging growth company," and we cannot be certain if the reduced reporting requirements applicable to"emerging growth companies" will make our ordinary shares less attractive to investors.We are an "emerging growth company," as defined in the JOBS Act. For as long as we continue to be an "emerginggrowth company," we may take advantage of exemptions from various reporting requirements that are applicable to otherpublic companies that are not "emerging growth companies," including not being required to comply with the auditorattestation requirements of Section 404 of the Sarbanes-Oxley Act, exemptions from the requirements to provide certainexecutive compensation disclosures, exemptions from the requirements of holding a nonbinding advisory vote on executivecompensation or seeking shareholder approval of any golden parachute payments not previously approved. As an "emerginggrowth company," in our initial registration statement, we were required to report only two years of financial results andselected financial data compared to three and five years, respectively, for comparable data reported by other publiccompanies. We could be an "emerging growth company" for up to five years, although circumstances could cause us to losethat status earlier, including if the market value of our ordinary shares held by non-affiliates exceeds $700 million as of anyJune 30 before that time, in which case we would no longer be an "emerging growth company" as of the followingDecember 31, our fiscal year end. We cannot predict if investors will find our ordinary shares less attractive because we mayrely on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less activetrading market for our ordinary shares and the price of our ordinary shares may be more volatile.72 Table of ContentsCertain provisions of the warrants issued in our 2016 private placement could impede a sale of the company.In the event of a sale of the company, the terms of the warrants issued to investors in our December 2016 privateplacement require us to use our best efforts to ensure the holders of such warrants will have a continuing right to purchaseshares of the acquirer and, if our efforts are unsuccessful, to make a payment to such warrant holders based on a Black-Scholes valuation (using variables as specified in the warrant agreements). Such payment must be made in cash in the eventthat the acquisition results in our shareholders receiving cash from the acquirer at the closing of the transaction, and must bemade in shares of the Company (with the value of each ordinary share determined according to the calculation specified inthe warrant agreements) in the event that the acquisition results in our shareholders receiving shares in the acquirer or otherentity at the closing of the transaction. In the event that our shareholders receive both cash and shares at the closing of thetransaction, such payment to the warrant holders shall also be made in both cash and shares in the same proportion as theconsideration received by the shareholders.Notwithstanding the foregoing, in the event that as a result of an acquisition the warrants will be exercisable foranything other than shares or securities that are listed on a regulated market (within the meaning of the Markets in FinancialInstruments Directive (2004/39(EC))) or a United States national securities exchange, the warrant holders will be entitled todemand to receive a cash payment in an amount equal to the Black-Scholes Value per warrant (calculated in accordance withthe warrants) contemporaneously with or promptly after the consummation of such acquisition. ITEM 1B. UNRESOLVED STAFF COMMENTSNone ITEM 2. PROPERTIESFor our corporate headquarters, we lease 22,069 square feet of office space at 900 Northbrook Drive, Suite 200 andSuite 250, Trevose, Pennsylvania 19053. We believe that our existing facility is adequate to meet our current needs, and thatsuitable additional alternative spaces will be available in the future on commercially reasonable terms. We also lease 3,173square feet of office space in Radnor, Pennsylvania, which was subleased in September 2015. ITEM 3. LEGAL PROCEEDINGSFrom time to time, we are a party to legal proceedings arising in the ordinary course of business. We are notcurrently a party to any other legal proceedings that we believe could have a material adverse effect on financial condition orresults of operations. ITEM 4. MINE SAFETY DISCLOSURENot applicable.73 Table of Contents ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASES OF EQUITY SECURITIESMarket InformationThe Company's common stock is listed on the Nasdaq Global Select Market under the symbol “SBBP”. The followingtable sets forth, for the periods indicated, the range of high and low sales prices per ordinary share as reported by Nasdaq: High Low Year ended December 31, 2017 Quarter ended December 31, 2017 $7.60 $5.20 Quarter ended September 30, 2017 $8.85 $5.40 Quarter ended June 30, 2017 $7.90 $3.50 Quarter ended March 31, 2017 $4.75 $2.00 Year ended December 31, 2016 Quarter ended December 31, 2016 $5.42 $2.05 Quarter ended September 30, 2016 $6.24 $3.73 Quarter ended June 30, 2016 $6.39 $3.30 Quarter ended March 31, 2016 $7.99 $3.51 StockholdersAs of December 31, 2017, there were approximately 31 stockholders of record of our ordinary shares. The actualnumber of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners,but whose shares are held in street name by brokers and other nominees. This number of holders of record also does notinclude stockholders whose shares may be held in trust by other entities.Dividend PolicyWe have never declared or paid any cash dividends on our capital stock. As per our loan agreement, we are restrictedto pay dividends or other distributions with respect to any shares of our capital stock. We do not intend to pay cashdividends on our common stock for the foreseeable future.Securities Authorized for Issuance Under Equity Compensation PlansSee Part III, Item 12. “Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters” for information relating to our equity compensation plans.Performance GraphThe performance graph below compares the cumulative total stockholder return on our common stock beginning onOctober 15, 2015, the date our stock began trading on the Nasdaq Global Market, and for each subsequent quarter period endthrough and including December 31, 2017, with the cumulative return of the Nasdaq Composite Index and NasdaqBiotechnology Index.74 Table of ContentsThe performance graph comparison assumes $100 was invested in our common stock and in each of the otherindices described above October 15, 2015. The stock performance shown on the graph below is not necessarily indicative offuture price performance.Recent Sale of Unregistered Securities and Use of ProceedsAs a condition to the Loan Agreement, on July 14, 2017, we sold an aggregate of 429,799 ordinary shares to CRGfor an aggregate purchase price of $3.0 million. We also issued to CRG a warrant to purchase up to an aggregate of 394,289ordinary shares, at an exercise price of $7.37 per share.We believe that the issuance of the ordinary shares and warrants to CRG were exempt from registration under theSecurities Act pursuant to Section 4(a)(2) of the Securities Act regarding transactions not involving a public offering.Purchases of Equity Securities By the Issuer and Affiliated PurchasersNone.75 Table of Contents ITEM 6. SELECTED FINANCIAL DATAThe following tables set forth a summary of our consolidated financial data. We have derived the consolidatedstatement of operations data for the years ended December 31, 2017, 2016, 2015, 2014 and 2013 and the balance sheet dataas of December 31, 2017, 2016 and 2015 from our consolidated audited financial statements. You should read this datatogether with the consolidated financial statements and related notes appearing elsewhere in this Annual Report and thesection in this filing titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Thehistorical results are not necessarily indicative of the results to be expected for any future periods. All of our operations arecontinuing operations and we have not proposed or paid dividends in any of the periods presented. December 31, 2017 2016 2015 2014 2013 (in thousands)Consolidated Statement of Operations Data: Revenues: Net product sales $7,046 $ — $ — $ — $ — Cost and expenses: Cost of sales (excluding amortization of intangible asset) $1,483 $ — $ — $ — $ —Selling, general and administrative 36,292 14,875 22,719 4,588 2,658Research and development 17,268 20,023 20,135 5,844 2,534Amortization of intangible asset 5,022 — — — —Impairment of intangible assets 20,723 15,828 — — —Total cost and expenses 80,788 50,726 42,854 10,432 5,192Operating loss (73,742) (50,726) (42,854) (10,432) (5,192)Total other income (expense), net (37,970) (631) (1,229) 282 (288)Loss before income taxes (111,712) (51,357) (44,083) (10,150) (5,480)Income tax (expense) benefit (1,771) 2,638 450 480 —Net loss (113,483) (48,719) (43,633) (9,670) (5,480) December 31, 2017 2016 2015 (in thousands)Consolidated Balance Sheet Data: Cash and cash equivalents $57,510 $66,837 $51,623Total assets 103,925 137,531 97,330Long-term debt 37,794 18,434 —Total liabilities 115,839 70,559 6,403Total stockholders’ (deficit) equity (11,914) 66,972 90,927 76 Table of Contents ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONSThe following discussion summarizes the significant factors affecting the operating results, financial condition,liquidity and cash flows of our company as of and for the periods presented below. The following discussion and analysisshould be read in conjunction with the financial statements and the related notes thereto included elsewhere in this AnnualReport. The statements in this discussion regarding industry outlook, our expectations regarding our future performance,liquidity and capital resources and all other non‑historical statements in this discussion are forward‑looking statementsand are based on the current beliefs of our management, as well as assumptions made by, and information currentlyavailable to, our management. Actual results could differ materially from those discussed in or implied by forward‑lookingstatements as a result of various factors, including those discussed below and elsewhere in this Annual Report, particularlyin the section titled “Risk Factors.”OverviewWe are a global commercial-stage biopharmaceutical company focused on the development and commercializationof therapies for rare diseases with significant unmet needs.Our first commercial product is Keveyis (dichlorphenamide), the first and only treatment approved by the U.S. Foodand Drug Administration, or the FDA, for hyperkalemic, hypokalemic, and related variants of PPP, a group of rare hereditarydisorders that cause episodes of muscle weakness or paralysis. Keveyis, for which we hold the U.S. marketing rights, hasorphan drug exclusivity status in the United States through August 7, 2022.On January 16, 2018 we entered into a License and Assignment Agreement with Aeterna Zentaris GmbH, pursuant towhich we acquired the U.S. and Canadian rights to manufacture and commercialize Macrilen (macimorelin). Macrilen is anoral growth hormone secretagogue receptor agonist to be used in the diagnosis of patients with AGHD. Macrilen has beengranted orphan drug designation in the United States and has patents with expiration dates through late 2027. We expect tolaunch Macrilen in the United States in mid-2018.In addition to our two commercial products, we have two clinical-stage product candidates for rare endocrinediseases, Recorlev and veldoreotide. Recorlev (levoketoconazole) is a cortisol synthesis inhibitor currently being studiedfor the treatment of endogenous Cushing's syndrome. Veldoreotide is a next-generation somatostatin analog beinginvestigated for the treatment of acromegaly, with potential additional applications in Cushing's syndrome andapplications in other conditions amenable to somatostatin receptor activation. Both Recorlev and veldoreotide havereceived orphan designation from the FDA and the EMA.Given the well-identified and concentrated prescriber base addressing our target markets, we intend to continue touse a small, focused sales force to effectively market Keveyis, Macrilen and any future products, in the United States, theEuropean Union and other key global markets. We believe that our ability to execute on our strategy is enhanced by thesignificant commercial and clinical development experience of key members of our management team. Since the introduction of our new management team in August 2014, we have been building a rare disease,franchise-based business model focused on expansion through a disciplined in-licensing and acquisition strategy. In pursuitof our growth strategy, we have raised over $275 million in equity and debt financings since December 2014. We willcontinue to identify and evaluate the acquisition of products and product candidates that would be complementary to ourexisting rare neuromuscular and endocrine franchises or that would form the basis for new rare disease franchises. We believethis approach will enable us to maximize our commercial potential by further leveraging our existing resources and expertise.We incurred a net loss attributable to Strongbridge Biopharma plc of $113.5 million for the year ended December 31,2017. At December 31, 2017, our accumulated deficit was $242.9 million.In December 2017, we received letters from the offices of United States Senators Amy Klobuchar, Susan Collins andTammy Baldwin, and Senator Claire McCaskill, Ranking Member of the Homeland Security and Governmental AffairsCommittee, that request information relating to the marketing and sales of Keveyis. The letters request informationprincipally relating to the pricing of Keveyis, among other things. We are cooperating with these77 Table of Contentsvoluntary requests for information.Financial Operations OverviewNet RevenueWe sell Keveyis to one specialty pharmacy provider (the “Customer”), who is the exclusive distributor of Keveyis inthe United States. The Customer subsequently resells Keveyis to patients, which are covered by payors that may provide forgovernment-mandated or privately negotiated rebates with respect to the purchase of the Keveyis. We recognize revenues from sales of Keveyis when we satisfy a performance obligation by transferring control ofKeveyis to the Customer. Transfer of control occurs upon receipt of Keveyis by the Customer. We expense incremental costsrelated to the set-up of the contract with the Customer when incurred, as these costs did not meet the criteria forcapitalization.We expect to launch Macrilen in the United States in mid-2018 and will recognize revenue in accordance with theFinancial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606, Revenue Recognition.Cost of SalesCost of sales includes third-party acquisition costs, third-party warehousing and product distribution charges.Selling, General and Administrative ExpensesSelling, general and administrative expenses include personnel costs, costs for outside professional services andother allocated expenses. Personnel costs consist of salaries, bonuses, benefits, travel and stock‑based compensation. Outsideprofessional services consist of legal, accounting and audit services, commercial evaluation and strategy services, sales,marketing and other consulting services. We expect to incur additional selling, general and administrative costs as a result ofour initial and on-going commercial activities in support of Keveyis and Macrilen. Research and Development ExpensesOur research and development expenses consist primarily of costs incurred in connection with the development ofour product candidates, including:·personnel‑related costs, such as salaries, bonuses, benefits, travel and other related expenses, includingstock‑based compensation;·expenses incurred under our agreements with CROs, clinical sites, contract laboratories, medical institutionsand consultants that plan and conduct our preclinical studies and clinical trials, including, in the case ofconsultants, stock‑based compensation;·costs associated with regulatory filings;·upfront and milestone payments under in‑license or acquisition agreements with third parties;·costs of acquiring preclinical study and clinical trial materials, and costs associated with formulation andprocess development; and·depreciation, maintenance and other facility‑related expenses.We expense all research and development costs as incurred. Clinical development expenses for our productcandidates are a significant component of our current research and development expenses as we progress our productcandidates into and through clinical trials. Product candidates in later stage clinical development generally have higher78 Table of Contentsresearch and development costs than those in earlier stages of development, primarily due to increased size and duration ofthe clinical trials. We recognize costs for each grant project, preclinical study or clinical trial that we conduct based on ourevaluation of the progress to completion, including the use of information and data provided to us by our external researchand development vendors and clinical sites.We expect our research and development expenses to increase in absolute dollars in the future as we continue toin‑license or acquire product candidates and as we advance our existing and any future product candidates into and throughclinical trials and pursue regulatory approval of our product candidates. The process of conducting the necessary clinicalresearch to obtain regulatory approval of a product candidate is costly and time consuming. The probability that any of ourproduct candidates receives regulatory approval and eventually is able to generate revenue depends on a variety of factors,including the quality of our product candidates, early clinical data, investment in our clinical program, competition,manufacturing capability and commercial viability. As a result of these uncertainties, we are unable to determine the durationand completion costs of our research and development projects or if, when and to what extent we will generate revenue fromthe commercialization and sale of any of our product candidates, if approved. We may never succeed in achieving regulatoryapproval for any of our product candidates.We do not allocate personnel‑related research and development costs, including stock‑based compensation or otherindirect costs, to specific programs, as they are deployed across multiple projects under development.Interest ExpenseInterest expense represents interest paid to our lenders throughout 2017, amortization of our debt discount, andissuance costs associated with loan and security agreements.Amortization of Intangible AssetAmortization of intangible asset relates to the amortization of our product rights to Keveyis, which we acquired inDecember of 2016. This intangible asset is being amortized over an eight-year period using the straight-line method.Other Income (Expense), NetOther income (expense), net, consists of unrealized (loss)/gain on the remeasurement of the fair value of warrantliability, interest expense recognized on our long-term debt, the loss on the early extinguishment of our pre-existing long-term debt, interest income generated from our cash and cash equivalents, foreign exchange gains and losses and gains andlosses on investments.Our consolidated financial statements are reported in U.S. dollars, which is also our functional currency.Transactions in foreign currencies are remeasured into our functional currency at the rate of exchange prevailing at the dateof the transaction. Any monetary assets and liabilities arising from these transactions are remeasured into our functionalcurrency at exchange rates prevailing at the balance sheet date or on settlement. Resulting gains and losses are recorded inforeign currency loss in other income (expense) in our consolidated statements of operations.Critical Accounting Policies and Significant Judgments and EstimatesThis operating and financial review of our financial condition and results of operations is based on our consolidatedfinancial statements, which have been prepared in accordance with U.S. generally accepted accounting principles(“U.S. GAAP”). The preparation of these consolidated financial statements requires us to make estimates and assumptionsthat affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date ofthe financial statements, as well as expenses incurred during the reporting periods. Our estimates are based on our historicalexperience and on various other factors that we believe are reasonable under the circumstances, the results of which form thebasis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statementsappearing elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies to be the mostcritical to the judgments and estimates used in the preparation of our financial statements.79 Table of ContentsRevenue RecognitionRevenues from sales of Keveyis are recognized when we satisfy a performance obligation by transferring control ofKeveyis to the Customer. Transfer of control occurs upon receipt of Keveyis by the Customer. We expense incremental costsrelated to the set-up of the contract with the Customer when incurred, as these costs did not meet the criteria forcapitalization.Warrant LiabilityThe fair values of certain outstanding warrants were measured using the Black-Scholes option-pricing model. Inputsused to determine estimated fair value of the warrant liabilities include the estimated fair value of the underlying stock at thevaluation date, the estimated term of the warrants, risk-free interest rates, expected dividends and the expected volatility ofthe underlying stock. The significant unobservable inputs used in the fair value measurement of the warrant liabilities werethe fair value of the underlying stock at the valuation date and the estimated term of the warrants. Generally, increases(decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to thefair value measurement.Intangible AssetsCertain intangible assets were acquired as part of an asset purchase, and have been capitalized at their acquisitiondate at fair value. Acquired definite life intangible assets are amortized using the straight-line method over their respectiveestimated useful lives or another appropriate method. The Company evaluates the potential impairment of intangible assets ifevents or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable or that theuseful lives of these assets are no longer appropriate.In connection with the Asset Purchase and Supply Agreement we entered into with Taro Pharmaceuticals NorthAmerica, Inc., we paid Taro an upfront payment in two installments of $1 million in December 2016 and $7.5 million inMarch 2017. We have concluded that the supply price payable by us exceeds fair value and, therefore, have used adiscounted cash flow method with a probability assumption to value the payments in excess of fair value at $29.3 million, forwhich we have recorded an intangible asset and corresponding liability. This liability will be amortized as we purchaseinventory over the term of the agreement. In addition, we incurred transaction costs of $2.4 million resulting in the recordingof an Intangible Asset of $40.2 million. This intangible asset is being amortized over an eight-year period using the straight-line method.Purchased identifiable intangible assets with indefinite lives, such as in‑process research and development, areevaluated for impairment annually in accordance with our policy and whenever events or changes in circumstances indicatethat it is more likely than not that the fair value of these assets has been reduced. To test these assets for impairment, wecompare the fair value of the asset to its carrying value. The method we use to estimate the fair value measurements ofindefinite‑lived intangible assets is based on the income approach. For the impairment analysis for the year endedDecember 31, 2017, significant unobservable inputs used in the income approach valuation method include discount rates,royalty rates and probabilities of product candidate advancement from one clinical trial phase to the next. The probabilitiesof product candidate advancement we used were based on standalone statistical analysis on a phase‑by‑phase basis.As of December 31, 2017, there were material events that led to the impairment of our intangible assets. We recordeda $20.7 million impairment for our veldoreotide in-process research and development (“IPR&D”) for the year endedDecember 31, 2017.GoodwillWe test goodwill for impairment on an annual basis or whenever events occur that may indicate possibleimpairment. This analysis requires us to make a series of critical assumptions to (1) evaluate whether any impairment existsand (2) measure the amount of impairment.80 Table of ContentsBecause we have one operating segment, when testing for a potential impairment of goodwill, we are required toestimate the fair value of our business as a whole and determine the carrying value. If the estimated fair value is less than thecarrying value of our business, then we are required to estimate the fair value of all identifiable assets and liabilities in amanner similar to a purchase price allocation for an acquired business. Only after this process is completed can the goodwillimpairment be determined, if any.We did not record a charge for impairment for the years ended December 31, 2017, 2016 and 2015. As of December31, 2017, there were no events or changes in circumstances indicating possible impairment.Stock‑Based CompensationWe account for stock based compensation awards in accordance with FASB ASC Topic 718, Compensation—StockCompensation (“ASC 718”). ASC 718 requires all stock based payments including grants of stock options and restrictedstock and modifications to existing stock options, to be recognized in the consolidated statements of operations based ontheir fair values.Our stock based awards are subject to either service based or performance based vesting conditions. Vesting ofcertain awards could also be accelerated upon achievement of defined market based vesting conditions. Certain awards alsocontain a combination of service and market conditions or performance and market conditions.We account for employee stock based awards at grant date fair value. If we issue awards with an exercise pricedenominated in a currency other than our functional currency, trading currency or the currency for which we compensate ouremployee, we account for these as liabilities. We account for non employee and liability-classified stock based awards basedon the then current fair values at each financial reporting date until the performance is complete for non employee awards, oruntil the award is settled (exercised) for liability-classified awards. Changes in the amounts attributed to these awardsbetween the reporting dates are included in stock based compensation expense (credit) in our statements of operations. Weinclude liability-classified stock options in non current liabilities in our balance sheets as their settlement (exercise) does notrequire use of cash, cash equivalents or other current assets.We record compensation expense for service based awards over the vesting period of the award on a straight-linebasis. Compensation expense related to awards with performance based vesting conditions is recognized over the requisiteservice period using the accelerated attribution method to the extent achievement of the performance condition isprobable. For those awards in which the performance condition was the completion of our initial public offering (“IPO”), wedid not recognize compensation expense until the close of the IPO as we did not deem the IPO probable until it occurred. Compensation expense for awards with service and market-based vesting conditions is recognized using theaccelerated attribution method over the shorter of the requisite service period or the implied period associated withachievement of the market based vesting provisions.We estimate the fair value of our awards with service conditions using the Black Scholes option pricing model,which requires the input of subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term ofthe award, (iii) the risk-free interest rate and (iv) expected dividends. Due to the lack of historical and implied volatility dataof our common stock, we based our estimate of expected volatility on the historical volatility of a group of similar companiesthat are publicly traded. We selected companies with comparable characteristics to us, including enterprise value, riskprofiles and position within the industry, and with historical share price information sufficient to meet the expected term ofthe stock based awards. We compute historical volatility data using the daily closing prices for the selected companies’shares during the equivalent period of the calculated expected term of the stock based awards.We estimate the fair value of our awards with market conditions using a Monte Carlo simulation to determine theprobability of satisfying the market condition. We make this estimate using the conditions that exist at the grant date. Thederived service period, which may be the requisite service period, is also determined at this time. Compensation cost for ourawards with a market condition is recognized ratably using the accelerated attribution method if the award is81 Table of Contentssubject to graded vesting over the requisite service period. The compensation cost for our awards with a market condition isnot reversed if the market condition is not satisfied.We have estimated the expected term of employee service-based stock options using the “simplified” method,whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option,due to our lack of sufficient historical data. We have estimated the expected term of employee awards with service andmarket conditions using a Monte Carlo simulation model. This approach involves generating random stock price pathsthrough a lattice type structure. Each path results in a certain financial outcome, such as accelerated vesting or specificoption payout. We have estimated the expected term of nonemployee service and performance based awards based on theremaining contractual term of such awards.The risk free interest rates for periods within the expected term of the option are based on the Swedish GovernmentBond rate or the U.S. Treasury Bond rate with a maturity date commensurate with the expected term of the associatedaward. We have never paid dividends, and do not expect to pay dividends in the foreseeable future.We account for forfeitures as they occur as opposed to estimating forfeitures. We record stock based compensationexpense only for those awards that are expected to vest.Income TaxesOn December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the TaxCuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but notlimited to, reducing the top U.S. federal corporate tax rate from 35 percent to 21 percent; requiring companies to pay a one-time transition tax on certain un-repatriated earnings of foreign subsidiaries; generally eliminating U.S. federal income taxeson dividends from foreign subsidiaries; requiring a current inclusion in U.S. federal taxable income of certain earnings ofcontrolled foreign corporations; eliminating the corporate alternative minimum tax (AMT) and changing how existing AMTcredits can be realized; creating the base erosion anti-abuse tax (BEAT), a new minimum tax; creating a new limitation ondeductible interest expense; and changing rules related to uses and limitations of net operating loss carryforwards created intax years beginning after December 31, 2017.The Tax Act reduces our U.S. corporate income tax rate from 34% to 21%, effective January 1, 2018. Deferred taxassets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which thosetemporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 34% to21% under the Tax Act, we revalued our ending net deferred tax assets and liabilities at December 31, 2017.The Tax Act provided for a one-time transition tax on the deemed repatriation of post-1986 undistributed foreignsubsidiary earnings and profits (“E&P”). Strongbridge did not have to recognize any income tax expense related to thetransition tax as they own no controlled foreign corporations.The global intangible low-taxed income tax and base erosion provisions are effective for taxable years beginningafter December 31, 2017. The Company does not currently expect these provisions to have a material impact on its tax rate asthey do not own any controlled foreign corporations and they are currently below the gross receipts threshold for purposes ofthe base erosion provisions.Due to the timing of the new tax law and the substantial changes it brings, the Staff of the Securities and ExchangeCommission (the "SEC") issued Staff Accounting Bulletin No. 118 ("SAB 118"), which provides registrants a measurementperiod to report the impact of the new US tax law. During the measurement period, provisional amounts for the effects of thelaw are recorded to the extent a reasonable estimate can be made. To the extent that all information necessary is notavailable, prepared or analyzed, companies may recognize provisional estimated amounts for a period of up to one yearfollowing enactment of the TCJA. The Company recorded amounts as provisional and will continue to monitor for futureupdates to guidance or interpretations issued by the IRS.82 Table of ContentsWe recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31,2017, 2016 and 2015, we had no accrued interest or penalties related to uncertain tax positions and no amounts have beenrecognized in our statements of operations.Results of OperationsComparison of the Years Ended December 31, 2017 and 2016The following table sets forth our results of operations for the years ended December 31, 2017 and 2016. Year Ended December 31, Change 2017 2016 $ (in thousands) Revenues: Net product sales $7,046 $ — $7,046 Total revenues 7,046 — 7,046 Cost and operating expenses: Cost of sales (excluding amortization of intangible asset) $1,483 $ — $1,483 Selling, general and administrative 36,292 14,875 21,417 Research and development 17,268 20,023 (2,755) Amortization of intangible asset 5,022 — 5,022 Impairment of intangible assets 20,723 15,828 4,895 Total cost and expenses 80,788 50,726 30,062 Operating loss (73,742) (50,726) (23,016) Other expense, net (37,970) (631) (37,339) Loss before income taxes (111,712) (51,357) (60,355) Income tax (expense) benefit (1,771) 2,638 (4,409) Net loss (113,483) (48,719) (64,764) Net loss attributable to non‑controlling interest — 122 (122) Net loss attributable to Strongbridge $(113,483) $(48,597) $(64,886) Net Revenue and Cost of Sales.Net revenue of $7.0 million and cost of sales of $1.5 million for the year ended December 31, 2017 resulted from ourinitial commercial sales of Keveyis following our product launch in April 2017.Selling, General and Administrative ExpensesThe following table summarizes our selling, general and administrative expenses during the years endedDecember 31, 2017 and 2016: Year Ended December 31, Change 2017 2016 $ (in thousands) Outside professional and consulting services $17,115 $5,626 $11,489 Compensation and other personnel costs 14,743 4,888 9,855 Stock-based compensation expense 4,027 4,006 21 Facility costs 407 355 52 Total selling, general and administrative expenses $36,292 $14,875 $21,417 Total selling, general and administrative expenses were $36.3 million and $14.9 million for the years endedDecember 31, 2017 and 2016, respectively. The $11.5 million increase during 2017 in outside professional and83 Table of Contentsconsulting services was primarily due to costs incurred for the launch and subsequent commercialization ofKeveyis. Compensation and related personnel costs increased by $9.9 million during 2017 primarily due to increasedheadcount of commercial personnel.Research and Development ExpensesThe following table summarizes our research and development expenses during the years ended December 31, 2017and 2016: Year Ended December 31, Change 2017 2016 $ (in thousands) Product development and supporting activities $12,488 $16,183 $(3,695) Compensation and other personnel costs 3,640 3,239 401 Stock-based compensation expense 1,140 601 539 Total research and development expenses $17,268 $20,023 $(2,755) Total research and development expenses were $17.3 million and $20.0 million for the years ended December 31,2017 and 2016, respectively. The $3.7 million decrease during 2017 in expenses for product development and supportingactivities was primarily due to a $2.3 million decrease in expenses for veldoreotide development activity and a $1.6 milliondecrease in development expenses related to programs we discontinued during 2016 (COR-004 and BioPancreate).Compensation and other personnel costs increased by $0.4 million during 2017 due to increased headcount in research anddevelopment. Stock-based compensation expense increased by $0.5 million during 2017 due to the granting of new awardsto newly hired employees during 2017. Amortization of Intangible AssetAmortization of intangible asset was $5.0 million for the year ended December 31, 2017 as we began amortizing theKeveyis product rights acquired in December 2016. We recorded no amortization of intangible asset for the year endedDecember 31, 2016.Impairment of Intangible AssetImpairment of intangible assets was $20.7 million and $15.8 million for the years ended December 31, 2017 and2016, respectively. The increase was due to a $20.7 million impairment charge recorded in the third quarter of 2017 relatedto our veldoreotide in-process research and development offset by impairment charges recorded in 2016.Other Income (Expense), Net Year Ended December 31, Change 2017 2016 $ (in thousands) Unrealized (loss) gain on fair value of warrants $(30,218) $638 $(30,856) Interest expense (4,313) (20) (4,293) Foreign exchange loss (41) (69) 28 Loss on early extinguishment of debt (3,545) — (3,545) Other income (expense), net 147 (1,180) 1,327 Total other income (expense), net $(37,970) $(631) $(37,339) Total other income (expense), net, increased by $37.3 million for the year ended December 31, 2017 as compared tothe year ended December 31, 2016. The increase was primarily due to a $30.9 million change in the fair value of our warrantliability, primarily resulting from an increase in our stock price, $4.3 million in interest expense and $3.5 million of expenserelating to the loss on the early extinguishment of debt.84 Table of ContentsIncome Tax (Expense) BenefitWe recorded income tax expense of $1.8 million for the year ended December 31, 2017 as a result of recording fullvaluation allowances against our deferred tax asset and deferred tax liability. We recorded income tax benefit of $2.6 millionfor the year ended December 31, 2016 primarily due to impairment of the value of intellectual property held by ourBioPancreate subsidiary and certain permanent deductions at Strongbridge U.S. Inc. Comparison of the Years Ended December 31, 2016 and 2015The following table sets forth our results of operations for the years ended December 31, 2016 and 2015. Year Ended December 31, Change 2016 2015 $ (in thousands) Operating expenses: Selling, general and administrative $14,875 $22,719 $(7,844) Research and development 20,023 20,135 (112) Impairment of intangible assets 15,828 — 15,828 Total operating expenses 50,726 42,854 7,872 Operating loss (50,726) (42,854) (7,872) Other expense, net (631) (1,229) 598 Loss before income taxes (51,357) (44,083) (7,274) Income tax benefit 2,638 450 2,188 Net loss (48,719) (43,633) (5,086) Net loss attributable to non‑controlling interest 122 53 69 Net loss attributable to Strongbridge $(48,597) $(43,580) $(5,017) Selling, General and Administrative ExpensesThe following table summarizes our selling, general and administrative expenses during the years endedDecember 31, 2016 and 2015: Year Ended December 31, Change 2016 2015 $ (in thousands) Outside professional and consulting services $5,626 $8,054 $(2,428) Redomiciliation and IPO preparation costs — 4,007 (4,007) Corporate development and licensing transaction costs — 3,390 (3,390) Compensation and other personnel costs 4,888 3,783 1,105 Stock-based compensation expense 4,006 3,147 859 Facility costs 355 338 17 Total selling, general and administrative expenses $14,875 $22,719 $(7,844) Total selling, general and administrative expenses were $14.9 million and $22.7 million for the years endedDecember 31, 2016 and 2015, respectively. The $2.4 million decrease in outside professional and consulting services wasprimarily due to decreased legal fees in support of general corporate matters, employee recruiting fees, and consulting fees forgeneral business efforts. Selling, general and administrative expenses for the year ended December 31, 2015 also included$4.0 million of legal and accounting fees related to the redomiciliation of the Company from Sweden to Ireland and theindirect activities necessary to prepare the Company’s financial records for the U.S. initial public offering completed inOctober 2015. Selling, general and administrative expenses for the year ended December 31, 2015 also included $3.4million of transaction fees and expenses related to the acquisition of veldoreotide from Aspireo Pharmaceuticals, the licenseof COR-004 from Antisense Therapeutics, and other business development85 Table of Contentsactivities. Compensation and other related personnel costs increased by $1.1 million, and non-cash stock-basedcompensation by $0.9 million, during the year ended December 31, 2016 due to increased headcount of administrativepersonnel during the 2016 period. Research and Development ExpensesThe following table summarizes our research and development expenses during the years ended December 31, 2016and 2015: Year Ended December 31, Change 2016 2015 $ (in thousands) Clinical development and supporting activities $16,183 $13,537 $2,646 Antisense Therapeutics license fee — 3,899 (3,899) Compensation and other personnel costs 3,239 1,906 1,333 Stock-based compensation expense 601 793 (192) Total research and development expenses $20,023 $20,135 $(112) Total research and development expenses were $20.0 million and $20.1 million for the years ended December 31,2016 and 2015, respectively. The $2.6 million increase in clinical development and supporting activities was primarilyattributed to a $3.0 million increase in expense to the ongoing clinical trials for Recorlev, and a $1.4 million increase due tothe initiation of the development activity for veldoreotide, partially offset by reduced development spend due todiscontinued programs for COR-004 and BioPancreate. Research and development expenses for the year ended December 31,2015 included $3.9 million of the $5.0 million in aggregate cash paid to Antisense Therapeutics upon entering into a licenseagreement with them in May 2015, with the remaining $1.1 million of cash paid recorded as the initial carrying value of ourinvestment in the equity of Antisense therapeutics. Compensation and other personnel costs increased by $1.3 million forthe year ended December 31, 2016 as compared to the same period in 2015 due to increased headcount of research anddevelopment personnel during the 2016 period. Stock-based compensation expense decreased $0.2 million due to thedeparture of certain research and development personnel.Other Expense, NetThe following table summarizes our other expense, net, during the years ended December 31, 2016 and 2015: Year Ended December 31, Change 2016 2015 $ (in thousands) Foreign exchange loss $(69) $(124) $55 Interest expense (20) — (20) Unrealized gain on fair value of warrants 638 — 638 Loss on termination of license agreement with AntisenseTherapeutics (1,051) — (1,051) Other expense, net (129) (1,105) 976 Total other expense, net $(631) $(1,229) $598 Total other expense, net, increased for the year ended December 31, 2016 as compared to the year ended December31, 2015. The decrease in other expense, is mostly due to the impairment of our Antisense investment in 2015 of $.5 millionas well as a loss on our Radnor lease of $0.2 million, whereas in 2016 we returned the license to Antisense and incurred a losson termination charge of $1.1 million. We also recorded an unrealized gain on the fair value of our warrants.86 Table of ContentsIncome Tax BenefitWe recorded income tax benefit of $2.6 million for the year ended December 31, 2016 and $0.5 million for the yearended December 31, 2015. For the year ended December 31, 2016, the benefit was primarily due to our subsidiaryBioPancreate’s write-off of intellectual property and certain permanent deductions at our subsidiary Strongbridge U.S. Inc. Additionally, Strongbridge U.S. Inc. is more likely than not to recognize it’s deferred tax assets. In December 31, 2015 thebenefit was due to the generation of U.S. state and federal net operating loss carry forwards and federal tax credit carryforwards. The income tax benefit for U.S. state and federal net operating loss carry forwards and the federal tax credit carryforwards has been recognized to the extent it is supported by the deferred tax liabilities recorded in connection with theacquisition of BioPancreate.Net Loss Attributable to Non‑Controlling InterestWe recorded a net loss attributable to non-controlling interest of $122,000 for the year ended December 31,2016. The non-controlling interest resulted from the 0.418% of Cortendo AB shares not acquired by StrongbridgeBiopharma plc pursuant to the exchange offer that expired September 3, 2015. In September 2016, the non-controllinginterest was acquired by the Company.Liquidity and Capital ResourcesOur operations have been financed primarily by net proceeds from the issuance of ordinary shares and the issuanceof debt. Our primary uses of capital have been third‑party expenses associated with the commercialization of Keveyis, theplanning and conduct of clinical trials, costs of process development services and manufacturing of our product candidates,and compensation‑related expenses. We expect our funding requirements for operating activities to increase in 2018 andpossibly beyond due to expenses associated with the commercialization of Keveyis and Macrilen, the execution of the Phase3 SONICS and LOGICS clinical trials for Recorlev, and selling, general and administrative expenses. We also expect our cashneeds to increase to fund potential in‑licenses, acquisitions or similar transactions as we pursue our strategy. These expensesmay be offset only in part by sales of Keveyis and Macrilen. In addition, beginning in September 2020, we may be requiredto make quarterly principal payments to repay amounts borrowed under our credit facility.Cash used to fund operating expenses is affected by the timing of when we pay expenses, as reflected in the changein our outstanding accounts payable and accrued expenses. We believe that our cash resources will be sufficient to allow usto fund planned operations for at least 12 months beyond the issuance date of these financial statements, which is after theexpected receipt of data from the Recorlev SONICS and LOGICS Phase 3 clinical trials.Our future funding requirements will depend on many factors, including the following:·the amount of revenue that we receive from sales of Keveyis and Macrilen;·the cost and timing of establishing sales, marketing, distribution and administrative capabilities;·the scope, rate of progress, results and cost of our clinical trials testing and other related activities for Recorlevand veldoreotide;·whether we borrow any additional amounts under our credit facility;·the number and characteristics of product candidates that we pursue, including any additional productcandidates we may in‑license or acquire;·the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;·the cost of defending potential intellectual property disputes, including patent infringement actions brought bythird parties against us or our product candidates;87 Table of Contents·the cost, timing and outcomes of regulatory approvals;·the terms and timing of any collaborative, licensing and other arrangements that we may establish, includingany required milestone and royalty payments thereunder; and·the emergence of competing technologies and their achieving commercial success before we do or otheradverse market developments.We expect to continue to incur losses. Our ability to achieve and maintain profitability is dependent upon thesuccessful commercialization of Keveyis and Macrilen, the development, regulatory approval and commercialization of ourproduct candidates and achieving a level of revenues adequate to support our cost structure. We may never achieveprofitability, and unless and until we do, we will continue to need to raise additional capital. If we need to raise additionalcapital to fund our operations and complete our ongoing and planned clinical trials, funding may not be available to us onacceptable terms, or at all.We plan to continue to fund our operations and capital funding needs through equity or debt financing, along withrevenues from Keveyis and Macrilen, our proceeds from our term loan facility with CRG Servicing LLC (described below)and proceeds from our at-the-market (ATM) facility. The sale of additional equity would result in additional dilution to ourshareholders. The incurrence of debt financing would result in debt service obligations and the instruments governing suchdebt could provide for operating and financing covenants that would restrict our operations. If we are not able to secureadequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers,liquidate assets where possible or suspend or curtail planned programs. In addition, lack of funding would limit any strategicinitiatives to in‑license or acquire additional product candidates or programs.Term Loan Agreement with CRG Servicing LLCThe Company and our subsidiaries are parties to a Term Loan Agreement with CRG Servicing LLC (“CRG”), asadministrative and collateral agent, and the lenders named therein (the “Lenders”). Pursuant to the terms of the Term LoanAgreement, as amended (the “Loan Agreement”), we may borrow up to $100 million from the Lenders under the LoanAgreement. We have borrowed $85.0 million under the Loan Agreement as of the date of this Annual Report.The Loan Agreement provides for additional disbursements of (i) up to $10.0 million (the “Third Tranche”),contingent upon our achievement of certain revenue milestones and a market capitalization condition or before June 30,2018, as described in the Loan Agreement and (ii) up to $5.0 million (the “Fourth Tranche”), contingent upon ourachievement of certain revenue milestones and a market capitalization condition on or before December 31, 2018, asdescribed in the Loan Agreement.The Loan Agreement has a six-year term with three and a half years (to December 31, 2020) of interest-onlypayments after which quarterly principal and interest payments will be due through the June 30, 2023 maturitydate. Amounts borrowed under the Loan Agreement accrue interest at an annual fixed rate of 12.50%, of which 4.0% may, atour election, be deferred during the first three years of the term of the loan (which may be extended for the entire term of theloan subject to the satisfaction of certain conditions under the Loan Agreement) by adding such amount to the principal loanamount (PIK Loans). We are also required to pay the Lenders a final payment fee upon repayment of the loans in full.We may prepay all or a portion of the outstanding principal and accrued unpaid interest under the Loan Agreementat any time upon prior notice to the Lenders subject to a prepayment fee during the first five years of the term of each loan(which reduces each year) and no prepayment fee thereafter. In certain circumstances, including a change of control andcertain asset sales or licensing transactions, we are required to prepay all or a portion of the loan, including the applicableprepayment premium on the amount of the outstanding principal to be prepaid.As security for its obligations under the Loan Agreement, we have entered into security agreements, whereby wehave granted to CRG, as collateral agent, a lien on substantially all of our assets, including intellectual property.88 Table of ContentsThe Loan Agreement requires us to maintain cash and cash equivalents of $3.0 million and, each year through theend of 2022, to meet a minimum total annual revenue threshold. In the event that we do not meet the minimum total annualrevenue threshold for a particular year, then we can retroactively cure the shortfall by either issuing additional equity inexchange for cash or incurring certain additional permitted indebtedness, in each case, in an amount equal to twice theshortfall. Any such amounts are required to be applied to prepay the loans. The Loan Agreement also contains customaryaffirmative and negative covenants for a credit facility of this size and type, including covenants that limit or restrict ourability to, among other things, incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments,make acquisitions, enter into transactions with affiliates, pay dividends or make distributions, license intellectual propertyrights on an exclusive basis or repurchase stock, in each case subject to customary exceptions.The Loan Agreement includes customary events of default that include, among other things, non-payment,inaccuracy of representations and warranties, covenant breaches, a material adverse change (as defined in the LoanAgreement), cross default to material indebtedness or material agreements, bankruptcy and insolvency, material judgments, achange of control, certain ERISA-related events and certain injunctions applicable to the sale of our products. Theoccurrence and continuance of an event of default could result in the acceleration of the obligations under the LoanAgreement. Under certain circumstances, a default interest rate of an additional 4.00% per annum will apply on alloutstanding obligations during the existence of an event of default under the Loan Agreement.As a condition to the Loan Agreement, the Lenders purchased an aggregate of 429,799 of our ordinary shares fromus for an aggregate purchase price of $3.0 million. In addition, pursuant to the terms of the Loan Agreement, we have issuedto CRG, or its designees, warrants to purchase an aggregate of (i) 394,289 ordinary shares at an exercise price of $7.37 pershare and (ii) 1,248,250 ordinary shares at an exercise price of $10.00 per share.If we borrow the Third Tranche, we must issue to CRG, or its designees, one or more additional warrants to purchasea number of our ordinary shares equal to an aggregate of 0.20% of our ordinary shares outstanding following such issuanceon a fully diluted basis (inclusive of the ordinary shares underlying all such warrants issued), at an exercise price equal to110% of the closing price of our ordinary shares on the date immediately preceding the Third Tranche disbursement date. Ifwe borrow the Fourth Tranche, we must issue to the Lenders, or their designees, one or more additional warrants to purchase anumber of our ordinary shares equal to an aggregate of 0.25% of our ordinary shares outstanding following such issuance ona fully diluted basis (inclusive of the ordinary shares underlying all such warrants issued), at an exercise price equal to 140%of the 10-day volume weighted average price (VWAP) per ordinary share for the consecutive 10-day trading period endingon the trading day immediately prior to the Fourth Tranche disbursement date.Each of the warrants issued or to be issued to CRG will be exercisable at any time prior to seven years following itsissue date and will contain customary provisions for assumption or exchange upon a change of control or a sale of all orsubstantially all of our assets. December 2016 Private PlacementOn December 22, 2016, we sold 14,000,000 ordinary shares at a price of $2.50 per ordinary share, together withwarrants to purchase 7,000,000 ordinary shares, in a private offering for approximately $23.4 million, after deductingunderwriting discounts and commissions and offering expenses payable by us.October 2017 Public Offering of Ordinary SharesOn October 6, 2017, we sold 4,000,000 ordinary shares in a public offering at a price to the public of $6.25 per sharefor net proceeds of approximately $23.4 million, after deducting underwriting discounts and commissions and offeringexpenses payable by us.89 Table of ContentsJanuary 2018 Public Offering of Ordinary SharesOn January 25, 2018, we sold 5,000,000 ordinary shares in a public offering at a price to the public of $6.75 perordinary share for net proceeds of approximately $31.7 million, after deducting underwriting discounts and commissions andoffering expenses payable by us.On February 26, 2018, we sold an additional 255,683 ordinary shares to the underwriters in connection with theirpartial exercise of the option to purchase additional shares that was granted to them under the underwriting agreement foradditional net proceeds of approximately $1.6 million, after deducting underwriting discounts and commissions and offeringexpenses payable by us.At-The-Market FacilityWe have entered into an Equity Distribution Agreement with JMP Securities LLC (“JMP Securities”), pursuant towhich we may offer and sell ordinary shares having an aggregate offering price of up to $40,000,000 from time to timethrough JMP Securities, acting as agent. As of December 31, 2017, we have issued an aggregate of 10,300 ordinary shares toJMP Securities under the Equity Distribution Agreement for aggregate net proceeds of approximately $73,000 and paid feesto JMP of $2,000.Cash FlowsComparison for the Years Ended December 31, 2017 and 2016: Year Ended December 31 2017 2016 (in thousands) Net cash provided by (used in): Operating activities $(45,336) $(31,714) Investing activities (7,500) (3,392) Financing activities 43,509 50,320 Net (decrease) increase in cash and cash equivalents $(9,327) $15,214 Operating ActivitiesNet cash used in operating activities was $45.3 million for the year ended December 31, 2017, compared to$31.7 million for the year ended December 31, 2016. The increase in net cash used in operating activities resulted primarilyfrom expenses during 2017 to support the commercialization of Keveyis. Investing ActivitiesNet cash used in investing activities in 2017 was from our scheduled payment of $7.5 million to Taro in connectionwith our acquisition of the U.S. marketing rights of Keveyis, and the $3.4 million cash used in investing activities in 2016was the result of our initial payment and transaction costs incurred with our acquisition of the U.S. marketing rights ofKeveyis.Financing ActivitiesNet cash provided by financing activities was $43.5 million for the year ended December 31, 2017, a decrease of$6.8 million from the year ended December 31, 2016. The decrease in net cash provided by financing activities resultedprimarily from a decrease of $5.9 million in proceeds received from the issuance of ordinary shares. 90 Table of ContentsContractual Obligations and Other CommitmentsThe following is a summary of our contractual obligations and other commitments as of December 31, 2017: Payments due by period Less than More than 1 year 1 to 3 years 3 to 5 years 5 years Total (in thousands) Minimum contractpurchases pursuant tosupply agreement $2,033 $7,901 $16,217 $ — $26,151 Debt payments $ — $7,466 $26,828 $6,465 $40,759 Operating leases $357 $492 $323 $69 $1,241 Total contractualobligations $2,390 $15,859 $43,368 $6,534 $68,151 We enter into agreements in the normal course of business with CROs for clinical trials and with vendors forpreclinical studies and other services and products for operating purposes, which are cancelable at any time by us, generallyupon 30 days prior written notice. Future payment obligations under these agreements are not included in this table ofcontractual obligations.We are obligated to make future payments to third parties under license agreements, including sublicense fees,royalties and payments that become due and payable upon the achievement of development and commercializationmilestones. As the amount and timing of sublicense fees and the achievement and timing of these milestones are not probableand estimable, such commitments have not been included on our consolidated balance sheets or in the contractualobligations table above.Off‑Balance Sheet ArrangementsWe do not have variable interests in variable interest entities or any off‑balance sheet arrangements.Recent Accounting PronouncementsSee Note 2 Summary of significant accounting policies and basis of presentation - Recently adopted accountingpronouncements to our consolidated financial statements. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKWe are exposed to certain market risks in the ordinary course of our business. These risks primarily include interestrate sensitivities as follows:Interest Rate RiskWe had cash and cash equivalents of $57.5 million as of December 31, 2017. Our cash and cash equivalents are heldin a variety of interest‑earning instruments, including money market funds. Such interest‑earning instruments carry a degreeof interest rate risk. To date, fluctuations in interest income have not been significant. We also had total outstanding long-term debt principal of $40.8 million as of December 31, 2017, of which $0 was due within 12 months. The interest rate of ourborrowings under the term loan agreement with CRG is fixed. A hypothetical 10% change in interest rates during any of theperiods presented would not have had a material impact on our financial statements.91 Table of Contents ITEM 8. Financial Statements.The financial statements and supplementary data required by this item are listed in Item 15 – “Exhibits andFinancial Statement Schedules” of this Annual Report. ITEM 9. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANTNone ITEM 9A. CONTROLS AND PROCEDURESDisclosure Controls and ProceduresWe maintain disclosure controls and procedures that are designed to ensure that information required to bedisclosed in our reports under the Exchange Act and the rules and regulations thereunder, is recorded, processed, summarizedand reported within the time periods specified in the SEC's rules and forms and that such information is accumulated andcommunicated to our management, including our principal executive officer and principal financial officer, as appropriate, toallow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures,management recognizes that any controls and procedures, no matter how well designed and operated, can provide onlyreasonable assurance of achieving the desired control objectives, and management is required to apply its judgment inevaluating the cost-benefit relationship of possible controls and procedures.As required by SEC Rule 13a‑15(b), we carried out an evaluation, under the supervision and with the participationof our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design andoperation of our disclosure controls and procedures, as of the end of the period covered by this report. Based on theforegoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedureswere effective as of December 31, 2017 at the reasonable assurance level.Remediation of material weaknessAs identified in Item 15 of our Annual Report and 20-F for the year ended December 31, 2016, we identified amaterial weakness in internal control over financial reporting relating to the valuation of warrants that were issued inconnection with our December 2016 private placement of ordinary shares. During 2017, management improved controls overthe valuation of the warrants and controls over work performed by third parties and the material weakness has beenremediated as of December 31, 2017.Management’s Annual Report on Internal Control over Financial ReportingManagement is responsible for establishing and maintaining adequate internal control over financial reporting asdefined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting refers to a processdesigned by, or under the supervision of, the principal executive and principal financial officer and effected by the board ofdirectors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurancethat transactions are recorded as necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance withauthorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect onthe financial statements.92 Table of ContentsUnder the supervision and with the participation of management, including the Chief Executive Officer and ChiefFinancial Officer, the Company carried out an evaluation of the effectiveness of its internal control over financial reportingas of December 31, 2017, based on the Internal Control-Integrated Framework (2013) issued by the Committee of SponsoringOrganizations of the Treadway Commission (COSO). Based upon this evaluation, management has concluded that, as ofDecember 31, 2017, the Company’s internal control over financial reporting was effective in providing reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles.Because of its inherent limitations, internal control over financial reporting may not prevent or detect allmisstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls maybecome inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures maydeteriorate.Attestation Report of the Registered Public Accounting FirmThis Annual Report does not include an attestation report of our registered public accounting firm regarding ourinternal control over financial reporting. Management’s report was not subject to attestation by our registered publicaccounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this Annual Reportfor so long as we qualify as an emerging growth company.Changes in Internal Control over Financial ReportingOther than the remediation efforts identified above to address the material weakness, there were no changes in theCompany's internal control over financial reporting that occurred during the period covered by this Annual Report that havematerially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table presents information about our officers and directors as of March 1, 2018.NAME AGE POSITION Executive Officers Matthew Pauls 47 Chief Executive Officer and Director A. Brian Davis 51 Chief Financial Officer Fredric Cohen, M.D. 53 Chief Medical Officer Stephen Long 52 Chief Legal Officer Non‑Employee Directors John H. Johnson 60 Director, Chairman of the Board Richard S. Kollender 48 Director Garheng Kong, M.D., Ph.D. 42 Director Jeffrey W. Sherman, M.D., FACP 63 Director Mårten Steen, M.D., Ph.D. 42 Director Hilde H. Steineger, Ph.D. 51 Director Unless otherwise indicated, the current business addresses for our executive officers and directors is 900 NorthbrookDrive, Suite 200, Trevose, Pennsylvania 19053, United States.93 Table of ContentsExecutive OfficersMatthew Pauls has served as our Chief Executive Officer since August 2014 and as a member of our board ofdirectors since September 2015. Mr. Pauls has served as a member of the board of directors of Savara Inc. (formerly MastTherapeutics, Inc.), a publicly traded biopharmaceutical company, since October 2015. Prior to joining Strongbridge,Mr. Pauls was Chief Commercial Officer of Insmed, Inc., a publicly traded biopharmaceutical company, from April 2013 toAugust 2014. Prior to Insmed, Mr. Pauls worked at Shire Pharmaceuticals, a publicly traded specialty biopharmaceuticalcompany, beginning in 2007 until March 2013, most recently as Senior Vice President, Head of Global CommercialOperations. Mr. Pauls also held positions at Bristol‑Myers Squibb, a publicly traded pharmaceutical company, in BrandManagement and Payor Marketing, and at Johnson & Johnson, a publicly traded medical devices, pharmaceutical andconsumer packaged goods manufacturer, in various U.S. and global commercial roles. He is a volunteer board member of thePennington School in Pennington, New Jersey, and the Boys & Girls Clubs of Philadelphia. Mr. Pauls holds B.S. and M.B.A.degrees from Central Michigan University and a J.D. from Michigan State University College of Law.A. Brian Davis has served as our Chief Financial Officer since March 2015. Prior to joining Strongbridge, Mr. Davisserved as Senior Vice President and Chief Financial Officer at Tengion, Inc., a publicly traded regenerative medicinecompany, from August 2010 to December 2014. In December 2014, Tengion, Inc. filed a petition for relief under Chapter 7 ofTitle 11 of the United States Bankruptcy Code. From 2009 to July 2010, Mr. Davis served in a consulting capacity as ChiefFinancial Officer of Neose Technologies, Inc., a biopharmaceutical company. Mr. Davis worked at Neose Technologies, Inc.from 1994 to 2009, where he held several positions of increasing responsibility, including Senior Vice President and ChiefFinancial Officer. Mr. Davis is licensed as a certified public accountant, and received a B.S. in accounting from Trenton StateCollege and an M.B.A. from The Wharton School at the University of Pennsylvania.Fredric Cohen, M.D. has served as our Chief Medical Officer since November 2016. Dr. Cohen joined Strongbridgein August 2015 and held roles of increasing responsibility, including Senior Vice President, Global Research andDevelopment, and Vice President, Clinical Research and Development, prior to his promotion to Chief Medical Officer. Fredis an endocrinologist by training with more than 20 years of drug and business development experience, most recentlyfocused in development and commercialization of rare disease and specialty products. Prior to joining Strongbridge, Fredprovided strategic and operational counsel to life science companies, actively supporting their development and licensingfunctions. Prior to that, he served as Executive Director, Clinical Pipeline, at Aptalis Pharma, where he was responsible forinnovation strategy as well as building and advancing the company’s specialty pharma pipeline. He has also held researchand development positions with Johnson & Johnson and Eli Lilly & Company. Fred holds an M.D. from Pennsylvania StateUniversity College of Medicine and an A.B. in biology from Franklin and Marshall College.Stephen Long has served as our Chief Legal Officer since March 2015 and as Company Secretary since September2015. Prior to joining Strongbridge, Mr. Long served as Counsel at the law firm of Reed Smith LLP, from April 2013 toFebruary 2015. He previously served at C.R. Bard, Inc., a medical device manufacturing company, from October 2000 to May2012 in the roles of Vice President, General Counsel, as Vice President, and Secretary, and as Associate General Counsel.Mr. Long also served as Assistant General Counsel, Consumer Healthcare, at Warner‑Lambert Company, and as Counsel forthe company’s pharmaceutical division from February 1998 to September 2000. Mr. Long held positions earlier in his careerat the law firm of Willkie Farr & Gallagher and Bankers Trust Company. Mr. Long received his B.S. from the School ofIndustrial and Labor Relations at Cornell University and his J.D. from Albany Law School of Union University.Non‑Employee DirectorsJohn H. Johnson has served as Chairman of our board of directors since March 2015. From January 2012 untilAugust 2014, Mr. Johnson served as the President and Chief Executive Officer of Dendreon Corporation and as its Chairmanfrom January 2012 until June 2014. From January 2011 until January 2012, he served as the Chief Executive Officer and amember of the board of Savient Pharmaceuticals, Inc. From November 2008 until January 2011, Mr. Johnson served as SeniorVice President and President of Eli Lilly and Company’s Oncology unit. He was also94 Table of ContentsChief Executive Officer of ImClone Systems Incorporated, which develops targeted biologic cancer treatments, from August2007 until November 2008, and served on ImClone’s board of directors until it was acquired by Eli Lilly in November 2008.From 2005 to 2007, Mr. Johnson served as Company Group Chairman of Johnson & Johnson’s WorldwideBiopharmaceuticals unit, President of its Ortho Biotech Products LP and Ortho Biotech Canada units from 2003 to 2005, andWorldwide Vice President of its CNS, Pharmaceuticals Group Strategic unit from 2001 to 2003. Prior to joining Johnson &Johnson, he also held several executive positions at Parkstone Medical Information Systems, Inc., Ortho‑McNeilPharmaceutical Corporation and Pfizer, Inc. Mr. Johnson is the former Chairman of Tranzyme Pharma, Inc., and former leadindependent director of Sucampo Pharmaceuticals, Inc. Mr. Johnson currently serves as a member of the board of directors ofMelinta Pharmaceuticals, Inc., Aveo Pharmaceuticals, Inc., Histogenics Corporation, and Portola Pharmaceuticals, Inc. Hepreviously served as a member of the board of directors for the Pharmaceutical Research and Manufacturers of America andthe Health Section Governing Board of Biotechnology Industry Organization. Mr. Johnson holds a B.S. from the EastStroudsburg University of Pennsylvania.Richard S. Kollender has served as a member of our board of directors since March 2015. Since January 2011, hehas served as a Partner and Executive manager of Quaker Partners Management, LP, a healthcare investment firm, which heinitially joined in 2003, and was promoted to Partner in 2005. Since August 2016, Mr. Kollender has served as ChiefBusiness Officer and Chief Financial Officer of Rapid Micro Biosystems. Mr. Kollender previously served as a director ofCelator Pharmaceuticals, Inc., Rapid Micro Biosystems, Inc., Insmed, Inc., Nupathe, Inc., TargetRx, Inc., and PrecisionTherapeutics, Inc. Mr. Kollender has held positions in sales, marketing and worldwide business development atGlaxoSmithKline or GSK, and served as investment manager at S.R. One, the corporate venture capital arm of GSK.Mr. Kollender holds a B.A. in accounting from Franklin and Marshall College and an M.B.A. and Health Administration andPolicy Degree (with Honors) from the University of Chicago and practiced as a certified public accountant for six years atpublic accounting firms including KPMG.Garheng Kong, M.D., Ph.D. has served as a member of our board of directors since September 2015. In July 2013, hefounded, and has since served as managing partner of, HealthQuest Capital, a healthcare venture growth fund. Dr. Kong was ageneral partner at Sofinnova Ventures, a venture firm focused on life sciences, from September 2010 to December 2013. FromMay 2000 to September 2010, he worked at Intersouth Partners, a venture capital firm, serving most recently as a generalpartner. Dr. Kong currently serves as a director of Melinta Therapeutics, Inc., Histogenics Corporation, Alimera Sciences, Inc.and Laboratory Corporation of America Holdings. Dr. Kong holds a B.S. from Stanford University and an M.D., Ph.D. andM.B.A. from Duke University.Jeffrey W. Sherman, M.D., FACP, has served as a member of our board of directors since October 2016. He currentlyserves as the Chief Medical Officer and Executive Vice President at Horizon Pharma plc. He brings than 25 years of research,clinical development, regulatory and commercialization experience within the biopharmaceutical industry. He is a memberof a number of professional societies, a diplomat of the National Board of Medical Examiners and the American Board ofInternal Medicine, and also serves on the Board of Advisors of the Center for Information and Study on Clinical ResearchParticipation (CISCRP). He previously held positions at IDM Pharma Takeda Global Research and Development, Neopharm,Searle/Pharmacia, Bristol-Myers Squibb, and is past president of the Drug Information Association (DIA). Dr. Sherman earnedhis M.D. from the Rosalind Franklin University of Medicine and Science/The Chicago Medical School. He completedinternship and residency programs at Northwestern University Feinberg School of Medicine, where he currently serves as anadjunct assistant professor, and a fellowship program at the University of California San Francisco. He received a B.A. inBiology from Lake Forrest College.Mårten Steen, M.D., Ph.D. has served as a member of our board of directors since December 2014. Since April 2010,he has served as a Partner of HealthCap VI LP, a venture capital firm investing in life science companies. Prior to HealthCap,from February 2008 until March 2010, Dr. Steen served as director at Merck Serono SA, a biopharmaceutical company.Currently, he serves as a member of the board of directors of BioClin Therapeutics, Inc. He previously served on the boards ofUltragenyx Inc., Wilson Therapeutics AB, Altimmune, Inc. and FerroKin Biosciences. Dr. Steen holds a B.Sc. in BusinessAdministration, an M.D., and a Ph.D. in Clinical Chemistry, all from Lund University.Hilde H. Steineger, Ph.D. has served as a member of our board of directors since January 2014. She is a Co-founderof NorthSea Therapeutics B.V., where she serves as Chief Operating Officer. She previously served as Head of95 Table of ContentsStrategic Innovation Management in the Nutrition & Health Division of BASF and as Head of Global Omega‑3 InnovationManagement at Pronova BioPharma ASA, a BASF company, from April 2013 to May 2015. From August 2007 to June 2010,Dr. Steineger was Head of Investor Relations for Pronova BioPharma and Vice President Business Development in PronovaBioPharma from November 2009 to April 2013. Dr. Steineger is a board member and Head of the Audit Committee of NordicNanovector ASA. Dr. Steineger also serves as a director of PCI Biotech AS. She previously served as a member of the board ofdirectors of Aifew AS, Algeta ASA, Weifa AS, Invent2 AS, Alertis AS, Clavis Pharma ASA and Biotech Pharmacon ASA.Dr. Steineger holds a Ph.D. in medical biochemistry from University of Oslo and an M.Sc. in molecularbiology/biotechnology.Section 16(a) Beneficial Ownership Reporting ComplianceWe were a foreign private issuer until December 31, 2017. By virtue of our status as a foreign private issuer, for the fiscalyear ended December 31, 2017 our directors, executive officers, and persons who owned more than 10% of our outstandingordinary shares (collectively, the “Section 16 insiders”) were not required to file with the SEC initial reports of ownership ofour ordinary shares and other equity securities on Form 3 or reports of changes in such ownership on Forms 4 or Form 5 priorto January 1, 2018. As result of our recent transition to domestic reporting status, the Section 16 insiders are now required tocomply with Section 16(a) of the Exchange Act, effective as of January 1, 2018. Code of Business Conduct and EthicsOur Code of Business Conduct and Ethics is applicable to all of our directors, officers and employees and is posted onthe Investors section of our website, which is located at www.strongbridgebio.com. Our Code of Business Conduct andEthics provides that our directors, officers and employees are expected to avoid any action, position or interest that conflictswith the interests of our company or gives the appearance of a conflict. We expect that any amendment to this code, or anywaivers of its requirements, will be disclosed on our website. Information contained on, or that can be accessed through, ourwebsite is not incorporated by reference into this document, and you should not consider information on our website to bepart of this document. Audit CommitteeThe current members of our audit committee are, Richard S. Kollender, Hilde H. Steineger and Jeffrey Sherman, with Mr.Kollender serving as chairman. Our board of directors has determined that each member of our audit committee isindependent under Rule 10A-3 of the Exchange Act and the applicable listing requirements of Nasdaq, and that each memberof our audit committee satisfies the other listing requirements of Nasdaq for audit committee membership. Our board ofdirectors has also determined that two of the three members of our audit committee, Mr. Kollender and Dr. Steineger, qualifyas an “audit committee financial expert,” as such term is defined by the SEC, and that he or she has the requisite level offinancial sophistication required by the continued listing standards of Nasdaq. ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following table sets forth information concerning cash and non-cash compensation paid for 2017 and 2016 tocertain of our executive officers (referred to herein as “our executive officers”). Stock Restricted All Other Salary Bonus awards Share Units Compensation Name and position Year ($) ($) ($)($) ($)Total Matthew Pauls 2017 $500,000 $350,000 $764,965 $ - $10,124$1,625,089 Chief Executive Officer 2016 468,000 198,900 600,750 157,600 1,170 1,426,420 A. Brian Davis 2017 354,835 182,030 367,183 - 8,639 912,687 Chief Financial Officer 2016 334,750 123,858 173,550 78,800 1,038 711,996 Fredric Cohen, M.D. (5) 2017 395,200 200,366 352,904 - 8,089 956,559 Chief Medical Officer 2016 318,747 134,900 107,892 87,620 977 650,136 96 (1)(2)(3)(4)Table of Contents(1)The amounts in this column represent the discretionary bonuses paid with respect to 2017 and 2016 performance. (2)The fair value of all stock options granted during the periods covered by the table are calculated on the grant date in accordance with ASC718-10-30-3 which represented the grant date fair value.(3)The fair value of the shares of restricted stock issued during the periods covered by the table are calculated on the grant date in accordancewith ASC 718-10-30-3 which represented the grant date fair value.(4)All other compensation received that does not properly report in any other column of the table including insurance premiums paid byStrongbridge with respect to term life insurance, company match on employee’s 401(k) contributions and club membership fees.(5)Dr. Cohen’s employment commenced in August 2015 and he was promoted to Chief Medical Officer in November 2016.Narrative to Summary Compensation TableWe have entered into employment agreements with Matthew Pauls, A. Brian Davis and Fredric Cohen. Theemployment agreements outline the terms of the employment relationship, including any potential severance benefits. Webelieve that the employment agreements provide certainty to our management team and help to retain the leadershipnecessary for our company to succeed.Employment AgreementsWe entered into an employment agreements with each of Messrs. Pauls and Davis and Dr. Cohen for their service asPresident and Chief Executive Officer, Chief Financial Officer and Chief Medical Officer, respectively. The agreements areeffective until terminated by either the Company or the executive officer, in either case in accordance with the terms of theagreement. The agreements also provide for annual incentive bonus targets for Messrs. Pauls and Davis, and Dr. Cohen of50%, 40% and 40%, respectively. Under the agreements, our executive officers are entitled to participate in benefits offeredby us for similarly situated employees, including the Company’s paid time-off policy.Each employment agreement provides for severance benefits detailed below under “Potential Payments uponTerminations of Employment or Following a Change in Control.” Each employment agreement also contains anon‑competition provision, which applies during the term of employment and for one year following termination, and arestrictive covenant with respect to non‑disclosure of confidential information, which remains in effect during the term ofemployment and at all times thereafter.Other BenefitsOur executive officers are eligible to participate in our employee benefit plans on the same basis as our otheremployees, including our health and welfare plans and our 401(k) plan. Under our 401(k) plan, participants may elect tomake both pre‑ and post‑tax contributions to their accounts in the plan, and we match 100% of those contributions up to 4%of compensation. Our executive officers are not eligible for retirement benefits other than under our 401(k) plan. Thecompany is not required to, and has not, set aside any amounts relating to pension or retirements.97 Table of ContentsOutstanding Equity Awards as of December 31, 2017The following table includes certain information with respect to option and restricted stock unit awards that wereoutstanding as of December 31, 2017 for our executive officers. Option Awards Stock Awards Number of Number of Market Securities Securities Numberof Value of Underlying Underlying Sharesor Shares or Unexercised Unexercised Option Units of Units of Options Options Exercise Option StockThat StockThat (#) (#) Price Grant Expiration HaveNot Have not Name Exercisable Unexercisable ($) Date Date Vested(#) Vested ($)(1) Matthew Pauls 72,727 — $8.06 8/23/2014 8/23/2019 40,000 $290,000 72,727 — $10.74 8/23/2014 8/23/2019 81,818 — $13.43 8/23/2014 8/23/2019 180,020 274,525 $15.71 5/26/2015 5/26/2025 37,751 126,562 $3.94 2/26/2016 2/26/2026 — 304,687 $2.90 2/23/2017 2/23/2027 A. Brian Davis 21,591 32,954 $15.71 5/26/2015 5/26/2025 20,000 $145,000 88,908 44,455 $18.80 7/21/2015 7/21/2020 28,438 36,562 $3.94 2/26/2016 2/26/2026 33,750 146,250 $2.90 2/23/2017 2/23/2027 Fredric Cohen, M.D. 46,023 35,795 $18.12 8/5/2015 8/5/2025 22,000 $159,500 13,125 16,875 $3.94 2/26/2016 2/26/2026 15,000 25,000 $4.16 6/13/2016 6/13/2026 2,500 7,500 $3.90 11/23/2016 11/23/2026 32,438 140,562 $2.90 2/23/2017 2/23/2027 (1)The market value of shares of stock that have not vested is based on the closing price of our common stock on December 29, 2017, or$7.25 per share.(2)These stock options vest in three separate tranches. The first tranche vests in 16 equal quarterly installments commencing the first quartersubsequent to the grant date; the second tranche vests in 16 equal quarterly installments commencing on the date on which our shares begintrading on NASDAQ; and the third tranche vests one-half on the date on which the closing price of our shares as reported on NASDAQequals $33.66 for Mr. Pauls, and $31.46 for Mr. Davis, for 20 consecutive trading days, so long as this occurs prior to May 26, 2019, andone-half on the one year anniversary of such initial vesting date. All of these options will fully vest and become exercisable upon a changeof control provided that the executive is employed on the date of such change in control.(3)These options vest in 16 equal quarterly installments commencing with the first quarter subsequent to the grant date. These options will fullyvest and become exercisable upon a change of control provided that the executive is employed on the date of such change of control.(4)These options vest in three equal annual tranches. The first tranche of these options vested on March 23, 2016. The second tranche vests onMarch 23, 2017. The third tranche vests on March 23, 2018. These options will fully vest and become exercisable upon a change of controlprovided that the executive is employed on the date of such change of control.(5)These options vest with respect to one-fourth of the shares to vest on the one-year anniversary of the Date of Grant and the remaining three-fourths of shares to vest in 12 equal, quarterly installments after the one-year anniversary of the Date of Grant. These options will fully vestand become exercisable upon a change in control provided that the executive is employed on the date of such change in control.(6)The restricted stock units vested on February 26, 2018.(7)The restricted stock units vest as follows: 13,000 vest on February 26, 2018; 5,000 vest on June 13, 2018; and 4,000 vest on November 23,2018.Prior to September 3, 2015, we did not have an equity compensation plan. Grants of stock options to the executiveofficers and other individuals were made through individual grant agreements. 98 (6)(2)(3)(3)(2)(6)(4)(3)(3)(5)(7)(3)(5)(5)(3)Table of ContentsStock Option and Restricted Stock Units GrantsOur Compensation Committee granted stock options to Messrs. Pauls and Davis and Dr. Cohen in February 2017 inthe amounts of 375,000, 180,000, and 173,000, respectively, with an exercise price equal to the fair market value of our stockon the date of grant. These options vest in 16 equal quarterly installments commencing with the first quarter subsequent tothe grant date, and will accelerate and vest upon a change of control provided that the executive is employed on the date ofsuch change of control.In 2016, our board of directors granted stock options and restricted stock units, or RSUs, to Messrs. Pauls and Davis,and Dr. Cohen. Messrs. Pauls and Davis, and Dr. Cohen were granted stock options in the amounts of 225,000, 65,000, and30,000, respectively, and RSUs in the amounts of 40,000, 20,000 and 13,000, respectively. In June 2016 and November2016, our board of directors approved additional grants to Dr. Cohen of stock options in the amounts of 40,000 and 10,000and RSUs in the amounts of 5,000 and 4,000, respectively. The options granted in February 2016 vest in 16 equal quarterly installments commencing with the first quartersubsequent to the grant date. The options granted to Dr. Cohen in June 2016 and November 2016, vest with respect to one-fourth of the shares on the one-year anniversary of the Date of Grant and the remaining three-fourths of shares in 12 equal,quarterly installments after the one-year anniversary of the Date of Grant. All options will fully vest and become exercisableupon a change in control provided that the executive is employed on the date of such change in control. All RSUs vest, withrespect to 100% of the grants, on the second anniversary following the date of grant, provided that the executive is employedby the Company on such vesting date and will fully vest upon a change of control of our company. If and when the RSUsvest, the Company will issue to the executive one ordinary share of the Company for each whole RSU that has vested, subjectto satisfaction of the executive’s tax withholding obligations. The RSUs will cease to be outstanding upon such issuance ofshares.Potential Payments Upon Terminations of Employment or Following a Change of ControlThe employment agreements with Messrs. Pauls and Davis, and Dr. Cohen provide that, upon a termination ofemployment by our company without “cause,” or by the executive for “good reason,” or due to the executive’s death, subjectto the execution of a release of claims, he or she will be entitled to (1) an amount equal to the sum of 18 months of base salaryand the target bonus for Mr. Pauls, or 12 months of base salary and the target bonus for our other executive officers, paid ininstallments over the 18‑month period following termination for Mr. Pauls or the 12‑month period following termination forour other executive officers, (2) a pro rata portion of the annual bonus that he or she would have been entitled to receive forthe calendar year that includes the termination date, based on the actual achievement of the applicable performance goals,and (3) medical and dental benefits provided by us that are at least equal to the level of benefits provided to other similarlysituated active employees until the earlier of (a) 18 months following the termination date for Mr. Pauls, or 12 monthsfollowing the termination date for our other executive officers and (b) the date the executive becomes covered under asubsequent employer’s medical and dental plans.In the event there is a change of control of our company and, during the 24‑month period following the change ofcontrol, any of our executive officers is terminated by us without cause, by the executive for good reason, or due to theexecutive’s death or, he or she will be entitled to the severance benefits detailed below and all unvested equity orequity‑based awards held by the executive will accelerate and vest. The severance benefits include (1) an amount equal tothe sum of 24 months base salary and the target bonus for Mr. Pauls, or the sum of 18 months base salary and the target bonusfor our other executive officers, paid in installments over the 24‑month period following termination for Mr. Pauls or the18‑month period following termination for our other executive officers; and (2) the medical and dental benefits provided byus until the earlier of (a) 18 months following the termination date for Mr. Pauls or one year following the termination date ofour other executive officers and (b) the date the executive becomes covered under a subsequent employer’s medical anddental plans.Under the employment agreements, “cause” is defined as (1) the conviction of, or plea of guilty or nolo contendereto, any felony or any crime involving theft, embezzlement, dishonesty or moral turpitude, (2) any act constituting willfulmisconduct, deliberate malfeasance, dishonesty, or gross negligence in the performance of the individual’s duties, (3) thewillful and continued failure to perform any of the individual’s duties, which has not been cured within 30 days followingwritten notice from us, or (4) any material breach by the individual of the employment99 Table of Contentsagreement or any other agreement with us, which has not been cured within 30 days following written notice from us. “Goodreason” is defined as any of the following reasons unless cured by us within a specified period: (1) a material reduction of theindividual’s base salary, other than a reduction that is applicable to other senior executives in the same manner andproportion, (2) the assignment of duties or responsibilities which are materially inconsistent with the individual’s position,(3) a change in the principal location at which the individual performs his or her duties to a new location that is more than 50miles from the prior location or (4) a material breach of the employment agreement by us. “Change of control ” is defined asthe occurrence of any of the following: (a) any person or group of persons becomes the beneficial owner, directly orindirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of theCompany’s then outstanding securities; provided that if the person or group of persons is already deemed to own more than50% of the total fair market value or total voting power, then the acquisition of additional stock by such person or group ofpersons shall not constitute an additional change of control; (b) the stockholders of the Company approve a plan of completeliquidation of the Company; (c) the sale or disposition of all or substantially all of the Company’s assets; or (d) a merger,consolidation or reorganization of the Company with or involving any other entity, other than a merger, consolidation orreorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing torepresent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least a 50%of the combined voting power of the Company (or such surviving entity) outstanding immediately after such merger,consolidation or reorganization owned in approximately the same proportion of such ownership by each of the priorshareholders as prior to the transaction. The following acquisitions are not considered to be a change of control of theCompany: (A) an acquisition by the Company or entity controlled by the Company, or (B) an acquisition by an employeebenefit plan (or related trust) sponsored or maintained by the Company.The employment agreements also provide that, in the event that any of our other executive officers is subject to theexcise tax under Section 4999 of the Code, the payments that would be subject to the excise tax will be reduced to the levelat which the excise tax will not be applied unless such executive would be in a better net after‑tax position by receiving thefull payments and paying the excise tax.Director CompensationOur board of directors’ compensation program for fiscal year 2017 provided for the following:·Annual Cash Retainer—$40,000·Additional Annual Cash Retainers·Non‑Executive Chairman of the Board Retainer—$35,000·Audit Committee Chair Retainer—$15,000·Compensation Committee Chair Retainer—$10,000·Governance Committee Chair Retainer—$7,500·Audit Committee Member (other than Chairman) Retainer—$7,500·Compensation Committee Member (other than Chairman) Retainer—$5,000·Governance Committee Member (other than Chairman) Retainer—$3,750·Equity Compensation·Initial Equity Grant—Option to purchase 60,000 shares, with one-third of the shares vesting on thefirst anniversary of the date of grant and the remaining two-thirds of the shares vesting in equal100 Table of Contentsmonthly installments over the 24‑month period that follows the first anniversary of the date of grant,provided that the director continues to provide services as a member of our board of directorscontinuously from the date of grant through the applicable vesting date·Annual Equity Grant—Option to purchase 40,000 shares with such option vesting in full on the firstanniversary of the date of grant, provided that the director continues to provide services as a memberof our board of directors continuously from the date of grant through the vesting dateOur directors earned compensation in 2017 for their service on the board as summarized below: Feesearned OptionsAwards (1) Total Name Year ($) ($) ($) John H. Johnson 2017 $88,750 $116,186 $204,936 Richard S. Kollender 2017 60,000 116,186 176,186 Garheng Kong, M.D., Ph.D. 2017 48,750 116,186 164,936 Jeffrey W. Sherman, M.D., FACP 2017 47,500 116,186 163,686 Mårten Steen, M.D., Ph.D. 2017 47,500 116,186 163,686 Hilde H. Steineger, Ph.D. 2017 47,500 116,186 163,686 (1)Amounts shown represent the aggregate grant date fair value of the option awards, computed in accordance with FASB ASC Topic 718.The following table includes a summary of outstanding stock options as of December 31, 2017 for our directors: OptionsName OutstandingJohn H. Johnson 147,767Richard S. Kollender 117,188Garheng Kong, M.D., Ph.D. 114,385Jeffrey W. Sherman, M.D., FACP 100,000Mårten Steen, M.D., Ph.D. 114,918Hilde H. Steineger, Ph.D. 114,918 Non‑Employee Director Equity Compensation PlanOur board of directors has adopted and our shareholders have approved, the Non‑Employee Director EquityCompensation Plan (the Non‑Employee Director Plan). The Non‑Employee Director Plan provides for the grant ofnonstatutory stock options, stock awards, and restricted stock units to our non‑employee directors. The Non‑EmployeeDirector Plan is effective as of September 3, 2015.Authorized Shares. A total of 828,904 shares of our common stock have been reserved for issuance pursuant to theNon‑Employee Director Plan. The shares of our common stock that we have reserved for issuance pursuant to theNon‑Employee Director Plan (the “Share Pool”) will be increased on the first day of each fiscal year, in an amount equal toone‑half percent (0.5%) of the outstanding shares of our common stock on the last day of the immediately preceding fiscalyear. The Share Pool will be reduced on the date of grant, by one share of our common stock for each award under theNon‑Employee Director Plan; provided that awards that are valued by reference to shares of our common stock but arerequired to be paid in cash pursuant to their terms will not reduce the Share Pool. If and to the extent options terminate,expire, or are canceled, forfeited, exchanged, or surrendered without having been exercised, or if any stock awards or awardsof restricted stock units (including restricted stock received upon the exercise of options) are forfeited, the shares of ourcommon stock subject to such awards will again be available for awards under the Share Pool. Notwithstanding theforegoing, shares tendered by individual grantees, or withheld by us, as full or partial payment to us upon the exercise ofoptions will not become available for issuance again under the Non‑Employee Director Plan.101 Table of ContentsPlan Administration. Our board administers the Non‑Employee Director Plan. Subject to the provisions of theNon‑Employee Director Plan, our board has the power to determine the terms of the awards, including the exercise price, thenumber of shares of our common stock subject to each such award, the exercisability of the awards and the form ofconsideration, if any, payable upon exercise. To the maximum extent permitted by law, no member of our board will be liablefor any action taken or decision made in good faith relating to the Non‑Employee Director Plan or any award grantedthereunder.Stock Options. The exercise price of options granted under the Non‑Employee Director Plan may be equal to orgreater than the fair market value of our common stock on the date of grant. The term of an option may not exceed ten years.After the termination of service of a non‑employee director for any reason other than death, disability or cause (as defined inthe Non‑Employee Director Plan), he or she may exercise the vested portion of his or her option for 90 days. If termination isdue to death (or death occurs within 90 days after the director’s termination date) or disability, the vested portion of theoption will remain exercisable for one year. However, in no event may an option be exercised later than the expiration of itsterm. The entire option is forfeited upon a termination for Cause. In addition, if a non‑employee director has engaged inconduct that constitutes cause, any shares acquired upon exercise of an option for which we have not yet delivered the sharecertificates shall be automatically forfeited to us in exchange for payment of the exercise price paid for such shares.Stock Awards. Stock awards may be granted under the Non‑Employee Director Plan. Stock awards are grants ofshares of our common stock that vest in accordance with terms and conditions established by the board. The board willdetermine the number of shares granted as stock awards to a non‑employee director and the consideration, if any, to be paidfor such shares. The board may impose whatever conditions to vesting it determines to be appropriate (for example, the boardmay set restrictions based on the achievement of specific performance goals or continued service to us); provided, however,that the board, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. Shares ofcommon stock subject to stock awards that do not vest are subject to forfeiture.Restricted Stock Units. Restricted stock units may be granted under the Non‑Employee Director Plan. Restrictedstock units are bookkeeping entries representing an amount equal to the fair market value of one share of our common stock.The board determines the terms and conditions of restricted stock units, including the vesting criteria (which may includeaccomplishing specified performance criteria or continued service to us) and the form and timing of payment. The amountpayable as a result of the vesting of a restricted stock unit will be distributed as soon as practicable following the vesting dateand in no event later than the fifteenth date of the third calendar month of the year following the vesting date of the restrictedstock unit (or as otherwise permitted under Section 409A of the Internal Revenue Code); provided, however, that anindividual grantee may, if and to the extent permitted by our board, elect to defer payment of restricted stock units in amanner permitted by Section 409A of the Internal Revenue Code. Notwithstanding the foregoing, the board, in its solediscretion, may accelerate the time at which any restrictions will lapse or be removed.Non‑Transferability of Awards. Unless our board provides otherwise, the Non‑Employee Director Plan generallydoes not allow for the transfer of awards and only the recipient of an award may exercise an award during his or her lifetime.Certain Adjustments. In the event of certain changes in our capitalization, to prevent diminution or enlargement ofthe benefits or potential benefits available under the Non‑Employee Director Plan, the board will adjust the number and classof shares that may be delivered under the Non‑Employee Director Plan and/or the number, class and price per share of sharescovered by each outstanding award.Change of Control. The Non‑Employee Director Plan provides that in the event of a change of control, as definedin the Non‑Employee Director Plan, where we are not the surviving corporation (or we survive only as a subsidiary of anothercorporation), unless our board determines otherwise, all outstanding awards will be assumed by, or replaced with comparableawards by, the surviving corporation (or a parent or subsidiary of the surviving corporation). In the event the survivingcorporation in such change of control (or a parent or subsidiary of the surviving corporation) does not assume or replace theoutstanding awards with comparable awards, (i) we will provide written notice of such change of control to each individualgrantee with outstanding awards; (ii) all outstanding options will automatically accelerate and become fully vested andexercisable; (iii) all outstanding stock awards will become vested and deliverable102 Table of Contentsin accordance with the Non‑Employee Director Plan; and (iv) all outstanding restricted stock units will become vested anddeliverable in accordance with the Non‑Employee Director Plan.Notwithstanding the foregoing, if there is a change of control, our board may require that grantees surrenderoutstanding options in exchange for a payment of cash or stock equal to the amount by which the fair market value of theshares exceeds the exercise price and/or, after giving grantees an opportunity to exercise options, terminate all unexercisedoptions, with such surrender or termination taking place as of the date of the change of control or such other date that ourboard specifies.Amendment; Termination. Our board has the authority to amend, suspend or terminate the Non‑Employee DirectorPlan provided such action does not impair the existing rights of any participant. The Non‑Employee Director Planautomatically terminates in 2025, unless we terminate it sooner. We will obtain shareholder approval of any amendment tothe Non‑Employee Director Plan as required by applicable law or listing requirements.Equity Compensation PlanOur board of directors has adopted, and our shareholders have approved, the 2015 Equity Compensation Plan (the“2015 Plan”). The 2015 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of theInternal Revenue Code, to our employees and any parent or subsidiary corporations’ employees, and for the grant ofnonstatutory stock options, stock awards, and restricted stock units to our employees, directors and consultants and ourparent or subsidiary corporations’ employees and consultants. The 2015 Plan is effective as of September 3, 2015.Authorized Shares. A total of 4,949,426 shares of our common stock have been reserved for issuance pursuant to the2015 Plan. The shares of our common stock that we have reserved for issuance pursuant to the 2015 Plan (the “Share Pool”),will be increased on the first day of each fiscal year, in an amount equal to four percent (4.0%) of the outstanding shares ofour common stock on the last day of the immediately preceding fiscal year. A maximum of 1,000,000 shares of our commonstock may be subject to awards made under the 2015 Plan to any individual during a calendar year, subject to adjustment asprovided in the 2015 Plan. The maximum number of shares that may be issued under the 2015 Plan as incentive stockoptions is 4,949,426. The Share Pool will be reduced on the date of grant, by one share of our common stock for each awardunder the 2015 Plan; provided that awards that are valued by reference to shares of our common stock but are required to bepaid in cash pursuant to their terms will not reduce the Share Pool. If and to the extent options terminate, expire, or arecanceled, forfeited, exchanged, or surrendered without having been exercised, or if any stock awards or awards of restrictedstock units (including restricted stock received upon the exercise of options) are forfeited, the shares of our common stocksubject to such awards will again be available for awards under the Share Pool. Notwithstanding the foregoing, the followingshares of our common stock will not become available for issuance under the 2015 Plan: (i) shares tendered by individualgrantees, or withheld by us, as full or partial payment to us upon the exercise of options granted under the 2015 Plan and(ii) shares withheld by, or otherwise remitted to us to satisfy an individual grantee’s tax withholding obligations upon thelapse of restrictions on stock awards, or the exercise of options granted under the 2015 Plan.Plan Administration. Our compensation committee administers the 2015 Plan. Subject to the provisions of the 2015Plan, our compensation committee has the power to determine the terms of the awards, including the exercise price, thenumber of shares of our common stock subject to each such award, the exercisability of the awards and the form ofconsideration, if any, payable upon exercise. To the maximum extent permitted by law, no member of our board or ourcompensation committee will be liable for any action taken or decision made in good faith relating to the 2015 Plan or anyaward granted thereunder.Stock Options. The exercise price of options granted under the 2015 Plan may be equal to or greater than the fairmarket value of our common stock on the date of grant. The term of an option may not exceed ten years, except that the termof an incentive stock option granted to any employee who owns more than 10% of the voting power of all classes of ouroutstanding stock must not exceed five years and the exercise price must equal to at least 110% of the fair market value ofour common stock on the grant date. After the termination of service of an employee, director or consultant for any reasonother than death, disability or cause (as defined in the 2015 Plan), he or she may exercise the vested portion of his or heroption for 90 days. If termination is due to death (or death occurs within 90 days after the individual’s termination date) ordisability, the vested portion of the option will remain exercisable for one year. However, in no event may an option beexercised later than the expiration of its term. The entire option is forfeited upon103 Table of Contentsa termination for Cause. In addition, if an employee, director or consultant has engaged in conduct that constitutes cause, anyshares acquired upon exercise of an option for which we have not yet delivered the share certificates shall be automaticallyforfeited to us in exchange for payment of the exercise price paid for such shares.Stock Awards. Stock awards may be granted under the 2015 Plan. Stock awards are grants of shares of our commonstock that vest in accordance with terms and conditions established by the compensation committee. The compensationcommittee will determine the number of shares of granted as stock awards to any employee, director, or consultant and theconsideration, if any, to be paid for such shares. The compensation committee may impose whatever conditions to vesting itdetermines to be appropriate (for example, the compensation committee may set restrictions based on the achievement ofspecific performance goals or continued service to us); provided, however, that the compensation committee, in its solediscretion, may accelerate the time at which any restrictions will lapse or be removed. Shares of our common stock subject tostock awards that do not vest are subject to forfeiture.Restricted Stock Units. Restricted stock units may be granted under the 2015 Plan. Restricted stock units arebookkeeping entries representing an amount equal to the fair market value of one share of our common stock. Thecompensation committee determines the terms and conditions of restricted stock units, including the vesting criteria (whichmay include accomplishing specified performance criteria or continued service to us) and the form and timing of payment.The amount payable as a result of the vesting of a restricted stock unit will be distributed as soon as practicable following thevesting date and in no event later than the fifteenth date of the third calendar month of the year following the vesting date ofthe restricted stock unit (or as otherwise permitted under Section 409A of the Internal Revenue Code); provided, however,that an individual grantee may, if and to the extent permitted by our compensation committee, elect to defer payment ofrestricted stock units in a manner permitted by Section 409A of the Internal Revenue Code. Notwithstanding the foregoing,the compensation committee, in its sole discretion, may accelerate the time at which any restrictions will lapse or beremoved.Performance‑Based Awards. Certain stock awards or restricted stock units granted under the 2015 Plan may begranted in a manner that should be deductible by us under Section 162(m) of the Internal Revenue Code. These awards,referred to as performance‑based awards, will be determined based on the attainment of written performance goals approvedby the compensation committee. The performance‑based awards will be based upon one or more of the following objectivecriteria: (i) consolidated earnings before or after taxes (including earnings before interest, taxes, depreciation andamortization); (ii) net income; (iii) operating income; (iv) earnings per share; (v) return on shareholders’ equity;(vi) attainment of strategic and operational initiatives; (vii) customer income; (viii) economic value‑added models;(ix) maintenance or improvement of profit margins; (x) stock price (including total shareholder return), including, withoutlimitation, as compared to one or more stock indices; (xi) market share; (xii) revenues, sales or net sales; (xiii) return onassets; (xiv) book value per share; (xv) expense management; (xvi) improvements in capital structure; (xvii) costs; and(xviii) cash flow. The foregoing criteria may relate to the company, one or more of our subsidiaries or one or more of ourdivisions or units, or any combination of the foregoing, and may be applied on an absolute basis and/or be relative to one ormore peer group companies or indices, or any combination thereof, all as determined by the compensation committee. Inaddition, to the degree consistent with the Internal Revenue Code, the performance criteria may be calculated without regardto extraordinary, unusual and/or non‑recurring items. With respect to performance‑based awards, (i) the compensationcommittee will establish the objective performance goals applicable to a given period of service while the outcome for thatperformance period is substantially uncertain and no later than 90 days after the commencement of that period of service (butin no event after 25% of that period of service has elapsed) and (ii) no awards will be granted to any participant for a givenperiod of service until the compensation committee certifies that the objective performance goals (and any other materialterms) applicable to that period have been satisfied.Non‑Transferability of Awards. Unless our compensation committee provides otherwise, the 2015 Plan generallydoes not allow for the transfer of awards and only the recipient of an award may exercise an award during his or her lifetime.Certain Adjustments. In the event of certain changes in our capitalization, to prevent diminution or enlargement ofthe benefits or potential benefits available under the 2015 Plan, the compensation committee will adjust the number andclass of shares that may be delivered under the 2015 Plan and/or the number, class and price per share of shares covered byeach outstanding award, and the numerical share limits set forth in the 2015 Plan.104 Table of ContentsChange of Control. The 2015 Plan provides that in the event of a change of control, as defined in the 2015 Plan,where we are not the surviving corporation (or we survive only as a subsidiary of another corporation), unless ourcompensation committee determines otherwise, all outstanding awards will be assumed by, or replaced with comparableawards by, the surviving corporation in such change of control (or a parent or subsidiary of the surviving corporation). In theevent the surviving corporation (or a parent or subsidiary of the surviving corporation) in such change of control does notassume or replace the outstanding awards with comparable awards, (i) we will provide written notice of such change ofcontrol to each individual grantee with outstanding awards; (ii) all outstanding options will automatically accelerate andbecome fully vested and exercisable; (iii) all outstanding stock awards will become vested and deliverable in accordancewith the 2015 Plan; and (iv) all outstanding restricted stock units will become vested and deliverable in accordance with the2015 Plan.Notwithstanding the foregoing, if there is a change of control, our board may require that grantees surrenderoutstanding options in exchange for a payment of cash or stock equal to the amount by which the fair market value of theshares exceeds the exercise price or, after giving grantees an opportunity to exercise options, terminate all unexercisedoptions, with such surrender or termination taking place as of the date of the change of control or such other date that ourboard specifies.Amendment; Termination. Our board has the authority to amend, suspend or terminate the 2015 Plan provided suchaction does not impair the existing rights of any participant. The 2015 Plan automatically terminates in 2025, unless weterminate it sooner. We will obtain shareholder approval of any amendment to the 2015 Plan as required by applicable law orlisting requirements.2017 Inducement PlanOn February 23, 2017, our board of directors adopted the 2017 Inducement Plan (the “Inducement Plan”), pursuantto which we (along with our affiliates and subsidiaries) may grant equity-based awards to new employees. The purpose of theInducement Plan is to attract valued employees by offering them a greater stake in our success and a closer identity with us,and to encourage ownership of our ordinary shares by such employees. The Inducement Plan was adopted without shareholder approval pursuant to Rule 5635(c)(4) of the NASDAQListing Rules. In accordance with Rule 5635(c)(4) of the NASDAQ Listing Rules, awards under the Inducement Plan mayonly be made to individuals who were not previously an employee or a non-employee director of the Company or any of oursubsidiaries (or who had a bona fide period of non-employment with the Company and our subsidiaries) who is hired by theCompany or a subsidiary. Subject to adjustments described in the Inducement Plan, we may issue up to 2,500,000 of ourordinary shares in the form of stock options, stock awards and restricted stock units to eligible recipients.Administration. Our compensation committee administers the Inducement Plan and is authorized to determine,among other things, the persons to whom inducement awards will be made and the terms of such awards.Stock Options. The exercise price of options granted under the Inducement Plan will be equal to or greater than thefair market value of our ordinary shares on the date the options are granted and the term of any option will not exceed tenyears from the date of the grant. After a termination of service for any reason other than death, disability or cause (as definedin the Inducement Plan), the grantee of an option award may exercise the vested portion of his or her option for 90 days. Iftermination is due to death (or death occurs within 90 days after the individual’s termination date) or disability, the vestedportion of the option will remain exercisable for one year. However, in no event may an option be exercised later than theexpiration of its term. The entire option will be forfeited upon a termination for cause. In addition, if an employee, director orconsultant has engaged in conduct that constitutes cause, any shares acquired upon exercise of an option for which we havenot yet delivered the share certificates will be automatically forfeited to us in exchange for payment of the exercise price paidfor such shares.Stock Awards and Restricted Stock Units. Ordinary shares issued or transferred pursuant to stock awards may beissued or transferred for consideration or for no consideration, and may be subject to restrictions or no restrictions, asdetermined by the compensation committee. Each restricted stock unit will be granted with respect to one ordinary share105 Table of Contentsor will have a value equal to the fair market value of one ordinary share. Restricted stock units will be paid in cash, ordinaryshares, or other securities, other awards or other property, as determined by the compensation committee, upon the lapse ofthe restrictions applicable thereto. The amount payable as a result of the vesting of a restricted stock unit will be distributedas soon as practicable following the vesting date and in no event later than the fifteenth date of the third calendar month ofthe year following the vesting date of the restricted stock unit (or as otherwise permitted under Section 409A of the InternalRevenue Code); provided, however, that an individual grantee may, if and to the extent permitted by our compensationcommittee, elect to defer payment of restricted stock units in a manner permitted by Section 409A of the Internal RevenueCode. Except as otherwise set forth in an award agreement, if a grantee ceases to be employed by, or provide services to, us,any stock award or restricted stock units held by the grantee that are subject to transfer restrictions will be forfeited.Non‑Transferability of Awards. Except as otherwise permitted by an award agreement or by our compensationcommittee, the Inducement Plan generally does not allow for the transfer of awards made under the Inducement Plan, exceptby will or by the laws of descent and distribution.Certain Adjustments. In the event of certain changes in our capitalization, to prevent dilution or enlargement of thebenefits or potential benefits available under the Inducement Plan, the compensation committee will adjust the number andclass of shares that may be delivered under the Inducement Plan and/or the number, class and price per share of sharescovered by each outstanding award, and the numerical share limits set forth in the Inducement Plan.Change of Control. The Inducement Plan provides that in the event of a change of control, as defined in theInducement Plan, where we are not the surviving corporation (or we survive only as a subsidiary of another corporation),unless our compensation committee determines otherwise, all outstanding awards will be assumed by, or replaced withcomparable awards by, the surviving corporation in such change of control (or a parent or subsidiary of the survivingcorporation). In the event the surviving corporation (or a parent or subsidiary of the surviving corporation) in such change ofcontrol does not assume or replace the outstanding awards with comparable awards, (i) we will provide written notice of suchchange of control to each individual grantee with outstanding awards; (ii) all outstanding options will automaticallyaccelerate and become fully vested and exercisable; (iii) all outstanding stock awards will become vested and deliverable inaccordance with the Inducement Plan; and (iv) all outstanding restricted stock units will become vested and deliverable inaccordance with the Inducement Plan.Notwithstanding the foregoing, if there is a change of control, our board may require that grantees surrenderoutstanding options in exchange for a payment of cash or stock equal to the amount by which the fair market value of theshares exceeds the exercise price or, after giving grantees an opportunity to exercise options, terminate all unexercisedoptions, with such surrender or termination taking place as of the date of the change of control or such other date that ourboard specifies.Amendment; Termination. Our board has the authority to amend or terminate the Inducement Plan at any time;provided, however, that the board will not amend the Inducement Plan without shareholder approval if such approval isrequired in order to comply with applicable laws or stock exchange requirements. The Inducement Plan automaticallyterminates in 2027, unless we terminate it sooner. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSTOCKHOLDER MATTERSThe following table sets forth information with respect to the beneficial ownership of our ordinary shares as ofMarch 1, 2018 by:·each of our directors and director nominees;·each of our “named executive officers”;·all of our directors and executive officers as a group; and106 Table of Contents·each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of ourordinary shares.The percentages in the columns entitled “Percentage of Shares Beneficially Owned” are based on a total of45,504,848 ordinary shares outstanding as of March 1, 2018.Beneficial ownership is determined in accordance with the rules and regulations of the SEC and includes voting orinvestment power with respect to our ordinary shares. Our ordinary shares subject to options that are currently exercisable orexercisable within 60 days of March 1, 2018 are considered outstanding and beneficially owned by the person holding theoptions for the purpose of calculating the percentage ownership of that person but not for the purpose of calculating thepercentage ownership of any other person. Except as otherwise noted, the persons and entities in this table have sole votingand investing power with respect to all of the ordinary shares beneficially owned by them, subject to community propertylaws, where applicable. Except as otherwise set forth below, the address of the beneficial owner is c/o StrongbridgeBiopharma plc, 900 Northbrook Drive, Suite 200, Trevose, Pennsylvania 19053. Number of SharesBeneficially Owned Percentage ofSharesBeneficiallyOwned5% Shareholders Caxton Alternative Management LP 7,614,994 12.2%Growth Equity Opportunities Fund III, LLC 5,141,308 8.2%Vivo Capital VIII, LLC 3,952,397 6.3%Broadfin 3,786,695 6.1%HealthCap VI, L.P. 3,694,063 5.9%Executive Officers and Directors Matthew Pauls 533,558 *A. Brian Davis 249,229 *Fredric Cohen, M.D. 135,860 *John H. Johnson 107,767 *Richard S. Kollender 77,188 *Garheng Kong, M.D., Ph.D. 70,219 *Jeffrey W. Sherman, M.D., F.A.C.P. 30,000 *Mårten Steen, M.D., Ph.D. 70,752 *Hilde H. Steineger, Ph.D. 70,752 *All current directors and executive officers as a group (10 persons) 1,589,600 3.8%*less than one percent(1)Based on the information disclosed in a Schedule 13D/A filed with the SEC on October 10, 2017 by Caxton Corporation (“Caxton”), CDKAssociates, L.L.C. (“CDK”) and Bruce Kovner, in which Caxton, the manager of CDK, and Mr. Kovner, the Chairman and sole shareholderof Caxton, each reported shared voting and dispositive power with respect to 7,614,994 ordinary shares, which includes 7,202,433 ordinaryshares beneficially owned by CDK and 412,561 ordinary shares beneficially owned by employees of an affiliate of Caxton. CDK reportedshared voting and dispositive power with respect to 7,202,433 ordinary shares. The 7,202,433 ordinary shares beneficially owned by CDKrepresent 5,102,433 ordinary shares and warrants to purchase up to an aggregate of 2,100,000 ordinary shares. The 412,561 ordinaryshares beneficially owned by employees of an affiliate of Caxton represent 292,561 ordinary shares and warrants to purchase up to anaggregate of 120,000 ordinary shares. The reporting persons will be prohibited from exercising the warrants, if after giving effect to suchexercise, they (together with any of their affiliates) would together beneficially own in excess of 4.99% of our ordinary shares outstandingimmediately after giving effect to such exercise or 9.99% if the holder beneficially owns greater than 4.99% of the number of ordinaryshares outstanding notwithstanding the ordinary shares issuable upon exercise of this warrant. The address of the reporting persons is 731Alexander Road, Princeton, NJ, 08540. (2)Based on the information disclosed in a Schedule 13D/A filed with the SEC on January 6, 2017 by Growth Equity Opportunities Fund III,LLC (“GEO”), New Enterprise Associates 14, L.P. (“NEA 14”), NEA Partners 14, L.P. (“NEA Partners 14”), NEA 14 GP, LTD (“NEA 14GP”), M. James Barrett, Peter J. Barris, Forest Baskett, Anthony A. Florence, Jr., Patrick J. Kerins, David M. Mott, Scott D. Sandell, Peter W.Sonsini, and Ravi Viswanathan, in which each reporting person reported shared voting and dispositive power with respect to 4,141,308ordinary shares. The number reported in the table above includes warrants to purchase up to an aggregate of 1,000,000 ordinary shares,which became exercisable subsequent to the Schedule 13D/A filed by the reporting persons. The reporting persons will be prohibited fromexercising the warrants, if after giving effect to such exercise, they (together with any of their affiliates) would together beneficially own inexcess of 4.99% of our ordinary shares outstanding immediately after giving effect to such exercise or 9.99% if the holder beneficially ownsgreater than 4.99% of the number of107 (1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11)(10)(10)Table of Contentsordinary shares outstanding notwithstanding the ordinary shares issuable upon exercise of this warrant. NEA 14 is the sole member of GEO,NEA Partners 14 is the sole general partner of NEA 14, and NEA 14 GP is the sole general partner of NEA Partners 14. Messrs. Barrett,Barris, Baskett, Florence, Kerins, Mott, Sandell, Sonsini and Viswanathan are the directors of NEA 14 GP. Each reporting person disclaimsbeneficial ownership of the ordinary shares reported other than those ordinary shares which such person owns of record. The address ofeach of GEO, NEA 14, NEA Partners 14, and NEA 14 GP is New Enterprise Associates, 1954 Greenspring Drive, Suite 600, Timonium, MD21093. The address of the principal business office for each of Messrs. Barris, Florence, Kerins and Mott is New Enterprise Associates, 5425Wisconsin Avenue, Suite 800, Chevy Chase, MD 20815. The address of the principal business officer for each of Messrs. Baskett, Sandell,Sonsini and Viswanathan is New Enterprise Associates, 2855 Sand Hill Road, Menlo Park, CA 94025.(3)Based on the information disclosed in a Schedule 13G/A filed with the SEC on February 12, 2018 by Vivo Capital VIII, LLC (“Vivo”), inwhich Vivo reported sole voting and dispositive power with respect to 3,952,397 ordinary shares. According to the Schedule 13G, theordinary shares are held of record by Vivo Capital Fund VIII, L.P. (2,154,841 ordinary shares and 1,318,000 ordinary shares issuable uponexercise of 1,318,000 warrants exercisable within 60 days)) and Vivo Capital Surplus Fund VIII, L.P. (297,556 ordinary shares and182,000 ordinary shares issuable upon exercise of 182,000 warrants). The reporting persons will be prohibited from exercising thewarrants, if after giving effect to such exercise, they (together with any of their affiliates) would together beneficially own in excess of4.99% of our ordinary shares outstanding immediately after giving effect to such exercise or 9.99% if the holder beneficially owns greaterthan 4.99% of the number of ordinary shares outstanding notwithstanding the ordinary shares issuable upon exercise of this warrant. Vivoserves as the general partner for each of these entities. The address of Vivo is 505 Hamilton Street, Palo Alto, CA 94301. (4)Based on the information disclosed in a Schedule 13G/A filed with the SEC on February 13, 2018 by Broadfin Capital, LLC (“BroadfinCapital”), Broadfin Healthcare Master Fund, Ltd. (“Broadfin Fund”) and Kevin Kotler, in which each reporting person reported sharedvoting and dispositive power with respect to 3,786,695 ordinary shares. This number includes warrants to purchase up to an aggregate of600,000 ordinary shares. The reporting persons will be prohibited from exercising the warrants, if after giving effect to such exercise, they(together with any of their affiliates) would together beneficially own in excess of 4.99% of our ordinary shares outstanding immediatelyafter giving effect to such exercise or 9.99% if the holder beneficially owns greater than 4.99% of the number of ordinary sharesoutstanding notwithstanding the ordinary shares issuable upon exercise of this warrant. The address of Broadfin Capital and Mr. Kotler isBroadfin Capital, 300 Park Avenue, 25th floor, New York, NY 10022. The address of Broadfin Fund is 20 Genesis Close, AnsbacherHouse, Second Floor, PO Box 1344, Grand Cayman KY1-1108, Cayman Islands.(5)Based on the information disclosed in a Schedule 13G/A filed with the SEC on January 30, 2018 by HealthCap VI, L.P. (“HealthCap”) andHealthCap VI GP S.A. (“HealthCap GP”), in which each reporting person reported shared voting and dispositive power with respect to3,694,063 ordinary shares, which includes (i) 67,973 ordinary shares issuable upon exercise of options that are exercisable within 60 daysand (ii) a warrant to purchase up to an additional 400,000 ordinary shares. The reporting persons will be prohibited from exercising thewarrants, if after giving effect to such exercise, they (together with any of their affiliates) would together beneficially own in excess of4.99% of our ordinary shares outstanding immediately after giving effect to such exercise or 9.99% if the holder beneficially owns greaterthan 4.99% of the number of ordinary shares outstanding notwithstanding the ordinary shares issuable upon exercise of thiswarrant. HealthCap GP is the sole general partner of HealthCap. The address of HealthCap and HealthCap GP is 18, Avenue d’Ouchy, 1006Lausanne, Switzerland. (6)This number includes 9,460 ordinary shares that are subject to options that are or will vest and become exercisable within 60 days.(7)This number includes 45,591 ordinary shares that are subject to options that are or will vest and become exercisable within 60 days.(8)This number includes 18,181 ordinary shares that are subject to options that are or will vest and become exercisable within 60 days.(9)This number includes 9,090 ordinary shares that are subject to options that are or will vest and become exercisable within 60 days.(10)This number includes 1,389 ordinary shares that are subject to options that are or will vest and become exercisable within 60 days.(11)This number includes 3,333 ordinary shares that are subject to options that are or will vest and become exercisable within 60 days.108 Table of ContentsEquity Compensation Plan InformationThe table below sets forth information with respect to ordinary shares that may be issued under our equitycompensation plans issued as of December 31, 2017: Number of SecuritiesRemaining Number of Securities tobe Issued Upon Weighted-Average Available for FutureIssuance Exercise of Outstanding ExercisePrice ofOutstanding Under EquityCompensation PlansPlan Category Options, Warrants andRights Options,Warrantsand Rights (Excluding SecuritiesReflected in Column(a)) (a) (b) (c)Equity compensation plans approved bysecurity holders 3,394,153 $4.39 577,436Equity compensation plans not approved bysecurity holders 1,206,650 4.89 293,350Total 4,600,803 870,786(1)This number includes the following: 2,766,790 ordinary shares subject to outstanding awards granted under the 2015Equity Compensation Plan as of December 31, 2017, of which 2,527,540 ordinary shares were subject to outstandingstock options and 239,250 ordinary shares were subject to outstanding restricted stock unit awards; and 627,363ordinary shares subject to outstanding awards granted in the form of options under the Non-Employee Director EquityCompensation Plan as of December 31, 2017.(2)This number represents ordinary shares subject to outstanding awards granted under the 2017 Inducement Plan, of which1,178,650 ordinary shares were subject to outstanding stock options and 28,000 ordinary shares were subject tooutstanding restricted stock unit awards as of December 31, 2017. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCERelated Party TransactionsOn October 6, 2017, we sold 4,000,000 ordinary shares in a public offering. Two of our existing shareholdersholding in excess of 5% of our outstanding shares prior to the public offering, Armistice Capital LLC and Broadfin CapitalLLC, purchased shares in the public offering for $6.0 million and $2.5 million, respectively.On January 25, 2018, we sold 5,000,000 ordinary shares in a public offering. One of our existing shareholdersholding in excess of 5% of our outstanding shares prior to the public offering, Broadfin Capital LLC, purchased shares in thepublic offering for $2.0 million.Policies and Procedures for Related Party TransactionsWe have adopted a policy that our executive officers, directors, nominees for election as a director, beneficialowners of more than 5% of any class of our voting securities and any members of the immediate family of any of theforegoing persons are not permitted to enter into a related person transaction with us without the prior consent of our auditcommittee. Any request for us to enter into a transaction with an executive officer, director, nominee for election as109 (1)(3)(2)Table of Contentsa director, beneficial owner of more than 5% of any class of our voting securities or any member of the immediate family ofany of the foregoing persons, in which the amount involved exceeds $120,000 and such person would have a direct orindirect material interest, must first be presented to our audit committee for review, consideration and approval. In approvingor rejecting any such proposal, our audit committee is to consider the material facts of the transaction, including, but notlimited to: the benefits to the Company; the impact on a director’s independence in the event the transaction involves adirector, an immediate family member of a director or an entity in which a director is a general partner, shareholder orexecutive officer; the availability of other sources for comparable products or services; the terms of the transaction; and theterms available to unrelated third parties or to employees generally. All of the transactions described above were entered intoprior to the adoption of such policy, but after presentation, consideration and approval by our board of directors.Director IndependenceBased upon information requested from and provided by each director concerning their background, employmentand affiliations, including family relationships, our board of directors has determined that each of Messrs. Johnson andKollender and Drs. Kong, Sherman, Steen and Steineger, representing six of our seven directors, is independent under theapplicable rules and regulations of Nasdaq. In making such determinations, the board of directors considered therelationships that each such non‑employee director has with the Company and all other facts and circumstances the board ofdirectors deemed relevant in determining their independence. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPrincipal Accountant Fees and ServicesThe following table sets forth the aggregate fees billed by Ernst & Young our independent registered publicaccounting firm as described below: 2017 2016 Fee Category: (in thousands) Audit Fees $582 $535 Audit-Related Fees 162 80 Tax Fees — — All Other Fees — — Total Fees $744 $615 (1)Audit fees consist of fees for the audit of our financial statements, the review of our interim financial statements andstatutory audits.(2)Audit-related fees included fees for consultations concerning financial and accounting matters not classified as auditservices.(3)Tax fees consists of fees incurred for tax compliance, tax advice and tax planning and includes fees for tax returnpreparation and tax consulting.The aggregate fees included in the Audit Fees are billed for the fiscal year. The aggregate fees included in the Audit-related fees and Tax Fees are fees billed in the fiscal year.All such accountant services and fees were pre-approved by our audit committee in accordance with the “Pre-Approval Policies and Procedures” described below.110 (1)(2)(3)Table of ContentsPre-approval policies and proceduresThe audit committee of our board of directors has adopted policies and procedures for the pre-approval of audit andnon-audit services for the purpose of maintaining the independence of our independent auditor. We may not engage ourindependent auditor to render any audit or non-audit service unless either the service is approved in advance by the auditcommittee, or the engagement to render the service is entered into pursuant to the audit committee’s pre-approval policiesand procedures. ITEM 15. EXHIBITSEXHIBIT INDEX3.1 Constitution of Strongbridge Biopharma plc (incorporated by reference to Exhibit 3.1 to the Form F-1/A (No.333-206654) filed September 9, 2015)3.2 Articles of Association of Strongbridge Biopharma plc (incorporated by reference to Exhibit 3.2 to the Form F-1/A (No. 333-206654) filed September 9, 2015)10.1 Sublease Agreement, dated March 30, 2015, by and between Insight Pharmaceuticals LLC and Cortendo AB(incorporated by reference to Exhibit 10.1 to the Form F-1 (No. 333-206654) filed August 28, 2015)10.2* Lease, dated November 21, 2017, by and between Northbrook TC Equities LLC, et. al. as Landlord, andStrongbridge U.S. Inc., as Tenant10.3 Securities Purchase Agreement, dated December 22, 2016, by and among Strongbridge Biopharma plc and theseveral purchasers signatory thereto (incorporated by reference to Exhibit 10.1 to the Form 6-K (File No. 001-37569) filed December 23, 2016)10.4 Asset Purchase Agreement, dated as of May 14, 2015, by and among Cortendo AB, and AspireoPharmaceuticals, Ltd. and TVM V Life Science Ventures GmbH & Co. KG (incorporated by reference to Exhibit10.3 to the Form F-1 (No. 333-206654) filed August 28, 2015)10.5† Asset Purchase Agreement, dated December 12, 2016, between Taro Pharmaceutical North America, Inc. andStrongbridge plc (incorporated by reference to Exhibit 10.3 to the Form F-3 (No. 333-215531) filed January 12,2017)10.6† Supply Agreement, dated December 12, 2016, between Taro Pharmaceutical North America, Inc. andStrongbridge plc (incorporated by reference to Exhibit 10.4 to the Form F-3 (No. 333-215531) filed January 12,2017)10.7* Amended and Restated Employment Agreement, dated as of October 13, 2017, by and between StrongbridgeU.S. Inc. and Matthew Pauls 10.8* Form of Amended and Restated Employment Agreement, dated as of October 13, 2017, by and betweenStrongbridge U.S. Inc. and certain of its executive officers 10.9 Share Purchase Agreement, dated as of January 12, 2015, by and among Cortendo AB, BioPancreate Inc.,Cortendo Invest AB and the Investors listed therein (incorporated by reference to Exhibit 10.10 to theCompany’s Form F-1 (No. 333-206654) filed August 28, 2015)10.10 Investors’ Rights Agreement, dated as of February 10, 2015, by and among Cortendo AB and the Investors listedtherein (incorporated by reference to Exhibit 10.11 to the Company’s Form F-1 (No. 333-206654) filed August28, 2015)10.11 Share Purchase Agreement, dated as of May 14, 2015, by and among Cortendo AB, BioPancreate Inc., CortendoInvest AB and the Investors named therein (incorporated by reference to Exhibit 10.12 to the Company’s FormF-1 (No. 333-206654) filed August 28, 2015)10.12 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.13 to the Company’s Form F-1/A(No. 333-206654) filed September 25, 2015)10.13* Strongbridge Biopharma plc 2015 Equity Compensation Plan10.14* Strongbridge Biopharma plc Non-Employee Director Equity Compensation Plan 10.15* Strongbridge Biopharma plc 2017 Inducement Plan 10.16* Form of Incentive Stock Option Award Agreement under the Strongbridge Biopharma plc 2015 EquityCompensation Plan 111 Table of Contents10.17* Form of Nonqualified Stock Option Award Agreement under the Strongbridge Biopharma plc 2015 EquityCompensation Plan 10.18* Form of Restricted Stock Unit Award Agreement under the Strongbridge Biopharma plc 2015 EquityCompensation 10.19* Form of Nonqualified Stock Option Award Agreement under the Strongbridge Biopharma plc Non-EmployeeDirector Equity Compensation Plan (incorporated by reference to Exhibit 10.16 to the Company’s Form 20-F(File No. 001-37569) filed March 24, 2016)10.20* Form of Stock Option Award Agreement under the Strongbridge Biopharma plc 2017 Inducement Plan 10.21* Form of Restricted Stock Unit Award Agreement under the Strongbridge Biopharma plc 2017 InducementPlan 10.22 Form of Warrant Securities Agreement, by and among Strongbridge Biopharma plc and the several purchaserssignatory thereto (incorporated by reference to Exhibit 10.3 to the Company’s Form 6-K (File No. 001-37569)filed December 23, 2016)10.23 Form of Warrant Securities Agreement, by and among Oxford Finance LLC, Horizon Technology FinanceCorporation, the other Lenders listed therein, and Strongbridge Biopharma plc, Cortendo Cayman Ltd,Cortendo AB (publ) and Strongbridge U.S. Inc. (incorporated by reference to Exhibit 10.20 to the Form 20-F(File No. 001-37569) filed April 4, 2017)10.24† Term Loan Agreement, dated as of July 14, 2017, by and among Strongbridge U.S. Inc., StrongbridgeBiopharma plc, Cortendo AB (publ), Cortendo Cayman Ltd., CRG Servicing LLC, as administrative agent andcollateral agent, and the lenders named therein (incorporated by reference to Exhibit 10.1 to the Report onForm 6-K (File No. 001-37569) filed on July 17, 2017)10.25 Securities Purchase Agreement, dated as of July 14, 2017, by and among Strongbridge Biopharma plc, CRGPartners III L.P., CRG Partners III — Parallel Fund “A” L.P., CRG Partners III — Parallel Fund “B” (Cayman)L.P., CRG Partners III (Cayman) Lev AIV I. L.P. and CRG Partners III (Cayman) Unlev AIV I L.P. (incorporatedby reference to Exhibit 10.2 to the Report on Form 6-K (File No. 001-37569) filed on July 17, 2017)10.26 Form of Warrant to CR Group Lenders, dated July 14, 2017 (incorporated by reference to Exhibit 10.3 to theReport on Form 6-K (File No. 001-37569) filed on July 17, 2017)10.27 Amendment No. 1 to Securities Purchase Agreement, dated as of December 22, 2016, by and betweenStrongbridge Biopharma plc and the purchasers named therein (incorporated by reference to Exhibit 10.4 tothe Report on Form 6-K (File No. 001-37569) filed on July 17, 2017)10.28* License and Assignment Agreement, dated January 16, 2018, by and between Aeterna Zentaris GmbH andStrongbridge Ireland Limited 10.29*†† Amendment No. 1 to Term Loan Agreement, dated January 16, 2018, by and among Strongbridge U.S. Inc.,Strongbridge Biopharma plc, Cortendo Cayman Ltd., Strongbridge Ireland Limited, Cortendo AB (Publ), CRGServicing LLC, as administrative agent and collateral agent, and the lenders listed therein10.30* Form of Warrant to CR Group Lenders, dated January 16, 201821.1* Subsidiaries of the Company23.1* Consent of Ernst & Young LLP31.1* Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2* Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1* Certification of Chief Executive Officer and Chief Financial Officer pursuant to Exchange Act Rules 13a-14(b)and 15d-14(b) and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002101.INS** XBRL Instance Document101.SCH** XBRL Taxonomy Extension Schema Document101.CAL** XBRL Taxonomy Extension Calculation Linkbase Document101.LAB** XBRL Taxonomy Extension Label Linkbase Document101.PRE** XBRL Taxonomy Extension Presentation Linkbase Document101.DEF** XBRL Taxonomy Extension Definitions Linkbase Document112 Table of Contents* Filed herewith.† Confidential treatment granted as to portions of the exhibit. Confidential materials omitted and filed separately with theSecurities and Exchange Commission.†† Portions of the exhibit are omitted pursuant to a confidential treatment request with the U.S. Securities and Exchangecommission. ITEM 16. FORM 10-K SUMMARYNone. 113 Table of ContentsSIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned, thereunto duly authorized. STRONGBRIDGE BIOPHARMA PLC By: /s/ Matthew Pauls Name: Matthew Pauls Title: Chief Executive Officer and DirectorPOWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes andappoints Matthew Pauls and A. Brian Davis, jointly and severally, his or her attorneys-in-fact, each with the power ofsubstitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to filethe same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission,hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to bedone by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this report has been signed by the followingpersons on the dates and in the capacities indicated below: NAME TITLE DATE /s/ Matthew PaulsMatthew Pauls President and Chief Executive Officer (principalexecutive officer) and Director March 12, 2018/s/ A. Brian DavisA. Brian Davis Chief Financial Officer (principal financialofficer and principal accounting officer) andauthorized representative in the United States March 12, 2018/s/ John H. JohnsonJohn H. Johnson Chairman, Director March 12, 2018 /s/ Richard KollenderRichard S. Kollender Director March 12, 2018 /s/ Garheng KongGarheng Kong Director March 12, 2018114 Table of Contents /s/ Jeffrey ShermanJeffrey Sherman Director March 12, 2018/s/ Marten SteenMarten Steen Director March 12, 2018/s/ Hilde SteinegerHilde Steineger Director March 12, 2018 115 Table of ContentsINDEX TO CONSOLIDATED FINANCIAL STATEMENTS9 PageConsolidated Financial Statements Reports of Independent Registered Public Accounting Firm F‑2Consolidated Balance Sheets F‑3Consolidated Statements of Operations and Comprehensive Loss F‑4Consolidated Statements of Shareholders’ Equity F‑5Consolidated Statements of Cash Flows F‑6Notes to Consolidated Financial Statements F‑7 F-1 Table of ContentsReport of Independent Registered Public Accounting FirmTo the Board of Directors and Shareholders of Strongbridge Biopharma plcOpinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Strongbridge Biopharma Plc. (the Company) as ofDecember 31, 2017 and 2016, the related consolidated statements of operations and comprehensive loss, shareholders' equityand cash flows for each of the three years in the period ended December 31, 2017, and the related notes (collectively referredto as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations andits cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally acceptedaccounting principles. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinionon the Company’s financial statements based on our audits. We are a public accounting firm registered with the PublicCompany Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to theCompany in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities andExchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether dueto error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control overfinancial reporting. As part of our audits we are required to obtain an understanding of internal control over financialreporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control overfinancial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whetherdue to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a testbasis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating theaccounting principles used and significant estimates made by management, as well as evaluating the overall presentation ofthe financial statements. We believe that our audits provide a reasonable basis for our opinion./s/ Ernst & Young LLPWe have served as the Company’s auditor since 2015.Philadelphia, PennsylvaniaMarch 12, 2018 F-2 Table of Contents STRONGBRIDGE BIOPHARMA plcConsolidated Balance Sheets(In thousands, except share and per share data) December 31, December 31, 2017 2016 ASSETS Current assets: Cash and cash equivalents$57,510 $66,837 Accounts receivable 1,584 — Inventory 511 — Prepaid expenses and other current assets 1,208 764 Total current assets 60,813 67,601 Property and equipment, net 15 25 Deferred tax asset — 1,599 Intangible assets, net 35,155 60,900 Goodwill 7,256 7,256 Other assets 686 150 Total assets$103,925 $137,531 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable$1,247 $1,089 Accrued liabilities 11,232 14,868 Total current liabilities 12,479 15,957 Long-term debt 37,794 18,434 Warrant liability 41,308 11,090 Supply agreement liability, noncurrent 24,258 25,078 Total liabilities 115,839 70,559 Commitments and contingencies (Note 9) Stockholders’ (deficit) equity: Deferred shares, $1.098 par value, 40,000 shares authorized, issued and outstanding atDecember 31, 2017 and December 31, 2016 44 44 Ordinary shares, $0.01 par value, 600,000,000 shares authorized atDecember 31, 2017 and December 31, 2016; 40,149,812 and 35,335,026 shares issuedand outstanding at December 31, 2017 and December 31, 2016 401 353 Additional paid-in capital 230,524 195,975 Accumulated deficit (242,883) (129,400) Total stockholders’ (deficit) equity (11,914) 66,972 Total liabilities and stockholders’ (deficit) equity$103,925 $137,531 The accompanying notes are an integral part of these consolidated financial statements.F-3 Table of ContentsSTRONGBRIDGE BIOPHARMA plcConsolidated Statements of Operations and Comprehensive Loss(In thousands, except share and per share data) Year Ended December 31 2017 2016 2015Revenues: Net product sales $7,046 $ — $ —Total revenues 7,046 — — Cost and expenses: Cost of sales (excluding amortization of intangible asset) $1,483 $ — $ —Selling, general and administrative 36,292 14,875 22,719Research and development 17,268 20,023 20,135Amortization of intangible asset 5,022 — —Impairment of intangible assets 20,723 15,828 —Total cost and expenses 80,788 50,726 42,854Operating loss (73,742) (50,726) (42,854)Other income (expense), net: Unrealized (loss) gain on fair value of warrants (30,218) 638 —Interest expense (4,313) (20) —Foreign exchange loss (41) (69) (124)Loss on early extinguishment of debt (3,545) — —Other income (expense), net 147 (1,180) (1,105)Total other income (expense), net (37,970) (631) (1,229)Loss before income taxes (111,712) (51,357) (44,083)Income tax (expense) benefit (1,771) 2,638 450Net loss (113,483) (48,719) (43,633)Net loss attributable to non-controlling interest — 122 53Net loss attributable to Strongbridge Biopharma $(113,483) $(48,597) $(43,580) Net loss attributable to ordinary shareholders: Basic $(113,483) $(48,597) $(43,580)Diluted $(113,483) $(49,236) $(43,580)Net loss per share attributable to ordinary shareholders: Basic $(3.11) $(2.26) $(2.62)Diluted $(3.11) $(2.27) $(2.62)Weighted-average shares used in computing net loss per share attributableto ordinary shareholders: Basic 36,544,825 21,550,353 16,606,669Diluted 36,544,825 21,655,564 16,606,669 The accompanying notes are an integral part of these consolidated financial statements.F-4 Table of Contents STRONGBRIDGE BIOPHARMA plcConsolidated Statements of Shareholders’ Equity(In thousands except share amounts) Additional Non- Total Ordinary Shares Deferred Shares Paid-In Accumulated Controlling Shareholders’ Shares Amount Shares Amount Capital Deficit Interest Equity Balance—December 31, 2014 9,700,789 97 — — 55,947 (37,223) — 18,821 Net loss — — — — — (43,580) (53) (43,633) Stock-based compensation — — — — 3,581 — — 3,581 Reclass of stock-basedliability award to equity — — — — 1,542 — — 1,542 Issuance of shares 9,108,169 91 — — 91,418 — — 91,509 U.S. non-accredited sharesrepurchased (24,955) — — — (412) — — (412) Issuance of shares in initialpublic offering, net 2,500,000 25 — — 19,450 — — 19,475 Non-controlling interestresulting from exchangeoffer (78,621) (1) — — (616) — 617 — Beneficial shares issued — — 40,000 $44 — — — 44 Balance—December 31, 2015 21,205,382 $212 40,000 $44 $170,910 $(80,803) $564 $90,927 Net loss — — — — — (48,597) (122) (48,719) Stock-based compensation — — — — 4,606 — — 4,606 Acquisition of non-controlling interest — — — — (972) — (442) (1,414) Issuance of shares, net ofoffering costs 14,000,000 140 — — 20,430 — — 20,570 Exercise of stock options 129,644 1 — — 119 — — 120 Issuance of warrants relatedto the loan agreement — — — — 882 — — 882 Balance—December 31, 2016 35,335,026 $353 40,000 $44 $195,975 $(129,400) $ — $66,972 Net loss — — — — — (113,483) — (113,483) Stock-based compensation — — — — 5,167 — — 5,167 Issuance of shares, net ofoffering costs 4,429,799 44 — — 26,340 — — 26,384 Issuance of shares inconnection with at-the-market facility, net of costs 10,300 * — — 73 — — 73 Exercise of stock options 196,081 2 — — 624 — — 626 Exercise of warrants 178,606 2 — — (2) — — — Issuance of warrants relatedto loan agreements, net — — — — 2,347 — — 2,347 Balance—December 31, 2017 40,149,812 $401 40,000 $44 $230,524 $(242,883) $ — $(11,914) * Represents an amount less than $1.The accompanying notes are an integral part of these consolidated financial statements.F-5 Table of ContentsSTRONGBRIDGE BIOPHARMA plcConsolidated Statements of Cash Flow(In thousands) Year Ended December 31, 2017 2016 2015 Cash flows from operating activities: Net loss $(113,483) $(48,719) $(43,633) Adjustments to reconcile net loss to net cash used in operating activities: Change in fair value of warrant liability 30,218 (638) — Impairment of intangible assets 20,723 15,828 — Stock-based compensation 5,167 4,606 3,940 Amortization of intangible asset 5,022 — — Loss on early extinguishment of debt 3,545 — — Interest paid in kind 896 — — Amortization of debt discounts and debt issuance costs 482 — — Deferred income tax expense (benefit) 1,958 (2,884) (450) Depreciation 10 10 11 Impairment/loss on investment in Antisense Therapeutics — 550 551 Change in fair value of foreign currency forward contracts — — 438 Changes in operating assets and liabilities: Accounts receivable (1,584) — — Inventory (511) — — Prepaid expenses and other current assets (444) 848 (1,165) Other assets (536) (88) (52) Accounts payable 158 (1,702) 1,737 Accrued liabilities and other liabilities 3,043 475 1,263 Net cash used in operating activities (45,336) (31,714) (37,360) Cash flows from investing activities: Payment for acquisition (7,500) (3,392) (3,168) Investment in Antisense Therapeutics — — (1,101) Purchase of equipment — — (25) Net cash used in investing activities (7,500) (3,392) (4,294) Cash flows from financing activities: Proceeds from long-term debt 38,687 19,316 — Repayment of long-term debt (22,261) — — Proceeds from issuance of ordinary shares and warrants, net 26,384 32,298 77,816 Proceeds from exercise of stock options 626 120 — Proceeds from issuance of ordinary shares in connection with at-the-marketoffering 73 — — Acquisition of non-controlling interest — (1,414) (412) Net cash provided by financing activities 43,509 50,320 77,404 Effect of exchange rate changes on cash and cash equivalents — — 241 Net decrease in cash and cash equivalents (9,327) 15,214 35,991 Cash and cash equivalents—beginning of period 66,837 51,623 15,632 Cash and cash equivalents—end of period $57,510 $66,837 $51,623 Supplemental disclosures of cash flow information Cash paid during the year for: Interest $2,935 $20 — Income taxes other, net of refunds $127 $ — $ — The accompanying notes are an integral part of these consolidated financial statements.F-6 Table of ContentsSTRONGBRIDGE BIOPHARMA plcNotes to Consolidated Financial Statements1. OrganizationStrongbridge Biopharma plc is a global commercial-stage biopharmaceutical company focused on the developmentand commercialization of therapies for rare diseases with significant unmet needs. Our first commercial product is Keveyis®(dichlorphenamide), the first and only treatment approved by the U.S. Food and Drug Administration ("FDA") forhyperkalemic, hypokalemic, and related variants of primary periodic paralysis. Keveyis has orphan drug exclusivity status inthe United States through August 7, 2022.On January 16, 2018, we acquired the U.S. and Canadian rights to Macrilen (macimorelin), our second commercialproduct, from Aeterna Zentaris GmbH. Macrilen is an oral growth hormone secretagogue receptor agonist, and is the first andonly oral drug approved by the FDA for the diagnosis of patients with AGHD. Macrilen has been granted orphan drugdesignation in the United States and has patents with expiration dates through late 2027. We expect to launch Macrilen inthe United States in mid-2018.In addition to our two commercial products, we have two clinical-stage product candidates for rare endocrinediseases, Recorlev and veldoreotide. Recorlev (levoketoconazole) is a cortisol synthesis inhibitor currently being studied forthe treatment of endogenous Cushing's syndrome. Veldoreotide is a next-generation somatostatin analog being investigatedfor the treatment of acromegaly and potential additional applications in other conditions amenable to somatostatin receptoractivation. Both Recorlev and veldoreotide have received orphan designation from the FDA and the European MedicinesAgency (“EMA”).Given the well-identified and concentrated prescriber base addressing our target markets, we intend to continue touse a small, focused sales force to market Keveyis, Macrilen and any future products, in the United States, the EuropeanUnion and other key global markets. We believe that our ability to execute on our strategy is enhanced by the significantcommercial and clinical development experience of key members of our management team. We will continue to identify and evaluate the potential acquisition of other products and product candidates thatwould be complementary to our existing rare neuromuscular and endocrine franchises or that would form the basis for newrare disease franchises. We believe this approach will enable us to maximize our commercial potential by further leveragingour existing resources and expertise.In October 2015 we sold 2,500,000 ordinary shares in our initial U.S. public offering (IPO) at a price of $10.00 pershare. The aggregate net proceeds received by us from the IPO were $19.5 million. Our shares began trading on TheNASDAQ Global Select Market under the symbol "SBBP" on October 16, 2015. On October 20, 2015, trading ceased on theNorwegian Over‑The‑Counter Market.Exchange offerOn May 26, 2015, Strongbridge Biopharma plc (then named Cortendo plc) was incorporated under the laws ofIreland.On August 7, 2015, Strongbridge Biopharma plc initiated an exchange offer for the outstanding shares of CortendoAB. The exchange offer was structured as a one‑for‑one exchange offer in which shareholders of Cortendo AB exchangedtheir common shares, with a par value of $0.15, for beneficial interests in ordinary shares of Strongbridge Biopharma plc,with a par value of $0.01, in the form of Norwegian depositary receipts and, as the case may be, Swedish depositary receipts(except for non‑accredited investors who hold Cortendo AB shares located in the United States, who were offered cash in anamount equivalent to the value of the Strongbridge Biopharma plc shares such investors would otherwise receive for theirCortendo AB shares exchanged).The exchange offer was settled on September 8, 2015, and Cortendo AB became a subsidiary with 99.582% of itsshares being owned by Strongbridge Biopharma plc. Accordingly, Strongbridge Biopharma plc is a continuation ofF-7 Table of ContentsCortendo AB, the predecessor, and the consolidated financial statements represent the assets, liabilities and results ofoperations of Cortendo AB, for all periods presented.On September 8, 2015, Strongbridge Biopharma plc effected a 1‑for‑11 reverse stock split of its ordinary shares.Accordingly, the consolidated financial statements and notes retroactively reflect the capital structure of StrongbridgeBiopharma plc after giving effect to the exchange offer and the reverse stock split. With affect from September 8, 2015, the0.418% of Cortendo AB not owned by Strongbridge Biopharma plc, is accounted for as a non‑controlling interest. InSeptember 2016, we acquired the non-controlling interest in Cortendo AB, after which Cortendo AB became a wholly-ownedsubsidiary of Strongbridge Biopharma plc. Total consideration paid per share was $13.66 resulting in an aggregate paymentof $1.4 million.LiquidityWe believe that our cash resources of $57.5 million at December 31, 2017 along with the completed subsequentfinancings from January and February 2018, will be sufficient to allow us to fund planned operations for at least 12 monthsbeyond the issuance date of these financial statements, which is after the expected receipt of data from the Recorlev SONICSand LOGICS Phase 3 clinical trials. We expect our funding requirements for operating activities to increase in 2018 andpossibly beyond due to expenses associated with the commercialization of Keveyis and Macrilen, the execution of the Phase3 SONICS and LOGICS clinical trials for Recorlev, and selling, general and administrative expenses. We also expect ourcash needs to increase to fund potential in‑licenses, acquisitions or similar transactions as we pursue our strategy. Theseexpenses may be offset only in part by sales of Keveyis and Macrilen. In addition, beginning in September 2020, we may berequired to make quarterly principal payments to repay amounts borrowed under our credit facility.In January 2018, we amended our loan agreement with CRG to increase availability from $50 million to $100million. In January 2018 and February 2018, we sold 5,255,683 of our ordinary shares for net proceeds of approximately$33.0 million (see Note 15).We may never achieve profitability, and unless and until we do, we will continue to need to raise additionalcapital. We plan to continue to fund our operations and capital funding needs through equity or debt financing along withrevenues from Keveyis and Macrilen. There can be no assurances, however, that additional funding will be available on termsacceptable to us.Our loan and security agreement, under which outstanding borrowings were $40.0 million at December 31, 2017contains financial and non-financial covenants including minimum amounts of net revenue in 2018 and beyond. Weachieved our 2017 financial covenant. Failure to comply with the covenants could result in the lenders declaring the loanimmediately due and payable. Our liquidity requirements are predicated on maintaining compliance with the debt covenantsand repaying outstanding borrowings in accordance with the loan term (see Note 7).2. Summary of significant accounting policies and basis of presentationBasis of presentation and principles of consolidationThe accompanying consolidated financial statements include the accounts of our wholly owned subsidiaries,Strongbridge US Inc. (Trevose, Pennsylvania, United States), Strongbridge Ireland Limited (Dublin, Ireland), Cortendo AB(Gothenburg, Sweden) and Cortendo Cayman (Georgetown, Cayman Islands). All intercompany balances and transactionshave been eliminated in consolidation. These audited consolidated financial statements have been prepared in conformitywith generally accepted accounting principles in the United States (U.S. GAAP). Any reference in theseF-8 Table of Contentsnotes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting StandardsCodification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB).Revenue recognitionPrior to the April 2017 launch of Keveyis, we did not generate any revenue. Therefore, we adopted AccountingStandards Codification (ASC), Topic 606, Revenue from Contracts with Customers, effective April 1, 2017. Topic 606applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases,insurance, collaboration arrangements and financial instruments. Under Topic 606, an entity recognizes revenue when itscustomer obtains control of promised goods or services, in an amount that reflects the consideration the entity expects toreceive in exchange for those goods or services. To determine revenue recognition for arrangements that an entitydetermines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with acustomer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate thetransaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies aperformance obligation. We apply the five-step model to contracts only when it is probable that we will collect theconsideration we are entitled to receive in exchange for the goods or services we transfer to the customer. At contractinception, once the contract is determined to be within the scope of Topic 606, we assess the goods or services promisedwithin each contract and determine those that are performance obligations, and assess whether each promised good or serviceis distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performanceobligation when (or as) the performance obligation is satisfied. For a complete discussion of accounting for net productrevenue, (see Note 3).Inventory and cost of salesInventory is stated at the lower of cost or market where cost is determined using the first-in, first-out method. Ourinventory consists of only finished goods.Cost of sales includes the cost of inventory sold, which includes third-party acquisition costs, third-partywarehousing and product distribution charges.Foreign currency translationThe consolidated financial statements are reported in United States dollars, which is the functional currency of oursubsidiaries and Cortendo AB. Transactions in foreign currencies are remeasured into our functional currency at the rate ofexchange prevailing at the date of the transaction. Any monetary assets and liabilities arising from these transactions areremeasured into our functional currency at exchange rates prevailing at the balance sheet date or on settlement. Resultinggains and losses are recorded in foreign exchange loss in our consolidated statements of operations.Use of estimatesThe preparation of financial statements in conformity with U.S. GAAP requires us to make estimates andassumptions that affect the reported amounts in the financial statements and accompanying notes. We must apply significantjudgment in this process. Actual results could materially differ from those estimates.Segment informationOperating segments are identified as components of an enterprise about which separate discrete financialinformation is available for evaluation by the chief operating decision maker, or decision making group, in making decisionson how to allocate resources and assess performance. We view our operations and manage our business in one operatingsegment. Our material long‑lived assets, reside in Ireland, Sweden and Cayman Islands. For the year ended December 31,2017, revenue from product sales were derived entirely from the United States.F-9 Table of ContentsCash and cash equivalentsWe consider all short‑term highly liquid investments with an original maturity at the date of purchase of threemonths or less to be cash equivalents. Cash and cash equivalents consist of account balances at banks and money marketaccounts, respectively.Concentration of credit risk and other risks and uncertaintiesAs part of our cash and investment management processes, we perform periodic evaluations of the credit standing ofthe financial institutions with which we deposit our cash or purchase cash equivalents, and we have not sustained any creditlosses from instruments held at these financial institutions.Fair value of financial instrumentsFair value accounting is applied for all financial assets and liabilities and non‑financial assets and liabilities that arerecognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).We are required to disclose information on all assets and liabilities reported at fair value that enables an assessmentof the inputs used in determining the reported fair values. FASB ASC Topic 820, Fair Value Measurements and Disclosures(ASC 820), establishes a hierarchy of inputs used in measuring fair value that maximizes the use of observable inputs andminimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputsare inputs that market participants would use in pricing the asset or liability based on market data obtained from sourcesindependent of us. Unobservable inputs are inputs that reflect our assumptions about the inputs that market participantswould use in pricing the asset or liability, and are developed based on the best information available in the circumstances.The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investmentsand is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described as follows:Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that wehave the ability to access at the measurement date.Level 2—Valuations based on quoted prices for similar assets or liabilities, or quoted prices in markets that are notactive, and for which all significant inputs are observable, either directly or indirectly.Level 3—Valuations that require inputs that reflect our own assumptions that are both significant to the fair valuemeasurement and unobservable. To the extent that valuation is based on models or inputs that are less observable orunobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree ofjudgment we exercise in determining fair value is greatest for instruments categorized in Level 3. A financialinstrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to thefair value measurement.In December 2016, we issued warrants in connection with our private placement of ordinary shares. Pursuant to theterms of the warrant agreement, the Company could be required to settle the warrants in cash in the event of an acquisition ofthe Company and, as a result, the warrants are required to be measured at fair value and reported as a liability in theconsolidated balance sheet. We recorded the fair value of the warrants upon issuance using the Black-Scholes Model and arerequired to revalue the warrants at each reporting date with any changes in fair value recorded on our statement of operations.The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions inthe valuation that that are both significant to the fair value measurement and unobservable. The change in the fair value ofthe Level 3 warrant liabilities is reflected in the statement of operations and comprehensive loss for the years endedDecember 31, 2017 and 2016. F-10 Table of ContentsProperty and equipment, netProperty and equipment, net, consists of office equipment such as furniture, fixtures and computers. Depreciationexpense for the years ended December 31, 2017 and 2016 was not significant. The following useful lives were used for thevarious classifications of property and equipment, net: Amortization Periods Computer hardware 3-5years Computer software 2-5years Furniture and fixtures 2-5years Business combinationsWhen acquiring new enterprises over which we obtain control, the acquisition method is applied. Under thismethod, we identify assets and liabilities of these enterprises and measure them at fair value at the acquisition date.Allowance is made for the tax effect of the adjustments made.The excess of the consideration transferred, the amount of the non‑controlling interest in the acquiree and theacquisition date fair value of previous equity interest in the acquiree over the fair value of the identifiable net assets acquiredis recorded as goodwill.Intangible assetsCertain intangible assets were acquired as part of an asset purchase and have been capitalized at their acquisitiondate fair value. Acquired definite life intangible assets are amortized using the straight line method over their respectiveestimated useful lives. The Company evaluates the potential impairment of intangible assets if events or changes incircumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of theseassets are no longer appropriate.Purchased identifiable intangible assets with indefinite lives are evaluated for impairment annually in accordancewith our policy and whenever events or changes in circumstances indicate that it is more likely than not that the fair value ofthese assets may not be recovered.To test these assets for impairment, we compare the fair value of the asset to its carrying value. Themethod we use to estimate the fair value measurements of indefinite‑lived intangible assets is based on theincome approach. For the impairment analysis for the year ended December 31, 2017, significantunobservable inputs used in the income approach valuation method including discount rates, royalty ratesand probabilities of product candidate advancement from one clinical trial phase to the next. Thedetermination of fair value of indefinite lived assets is considered Level 3 for fair value measurement. GoodwillWe test goodwill for impairment on an annual basis or whenever events occur that may indicate possibleimpairment. This analysis requires us to make a series of critical assumptions to (1) evaluate whether any impairment existsand (2) measure the amount of impairment.Because we have one operating segment, when testing for a potential impairment of goodwill, we are required toestimate the fair value of our business and determine the carrying value. If the estimated fair value is less than the carryingvalue of our business, then we are required to estimate the fair value of all identifiable assets and liabilities in a mannersimilar to a purchase price allocation for an acquired business. Only after this process is completed can the goodwillimpairment be determined, if any.F-11 Table of ContentsTo estimate the fair value of the business, primarily a market‑based approach is applied, utilizing our public marketvalue. We did not record a charge for impairment for our goodwill for the years ended December 31, 2017, 2016 and 2015.Research and development expensesResearch and development costs are expensed as incurred. Research and development expenses consist of internaland external expenses. Internal expenses include compensation and related expenses. External expenses includedevelopment, clinical trials, report writing and regulatory compliance costs incurred with clinical research organizations andother third‑party vendors. At the end of the reporting period, we compare payments made to third‑party service providers tothe estimated progress toward completion of the research or development objectives. Such estimates are subject to change asadditional information becomes available. Depending on the timing of payments to the service providers and the progressthat we estimate has been made as a result of the service provided, we may record net prepaid or accrued expense relating tothese costs. Upfront and milestone payments made to third parties who perform research and development services on ourbehalf are expensed as services are rendered.Stock‑based compensationWe account for stock‑based compensation awards in accordance with FASB ASC Topic 718, Compensation—StockCompensation (ASC 718). ASC 718 requires all stock‑based payments including grants of stock options and restricted stockand modifications to existing stock options, to be recognized in the consolidated statements of operations based on their fairvalues.Our stock‑based awards are subject to either service‑based or performance‑based vesting conditions. Vesting ofcertain awards could also be accelerated upon achievement of defined market‑based vesting conditions. Certain awards alsocontain a combination of service and market conditions or performance and market conditions.We record compensation expense for service‑based awards over the vesting period of the award on a straight‑linebasis. Compensation expense related to awards with performance‑based vesting conditions is recognized over the requisiteservice period using the accelerated attribution method to the extent achievement of the performance condition isprobable. For those awards in which the performance condition was the completion of our IPO, we did not recognizecompensation expense until the close of the IPO as we did not deem the IPO probable until it occurred. Compensation expense for awards with service and market‑based vesting conditions is recognized using theaccelerated attribution method over the shorter of the requisite service period or the implied period associated withachievement of the market‑based vesting provisions.We estimate the fair value of our awards with service conditions using the Black‑Scholes option pricing model,which requires the input of subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term ofthe award, (iii) the risk‑free interest rate and (iv) expected dividends. Due to the lack of historical and implied volatility dataof our common stock, we based our estimate of expected volatility on the historical volatility of a group of similar companiesthat are publicly traded. We selected companies with comparable characteristics to us, including enterprise value, riskprofiles and position within the industry, and with historical share price information sufficient to meet the expected term ofthe stock‑based awards. We compute historical volatility data using the daily closing prices for the selected companies’shares during the equivalent period of the calculated expected term of the stock‑based awards.We estimate the fair value of our awards with market conditions using a Monte Carlo simulation to determine theprobability of satisfying the market condition. We make this estimate using the conditions that exist at the grant date. Thederived service period, which may be the requisite service period, is also determined at this time. Compensation cost for ourawards with a market condition is recognized ratably using the accelerated attribution method if the award is subject tograded vesting over the requisite service period. The compensation cost for our awards with a market condition is notreversed if the market condition is not satisfied.We have estimated the expected term of employee service‑based stock options using the “simplified” method,whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option,due to our lack of sufficient historical data. We have estimated the expected term of employee awards with market conditionsusing a Monte‑Carlo simulation model. This approach involves generating random stock‑price pathsF-12 Table of Contentsthrough a lattice‑type structure. Each path results in a certain financial outcome, such as accelerated vesting or specificoption payout. We have estimated the expected term of nonemployee service‑ and performance‑based awards based on theremaining contractual term of such awards.The risk‑free interest rates for periods within the expected term of the option are based on the Swedish GovernmentBond rate or the U.S. Treasury Bond rate with a maturity date commensurate with the expected term of the associatedaward. We have never paid dividends and do not expect to pay dividends in the foreseeable future.We account for forfeitures as they occur.Income taxesOn December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the TaxCuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but notlimited to, reducing the top U.S. federal corporate tax rate from 35 percent to 21 percent; requiring companies to pay a one-time transition tax on certain un-repatriated earnings of foreign subsidiaries; generally eliminating U.S. federal income taxeson dividends from foreign subsidiaries; requiring a current inclusion in U.S. federal taxable income of certain earnings ofcontrolled foreign corporations; eliminating the corporate alternative minimum tax (AMT) and changing how existing AMTcredits can be realized; creating the base erosion anti-abuse tax (BEAT), a new minimum tax; creating a new limitation ondeductible interest expense; and changing rules related to uses and limitations of net operating loss carryforwards created intax years beginning after December 31, 2017.The Tax Act reduces our U.S. corporate income tax rate from 34% to 21%, effective January 1, 2018. Deferred taxassets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which thosetemporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 34% to21% under the Tax Act, we revalued our ending net deferred tax assets and liabilities at December 31, 2017.The Tax Act provided for a one-time transition tax on the deemed repatriation of post-1986 undistributed foreignsubsidiary earnings and profits (“E&P”). Strongbridge did not have to recognize any income tax expense related to thetransition tax as they own no controlled foreign corporations.The global intangible low-taxed income tax and base erosion provisions are effective for taxable years beginningafter December 31, 2017. The Company does not currently expect these provisions to have a material impact on its tax rate asthey do not own any controlled foreign corporations and they are currently below the gross receipts threshold for purposes ofthe base erosion provisions.Due to the timing of the new tax law and the substantial changes it brings, the Staff of the Securities and ExchangeCommission (the "SEC") issued Staff Accounting Bulletin No. 118 ("SAB 118"), which provides registrants a measurementperiod to report the impact of the new US tax law. During the measurement period, provisional amounts for the effects of thelaw are recorded to the extent a reasonable estimate can be made. To the extent that all information necessary is notavailable, prepared or analyzed, companies may recognize provisional estimated amounts for a period of up to one yearfollowing enactment of the TCJA. The Company recorded amounts as provisional and will continue to monitor for futureupdates to guidance or interpretations issued by the IRS. We recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31,2017, 2016 and 2015, we had no accrued interest or penalties related to uncertain tax positions and no amounts have beenrecognized in our statements of operations.Net loss per shareBasic net loss per share is calculated by dividing the net loss attributable to shareholders by the weighted averagenumber of ordinary shares outstanding during the period. Diluted net loss per share is calculated by dividing the net lossattributable to shareholders by the weighted‑average number of ordinary shares outstanding for the period, including anydilutive effect from outstanding stock options or other equity-based awards. Shares used in the diluted netF-13 Table of Contentsloss per share calculations exclude anti‑dilutive ordinary share equivalents, which currently consist of outstanding stockoptions, unvested restricted stock units and warrants. Year Ended December 31, 2017 20162015Warrants 7,555,003 7,000,000 —Stock options issued and outstanding 6,104,715 3,249,784 2,591,520Unvested restricted stock units 267,250 184,000 — Customer concentrationFor the year ended December 31, 2017, we sold Keveyis to one customer, who is the exclusive distributor of Keveyisin the United States.Recently issued accounting pronouncementsIn January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)2017-04, Intangibles - Goodwill and Other: Simplifying the Accounting for Goodwill Impairment. ASU 2017-04 removesStep 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment willnow be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount ofgoodwill. This standard, which will be effective for the us beginning in the first quarter of fiscal year 2021, is required to beapplied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing datesafter January 1, 2017. We are currently evaluating the impact this new accounting guidance will have on our consolidatedfinancial statements.In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, whichclarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows in order toreduce diversity in practice. The guidance is effective for us beginning in the first quarter of fiscal year 2018. Early adoptionis permitted. We are currently evaluating the impact this new accounting guidance will have on our consolidated financialstatements.In March 2016, the FASB issued ASU No. 2016-09, Compensation - Improvements to Employee Share-BasedPayment Accounting, which affects all entities that issue share-based payment awards to their employees. The amendmentsin this ASU cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess taxbenefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withholdto cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement ofcash flows. This ASU is effective for annual and interim periods beginning after December 15, 2016. This guidance can beapplied either prospectively, retrospectively or using a modified retrospective transition method. Early adoption is permitted.We have adopted the standard effective January 1, 2017 and have elected to account for forfeitures as they occur as opposedto estimating forfeitures. The adoption of this standard did not have a material impact on our financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, that discusses how an entity should account for leaseassets and lease liabilities. The guidance specifies that an entity who is a lessee under lease agreements should recognizelease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting forleases by lessors is largely unchanged under the new guidance. The guidance is effective for us beginning in the first quarterof fiscal year 2019. Early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leasesat the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating theimpact this new accounting guidance will have on our consolidated financial statements.In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets andF-14 Table of ContentsFinancial Liabilities, that modifies certain aspects of the recognition, measurement, presentation, and disclosure of financialinstruments. The accounting standard update is effective for fiscal years, and interim periods within those years, beginningafter December 15, 2017, and early adoption is permitted. We are currently evaluating the impact this new accountingguidance will have on our consolidated financial statements.In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory.ASU No. 2015-11 applies only to inventory for which cost is determined by methods other than last in, first-out and the retailinventory method, which includes inventory that is measured using first-in, first-out or average cost. Inventory within thescope of this standard is required to be measured at the lower of cost and net realizable value. Net realizable value is theestimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, andtransportation. We adopted this standard on April 1, 2017. The adoption of this standard had no impact on the Company’sconsolidated financial statements, there was no accounting impact to previously issued financial statements based on ouradoption.In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires entities torecognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects theconsideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance alsorequires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising fromcustomer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred toobtain or fulfill a contract. We adopted this new standard on April 1, 2017 in conjunction with the launch of Keveyis. As wedid not record revenue prior to adopting this standard, there was no accounting impact to previously issued financialstatements based on our adoption of ASC Topic 606. 3. Revenue recognitionProduct revenue, netWe sell Keveyis to one specialty pharmacy provider (the “Customer”), who is the exclusive distributor of Keveyis inthe United States. The Customer subsequently resells Keveyis to patients, which are covered by payors that may provide forgovernment-mandated or privately negotiated rebates with respect to the purchase of Keveyis. Reserves for variable considerationRevenues from sales of Keveyis are recorded at the net sales price (transaction price), which includes estimates ofvariable consideration for which reserves are established and which result from rebates, co-pay assistance and otherallowances that are offered between us and the patients’ payors. There is no variable consideration reserve for returns as wedo not accept returns of Keveyis. These reserves are based on the amounts earned or to be claimed on the related sales andare classified as reductions of accounts receivable (if the amount is payable to the Customer) or a current liability (if theamount is payable to a party other than the Customer). Where appropriate, these estimates may take into consideration arange of possible outcomes that are probability-weighted for relevant factors such as our historical experience, currentcontractual and statutory requirements, specific known market events and trends, industry data and forecasted customerbuying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we areentitled based on the terms of the contract. The amount of variable consideration that is included in the transaction price maybe constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in theamount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimatelyreceived may differ from our estimates. We reassess our estimates on an ongoing basis. If actual results in the future vary fromour estimates, we will adjust our estimates. Any such adjustments would affect net product revenue and earnings in the periodsuch variances become known.Trade discount: We provide the Customer with a discount that is explicitly stated in our contract and is recorded asa reduction of revenue in the period the related product revenue is recognized. In addition, we receive sales ordermanagement, data and distribution services from the Customer. To the extent, the services received are distinct from our saleof Keveyis to the Customer, these payments are classified in selling, general and administrative expenses in our consolidatedstatement of operations and comprehensive loss.F-15 Table of ContentsFunded Co-pay Assistance Program: We contract with a third-party to manage the co-pay assistance programintended to provide financial assistance to qualified insured patients. The calculation of the accrual for co-pay assistance isbased on an estimate of claims and the cost per claim that we expect to receive associated with Keveyis that has beenrecognized as revenue, but remains in the distribution channel inventories at the end of each reporting period. Thesepayments are consideration payable to the customer and the related reserve is recorded in the same period the related revenueis recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included inaccrued expenses on the consolidated balance sheet.Government rebates: We are subject to discount obligations under state Medicaid programs and Medicare. Weestimate our Medicaid and Medicare rebates based upon a range of possible outcomes that are probability-weighted for theestimated patient mix. These reserves are recorded in the same period the related revenue is recognized, resulting in areduction of product revenue and the establishment of a current liability which is included in accrued expenses on theconsolidated balance sheet. For Medicaid, accruals are based on estimates of future Medicaid beneficiary utilization appliedto the Medicaid unit rebate formula established by the Center for Medicaid and Medicare Services. Effective January 1,2011, manufacturers of pharmaceutical products are responsible for 50% of the patient’s cost of branded prescription drugsrelated to the Medicare Part D Coverage Gap. In order to estimate the cost to us of this Medicare coverage gap responsibility,we estimate the number of patients in the prescription drug coverage gap for whom we will owe an additional liability underthe Medicare Part D program. Our liability for these rebates consists of estimates of claims for the current quarter andestimated future claims that will be made for Keveyis that has been recognized as revenue, but remains in the distributionchannel inventories at the end of each reporting period.Temporary Supply and Patient Assistance Programs: We provide free Keveyis to uninsured patients who satisfy pre-established criteria for either the Temporary Supply Program or the Patient Assistance Program. Patients who meet theTemporary Supply Program eligibility criteria may receive a temporary supply of free Keveyis for no more than sixty dayswhile we are determining the patient’s third-party insurance, prescription drug benefit or other third-party coverage forKeveyis. The Patient Assistance Program provides free Keveyis for up to twelve months to patients that satisfy pre-established criteria for financial need. We do not recognize any revenue related to these free products and the associatedcosts are classified in selling, general and administrative expenses in our consolidated statements of operations andcomprehensive loss.4. Fair value measurementThe following table sets forth the fair value measurements by level within the fair value hierarchy, that are measuredon a recurring basis. Our level 3 instrument consist of the common stock warrant liability. The fair values of the outstandingwarrants were measured using the Black-Scholes option-pricing model. Inputs used to determine estimated fair value of thewarrant liabilities include the estimated fair value of the underlying stock at the valuation date, the estimated term of thewarrants, risk-free interest rates, expected dividends and the expected volatility of the underlying stock. The significantunobservable inputs used in the fair value measurement of the warrant liabilities were the volatility rate and the estimatedterm of the warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would resultin a directionally similar impact to the fair value measurement.The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basisfor the periods presented (in thousands): As of December 31, 2017 Level I Level II Level III Total Cash equivalents 57,024 — — 57,024 Total assets $57,024 $ — $ — $57,024 Warrant liability — — 41,308 41,308 Total liabilities $ — $ — $41,308 $41,308 F-16 Table of Contents As of December 31, 2016 Level I Level II Level III Total Warrant liability — — 11,090 11,090 Total liabilities $ — $ — $11,090 $11,090 5. Intangible assets and goodwillThe gross carrying amount of in‑process research and development, acquired developed product rights and goodwillis as follows (in thousands): As of December 31, 2017 Beginning of Period Additions Impairment Amortization End of Period IPR&D $20,723 $ — $(20,723) $ — $ — Acquired developed product rights 40,177 — — (5,022) 35,155 Goodwill 7,256 — — — 7,256 Total $68,156 $ — $(20,723) $(5,022) $42,411 As of December 31, 2016 Beginning ofPeriod Additions Impairment Amortization End of Period IPR&D $36,551 $ — $(15,828) $ — $20,723 Acquired developed product rights — 40,177 — — 40,177 Goodwill 7,256 — — — 7,256 Total $43,807 $40,177 $(15,828) $ — $68,156 Estimated amortization of our acquired developed product rights intangible asset for the five years subsequent toDecember 31, 2017 is as follows (in thousands):2018 $5,0222019 5,0222020 5,0222021 5,0222022 5,022 Goodwill and in‑process research and development resulted from our acquisition of BioPancreate and our 2015acquisition of veldoreotide from Aspireo Pharmaceuticals, Ltd. In‑process research and development is initially measured atits fair value and is not amortized until commercialization. Once commercialization occurs, in‑process research anddevelopment will be amortized over its estimated useful life. We recorded $20.7 million of impairment relating for ourveldoreotide IPR&D during the year ended December 31, 2017. The significant inputs to the fair value measurement werefuture revenues expected to be generated, estimated costs to manufacture and appropriate risk adjusted discount rate. Theimpairment of veldoreotide is due to estimated increased development costs and longer time lines related to the developmentprocess; resulting in a decrease in the valuation of our intangible asset.Our finite lived intangible asset consists of acquired developed product rights obtained from the asset acquisition ofKeveyis (dichlorphenamide) from a subsidiary of Taro Pharmaceutical Industries Ltd. (“Taro”). In connection with the AssetPurchase and Supply Agreement we entered into with Taro Pharmaceutical Industries Ltd, we have paid Taro an upfrontpayment in two installments of $1 million in December 2016 and $7.5 million in March 2017. We concluded that the supplyprice payable by us exceeds fair value and, therefore, have used a discounted cash flow method with a probabilityassumption to value the payments in excess of fair value at $29.3 million, for which we have recorded an intangible asset andcorresponding liability. This liability will be amortized as we purchase inventory over the term of the agreement. Inaddition, we incurred transaction costs of $2.4 million resulting in the recording of anF-17 Table of ContentsIntangible Asset of $40.2 million. This asset began being amortized in 2017 and is being amortized over an 8-year period. 6. Accrued liabilitiesAccrued liabilities consist of the following (in thousands): December 31, December 31, 2017 2016 Consulting and professional fees $3,207 $1,110 Accrued payable due Taro Pharmaceuticals Industries Ltd. — 7,500 Supply agreement - current portion 4,237 4,207 Employee compensation 3,668 1,554 Other 120 497 Total accrued liabilities $11,232 $14,868 7. Long-term debtOn July 14, 2017, we entered into a $50 million senior credit facility with CRG LP (“CRG”), a healthcare-focusedinvestment firm, to retire our prior credit facility with Oxford Finance LLC and Horizon Technology Finance Corporationand provide additional capital to us. We initially borrowed $40 million under the term loan agreement and have the optionto borrow an additional $10 million based upon the achievement of a certain revenue milestone on or prior to June 30, 2018.Concurrent with the initial borrowing, CRG purchased $3 million of our ordinary shares at a price of $6.98 per share. As acondition to the new credit facility, we issued warrants with a seven-year term to CRG to purchase 394,289 of our ordinaryshares at an exercise price of $7.37 per share.The term loan agreement has a six-year term with three years of interest-only payments. The interest-only periodmay be extended to six years based upon the achievement of certain milestones during the first three years of the loan term.The loan agreement provides for interest payable at an annual rate of 12.5% and a final payment fee of 5% of the principalbalance. The loan agreement includes a payment-in-kind (PIK) provision, which allows us to defer 4.0% of the 12.5% annualinterest payable under the loan during the first three years of the term of the loan (which may be extended for the entire termof the loan, subject to the satisfaction of certain conditions) by adding such amount to the principal loan amount. We havegranted a security interest in substantially all of our existing assets and assets acquired by us in the future, includingintellectual property. The loan agreement contains facility and prepayment fees, and customary affirmative and negativecovenants, including a financial covenant regarding minimum amounts of net revenue and restrictions on our ability to paycash dividends, and a list of events that will constitute “events of default” under the loan agreement, and permit the lendersto declare all amounts under the loan agreement immediately due and payable, including a material adverse change in ourbusiness, operations or financial condition. We incurred $2.5 million in debt discounts and $0.8 million of debt issuancecosts relating to this loan agreement which have been recorded as a reduction to the long-term debt. These amounts will beamortized over the outstanding period of the debt to interest expense using the effective interest rate method.In connection with the retirement of our prior credit facility we incurred a final payment fee of $1.6 million and aloss on early extinguishment of debt of $3.5 million.In January 2018, our term loan agreement was amended (see Note 15).F-18 Table of ContentsFuture principal payments due under the Loan Agreement are as follows (in thousands): Principal Payments 2018 $ — 2019 — 2020 6,834 2021 13,667 2022 13,667 2023 6,591 Total future payments $40,759 8. WarrantsCommon stock warrants are accounted for in accordance with applicable accounting guidance provided in ASCTopic 815, Derivatives and Hedging — Contracts in Entity’s Own Equity (ASC Topic 815), as either derivative liabilities oras equity instruments depending on the specific terms of the warrant agreement.Warrants outstanding and warrant activity for the year ended December 31, 2017 is as follows: Exercise Expiration Warrants Warrants December 31, Classification Price Date Issued Exercised 2017 Warrants in connection with privateequity placement Liability $2.50 6/28/2022 7,000,000 — 7,000,000 Warrants in connection with Horizon andOxford loan agreement Equity $2.45 12/28/2026 428,571 (267,857) 160,714 Warrants in connection with CRG loanagreement Equity $7.37 7/14/2024 394,289 — 394,289 7,822,860 7,555,003 9. Commitments and contingencies(a) LeaseOn April 22, 2014, we entered into a 48‑month building lease for approximately 3,000 square feet of space inRadnor, Pennsylvania. The lease has annual rent escalations. We obtained access to the newly leased space on August 1,2014, and this was considered the lease commencement date for accounting purposes. Thus, rent expense began on this dateand is recognized on a straight‑line basis over the term of the lease.In March 2015, the Company entered into a 52‑month building sublease agreement for 14,743 square feet of officespace in Trevose, Pennsylvania. The lease has annual rent escalations and is recognized on a straight‑line basis over the termof the lease. As a result of this lease, we vacated the previously leased Radnor, Pennsylvania facility as of April 13, 2015 anddetermined that the Radnor, Pennsylvania facility was not likely to be utilized during the remaining lease term and as suchwe commenced efforts to sublease the facility. The Company recorded a liability as of the April 13, 2015 cease‑use date of$0.1 million for the estimated fair value of its obligations under the lease. The most significant assumptions used indetermining the amount of the estimated liability are the potential sublease revenues and the credit‑adjusted risk‑free rateutilized to discount the estimated future cash flows.In November 2017, the Company entered into a 60‑month building lease agreement for an additional 7,326 squarefeet of office space in Trevose, Pennsylvania. The lease has annual rent escalations and is recognized on a straight‑line basisover the term of the lease.F-19 Table of ContentsAs of December 31, 2017, future minimum commitments under facility operating leases were as follows (inthousands): Operating leases 2018 357 2019 336 2020 156 2021 160 2022 163 2023 69 Total minimum lease payments $1,241 Rent expense recognized under our operating lease, including additional rent charges for utilities, parking,maintenance and real estate taxes, was $314,000, $275,000 and $254,000 for the years ended December 31, 2017, 2016 and2015, respectively.(b) Commitments to Taro Pharmaceuticals Industries Ltd.In December 2016, we acquired the U.S. marketing rights to Keveyis® (dichlorphenamide) from a subsidiary of TaroPharmaceutical Industries Ltd. (“Taro”). Keveyis is approved in the U.S. to treat hyperkalemic, hypokalemic and relatedvariants of primary periodic paralysis, a group of rare hereditary disorders that cause episodes of muscle weakness orparalysis. Keveyis has received orphan drug exclusivity status in the U.S. through August 7, 2022. Under the terms of anasset purchase agreement, we paid Taro an upfront payment in two installments of $1 million in December 2016 and $7.5million in March 2017, and will pay an aggregate of $7.5 million in potential milestones upon the achievement of certainproduct sales targets. Taro has agreed to continue to manufacture Keveyis for us under an exclusive supply agreementthrough the orphan exclusivity period. We are obligated to purchase certain annual minimum amounts of product totalingapproximately $29 million over a six-year period. The supply agreement may extend beyond the orphan exclusivity periodunless terminated by either party pursuant to the terms of the agreement. If terminated by Taro at the conclusion of theorphan exclusivity period, we have the right to manufacture the product on our own or have the product manufactured by athird party on our behalf. 10. Defined contribution planOur 401(k) Employee Savings Plan “401(k) Plan” is available to all employees. We have elected a Safe-Harborprovision for the 401(k) Plan in which participants are always fully vested in their employer contributions. During 2017, weimplemented a match, where we match 100% of the first 4% of participating employee contributions. In 2017, we contributedapproximately $173,000. Our contributions are made in cash. Our common stock is not an investment option available toparticipants in the 401(k) Plan.11. Income taxesFor the years ended December 31, 2017, 2016 and 2015, the components of loss before income taxes were as follows(in thousands): Year Ended December 31, 2017 2016 2015 Sweden $(19,249) $(16,433) $(33,960) Ireland (47,211) (11,653) (191) Cayman Islands (21,709) (19,550) (8,722) U.S. (23,543) (3,721) (1,210) Total $(111,712) $(51,357) $(44,083) F-20 Table of ContentsThe components of income tax expense (benefit) for the years ended December 31, 2017, 2016 and 2015 were asfollows (in thousands): Year Ended December 31, 2017 2016 2015 Current tax (benefit) expense: Sweden $ — $— $— Ireland (22) 22 — U.S. Federal (151) 151 — State (14) 73 — Total current tax (benefit) expense $(187) $246 $— Deferred tax expense (benefit): Sweden $(4,586) $(834) $212 Ireland 1,280 (1,547) (24) U.S. Federal 39 (3,412) (17,543) State (2,392) (678) (1,233) Change in valuation allowance 7,617 3,587 18,138 Total deferred tax expense (benefit) 1,958 (2,884) (450) Total tax expense (benefit) $1,771 $(2,638) $(450) With the exception of the newly formed U.S. Entity, we have incurred net operating losses since inception. For theIreland and Swedish operations, we have not reflected any benefit of net operating loss carryforwards (NOLs) in theaccompanying financial statements. Strongbridge US, Inc, as a result of the intercompany service agreements, was in taxableincome and determined they were able to recognize all deferred tax assets in 2016. In 2017, Strongbridge US, Inc. generatedbook loss as the Company decided this entity will market and commercialize certain products. As such, given the expensesincurred, it is not more likely than not to recognize all deferred tax assets which results in the company establishing a fullvaluation allowance against its deferred tax assets.Deferred taxes are recognized for temporary differences between the bases of assets and liabilities for financialstatement and income tax purposes. The tax effect of temporary differences that give rise to significant portions of thedeferred tax assets are as follows (in thousands): Year Ended December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $28,570 $24,433 Stock based compensation 2,824 1,870 Other deferred activity 617 96 Tax credits 9,182 9,135 Capitalized research and development costs 161 161 Total deferred tax assets 41,354 35,695 Valuation allowance (41,354) (33,738) Deferred tax assets recognized — 1,957 Deferred tax liabilities: Warrants — (358) Acquired intangible assets — — Total deferred tax liabilities — (358) Net deferred tax assets (liabilities) $ — $1,599 F-21 Table of ContentsWe have evaluated the positive and negative evidence bearing upon the realizability of our deferred tax assets.Based on our history of operating losses in Ireland and Sweden and also the current year operating losses in the U.S., we haveconcluded that it is more likely than not that the benefit of our deferred tax assets will not be realized. The valuationallowance increased by approximately $7.6 million and $3.6 million during the years ended December 31, 2017 and 2016,respectively, due primarily to net operating losses.The Company’s effective income tax rate differs from the ultimate parent company, Strongbridge Biopharma plc,Irish domestic statutory rate of 12.5% for the year ended December 31, 2017, 2016 and 2015. Year Ended December 31, 2017 2016 2015 Ireland statutory income tax rate 12.50% 12.50% 12.50%Foreign tax differential between Sweden, U.S., Cayman Island andIreland 3.99 2.28 15.70 Federal tax credits — — 12.10 Change in valuation allowance (6.82) (6.69) (41.20) State income taxes 1.43 0.92 — Permanent differences (5.04) 1.59 — Rate change - tax impact (7.09) — — Fx remeasurement of Swedish DTA 0.83 (5.42) (5.41) Provision to return (1.33) — — Other (0.06) (0.04) 7.31 Effective income tax rate (1.59)% 5.14% 1.00% At December 31, 2017, we had approximately $56.0 million of Swedish NOLs and approximately $2.3 million ofIreland NOLs, which have an indefinite life, and approximately $53.4 million of U.S. federal and $51.3 million of state NOLs,which begin to expire in 2031. Through December 31, 2015 we operated through a permanent establishment in both Swedenand the United States. Relief is granted by way of crediting the U.S. tax against the Swedish tax. This tax credit can neverexceed the Swedish tax on the income. Since the tax rate is higher in the United States than in Sweden, the Swedish taxablecarryforward losses of $56.0 million can only generate a tax benefit if income is derived from sources other than thepermanent establishment in the United States. Beginning January 1, 2016, the US operations that were not part ofBioPancreate Inc occurred in a newly formed US corporation. There were no operating losses generated during 2016 in theU.S. except for a minor state NOL at BioPancreate.At December 31, 2017, we had $8.9 million of U.S. federal orphan drug tax credit carryforwards, which begin toexpire in 2032, and $84,000 of U.S. federal research and development tax credit carryforwards, which begin to expire in2031. The orphan drug credit carryforward is attributable to the permanent establishment of the Swedish entity within theU.S.Utilization of the NOLs may be subject to limitations under Swedish tax regulations or U.S. Internal Revenue CodeSection 382 if there is a greater than 50% ownership change as determined under applicable regulations.The Company files income tax returns in Sweden, the U.K., the United States, and various states within the UnitedStates. In the normal course of business, the Company is subject to examination by federal, state and foreign jurisdictions,where applicable. The Company’s tax years are still open under statute from inception to present. All open years may beexamined to the extent that tax credit or net operating loss carryforwards are used in future periods.12. Ordinary sharesVoting rights and privilegesAs of December 31, 2017 and December 31, 2016, there are 600,000,000 authorized shares and 40,149,812 and35,335,026 outstanding shares, respectively.F-22 Table of ContentsThe holders of our ordinary shares are entitled to one vote for each ordinary share held at all meetings ofshareholders without limitation and written actions in lieu of meetings. The holders are entitled to receive dividends if andwhen declared by our Board of Directors. No dividends have been declared or paid since our inception. The holders areentitled to share ratably in our assets available for distribution to stockholders, in the event of any voluntary or involuntaryliquidation. In addition, on May 26, 2015 the Company issued 40,000 deferred shares with a €1.00 euro par value per share(US$1.098). The deferred shares are issued in order to satisfy an Irish legislative requirement to maintain a minimum level ofissued share capital denominated in euro. The deferred shares carry no voting rights and are not entitled to any dividend ordistribution.Equity financingsOn October 6, 2017, we sold 4,000,000 ordinary shares in a public offering at a price to the public of $6.25 perordinary share for net proceeds of approximately $23.4 million, after deducting underwriting discounts and commissions andoffering expenses payable by us. Concurrent with the CRG credit facility from July 2017, CRG purchased 429,799 shares of our ordinary shares at aprice of $6.98 per share for total proceeds to us of approximately $3.0 million.We entered into an equity distribution agreement with JMP on April 28, 2017, pursuant to which we may sell, at ouroption, from time to time, up to an aggregate of $40 million in ordinary shares of the Company through JMP, as sales agent.We will pay JMP a commission equal to 3% of the gross proceeds from the sale of ordinary shares under the ATM Facility.Pursuant to the terms of the equity distribution agreement, we reimbursed JMP for certain out-of-pocket expenses, includingthe fees and disbursements of counsel to JMP, incurred in connection with establishing the ATM Facility and have providedJMP with customary indemnification rights. During the year ended December 31, 2017, we sold an aggregate of 10,300ordinary shares under the ATM Facility for net proceeds of approximately $73,000 and paid fees to JMP of $2,000.On December 22, 2016, we raised $32.7 million, net of transaction costs, in a private placement of ordinary sharesand warrants. We issued and sold 14,000,000 ordinary shares of common stock at a purchase price of $2.50 per ordinary shareas well as warrants to purchase 7,000,000 shares. The warrants are exercisable at a price of $2.50 per share beginning onJune 28, 2017 and expire in five years from June 28, 2017. In the event of a sale of the Company, the terms of the warrantsrequire us to use our best efforts to ensure the holders of such warrants will have a continuing right to purchase shares of theacquirer and, if our efforts are unsuccessful, to make a payment to such warrant holders based on a Black-Scholes valuation(using variables as specified in the warrant agreements). Therefore we are required to account for these warrants as liabilitiesand record them at fair value. Fair value for these warrants was initially determined upon issuance using the Black-ScholesModel and were revalued at fair value. The resulting change in fair value resulted in an unrealized loss of $30.2 million forDecember 31, 2017 and a unrealized gain of $0.6 million as of December 31, 2016. As of December 31, 2017, the fair valueof these warrants of $41.3 million was recorded as a long-term liability on our consolidated balance sheet.On October 22, 2015, we closed on our initial U.S. public offering of 2,500,000 ordinary shares at a price to thepublic of $10.00 per ordinary share for aggregate gross proceeds of $25 million, before deducting the underwritingcommission and estimated offering expenses of $5.5 million. In June 2015, we raised $32.6 million, net of transaction costs,in a private placement of 2,284,414 shares of our common stock. The subscription price was $14.54 per share. In February2015, we raised $25.8 million, net of transaction costs, in a private placement of 4,761,078 shares of our common stock. Thesubscription price was $5.54 per share.Shares reserved for issuanceThere were 728,411 and 1,951,022 shares of common stock reserved for future issuance upon exercise of stockoptions as of December 31, 2017 and 2016, respectively. As of December 31, 2017, we have 7,555,003 shares reserved foroutstanding warrants.F-23 Table of Contents13. Stock‑based compensationThe Board of Directors approve the granting of awards to our officers, directors, employees and thirdparty‑consultants. Under these grants, the beneficiaries are given the right to acquire new shares of common stock at apre‑determined option price. The purpose of the grants is to assist us in attracting, retaining and motivating officers,employees, directors and consultants. In addition, these awards provide us with the ability to provide incentives that aredirectly linked to the performance of our business and the related increase in shareholder value.Our awards have terms that range from five to ten years. As determined by our Board of Directors, our awards vestover service periods ranging up to four years or upon achievement of defined performance or market criteria such as thevesting of certain awards upon our IPO or awards that are accelerated when the fair value of our stock price reaches definedtargets.The exercise price for each stock option is determined by the Board of Directors based upon considerations such asthe fair value of the underlying ordinary shares and certain market conditions. For options granted prior to our October 22,2015, IPO, the determination of the fair value of our common stock takes into account the price at which our shares werebeing quoted on the Norwegian Over The Counter Market, recent equity financings and our valuations calculated with theassistance of third‑parties.A summary of the outstanding stock options activity for the year ended December 31, 2017 is as follows: Options Outstanding Weighted- Average Weighted- Remaining Average Contractual Number of Exercise Term Aggregate Shares Price (Years) Intrinsic Value (in thousands) Outstanding—January 1, 2017 3,249,784 $11.00 6.89 $ — Granted 3,260,350 $3.73 Forfeited and cancelled (144,864) $7.22 $ — Exercised (260,555) $4.08 Outstanding—December 31, 2017 6,104,715 $7.50 7.70 $14,021 Vested and exercisable—December 31, 2017 2,073,201 $10.68 5.69 $2,533 Included in the stock options outstanding at December 31, 2017 are unvested stock options to purchase 88,908shares at a weighted average exercise price of $18.80 per share for which the vesting of certain tranches will accelerate if thefair value per share of our stock reaches $31.46. In addition, the options outstanding include 97,652 shares that vest upon amarket appreciation event, so long as it occurs prior to the date specified in the applicable award agreement and 97,652shares that will vest upon the one year anniversary of the market appreciation event. The market appreciation event, whichhad not yet occurred as of December 31, 2017, is defined as the last trading day in the period in which our closing stock priceon each of 20 consecutive trading days reported on NASDAQ has been at least $30.14 or $33.66 for the respective grantee.F-24 Table of ContentsStock‑based compensation expenseWe recognized stock‑based compensation expense for employees and non‑employees in the accompanyingconsolidated statements of operations as follows (in thousands): Year Ended December 31, 2017 2016 2015 Selling, general and administrative $4,027 $4,005 $3,147 Research and development 1,140 601 793 Total stock-based compensation $5,167 $4,606 $3,940 Included in these amounts was stock compensation expense (credit) attributed to liability‑classified awards of, $0,$0 and $359,000, for the years ended December 31, 2017, 2016 and 2015, respectively. As of December 31, 2017, the totalunrecognized compensation expense related to unvested options was $10.1 million, which we expect to recognize over anestimated weighted‑average period of 2.75 years.In determining the estimated fair value of the stock‑based awards, we use the Black‑Scholes option‑pricing modeland assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment.The fair value of stock option awards was estimated with the following assumptions: Year Ended December 31, 2017 2016 2015Expected term (in years) 5.98 5.9 3.23Risk-free interest rate 1.78% - 2.26% 1.21% - 2.23% 0.0% - 0.6%Expected volatility 78.2% - 85.0% 78.1% - 83.6% 79.0% - 83.1%Dividend rate —% —% —% On February 26, 2016, our board of directors approved grants of restricted stock units (“RSUs”) to employees. TheseRSUs vest two years from the date of issuance, provided that the employee is employed by us on such vesting date. All RSUswill fully vest upon a change of control of our company. If and when the RSUs vest, we will issue one ordinary share for eachwhole RSU that has vested, subject to satisfaction of the employees’ tax withholding obligations. The RSUs will cease to beoutstanding upon such issuance of ordinary shares. We recorded expense, which is included in the stock-basedcompensation table above, of $436,000 and $280,000 for the year ended December 31, 2017 and 2016, respectively. As ofDecember 31, 2017, the total unrecognized compensation expense related to unvested RSUs is $0.5 million, which we expectto recognize over an estimated weighted‑average period of 1.39 years.A summary of our unvested RSUs as of December 31, 2017 is as follows: Number of Shares Unvested—January 1, 2017 184,000 Granted 92,250 Forfeited (9,000) Vested — Unvested—December 31, 2017 267,250 F-25 Table of Contents14. Quarterly financial information (unaudited)This table summarizes the unaudited consolidated financial results of operations for the quarters ended:(in thousands, except share and per share data) March 31, June 30, September30, December31,2017 Quarter Ended Total revenues $ — $1,529 $2,533 $2,984Cost of sales (excluding amortization ofintangible asset) — 377 591 515Total costs and expenses 12,179 15,525 34,967 16,634Other expenses (15,712) (15,910) (2,885) (3,463)Income tax (expense) benefit (1,594) 92 850 (1,119)Net loss (29,485) (30,191) (35,060) (18,747)Net loss per share of common stock, basicand diluted (1) (0.83) (0.86) (0.98) (0.47) 2016 Quarter Ended Total revenues $ — $ — $ — $ —Cost of sales (excluding amortization ofintangible asset) — — — —Total costs and expenses 10,923 13,814 7,633 18,356Other (expenses) income (1,337) 47 15 643Income tax benefit 55 871 — 1,712Net loss (12,154) (12,841) (7,601) (16,001)Net loss per share of common stock, basic(1) (0.57) (0.61) (0.36) (0.71)Net loss per share of common stock, diluted(1) (0.57) (0.61) (0.36) (0.73)(1)Net loss per share amounts may not agree to the per share for the full year due to the use of weighted average shares foreach period. 15. Subsequent eventsAcquisition of U.S. and Canadian rights to MacrilenOn January 16, 2018 we entered into a License and Assignment Agreement with Aeterna Zentaris GmbH, pursuant towhich we acquired the U.S. and Canadian rights to manufacture and commercialize Macrilen (macimorelin) for $24million. Macrilen is an oral growth hormone secretagogue receptor agonist to be used in the diagnosis of patients withAGHD. Macrilen has been granted orphan drug designation in the United States and has patents with expiration datesthrough late 2027. We expect to launch Macrilen in the U.S. in mid-2018.Amendment to term loan agreement with CRG Servicing LLCOn January 16, 2018 (the “Loan Amendment Effective Date”), we and our subsidiaries, Strongbridge U.S. Inc.,Strongbridge Ireland Limited, Cortendo AB (publ) and Cortendo Cayman Ltd., entered into an amendment(the “LoanAmendment”), to the Term Loan Agreement (the “Loan Agreement”), dated July 14, 2017, with CRG, as administrative agentand collateral agent, and the lenders named therein (the “Lenders”).The primary purpose of the Loan Amendment was to increase the total potential borrowing under the Term LoanAgreement from $50 million to $100 million. The Loan Amendment provides for (i) an additional disbursement of$45.0 million (the “Second Tranche”), to the Company on the Loan Amendment Effective Date, and (ii) an additionaldisbursement of $5.0 million (the “Fourth Tranche”), to us at our election, contingent upon our achievement of certainrevenue milestones and a market capitalization condition on or before December 31, 2018, as described in the LoanF-26 Table of ContentsAmendment. We continue to be eligible to borrow up to an additional $10.0 million (the “Third Tranche”), contingent uponour achievement of certain revenue milestones on or before June 30, 2018, as previously provided in the Term LoanAgreement; provided, however, that under the Term Loan Agreement, as amended, the Third Tranche is now subject tomarket capitalization condition, as described in the Loan Amendment.The term of the Term Loan Agreement, as amended, remains six years, although the interest-only period has beenextended by six months to December 31, 2020. We have retained the option to extend the interest-only period to six yearsbased upon the achievement of certain milestones during the interest-only period.As a condition to the Second Tranche under the Term Loan Agreement, as amended, we issued to the Lenders on theLoan Amendment Effective Date warrants to purchase an aggregate of 1,248,250 of our ordinary shares, at an exercise priceof $10.00 per share. If we borrow the Third Tranche, we must issue to the Lenders, or their designees, one or more additionalwarrants to purchase a number of our ordinary shares equal to an aggregate of 0.20% of our ordinary shares outstandingfollowing such issuance on a fully diluted basis (inclusive of the ordinary shares underlying all such warrants issued), at anexercise price equal to 110% of the closing price of our ordinary shares on the date immediately preceding the Third Tranchedisbursement date. If we borrow the Fourth Tranche, we must issue to the Lenders, or their designees, one or more additionalwarrants to purchase a number of our ordinary shares equal to an aggregate of 0.25% of our ordinary shares outstandingfollowing such issuance on a fully diluted basis (inclusive of the ordinary shares underlying all such warrants issued), at anexercise price equal to 140% of the 10-day volume weighted average price (VWAP) per ordinary share for the consecutive10-day trading period ending on the trading day immediately prior to the Fourth Tranche disbursement date. Each of thesewarrants will be exercisable at any time prior to seven years following its issue date and will contain customary provisions forassumption or exchange upon a change of control or a sale of all or substantially all of our assets.Equity financingsOn January 25, 2018, we sold 5,000,000 ordinary shares in a public offering at a price to the public of $6.75 perordinary share for net proceeds of approximately $31.7 million, after deducting underwriting discounts and commissions andoffering expenses payable by us.On February 26, 2018, we sold an additional 255,683 ordinary shares as part of our January 2018 public offering at aprice of $6.75 per ordinary share for net proceeds of approximately $1.6 million, after deducting underwriting discounts andcommissions and offering expenses payable by us. F-27 EXHIBIT 10.13 STRONGBRIDGE BIOPHARMA PLC2015 EQUITY COMPENSATION PLANThe purpose of the Strongbridge Biopharma plc 2015 Equity Compensation Plan (the “Plan”)is to provide (i) designated employees of Strongbridge Biopharma plc (the “Company”) and its parentsand subsidiaries; (ii) certain consultants and advisors who perform services for the Company or itsparents or subsidiaries; and (iii) non-employee members of the Board of Directors of the Company (the“Board”) with the opportunity to receive grants of incentive stock options, nonqualified stock optionsand stock awards. The Company believes that the Plan will encourage the participants to contributematerially to the growth of the Company, thereby benefitting the Company’s shareholders, and willalign the economic interests of the participants with those of the shareholders.1. Administration(a) Committee. The Plan shall be administered and interpreted by the Board or by acommittee consisting of members of the Board, which shall be appointed by the Board. After aninitial public offering of the Company’s stock as described in Section 19(b) (a “Public Offering”), thePlan shall be administered by a committee of Board members, which may consist of “outsidedirectors” as defined under section 162(m) of the Internal Revenue Code of 1986, as amended (the“Code”), and related Treasury regulations, and “non-employee directors” as defined under Rule 16b-3under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board, however,may ratify or approve any grants as it deems appropriate, and the Board shall approve and administerall grants made to non-employee directors. The committee may delegate authority to one or moresubcommittees as it deems appropriate. To the extent that a committee or subcommittee administersthe Plan, references in the Plan to the “Board” shall be deemed to refer to the committee orsubcommittee.(b) Board Authority. The Board shall have the sole authority to (i) determine theindividuals to whom grants shall be made under the Plan; (ii) determine the type, size, and terms of thegrants to be made to each such individual; (iii) determine the time when the grants will be made andthe duration of any applicable exercise or restriction period, including the criteria for exercisability andthe acceleration of exercisability; (iv) amend the terms of any previously issued grant; (v) acceleratethe vesting, exercisability, or lapse of any forfeiture condition with respect to an Award; and (vi) dealwith any other matters arising under the Plan.(c) Board Determinations. The Board shall have full power and authority to administer,construe and interpret the Plan, correct any defect, supply any omission, or reconcile anyinconsistency in the Plan or any Award or Award Agreement, make factual determinations and adoptor amend such rules, regulations, agreements, and instruments for implementing the Plan and for theconduct of its business as it deems necessary or advisable, in its sole discretion. The Board’sinterpretations of the Plan and all determinations made by the Board pursuant to the powers vested init hereunder shall be conclusive and binding on all persons having any interest in the Plan or in anyawards granted hereunder. All powers of the Board shall be executed in its US_ACTIVE-122865329.1-KHALPERN 03/12/2018 5:55 AM sole discretion, in the best interest of the Company, not as a fiduciary, and in keeping with theobjectives of the Plan and need not be uniform as to similarly situated individuals.(d) Limitation of Liability. To the maximum extent permitted by law, no member of theBoard shall be liable for any action taken or decision made in good faith relating to the Plan or anyAward thereunder. The Board may employ counsel, consultants, accountants, appraisers, brokers orother persons. The Board, the Company, and the officers and directors of the Company shall beentitled to rely upon the advice, opinions or valuations of any such persons.2. AwardsAwards under the Plan may consist of grants of incentive stock options as described in Section5 (“Incentive Stock Options”), nonqualified stock options as described in Section 5 (“NonqualifiedStock Options”) (Incentive Stock Options and Nonqualified Stock Options are collectively referred toas “Options”), as stock awards as described in Section 6 (“Stock Awards”), and restricted stock unitsas described in Section 6 (“RSUs”) (hereinafter collectively referred to as “Awards”). All Awardsshall be subject to the terms and conditions set forth herein and to such other terms and conditionsconsistent with the Plan as the Board deems appropriate and as are specified in writing by the Board tothe individual in a grant instrument or an amendment to the grant instrument (the “AwardAgreement”). The Board shall approve the form and provisions of each Award Agreement. Awardsunder a particular Section of the Plan need not be uniform as among the grantees. 3. Shares Subject to the Plan(a) Shares Authorized. Subject to adjustment as described below, the aggregate number ofordinary shares of par value US$0.01 each of the Company (“Company Stock”) that may be issued ortransferred under the Plan is 4,949,426 (the “Share Pool”) and the maximum aggregate number ofshares that may be issued under the Plan under Incentive Stock Options is 4,949,426. After a PublicOffering, the maximum aggregate number of shares of Company Stock that shall be subject to Awardsmade under the Plan to any individual during any calendar year shall be 1,000,000 shares, subject toadjustment as described below. The shares may be authorized but unissued shares of Company Stockor reacquired shares of Company Stock, including shares purchased by the Company on the openmarket for purposes of the Plan.(b) Automatic Share Pool Increase. The Share Pool shall be increased on the first day ofeach Fiscal Year beginning with the 2016 fiscal year, in an amount equal to four percent (4.0%) of theoutstanding shares of Company Stock on the last day of the immediately preceding fiscal year. (c) Adjustments to Share Pool. The Share Pool shall be reduced, on the date of grant, byone share for each Award granted under the Plan; provided that Awards that are valued by referenceto shares of Company Stock but are required to be paid in cash pursuant to their terms shall not reducethe Share Pool. If and to the extent Options terminate, expire, or are canceled, forfeited, exchanged, orsurrendered without having been exercised, or if any Stock Awards or RSUs (including restrictedstock received upon the exercise of Options) are forfeited, the shares of Company Stock subject tosuch Awards shall again be available for Awards under the Share Pool. Notwithstanding theforegoing, the following shares of Company Stock shall not become-2- available for issuance under the Plan: (A) shares tendered by Grantees, or withheld by the Company,as full or partial payment to the Company upon the exercise of stock options granted under the Plan;and (B) shares withheld by, or otherwise remitted to, the Company to satisfy a Grantee’s taxwithholding obligations upon the lapse of restrictions on Stock Awards or the exercise of Optionsgranted under the Plan. (d) Adjustments. If there is any change in the number or kind of shares of Company Stockoutstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock split, or combination orexchange of shares; (ii) by reason of a merger, reorganization, or consolidation; (iii) by reason of areclassification or change in par value; or (iv) by reason of any other extraordinary or unusual eventaffecting the outstanding Company Stock as a class without the Company’s receipt of consideration,or if the value of outstanding shares of Company Stock is substantially reduced as a result of a spinoffor the Company’s payment of an extraordinary dividend or distribution, the maximum number ofshares of Company Stock available for Awards, the maximum number of shares of Company Stockthat any individual participating in the Plan may be granted in any year, the number of shares coveredby outstanding Awards, the kind of shares issued under the Plan, and the price per share of suchAwards shall be adjusted by the Board to reflect any increase or decrease in the number of, or changein the kind or value of, issued shares of Company Stock to preclude the enlargement or dilution ofrights and benefits under such Awards; provided, however, that any fractional shares resulting fromsuch adjustment shall be eliminated. Any adjustments determined by the Board shall be final, binding,and conclusive.4. Eligibility for Participation(a) Eligible Persons. All employees of the Company and its parents or subsidiaries(“Employees”), including Employees who are officers or members of the Board, and members of theBoard who are not Employees (“Non-Employee Directors”) shall be eligible to participate in thePlan. Consultants and advisors who perform services for the Company or any of its parents orsubsidiaries (“Key Advisors”) shall be eligible to participate in the Plan if the Key Advisors renderbona fide services to the Company or its parents or subsidiaries, the services are not in connection withthe offer and sale of securities in a capital-raising transaction, and the Key Advisors do not directly orindirectly promote or maintain a market for the Company’s securities.(b) Selection of Grantees. The Board shall select the Employees, Non-EmployeeDirectors, and Key Advisors to receive Awards and shall determine the number of shares of CompanyStock subject to a particular Award in such manner as the Board determines. Employees, KeyAdvisors, and Non-Employee Directors who receive Awards under the Plan shall hereinafter bereferred to as “Grantees.” 5. Granting of OptionsThe Company may grant Options to purchase shares of Company Stock to Employees, Non-Employee Directors, and Key Advisors. The following provisions are applicable to Options.(a) Number of Shares. The Board shall determine the number of shares of Company Stockthat shall be subject to each Award of Options.-3- (b) Type of Option and Price.(i) The Board may grant Incentive Stock Options that are intended to qualify as“incentive stock options” within the meaning of section 422 of the Code or Nonqualified StockOptions that do not qualify as Incentive Stock Options. Incentive Stock Options may be granted onlyto employees of the Company or its parents or subsidiaries, as defined in section 424 of the Code. (ii) The purchase price (the “Exercise Price”) of Company Stock subject to anOption shall be determined by the Board and may be equal to or greater than the Fair Market Value (asdefined below) of a share of Company Stock on the date the Option is granted. An Incentive StockOption may not be granted to an Employee who, at the time of grant, owns stock possessing more thanten percent of the total combined voting power of all classes of stock of the Company or any parent orsubsidiary of the Company, unless the Exercise Price per share is not less than 110% of the FairMarket Value of Company Stock on the date of grant.(iii) If the Company Stock is publicly traded, the Fair Market Value per share shallbe determined as follows: (x) if the principal trading market for the Company Stock is a nationalsecurities exchange or the Nasdaq National Market, the last reported sale price thereof on the relevantdate or (if there were no trades on that date) the latest preceding date upon which a sale was reported,or (y) if the Company Stock is not principally traded on such exchange or market, the mean betweenthe last reported “bid” and “asked” prices of Company Stock on the relevant date, as reported onNasdaq or, if not so reported, as reported by the National Daily Quotation Bureau, Inc. or as reportedin a customary financial reporting service, as applicable and as the Board determines.(iv) If the Company Stock is not publicly traded or, if publicly traded, is not subjectto reported transactions or “bid” or “asked” quotations as set forth above, the Fair Market Value pershare shall be as determined by the Board. The Board shall determine the Fair Market Value basedupon the application of a reasonable valuation method that considers all material information availableto the Board. The Board may engage outside advisors, valuation experts and counsel to assist theBoard in making a determination of Fair Market Value for purpose of the Plan. (c) Option Term. The Board shall determine the term of each Option. The term of anyOption shall not exceed ten years from the date of grant. An Incentive Stock Option that is granted toan Employee who, at the time of grant, owns stock possessing more than ten percent of the totalcombined voting power of all classes of stock of the Company, or any parent or subsidiary of theCompany, however, may not have a term that exceeds five years from the date of grant.(d) Exercisability of Options. Options shall become exercisable in accordance with suchterms and conditions, consistent with the Plan, as may be determined by the Board and specified in theAward Agreement. The Board may accelerate the exercisability of any or all outstanding Options atany time for any reason. The Board may provide in an Award Agreement that the Grantee may electto exercise part or all of an Option before it otherwise has become exercisable. Any shares sopurchased shall be restricted shares and shall be subject to a repurchase-4- right in favor of the Company during a specified restriction period, with the repurchase price equal tothe lesser of (A) the Exercise Price or (B) the Fair Market Value of such shares at the time ofrepurchase, and (C) any other restrictions determined by the Company.(e) Termination of Employment, Disability, or Death.(i) Except as provided below, an Option may only be exercised while the Granteeis employed by, or providing service to, the Employer (as defined below) as an Employee, KeyAdvisor, or member of the Board. In the event that a Grantee ceases to be employed by, or provideservice to, the Employer for any reason other than Disability, death, or termination for Cause, anyOption which is otherwise exercisable by the Grantee shall terminate unless exercised within 90 daysafter the date on which the Grantee ceases to be employed by, or provide service to, the Employer (orwithin such other period of time as may be specified by the Board), but in any event no later than thedate of expiration of the Option term. Except as otherwise provided by the Board or in the AwardAgreement, any of the Grantee’s Options that are not otherwise exercisable as of the date on which theGrantee ceases to be employed by, or provide service to, the Employer shall terminate as of such date. (ii) In the event the Grantee ceases to be employed by, or provide service to, theEmployer on account of a termination for Cause by the Employer, any Option held by the Granteeshall terminate as of the date the Grantee ceases to be employed by, or provide service to, theEmployer. In addition, notwithstanding any other provisions of this Section 5, if the Board determinesthat the Grantee has engaged in conduct that constitutes Cause at any time while the Grantee isemployed by, or providing service to, the Employer or after the Grantee’s termination of employmentor service, any Option held by the Grantee shall immediately terminate, and the Grantee shallautomatically forfeit all shares underlying any exercised portion of an Option for which the Companyhas not yet delivered the share certificates, upon refund by the Company of the Exercise Price paid bythe Grantee for such shares. Upon any exercise of an Option, the Company may withhold delivery ofshare certificates pending resolution of an inquiry that could lead to a finding resulting in a forfeiture.(iii) In the event the Grantee ceases to be employed by, or provide service to, theEmployer because the Grantee is Disabled, any Option which is otherwise exercisable by the Granteeshall terminate unless exercised within one year after the date on which the Grantee ceases to beemployed by, or provide service to, the Employer (or within such other period of time as may bespecified by the Board), but in any event no later than the date of expiration of the Optionterm. Except as otherwise provided by the Board, any of the Grantee’s Options which are nototherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide serviceto, the Employer shall terminate as of such date.(iv) If the Grantee dies while employed by, or providing service to, the Employer orwithin 90 days after the date on which the Grantee ceases to be employed or provide service onaccount of a termination specified in Section 5(f)(i) above (or within such other period of time as maybe specified by the Board), any Option that is otherwise exercisable by the Grantee shall terminateunless exercised within one year after the date on which the Grantee ceases to be employed by, orprovide service to, the Employer (or within such other period of time as may be specified by theBoard), but in any event no later than the date of expiration of the Option term. -5- Except as otherwise provided by the Board, any of the Grantee’s Options that are not otherwiseexercisable as of the date on which the Grantee ceases to be employed by, or provide service to, theEmployer shall terminate as of such date.(v) For purposes of this Plan:(A) The term “Employer” shall mean the Company and its parent and subsidiarycorporations or other entities, as determined by the Board.(B) “Employed by, or provide service to, the Employer” shall mean employmentor service as an Employee, Key Advisor, or member of the Board (so that, for purposes ofexercising Options and satisfying conditions with respect to Stock Awards or RSUs, aGrantee shall not be considered to have terminated employment or service until the Granteeceases to be an Employee, Key Advisor, or member of the Board), unless the Boarddetermines otherwise.(C) “Disability” shall mean a Grantee’s becoming disabled within the meaning ofsection 22(e)(3) of the Code, within the meaning of the Employer’s long-term disability planapplicable to the Grantee, or as otherwise determined by the Board.(D) “Cause” shall mean, except to the extent specified otherwise by the Board oras defined in any other agreement between the Grantee and the Company, a finding by theBoard that the Grantee has (i) been convicted of a felony or crime involving moral turpitude;(ii) disclosed trade secrets or confidential information of the Employer to persons not entitledto receive such information; (iii) breached any written noncompetition or nonsolicitationagreement between the Grantee and the Employer; or (iv) engaged in willful and continuednegligence in the performance of the duties assigned to the Grantee by the Employer, afterthe Grantee has received notice of and failed to cure such negligence.(f) Exercise of Options. A Grantee may exercise an Option that has become vested andexercisable, in whole or in part, by delivering a notice of exercise to the Company. The Grantee shallpay the Exercise Price for an Option by the Board (i) in cash; (ii) by delivering shares of CompanyStock owned by the Grantee (including Company Stock acquired in connection with the exercise ofan Option, subject to such restrictions as the Board deems appropriate) and having a Fair MarketValue on the date of exercise equal to the Exercise Price or by attestation (on a form prescribed by theBoard) to ownership of shares of Company Stock having a Fair Market Value on the date of exerciseequal to the Exercise Price; (iii) after a Public Offering, payment through a broker in accordance withprocedures permitted by Regulation T of the Federal Reserve Board; or (iv) by such other method asthe Board may approve. In addition, the Grantee may elect to settle the Option on a “net basis” bytaking delivery of the number of Company Stock equal to Fair Market Value of the shares subject toany Option less the exercise price, any tax (or other governmental obligation) or other administrationfees due. Shares of Company Stock used to exercise an Option shall have been held by the Granteefor the requisite period of time to avoid adverse accounting consequences to the Company withrespect to the Option. The Grantee shall pay the Exercise Price and the amount of any withholdingtax due (pursuant to Section 7) as specified by the Board.-6- (g) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide that, ifthe aggregate Fair Market Value of the stock on the date of the grant with respect to which IncentiveStock Options are exercisable for the first time by a Grantee during any calendar year, under the Planor any other stock option plan of the Company or a parent or subsidiary, exceeds $100,000, then theOption, as to the excess, shall be treated as a Nonqualified Stock Option. An Incentive Stock Optionshall not be granted to any person who is not an Employee of the Company or a parent or subsidiary(within the meaning of section 424(f) of the Code) of the Company.6. Stock Awards and RSUsThe Company may issue or transfer shares of Company Stock to an Employee, Non-EmployeeDirector, or Key Advisor under a Stock Award or RSU, upon such terms as the Board deemsappropriate. The following provisions are applicable to Stock Awards and RSUs:(a) General Requirements. Shares of Company Stock issued or transferred pursuant toStock Awards may be issued or transferred for consideration or for no consideration, and subject torestrictions or no restrictions, as determined by the Board. The Board shall determine the number ofshares of Company Stock subject to a Stock Award and the number of RSUs to be granted to aGrantee, the duration of the period during which, and the conditions, if any, under which, the StockAward and RSUs may vest or may be forfeited to the Company and the other terms and conditions ofsuch Awards. The Board may require different periods of service or different performance goals andobjectives with respect to different Grantees holding different Stock Awards or RSUs or to separate,designated portions of shares constituting Stock Awards.(b) Transfer Restrictions and Legend on Stock Certificate. Stock Awards and RSUs maynot be sold, assigned, transferred, pledged or otherwise encumbered except as provided in the Plan oras may be provided in the applicable Award Agreement; provided, however, that the Board maydetermine that Stock Awards and RSUs may be transferred by the Grantee. Each certificate for StockAwards shall contain a legend giving appropriate notice of the restrictions in the Award. The Granteeshall be entitled to have the legend removed from the stock certificate covering the shares subject torestrictions when all restrictions on such shares have lapsed. The Board may determine that theCompany shall not issue certificates for Stock Awards until all restrictions on such shares have lapsed,or that the Company shall retain possession of certificates for Stock Awards until all restrictions onsuch shares have lapsed. Upon the lapse of the restrictions applicable to a Stock Award, the Companyor other custodian, as applicable, shall deliver such certificates to the Grantee or the Grantee’s legalrepresentative.(c) Payment/Lapse of Restrictions. Each RSU shall be granted with respect to one share ofCompany Stock or shall have a value equal to the Fair Market Value of one share of Company Stock.RSUs shall be paid in cash, shares of Company Stock, other securities, other Awards or otherproperty, as determined in the sole discretion of the Board, upon the lapse of restrictions applicablethereto, or otherwise in accordance with the applicable Award Agreement. The amount payable as aresult of the vesting of an RSU shall be distributed as soon as practicable following the vesting dateand in no event later than the fifteenth date of the third calendar month of the year following thevesting date of the RSU (or as otherwise permitted under Section 409A of the Code); provided,however, that a Grantee may, if and to the extent permitted by the Board, elect to defer payment ofRSUs in a manner permitted by Section 409A of the Code.-7- (d) Termination of Employment or Service. Except as otherwise set forth in the AwardAgreement, if the Grantee ceases to be employed by, or provide service to, the Employer (as definedin Section 5(e)), any Stock Award or RSUs held by the Grantee that are subject to the transferrestrictions set forth in Section 6(b) above at such time shall be forfeited. The Board may, however,provide for complete or partial exceptions to this requirement as it deems appropriate.(e) No Right to Vote and to Receive Dividends. Prior to the lapse of the transferrestrictions set forth in Section 6(b) above, the Grantee shall not have the right to vote shares subject toStock Awards or to receive any dividends or other distributions paid on such shares, subject to anyrestrictions deemed appropriate by the Board.7. Performance-Based AwardsNotwithstanding anything to the contrary herein, certain Stock Awards or RSUs grantedunder the Plan may be granted in a manner which is deductible by the Company under Section162(m) of the Code (or any successor section thereto). Such Stock Awards or RSUs shall bedesignated “Performance-Based Awards”. The following provisions are applicable to Performance-Based Awards: (a) Performance Goals. A Grantee’s Performance-Based Awards shall be determinedbased on the attainment of written performance goals approved by the Board for a performance periodestablished by the Board (i) while the outcome for that performance period is substantially uncertainand (ii) no more than 90 days after the commencement of the performance period to which theperformance goal relates or, if less, the number of days which is equal to 25 percent of the relevantperformance period, or as otherwise permitted pursuant to Section 162(m) of the Code (or anysuccessor section thereto). The performance goals, which must be objective, shall be based upon oneor more of the following criteria: (i) consolidated earnings before or after taxes (including earningsbefore interest, taxes, depreciation and amortization); (ii) net income; (iii) operating income; (iv)earnings per share; (v) return on shareholders’ equity; (vi) attainment of strategic and operationalinitiatives; (vii) customer income; (viii) economic value-added models; (ix) maintenance orimprovement of profit margins; (x) stock price (including total shareholder return), including, withoutlimitation, as compared to one or more stock indices; (xi) market share; (xii) revenues, sales or netsales; (xiii) return on assets; (xiv) book value per share; (xv) expense management; (xvi)improvements in capital structure; (xvii) costs and (xviii) cash flow. The foregoing criteria may relateto the Company, one or more of its subsidiaries or one or more of its divisions or units, or anycombination of the foregoing, and may be applied on an absolute basis and/or be relative to one ormore peer group companies or indices, or any combination thereof, all as the Board shall determine. Inaddition, to the degree consistent with the Code, the performance goals may be calculated withoutregard to extraordinary, unusual and/or non-recurring items.(b) Determination of Satisfaction of Performance Goals. The Board shall determinewhether, with respect to a performance period, the applicable performance goals have been met withrespect to a given Grantee and, if they have, so certify and ascertain the amount of the applicablePerformance-Based Award. No Performance-Based Awards will be paid for such performance perioduntil such certification is made by the Board. The amount of the Performance-Based Award actuallypaid to a given Grantee may be less than the amount determined by the-8- applicable performance goal formula, at the discretion of the Board. The amount of the Performance-Based Award determined by the Board for a performance period shall be paid to the Grantee at suchtime as determined by the Board in its sole discretion after the end of such performance period;provided, however, that a Grantee may, if and to the extent permitted by the Board and consistent withthe provisions of Section 162(m) of the Code, elect to defer payment of a Performance-Based Awardin a manner permitted by Section 409A of the Code. To the extent Section 162(m) of the Code (or anysuccessor section thereto) provides terms different from the requirements of this Section 7, this Section7 shall be deemed amended thereby8. Withholding of Taxes(a) Required Withholding. All Awards under the Plan shall be subject to applicable federal(including FICA), state, and local tax (or other governmental obligation) withholding requirements orother administration fees due. The Employer may require that the Grantee or other person receiving orexercising Awards pay to the Employer the amount of any federal, state, or local taxes (or othergovernmental obligations) that the Employer is required to withhold or any administration fees duewith respect to such Awards, or the Employer may deduct from other wages paid by the Employer theamount of any withholding taxes, governmental obligations or administration fees due with respect tosuch Awards.(b) Election to Withhold Shares. If the Board so permits, a Grantee may elect to satisfy theEmployer’s income tax (or other governmental obligation) withholding requirement and anyadministration fees due with respect to an Award by having shares withheld up to an amount that doesnot exceed the Grantee’s minimum applicable withholding rate for federal (including FICA), state, andlocal tax (and other governmental obligation) liabilities plus any other administration fees due. Theelection must be in a form and manner prescribed by the Board and may be subject to the priorapproval of the Board.9. Transferability of Awards(a) Nontransferability of Awards. Except as provided below, only the Grantee mayexercise rights under an Award during the Grantee’s lifetime. A Grantee may not transfer those rightsexcept (i) by will or by the laws of descent and distribution or (ii) with respect to Awards other thanIncentive Stock Options, if permitted in any specific case by the Board, pursuant to a domesticrelations order or otherwise as permitted by the Board. When a Grantee dies, the personalrepresentative or other person entitled to succeed to the rights of the Grantee may exercise suchrights. Any such successor must furnish proof satisfactory to the Company of his or her right toreceive the Award under the Grantee’s will or under the applicable laws of descent and distribution.(b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the Boardmay provide, in an Award Agreement, that a Grantee may transfer Nonqualified Stock Options tofamily members, or one or more trusts or other entities for the benefit of or owned by family members,consistent with applicable securities laws, according to such terms as the Board may determine;provided that the Grantee receives no consideration for the transfer of an Option and the transferredOption shall continue to be subject to the same terms and conditions as were applicable to the Optionimmediately before the transfer.-9- 10. Right of First Refusal; Repurchase Right(a) Offer. Prior to a Public Offering, if at any time an individual desires to sell, encumber,or otherwise dispose of shares of Company Stock that were distributed to him or her under the Planand that are transferable, the individual may do so only pursuant to a bona fide written offer, and theindividual shall first offer the shares to the Company by giving the Company written noticedisclosing: (i) the name of the proposed transferee of the Company Stock; (ii) the certificate numberand number of shares of Company Stock proposed to be transferred or encumbered; (iii) the proposedprice; (iv) all other terms of the proposed transfer; and (v) a written copy of the proposed offer. Within60 days after receipt of such notice, the Company shall have the option to purchase all or part of suchCompany Stock at the price and on the terms described in the written notice; provided that theCompany may pay such price in installments over a period not to exceed four years, at the discretionof the Board.(b) Sale. In the event the Company (or a shareholder, as described below) does notexercise the option to purchase Company Stock, as provided above, the individual shall have the rightto sell, encumber, or otherwise dispose of the shares of Company Stock described in subsection (a) atthe price and on the terms of the transfer set forth in the written notice to the Company, provided suchtransfer is effected within 15 days after the expiration of the option period. If the transfer is noteffected within such period, the Company must again be given an option to purchase, as providedabove.(c) Assignment of Rights. The Board, in its sole discretion, may waive the Company’sright of first refusal and repurchase right under this Section 10. If the Company’s right of first refusalor repurchase right is so waived, the Board may, in its sole discretion, assign such right to theremaining shareholders of the Company in the same proportion that each shareholder’s stockownership bears to the stock ownership of all the shareholders of the Company, as determined by theBoard. To the extent that a shareholder has been given such right and does not purchase his or herallotment, the other shareholders shall have the right to purchase such allotment on the same basis.(d) Purchase by the Company. Prior to a Public Offering, if a Grantee ceases to beemployed by, or provide service to, the Employer, the Company shall have the right to purchase,within 60 days of the date that Grantee ceases to be employed by, or provide services to, theEmployer, all or part of any Company Stock distributed to Grantee under the Plan at the Fair MarketValue (as defined in Section 5(b)) on the date that Grantee ceases to be employed by, or provideservices to, the Employer (or at such other price as may be established in the Award Agreement);provided, however, that such repurchase shall be made in accordance with applicable accounting rulesto avoid adverse accounting treatment.(e) Public Offering. On and after a Public Offering, the Company shall have no furtherright to purchase shares of Company Stock under this Section 10.(f) Shareholder’s Agreement. Notwithstanding the provisions of this Section 10, if theBoard requires that a Grantee execute a shareholder’s agreement with respect to any Company Stockdistributed pursuant to the Plan, which contains a right of first refusal or repurchase right, theprovisions of this Section 10 shall not apply to such Company Stock.-10- 11. Change of Control of the CompanyAs used herein, a “Change of Control” shall be deemed to have occurred if:(a) Any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act)(other than persons who are shareholders on the effective date of the Plan) becomes a “beneficialowner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of theCompany representing more than 50% of the voting power of the then outstanding securities of theCompany; provided that a Change of Control shall not be deemed to occur as a result of a change ofownership resulting from the death of a shareholder, and a Change of Control shall not be deemed tooccur as a result of a transaction in which the Company becomes a subsidiary of another corporationand in which the shareholders of the Company, immediately prior to the transaction, will beneficiallyown, immediately after the transaction, shares entitling such shareholders to more than 50% of allvotes to which all shareholders of the parent corporation would be entitled in the election of directors(without consideration of the rights of any class of stock to elect directors by a separate class vote); or (b) The consummation of (i) a merger or consolidation of the Company with anothercorporation where the shareholders of the Company, immediately prior to the merger or consolidation,will not beneficially own, immediately after the merger or consolidation, shares entitling suchshareholders to more than 50% of all votes to which all shareholders of the surviving corporationwould be entitled in the election of directors (without consideration of the rights of any class of stockto elect directors by a separate class vote); (ii) a sale or other disposition of all or substantially all of theassets of the Company; or (iii) a liquidation or dissolution of the Company.(c) Notwithstanding the foregoing, the following acquisitions shall not constitute a Changeof Control: (A) an acquisition by the Company or entity controlled by the Company, or (B) anacquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company12. Consequences of a Change of Control(a) Assumption of Awards. Upon a Change of Control where the Company is not thesurviving corporation (or survives only as a subsidiary of another corporation), unless the Boarddetermines otherwise, all outstanding Awards shall be assumed by, or replaced with comparableAwards by, the surviving corporation (or a parent or subsidiary of the surviving corporation).(b) Termination of Awards. Upon a Change of Control where the Company is not thesurviving corporation (or survives only as a subsidiary of another corporation), in the event thesurviving corporation (or a parent or subsidiary of the surviving corporation) does not assume orreplace the Awards with comparable Awards, (i) the Company shall provide each Grantee withoutstanding Awards written notice of such Change of Control; (ii) all outstanding Options shallautomatically accelerate and become fully vested and exercisable; (iii) all outstanding Stock Awardsshall become vested and deliverable in accordance with Section 6(b); and (iv) all outstanding RSUsshall become vested and deliverable in accordance with Section 6(c).-11- (c) Other Alternatives. Notwithstanding the foregoing, in the event of a Change ofControl, the Board may take one or both of the following actions: the Board may (i) require thatGrantees surrender their outstanding Options in exchange for a payment by the Company, in cash orCompany Stock as determined by the Board, in an amount equal to the amount by which the then FairMarket Value of the shares of Company Stock subject to the Grantee’s unexercised Options exceedsthe Exercise Price of the Options; or (ii) after giving Grantees an opportunity to exercise theiroutstanding Options, terminate any or all unexercised Options at such time as the Board deemsappropriate. Such surrender or termination shall take place as of the date of the Change of Control orsuch other date as the Board may specify.13. Requirements for Issuance or Transfer of Shares(a) Shareholder’s Agreement. The Board may require that a Grantee execute ashareholder’s agreement, with such terms as the Board deems appropriate, with respect to anyCompany Stock issued or distributed pursuant to the Plan.(b) Limitations on Issuance or Transfer of Shares. No Company Stock shall be issued ortransferred in connection with any Award hereunder unless and until all legal requirements applicableto the issuance or transfer of such Company Stock have been complied with to the satisfaction of theBoard. The Board shall have the right to condition any Award made to any Grantee hereunder onsuch Grantee’s undertaking in writing to comply with such restrictions on his or her subsequentdisposition of such shares of Company Stock as the Board shall deem necessary or advisable, andcertificates representing such shares may be legended to reflect any such restrictions. Certificatesrepresenting shares of Company Stock issued or transferred under the Plan shall be subject to suchstop-transfer orders and other restrictions as may be required by applicable laws, regulations, andinterpretations, including any requirement that a legend be placed thereon.(c) Lock-Up Period. If so requested by the Company or any representative of theunderwriters (the “Managing Underwriter”) in connection with any underwritten offering of securitiesof the Company under the Securities Act of 1933, as amended (the “Securities Act”), a Grantee(including any successor or assigns) shall not sell or otherwise transfer any shares or other securities ofthe Company during the 30-day period preceding and the 180-day period following the effective dateof a registration statement of the Company filed under the Securities Act for such underwriting (orsuch shorter period as may be requested by the Managing Underwriter and agreed to by theCompany) (the “Market Standoff Period”). The Company may impose stop-transfer instructions withrespect to securities subject to the foregoing restrictions until the end of such Market Standoff Period.14. Amendment and Termination of the Plan(a) Amendment. The Board may amend or terminate the Plan at any time; provided,however, that the Board shall not amend the Plan without shareholder approval if such approval isrequired in order to comply with the Code or other applicable laws or, after an Initial Public Offering,to comply with applicable stock exchange requirements.-12- (b) Termination of Plan. The Plan shall terminate on the day immediately preceding thetenth anniversary of its effective date, unless the Plan is terminated earlier by the Board or is extendedby the Board with the approval of the shareholders.(c) Termination and Amendment of Outstanding Awards. A termination or amendment ofthe Plan that occurs after an Award is made shall not materially impair the rights of a Grantee unlessthe Grantee consents or unless the Board acts under Section 20(b). The termination of the Plan shallnot impair the power and authority of the Board with respect to an outstanding Award. Whether ornot the Plan has terminated, an outstanding Award may be terminated or amended under Section 20(b)or may be amended by agreement of the Company and the Grantee consistent with the Plan.(d) Governing Document. The Plan shall be the controlling document. No otherstatements, representations, explanatory materials or examples, oral or written, may amend the Plan inany manner. The Plan shall be binding upon and enforceable against the Company and its successorsand assigns.15. Funding of the PlanThe Plan shall be unfunded. The Company shall not be required to establish any special orseparate fund or to make any other segregation of assets to assure the payment of any Awards underthe Plan. In no event shall interest be paid or accrued on any Award, including unpaid installments ofAwards.16. Rights of ParticipantsNothing in the Plan shall entitle any Employee, Key Advisor, Non-Employee Director, or otherperson to any claim or right to be granted an Award under the Plan. Neither the Plan nor any actiontaken hereunder shall be construed as giving any individual any rights to be retained by or in theemploy of the Employer or any other employment rights. 17. No Fractional SharesNo fractional shares of Company Stock shall be issued or delivered pursuant to the Plan or anyAward. The Board shall determine whether cash, other awards or other property shall be issued orpaid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall beforfeited or otherwise eliminated.18. HeadingsSection headings are for reference only. In the event of a conflict between a title and thecontent of a Section, the content of the Section shall control.19. Effective Date of the Plan(a) Effective Date. The Plan shall be effective on September 3, 2015.-13- (b) Public Offering. The provisions of the Plan that refer to a Public Offering, or that referto, or are applicable to persons subject to, section 16 of the Exchange Act or section 162(m) of theCode, shall be effective, if at all, upon the initial registration of the Company Stock under section12(g) of the Exchange Act, and shall remain effective thereafter for so long as such stock is soregistered.20. Miscellaneous(a) Awards in Connection with Corporate Transactions and Otherwise. Nothing containedin the Plan shall be construed to (i) limit the right of the Board to make Awards under the Plan inconnection with the acquisition, by purchase, lease, merger, consolidation, or otherwise, of thebusiness or assets of any corporation, firm or association, including Awards to employees thereof whobecome Employees, or for other proper corporate purposes; or (ii) limit the right of the Company togrant stock options or make other awards outside of the Plan. Without limiting the foregoing, theBoard may make an Award to an employee of another corporation who becomes an Employee byreason of a corporate merger, consolidation, acquisition of stock or property, reorganization, orliquidation involving the Company, the Parent, or any of their subsidiaries in substitution for a stockoption, stock award or other type of applicable equity grants made by such corporation. The termsand conditions of the substitute grants may vary from the terms and conditions required by the Planand from those of the substituted stock incentives. The Board shall prescribe the provisions of thesubstitute grants.(b) Compliance with Law. The Plan, exercise of Options, restrictions of Stock Awardsand obligations of the Company to issue or transfer shares of Company Stock under Awards shall besubject to all applicable laws and to approvals by any governmental or regulatory agency as may berequired. With respect to persons subject to section 16 of the Exchange Act, after a Public Offering, itis the intent of the Company that the Plan and all transactions under the Plan comply with allapplicable provisions of Rule 16b-3 or its successors under the Exchange Act. In addition, it is theintent of the Company that the Plan and applicable Awards under the Plan comply with the applicableprovisions of sections 162(m), 409A and 422 of the Code. To the extent that any legal requirement ofsection 16 of the Exchange Act or sections 162(m), 409A or 422 of the Code as set forth in the Planceases to be required under section 16 of the Exchange Act or sections 162(m), 409A or 422 of theCode, that Plan provision shall cease to apply. The Board may revoke any Award if it is contrary tolaw or modify an Award to bring it into compliance with any valid and mandatory governmentregulation. The Board may also adopt rules regarding the withholding of taxes on payments toGrantees. The Board may, in its sole discretion, agree to limit its authority under this Section.(c) Employees Subject to Taxation Outside the United States. With respect to Granteeswho are subject to taxation in countries other than the United States, the Board may make Awards onsuch terms and conditions as the Board deems appropriate to comply with the laws of the applicablecountries, and the Board may create such procedures, addenda, and subplans and make suchmodifications as may be necessary or advisable to comply with such laws.(d) Governing Law. The validity, construction, interpretation, and effect of the Plan andAward Agreements issued under the Plan shall be governed and construed by and determined-14- in accordance with the laws of the State of Delaware, without giving effect to the conflict of lawsprovisions thereof. -15-  EXHIBIT 10.14STRONGBRIDGE BIOPHARMA PLCNON-EMPLOYEE DIRECTOR EQUITY COMPENSATION PLANThe purpose of the Strongbridge Biopharma plc Non-Employee Director Equity CompensationPlan (the “Plan”) is to provide non-employee members of the Board of Directors (the “Board”) ofStrongbridge Biopharma plc (the “Company”) with the opportunity to receive grants of nonqualifiedstock options and stock awards. The Company believes that the Plan will encourage the participants tocontribute materially to the growth of the Company, thereby benefitting the Company’s shareholders,and will align the economic interests of the participants with those of the shareholders.1. Administration(a) Administrator. The Plan shall be administered and interpreted by the Board and allgrants made hereunder shall be approved by the Board.(b) Board Authority. The Board shall have the sole authority to (i) determine theindividuals to whom grants shall be made under the Plan; (ii) determine the type, size, and terms of thegrants to be made to each such individual; (iii) determine the time when the grants will be made andthe duration of any applicable exercise or restriction period, including the criteria for exercisability andthe acceleration of exercisability; (iv) amend the terms of any previously issued grant; (v) acceleratethe vesting, exercisability, or lapse of any forfeiture condition with respect to an Award; and (vi) dealwith any other matters arising under the Plan.(c) Board Determinations. The Board shall have full power and authority to administer,construe and interpret the Plan, correct any defect, supply any omission, or reconcile anyinconsistency in the Plan or any Award or Award Agreement, make factual determinations and adoptor amend such rules, regulations, agreements, and instruments for implementing the Plan and for theconduct of its business as it deems necessary or advisable, in its sole discretion. The Board’sinterpretations of the Plan and all determinations made by the Board pursuant to the powers vested init hereunder shall be conclusive and binding on all persons having any interest in the Plan or in anyawards granted hereunder. All powers of the Board shall be executed in its sole discretion, in the bestinterest of the Company, not as a fiduciary, and in keeping with the objectives of the Plan and neednot be uniform as to similarly situated individuals.(d) Limitation of Liability. To the maximum extent permitted by law, no member of theBoard shall be liable for any action taken or decision made in good faith relating to the Plan or anyAward thereunder. The Board may employ counsel, consultants, accountants, appraisers, brokers orother persons. The Board, the Company, and the officers and directors of the Company shall beentitled to rely upon the advice, opinions or valuations of any such persons.2. AwardsAwards under the Plan may consist of grants of nonqualified stock options as described inSection 5 (“Options”), as stock awards as described in Section 6 (“Stock Awards”), and restrictedstock units as described in Section 6 (“RSUs”) (hereinafter collectively referred to as “Awards”). US_ACTIVE-122865329.1-KHALPERN 03/12/2018 5:55 AM All Awards shall be subject to the terms and conditions set forth herein and to such other terms andconditions consistent with the Plan as the Board deems appropriate and as are specified in writing bythe Board to the individual in a grant instrument or an amendment to the grant instrument (the “AwardAgreement”). The Board shall approve the form and provisions of each Award Agreement. Awardsunder a particular Section of the Plan need not be uniform as among the Grantees. 3. Shares Subject to the Plan(a) Shares Authorized. Subject to adjustment as described below, the aggregate number ofordinary shares of par value US$0.01 each of the Company (“Company Stock”) that may be issued ortransferred under the Plan is 828,904 (the “Share Pool”). The shares may be authorized but unissuedshares of Company Stock or reacquired shares of Company Stock, including shares purchased by theCompany on the open market for purposes of the Plan.(b) Automatic Share Pool Increase. The Share Pool shall be increased on the first day ofeach Fiscal Year beginning with the 2016 fiscal year, in an amount equal to one-half percent (0.5%) ofthe outstanding shares of Company Stock on the last day of the immediately preceding fiscal year. (c) Adjustments to Share Pool. The Share Pool shall be reduced, on the date of grant, byone share for each Award granted under the Plan; provided that Awards that are valued by referenceto shares of Company Stock but are required to be paid in cash pursuant to their terms shall not reducethe Share Pool. If and to the extent Options terminate, expire, or are canceled, forfeited, exchanged, orsurrendered without having been exercised, or if any Stock Awards or RSUs (including restrictedstock received upon the exercise of Options) are forfeited, the shares of Company Stock subject tosuch Awards shall again be available for Awards under the Share Pool. Notwithstanding theforegoing, shares tendered by Grantees, or withheld by the Company, as full or partial payment to theCompany upon the exercise of Options granted under the Plan, shall not become available forissuance under the Plan. (d) Adjustments. If there is any change in the number or kind of shares of Company Stockoutstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock split, or combination orexchange of shares; (ii) by reason of a merger, reorganization, or consolidation; (iii) by reason of areclassification or change in par value; or (iv) by reason of any other extraordinary or unusual eventaffecting the outstanding Company Stock as a class without the Company’s receipt of consideration,or if the value of outstanding shares of Company Stock is substantially reduced as a result of a spinoffor the Company’s payment of an extraordinary dividend or distribution, the maximum number ofshares of Company Stock available for Awards, the maximum number of shares of Company Stockthat any individual participating in the Plan may be granted in any year, the number of shares coveredby outstanding Awards, the kind of shares issued under the Plan, and the price per share of suchAwards shall be adjusted by the Board to reflect any increase or decrease in the number of, or changein the kind or value of, issued shares of Company Stock to preclude the enlargement or dilution ofrights and benefits under such Awards; provided, however, that any fractional shares resulting fromsuch adjustment shall be eliminated. Any adjustments determined by the Board shall be final, binding,and conclusive.-2- 4. Eligibility for Participation(a) Eligible Persons. All members of the Board who are not employees (“Non-EmployeeDirectors”) shall be eligible to participate in the Plan. (b) Selection of Grantees. The Board shall select the Non-Employee Directors to receiveAwards and shall determine the number of shares of Company Stock subject to a particular Award insuch manner as the Board determines. Non-Employee Directors who receive Awards under the Planshall hereinafter be referred to as “Grantees.” 5. Granting of OptionsThe following provisions are applicable to Options.(a) Number of Shares. The Board shall determine the number of shares of Company Stockthat shall be subject to each Award of Options.(b) Type of Option and Price.(i) The purchase price (the “Exercise Price”) of Company Stock subject to anOption shall be determined by the Board and may be equal to or greater than the Fair Market Value (asdefined below) of a share of Company Stock on the date the Option is granted. (ii) If the Company Stock is publicly traded, the Fair Market Value per share shallbe determined as follows: (x) if the principal trading market for the Company Stock is a nationalsecurities exchange or the Nasdaq National Market, the last reported sale price thereof on the relevantdate or (if there were no trades on that date) the latest preceding date upon which a sale was reported,or (y) if the Company Stock is not principally traded on such exchange or market, the mean betweenthe last reported “bid” and “asked” prices of Company Stock on the relevant date, as reported onNasdaq or, if not so reported, as reported by the National Daily Quotation Bureau, Inc. or as reportedin a customary financial reporting service, as applicable and as the Board determines.(iii) If the Company Stock is not publicly traded or, if publicly traded, is not subjectto reported transactions or “bid” or “asked” quotations as set forth above, the Fair Market Value pershare shall be as determined by the Board. The Board shall determine the Fair Market Value basedupon the application of a reasonable valuation method that considers all material information availableto the Board. The Board may engage outside advisors, valuation experts and counsel to assist theBoard in making a determination of Fair Market Value for purpose of the Plan. (c) Option Term. The Board shall determine the term of each Option. The term of anyOption shall not exceed ten years from the date of grant. (d) Exercisability of Options. Options shall become exercisable in accordance with suchterms and conditions, consistent with the Plan, as may be determined by the Board and specified in theAward Agreement. The Board may accelerate the exercisability of any or all outstanding Options atany time for any reason. The Board may provide in an Award Agreement-3- that the Grantee may elect to exercise part or all of an Option before it otherwise has becomeexercisable. Any shares so purchased shall be restricted shares and shall be subject to a repurchaseright in favor of the Company during a specified restriction period, with the repurchase price equal tothe lesser of (A) the Exercise Price or (B) the Fair Market Value of such shares at the time ofrepurchase, and (C) any other restrictions determined by the Company.(e) Termination of Service, Disability, or Death.(i) Except as provided below, an Option may only be exercised while the Granteeis providing service to the Company as a member of the Board. In the event that a Grantee ceases toprovide service to the Company for any reason other than Disability, death, or termination for Cause,any Option which is otherwise exercisable by the Grantee shall terminate unless exercised within 90days after the date on which the Grantee ceases to provide service to the Company (or within suchother period of time as may be specified by the Board), but in any event no later than the date ofexpiration of the Option term. Except as otherwise provided by the Board or in the Award Agreement,any of the Grantee’s Options that are not otherwise exercisable as of the date on which the Granteeceases to provide service to the Company shall terminate as of such date. (ii) In the event the Grantee ceases to provide service to the Company on account ofa removal from the Board for Cause by the Company, any Option held by the Grantee shall terminateas of the date the Grantee ceases to provide service to the Company. In addition, notwithstanding anyother provisions of this Section 5, if the a majority of disinterested members of the Board determinesthat the Grantee has engaged in conduct that constitutes Cause at any time while the Grantee isproviding service to the Company or after the Grantee’s termination of service, any Option held by theGrantee shall immediately terminate, and the Grantee shall automatically forfeit all shares underlyingany exercised portion of an Option for which the Company has not yet delivered the share certificates,upon refund by the Company of the Exercise Price paid by the Grantee for such shares. Upon anyexercise of an Option, the Company may withhold delivery of share certificates pending resolution ofan inquiry that could lead to a finding resulting in a forfeiture.(iii) In the event the Grantee ceases to provide service to the Company because theGrantee is Disabled, any Option which is otherwise exercisable by the Grantee shall terminate unlessexercised within one year after the date on which the Grantee ceases to provide service to theCompany (or within such other period of time as may be specified by the Board), but in any event nolater than the date of expiration of the Option term. Except as otherwise provided by the Board, any ofthe Grantee’s Options which are not otherwise exercisable as of the date on which the Grantee ceasesto provide service to the Company shall terminate as of such date.(iv) If the Grantee dies while providing service to the Company or within 90 daysafter the date on which the Grantee ceases to provide service on account of a termination specified inSection 5(f)(i) above (or within such other period of time as may be specified by the Board), anyOption that is otherwise exercisable by the Grantee shall terminate unless exercised within one yearafter the date on which the Grantee ceases to provide service to the Company (or within such otherperiod of time as may be specified by the Board), but in any event no later than the date of expirationof the Option term. Except as otherwise provided by the Board, any of the-4- Grantee’s Options that are not otherwise exercisable as of the date on which the Grantee ceases toprovide service to the Company shall terminate as of such date.(v) For purposes of this Plan:(A) “Provide service to the Company” shall mean service as a member of theBoard (so that, for purposes of exercising Options and satisfying conditions with respect toStock Awards or RSUs, a Grantee shall not be considered to have terminated service untilthe Grantee ceases to be a member of the Board), unless the Board determines otherwise.(B) “Disability” shall mean a Grantee’s becoming disabled within the meaning ofsection 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), or asotherwise determined by the Board.(C) “Cause” shall mean that the Grantee has been convicted of a felony or crimeinvolving moral turpitude; or a determination by a majority of the disinterested members ofthe Board that the Grantee has engaged in any of the following: (i) malfeasance in office; (ii)gross misconduct or neglect; (iii) false or fraudulent misrepresentation inducing the Grantee’sappointment to the Board; (iv) willful conversion of corporate funds; or (v) disclosure oftrade secrets or confidential information of the Company to persons not entitled to receivesuch information.(f) Exercise of Options. A Grantee may exercise an Option that has become vested andexercisable, in whole or in part, by delivering a notice of exercise to the Company. The Grantee shallpay the Exercise Price for an Option (i) in cash; (ii) by delivering shares of Company Stock owned bythe Grantee (including Company Stock acquired in connection with the exercise of an Option, subjectto such restrictions as the Board deems appropriate) and having a Fair Market Value on the date ofexercise equal to the Exercise Price or by attestation (on a form prescribed by the Board) to ownershipof shares of Company Stock having a Fair Market Value on the date of exercise equal to the ExercisePrice; (iii) after an initial public offering of the Company’s stock as described in Section 17(b) (a“Public Offering”), payment through a broker in accordance with procedures permitted by RegulationT of the Federal Reserve Board; or (iv) by such other method as the Board may approve. In addition,the Grantee may elect to settle the Option on a “net basis” by taking delivery of the number ofCompany Stock equal to Fair Market Value of the shares subject to any Option less the exercise price,any tax (or other governmental obligation) or other administration fees due. Shares of Company Stockused to exercise an Option shall have been held by the Grantee for the requisite period of time to avoidadverse accounting consequences to the Company with respect to the Option. The Grantee shall paythe Exercise Price as specified by the Board.6. Stock Awards and RSUsThe following provisions are applicable to Stock Awards and RSUs:(a) General Requirements. Shares of Company Stock issued or transferred pursuant toStock Awards may be issued or transferred for consideration or for no consideration, and subject torestrictions or no restrictions, as determined by the Board. The Board shall determine-5- the number of shares of Company Stock subject to a Stock Award and the number of RSUs to begranted to a Grantee, the duration of the period during which, and the conditions, if any, under which,the Stock Award and RSUs may vest or may be forfeited to the Company and the other terms andconditions of such Awards. The Board may require different periods of service or differentperformance goals and objectives with respect to different Grantees holding different Stock Awards orRSUs or to separate, designated portions of shares constituting Stock Awards.(b) Transfer Restrictions and Legend on Stock Certificate. Stock Awards and RSUs maynot be sold, assigned, transferred, pledged or otherwise encumbered except as provided in the Plan oras may be provided in the applicable Award Agreement; provided, however, that the Board maydetermine that Stock Awards and RSUs may be transferred by the Grantee. Each certificate for StockAwards shall contain a legend giving appropriate notice of the restrictions in the Award. The Granteeshall be entitled to have the legend removed from the stock certificate covering the shares subject torestrictions when all restrictions on such shares have lapsed. The Board may determine that theCompany shall not issue certificates for Stock Awards until all restrictions on such shares have lapsed,or that the Company shall retain possession of certificates for Stock Awards until all restrictions onsuch shares have lapsed. Upon the lapse of the restrictions applicable to a Stock Award, the Companyor other custodian, as applicable, shall deliver such certificates to the Grantee or the Grantee’s legalrepresentative.(c) Payment/Lapse of Restrictions. Each RSU shall be granted with respect to one share ofCompany Stock or shall have a value equal to the Fair Market Value of one share of Company Stock.RSUs shall be paid in cash, shares of Company Stock, other securities, other Awards or otherproperty, as determined in the sole discretion of the Board, upon the lapse of restrictions applicablethereto, or otherwise in accordance with the applicable Award Agreement. The amount payable as aresult of the vesting of an RSU shall be distributed as soon as practicable following the vesting dateand in no event later than the fifteenth date of the third calendar month of the year following thevesting date of the RSU (or as otherwise permitted under Section 409A of the Code); provided,however, that a Grantee may, if and to the extent permitted by the Board, elect to defer payment ofRSUs in a manner permitted by Section 409A of the Code.(d) Termination of Service. Except as otherwise set forth in the Award Agreement, if theGrantee ceases to provide service to the Company, any Stock Award or RSUs held by the Granteethat are subject to the transfer restrictions set forth in Section 6(b) above at such time shall be forfeited.The Board may, however, provide for complete or partial exceptions to this requirement as it deemsappropriate.(e) No Right to Vote and to Receive Dividends. Prior to the lapse of the transferrestrictions set forth in Section 6(b) above, the Grantee shall not have the right to vote shares subject toStock Awards or to receive any dividends or other distributions paid on such shares, subject to anyrestrictions deemed appropriate by the Board.7. Transferability of Awards(a) Nontransferability of Awards. Except as provided below, only the Grantee mayexercise rights under an Award during the Grantee’s lifetime. A Grantee may not transfer those rightsexcept (i) by will or by the laws of descent and distribution or (ii) if permitted in any specific-6- case by the Board, pursuant to a domestic relations order or otherwise as permitted by theBoard. When a Grantee dies, the personal representative or other person entitled to succeed to therights of the Grantee may exercise such rights. Any such successor must furnish proof satisfactory tothe Company of his or her right to receive the Award under the Grantee’s will or under the applicablelaws of descent and distribution.(b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the Boardmay provide, in an Award Agreement, that a Grantee may transfer Options to family members, or oneor more trusts or other entities for the benefit of or owned by family members, consistent withapplicable securities laws, according to such terms as the Board may determine; provided that theGrantee receives no consideration for the transfer of an Option and the transferred Option shallcontinue to be subject to the same terms and conditions as were applicable to the Option immediatelybefore the transfer.8. Right of First Refusal; Repurchase Right(a) Offer. Prior to a Public Offering, if at any time an individual desires to sell, encumber,or otherwise dispose of shares of Company Stock that were distributed to him or her under the Planand that are transferable, the individual may do so only pursuant to a bona fide written offer, and theindividual shall first offer the shares to the Company by giving the Company written noticedisclosing: (i) the name of the proposed transferee of the Company Stock; (ii) the certificate numberand number of shares of Company Stock proposed to be transferred or encumbered; (iii) the proposedprice; (iv) all other terms of the proposed transfer; and (v) a written copy of the proposed offer. Within60 days after receipt of such notice, the Company shall have the option to purchase all or part of suchCompany Stock at the price and on the terms described in the written notice; provided that theCompany may pay such price in installments over a period not to exceed four years, at the discretionof the Board.(b) Sale. In the event the Company (or a shareholder, as described below) does notexercise the option to purchase Company Stock, as provided above, the individual shall have the rightto sell, encumber, or otherwise dispose of the shares of Company Stock described in subsection (a) atthe price and on the terms of the transfer set forth in the written notice to the Company, provided suchtransfer is effected within 15 days after the expiration of the option period. If the transfer is noteffected within such period, the Company must again be given an option to purchase, as providedabove.(c) Assignment of Rights. The Board, in its sole discretion, may waive the Company’sright of first refusal and repurchase right under this Section 8. If the Company’s right of first refusal orrepurchase right is so waived, the Board may, in its sole discretion, assign such right to the remainingshareholders of the Company in the same proportion that each shareholder’s stock ownership bears tothe stock ownership of all the shareholders of the Company, as determined by the Board. To theextent that a shareholder has been given such right and does not purchase his or her allotment, theother shareholders shall have the right to purchase such allotment on the same basis.(d) Purchase by the Company. Prior to a Public Offering, if a Grantee ceases to provideservice to the Company, the Company shall have the right to purchase, within 60 days of-7- the date that Grantee ceases to provide services to the Company, all or part of any Company Stockdistributed to Grantee under the Plan at the Fair Market Value (as defined in Section 5(b)) on the datethat Grantee ceases to provide services to the Company (or at such other price as may be established inthe Award Agreement); provided, however, that such repurchase shall be made in accordance withapplicable accounting rules to avoid adverse accounting treatment.(e) Public Offering. On and after a Public Offering, the Company shall have no furtherright to purchase shares of Company Stock under this Section 8.(f) Shareholder’s Agreement. Notwithstanding the provisions of this Section 8, if theBoard requires that a Grantee execute a shareholder’s agreement with respect to any Company Stockdistributed pursuant to the Plan, which contains a right of first refusal or repurchase right, theprovisions of this Section 8 shall not apply to such Company Stock.9. Change of Control of the CompanyAs used herein, a “Change of Control” shall be deemed to have occurred if:(a) Any “person” (as such term is used in sections 13(d) and 14(d) of the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”)) (other than persons who are shareholderson the effective date of the Plan) becomes a “beneficial owner” (as defined in Rule 13d-3 under theExchange Act), directly or indirectly, of securities of the Company representing more than 50% of thevoting power of the then outstanding securities of the Company; provided that a Change of Controlshall not be deemed to occur as a result of a change of ownership resulting from the death of ashareholder, and a Change of Control shall not be deemed to occur as a result of a transaction inwhich the Company becomes a subsidiary of another corporation and in which the shareholders of theCompany, immediately prior to the transaction, will beneficially own, immediately after thetransaction, shares entitling such shareholders to more than 50% of all votes to which all shareholdersof the parent corporation would be entitled in the election of directors (without consideration of therights of any class of stock to elect directors by a separate class vote); or (b) The consummation of (i) a merger or consolidation of the Company with anothercorporation where the shareholders of the Company, immediately prior to the merger or consolidation,will not beneficially own, immediately after the merger or consolidation, shares entitling suchshareholders to more than 50% of all votes to which all shareholders of the surviving corporationwould be entitled in the election of directors (without consideration of the rights of any class of stockto elect directors by a separate class vote); (ii) a sale or other disposition of all or substantially all of theassets of the Company; or (iii) a liquidation or dissolution of the Company.(c) Notwithstanding the foregoing, the following acquisitions shall not constitute a Changeof Control: (A) an acquisition by the Company or entity controlled by the Company, or (B) anacquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company-8- 10. Consequences of a Change of Control(a) Assumption of Awards. Upon a Change of Control where the Company is not thesurviving corporation (or survives only as a subsidiary of another corporation), unless the Boarddetermines otherwise, all outstanding Awards shall be assumed by, or replaced with comparableAwards by, the surviving corporation (or a parent or subsidiary of the surviving corporation).(b) Termination of Awards. Upon a Change of Control where the Company is not thesurviving corporation (or survives only as a subsidiary of another corporation), in the event thesurviving corporation (or a parent or subsidiary of the surviving corporation) does not assume orreplace the Awards with comparable Awards, (i) the Company shall provide each Grantee withoutstanding Awards written notice of such Change of Control; (ii) all outstanding Options shallautomatically accelerate and become fully vested and exercisable; (iii) all outstanding Stock Awardsshall become vested and deliverable in accordance with Section 6(b); and (iv) all outstanding RSUsshall become vested and deliverable in accordance with Section 6(c).(c) Other Alternatives. Notwithstanding the foregoing, in the event of a Change ofControl, the Board may take one or both of the following actions: the Board may (i) require thatGrantees surrender their outstanding Options in exchange for a payment by the Company, in cash orCompany Stock as determined by the Board, in an amount equal to the amount by which the then FairMarket Value of the shares of Company Stock subject to the Grantee’s unexercised Options exceedsthe Exercise Price of the Options; or (ii) after giving Grantees an opportunity to exercise theiroutstanding Options, terminate any or all unexercised Options at such time as the Board deemsappropriate. Such surrender or termination shall take place as of the date of the Change of Control orsuch other date as the Board may specify.11. Requirements for Issuance or Transfer of Shares(a) Shareholder’s Agreement. The Board may require that a Grantee execute ashareholder’s agreement, with such terms as the Board deems appropriate, with respect to anyCompany Stock issued or distributed pursuant to the Plan.(b) Limitations on Issuance or Transfer of Shares. No Company Stock shall be issued ortransferred in connection with any Award hereunder unless and until all legal requirements applicableto the issuance or transfer of such Company Stock have been complied with to the satisfaction of theBoard. The Board shall have the right to condition any Award made to any Grantee hereunder onsuch Grantee’s undertaking in writing to comply with such restrictions on his or her subsequentdisposition of such shares of Company Stock as the Board shall deem necessary or advisable, andcertificates representing such shares may be legended to reflect any such restrictions. Certificatesrepresenting shares of Company Stock issued or transferred under the Plan shall be subject to suchstop-transfer orders and other restrictions as may be required by applicable laws, regulations, andinterpretations, including any requirement that a legend be placed thereon.(c) Lock-Up Period. If so requested by the Company or any representative of theunderwriters (the “Managing Underwriter”) in connection with any underwritten offering of securitiesof the Company under the Securities Act of 1933, as amended (the “Securities Act”), a-9- Grantee (including any successor or assigns) shall not sell or otherwise transfer any shares or othersecurities of the Company during the 30-day period preceding and the 180-day period following theeffective date of a registration statement of the Company filed under the Securities Act for suchunderwriting (or such shorter period as may be requested by the Managing Underwriter and agreed toby the Company) (the “Market Standoff Period”). The Company may impose stop-transferinstructions with respect to securities subject to the foregoing restrictions until the end of such MarketStandoff Period.12. Amendment and Termination of the Plan(a) Amendment. The Board may amend or terminate the Plan at any time; provided,however, that the Board shall not amend the Plan without shareholder approval if such approval isrequired in order to comply with the Code or other applicable laws or, after an Initial Public Offering,to comply with applicable stock exchange requirements.(b) Termination of Plan. The Plan shall terminate on the day immediately preceding thetenth anniversary of its effective date, unless the Plan is terminated earlier by the Board or is extendedby the Board with the approval of the shareholders.(c) Termination and Amendment of Outstanding Awards. A termination or amendment ofthe Plan that occurs after an Award is made shall not materially impair the rights of a Grantee unlessthe Grantee consents or unless the Board acts under Section 18(b). The termination of the Plan shallnot impair the power and authority of the Board with respect to an outstanding Award. Whether ornot the Plan has terminated, an outstanding Award may be terminated or amended under Section 18(b)or may be amended by agreement of the Company and the Grantee consistent with the Plan.(d) Governing Document. The Plan shall be the controlling document. No otherstatements, representations, explanatory materials or examples, oral or written, may amend the Plan inany manner. The Plan shall be binding upon and enforceable against the Company and its successorsand assigns.13. Funding of the PlanThe Plan shall be unfunded. The Company shall not be required to establish any special orseparate fund or to make any other segregation of assets to assure the payment of any Awards underthe Plan. In no event shall interest be paid or accrued on any Award, including unpaid installments ofAwards.14. Rights of ParticipantsNothing in the Plan shall entitle any Non-Employee Director or other person to any claim orright to be granted an Award under the Plan. Neither the Plan nor any action taken hereunder-10- shall be construed as giving any individual any rights to be retained by the Company or any otheremployment rights. 15. No Fractional SharesNo fractional shares of Company Stock shall be issued or delivered pursuant to the Plan or anyAward. The Board shall determine whether cash, other awards or other property shall be issued orpaid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall beforfeited or otherwise eliminated.16. HeadingsSection headings are for reference only. In the event of a conflict between a title and thecontent of a Section, the content of the Section shall control.17. Effective Date of the Plan(a) Effective Date. The Plan shall be effective on September 3, 2015.(b) Public Offering. The provisions of the Plan that refer to a Public Offering, or that referto, or are applicable to persons subject to, section 16 of the Exchange Act, shall be effective, if at all,upon the initial registration of the Company Stock under section 12(g) of the Exchange Act, and shallremain effective thereafter for so long as such stock is so registered.18. Miscellaneous(a) Withholding. To the extent required by applicable Federal, state or local law, a Granteemust make arrangements satisfactory to the Company for the payment of any withholding or similartax obligations that arise in connection with the Plan.(b) Compliance with Law. The Plan, exercise of Options, restrictions of Stock Awardsand obligations of the Company to issue or transfer shares of Company Stock under Awards shall besubject to all applicable laws and to approvals by any governmental or regulatory agency as may berequired. With respect to persons subject to section 16 of the Exchange Act, after a Public Offering, itis the intent of the Company that the Plan and all transactions under the Plan comply with allapplicable provisions of Rule 16b-3 or its successors under the Exchange Act. In addition, it is theintent of the Company that the Plan and applicable Awards under the Plan comply with the applicableprovisions of section 409A of the Code. To the extent that any legal requirement of section 16 of theExchange Act or section 409A of the Code as set forth in the Plan ceases to be required under section16 of the Exchange Act or section 409A of the Code, that Plan provision shall cease to apply. TheBoard may revoke any Award if it is contrary to law or modify an Award to bring it into compliancewith any valid and mandatory government regulation. The Board may also adopt rules regarding thewithholding of taxes on payments to Grantees. The Board may, in its sole discretion, agree to limit itsauthority under this Section.(c) Grantees Subject to Taxation Outside the United States. With respect to Grantees whoare subject to taxation in countries other than the United States, the Board may make Awards on suchterms and conditions as the Board deems appropriate to comply with the laws of the-11- applicable countries, and the Board may create such procedures, addenda, and subplans and makesuch modifications as may be necessary or advisable to comply with such laws.(d) Governing Law. The validity, construction, interpretation, and effect of the Plan andAward Agreements issued under the Plan shall be governed and construed by and determined inaccordance with the laws of the State of Delaware, without giving effect to the conflict of lawsprovisions thereof. -12-  EXHIBIT 10.15STRONGBRIDGE BIOPHARMA PLC2017 INDUCEMENT PLANThe purpose of the Strongbridge Biopharma plc 2017 Inducement Plan is to assist StrongbridgeBiopharma plc and its affiliates and subsidiaries in attracting valued employees by offering them agreater stake in the Company’s success and a closer identity with it, and to encourage ownership of theCompany’s stock by such employees.1. DefinitionsAs used herein, the following definitions shall apply:(a) “Award” means a grant of Options, Stock Awards or Restricted Stock Units under thePlan.(b) “Award Agreement” means the written agreement, instrument or document evidencingan Award.(c) “Board” means the Board of Directors of the Company.(d) “Change of Control” means, after the Effective Date, any of the following events:(i) Any “person” (as such term is used in sections 13(d) and 14(d) of the ExchangeAct) (other than persons who are shareholders on the Effective Date) becomes a “beneficial owner” (asdefined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Companyrepresenting more than 50% of the voting power of the then outstanding securities of the Company;provided that a Change of Control shall not be deemed to occur as a result of a change of ownershipresulting from the death of a shareholder, and a Change of Control shall not be deemed to occur as aresult of a transaction in which the Company becomes a subsidiary of another corporation and inwhich the shareholders of the Company, immediately prior to the transaction, will beneficially own,immediately after the transaction, shares entitling such shareholders to more than 50% of all votes towhich all shareholders of the parent corporation would be entitled in the election of directors (withoutconsideration of the rights of any class of stock to elect directors by a separate class vote); or(ii) The consummation of (i) a merger or consolidation of the Company withanother corporation where the shareholders of the Company, immediately prior to the merger orconsolidation, will not beneficially own, immediately after the merger or consolidation, shares entitlingsuch shareholders to more than 50% of all votes to which all shareholders of the surviving corporationwould be entitled in the election of directors (without consideration of the rights of any class of stock toelect directors by a separate class vote); (ii) a sale or other disposition of all or substantially all of theassets of the Company; or (iii) a liquidation or dissolution of the Company.(iii) Notwithstanding the foregoing, the following acquisitions shall not constitute aChange of Control: (A) an acquisition by the Company or entity controlled by the US_ACTIVE-122865329.1-KHALPERN 03/12/2018 5:55 AM Company, or (B) an acquisition by an employee benefit plan (or related trust) sponsored or maintainedby the Company.(e) “Code” means the Internal Revenue Code of 1986, as amended, and the Treasuryregulations promulgated thereunder. A reference to any provision of the Code or the Treasuryregulations promulgated thereunder shall include reference to any successor provision of the Code orthe Treasury regulations.(f) “Committee” means the committee designated by the Board to administer the Plan underSection 2. The Committee shall consist of at least two members and each member shall be a Non-Employee Director and an “independent director” within the meaning of Rule 5605(a)(3) of theNasdaq Stock Market Equity Rules.(g) “Company” means Strongbridge BioPharma plc.(h) “Company Stock” means the ordinary shares of the Company, par value US$0.01 pershare each.(i) “Effective Date” has the meaning set forth in Section 17.(j) “Eligible Individual” means any individual who was not previously an employee or aNon-Employee Director of the Company or any of its subsidiaries (or who had a bona fide period ofnon-employment with the Company and its subsidiaries) who is hired by the Company or asubsidiary.(k) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rulespromulgated thereunder. A reference to any provision of the Exchange Act or rule promulgated underthe Exchange Act shall include reference to any successor provision or rule.(l) “Fair Market Value” means: (x) if the principal trading market for the Company Stock isa national securities exchange or the Nasdaq National Market, the last reported sale price thereof onthe relevant date or (if there were no trades on that date) the latest preceding date upon which a salewas reported, or (y) if the Company Stock is not principally traded on such exchange or market, themean between the last reported “bid” and “asked” prices of Company Stock on the relevant date, asreported on Nasdaq or, if not so reported, as reported by the National Daily-2- Quotation Bureau, Inc. or as reported in a customary financial reporting service, as applicable and asthe Committee determines.(m) “Grantee” means an Eligible Individual who receives an Award under the Plan. (n) “Non-Employee Director” means a member of the Board who meets the definition of a“non-employee director” under Rule 16b-3(b)(4) promulgated by the Exchange Act.(o) “Option” means a right to purchase a specified number of Company Stock at a specifiedprice awarded by the Committee as described in Section 6 of the Plan.(p) “Plan” means the Strongbridge BioPharma plc 2017 Inducement Plan.(q) “Restricted Stock Unit” means the right to a payment in Company Stock or in cash, or ina combination thereof, awarded by the Committee under Section 7 of the Plan.(r) “Stock Award” means the right to payment in Company Stock awarded by theCommittee under Section 7 of the Plan.2. Administration(a) Administration and Authority. The Plan shall be administered by the CompensationCommittee. The Committee shall have the sole authority to (i) determine the Eligible Individuals towhom Awards shall be made under the Plan; (ii) determine the type, size, and terms of the Award tobe made to each such Eligible Individual; (iii) determine the time when the Awards will be made andthe duration of any applicable exercise or restriction period, including the criteria for exercisability andthe acceleration of exercisability; (iv) amend the terms of any previously issued Award; (v) acceleratethe vesting, exercisability, or lapse of any forfeiture condition with respect to an Award; and (vi) dealwith any other matters arising under the Plan.(b) Committee Determinations. The Committee shall have full power and authority toadminister, construe and interpret the Plan, correct any defect, supply any omission, or reconcile anyinconsistency in the Plan or any Award or Award Agreement, make factual determinations and adoptor amend such rules, regulations, agreements, and instruments for implementing the Plan and for theconduct of its business as it deems necessary or advisable, in its sole discretion. The Committee’sinterpretations of the Plan and all determinations made by the Committee pursuant to the powersvested in it hereunder shall be conclusive and binding on all persons having any interest in the Plan orin any Awards granted hereunder. All powers of the Committee shall be executed in its solediscretion, in the best interest of the Company, not as a fiduciary, and in keeping with the objectives ofthe Plan and need not be uniform as to similarly situated individuals.(c) Limitation of Liability. To the maximum extent permitted by law, no member of theCommittee shall be liable for any action taken or decision made in good faith relating to the Plan orany Award thereunder. The Committee may employ counsel, consultants, accountants, appraisers,brokers or other persons. The Committee, the Company, and the officers and directors-3- of the Company shall be entitled to rely upon the advice, opinions or valuations of any such persons.3. AwardsAwards under the Plan may consist of grants of Options as described in Section 6, as StockAwards as described in Section 7, and Restricted Stock Units as described in Section 7. All Awardsshall be subject to the terms and conditions set forth herein and to such other terms and conditionsconsistent with the Plan as the Committee deems appropriate and as are specified in the AwardAgreement. The Committee shall approve the form and provisions of each AwardAgreement. Awards under a particular Section of the Plan need not be uniform as among theGrantees. 4. Shares Subject to the Plan(a) Shares Authorized. Subject to adjustment as described below, the Company Stockavailable for Awards under the Plan is 2,500,000 (the “Share Pool”). The shares may be authorizedbut unissued shares of Company Stock or reacquired shares of Company Stock, including sharespurchased by the Company on the open market for purposes of the Plan.(b) Adjustments to Share Pool. The Share Pool shall be reduced, on the date of grant, byone share for each Award granted under the Plan; provided that Awards that are valued by referenceto shares of Company Stock but are required to be paid in cash pursuant to their terms shall not reducethe Share Pool. If and to the extent Options terminate, expire, or are canceled, forfeited, exchanged, orsurrendered without having been exercised, or if any Stock Awards or Restricted StockUnits (including restricted stock received upon the exercise of Options) are forfeited, the shares ofCompany Stock subject to such Awards shall again be available for Awards under the Share Pool.Notwithstanding the foregoing, the following shares of Company Stock shall not become available forissuance under the Plan: (A) shares tendered by Grantees, or withheld by the Company, as full orpartial payment to the Company upon the exercise of stock options granted under the Plan; and (B)shares withheld by, or otherwise remitted to, the Company to satisfy a Grantee’s tax withholdingobligations upon the lapse of restrictions on Stock Awards or the exercise of Options granted underthe Plan. (c) Adjustments. If there is any change in the number or kind of shares of Company Stockoutstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock split, or combination orexchange of shares; (ii) by reason of a merger, reorganization, or consolidation; (iii) by reason of areclassification or change in par value; or (iv) by reason of any other extraordinary or unusual eventaffecting the outstanding Company Stock as a class without the Company’s receipt of consideration,or if the value of outstanding shares of Company Stock is substantially reduced as a result of a spinoffor the Company’s payment of an extraordinary dividend or distribution, the maximum number ofshares of Company Stock available for Awards, the maximum number of shares of Company Stockthat any individual participating in the Plan may be granted in any year, the number of shares coveredby outstanding Awards, the kind of shares issued under the Plan, and the price per share of suchAwards shall be adjusted by the Committee to reflect any increase or decrease in the number of, orchange in the kind or value of, issued shares of Company Stock to preclude the enlargement ordilution of rights and benefits under such Awards; provided, however, that any fractional sharesresulting from such adjustment-4- shall be eliminated. Any adjustments determined by the Committee shall be final, binding, andconclusive.5. Eligibility for ParticipationAny Eligible Individual shall be eligible to participate in the Plan. The Committee shall selectthe Eligible Individuals to receive Awards and shall determine the number of shares of CompanyStock subject to a particular Award in such manner as the Committee determines.6. Granting of OptionsThe Company may grant Options to purchase shares of Company Stock to EligibleIndividuals. The following provisions are applicable to Options.(a) Number of Shares. The Committee shall determine the number of shares of CompanyStock that shall be subject to each Award of Options.(b) Price. The purchase price (the “Exercise Price”) of Company Stock subject to anOption shall be determined by the Board and shall be equal to or greater than the Fair Market Value ofa share of Company Stock on the date the Option is granted.(c) Option Term. The Committee shall determine the term of each Option. The term ofany Option shall not exceed ten years from the date of grant.(d) Exercisability of Options. Options shall become exercisable in accordance with suchterms and conditions, consistent with the Plan, as may be determined by the Committee and specifiedin the Award Agreement. The Committee may accelerate the exercisability of any or all outstandingOptions at any time for any reason. The Committee may provide in an Award Agreement that theGrantee may elect to exercise part or all of an Option before it otherwise has becomeexercisable. Any shares so purchased shall be restricted shares and shall be subject to a repurchaseright in favor of the Company during a specified restriction period, with the repurchase price equal tothe lesser of (A) the Exercise Price, or (B) the Fair Market Value of such shares at the time ofrepurchase, and (C) any other restrictions determined by the Company.(e) Termination of Employment, Disability, or Death.(i) Except as provided below, an Option may only be exercised while the Granteeis employed by, or providing service to, the Employer (as defined below) as an Eligible Individual. Inthe event that a Grantee ceases to be employed by, or provide service to, the Employer for any reasonother than Disability, death, or termination for Cause, any Option which is otherwise exercisable by theGrantee shall terminate unless exercised within 90 days after the date on which the Grantee ceases tobe employed by, or provide service to, the Employer (or within such other period of time as may bespecified by the Committee), but in any event no later than the date of expiration of the Optionterm. Except as otherwise provided by the Committee or in the Award Agreement, any of theGrantee’s Options that are not otherwise exercisable as of the date on which the Grantee ceases to beemployed by, or provide service to, the Employer shall terminate as of such date. -5- (ii) In the event the Grantee ceases to be employed by, or provide service to, theEmployer on account of a termination for Cause by the Employer, any Option held by the Granteeshall terminate as of the date the Grantee ceases to be employed by, or provide service to, theEmployer. In addition, notwithstanding any other provisions of this Section 6, if the Committeedetermines that the Grantee has engaged in conduct that constitutes Cause at any time while theGrantee is employed by, or providing service to, the Employer or after the Grantee’s termination ofemployment or service, any Option held by the Grantee shall immediately terminate, and the Granteeshall automatically forfeit all shares underlying any exercised portion of an Option for which theCompany has not yet delivered the share certificates, upon refund by the Company of the ExercisePrice paid by the Grantee for such shares. Upon any exercise of an Option, the Company maywithhold delivery of share certificates pending resolution of an inquiry that could lead to a findingresulting in a forfeiture.(iii) In the event the Grantee ceases to be employed by, or provide service to, theEmployer because the Grantee is Disabled (as defined below), any Option which is otherwiseexercisable by the Grantee shall terminate unless exercised within one year after the date on which theGrantee ceases to be employed by, or provide service to, the Employer (or within such other period oftime as may be specified by the Committee), but in any event no later than the date of expiration of theOption term. Except as otherwise provided by the Committee, any of the Grantee’s Options which arenot otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provideservice to, the Employer shall terminate as of such date.(iv) If the Grantee dies while employed by, or providing service to, the Employer orwithin 90 days after the date on which the Grantee ceases to be employed or provide service onaccount of a termination specified in Section 6(e)(i) above (or within such other period of time as maybe specified by the Committee), any Option that is otherwise exercisable by the Grantee shall terminateunless exercised within one year after the date on which the Grantee ceases to be employed by, orprovide service to, the Employer (or within such other period of time as may be specified by theCommittee), but in any event no later than the date of expiration of the Option term. Except asotherwise provided by the Committee, any of the Grantee’s Options that are not otherwise exercisableas of the date on which the Grantee ceases to be employed by, or provide service to, the Employershall terminate as of such date.(v) For purposes of this Plan:(A) The term “Employer” shall mean the Company and its parent and subsidiarycorporations or other entities, as determined by the Committee.(B) “Employed by, or provide service to, the Employer” shall mean employmentor service as an Eligible Individual (so that, for purposes of exercising Options and satisfyingconditions with respect to Stock Awards or Restricted Stock Units, a Grantee shall not beconsidered to have terminated employment or service until the Grantee ceases to be anEligible Individual, unless the Committee determines otherwise.(C) “Disability” shall mean a Grantee’s becoming disabled within the meaning ofsection 22(e)(3) of the Code, within the meaning of the Employer’s long--6- term disability plan applicable to the Grantee, or as otherwise determined by the Committee.(D) “Cause” shall mean, except to the extent specified otherwise by theCommittee or as defined in any other agreement between the Grantee and the Company, afinding by the Committee that the Grantee has (i) been convicted of a felony or crimeinvolving moral turpitude; (ii) disclosed trade secrets or confidential information of theEmployer to persons not entitled to receive such information; (iii) breached any writtennoncompetition or nonsolicitation agreement between the Grantee and the Employer; or (iv)engaged in willful and continued negligence in the performance of the duties assigned to theGrantee by the Employer, after the Grantee has received notice of and failed to cure suchnegligence.(f) Exercise of Options. A Grantee may exercise an Option that has become vested andexercisable, in whole or in part, by delivering a notice of exercise to the Company. The Grantee shallpay the Exercise Price for an Option by the Committee (i) in cash; (ii) by delivering shares ofCompany Stock owned by the Grantee (including Company Stock acquired in connection with theexercise of an Option, subject to such restrictions as the Committee deems appropriate) and having aFair Market Value on the date of exercise equal to the Exercise Price or by attestation (on a formprescribed by the Committee) to ownership of shares of Company Stock having a Fair Market Valueon the date of exercise equal to the Exercise Price; (iii) payment through a broker in accordance withprocedures permitted by Regulation T of the Federal Reserve Board; or (iv) by such other method asthe Committee may approve. In addition, the Grantee may elect to settle the Option on a “net basis”by taking delivery of the number of Company Stock equal to Fair Market Value of the shares subjectto any Option less the exercise price, any tax (or other governmental obligation) or otheradministration fees due. The Grantee shall pay the Exercise Price and the amount of any withholdingtax due (pursuant to Section 8) as specified by the Committee.7. Stock Awards and Restricted Stock UnitsThe Company may issue or transfer shares of Company Stock to an Eligible Individual under aStock Award or Restricted Stock Unit, upon such terms as the Committee deems appropriate. Thefollowing provisions are applicable to Stock Awards and Restricted Stock Units:(a) General Requirements. Shares of Company Stock issued or transferred pursuant toStock Awards may be issued or transferred for consideration or for no consideration, and subject torestrictions or no restrictions, as determined by the Committee. The Committee shall determine thenumber of shares of Company Stock subject to a Stock Award and the number of Restricted StockUnits to be granted to a Grantee, the duration of the period during which, and the conditions, if any,under which, the Stock Award and Restricted Stock Units may vest or may be forfeited to theCompany and the other terms and conditions of such Awards. The Committee may require differentperiods of service wiith respect to different Grantees holding different Stock Awards or RestrictedStock Units or to separate, designated portions of shares constituting Stock Awards.(b) Transfer Restrictions and Legend on Stock Certificate. Stock Awards and RestrictedStock Units may not be sold, assigned, transferred, pledged or otherwise encumbered-7- except as provided in the Plan or as may be provided in the applicable Award Agreement; provided,however, that the Committee may determine that Stock Awards and Restricted Stock Units may betransferred by the Grantee. Each certificate for Stock Awards shall contain a legend giving appropriatenotice of the restrictions in the Award. The Grantee shall be entitled to have the legend removed fromthe stock certificate covering the shares subject to restrictions when all restrictions on such shares havelapsed. The Committee may determine that the Company shall not issue certificates for Stock Awardsuntil all restrictions on such shares have lapsed, or that the Company shall retain possession ofcertificates for Stock Awards until all restrictions on such shares have lapsed. Upon the lapse of therestrictions applicable to a Stock Award, the Company or other custodian, as applicable, shall deliversuch certificates to the Grantee or the Grantee’s legal representative.(c) Payment/Lapse of Restrictions. Each Restricted Stock Unit shall be granted withrespect to one share of Company Stock or shall have a value equal to the Fair Market Value of oneshare of Company Stock. Restricted Stock Units shall be paid in cash, shares of Company Stock,other securities, other Awards or other property, as determined in the sole discretion of the Committee,upon the lapse of restrictions applicable thereto, or otherwise in accordance with the applicable AwardAgreement. The amount payable as a result of the vesting of an Restricted Stock Unit shall bedistributed as soon as practicable following the vesting date and in no event later than the fifteenth dateof the third calendar month of the year following the vesting date of the Restricted Stock Unit (or asotherwise permitted under Section 409A of the Code); provided, however, that a Grantee may, if andto the extent permitted by the Committee, elect to defer payment of Restricted Stock Units in a mannerpermitted by Section 409A of the Code.(d) Termination of Employment or Service. Except as otherwise set forth in the AwardAgreement, if the Grantee ceases to be employed by, or provide service to, the Employer (as definedin Section 6(e)), any Stock Award or Restricted Stock Units held by the Grantee that are subject to thetransfer restrictions set forth in Section 7(b) above at such time shall be forfeited. The Committee may,however, provide for complete or partial exceptions to this requirement as it deems appropriate.(e) No Right to Vote and to Receive Dividends. Prior to the lapse of the transferrestrictions set forth in Section 7(b) above, the Grantee shall not have the right to vote shares subject toStock Awards or to receive any dividends or other distributions paid on such shares, subject to anyrestrictions deemed appropriate by the Committee.8. Withholding of Taxes(a) Required Withholding. All Awards under the Plan shall be subject to applicable federal(including FICA), state, and local tax (or other governmental obligation) withholding requirements orother administration fees due. The Employer may require that the Grantee or other person receiving orexercising Awards pay to the Employer the amount of any federal, state, or local taxes (or othergovernmental obligations) that the Employer is required to withhold or any administration fees duewith respect to such Awards, or the Employer may deduct from other wages paid by the Employer theamount of any withholding taxes, governmental obligations or administration fees due with respect tosuch Awards.-8- (b) Election to Withhold Shares. If the Board so permits, a Grantee may elect to satisfy theEmployer’s income tax (or other governmental obligation) withholding requirement and anyadministration fees due with respect to an Award by having shares withheld up to an amount that doesnot exceed the Grantee’s minimum applicable withholding rate for federal (including FICA), state, andlocal tax (and other governmental obligation) liabilities plus any other administration fees due. Theelection must be in a form and manner prescribed by the Committee and may be subject to the priorapproval of the Committee.9. Transferability of Awards(a) Nontransferability of Awards. Except as provided below, only the Grantee mayexercise rights under an Award during the Grantee’s lifetime. A Grantee may not transfer those rightsexcept by will or by the laws of descent and distribution. When a Grantee dies, the personalrepresentative or other person entitled to succeed to the rights of the Grantee may exercise suchrights. Any such successor must furnish proof satisfactory to the Company of his or her right toreceive the Award under the Grantee’s will or under the applicable laws of descent and distribution.(b) Transfer of Stock Options. Notwithstanding the foregoing, the Committee mayprovide, in an Award Agreement, that a Grantee may transfer Options to family members, or one ormore trusts or other entities for the benefit of or owned by family members, consistent with applicablesecurities laws, according to such terms as the Committee may determine; provided that the Granteereceives no consideration for the transfer of an Option and the transferred Option shall continue to besubject to the same terms and conditions as were applicable to the Option immediately before thetransfer.10. Consequences of a Change of Control(a) Assumption of Awards. Upon a Change of Control where the Company is not thesurviving corporation (or survives only as a subsidiary of another corporation), unless the Committeedetermines otherwise, all outstanding Awards shall be assumed by, or replaced with comparableAwards by, the surviving corporation (or a parent or subsidiary of the surviving corporation).(b) Termination of Awards. Upon a Change of Control where the Company is not thesurviving corporation (or survives only as a subsidiary of another corporation), in the event thesurviving corporation (or a parent or subsidiary of the surviving corporation) does not assume orreplace the Awards with comparable Awards, (i) the Company shall provide each Grantee withoutstanding Awards written notice of such Change of Control; (ii) all outstanding Options shallautomatically accelerate and become fully vested and exercisable; (iii) all outstanding Stock Awardsshall become vested and deliverable in accordance with Section 7(b); and (iv) all outstandingRestricted Stock Units shall become vested and deliverable in accordance with Section 7(c).(c) Other Alternatives. Notwithstanding the foregoing, in the event of a Change ofControl, the Committee may take one or both of the following actions: the Committee may (i) requirethat Grantees surrender their outstanding Options in exchange for a payment by the-9- Company, in cash or Company Stock as determined by the Committee, in an amount equal to theamount by which the then Fair Market Value of the shares of Company Stock subject to the Grantee’sunexercised Options exceeds the Exercise Price of the Options; or (ii) after giving Grantees anopportunity to exercise their outstanding Options, terminate any or all unexercised Options at suchtime as the Committee deems appropriate. Such surrender or termination shall take place as of the dateof the Change of Control or such other date as the Committee may specify.11. Requirements for Issuance or Transfer of Shares(a) Shareholder’s Agreement. The Committee may require that a Grantee execute ashareholder’s agreement, with such terms as the Committee deems appropriate, with respect to anyCompany Stock issued or distributed pursuant to the Plan.(b) Limitations on Issuance or Transfer of Shares. No Company Stock shall be issued ortransferred in connection with any Award hereunder unless and until all legal requirements applicableto the issuance or transfer of such Company Stock have been complied with to the satisfaction of theCommittee. The Committee shall have the right to condition any Award made to any Granteehereunder on such Grantee’s undertaking in writing to comply with such restrictions on his or hersubsequent disposition of such shares of Company Stock as the Committee shall deem necessary oradvisable, and certificates representing such shares may be legended to reflect any suchrestrictions. Certificates representing shares of Company Stock issued or transferred under the Planshall be subject to such stop-transfer orders and other restrictions as may be required by applicablelaws, regulations, and interpretations, including any requirement that a legend be placed thereon.(c) Lock-Up Period. If so requested by the Company or any representative of theunderwriters (the “Managing Underwriter”) in connection with any underwritten offering of securitiesof the Company under the Securities Act of 1933, as amended (the “Securities Act”), a Grantee(including any successor or assigns) shall not sell or otherwise transfer any shares or other securities ofthe Company during the 30-day period preceding and the 180-day period following the effective dateof a registration statement of the Company filed under the Securities Act for such underwriting (orsuch shorter period as may be requested by the Managing Underwriter and agreed to by theCompany) (the “Market Standoff Period”). The Company may impose stop-transfer instructions withrespect to securities subject to the foregoing restrictions until the end of such Market Standoff Period.12. Amendment and Termination of the Plan(a) Amendment. The Board may amend or terminate the Plan at any time; provided,however, that the Board shall not amend the Plan without shareholder approval if such approval isrequired in order to comply with the Code or other applicable laws or to comply with applicable stockexchange requirements.(b) Termination of Plan. The Plan shall terminate on the day immediately preceding thetenth anniversary of its effective date, unless the Plan is terminated earlier by the Board or is extendedby the Board.-10- (c) Termination and Amendment of Outstanding Awards. A termination or amendment ofthe Plan that occurs after an Award is made shall not materially impair the rights of a Grantee unlessthe Grantee consents or unless the Board acts under Section 20(b). The termination of the Plan shallnot impair the power and authority of the Committee with respect to an outstanding Award. Whetheror not the Plan has terminated, an outstanding Award may be terminated or amended under Section20(b) or may be amended by agreement of the Company and the Grantee consistent with the Plan.Notwithstanding the foregoing, any such amendment or termination shall be subject to the approval ofthe Company’s stockholders if such stockholder approval is required by any federal or state law orregulation or the rules of any stock exchange or automated quotation system on which the CompanyStock may then be listed or quoted, in each case.(d) Governing Document. The Plan shall be the controlling document. No otherstatements, representations, explanatory materials or examples, oral or written, may amend the Plan inany manner. The Plan shall be binding upon and enforceable against the Company and its successorsand assigns.13. Funding of the PlanThe Plan shall be unfunded. The Company shall not be required to establish any special orseparate fund or to make any other segregation of assets to assure the payment of any Awards underthe Plan. In no event shall interest be paid or accrued on any Award, including unpaid installments ofAwards.14. Rights of ParticipantsNothing in the Plan shall entitle any Eligible Individual or other person to any claim or right tobe granted an Award under the Plan. Neither the Plan nor any action taken hereunder shall beconstrued as giving any individual any rights to be retained by or in the employ of the Employer or anyother employment rights. 15. No Fractional SharesNo fractional shares of Company Stock shall be issued or delivered pursuant to the Plan or anyAward. The Committee shall determine whether cash, other awards or other property shall be issuedor paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall beforfeited or otherwise eliminated.16. HeadingsSection headings are for reference only. In the event of a conflict between a title and thecontent of a Section, the content of the Section shall control.17. Effective Date of the PlanThe Plan shall be effective on February 23, 2017.-11- 18. Miscellaneous(a) Awards in Connection with Corporate Transactions and Otherwise. Nothing containedin the Plan shall be construed to (i) limit the right of the Committee to make Awards under the Plan inconnection with the acquisition, by purchase, lease, merger, consolidation, or otherwise, of thebusiness or assets of any corporation, firm or association; or (ii) limit the right of the Company to grantstock options or make other awards outside of the Plan.(b) Compliance with Law. The Plan, exercise of Options, restrictions of Stock Awardsand obligations of the Company to issue or transfer shares of Company Stock under Awards shall besubject to all applicable laws and to approvals by any governmental or regulatory agency as may berequired. With respect to persons subject to section 16 of the Exchange Act, it is the intent of theCompany that the Plan and all transactions under the Plan comply with all applicable provisions ofRule 16b-3 or its successors under the Exchange Act. In addition, it is the intent of the Company thatthe Plan and applicable Awards under the Plan comply with the applicable provisions of section 409Aof the Code. To the extent that any legal requirement of section 16 of the Exchange Act or section409A of the Code as set forth in the Plan ceases to be required under section 16 of the Exchange Actor section 409A of the Code, that Plan provision shall cease to apply. The Committee may revokeany Award if it is contrary to law or modify an Award to bring it into compliance with any valid andmandatory government regulation. The Committee may also adopt rules regarding the withholding oftaxes on payments to Grantees. The Committee may, in its sole discretion, agree to limit its authorityunder this Section.(c) Employees Subject to Taxation Outside the United States. With respect to Granteeswho are subject to taxation in countries other than the United States, the Committee may makeAwards on such terms and conditions as the Committee deems appropriate to comply with the laws ofthe applicable countries, and the Committee may create such procedures, addenda, and subplans andmake such modifications as may be necessary or advisable to comply with such laws.(d) Governing Law. The validity, construction, interpretation, and effect of the Plan andAward Agreements issued under the Plan shall be governed and construed by and determined inaccordance with the laws of the State of Delaware, without giving effect to the conflict of lawsprovisions thereof. -12- EXHIBIT 10.16STRONGBRIDGE BIOPHARMA PLC2015 EQUITY COMPENSATION PLANINCENTIVE STOCK OPTION AWARDStrongbridge Biopharma plc (the “Company”) has granted you an Incentive Stock Option (the“Option”) under the 2015 Equity Compensation Plan (the “Plan”). The terms of the grant are set forthin the Incentive Stock Option Award Agreement provided to you (the “Agreement”). The followingprovides a summary of the key terms of the grant; however, you should read the entire Agreement,along with the terms of the Plan, to fully understand the grant. SUMMARY OF INCENTIVE STOCK OPTION AWARD Grantee:______________________________Date of Grant:Vesting Schedule:______________________________Exercise Price Per Share: Total Number of Options Granted:Term/Expiration Date: STRONGBRIDGE BIOPHARMA PLC2015 EQUITY COMPENSATION PLANINCENTIVE STOCK OPTION AWARD AGREEMENTThis INCENTIVE STOCK OPTION AWARD AGREEMENT (the “Agreement”), datedas of [_________________] (the “Date of Grant”), is delivered by Strongbridge Biopharma plc (the“Company”) to [_____________________] (the “Grantee”).RECITALSA.The 2015 Equity Compensation Plan (the “Plan”) provides for the grant of options topurchase shares of common stock of the Company (“Company Stock”). The Company has decided tomake a stock option award as an inducement for the Grantee to promote the best interests of theCompany and its stockholders. Capitalized terms that are used but not defined herein shall have therespective meanings accorded to such terms in the Plan. B.The Plan is administered and interpreted by the Compensation Committee of the Boardof Directors of the Company (the “Board”) (or a subcommittee thereof), or such other committee of theBoard (including, without limitation, the full Board) to which the Board has delegated power to actunder or pursuant to the provisions of the Plan (the “Committee”). The Committee may delegateauthority to one or more subcommittees as it deems appropriate. If a subcommittee is appointed, allreferences in this Agreement to the “Committee” shall be deemed to refer to the committee.NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby,agree as follows:1. Grant of Option. Subject to the terms and conditions set forth in this Agreement and in thePlan, the Company hereby grants to the Grantee an Incentive Stock Option (the “Option”) to purchase___________ shares of Company Stock at an exercise price of $[____] per share.2. Vesting. The Option shall become vested and exercisable, according to the vesting scheduleset forth on Attachment A, if the Grantee continues to be employed by, or provide service to, theCompany (or its parent or subsidiary, as applicable) (the “Employer”) from the Date of Grant until theapplicable vesting date.3. Term of Option.(a) The Option shall have a term of ten (10) years from the Date of Grant and shallterminate at the expiration of that period, unless it is terminated at an earlier date pursuant to theprovisions of this Agreement or the Plan.(b) Unless a later termination date is provided for in a Company-sponsored plan, policy orarrangement, or any agreement to which the Employer is a party, the Option shall automaticallyterminate upon the happening of the first of the following events:- 1 - (i) The expiration of the ninety (90) day period after the Grantee ceases to beemployed by, or provide service to, the Employer, if the termination is for any reason other thanDisability (as defined in the Plan), death or Cause (as defined in the Plan).(ii) The expiration of the one (1) year period after the Grantee ceases to beemployed by, or provide service to, the Employer on account of the Grantee’s Disability.(iii) The expiration of the one (1) year period after the Grantee ceases to beemployed by, or provide service to, the Employer, if the Grantee dies (x) while employed by,or providing service to, the Employer or (y) within ninety (90) days after the Grantee ceases tobe so employed or provide such services on account of a termination described in subparagraph(i) above.(iv) The date on which the Grantee ceases to be employed by, or provide service to,the Employer on account of a termination by the Employer for Cause. In addition,notwithstanding the prior provisions of this Paragraph 3, if the Board determines that theGrantee has engaged in conduct that constitutes Cause at any time while the Grantee isemployed by, or providing service to, the Employer or after the Grantee’s termination ofemployment or service, any Option held by the Grantee shall immediately terminate, and theGrantee shall automatically forfeit all shares underlying any exercised portion of an Option forwhich the Company has not yet delivered the share certificates, upon refund by the Companyof the Exercise Price paid by the Grantee for such shares.Notwithstanding the foregoing, in no event may the Option be exercised after the date that isimmediately before the tenth anniversary of the Date of Grant. Any portion of the Option that is notvested and exercisable at the time the Grantee ceases to be employed by, or provide service to, theEmployer shall immediately terminate. 4. Exercise Procedures(a) Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may exercise part orall of the vested Option by delivering a written notice of exercise to the Company in the mannerprovided in this Agreement, specifying the number of shares of Company Stock as to which theOption is to be exercised. The Grantee shall pay the Exercise Price (i) in cash, (ii) by delivering sharesof Company Stock owned by the Grantee (including Company Stock acquired in connection with theexercise of an Option, subject to such restrictions as the Committee deems appropriate) and having aFair Market Value on the date of exercise equal to the Exercise Price or by attestation (on a formprescribed by the Committee) to ownership of shares of Company Stock having a Fair Market Valueon the date of exercise equal to the Exercise Price; (iii) by payment through a broker in accordancewith procedures permitted by Regulation T of the Federal Reserve Board; or (iv) by such other methodas the Committee may approve. In addition, the Grantee may elect to settle the Option on a “net basis”by taking delivery of the number of Company Stock equal to Fair Market Value of the shares subjectto any Option less the exercise price, any tax (or governmental obligation) or other administration feesdue. The Company may impose from time to time such limitations as it deems appropriate on the use ofshares of Company Stock to exercise the Option. - 2 - (b) The obligation of the Company to deliver shares of Company Stock upon exercise ofthe Option shall be subject to all applicable laws, rules, and regulations and such approvals bygovernmental agencies as may be deemed appropriate by the Company, including such actions asCompany counsel shall deem necessary or appropriate to comply with relevant securities laws andregulations. The Company may require that the Grantee (or other person exercising the Option afterthe Grantee’s death) represent that the Grantee is purchasing shares of Company Stock for theGrantee’s own account and not with a view to or for sale in connection with any distribution of theshares of Company Stock, or such other representation as the Company deems appropriate. (c) All obligations of the Company under this Agreement shall be subject to the rights of theCompany as set forth in the Plan to withhold amounts required to be withheld for any taxes, ifapplicable. The Grantee may elect to satisfy any tax withholding obligation of the Company withrespect to the Option by having shares of Company Stock withheld up to an amount that does notexceed the minimum applicable withholding tax rate for federal (including FICA), state and local taxliabilities.5. Designation as Incentive Stock Option.(a) This Option is designated an incentive stock option under Section 422 of the InternalRevenue Code of 1986, as amended (the “Code”). If the aggregate fair market value of the stock onthe date of the grant with respect to which incentive stock options are exercisable for the first time bythe Grantee during any calendar year, under the Plan or any other stock option plan of the Company ora parent or subsidiary, exceeds one hundred thousand dollars ($100,000), then the Option, as to theexcess, shall be treated as a nonqualified stock option that does not meet the requirements of Section422. If and to the extent that the Option fails to qualify as an incentive stock option under the Code,the Option shall remain outstanding according to its terms as a nonqualified stock option.(b) The Grantee understands that favorable incentive stock option tax treatment is availableonly if the Option is exercised while the Grantee is an employee of the Employer or within a period oftime specified in the Code after the Grantee ceases to be an employee. The Grantee understands thatthe Grantee is responsible for the income tax consequences of the Option, and, among other taxconsequences, the Grantee understands that he or she may be subject to the alternative minimum taxunder the Code in the year in which the Option is exercised. The Grantee will consult with his or hertax adviser regarding the tax consequences of the Option.(c) The Grantee agrees that the Grantee shall immediately notify the Company in writing ifthe Grantee sells or otherwise disposes of any Shares acquired upon the exercise of the Option andsuch sale or other disposition occurs on or before the later of (i) two (2) years after the Date of Grant or(ii) one (1) year after the exercise of the Option. The Grantee also agrees to provide the Company withany information requested by the Company with respect to such sale or other disposition.6. Change of Control. Upon a Change of Control (as defined in the Plan), the Option shallautomatically accelerate and become fully vested and exercisable, provided that the Grantee isemployed by, or providing service to, the Employer on the date of such Change of Control.- 3 - 7. Restrictions on Exercise. Except as the Company may otherwise permit pursuant to the Plan,only the Grantee may exercise rights under the Option during the Grantee’s lifetime and, after theGrantee’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solelyby the personal representative or other person entitled to succeed to the rights of the Grantee, or by theperson who acquires the right to exercise the Option by will or by the laws of descent and distribution,to the extent that the Option is vested and exercisable pursuant to this Agreement. Any such successormust furnish proof satisfactory to the Company of his or her right to receive the Option under theGrantee’s will or under the applicable laws of descent and distribution.8. Adjustments. The provisions of the Plan applicable to Adjustments (as described in Section 3of the Plan) shall apply to the Option.9. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of whichare incorporated herein by reference, and in all respects shall be interpreted in accordance with thePlan. The grant and exercise of the Option are subject to interpretations, regulations anddeterminations concerning the Plan established from time to time by the Committee in accordance withthe provisions of the Plan, including, but not limited to, provisions pertaining to (i) rights andobligations with respect to withholding taxes, (ii) the registration, qualification or listing of the shares ofCompany Stock, (iii) changes in capitalization of the Company and (iv) other requirements ofapplicable law. The Committee shall have the authority to interpret and construe the Option pursuantto the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.10. No Employment or Other Rights. The grant of the Option shall not confer upon the Granteeany right to be retained by or in the employ or service of the Company and shall not interfere in anyway with the right of the Company to terminate the Grantee’s employment or service at any time. Theright of the Company to terminate at will the Grantee’s employment or service at any time for anyreason is specifically reserved.11. No Shareholder Rights. Neither the Grantee, nor any person entitled to exercise the Grantee’srights in the event of the Grantee’s death, shall have any of the rights and privileges of a shareholderwith respect to the shares of Company Stock subject to the Option, until certificates for shares ofCompany Stock have been issued upon the exercise of the Option.12. Assignment and Transfers. Except as the Committee may otherwise permit pursuant to thePlan, the rights and interests of the Grantee under this Agreement may not be sold, assigned,encumbered or otherwise transferred except, in the event of the death of the Grantee, by will or by thelaws of descent and distribution. In the event of any attempt by the Grantee to alienate, assign, pledge,hypothecate, or otherwise dispose of the Option or any right hereunder, except as provided for in thisAgreement, or in the event of the levy or any attachment, execution or similar process upon the rightsor interests hereby conferred, the Company may terminate the Option by notice to the Grantee, and theOption and all rights hereunder shall thereupon become null and void. The rights and protections ofthe Company hereunder shall extend to any successors or assigns of the Company and to theCompany’s parents, subsidiaries, and affiliates. This Agreement may be assigned by the Companywithout the Grantee’s consent.- 4 - 13. Applicable Law. The validity, construction, interpretation and effect of this Agreement shallbe governed by and construed in accordance with the laws of the State of Delaware, without givingeffect to the conflicts of laws provisions thereof.14. Notice. Any notice to the Company provided for in this Agreement shall be addressed to theCompany, in care of the Committee, and any notice to the Grantee shall be addressed to such Granteeat the current address shown on the payroll of the Company, or to such other address as the Granteemay designate to the Company in writing. - 5 - IN WITNESS WHEREOF, the Company has caused its duly authorized officer to executethis Agreement, and the Grantee has executed this Agreement, effective as of the Date of Grant. Strongbridge Biopharma plcBy:Name:Title: I hereby accept the Option described in this Agreement, and I agree to be bound by the terms of thePlan and this Agreement. I hereby further agree that all the decisions and determinations of theCommittee shall be final and binding. Grantee: Date: (Signature Page to Incentive Stock Option Award Agreement) ATTACHMENT A The Option shall become vested and exercisable according to the following vesting schedule, if theGrantee continues to be employed by, or provide service to, the Employer from the Date of Grant untilthe applicable vesting date: [VESTING SCHEDULE] The vesting of the Option shall be cumulative, but shall not exceed 100% of the shares subject to theOption granted above. If the foregoing schedule would produce fractional shares, the portion of theOption that vests shall be rounded down to the nearest whole share. EXHIBIT 10.17STRONGBRIDGE BIOPHARMA PLC2015 EQUITY COMPENSATION PLANNONQUALIFIED STOCK OPTION AWARDStrongbridge Biopharma plc (the “Company”) has granted you a Nonqualified Stock Option (the“Option”) under the 2015 Equity Compensation Plan (the “Plan”). The terms of the grant are set forthin the Nonqualified Stock Option Award Agreement provided to you (the “Agreement”). Thefollowing provides a summary of the key terms of the grant; however, you should read the entireAgreement, along with the terms of the Plan, to fully understand the grant. SUMMARY OF NONQUALIFIED STOCK OPTION AWARD Grantee:[NAME] Date of Grant:_______________ Vesting Schedule:16 equal, quarterly installments following theGrant Date (provided employee is employed by theCompany on each vesting date) Exercise Price Per Share:$_____ Total Number of Options Granted:[#UNITS] Term/Expiration Date:________________ STRONGBRIDGE BIOPHARMA PLC 2015 EQUITY COMPENSATION PLAN NONQUALIFIED STOCK OPTION AWARD AGREEMENT This NONQUALIFIED STOCK OPTION AWARD AGREEMENT (the “Agreement”),dated as of _______________ (the “Date of Grant”), is delivered by Strongbridge Biopharma plc (the“Company”) to [NAME] (the “Grantee”). RECITALS A.The 2015 Equity Compensation Plan (the “Plan”) provides for the grant of options topurchase shares of common stock of the Company (“Company Stock”). The Company has decided tomake a stock option award as an inducement for the Grantee to promote the best interests of theCompany and its stockholders. Capitalized terms that are used but not defined herein shall have therespective meanings accorded to such terms in the Plan. B.The Plan is administered and interpreted by the Compensation Committee of theBoard of Directors of the Company (the “Board”) (or a subcommittee thereof), or such other committeeof the Board (including, without limitation, the full Board) to which the Board has delegated power toact under or pursuant to the provisions of the Plan (the “Committee”). The Committee may delegateauthority to one or more subcommittees as it deems appropriate. If a subcommittee is appointed, allreferences in this Agreement to the “Committee” shall be deemed to refer to the committee.NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby,agree as follows:1.Grant of Option. Subject to the terms and conditions set forth in this Agreement and in thePlan, the Company hereby grants to the Grantee a Nonqualified Stock Option (the “Option”) topurchase [#UNITS] shares of Company Stock at an exercise price of $_____ per share. 2.Vesting. The Option shall become vested and exercisable, according to the following vestingschedule, if the Grantee continues to be employed by, or provide service to, the Company (or its parentor subsidiary, as applicable) (the “Employer”) from the Date of Grant until the applicable vesting date. Vesting Date% of OptionVested16 equal, quarterly installments following the GrantDate (provided employee is employed by theCompany on each vesting date)100% of theOption - 1 - The vesting of the Option shall be cumulative, but shall not exceed 100% of the shares subject to theOption granted above. If the foregoing schedule would produce fractional shares, the portion of theOption that vests shall be rounded down to the nearest whole share. 3.Term of Option.(a)The Option shall have a term of ten (10) years from the Date of Grant and shallterminate at the expiration of that period, unless it is terminated at an earlier date pursuant to theprovisions of this Agreement or the Plan.(b)Unless a later termination date is provided for in a Company-sponsored plan, policyor arrangement, or any agreement to which the Employer is a party, the Option shall automaticallyterminate upon the happening of the first of the following events:(i)The expiration of the ninety (90) day period after the Grantee ceases to beemployed by, or provide service to, the Employer, if the termination is for any reason other thanDisability (as defined in the Plan), death or Cause (as defined in the Plan).(ii)The expiration of the one (1) year period after the Grantee ceases to beemployed by, or provide service to, the Employer on account of the Grantee’s Disability.(iii)The expiration of the one (1) year period after the Grantee ceases to beemployed by, or provide service to, the Employer, if the Grantee dies (x) while employed by,or providing service to, the Employer or (y) within ninety (90) days after the Grantee ceases tobe so employed or provide such services on account of a termination described in subparagraph(i) above.(iv)The date on which the Grantee ceases to be employed by, or provide service to,the Employer on account of a termination by the Employer for Cause. In addition,notwithstanding the prior provisions of this Paragraph 3, if the Board determines that theGrantee has engaged in conduct that constitutes Cause at any time while the Grantee isemployed by, or providing service to, the Employer or after the Grantee’s termination ofemployment or service, any Option held by the Grantee shall immediately terminate, and theGrantee shall automatically forfeit all shares underlying any exercised portion of an Option forwhich the Company has not yet delivered the share certificates, upon refund by the Companyof the Exercise Price paid by the Grantee for such shares.Notwithstanding the foregoing, in no event may the Option be exercised after the date that isimmediately before the tenth anniversary of the Date of Grant. Any portion of the Option that is notvested and exercisable at the time the Grantee ceases to be employed by, or provide service to, theEmployer shall immediately terminate.4.Exercise Procedures(a)Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may exercise partor all of the vested Option by delivering a written notice of exercise to the Company in the mannerprovided in this Agreement, specifying the number of shares of Company Stock as to- 2 - which the Option is to be exercised. The Grantee shall pay the Exercise Price (i) in cash, (ii) bydelivering shares of Company Stock owned by the Grantee (including Company Stock acquired inconnection with the exercise of an Option, subject to such restrictions as the Committee deemsappropriate) and having a Fair Market Value on the date of exercise equal to the Exercise Price or byattestation (on a form prescribed by the Committee) to ownership of shares of Company Stock having aFair Market Value on the date of exercise equal to the Exercise Price; (iii) by payment through a brokerin accordance with procedures permitted by Regulation T of the Federal Reserve Board; or (iv) bysuch other method as the Committee may approve. In addition, the Grantee may elect to settle theOption on a “net basis” by taking delivery of the number of Company Stock equal to Fair MarketValue of the shares subject to any Option less the exercise price, any tax (or governmental obligation)or other administration fees due. The Company may impose from time to time such limitations as itdeems appropriate on the use of shares of Company Stock to exercise the Option.(b)The obligation of the Company to deliver shares of Company Stock upon exercise ofthe Option shall be subject to all applicable laws, rules, and regulations and such approvals bygovernmental agencies as may be deemed appropriate by the Company, including such actions asCompany counsel shall deem necessary or appropriate to comply with relevant securities laws andregulations. The Company may require that the Grantee (or other person exercising the Option after theGrantee’s death) represent that the Grantee is purchasing shares of Company Stock for the Grantee’sown account and not with a view to or for sale in connection with any distribution of the shares ofCompany Stock, or such other representation as the Company deems appropriate.(c)All obligations of the Company under this Agreement shall be subject to the rights ofthe Company as set forth in the Plan to withhold amounts required to be withheld for any taxes, ifapplicable. The Grantee may elect to satisfy any tax withholding obligation of the Company withrespect to the Option by having shares of Company Stock withheld up to an amount that does notexceed the minimum applicable withholding tax rate for federal (including FICA), state and local taxliabilities.5.Change of Control. Upon a Change of Control (as defined in the Plan), the Option shallautomatically accelerate and become fully vested and exercisable, provided that the Grantee isemployed by, or providing service to, the Employer on the date of such Change of Control.6.Restrictions on Exercise. Except as the Company may otherwise permit pursuant to thePlan, only the Grantee may exercise rights under the Option during the Grantee’s lifetime and, after theGrantee’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solelyby the personal representative or other person entitled to succeed to the rights of the Grantee, or by theperson who acquires the right to exercise the Option by will or by the laws of descent and distribution,or if permitted in any case by the Committee, pursuant to a domestic relations order or otherwise aspermitted by the Committee, to the extent that the Option is vested and exercisable pursuant to thisAgreement. Any such successor must furnish proof satisfactory to the Company of his or her right toreceive the Option under the Grantee’s will or under the applicable laws of descent and distribution.7.Adjustments. The provisions of the Plan applicable to Adjustments (as described in Section3 of the Plan) shall apply to the Option.- 3 - 8.Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms ofwhich are incorporated herein by reference, and in all respects shall be interpreted in accordance withthe Plan. The grant and exercise of the Option are subject to interpretations, regulations anddeterminations concerning the Plan established from time to time by the Committee in accordance withthe provisions of the Plan, including, but not limited to, provisions pertaining to (i) rights andobligations with respect to withholding taxes, (ii) the registration, qualification or listing of the shares ofCompany Stock, (iii) changes in capitalization of the Company and (iv) other requirements ofapplicable law. The Committee shall have the authority to interpret and construe the Option pursuant tothe terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.9.No Employment or Other Rights. The grant of the Option shall not confer upon theGrantee any right to be retained by or in the employ or service of the Company and shall not interferein any way with the right of the Company to terminate the Grantee’s employment or service at anytime. The right of the Company to terminate at will the Grantee’s employment or service at any time forany reason is specifically reserved.10.No Shareholder Rights. Neither the Grantee, nor any person entitled to exercise theGrantee’s rights in the event of the Grantee’s death, shall have any of the rights and privileges of ashareholder with respect to the shares of Company Stock subject to the Option, until certificates forshares of Company Stock have been issued upon the exercise of the Option.11.Assignment and Transfers. Except as the Committee may otherwise permit pursuant to thePlan, the rights and interests of the Grantee under this Agreement may not be sold, assigned,encumbered or otherwise transferred except, in the event of the death of the Grantee, by will or by thelaws of descent and distribution or if permitted in any specific case by the Committee, pursuant to adomestic relations order or otherwise as permitted by the Committee. In the event of any attempt by theGrantee to alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any righthereunder, except as provided for in this Agreement, or in the event of the levy or any attachment,execution or similar process upon the rights or interests hereby conferred, the Company may terminatethe Option by notice to the Grantee, and the Option and all rights hereunder shall thereupon becomenull and void. The rights and protections of the Company hereunder shall extend to any successors orassigns of the Company and to the Company’s parents, subsidiaries, and affiliates. This Agreementmay be assigned by the Company without the Grantee’s consent.12.Applicable Law. The validity, construction, interpretation and effect of this Agreementshall be governed by and construed in accordance with the laws of the State of Delaware, withoutgiving effect to the conflicts of laws provisions thereof.13.Notice. Any notice to the Company provided for in this Agreement shall be addressed to theCompany in care of the Committee, and any notice to the Grantee shall be addressed to such Grantee atthe current address shown on the payroll of the Company, or to such other address as the Grantee maydesignate to the Company in writing. - 4 - IN WITNESS WHEREOF, the Company has caused its duly authorized officer to executethis Agreement, and the Grantee has executed this Agreement, effective as of the Date of Grant.Strongbridge Biopharma plcBy:______________________________Name: Matthew PaulsTitle: Chief Executive OfficerI hereby accept the Option described in this Agreement, and I agree to be bound by the terms of thePlan and this Agreement. I hereby further agree that all the decisions and determinations of theCommittee shall be final and binding.Grantee: ______________________________Name: [name] Date:______________________________ (Signature Page to Nonqualified Stock Option Award Agreement) EXHIBIT 10.18STRONGBRIDGE BIOPHARMA PLC2015 EQUITY COMPENSATION PLANRESTRICTED STOCK UNIT AWARDStrongbridge Biopharma plc (the “Company”) has determined to grant to you an award of restricted stockunits (the “RSUs”) under the 2015 Equity Compensation Plan (the “Plan”). The terms of the grant are setforth in the attached Restricted Stock Unit Award Agreement (the “Agreement”). The following providesa summary of the key terms of the Agreement; however, you should read the entire Agreement along withthe terms of the Plan, to fully understand the Agreement. SUMMARY OF RESTRICTED STOCK UNIT AWARD Grantee:[name]Date of Grant:[date]Vesting Schedule:100% vest on 2-year anniversary of Date of Grant(provided employee is employed by the Companyon such vesting date)Total Number of Restricted Stock UnitsGranted:[#units] STRONGBRIDGE BIOPHARMA PLC2015 EQUITY COMPENSATION PLANRESTRICTED STOCK UNIT AWARD AGREEMENTThis RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Agreement”), dated as of[DATE], (the “Date of Grant”) is delivered by Strongbridge Biopharma plc (the “Company”), to[NAME] (the “Grantee”). The Company has determined to provide the Grantee an award of restricted stock units underthe 2015 Equity Compensation Plan (the “Plan”) and in accordance with the terms and conditions setforth in this Agreement. Capitalized terms that are used but not defined herein shall have the respectivemeanings accorded to such terms in the Plan.The Plan is administered and interpreted by the Compensation Committee of the Board ofDirectors of the Company (the “Board”) (or a subcommittee thereof), or such other committee of theBoard (including, without limitation, the full Board) to which the Board has delegated power to actunder or pursuant to the provisions of the Plan (the “Committee”). The Committee may delegateauthority to one or more subcommittees as it deems appropriate. If a subcommittee is appointed, allreferences in this Agreement to the “Committee” shall be deemed to refer to the committee. The Company and Grantee, intending to be legally bound hereby, agree as follows:1. Grant of Restricted Stock Unit Award. Subject to the terms and conditions set forth in thisAgreement and the Plan, the Company hereby awards to the Grantee [#units] Restricted Stock Units(the “RSUs”) under the Plan. The Grantee accepts the RSUs and agrees to be bound by the terms andconditions of this Agreement and the Plan with respect to the award. Each vested RSU entitles theGrantee to receive one share of Company Stock, as described in Paragraph 2 below.2. Vesting of Award/Payment of Shares.(a) The RSUs shall vest in full on the second anniversary of the Date of Grant (the“Vesting Date”), if the Grantee continues to be employed by, or provide service to, the Company (orits parent or subsidiary, as applicable) (the “Employer”) from the Date of Grant until the Vesting Date.(b) If and when the RSUs vest, the Company will issue to the Grantee one share ofCompany Stock for each whole RSU that has vested, subject to satisfaction of the Grantee’s taxwithholding obligations as described in Paragraph 5 below. The RSUs shall cease to be outstandingupon such issuance of shares.(c) Unless otherwise provided in a Company-sponsored plan, policy or arrangement, orany agreement to which the Employer is a party, the Grantee shall forfeit the unvested RSUs in the event the Grantee ceases to be employed by, or provide service to, the Employer prior to theVesting Date.3. No Stockholder Rights Prior to Settlement; Issuance of Certificates. The Grantee shallhave no rights as a stockholder with respect to any shares of Company Stock represented by the RSUsuntil the date of issuance of the shares of Company Stock (as evidenced by the appropriate entry on thebooks of the Company or of a duly authorized transfer agent of the Company), if applicable. Except asotherwise required by the Plan, no adjustment shall be made for dividends, distributions, or other rightsfor which the record date is prior to the date, if any, that shares of Company Stock are issued.4. Change of Control. Upon a Change of Control (as defined in the Plan), the RSUs shallaccelerate and vest and shall be paid pursuant to Paragraph 2(b) above, provided that the Grantee isemployed by, or providing service to, the Employer on the date of such Change of Control. 5. Withholding. The Grantee shall be required to pay to the Company, or make otherarrangements satisfactory to the Company to provide for the payment of, any federal, state, local orother taxes that the Employer is required to withhold with respect to the grant or vesting of the RSUs,or the Employer may deduct from other wages paid by the Employer the amount of any withholdingtaxes due with respect to the RSUs. The Grantee may elect to satisfy any income tax withholdingobligation of the Employer with respect to the RSUs by having shares of Company Stock withheld upto an amount that does not exceed the minimum applicable withholding tax rate for federal (includingFICA), state, local and other tax liabilities. Unless the tax withholding obligations of the Company aresatisfied, the Company shall have no obligation to deliver to the Grantee any Company Stock. In theevent the Company’s obligation to withhold arises prior to the delivery to the Grantee of shares ofCompany Stock or it is determined after the delivery of shares of Company Stock to the Grantee thatthe amount of the Company’s withholding obligation was greater than the amount withheld by theCompany, the Grantee agrees to indemnify and hold the Company harmless from any failure by theCompany to withhold the proper amount.6. Adjustments. The provisions of the Plan applicable to adjustments (as described in Section 3of the Plan) shall apply to the RSUs.7. Assignment and Transfers. The rights and interests of the Grantee under this Agreement maynot be sold, assigned, encumbered or otherwise transferred except, in the event of the death of theGrantee, by will or by the laws of descent and distribution. In the event of any attempt by the Granteeto alienate, assign, pledge, hypothecate, or otherwise dispose of the RSUs or any right hereunder, or inthe event of the levy or any attachment, execution or similar process upon the rights or interests herebyconferred, the Company may terminate the RSUs by notice to the Grantee, and the RSUs and all rightshereunder shall thereupon become null and void. The rights and protections of the Companyhereunder shall extend to any successors or assigns of the Company and to the Company’s parents,subsidiaries, and affiliates. This Agreement may be assigned by the Company without the Grantee’sconsent.- 2 - 8. Miscellaneous.(a) No Right to Employment. The grant of the RSUs shall not be construed as giving theGrantee the right to be retained by or in the employ of the Employer or any other employment right.(b) Delivery Subject to Legal Requirements. The obligation of the Company to deliverstock shall be subject to the condition that if at any time the Board shall determine in its discretion thatthe listing, registration or qualification of the shares upon any securities exchange or under any state orfederal law, or the consent or approval of any governmental regulatory body is necessary or desirableas a condition of, or in connection with, the issue of shares, the shares may not be issued in whole or inpart unless such listing, registration, qualification, consent or approval shall have been effected orobtained free of any conditions not acceptable to the Board. The issuance of shares to the Granteepursuant to this Agreement is subject to any applicable taxes and other laws or regulations of theUnited States or of any state having jurisdiction thereof.(c) RSUs Subject to Plan. By entering into this Agreement the Grantee agrees andacknowledges that the Grantee has received and read a copy of the Plan. The RSUs are subject to theterms and provisions of the Plan, as they may be amended from time to time, and such terms andprovisions of the Plan are hereby incorporated herein by reference. In the event of a conflict betweenany term or provision contained herein and a term or provision of the Plan, the applicable terms andprovisions of the Plan will govern and prevail.(d) Committee Authority. By entering into this Agreement the Grantee agrees andacknowledges that all decisions and determinations of the Committee shall be final and binding on theGrantee, his or her beneficiaries and any other person having or claiming and interest in the RSUs.(e) Severability. If any provision of this Agreement is or becomes or is deemed to beinvalid, illegal or unenforceable in any jurisdiction or would disqualify this Agreement or the RSUsunder any applicable law, such provision shall be construed or deemed amended to conform toapplicable law (or if such provision cannot be so construed or deemed amended without materiallyaltering the purpose or intent of this Agreement and the grant of the RSUs hereunder, such provisionshall be stricken as to such jurisdiction and the remainder of this Agreement and the award shallremain in full force and effect).(d) Notices. Any notice to be given to the Company under the terms of this Agreementshall be addressed to the Company, at the attention of the Committee, at its principal place of business,and any notice to be given to Grantee may be sent to Grantee’s address as it appears in the payrollrecords of the Company, or at such other addresses as either party may designate in writing to theother.(e) Section 409A. This Agreement and the RSUs granted hereunder are intended to fitwithin the “short-term deferral” exemption from Section 409A of the Code, as set forth in TreasuryRegulation Section 1.409A-1(b)(4) or any successor provision, or to comply with, or otherwise beexempt from, Section 409A of the Code. This Agreement and the RSUs shall be administered,interpreted and construed in a manner consistent with Section 409A of the Code. Each amount- 3 - payable under this Agreement is designated as a separate identified payment for purposes of Section409A of the Code. The payment of dividend equivalents under Paragraph 3 of this Agreement shall beconstrued as earnings and the time and form of payment of such dividend equivalents shall be treatedseparately from the time and form of payment of the underlying RSUs for purposes of Section 409A ofthe Code.(f) Governing Law. The validity, construction, interpretation and effect of this Agreementshall be governed by and construed in accordance with the laws of the State of Delaware, withoutgiving effect to the conflict of laws provisions thereof(g) Interpretation. The Grantee accepts the RSUs subject to all the terms and provisions ofthis Agreement and the terms and conditions of the Plan.(g) Headings. Headings are given to the paragraphs and subparagraphs of this Agreementsolely as a convenience to facilitate reference. Such headings shall not be deemed in any way materialor relevant to the construction or interpretation of this Agreement or any provision thereof.(h) Counterparts. This Agreement may be executed in one or more counterparts, each ofwhich will be deemed to be an original copy of this Agreement and all of which, when taken together,will be deemed to constitute one and the same agreement. Facsimile or other electronic transmission ofany signed original document or retransmission of any signed facsimile or other electronic transmissionwill be deemed the same as delivery of an original.(i) Complete Agreement. Except as otherwise provided for herein, this Agreement andthose agreements and documents expressly referred to herein embody the complete agreement andunderstanding among the parties and supersede and preempt any prior understandings, agreements orrepresentations by or among the parties, written or oral, which may have related to the subject matterhereof in any way. The terms of this Agreement shall be binding upon the executors, administrators,heirs, successors and assigns of the Grantee. [Signature Page Follows] - 4 - IN WITNESS WHEREOF, the Company and Grantee have executed this Agreement as ofthe grant date shown above. Strongbridge Biopharma plc By: Name:Matthew Pauls Title:Chief Executive Officer I hereby accept the RSUs described in this Agreement, and I agree to be bound by the terms of thePlan and this Agreement. I hereby further agree that all the decisions and determinations of theCommittee shall be final and binding. GRANTEE: Name:[name] Date: (Signature Page to Restricted Stock Unit Award Agreement)EXHIBIT 10.19STRONGBRIDGE BIOPHARMA PLC2015 NON-EMPLOYEE DIRECTOR EQUITY COMPENSATION PLANNONQUALIFIED STOCK OPTION AWARDStrongbridge Biopharma plc (the “Company”) has granted you a Stock Option (the “Option”) underthe Non-Employee Director Equity Compensation Plan (the “Plan”). The terms of the grant are setforth in the Stock Option Award Agreement provided to you (the “Agreement”). The followingprovides a summary of the key terms of the grant; however, you should read the entire Agreement,along with the terms of the Plan, to fully understand the grant. SUMMARY OF NONQUALIFIED STOCK OPTION AWARD Grantee:[name]Date of Grant:[date]Vesting Schedule:To vest and become exercisable (i) on [date],provided that the applicable member of theBoard continues to provide service as a memberof the Board continuously from the date of grantthrough [date]; (ii) upon a change of control ofthe Company, provided the applicable memberof the Board is a director of the Company onsuch date.Exercise Price Per Share:[price]Total Number of Options Granted:[#units]Term/Expiration Date:[date] STRONGBRIDGE BIOPHARMA PLCNON-EMPLOYEE DIRECTOR EQUITY COMPENSATION PLANNONQUALIFIED STOCK OPTION AWARD AGREEMENTThis STOCK OPTION AWARD AGREEMENT (the “Agreement”), dated as of [date] (the“Date of Grant”), is delivered by Strongbridge Biopharma plc (the “Company”) to [name] (the“Grantee”).RECITALSA.The Non-Employee Director Equity Compensation Plan (the “Plan”) provides for thegrant of options to purchase shares of common stock of the Company (“Company Stock”). TheCompany has decided to make a stock option award as an inducement for the Grantee to promote thebest interests of the Company and its stockholders. Capitalized terms that are used but not definedherein shall have the respective meanings accorded to such terms in the Plan. B.The Plan is administered and interpreted by the Board of Directors of the Company(the “Board”).NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby,agree as follows:1. Grant of Option. Subject to the terms and conditions set forth in this Agreement and in thePlan, the Company hereby grants to the Grantee a Stock Option (the “Option”) to purchase___________ shares of Company Stock at an exercise price of $[____] per share.2. Vesting. The Option shall become vested and exercisable, according to the following vestingschedule, if the Grantee continues to provide service to the Company from the Date of Grant until theapplicable vesting date:Vesting Date% of OptionVestedTo vest and become exercisable (i) on [date], provided that theapplicable member of the Board continues to provide service as amember of the Board continuously from the date of grant through[date]; (ii) upon a change of control of the Company, provided theapplicable member of the Board is a director of the Company on suchdate.100% The vesting of the Option shall be cumulative, but shall not exceed 100% of the shares subject to theOption granted above. If the foregoing schedule would produce fractional shares, the portion of theOption that vests shall be rounded down to the nearest whole share.- 1 - 3. Term of Option.(a) The Option shall have a term of ten (10) years from the Date of Grant and shallterminate at the expiration of that period, unless it is terminated at an earlier date pursuant to theprovisions of this Agreement or the Plan.(b) Unless a later termination date is provided for in a Company-sponsored plan, policy orarrangement, or any agreement to which the Company is a party, the Option shall automaticallyterminate upon the happening of the first of the following events:(i) The expiration of the ninety (90) day period after the Grantee ceases to provideservice to the Company, if the termination is for any reason other than Disability (as defined inthe Plan), death or Cause (as defined in the Plan).(ii) The expiration of the one (1) year period after the Grantee ceases to provideservice to the Company on account of the Grantee’s Disability.(iii) The expiration of the one (1) year period after the Grantee ceases to provideservice to the Company, if the Grantee dies (x) while providing service to the Company or (y)within ninety (90) days after the Grantee ceases to provide such services on account of atermination described in subparagraph (i) above.(iv) The date on which the Grantee ceases to provide service to the Company onaccount of a removal for Cause. In addition, notwithstanding the prior provisions of thisParagraph 3, if a majority of disinterested members of the Board determines that the Granteehas engaged in conduct that constitutes Cause at any time while the Grantee is providingservice to the Company or after the Grantee’s termination of service, any Option held by theGrantee shall immediately terminate, and the Grantee shall automatically forfeit all sharesunderlying any exercised portion of an Option for which the Company has not yet delivered theshare certificates, upon refund by the Company of the Exercise Price paid by the Grantee forsuch shares.Notwithstanding the foregoing, in no event may the Option be exercised after the date that isimmediately before the tenth anniversary of the Date of Grant. Any portion of the Option that is notvested and exercisable at the time the Grantee ceases to provide service to the Company shallimmediately terminate. 4. Exercise Procedures(a) Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may exercise part orall of the vested Option by delivering a written notice of exercise to the Company in the mannerprovided in this Agreement, specifying the number of shares of Company Stock as to which theOption is to be exercised. The Grantee shall pay the Exercise Price (i) in cash, (ii) by delivering sharesof Company Stock owned by the Grantee (including Company Stock acquired in connection with theexercise of an Option, subject to such restrictions as the Board deems appropriate) and having a FairMarket Value on the date of exercise equal to the Exercise Price or by attestation (on a form prescribedby the Board) to ownership of shares of Company Stock having a Fair Market Value on the date ofexercise equal to the Exercise Price; (iii) after a Public Offering,- 2 - by payment through a broker in accordance with procedures permitted by Regulation T of the FederalReserve Board; or (iv) by such other method as the Board may approve. In addition, the Grantee mayelect to settle the Option on a “net basis” by taking delivery of the number of Company Stock equal toFair Market Value of the shares subject to any Option less the exercise price, any tax (or governmentalobligation) or other administration fees due. The Company may impose from time to time suchlimitations as it deems appropriate on the use of shares of Company Stock to exercise the Option. (b) The obligation of the Company to deliver shares of Company Stock upon exercise ofthe Option shall be subject to all applicable laws, rules, and regulations and such approvals bygovernmental agencies as may be deemed appropriate by the Company, including such actions asCompany counsel shall deem necessary or appropriate to comply with relevant securities laws andregulations. The Company may require that the Grantee (or other person exercising the Option afterthe Grantee’s death) represent that the Grantee is purchasing shares of Company Stock for theGrantee’s own account and not with a view to or for sale in connection with any distribution of theshares of Company Stock, or such other representation as the Company deems appropriate. 5. Change of Control. Upon a Change of Control (as defined in the Plan), the Option shallautomatically accelerate and become fully vested and exercisable, provided that the Grantee isproviding service to the Company on the date of such Change of Control.6. Restrictions on Exercise. Except as the Company may otherwise permit pursuant to the Plan,only the Grantee may exercise rights under the Option during the Grantee’s lifetime and, after theGrantee’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solelyby the personal representative or other person entitled to succeed to the rights of the Grantee, or by theperson who acquires the right to exercise the Option by will or by the laws of descent and distribution,or if permitted in any case by the Board, pursuant to a domestic relations order or otherwise aspermitted by the Board, to the extent that the Option is vested and exercisable pursuant to thisAgreement. Any such successor must furnish proof satisfactory to the Company of his or her right toreceive the Option under the Grantee’s will or under the applicable laws of descent and distribution.7. Adjustments. The provisions of the Plan applicable to Adjustments (as described in Section 3of the Plan) shall apply to the Option.8. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of whichare incorporated herein by reference, and in all respects shall be interpreted in accordance with thePlan. The grant and exercise of the Option are subject to interpretations, regulations anddeterminations concerning the Plan established from time to time by the Board in accordance with theprovisions of the Plan, including, but not limited to, provisions pertaining to (i) rights and obligationswith respect to withholding taxes, (ii) the registration, qualification or listing of the shares of CompanyStock, (iii) changes in capitalization of the Company and (iv) other requirements of applicablelaw. The Board shall have the authority to interpret and construe the Option pursuant to the terms ofthe Plan, and its decisions shall be conclusive as to any questions arising hereunder.- 3 - 9. No Rights to Conitnued Service. The grant of the Option shall not confer upon the Granteeany right to be retained by or in the service of the Company and shall not interfere in any way with theright of the Board to terminate the Grantee’s service. 10. No Shareholder Rights. Neither the Grantee, nor any person entitled to exercise the Grantee’srights in the event of the Grantee’s death, shall have any of the rights and privileges of a shareholderwith respect to the shares of Company Stock subject to the Option, until certificates for shares ofCompany Stock have been issued upon the exercise of the Option.11. Assignment and Transfers. Except as the Board may otherwise permit pursuant to the Plan,the rights and interests of the Grantee under this Agreement may not be sold, assigned, encumbered orotherwise transferred except, in the event of the death of the Grantee, by will or by the laws of descentand distribution or if permitted in any specific case by the Board, pursuant to a domestic relations orderor otherwise as permitted by the Board. In the event of any attempt by the Grantee to alienate, assign,pledge, hypothecate, or otherwise dispose of the Option or any right hereunder, except as provided forin this Agreement, or in the event of the levy or any attachment, execution or similar process upon therights or interests hereby conferred, the Company may terminate the Option by notice to the Grantee,and the Option and all rights hereunder shall thereupon become null and void. The rights andprotections of the Company hereunder shall extend to any successors or assigns of the Company and tothe Company’s parents, subsidiaries, and affiliates. This Agreement may be assigned by the Companywithout the Grantee’s consent.12. Applicable Law. The validity, construction, interpretation and effect of this Agreement shallbe governed by and construed in accordance with the laws of the State of Delaware, without givingeffect to the conflicts of laws provisions thereof.13. Notice. Any notice to the Company provided for in this Agreement shall be addressed to theCompany in care of the Board, and any notice to the Grantee shall be addressed to such Grantee at thecurrent address shown on the payroll of the Company, or to such other address as the Grantee maydesignate to the Company in writing. - 4 - IN WITNESS WHEREOF, the Company has caused its duly authorized officer to executethis Agreement, and the Grantee has executed this Agreement, effective as of the Date of Grant. Strongbridge Biopharma plc By:Name: Matthew PaulsTitle: Chief Executive Officer I hereby accept the Option described in this Agreement, and I agree to be bound by the terms of thePlan and this Agreement. I hereby further agree that all the decisions and determinations of the Boardshall be final and binding. Grantee: Name: [name]Date:(Signature Page to Nonqualified Stock Option Award Agreement) Exhibit 10.2LEASE NORTHBROOK TC EQUITIES LLCNORTHBROK 134 WEST 93 EQUITIES LLCNORTHBROOK LEMAD EQUITIES LLCNORTHBROOK CH EQUITIES LLCNORTHBROOK CLINTON EQUITIES LLCNORTHBROOK UK1 EQUITIES LLCNORTHBROOK LOKEN LLCNORTHBROOK HS DEVELOPMENT LLCNORTHBROOK HS RK LLCNORTHBROOK TEIDIF LLC AS TENANTS IN COMMONLANDLORD and STRONGBRIDGE U.S., INC. TENANT OFFICE REFERENCE PAGE BUILDING:900 Northbrook DriveTrevose, PA 19053LANDLORD:Northbrook TC Equities, Northbrook 134 West 93 Equities LLC,Northbrook Lemad Equities LLC, Northbrook CH Equities LLC,Northbrook Clinton Equities LLC, Northbrook UK1 Equities LLC,Northbrook Loken LLC, Northbrook HS Development LLC andNorthbrook HS RK LLC, Northbrook TEIDIF LLC, as Tenants inCommonLANDLORD’S ADDRESS:c/oTime Equities Inc.55 Fifth Avenue,New York, NY 10003TENANT:STRONGBRIDGE U.S., INC.TENANT’S ADDRESS:900 Northbrook Drive, Suite 200, Trevose, PA 19053LEASE EXECUTION DATE:November 21, 2017PREMISES:Second Floor Suite 250USE:General Office SpacePREMISES RENTABLE AREA:7,326 RSF on the Second Floor of a 65,825 RSF buildingRENT COMMENCEMENT DATE:The earlier of (1) One HundredEighty (180) days from the Commencement Date or (2) uponSubstantial Completion of Tenant’s Work.COMMENCEMENT DATE: TERMINATION DATE:Upon Execution of this Lease. Five (5) years from Rent Commencement Date.TERMFive (5) years from Rent Commencement Date.ANNUAL RENT:$20.50/RSF Year 1 with $.50/SF annual increases (see Exhibit “D-1”attached)FREE RENT:See Section 3.2ANNUAL ESCALATION:$0.50 /SFMONTHLY INSTALLMENTS OFRENT (PLUS UTILITIES):$12,515.25TENANT’S PROPORTIONATESHARE:11.13%BASE YEAR (DIRECTEXPENSES):Calendar 2018 Base YearBASE YEAR (TAXES):Calendar 2018 Base YearBROKER DUE COMMISSION:CBRE, Inc. and NAI Geis Realty Group Inc.ADDITIONAL RENT:Any sum to be paid pursuant to the provisions of this Leaseother than Annual Rent. i Initials The reference Page information is incorporated into and made part of the Lease. In the event of any conflict betweenany Reference Page information and the Lease, the Lease shall control. This Lease includes Exhibits “A” through “E”all which, are made a part hereof. LANDLORD:TENANT: NORTHBROOK TC EQUITIES LLCSTRONGBRIDGE U.S., INC.NORTHBROK 134 WEST 93 EQUITIES LLC NORTHBROOK LEMAD EQUITIES LLC NORTHBROOK CH EQUITIES LLC NORTHBROOK CLINTON EQUITIES LLC NORTHBROOK UK1 EQUITIES LLC NORTHBROOK LOKEN LLC NORTHBROOK HS DEVELOPMENT LLC NORTHBROOK HS RK LLC NORTHBROOK TEIDIF LLC As Tenants In Common By: By: Print: Print: Title: Title: Date: Date: ii Initials TABLE OF CONTENTS Article Page 1.USE AND RESTRICTIONS ON USE1 2.TERM2 3.RENT2 4.RENT ADJUSTMENTS3 5.SECURITY DEPOSIT6 6.ALTERATIONS6 7.REPAIR8 8.LIENS8 9.ASSIGNMENT AND SUBLETTING9 10.INDEMNIFICATION11 11.INSURANCE11 12.WAIVER OF SUBROGATION14 13.SERVICES AND UTILITIES15 14.HOLDING OVER16 15.SUBORDINATION17 16.RULES AND REGULATIONS17 17.REENTRY BY LANDLORD17 18.DEFAULT18 19.REMEDIES19 20.TENANT'S BANKRUPTCY OR INSOLVENCY23 iii Initials 21.QUIET ENJOYMENT24 22.DAMAGE BY FIRE, ETC.25 23.EMINENT DOMAIN26 24.SALE BY LANDLORD27 25.ESTOPPEL CERTIFICATES27 26.SURRENDER OF PREMISES27 27.NOTICES28 28.TAXES PAYABLE BY TENANT28 29.LANDLORD DEFAULT29 30.DEFINED TERMS AND HEADINGS29 31.TENANT'S AUTHORITY30 32.COMMISSIONS30 33.TIME AND APPLICABLE LAW30 34.SUCCESSORS AND ASSIGNS30 35.ENTIRE AGREEMENT30 36.EXAMINATION NOT OPTION31 37.RECORDATION31 38.LIMITATION OF LANDLORD'S LIABILITY31 39.COMPLIANCE WITH LAWS31 40.PARKING32 41.DRAFTING OF LEASE32 42.INTENTIONALLY DELETED32 43.BUILDING CONTAMINANTS32 iv Initials 44.WI-FI ACCESS32 45.ALLOWANCE - TENANT PERFORMING WORK34 46.EXPANSION PREMISES38 EXHIBIT A PREMISES EXHIBIT B INITIAL ALTERATIONS/TENANT’S WORK EXHIBIT C RULES AND REGULATIONS EXHIBIT D-1 RENT SCHEDULE EXHIBIT D-2 RENT SCHEDULE AFTER THE EXPANSIONPREMISES COMMENCEMENT DATEEXHIBIT E EXPANSION PREMISES v Initials LEASE For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged andintending to be legally bound, by this Lease Landlord leases to Tenant and Tenant leases from Landlord the Premisesin the Building as set forth and described on the Reference Page. The Reference Page, including all terms definedthereon, is incorporated as part of this Lease. 1. USE AND RESTRICTIONS ON USE. 1.1 The Premises are to be used solely for general office purposes. Tenant shall not do or permit anything tobe done in or about the Premises which will unreasonably obstruct or interfere with the rights of other tenants oroccupants of the Building or injure, annoy, or disturb them or allow the Premises to be used for any improper, immoral,unlawful, or objectionable purpose. Tenant shall not do, permit or suffer in, on, or about the Premises the sale of anyalcoholic liquor without the written consent of Landlord first obtained, or the commission of any waste.Notwithstanding anything else contained above, Tenant’s use of the Premises for ordinary office use shall not be inviolation of the terms of this Section 1.1. Tenant shall comply with all governmental laws, ordinances and regulationsapplicable to the use of the Premises and its occupancy and shall promptly comply with all governmental orders anddirections for the correction, prevention and abatement of any violations in or upon, or in connection with, thePremises, all at Tenant's sole expense. Tenant shall not do or permit anything to be done on or about the Premises orbring or keep anything into the Premises which will in any way increase the rate of, invalidate or prevent the procuringof any insurance protecting against loss or damage to the Building or any of its contents by fire or other casualty oragainst liability for damage to property or injury to persons in or about the Building or any part thereof. 1.2 Tenant shall not, and shall not direct, suffer or permit any of its agents, contractors, employees,licensees or invitees to at any time handle, use, manufacture, store or dispose of in or about the Premises or theBuilding any flammables, explosives, radioactive materials, hazardous wastes or materials, toxic wastes or materials, orother similar substances, petroleum products or derivatives or any substance subject to regulation by or under anyEnvironmental Laws (collectively "Hazardous Materials") , nor shall Tenant suffer or permit any Hazardous Materialsto be used in any manner not fully in compliance with all Environmental Laws, in the Premises or the Building andappurtenant land or allow the environment to become contaminated with any Hazardous Materials. Notwithstandingthe foregoing, Tenant may handle, store, use or dispose of products containing small quantities of Hazardous Materials(such as aerosol cans containing insecticides, toner for copiers, paints, paint remover and the like) to the extentcustomary and necessary for the use of the Premises for general office purposes; provided that Tenant shall alwayshandle, store, use, and dispose of any such Hazardous Materials in a safe and lawful manner and never allow suchHazardous Materials to contaminate the Premises, Building and appurtenant land or the environment. Tenant shallprotect, defend, indemnify and hold each and all of the Landlord Entities (as defined in Article 30) harmless from andagainst any and all loss, claims, liability or costs (including court costs and attorney's fees) incurred by reason of anyactual or asserted failure of Tenant to fully comply with all applicable Environmental Laws, or the presence, handling,use 1 Initials or disposition in or from the Premises of any Hazardous Materials (even though permissible under all applicableEnvironmental Laws or the provisions of this Lease), or by reason of any actual or asserted failure of Tenant to keep,observe, or perform any provision of this Section 1.2. For purposes of this Lease, "Environmental Laws" shall meanall federal, state and local laws and ordinances relating to the protection of the environment or the keeping, use ordisposition of Hazardous Materials, presently in effect or hereafter adopted, all amendments to any of them, and allrules and regulations issued pursuant to any of such laws or ordinances. 2. TERM. 2.1 The Term of this Lease shall begin on the date ("Commencement Date"), as shown on the ReferencePage. Landlord shall tender possession of the Premises, broom clean and vacant and (to the best knowledge ofLandlord), free from any Hazardous Materials and otherwise in its as-is condition. 2.2 In the event Landlord shall permit Tenant to occupy the Premises prior to the Commencement Date, suchoccupancy shall be subject to all the provisions of this Lease except that no Rent shall be due in connection with suchoccupancy until the Rent Commencement Date (as set forth on the Reference Page). Notwithstanding the above,Additional Rent for electric service shall be due to Landlord as of Tenant’s occupation of the Premises. Said earlypossession shall not advance the Rent Commencement Date or the Termination Date. 2.3 Landlord shall have the right to confirm the rentable and usable square footage of the Premises byindependent measurement. For such purpose, the measurement of the Premises shall be in accordance with the methodfor determining "rentable area" and "usable area" under the Building Owners and Managers Association International,Office Buildings: Standard Methods of Measurement (ANSI/BOMA Z65.1 – 2010). Following such measurement, ifthe rentable square footage of the Premises differs from that set forth in the Basic Lease Information, Tenant andLandlord shall amend this Lease to revise the monthly installments of Annual Rent, the Tenant's Proportionate Shareand to otherwise reflect such revised rentable area of the Premises. If Landlord has not, by the date that is sixty (60)days after the Commencement Date, notified Tenant that an adjustment to the rentable area recited in the Basic LeaseInformation is required, the parties conclusively agree that the rentable area set forth in the Office Reference Page iscorrect. 3. RENT. 3.1 Pursuant to the terms set forth on the Reference Page, Tenant agrees to pay to Landlord the AnnualRent in effect from time to time by paying the Monthly Installment of Rent then in effect on or before the first day ofeach full calendar month during the Term from and after the Rent Commencement Date. 3.2 The Monthly Installment of Rent in effect at any time shall be one-twelfth of the Annual Rent in effectat such time. Rent for any period during the Term, which is less than a full month shall be a prorated portion of theMonthly Installment of Rent based upon a thirty (30)-day month. Said Annual Rent shall be paid to Landlord, withoutdeduction or offset and without notice 2 Initials or demand, at the Landlord's address, as set forth on the Reference Page, or to such other person or at such other placeas Landlord may from time to time designate in writing. Provided Tenant is not in default of any of the terms andconditions of this lease beyond any applicable grace or cure period, the first four (4) months of Rent, shall beabated. During this period, Tenant shall remain responsible for the payment of all Additional Rent, includingelectricity. 3.3 Tenant recognizes that late payment of any Annual Rent or other sum due under this Lease will result inadministrative expense to Landlord, the extent of which additional expense is extremely difficult and economicallyimpractical to ascertain. Tenant therefore agrees that if Annual Rent or any other sum is not paid within five (5) daysafter the applicable due date hereunder, a late charge shall be imposed in an amount equal to the greater of: (a) FiftyDollars ($50.00), or (b) a sum equal to five percent (5%) per month of the unpaid Annual Rent or other payment. Theprovisions of this Section 3.2 in no way relieve Tenant of the obligation to pay Annual Rent or other payments on orbefore the date on which they are due, nor do the terms of this Section 3.2 in any way affect Landlord's remediespursuant to Article 19 of this Lease in the event said Annual Rent or other payment is unpaid after date due. 4. RENT ADJUSTMENTS. 4.1 For the purpose of this Article 4, the following terms are defined as follows: 4.1.1 Lease Year: Each calendar year falling partly or wholly within the Term. 4.1.2 Direct Expenses: All direct costs of operation, maintenance, repair and management of theBuilding (including the amount of any credits which Landlord may grant to particular tenants of the Building in lieu ofproviding any standard services or paying any standard costs described in this Section 4.1.2 for similar tenants), asdetermined in accordance with generally accepted accounting principles (“GAAP”) or other sound accountingprincipals consistently used by Landlord, including the following costs by way of illustration, but not limitation: waterand sewer charges; insurance charges of or relating to all insurance policies and endorsements required to bemaintained by Landlord pursuant to Section 11.2 hereof, utility costs, including, but not limited to, the cost of heat,power, steam, gas, and waste disposal; the cost of janitorial services; the cost of security and alarm services; windowcleaning costs; labor costs; costs and expenses of managing the Building including management fees in an amount notto exceed 5% per annum; air conditioning maintenance costs; elevator maintenance fees and supplies; material costs;equipment costs including the cost of maintenance, repair and service agreements and rental and leasing costs; purchasecosts of equipment other than capital items; current rental and leasing costs of items which would be amortizable capitalitems if purchased; tool costs; licenses, permits and inspection fees; wages and salaries of Landlord employees oragents directly engaged in the operation, maintenance, repair or management of the Building, and employee benefitsand reasonable payroll taxes with regard to such Landlord employees; accounting and legal fees; any sales, use orservice taxes incurred in connection therewith. Direct Expenses for any year during which average occupancy of theBuilding is less than one hundred percent (100%) shall be calculated based upon the Direct Expenses that would havebeen incurred if the Building had an average occupancy of one hundred percent (100%) during the entire calendaryear. Direct 3 Initials Expenses shall not include any of the following: capital expenditures not permitted herein; legal fees for enforcingrights under other tenant leases in the Building or in defense of Landlord’s title to the Building; depreciation oramortization of the Building or equipment in the Building except as expressly provided herein; loan principal or interestpayments or rental payments on any ground or other underlying leases; costs of alterations of tenants' premises; leasingcommissions, interest expenses on long-term borrowings; advertising and marketing costs; management salaries forexecutive personnel other than personnel directly engaged in the operation, maintenance, repair or management of theBuilding; interest or penalty charges incurred by Landlord due to the failure to timely pay obligations of Landlord(even if such obligation is reimbursed through Direct Expenses); the costs of Landlord’s compliance with anyEnvironmental Laws or the removal or abatement of any Hazardous Materials from the Premises or the Building(unless such costs arise out of the acts of Tenant during the Term); expenses for repair or other work occasioned by fireor other casualty which is covered under the casualty insurance policy described in Section 11.2 hereof; expenses forthe replacement of any items covered by a manufacturer’s or seller’s warranty; costs of repair to the Premisesnecessitated by Landlord’s gross negligence or willful misconduct, or of correcting any latent defects or original designdefects in the construction of the Building or the materials and equipment used therefor; reserves; salaries of employeesof Landlord above the grade of Building manager and/or employees of Landlord whose time is not substantially spentin the management and operation of the Building; new artwork installed in the Building the cost of which exceeds$10,000 in the aggregate; charges for utility services separately metered to particular tenants in the Building; and feesand charges not reasonable and competitive with fees charged by unaffiliated entities for the performance of suchservices of comparable quality in comparable buildings in the area. In addition, Landlord shall be entitled to amortizeand include as an Additional Rental adjustment: (i) an allocable portion of the cost of capital improvement items whichare reasonably calculated to reduce operating expenses, as may be determined in accordance with GAAP or otherapplicable sound accounting or administrative practices; (ii) fire sprinklers and suppression systems and other life safetysystems; and (iii) other capital expenses which are required under any governmental laws, regulations or ordinanceswhich were not applicable to the Building at the time it was constructed. All such costs shall be amortized over thereasonable life of such improvements in accordance with such reasonable life and amortization schedules as shall bedetermined by Landlord in accordance with generally accepted accounting principles, with interest on the unamortizedamount at one percent (1%) in excess of the prime lending rate announced from time to time as such by Chase Bank. 4.1.3 Taxes: Tenant agrees to pay Tenant’s Proportionate Share of any and all increases in Taxes, asdefined below, assessed and levied against the Building and the land appurtenant thereto above the taxes paid for theBase Year as well as any special assessment(s) imposed upon the Premises for any purpose whatsoever during theterm, whether the increase in taxation results from a higher tax rate or an increase in the assessed valuation of thePremises, or both. Taxes shall be defined as real estate taxes and any other taxes, charges and assessments which arelevied with respect to the Building or the land appurtenant to the Building, or with respect to any improvements,fixtures and equipment or other property of Landlord, real or personal, located in the Building and used in connectionwith the operation of the Building and said land, any payments to any ground lessor in reimbursement of tax paymentsmade by such lessor; and all fees, expenses and costs incurred by Landlord in investigating, protesting, contesting 4 Initials or in any way seeking to reduce or avoid increase in any assessments, levies or the tax rate pertaining to any Taxes tobe paid by Landlord in any Lease Year. Taxes shall not include any corporate franchise, or estate, inheritance orcorporate net income tax or gross receipts or similar tax, any tax imposed upon any transfer by Landlord of its interestin this Lease or the Building or any late charges, fines or penalties incurred by Landlord with respect to the failure topay any of the foregoing taxes in a timely manner. 4.2 If in any Lease Year, Tenant's Proportionate Share of Direct Expenses exceeds the Direct Expense BaseYear as set forth in the Reference Page above, respectively, Tenant shall pay such excess as Additional Rent for suchLease Year as provided in Section 4.5 below. 4.3 The annual determination of Direct Expenses shall be made by Landlord and if certified by a publicaccountants selected by Landlord shall be binding upon Landlord and Tenant, subject to the provisions of Section 4.7below. In the event that during all or any portion of any Lease Year, the Building is not fully rented and occupiedLandlord may make any appropriate adjustment in occupancy-related Direct Expenses for such year for the purpose ofavoiding distortion of the amount of such Direct Expenses to be attributed to Tenant by reason of variation in totaloccupancy of the Building, by employing GAAP and other applicable sound accounting and management principles todetermine Direct Expenses that would have been paid or incurred by Landlord had the Building been fully rented andoccupied, and the amount so determined shall be deemed to have been Direct Expenses for such Lease Year. 4.4 Prior to the commencement date of any Lease Year other than the first Lease Year hereunder, Landlordshall estimate Tenant's liability for Direct Expenses and/or Taxes under Section 4.2, Article 6 and Article 29 (“Tenant’sEstimated Share”) for the Lease Year or portion thereof. Landlord will give Tenant written notification of the amountof such estimate at least fifteen (15) days prior to the commencement date of such Lease Year. Tenant agrees that itwill pay, by increase of its Monthly Installments of Rent due in such Lease Year, Tenant’s Estimated Share withrespect to such Lease Year as Additional Rent in equal monthly installments of 1/12 of such estimate, through and untilthe end of such Lease Year. Any such increased rate of Monthly Installments of Rent pursuant to this Section 4.4 shallremain in effect through and until the end of the applicable Lease Year, and thereafter shall be subject to adjustment asprovided in Section 4.5 below. 4.5 Within one hundred eighty (180) days after the expiration of each Lease Year in which Tenant paid itsEstimated Share as provided in Section 4.4 above, Landlord shall communicate to Tenant in writing the actualdetermination of Tenant's liability for Direct Expenses and/or Taxes with regard to such Lease Year , in which instancethe parties shall proceed as follows: 4.5.1 If the total Tenant’s Estimated Share paid for such applicable Lease Year is less than the actualamount of Tenant's liability for Direct Expenses and/or Taxes, then Tenant shall pay such deficiency to Landlord asAdditional Rent in one lump sum within thirty (30) days of the later of Tenant’s receipt of Landlord's bill therefor orthe conclusion of Tenant’s audit proceedings with respect thereto pursuant to Section 4.7 below; or4.5.2 If the total Tenant’s Estimated Share paid for such applicable Lease Year is 5 Initials more than the actual amount of Tenant's liability for Direct Expenses and/or Taxes, then Landlord shall credit thedifference against the then next due payments to be made by Tenant under this Article 4. Tenant shall not be entitledto a credit by reason of actual Direct Expenses and/or Taxes in any Lease Year being less than the Base Year. 4.6 If the Commencement Date is other than January 1 or if the Termination Date is other than December 31,Tenant's liability for Direct Expenses and Taxes for the Lease Year in which said Date occurs shall be prorated basedupon a three hundred sixty-five (365) day year. 4.7 Landlord shall keep accurate records showing in detail all Additional Rent charges provided for in thisLease for the duration of the Term. Tenant has the right, exercisable no more than once each Lease Year on not lessthan forty-five (45) days’ prior written notice and at a time reasonably acceptable to Landlord, to cause an audit to beperformed of Landlord's operations and/or books and records pertaining to the Direct Expenses and Taxes for thepreceding Lease Year. In the event that (i) such audit determines that Tenant’s Estimated Share exceeds the actualamount of Tenant’s liability for Direct Expenses and/or Taxes by more than five percent (5%) for such prior LeaseYear and (ii) provided no Event of Default is continuing at such time, then Landlord will reimburse Tenant for thecosts of such audit and verification incurred by Tenant within thirty (30) days after demand therefor by Tenantaccompanied by Tenant's reasonably detailed verification of such overcharges and paid invoices; provided, however,that Tenant shall not use a contingent fee auditor and if Tenant does, then to the extent Landlord shall be obligatedhereunder to reimburse Tenant for the costs of such audit, Landlord shall pay the commercially reasonable hourly rate. 5. SECURITY DEPOSIT. Tenant shall not be required to provide any security deposit to Landlord in connection with this Lease. 6. ALTERATIONS. 6.1 Except for those alterations specifically provided for in Exhibit “B” to this Lease or as provided inSection 6.5 below, Tenant shall not make or suffer to be made any alterations, additions, or improvements in, on, or tothe Premises or any part thereof or the making of any improvements as required by Article 7, without the prior writtenconsent of Landlord, which shall not be unreasonably withheld, conditioned or delayed. When applying for suchconsent, Tenant shall, if requested by Landlord, furnish complete plans and specifications for such alterations, additionsand improvements. To the extent that Landlord’s consent is required pursuant to this Section 6.1, Landlord shallcommunicate the same in writing to Tenant within thirty (30) days after application therefor and the provision of anyand all required plans or specifications to Landlord (and any failure by Landlord to respond to such request within such30-day period shall be deemed to be an approval of such alterations). 6.2 In the event Landlord’s consent is required pursuant to Section 6.1 above and Landlord affirmativelyconsents to the making of any such alteration, addition or improvement by 6 Initials Tenant, the same shall be made using a contractor reasonably acceptable to Landlord (“Landlord’s Contractor”) (unlessLandlord agrees in writing otherwise) at Tenant's sole cost and expense. Any other alterations, additions orimprovements by Tenant shall be made using a contractor selected by Tenant in its sole discretion. If Landlord entersinto any contract or agreement during the Term restricting the use of non-union labor or suppliers in connection withany construction or alterations in or to the Building, Landlord shall promptly notify Tenant in writing of thesame. Thereafter, if Tenant shall employ any contractor and such contractor or any subcontractor thereof shall employany non-union labor or supplier, Tenant shall be responsible for and hold Landlord harmless from any and all delays,damages and extra costs directly suffered by Landlord as a result of any dispute with any labor unions employed at theBuilding concerning the wage, hours, terms or conditions of the employment of any such labor resulting from Tenant’sdirect or indirect employment of such non-union labor or supplier at the Building. 6.3 All alterations, additions or improvements proposed by Tenant shall be constructed in accordance withall government laws, ordinances, rules and regulations and Tenant shall, prior to construction, provide any additionalinsurance required under Article 11 in such case, and also all such assurances to Landlord, including but not limited to,reasonable and customary waivers of lien, and if such alteration, addition or improvement is in excess of $100,000 inthe aggregate, reasonable and customary surety company performance bonds as Landlord shall reasonably require toassure payment of the costs thereof and to protect Landlord and the Building and appurtenant land against any lossfrom any mechanic's, materialmen's or other liens. Tenant shall as Additional Rent pay in addition to any sums duepursuant to Article 4, any increase in Taxes attributable directly to any such alteration, addition or improvement for solong, during the Term, as such increase is ascertainable, at Landlord's election said sums shall be paid in the same wayas sums due under Article 4. 6.4 All alterations, additions, and improvements in, on, or to the Premises made or installed by Tenant,including carpeting, shall be and remain the property of Tenant during the Term but, excepting furniture, furnishings,movable partitions of less than full height from floor to ceiling and other trade fixtures, shall become a part of the realtyand belong to Landlord without compensation to Tenant upon the expiration or sooner termination of the Term, atwhich time title shall pass to Landlord under this Lease as by a bill of sale, unless Landlord communicates to Tenantwithin thirty (30) days after the installation of such alterations, additions or improvements, that the same must beremoved from the Premises upon the expiration or sooner termination of this Lease. If Landlord provides the foregoingnotice to Tenant, Tenant shall upon the expiration or sooner termination of this Lease, at Tenant's sole cost andexpense, remove any such alterations, additions or improvements which are designated by Landlord to be removed,and Tenant shall forthwith and with all due diligence, at its sole cost and expense, repair and restore the Premises totheir original condition, reasonable wear and tear and damage by fire or other casualty excepted. 6.5 Notwithstanding anything to the contrary set forth in Section 6.1 above, Tenant shall have the right,without the consent of Landlord, to make alterations to the Premises which (i) are non-structural; (ii) which do nototherwise affect the structural integrity of the Premises, the Building, or Building utility services or plumbing andelectrical lines; and (iii) cost less than $30,000 in the aggregate during the Term. 7 Initials 7. REPAIR. 7.1 It is the Landlord’s responsibility to maintain and repair common areas, mechanical systems in theBuilding (including those serving the Premises) and public portions of the Building, interior and exterior, in good orderand condition, reasonable wear and tear excepted. Landlord shall have no obligation to alter, remodel, improve, repair,decorate or paint the Premises, except as specified in Exhibit “B” attached hereto and made a part hereof and exceptthat Landlord shall repair and maintain the structural portions of the Building, including the basic plumbing, airconditioning, heating and electrical systems installed or furnished by Landlord, including portions of such systems thatmay be located within the Premises. By taking possession of the Premises, Tenant accepts them as being in good order,condition and repair and in the condition in which Landlord is obligated to deliver them, except for the presence of anyHazardous Materials in the Premises. It is hereby understood and agreed that no representations respecting thecondition of the Premises or the Building have been made by Landlord to Tenant, except as specifically set forth in thisLease. 7.2 Tenant shall, at all times during the Term, keep the Premises in good condition and repair, exceptingreasonable wear and tear and damage by fire, or other casualty, and in compliance with all applicable governmentallaws, ordinances and regulations, promptly complying with all governmental orders and directives for the correction,prevention and abatement of any violations or nuisances in or upon, or connected with, the Premises, all at Tenant'ssole expense, except for any violations or nuisances resulting from any acts or omissions of Landlord or its agents orthe presence of Hazardous Materials in the Premises. 7.3 Except as provide in Article 13 below, Landlord shall not be liable for any failure to make any repairs orto perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need ofsuch repairs or maintenance is given to Landlord by Tenant. 7.4 Except as provided in Article 22 below, there shall be no abatement of Annual Rent or Additional Rentand no liability of Landlord by reason of any injury to or interference with Tenant's business arising from the makingof any repairs, alterations or improvements in or to any portion of the Building or the Premises or to fixtures,appurtenances and equipment in the Building. 8. LIENS. Tenant shall keep the Premises, the Building and appurtenant land and Tenant's leasehold interest in thePremises free from any liens arising out of any services, work or materials performed, furnished, or contracted for byTenant, or obligations incurred by Tenant. In the event that Tenant shall not, within thirty (30) days following theimposition of any such lien, either cause the same to be released of record or provide Landlord with a bond or othercustomary insurance against the same in a customary amount, Landlord shall have the right to cause the same to bereleased by any customary means, including payment of the claim giving rise to such lien. All actual such sums paidby Landlord and all reasonable expenses incurred by it in connection 8 Initials therewith shall be considered Additional Rent and shall be payable to it by Tenant on demand. 9. ASSIGNMENT AND SUBLETTING. 9.1 Except as otherwise provided in this Article 9, Tenant shall not have the right to assign or pledge thisLease or to sublet the whole or any part of the Premises whether voluntarily or by operation of law, or permit the use oroccupancy of the Premises by anyone other than Tenant, and shall not make, suffer or permit such assignment,subleasing or occupancy without the prior written consent of Landlord, which shall not be unreasonably withheld,conditioned or delayed, and said restrictions shall be binding upon any and all assignees of the Lease and subtenants ofthe Premises. In the event Tenant desires to sublet, or permit such occupancy of, the Premises, or any portion thereof,or assign this Lease, Tenant shall give written notice thereof to Landlord at least thirty (30) days but no more than onehundred eighty (180) days prior to the proposed commencement date of such subletting or assignment, which noticeshall set forth the name of the proposed subtenant or assignee, the relevant terms of any sublease or assignment andcopies of financial reports and other or relevant financial information of the proposed subtenant or assignee, to theextent disclosure of such financial reports or other information is not prohibited by the terms of such proposed subleaseor assignment. 9.2 Notwithstanding any assignment or subletting, permitted or otherwise, Tenant shall at all times remaindirectly, primarily and fully responsible and liable for the payment of the Annual Rent and Additional Rent specified inthis Lease and for compliance with all of its other obligations under the terms, provisions and covenants of thisLease. Upon the occurrence of an Event of Default (hereinafter defined), if the Premises or any part of them are thenassigned or sublet, Landlord, in addition to any other remedies provided in this Lease or provided by law, may, at itsoption, collect directly from such assignee or subtenant all rents due and becoming due to Tenant under suchassignment or sublease and apply such rent against any sums due to Landlord from Tenant under this Lease, and nosuch collection shall be construed to constitute a novation or release of Tenant from the further performance of Tenant'sobligations under this Lease. 9.3 In addition to Landlord's right to approve of any subtenant or assignee as provided in Section 9.1 above,Landlord shall have the option, in its sole discretion, in the event of any proposed subletting or assignment, to terminatethis Lease, or in the case of a proposed subletting of less than the entire Premises, to recapture the portion of thePremises to be sublet, as of the date the subletting or assignment is to be effective. The option shall be exercised, if atall, by Landlord giving Tenant written notice given by Landlord to Tenant within sixty (60) days following Landlord'sreceipt of Tenant's written notice as required above. If this Lease shall be terminated with respect to the entire Premisespursuant to this Section 9.3, the Term of this Lease shall end on the date stated in Tenant's notice as the effective dateof the sublease or assignment as if that date had been originally fixed in this Lease for the expiration of the Term. IfLandlord recaptures under this Section 9.3 only a portion of the Premises, the Annual Rent and the Additional Rent tobe paid from time to time during the Term shall abate proportionately based on the proportion by which theapproximate square footage of the remaining portion of the Premises shall be less than that of the Premises as of thedate immediately prior to such recapture. Tenant shall, at Tenant's own cost and expense, discharge in full anyoutstanding commission obligation on the part of 9 Initials Landlord with respect to this Lease, and any commissions which may be due and owing as a result of any proposedassignment or subletting, whether or not the Premises are recaptured pursuant to this Section 9.3 and rented byLandlord to the proposed tenant or any other tenant. 9.4 In the event that Tenant sells, sublets, assigns or transfers this Lease except as provided in Section 9.7hereof, Tenant shall pay to Landlord as Additional Rent an amount equal to fifty percent (50%) of any Increased Rent(as defined below) when and as such Increased Rent is received by Tenant. As used in this Section 9.4, "IncreasedRent" shall mean the excess of the sum of (x) all rent and other consideration which Tenant is entitled to receive byreason of any sale, sublease, assignment or other transfer of this Lease, over (y) the Annual Rent and Additional Rentotherwise payable by Tenant under this Lease at such time, less (z) all reasonable costs incurred by Tenant to obtainsuch sublease or assignment. For purposes of the foregoing, any consideration received by Tenant in form other thancash shall be valued at its fair market value as determined by Landlord in good faith, unless prohibited by law. 9.5 Notwithstanding any other provision hereof, Tenant shall have no right to make (and Landlord shall havethe absolute right to refuse consent to) any assignment of this Lease or sublease of any portion of the Premises if at thetime of either Tenant's notice of the proposed assignment or sublease or the proposed commencement date thereof,there shall exist any Event of Default hereunder, or if the proposed assignee or sub-lessee is an entity: (a) with whichLandlord is already in negotiation as evidenced by the issuance of a written proposal; (b) is already an occupant of theBuilding; (c) is a governmental agency; ; or (d) would subject the Premises to a use which would: (i) involve amaterial increase in the number of occupants or degree of wear and tear upon the Building; (ii) violate any exclusiveright granted to another tenant of the Building (which exclusive rights shall have been communicated by Landlord toTenant in advance of Tenant’s request for approval of such proposed sublease or assignment); (iii) require any materialaddition to or modification of the Premises or the Building in order to comply with building code or othergovernmental requirements; or (iv) involve a violation of Section 1.2 above. 9.6 Upon any request to assign or sublet which requires Landlord’s consent hereunder, Tenant will pay toLandlord a fee equal to $1,500, which shall serve as reimbursement of Landlord's costs, including attorney's fees,incurred in investigating and considering any proposed or purported assignment or pledge of this Lease or sublease ofany of the Premises, regardless of whether Landlord shall consent to, refuse consent, or determine that Landlord'sconsent is not required for, such assignment, pledge or sublease. 9.7 Notwithstanding anything else contained in this Article 9, (i) Landlord shall not withhold consent toassignment or sublease based on the financial condition of proposed assignee or sublessee provided that Tenantremains liable under the terms of this Lease for the duration of the Term; and (ii) Landlord’s consent shall not berequired (and no fee shall be payable pursuant to Section 9.6 above) with respect to any proposed sublease orassignment of the Lease to an entity Controlled, in Control of or under common Control with Tenant or to anysuccessor to Tenant by means of merger, consolidation or other similar transaction or any entity purchasing all orsubstantially all of the equity interests or assets of Tenant. For purposes of this Lease, the term “Control” or variationsthereof shall mean the direct or indirect ownership of more than fifty 10 Initials percent (50%) of the issued and outstanding voting equity interests of an entity. 10. INDEMNIFICATION. 10.1 Tenant shall protect, indemnify and hold the Landlord Entities harmless from and against any and allloss, claims, liability or costs (including court costs and attorney's fees) incurred by reason of (a) any damage to anyproperty (including but not limited to property of any Landlord Entity) or any injury (including but not limited to death)to any person occurring in, on or about the Premises or the Building to the extent that such injury or damage shall becaused by or arise from any actual or alleged act, neglect, fault, or omission by or of Tenant, its agents, servants,employees, invitees, or visitors to meet any standards imposed by any duty with respect to the injury or damage: (b) theconduct or management of any work or thing whatsoever done by the Tenant in or about the Premises or fromtransactions of the Tenant concerning the Premises; (c) Tenant's failure to comply with any and all governmental laws,ordinances and regulations applicable to the condition or use of the Premises or its occupancy; or (d) any breach ordefault on the part of Tenant in the performance of any covenant or agreement on the part of the Tenant to beperformed pursuant to this Lease. 10.2 Landlord shall protect, indemnify and hold Tenant and its directors, managers, officers, employees,agents, invitees and licensees (each, a “Tenant Entity”) harmless from and against any and all loss, claims, liability orcosts (including court costs and attorney's fees) incurred by reason of (a) any damage to any property (including but notlimited to property of any Tenant Entity) or any injury (including but not limited to death) to any person occurring in,on or about the Premises or the Building to the extent that such injury or damage shall be caused by or arise from anyactual act, neglect, fault, or omission by or of any Landlord Entity to meet any standards imposed by any duty withrespect to the injury or damage or : or (b) any breach or default on the part of Landlord in the performance of anycovenant or agreement on the part of Landlord to be performed pursuant to this Lease. 10.3 The provisions of this Article 10 shall survive the termination of this Lease with respect to any claims orliability accruing prior to such termination. 11. INSURANCE. 11.1 During the Lease Term (and any period of early entry or occupancy or holding over by Tenant, ifapplicable), Tenant shall maintain the following types of insurance, in the amounts specified below: 11.1.1 Commercial Insurance. Tenant shall maintain commercial general liability (CGL) and, ifnecessary, commercial umbrella insurance, with a limit of not less than $1,000,000 each occurrence. If suchCGL insurance contains a general aggregate limit, it shall apply separately to this location. 11.1.1.1. CGL insurance shall be written on ISO occurrence form CG 00 01 12 07, or asubstitute form providing coverage at least as broad, and shall 11 Initials  cover liability arising from premises, operations, independent contractors, products-completedoperations, personal injury and advertising injury, and liability assumed under an insured contract. 11.1.1.2. Landlord, Landlord’s managing agent, and any mortgagee requested by Landlordshall be included as additional insureds under the CGL, using ISO additional insured endorsement CG20 11 or a substitute providing coverage at least as broad, and under the commercial umbrella, if any.Tenant’s insurance shall apply on a primary and noncontributory basis with respect to any otherinsurance or self-insurance programs afforded to Landlord. There shall be no endorsement ormodification of the CGL to make it excess over other available insurance; alternatively, if the CGLstates that it is excess or pro rata, the policy shall be endorsed to be primary and noncontributory withrespect to the additional insureds. 11.1.2 Commercial Property Insurance. Tenant shall maintain commercial property insurance coveringTenant's property and improvements (including, without limitation, alterations or additions performed byTenant pursuant hereto, but excluding those improvements, if any, made pursuant to Section 6 above), andother personal property (including property of others), in the Premises. 11.1.2.1 Commercial property insurance shall, at minimum, cover the perils insured under theISO special causes of loss form (CP 10 30). 11.1.2.2 Commercial property insurance shall cover the replacement cost of the propertyinsured. 11.1.2.3 The amount insured shall equal the full estimated replacement cost of the propertyinsured. 11.1.2.4 Any coinsurance requirement in the policy shall be eliminated through the attachmentof an agreed amount endorsement, the activation of an agreed value option, or as is otherwiseappropriate under the particular policy form. 11.1.2.5 Tenant shall purchase business interruption coverage with a limit not less than anamount equal to one (1) year of Annual Rent hereunder as part of this commercial property insurance,and in no event shall Landlord be liable for any business interruption or other consequential losssustained by Tenant, whether or not it is insured, even if such loss is caused by negligence of Landlord,its employees, officers, directors, or agents. 11.1.3 Worker's Compensation Insurance. Tenant shall maintain worker's compensation insurance inamounts required by applicable law. Tenant shall maintain employer’s liability insurance with limits not lessthan $1,000,000 each accident for bodily 12 Initials  injury by accident and $1,000,000 each employee for bodily injury by disease. The limit requirements can besatisfied through the combination of primary employer’s liability and umbrella liability coverage. 11.1.4 Automobile Liability Insurance. If Tenant parks fleet vehicles at the Premises on a routine basisduring the Term, Tenant shall maintain automobile liability with a limit of not less than $1,000,000 each loss. 11.1.4.1 Such insurance shall cover liability arising out of any auto (including owned, hired, andnon-owned autos), except that if Tenant does not own any autos, such insurance may cover only hiredand non-owned autos at any time as Tenant continues not to own any autos. 11.1.4.2 Coverage shall be written on ISO form CA 00 01 10 13 or a substitute form providingcoverage at least as broad. 11.1.5 Umbrella Liability Insurance. Tenant shall maintain commercial umbrella liability insurance,with a limit of not less than $1,000,000 each loss. Coverage shall be written on ISO form CA 00 01 10 13 or asubstitute form providing coverage at least as broad All insurance required to be carried by Tenant hereunder shall be issued by one or more insurance companiesreasonably acceptable to Landlord, licensed to do business in the State in which the Leased Premises is located andhaving an AM Best's rating of A IX or better, and Tenant will endeavor to provide no less than thirty (30) days' priorwritten notice to Landlord of any material change, cancellation, or lapse in the aforementioned coverage. On or beforethe Commencement Date (or the date of any earlier entry or occupancy by Tenant), and thereafter, within thirty (30)days prior to the expiration of each such policy, Tenant shall furnish Landlord with certificates of insurance in the formof ACORD 25 (or other evidence of insurance reasonably acceptable to Landlord), evidencing all required coverages(including all required endorsements), and that with the exception of Worker's Compensation insurance, such insuranceis primary and non-contributory. If Tenant fails to carry such insurance and furnish Landlord with such certificates ofinsurance, Landlord may obtain such insurance on Tenant's behalf and Tenant shall reimburse Landlord upon demandfor the cost thereof as Additional Rent. Upon Tenant's receipt of a request from Landlord, Tenant shall provideLandlord with copies of all endorsements, evidencing the coverages required hereunder. Landlord reserves the rightfrom time to time to require Tenant to obtain higher minimum amounts or different types of insurance if it becomescustomary for other landlords of similar buildings in the area to require similar sized tenants in similar industries tocarry insurance of such higher minimum amounts or of such different types. By requiring insurance herein, Landlorddoes not represent that the coverage and limits will necessarily be adequate to protect Tenant, and such coverage andlimits shall not be deemed as a limitation on Tenant’s liability under the indemnities granted to Landlord in this Lease.If Tenant’s policies do not contain the standard ISO separation of insureds provision, or a substantially similar clause,they shall be endorsed to provide cross-liability coverage. There shall be no provisions that limit Landlord’s ability topursue a claim against Tenant. 13 Initials 11.2 Landlord's Insurance. During the Lease Term, Landlord shall maintain the following types ofinsurance, in the amounts specified below (the cost of which shall be included in Operating Expenses): 11.2.1 Commercial General and Umbrella Liability Insurance. Landlord shall maintain commercialgeneral liability (CGL) and, if necessary, commercial umbrella insurance, with a limit of not less than$1,000,000 each occurrence. If such CGL insurance contains a general aggregate limit, it shall apply separatelyto this location.CGL insurance shall be written on ISO occurrence form CG 00 01 12 07, or a substitute form providingcoverage at least as broad, and shall cover liability arising from premises, operations, independent contractors,products-completed operations, personal injury and advertising injury, and liability assumed under an insuredcontract. 11.2.2 Commercial Property Insurance. Landlord shall maintain commercial property insurancecovering the Building, including, without limitation, any improvements, if any, made pursuant to Section 6above, but excluding Tenant's personal property and any other items required to be insured by Tenant pursuantto Section 11.1 above. 11.2.2.2 Commercial property insurance shall, at minimum, cover the perils insured under theISO special causes of loss form (CP 10 30). 11.2.2.3 Commercial property insurance shall cover the replacement cost of the property insuredon an all-risk basis. 11.2.2.4 The amount insured shall equal the full estimated replacement cost of the propertyinsured. 12. WAIVER OF SUBROGATION. Notwithstanding anything contained in this Lease to the contrary, Landlord (and its affiliates, propertymanagers and mortgagees) and Tenant (and its affiliates) shall have no liability to one another, or to any insurer, byway of subrogation or otherwise, on account of any loss of or damage to their respective property, the LeasedPremises, its contents, or other portions of the Building or Common Areas, regardless of whether such loss or damageis caused by the negligence of Landlord or Tenant, arising out of any of the perils or casualties insured against by theproperty insurance policies carried, or required to be carried, by the parties pursuant to this Lease. The insurancepolicies obtained by Landlord and Tenant pursuant to this Lease shall permit waivers of subrogation which the insurerway have against the non-insuring party. In the event the policy or policies do not allow waiver of subrogation prior toloss, either Landlord or Tenant shall deliver to the other party a waiver of subrogation endorsement containing anexpress waiver of any rights of subrogation by the insurance company against Landlord or Tenant, as applicable. 13. SERVICES AND UTILITIES. 13.1 Provided Tenant shall not be in default under this Lease, and subject to the other 14 Initials provisions of this Lease, Landlord agrees to furnish to the Premises during ordinary business hours (8:00AM to6:00PM) on generally recognized business days (but exclusive in any event of Sundays and legal holidays), thefollowing services and utilities subject to the rules and regulations of the Building prescribed from time to time: (a)water suitable for normal office use of the Premises; (b) heat and air conditioning required in Landlord's judgment forthe use and occupation of the Premises; (c) cleaning and janitorial service; (d) elevator service by non-attendedautomatic elevators; (e) such window washing as may from in time to time in Landlord's judgment be reasonablyrequired; and, (f) equipment to bring to Tenant's meter, electricity for lighting, convenience outlets and other normaloffice use. To the extent that Tenant is not billed directly by a public utility, Tenant shall pay, upon demand, asAdditional Rent, for all electricity used by Tenant in the Premises and Tenant shall pay as Additional Rent, forTenant’s Proportionate Share of electricity used in the operation, maintenance, repair and management of the Building,including all common areas. The charge shall be at the rates charged for such services by the local public utility.Landlord shall use reasonable efforts to remedy any interruption in the furnishing of services and utilities. Landlordshall not be liable for, and Tenant shall not be entitled to, any abatement or reduction of rental by reason of Landlord'sfailure to furnish any of the foregoing; provided, however, in the event that (i) any heat, air conditioning, electric,water, or sewer (the “Primary Utilities”) are not available for use by the Tenant at the Premises for a period of five (5)consecutive days, and the cause of such non availability is due to something in Landlord’s control, or (ii) if theBuilding is not available for use for a period of five (5) consecutive days due to the violation or alleged violation of anyEnvironmental Laws, then Tenant shall have the right thereafter to abate rent on a per diem basis for each day that anyof the Primary Utilities or the Building are not available for use by the Tenant. 13.2 Should Tenant require any additional work or service, as described above, including services furnishedoutside ordinary business hours specified above, Landlord may, on terms to be agreed, upon reasonable advance noticeby Tenant, furnish such additional service and Tenant agrees to pay to Landlord as Additional Rent such charges asmay be agreed upon, including any tax imposed thereon, but in no event at a charge less than Landlord's actual costplus overhead for such additional service and, where appropriate, a reasonable allowance for depreciation of anysystems being used to provide such service. As of the date of this Lease, the after-hours charge for HVAC is $40 perhour. This charge is subject to change during the term of the Lease. 13.3 Wherever heat-generating machines or equipment are used by Tenant in the Premises which affect thetemperature otherwise maintained by the air conditioning system, Landlord reserves the right to install supplementaryair conditioning units in or for the benefit of the Premises and the cost thereof, including the cost of installation and thecost of operations and maintenance, shall be paid by Tenant to Landlord upon demand as such Additional Rent. 13.4 Tenant will not, without the written consent of Landlord, use any apparatus or device in the Premises,including but not limited to, electronic data processing machines and machines using current in excess of 200 watts or110 volts, which will in any way increase the amount of electricity or water usually furnished or supplied for use of thePremises for normal office use, nor connect with electric current, except through existing electrical outlets in thePremises, or water pipes, any apparatus or device for the purposes of using electrical current or 15 Initials water. If Tenant shall require water or electric current in excess of that usually furnished or supplied for use of thePremises as normal office use, Tenant shall procure the prior written consent of Landlord for the use thereof, whichLandlord may refuse, and if Landlord does consent, Landlord may cause a water meter or electric current meter to beinstalled so as to measure the amount of such excess water and electric current. The cost of any such meters shall bepaid for by Tenant as Additional Rent. Tenant agrees to pay as Additional Rent to Landlord promptly upon demandtherefor, the cost of all such excess water and electric current consumed (as shown by said meters, if any, or, if none, asreasonably estimated by Landlord) at the rates charged for such services by the local public utility or agency, as thecase may be, furnishing the same, plus any additional expense incurred in keeping account of the water and electriccurrent so consumed. 13.5 Tenant reserves the right, at Tenant’s sole cost and expense, to install a generator at the Building, uponwritten approval of Landlord, and subject to all local codes and regulations, and Tenant. Tenant shall pay for all costsassociated with the installation, maintenance, and repair of such generator, and the associated pad and enclosurerequired to be installed. The specific location of the generator, and the plans and specifications for such equipment andits installation, shall be subject to Landlord’s prior written approval, which shall not be unreasonably withheld,conditioned, or delayed. Tenant shall have access to the generator pursuant to the Building’s Rules and Regulationsprovided Tenant supplies Landlord with forty-eight (48) hours prior notice. Upon vacating the Premises, at Landlord’ssole discretion, Tenant shall remove the generator installed pursuant to this Section and shall restore the Building or thearea where the generator is constructed, to substantially its condition prior to installation of the generator describedherein, reasonable wear and tear and casualty damage excepted. With Landlord’s approval as to location and mannerof installation, which shall not be unreasonably withheld, conditioned, or delayed, Tenant shall be entitled to install,connect, run, and maintain connections to the generator, and other wiring within the Building which shall bereasonably located so as not materially to interfere with other tenants. 14. HOLDING OVER. Tenant shall pay Landlord for each day Tenant retains possession of the Premises or part of them aftertermination of this Lease by lapse of time or otherwise at the rate ("Holdover Rate") which shall be 125% of theamount of the Annual Rent for the last month prior to the date of such termination plus all Rent Adjustments underArticle 4 for the first thirty (30) days after the Expiration Date or early termination of the Lease and 150% of theamount of the Annual Rent for the last month prior to the date of such termination plus all Rent Adjustments underArticle 4 thereafter. 16 Initials 15. SUBORDINATION. Without the necessity of any additional document being executed by Tenant for the purpose of effecting asubordination, this Lease shall be subject and subordinate at all times to ground or underlying leases and to the lien ofany mortgages or deeds of trust now or hereafter placed on, against or affecting the Building, Landlord's interest orestate in the Building, or any ground or underlying lease; provided, however, that if the lessor, mortgagee, trustee, orholder of any such mortgage or deed of trust elects to have Tenant's interest in this Lease be superior to any suchinstrument, then, by notice to Tenant, this Lease shall be deemed superior, whether this Lease was executed before orafter said instrument. Notwithstanding the foregoing, Tenant covenants and agrees to execute and deliver upon demandsuch further instruments evidencing such subordination or superiority of this Lease as may be required by Landlord,provided such instruments contain language reasonable acceptable to Tenant. Notwithstanding anything contained inthe Lease to the contrary, Landlord shall obtain a subordination, non-disturbance and attornment agreement (“SNDA”)to the benefit of Tenant from the holder of any current or future mortgage or lessor under any ground lease with respectto the Building (a “Lender”), using the specific Lender’s SNDA form together with such modifications as may bereasonably agreed upon by Tenant and Lender. To the extent that any such mortgage or ground lease exists as of theCommencement Date, Landlord shall use commercially reasonable efforts to secure such SNDA. With respect to anyfuture mortgage or ground lease with respect to the Building, Landlord shall secure such SNDA with respect to thesame simultaneously with Landlord’s execution and delivery of such mortgage or ground lease to Lender. 16. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with all the rules and regulations as set forth in Exhibit “C” attachedto and made a part of this Lease and all reasonable modifications of and additions to them from time to time put intoeffect by Landlord. Landlord shall not be responsible to Tenant for the non-performance by any other tenant oroccupant of the Building of any such rules and regulations. 17. REENTRY BY LANDLORD. 17.1 Landlord reserves and shall at all times have the right to re-enter the Premises to inspect the same, tosupply janitor service and any other service to be provided by Landlord to Tenant under this Lease, and with twenty-four (24) hour advance notice, except in the case of an emergency where no notice is required, to show said Premisesto prospective purchasers, mortgagees or, within the last twelve (12) calendar month of the Lease Term), to prospectivetenants, and to alter, improve or repair the Premises and any portion of the Building, without abatement of Annual Rentor Additional Rent, and may for that purpose erect, use and maintain scaffolding, pipes, conduits and other necessarystructures and open any wall, ceiling or floor in and through the Building and Premises where reasonably required bythe character of the work to be performed, provided entrance to the Premises shall not be blocked thereby, and furtherprovided that the business of Tenant shall not be interfered with unreasonably. 17 Initials 17.2 Landlord shall have the right at any time to change the arrangement and/or locations of entrances, orpassageways, doors and doorways, and corridors, windows, elevators, stairs, toilets or other public parts of theBuilding (provided that such changes do not materially interfere with any Tenant Entity’s access to and from thePremises) and to change the name, number or designation by which the Building is commonly known. In the event thatLandlord damages any portion of any wall or wall covering, ceiling, or floor or floor covering within the Premises,Landlord shall repair or replace the damaged portion to match the original as nearly as commercially reasonable butshall not be required to repair or replace more than the portion actually damaged. 17.3 For each of the aforesaid purposes, Landlord shall at all times have and retain a key with which tounlock all of the doors in the Premises, excluding Tenant's vaults and safes or special security areas (designated inadvance), and Landlord shall have the right to use any and all means which Landlord may deem proper to open saiddoors in an emergency to obtain entry to any portion of the Premises. As to any portion to which access cannot be hadby means of a key or keys in Landlord's possession, Landlord is authorized to gain access by such means as Landlordelects and the cost of repairing any damage occurring in doing so shall be borne by Tenant and paid to Landlord asAdditional Rent upon demand. 18. DEFAULT. 18.1 Otherwise provided in Article 20, the following events shall be deemed to be Events of Default(“Events of Default”) under this Lease: 18.1.1 Tenant shall fail to pay when due any sum of money becoming due to be paid to Landlordunder this Lease, whether such sum be any installment of the rent reserved by this Lease, any other amounttreated as Additional Rent under this Lease, or any other payment or reimbursement to Landlord required bythis Lease, whether or not treated as Additional Rent under this Lease, and such failure shall continue for aperiod of five business days after written notice that such payment was not made when due, but if any suchnotice shall be given, for two or more times in a twelve (12) month period commencing with the date of suchnotice, the failure to pay within five business days after due any additional sum of money becoming due to bepaid to Landlord under this Lease during the remainder of such period shall be an Event of Default, withoutnotice. 18.1.2 Tenant shall fail to comply with any non-monetary term, provision or covenant of this Leasewhich is not provided for in another Section of this Article and shall not cure such failure within thirty (30)days after written notice of such failure to Tenant; provided, however, if such default cannot reasonably becured within such thirty (30) day period, Tenant shall not be in default if Tenant promptly commences the cureof such default and diligently pursues such cure to completion within a reasonable time thereafter not to exceedone hundred twenty (120) days total. 18.1.3 Tenant shall become insolvent, admit in writing its inability to pay its debts generally as theybecome due, file a petition in bankruptcy or a petition to take advantage of any 18 Initials insolvency statute, make an assignment for the benefit of creditors, make a transfer in fraud of creditors, applyfor or consent to the appointment of a receiver of itself or of the whole or any substantial part of its property, orfile a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws, as now ineffect or hereafter amended, or any other applicable law or statute of the United States or any state thereof. 18.1.4 A court of competent jurisdiction shall enter an order, judgment or decree adjudicating Tenantbankrupt, or appointing a receiver of Tenant, or of the whole or any substantial part of its property, without theconsent of Tenant, or approving a petition filed against Tenant seeking reorganization or arrangement of Tenantunder the bankruptcy laws of the United States, as now in effect or hereafter amended, or any state thereof, andsuch order, judgment or decree shall not be vacated or set aside or stayed within thirty (30) days from the dateof entry thereof. 18.1.5 Tenant fails to deliver any estoppel certificate requested by Landlord within the perioddescribed in Article25, which failure continues for five (5) days after written notice of such failure fromLandlord. 18.1.6 Tenant violates the restrictions on Transfer set forth in Article 9, which failure continues forthirty (30) days after written notice of such failure from Landlord. 19. REMEDIES. 19.1 Except as otherwise provided in Article 20, upon the occurrence of any of the Events of Defaultdescribed or referred to in Article 18, Landlord shall have the option to pursue any one or more of the followingremedies without any notice or demand whatsoever, concurrently or consecutively and not alternatively: 19.1.1 Landlord may, at its election, terminate this Lease or terminate Tenant's right to possession only,without terminating the Lease. 19.1.2 Upon any termination of this Lease, whether by lapse of time or otherwise, or upon anytermination of Tenant's right to possession without termination of the Lease, Tenant shall surrender possessionand vacate the Premises immediately, and deliver possession thereof to Landlord, and Tenant hereby grants toLandlord full and free license to enter into and upon the Premises in such event and to repossess Landlord ofthe Premises as of Landlord's former estate and to expel or remove Tenant and any others who may beoccupying or be within the Premises and to remove Tenant's signs and other evidence of tenancy and all otherproperty of Tenant therefrom without being deemed in any manner guilty of trespass, eviction or forcible entryor detainer, and without incurring any liability for any damage resulting therefrom, Tenant waiving any right toclaim damages for such re-entry and expulsion, and without relinquishing Landlord's right to rent or any otherright given to Landlord under this Lease or by operation of law. 19.1.3 Upon any termination of this Lease, whether by lapse of time or otherwise, Landlord shall beentitled to recover as damages, all Annual Rent, including any amounts treated as Additional Rent under thisLease, and other sums due and payable by Tenant on the date of 19 Initials termination, plus as liquidated damages and not as a penalty, an amount equal to the sum of (a) then presentvalue of the Annual Rent reserved in this Lease for the residue of the stated Term of this Lease including anyamounts treated as Additional Rent under this Lease and all other sums provided in this Lease to be paid byTenant, discounted to the present value thereof at a rate equal to the Prime Rate established from time to timeby Chase Bank or any successor thereto minus the fair rental value of the Premises for such residue; and (b) theactual reasonable cost incurred by Landlord of performing any other covenants of Tenant hereunder whichremained unperformed by Tenant as of the date of such termination. 19.1.4 Upon any termination of Tenant's right to possession only without termination of the Lease: 19.1.4.1 Neither such termination of Tenant's right to possession nor Landlord's taking andholding possession thereof as provided in Section 19.1.2 shall terminate the Lease or release Tenant, inwhole or in part, from any obligation, including Tenant's obligation to pay the Annual Rent, includingany amounts treated as Additional Rent, under this Lease for the full Term, and if Landlord so electsTenant shall pay forthwith to Landlord the sum equal to the entire amount of the Annual Rent,including any amounts treated as Additional Rent under this Lease, for the remainder of the Term plusany other sums provided in this Lease to be paid by Tenant for the remainder of the Term. 19.1.4.2 Landlord may, but need not, relet the Premises or any part thereof for such rent andupon such terms as Landlord, in its reasonable discretion, shall determine (including the right to relet thepremises for a greater or lesser term than that remaining under this Lease, the right to relet the Premisesas a part of a larger area, and the right to change the character or use made of the Premises). Inconnection with or in preparation for any reletting, Landlord may, but shall not be required to, makerepairs, alterations and additions in or to the Premises and redecorate the same to the extent Landlordreasonably deems necessary or desirable, and Tenant shall, upon demand, pay the cost thereof, togetherwith Landlord's expenses of reletting, including, without limitation, any commission incurred byLandlord. Landlord shall use commercially reasonable efforts to mitigate its damages arising out suchEvent of Default by reletting the Premises in a commercially reasonable manner; provided, thatLandlord and Tenant agree that nevertheless Landlord shall at most be required to use only the sameefforts Landlord then uses to lease premises in the Building generally and that in any case that Landlordshall not be required to give any preference or priority to the showing or leasing of the Premises overany other space that Landlord may be leasing or have available and may place a suitable prospectivetenant in any such other space regardless of when such other space becomes available. Landlord shallnot be required to observe any instruction given by Tenant about any reletting or accept any tenantoffered by Tenant unless such offered tenant has a credit-worthiness acceptable to Landlord and leasesthe entire Premises upon terms and conditions including a rate of rent (after giving effect to allexpenditures by Landlord for tenant improvements, broker's commissions and other leasing costs) all noless favorable to Landlord than as called for in this Lease, nor shall Landlord be required to make orpermit any assignment or sublease for more than the current term or which Landlord would not berequired to permit under the provisions of Article 9. 20 Initials 19.1.4.3 Until such time as Landlord shall elect to terminate the Lease and shall thereupon beentitled to recover the amounts specified in such case in Section 19.1.3, Tenant shall pay to Landlordupon demand the full amount of all Annual Rent, including any amounts treated as Additional Rentunder this Lease and other sums reserved in this Lease for the remaining Term, together with the costsof repairs, alterations, additions, redecorating and Landlord's expenses of reletting and the collection ofthe rent accruing therefrom (including attorney's fees and broker's commissions), as the same shall thenbe due or become due from time to time, less only such consideration as Landlord may have receivedfrom any reletting of the Premises; and Tenant agrees that Landlord may file suits from time to time torecover any sums falling due under this Article 19 as they become due. Any proceeds of reletting byLandlord in excess of the amount then owed by Tenant to Landlord from time to time shall be creditedagainst Tenant's future obligations under this Lease but shall not otherwise be refunded to Tenant orinure to Tenant's benefit. 19.2 Landlord may, at Landlord's option, enter into and upon the Premises if Landlord determines in its solediscretion that Tenant is not acting within a commercially reasonable time to maintain, repair or replace anything forwhich Tenant is responsible under this Lease and correct the same, without being deemed in any manner guilty oftrespass, eviction or forcible entry and detainer and without incurring any liability for any damage or interruption ofTenant's business resulting therefrom. If Tenant shall have vacated the Premises, Landlord may at Landlord's optionre-enter the Premises at any time during the last six months of the then current Term of this Lease and make any and allsuch changes, alterations, revisions, additions and tenant and other improvements in or about the Premises as Landlordshall elect, all without any abatement of any of the Annual Rent and Additional Rent otherwise to be paid by Tenantunder this Lease. 19.3 If, on account of any breach or default by Tenant in Tenant's obligations under the terms and conditionsof this Lease, it shall become necessary or appropriate for Landlord to employ or consult with an attorney concerningor to enforce or defend any of Landlord's rights or remedies arising under this Lease, Tenant agrees to pay allLandlord's attorney's fees so incurred. Tenant expressly waives any right to: (a) trial by jury; and (b) service of anynotice required by any present or future law or ordinance applicable to landlords or tenants but not required by theterms of this Lease. 19.4 Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies providedin this Lease or any other remedies provided by law (all such remedies being cumulative), nor shall pursuit of anyremedy provided in this Lease constitute a forfeiture or waiver of any rent due to Landlord under this Lease or of anydamages accruing to Landlord by reason of the violation of any of the terms, provisions and covenants contained inthis Lease. 19.5 No act or thing done by Landlord or its agents during the Term shall be deemed a termination of thisLease or an acceptance of the surrender of the Premises, and no agreement to terminate this Lease or accept a surrenderof said Premises shall be valid, unless in writing signed by Landlord. No waiver by Landlord of any violation orbreach of any of the terms, provisions and covenants contained in this Lease shall be deemed or construed to constitutea waiver of any other violation or breach of any of the terms, provisions and covenants contained in this Lease. 21 Initials Landlord's acceptance of the payment of Annual Rent or Additional Rent or other payments after the occurrence of anEvent of Default shall not be construed as a waiver of such Default, unless Landlord so notifies Tenant in writing.Forbearance by Landlord in enforcing one or more of the remedies provided in this Lease upon an Event of Defaultshall not be deemed or construed to constitute a waiver of such Default or of Landlord's right to enforce any suchremedies with respect to such Default or any subsequent Default. 19.6 Any and all property which may be removed from the Premises by Landlord pursuant to the authority ofthis Lease or of law, to which Tenant is or may be entitled, may be handled, removed and/or stored, as the case maybe, by or at the direction of Landlord but at the risk, cost and expense of Tenant, and Landlord shall in no event beresponsible for the value, preservation or safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and allexpenses incurred in such removal and all storage charges against such property so long as the same shall be inLandlord's possession or under Landlord's control. Any such property of Tenant not retaken by Tenant from storagewithin sixty (60) days after removal from the Premises shall, at Landlord's option, be deemed conveyed by Tenant toLandlord under this Lease as by a bill of sale without further payment or credit by Landlord to Tenant. 19.7 Confession of Judgment for Possession of Real Property. Upon the occurrence of an Event of Defaulthereunder, or upon the expiration of the Term of this Lease, whether the initial stated term or the earlier termination orsurrender hereof, as provided in this Lease, it shall be lawful for any attorney of any court of record to appear asattorney for Tenant as well as for all persons claiming through, by, or under Tenant, and to, by complaint or inejectment of Tenant and all persons claiming through, by or under Tenant and for which a copy of the Lease, verifiedby affidavit, shall be sufficient warrant, whereupon, if Landlord so desires, a writ of possession or other appropriatewrit under the rules of civil procedure then in effect may issue forthwith, without any prior writ or proceedings.Whether this Lease is terminated or not and possession of the Premises remains in, or is restored to Lessee, Landlordshall have the right for the same Event of Default and upon any subsequent Event(s) of Default, or upon thetermination of this Lease, to bring one or more further actions to recover possession of the Premises and confessjudgment for the recovery of possession of the Premises as provided in this Section 19.7. 19.7.1 Tenant’s Acknowledgment and Understanding of Confession of Judgment. TENANTHEREBY ACKNOWLEDGES THAT TENANT HAS HAD THE OPPORTUNITY TO SEEK THEASSISTANCE OF LEGAL COUNSEL IN THE REVIEW AND EXECUTION OF THIS LEASE AND IFCOUNSEL WAS CONSULTED, TENANT FURTHER ACKNOWLEDGES THAT THE MEANINGAND EFFECT OF THE FOREGOING PROVISIONS CONCERNING CONFESSION OF JUDGMENTHAVE BEEN FULLY EXPLAINED TO TENANT BY SUCH COUNSEL. TENANT UNDERSTANDSAND AGREES THAT THIS LEASE CONTAINS PROVISIONS BY WHICH LANDLORD MAYENTER JUDGMENT BY CONFESSION AGAINST TENANT. TENANT UNDERSTANDS THAT,WITHOUT THESE PROVISIONS, TENANT WOULD RECEIVE PRIOR NOTICE IN ADDITION TOTHE NOTICE SET FORTH HEREIN IN CONNECTION WITH AN EVENT OF DEFAULT AND AHEARING OF ANY CLAIMS BY LANDLORD BEFORE A JUDGMENT COULD BEENTERED. HOWEVER, TENANT HEREBY FREELY, 22 Initials KNOWINGLY, INTELLIGENTLY WAIVES THESE RIGHTS AND CONSENTS TO LANDLORD’SENTERING JUDGMENT AGAINST TENANT BY CONFESSION PURSUANT TO THE TERMS OFTHE LEASE. TENANT ALSO UNDERSTANDS THAT UPON THE ENTRY OF JUDGMENT,LANDLORD MAY DIRECT THE SHERIFF TO PUT THE TENANT OUT OF POSSESSION OF THEPREMISES. TENANT, FREELY, KNOWINGLY AND INTELLIGENTLY WAIVES THE RIGHT TONOTICE AND HEARING BEFORE LANDLORD MAY RETAKE POSSESSION OF THE PREMISESPURSUANT TO A CONFESSED JUDGMENT AND AGREES THAT LANDLORD MAY RETAKEPOSSESSION OF THE PREMISES AND MAY DIRECT THE SHERIFF TO DO SO, IMMEDIATELYUPON ENTRY OF JUDGMENT. TENANT CERTIFIES THAT TENANT’S ANNUAL INCOMEEXCEEDS $10,000.00 AND THAT THIS IS A COMMERCIAL TRANSACTION. Tenant’s Initials and Date 19.7.2 Landlord’s Assignee’s Right to Confess Judgment. The right to enter judgment against Tenantby confession and to enforce all of the other provisions of this Lease herein provided for may at the option ofany assignee of this Lease, be exercised by any assignee of the Landlord’s right, title and interest in this Leasein his, her or their own name, any statute, rule of court, custom, or practice to the contrary notwithstanding. Inthe event that this Lease is amended (including but not limited to an amendment extending the Term of thisLease and/or expanding the Premises), the right to enter judgment by confession against Tenant for monetarydamages and in ejectment shall remain in full force and effect. 19.7.3 All remedies hereinbefore given to Landlord and all rights and remedies otherwise given to it bylaw and equity shall be cumulative and concurrent. No termination of this Lease or the taking or recovery ofthe Premises shall deprive Landlord of any of its remedies or actions against Tenant for Minimum Rent andAdditional Rent, nor shall the bringing of any action for Minimum Rent and Additional Rent be construed as awaiver of the right to obtain possession of the Premises. 19.7.4 In any action for Rent or other charges payable hereunder, Landlord shall cause to be filed insuch action an affidavit setting forth the facts necessary to authorize the entry of judgment and, if a true copy ofthis Lease (and of the truth of the copy such affidavit shall be sufficient proof) be filed in such action, it shallnot be necessary to file the original as a warrant of attorney, any law, rule of court, custom or practice to thecontrary notwithstanding. Tenant releases to Landlord, and to any and all attorneys who may appear forTenant, all errors in any proceedings taken by Landlord, whether by virtue of the powers of attorney containedin this Lease or not, and all liability therefor. Tenant expressly waives the benefits of all laws, not or hereafter inforce, exempting any goods within the Premises or elsewhere from restraint, levy or sale. 23 Initials 20. TENANT'S BANKRUPTCY OR INSOLVENCY. 20.1 If at any time and for so long as Tenant shall be subjected to the provisions of the United StatesBankruptcy Code or other law of the United States or any state thereof for the protection of debtors as in effect at suchtime (each a "Debtor's Law"): 20.1.1 Tenant, Tenant as debtor-in-possession, and any trustee or receiver of Tenant's assets (each a"Tenant's Representative") shall have no greater right to assume or assign this Lease or any interest in thisLease, or to sublease any of the Premises than accorded to Tenant in Article 9, except to the extent Landlordshall be required to permit such assumption, assignment or sublease by the provisions of such Debtor'sLaw. Without limitation of the generality of the foregoing, any right of any Tenant's Representative to assumeor assign this Lease or to sublease any of the Premises shall be subject to the conditions that: 20.1.1.1 Such Debtor's Law shall provide to Tenant's Representative a right of assumption ofthis Lease which Tenant's Representative shall have timely exercised and Tenant's Representative shallhave fully cured any default of Tenant under this Lease. 20.1.1.2 Tenant's Representative or the proposed assignee, as the case shall be, shall havedeposited with Landlord as security for the timely payment of Annual Rent or Additional Rent anamount equal to the larger of: (a) three months' rent and other monetary charges accruing under thisLease; and (b) any sum specified in Article 5; and shall have provided Landlord with adequate otherassurance of the future performance of the obligations of the Tenant under this Lease. Withoutlimitation, such assurances shall include, at least, in the case of assumption of this Lease, demonstrationto the satisfaction of the Landlord that Tenant's Representative has and will continue to have sufficientunencumbered assets after the payment of all secured obligations and administrative expenses to assureLandlord that Tenant's Representative will have sufficient funds to fulfill the obligations of Tenantunder this Lease; and, in the case of assignment, submission of current financial statements of theproposed assignee, audited by an independent certified public accountant reasonably acceptable toLandlord and showing a net worth and working capital in amounts determined by Landlord to besufficient to assure the future performance by such assignee of all of the Tenant's obligations under thisLease. 20.1.1.3 The assumption or any contemplated assignment of this Lease or subleasing any partof the Premises, as shall be the case, will not breach any provision in any other lease, mortgage,financing agreement or other agreement by which Landlord is bound. 20.1.1.4 Landlord shall have, or would have had absent the Debtor's Law, no right underArticle 9 to refuse consent to the proposed assignment or sublease by reason of the identity or nature ofthe proposed assignee or sublessee or the proposed use of the Premises concerned 21. QUIET ENJOYMENT. Landlord represents and warrants that it has full right and authority to enter into this Lease and that Tenant,while paying the Annual Rent and Additional Rent and performing its other covenants and agreements contained inthis Lease, shall peaceably and quietly have, hold and 24 Initials enjoy the Premises for the Term without hindrance or molestation from Landlord subject to the terms and provisions ofthis Lease. Landlord shall not be liable for any interference or disturbance by other tenants or third persons, nor shallTenant be released from any of the obligations of this Lease because of such interference or disturbance. 22. DAMAGE BY FIRE, ETC. 22.1 In the event the Premises or the Building are damaged by fire or other cause, Landlord shall notifyTenant in writing within thirty (30) days after the occurrence of such casualty whether, in Landlord's reasonableestimation, such damage can be materially restored within one hundred eighty (180) day from the receipt of insuranceproceeds. If Landlord determines that such damages can be repaired within such 180 day period, Landlord shallforthwith repair the same and this Lease shall remain in full force and effect, except that Tenant shall be entitled to aproportionate abatement in Annual Rent and Additional Rent from the date of such damage. Such abatement of rentshall be made pro rata in accordance with the extent to which the damage and the making of such repairs shall interferewith the use and occupancy by Tenant of the Premises from time to time. For purposes of this Lease, the Building orPremises shall be deemed "materially restored" if they are in such condition as would not prevent or materially interferewith Tenant's use of the Premises for the purpose for which it was being used immediately before such damage. 22.2 If Tenant’s notice provided within 30 days of the casualty pursuant to Section 22.1 above states that theapplicable repairs cannot, in Landlord's reasonable estimation, be made within one hundred eighty (180) days from thereceipt of insurance proceeds, or if the casualty occurs within the last twelve (12) months of the Term, Landlord andTenant (unless an Event of Default is existing or if Tenant caused the applicable damage) shall each have the option ofgiving the other, at any time within thirty (30) days after such damage, notice terminating this Lease as of the date ofsuch damage. In the event of the giving of such notice, this Lease shall expire and all interest of the Tenant in thePremises shall terminate as of the date of such damage as if such date had been originally fixed in this Lease for theexpiration of the Term and all obligations of Tenant hereunder shall terminate. In the event that neither Landlord norTenant exercises its option to terminate this Lease, then provided that Landlord’s mortgagee consents to suchrestoration or repair, Landlord shall repair or restore such damage, this Lease continuing in full force and effect, and theAnnual Rent and Additional Rent hereunder shall be proportionately abated as provided in Section 22.1. 22.3 Landlord shall not be required to repair or replace any damage or loss by or from fire other cause to anypanels, decorations, partitions, additions, railings, ceilings, floor coverings, office fixtures or any other personalproperty or improvements installed on the Premises or belonging to Tenant. Any insurance that may be carried byLandlord or Tenant against loss or damage to the Building or Premises shall be for the sole benefit of the party carryingsuch insurance and under its sole control. 22.4 In the event that the Landlord should fail to complete such repairs and material restoration within ninety(90) days after the date estimated by Landlord therefor as extended by this Section 22.4, Tenant (Tenant shall have noright of cancellation if an Event of Default exists 25 Initials and if Tenant caused the damage) may at its option and as its sole remedy terminate this Lease by delivering writtennotice to Landlord, within fifteen (15) days after the expiration of said period of time, whereupon the Lease shall endon the date of such notice or such later date fixed in such notice as if the date of such notice was the date originallyfixed in this Lease for the expiration of the Term; provided, however, that if construction is delayed because ofchanges, deletions or additions in construction requested by Tenant, strikes, lockouts, casualties, Acts of God, war,material or labor shortages, government regulation or control or other causes beyond the reasonable control ofLandlord, the period for restoration, repair or rebuilding shall be extended for the amount of time Landlord is sodelayed; provided further, that no such delay shall be permitted on account of general economic conditions. 22.5 Notwithstanding anything to the contrary contained in this Article: (a) Landlord shall not have anyobligation whatsoever to repair, reconstruct, or restore the Premises when the damages resulting from any casualtycovered by the provisions of this Article 22 occur during the last twelve (12) months of the Term or any extensionthereof, but if Landlord determines not to repair such damages Landlord shall notify Tenant and if such damages shallrender any material portion of the Premises untenantable Tenant (Tenant shall have no right of cancellation if Tenant isin default of any of the provisions of this Lease beyond any applicable grace or cure period and if Tenant caused thedamage) shall have the right to terminate this Lease by notice to Landlord within fifteen (15) days' after receipt ofLandlord's notice; and (b) in the event the holder of any indebtedness secured by a mortgage or deed of trust coveringthe Premises or Building requires that any insurance proceeds be applied to such indebtedness, then Landlord shallhave the right to terminate this Lease by delivering written notice of termination to Tenant within fifteen (15) days aftersuch requirement' is' made by any such holder, whereupon this Lease shall end on the date of such damage as, if thedate of such damage were the date originally fixed in this Lease for the expiration of the Term. 22.6 In the event of any damage or destruction to the Building or Premises by any peril covered by theprovisions of this Article 22, it shall be Tenant's responsibility to properly secure the Premises and upon notice fromLandlord to remove forthwith, at its sole cost and expense, such portion of all of the personal property belonging toTenant or its licensees from such portion or all of the Building or Premises as Landlord shall request. 23. EMINENT DOMAIN. If all or any substantial part of the Premises shall be taken or appropriated by any public or quasi-publicauthority under the power of eminent domain, or conveyance in lieu of such appropriation, either party to this Leaseshall have the right (Tenant shall have no right to terminate the Lease if Tenant is in default of any of the terms andconditions of this Lease beyond any applicable grace or cure period), at its option, of giving the other, at any timewithin thirty (30) days after such taking, notice terminating this Lease, except that Tenant may only terminate thisLease by reason of taking or appropriation, if such taking or appropriation shall be so substantial as to materiallyinterfere with Tenant's use and occupancy of the Premises. If neither party to this Lease shall so elect to terminate thisLease, the Annual Rent and Additional Rent thereafter to be paid shall be adjusted on a fair and equitable basis underthe circumstances. In addition to the rights 26 Initials of Landlord above, if any substantial part of the Building shall be taken or appropriated by any public or quasi-publicauthority under the power of eminent domain or conveyance in lieu thereof and such taking materially affects Tenant’suse of or access to the Premises and the Building, and regardless of whether the Premises or any part thereof are sotaken or appropriated, either party shall have the right, at its sole option, to terminate this Lease. Landlord shall beentitled to any and all income, rent, award, or any interest whatsoever in or upon any such sum, which may be paid ormade in connection with any such public or quasi-public use or purpose, and Tenant hereby assigns to Landlord anyinterest it may have in or claim to all or any part of such sums, other than any separate award which may be made withrespect to Tenant's trade fixtures and moving expenses; Tenant shall make no claim for the value of any unexpiredTerm. 24. SALE BY LANDLORD. In event of a sale or conveyance by Landlord of the Building, the same shall operate to release Landlord fromany future liability upon any of the covenants or conditions, expressed or implied, contained in this Lease in favor ofTenant, and in such event Tenant agrees to look solely to the responsibility of the successor in interest of Landlord inand to this Lease. Except as set forth in this Article 24, this Lease shall not be affected by any such sale and Tenantagrees to attorn to the purchaser or assignee. If any security has been given by Tenant to secure the faithfulperformance of any of the covenants of this Lease, Landlord may transfer or deliver said security, as such, toLandlord's successor in interest and thereupon Landlord shall be discharged from any further liability with regard tosaid security 25. ESTOPPEL CERTIFICATES. Within twenty (20) days following any written request which Landlord may make from time to time, Tenantshall execute and deliver to Landlord or mortgagee or prospective mortgagee a sworn statement certifying: (a) the dateof commencement of this Lease; (b) the fact that this Lease is unmodified and in full force and effect (or, if there havebeen modifications to this Lease, that this lease is in full force and effect, as modified, and stating the date and nature ofsuch modifications); (c) the date to which the Annual Rent and Additional Rent and other sums payable under thisLease have been paid; (d) the fact that there are no current defaults under this Lease by either Landlord or Tenantexcept as specified in Tenant's statement; and (e) such other customary matters as may be requested by Landlord.Landlord and Tenant intend that any statement delivered pursuant to this Article 25 may be relied upon by anymortgagee, beneficiary or purchaser and Tenant shall be liable for all loss, cost or expense resulting from the failure ofany sale or funding of any loan caused by any material misstatement contained in such estoppel certificate. 26. SURRENDER OF PREMISES. 26.1 Tenant shall, at least thirty (30) days before the expiration of the Term, arrange to meet Landlord for ajoint inspection of the Premises. Within ten (10) days after such joint inspection, Landlord and Tenant in good faithwill determine Tenant’s responsibility for repairs and restoration, if any, necessary to return the Premises to thecondition required by Section 26.2 below. In the event of Tenant's failure to arrange such joint inspection to be heldprior to vacating 27 Initials the Premises, Landlord's inspection at or after Tenant's vacating the Premises shall be conclusively deemed correct forpurposes of determining Tenant's responsibility for repairs and restoration. 26.2 At the end of the Term or any renewal of the Term or other sooner termination of this Lease, Tenant willpeaceably deliver up to Landlord possession of the Premises, together with all improvements or additions upon orbelonging to the same, by whomsoever made, in the same conditions received or first installed, broom clean and free ofall debris, excepting only ordinary wear and tear and damage by fire or other casualty. Following the completion ofthe joint inspection described in Section 26.1 above, Tenant may, and at Landlord's request shall, at Tenant's sole cost,remove upon termination of this Lease, any and all furniture, furnishings, movable partitions of less than full heightfrom floor to ceiling, trade fixtures and other property installed by Tenant, title to which shall not be in or passautomatically to Landlord upon such termination, repairing all damage caused by such removal. Property not soremoved shall, unless requested to be removed, be deemed abandoned by the Tenant and title to the same shallthereupon pass to Landlord under this Lease as by a bill of sale. All other alterations, additions and improvements in,on or to the Premises shall be dealt with and disposed of as provided in Article 6 hereof. 26.3 All obligations of Tenant under this Lease not fully performed as of the expiration or earlier terminationof the Term shall survive the expiration or earlier termination of the Term. In the event that Tenant's failure to performprevents Landlord from releasing the Premises, Tenant shall continue to pay Annual Rent and Additional Rentpursuant to the provisions of Article 14 until such performance is complete. Upon the expiration or earlier terminationof the Term, Tenant shall pay to Landlord as Additional Rent the amount, as agreed upon by Landlord and Tenantfollowing the completion of the joint inspection described in Section 26.1 above, necessary to repair and restore thePremises as provided in this Lease and/or to discharge Tenant's obligation for unpaid amounts due or to become due toLandlord. 27. NOTICES. Any notice or document required or permitted to be delivered under this Lease shall be addressed to theintended recipient, shall be transmitted personally, by fully prepaid registered or certified United States Mail returnreceipt requested, or by reputable independent contract delivery service furnishing a written record of attempted oractual delivery, and shall be deemed to be delivered when tendered for delivery to the addressee at its address set forthon the Reference Page, or at such other address as it has then last specified by written notice delivered in accordancewith this Article 27, or if to Tenant at either its aforesaid address or its last known registered office or home of a generalpartner or individual owner, whether or not actually accepted or received by the addressee. 28. TAXES PAYABLE BY TENANT. In addition to Annual Rent and Additional Rent and other charges to be paid by Tenant under this Lease,Tenant shall reimburse to Landlord as Additional Rent, upon demand, any and all taxes payable by Landlord (otherthan net income taxes) whether or not now customary or within the contemplation of the parties to this Lease: (a) uponor with respect to the possession, 28 Initials  leasing, operation, management, maintenance, alteration, repair, use or occupancy of the Premises or any portionthereof, including any sales, use or service tax imposed as a result thereof; (b) upon Tenant's gross receipts or payroll orthe value of Tenant's equipment, furniture, fixtures and other personal property of Tenant or leasehold improvements,alterations or additions located in the Premises; or (c) upon this transaction or any document to which Tenant is a partycreating or transferring any interest of Tenant in this Lease or the Premises. In addition to the foregoing, Tenant agreesto pay as Additional Rent, before delinquency, any and all taxes levied or assessed against Tenant and which becomepayable during the term hereof upon Tenant's equipment furniture, fixtures and other personal property of Tenantlocated in the Premises. 29. LANDLORD DEFAULT. If Landlord shall default in the performance of any of its obligations hereunder, or if Landlord shall fail to makeany payment which Landlord agrees to make hereunder, then Tenant, without being obligated to and without waivingsuch default, shall have the following remedies which shall be cumulative and shall be in addition to those remedieswhich Tenant may have at law or in equity. If Tenant provides written notice to Landlord (and any mortgagee ofwhich Tenant has been notified) of any default of Landlord hereunder, and Landlord (or such mortgagee) shall fail tocure such default within thirty (30) days following the receipt of such notice (or as soon as possible under all of thecircumstances in the event of an emergency), Tenant may perform such obligation, or pay any sums due to any thirdparty, as Landlord's agent; provided, however, if such default cannot reasonably be cured within such thirty (30) dayperiod, Landlord shall not be in default if Landlord (or such mortgagee) promptly commences the cure of such defaultand diligently pursues such cure to completion within a reasonable time thereafter not to exceed one hundred twenty(120) days total. The full reasonable amount of the costs and expenses incurred by Tenant to perform such obligationor make such payment, together with reasonable attorney's fee incurred by Tenant, shall be paid by Landlord to Tenantwithin thirty (30) days after presentation of invoices therefor to Landlord; provided, if Landlord fails to pay suchamount within such 30-day period, Tenant shall have the right to offset such unpaid amounts against the nextinstallment(s) of Additional Rent due and payable hereunder. 30. DEFINED TERMS AND HEADINGS. The Article headings shown in this Lease are for convenience of reference and shall in no way define, increase,limit or describe the scope or intent of any provision of this Lease. Any indemnification or insurance of Landlord shallapply to and inure to the benefit of all the following "Landlord Entities", being Landlord, Landlord's investmentmanager, and the trustees, boards of directors, officers, general partners beneficiaries, stockholders, employees andagents of each of them. Any option granted to Landlord shall also include or be exercisable by Landlord's trustee,beneficiary, agents and employees, as the case may be. In any case where this Lease is signed by more than one personthe obligations under this Lease shall be joint and several. The terms "Tenant" and "Landlord" or any pronoun used inplace thereof shall indicate and include the masculine or feminine, the singular or plural number, individuals, firms orcorporations and each of their respective successors executors, administrators and permitted assigns, according to thecontext hereof. The term "rentable area" shall mean the rentable area of the Premises or the 29 Initials Building as calculated by the Landlord on the basis of the plans and specifications of the Building including aproportionate share of any common areas. Tenant hereby accepts and agrees to be bound by the figures for the rentablespace footage of the Premises and Tenant's Proportionate Share shown on the Reference Page. 31. TENANT'S AUTHORITY. If Tenant signs as a corporation each of the persons executing this Lease on behalf of Tenant represents andwarrants that Tenant has been and is qualified to do business in the state in which the Building is located, that thecorporation has full right and authority to enter into this Lease, and that all persons signing on behalf of the corporationwere authorized to do so by appropriate corporate actions. If Tenant signs as a partnership, trust or other legal entity,each of the persons executing this Lease on behalf of Tenant represents and warrants that Tenant has complied with allapplicable laws, rules and governmental regulations relative to its right to do business in the state and that such entityon behalf of the Tenant was authorized to do so by any and all appropriate partnership trust or other actions. Tenantagrees to furnish promptly upon request a corporate resolution proof of due authorization by partners or otherappropriate documentation evidencing the due authorization of Tenant to enter into this Lease. 32. COMMISSIONS. Each of the parties represents and warrants to the other that it has not dealt with any broker or finder inconnection with this Lease except as described on the Reference Page. All commissions payable to the brokersidentified on the Reference Page shall be paid by Landlord. 33. TIME AND APPLICABLE LAW. Time is of the essence of this Lease and all of its provisions. This Lease shall in all respects be governed by thelaws of the state in which the Building is located. 34. SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 9, the terms, covenants and conditions contained in this Lease shall bebinding upon and inure to the benefit of the heirs, successors, executors, administrators and assigns of the parties to thisLease. 35. ENTIRE AGREEMENT. This Lease, together with its Exhibits, contains all agreements of the parties to this Lease and supersedes anyprevious negotiations. There have been no representations made by the Landlord or understandings made between theparties other than those set forth in this Lease and its Exhibits. This Lease may not be modified except by a writteninstrument duly executed by the parties to this Lease. 30 Initials 36. EXAMINATION NOT OPTION. Submission of this Lease shall not be deemed to be a reservation of the Premises. Landlord shall not be boundby this Lease until it has received a copy of this Lease duly executed by Tenant and has delivered to Tenant a copy ofthis Lease duly executed by Landlord, and until such delivery Landlord reserves the right to exhibit and lease thePremises 10 other prospective tenants. Notwithstanding anything contained in this Lease to the contrary, Landlord maywithhold delivery of possession of the Premises from Tenant until such time as Tenant has paid to Landlord anysecurity deposit required by Article 5, the first month's rent as set forth in Article 3 and any sum owed pursuant to thisLease. 37. RECORDATION. Tenant shall not record or register this Lease or a short form memorandum hereof without the prior writtenconsent of Landlord, and then shall pay all charges and taxes incident such recording or registration. 38. LIMITATION OF LANDLORD'S LIABILITY. Redress for any claim against Landlord under this Lease shall be limited to and enforceable only against and tothe extent of Landlord's interest in the Building. The obligations of Landlord under this Lease are not intended to andshall not be personally binding on, nor shall any resort be had to the private properties of, any of its trustees or board ofdirectors and officers, as the case may be, its investment manager, the general partners thereof, or any beneficiaries,stockholders, employees, or agents of Landlord or the investment manager. 39. COMPLIANCE WITH LAWS 39.1 The Tenant shall keep the Premises in clean and orderly condition, promptly execute and materiallycomply with all statutes, ordinances, rules, orders, regulations and requirements ("Laws") of the Federal, Provincialand City governments and of any and all their departments, agencies and bureaus or any other governmental authorities(collectively, "Governmental Authorities") applicable to the Premises and with all notices for the correction, preventionand abatement of nuisances, violations or other grievances in, upon or connected with the Premises during the term ofthis Lease. Tenant shall also promptly materially comply with and execute all rules, orders and regulations relating tothe Building of the Board of Fire Underwriters or similar or successor agency and all insurance companies writingpolicies pertaining to the Premises, for the prevention of fires (collectively "Fire Requirements"), at its sole cost andexpense. 39.2 If the Tenant shall fail or neglect to timely comply with any of the aforesaid Laws and/or FireRequirements or if the Tenant shall fail or neglect to make any necessary or required repairs then the Landlord or itsagents, without notice in the case of an emergency and in all other cases if such default is not cured within ten (10)days from the date of the giving by Landlord to Tenant of notice of such intention, may, but shall in no event beobligated to, enter the Premises and make said repairs, comply with any or all of said Laws and/or Fire Requirementsand perform any such obligation of the Tenant, all at the cost and expense of the Tenant. 31 Initials 39.3 Tenant shall obtain all approvals, certificates or permits of every kind and nature required in connectionwith Tenant's use and occupancy of the Premises. 40. PARKING. Subject to the requirements and limitations set forth in the in the Building’s Rules and Regulations, and anyother provision therein applicable to the parking of vehicles, Landlord shall provide Tenant, throughout the Term, withthe non-exclusive use of up to four (4) surface parking spaces per 1,000 rentable square feet of the Premises, whichparking spaces shall be located in the general parking area at the Property. (the “Parking Area”). Landlord hereby alsoacknowledges and agrees that, in addition to the foregoing non-reserved spaces, Tenant shall have a total of eight (8)reserved covered parking spaces within the Parking Area for Tenant’s employees working at the Premises and theExpansion Premises. 41. DRAFTING OF LEASE Notwithstanding anything contained to the contrary contained herein or presumed at law or otherwise, theparties and signatories hereto hereby agree and acknowledge that, for the purposes of the interpretation or constructionof this Lease and its riders, etc., neither party/signatory shall be deemed or considered to be the drafter of the Lease, itriders, etc., it being the intention of the parties that any interpretation and/or construction of the same be made by acourt of competent jurisdiction without regard to the history of the drafting, or to the drafter(s), of the same. 42. [INTENTIONALLY DELETED] 43. BUILDING CONTAMINANTS. To prevent the contamination, growth, or deposit of any mold, mildew, bacillus, virus, pollen, or other micro-organism (collectively, “Biologicals”) and the deposit, release or circulation of any indoor contaminants includingemissions from paint, carpet and drapery treatments, cleaning, maintenance and construction materials and supplies,pesticides, pressed wood products, insulation, and other materials and products (collectively with Biologicals,“Contaminants”) that could adversely affect the health, safety or welfare of any tenant, employee, or other occupant ofthe Building or their invitees (each, an “Occupant”), Tenant shall, at Tenant’s sole cost and expense, at all times duringthe term hereof (1) operate the Premises in such a manner to reasonably prevent or minimize the accumulation ofstagnant water and moisture in planters, kitchen appliances and vessels, carpeting, insulation, water coolers, and anyother locations where stagnant water or moisture could accumulate, and (2) otherwise operate the Premises to preventthe generation, growth, deposit, release or circulation of any Contaminants. 44. WI-FI ACCESS. 44.1 Tenant shall have the right to install a wireless intranet, Internet, and communications network (alsoknown as “Wi-Fi”) within the Premises for the use of Tenant and 32 Initials its employees and [clients/customers] (the “Network”) subject to this clause and all the other clauses of this Lease asare applicable. 44.2 Tenant shall not solicit, suffer, or permit other tenants or occupants of the Building to use the Networkor any other communications service, including, without limitation, any wired or wireless Internet service that passesthrough, is transmitted through, or emanates from the Premises. 44.3 Subject to Landlord’s approval, which shall not be unreasonably withheld, and subject to any necessarygovernmental approval, Tenant shall have the right to place communications dishes, antennae and related equipment(collectively the “Antenna Equipment”) on the roof of the Building for its own use. Placement of the AntennaEquipment will comply with all applicable city, county, or other jurisdictional zoning ordinances. There shall be nocharge to Tenant during the Lease Term for the placement of Antenna Equipment. The specific location of theAntenna Equipment, and the plans and specifications for such equipment and its installation, shall be subject toLandlord’s prior written approval, which shall not be unreasonably withheld, conditioned, or delayed. Tenant shallhave access to the Antenna Equipment pursuant to the Building’s Rules and Regulations provided Tenant suppliesLandlord with forty-eight (48) hours prior notice. Upon vacating the Premises, Tenant shall remove the AntennaEquipment installed pursuant to this Section and shall restore the roof to substantially its condition prior to installationof the Antenna Equipment described herein, reasonable wear and tear and casualty damage excepted. With Landlord’sapproval as to location and manner of installation, which shall not be unreasonably withheld, conditioned, or delayed,Tenant shall be entitled to install, connect, run, and maintain fiber optic conduits, telephone lines, and other wiringwithin the Building which shall be reasonably located so as not materially to interfere with other tenants. Tenant shallreceive any condemnation award related to the Antenna Equipment installed by Tenant pursuant hereto. Tenant andLandlord operating communications dishes, antennae, or other telecommunications equipment shall (1) operate theirequipment within the technical parameters specified by its manufacturer and/or as defined by the FCC, and (2) not useany portion of the Building in any way which causes radio frequency and/or electrical interference with any equipmentof another tenant or licensee operated prior in time to the interfering equipment and in accordance with subsection (1)hereof. In the event of any such interference by Tenant, Tenant shall terminate the interference (as applicable). In theevent the interference is caused by others, Landlord shall use commercially reasonable efforts to cause suchinterference be terminated. 44.4 Tenant agrees that Tenant’s communications equipment, Antenna Equipment and the communicationsequipment of Tenant’s service providers and contractors located in or about the Premises or installed in the Building toservice the Premises including, without limitation, any antennas, switches, or other equipment (collectively, “Tenant’sCommunications Equipment”) shall be of a type and, if applicable, a frequency that will not cause radio frequency,electromagnetic, or other interference to any other party or any equipment of any other party including, withoutlimitation, Landlord, other tenants, or occupants of the Building or any other party. In the event thatTenant’s Communications Equipment causes or is believed to cause any such interference, upon receipt of notice fromLandlord of such interference, Tenant will take all steps necessary to correct and eliminate the interference. If theinterference is not eliminated 33 Initials within 24 hours (or a shorter period if Landlord believes a shorter period to be appropriate) then, upon request fromLandlord, Tenant shall shut down the Tenant’s Communications Equipment pending resolution of the interference,with the exception of intermittent testing, upon prior notice to and with the approval of Landlord. 44.5 Tenant acknowledges that Landlord has granted and/or may grant lease rights, licenses, and other rightsto various other tenants and occupants of the Building and to telecommunications service providers.45. ALLOWANCE – TENANT PERFORMING WORK. 45.1 Tenant may construction improvements in the Premises after the Commencement Date (“Tenant’sWork”), as conceptually depicted on Exhibit “E” attached hereto. Landlord shall provide Tenant with a constructionallowance equal to $25/RSF (i.e., $183,150 based on 7,326 rentable square feet) (the “Landlord’s Contribution”), to beused by Tenant towards the cost of Tenant’s Work and the purchase and installation of furniture, fixtures andequipment (the “FF&E”) in the Premises. Landlord shall make disburse the Landlord’s Contribution to the Tenant inthe accordance with the following:45.1.1 Landlord shall make progress payments to Tenant of Landlord’s Contribution on a monthlybasis, as hereinafter provided. Each progress payment shall be equal to 90% of the cost of the Tenant Workincurred and/or the FF&E installed in the Premises (for which no prior requests for payment have been made)for the period for which payment is requested. Each progress payment shall be made to Tenant within thirty(30) days after Landlord’s receipt of Tenant’s requisition request, together with the required documentationdescribed below, provided such request and documentation are delivered to Landlord by the tenth (10th) day ofthe month and further provided that all of the following conditions are met at the time each such payment isrequested and due:45.1.1.1 No Event of Default is continuing as of the applicable payment date; and45.1.1.2 No mechanic’s lien has been filed against Landlord, Tenant, the Premises, or theBuilding, which lien has not yet been discharged of; and45.1.1.3 Tenant submits to Landlord all of the following documentation:45.1.1.1.1 A requisition for payment, provided, however, that Tenant shall submit suchrequisition for payment no more often than once monthly (and subject to the time constraints setforth above), and each such requisition shall cover services performed and materials supplied(for which no prior requests for payment have been made) for the period(s) preceding the monthin which such submission is made; and45.1.1.1.2 A certification by the architect engaged by Tenant or general contractor forthe Tenant’s Work stating that the portion of the Work for which Tenant is applying forpayment has been completed in accordance 34 Initials  with the Plans and Specifications approved by Landlord and, to the architect’sknowledge or general contractor, all applicable laws (or, with respect to any FF&E, that suchFF&E has been installed in the Premises); and45.1.1.1.3 Itemized bills from Tenant’s architects, consultants, contractors, engineers,and suppliers for services performed and materials supplied for those portions of the Tenant’sWork or the FF&E for which Tenant seeks payment and for which Tenant has not previouslysubmitted a requisition (and where Tenant elects to be reimbursed, such bills shall have beenmarked “paid” by the architect, consultant, contractor, engineer, or supplier); and45.1.1.1.4 Executed and acknowledged releases of lien in form and substancereasonably satisfactory to Landlord evidencing payment for any prior work or servicesperformed and materials supplied for which Tenant previously applied for payment.45.1.2 The progress payments shall be made, at Tenant’s option, either to:45.1.2.1 Tenant’s architects, consultants, contractors, engineers, and suppliers engaged inthe performance of the Initial Alterations for whom Tenant requests payment; or45.1.2.2 Tenant, as reimbursement for the amounts paid by Tenant for such servicesand/or supplies.45.1.3 Tenant shall be responsible for all additional costs incurred by Tenant above Landlord’sContribution for Tenant’s Work and the FF&E.45.2 The plans and specifications for the Tenant’s Work shown on Exhibit “E” are conceptual in nature anddo not constitute final plans. Prior to the performance of the Tenant Work, Tenant shall submit to Landlord forLandlord's written approval detailed plans and specifications therefor (“Plans and Specifications”), including the list ofall contractors and subcontractors, and Tenant shall not proceed with the Tenant’s Work until it obtains Landlord'swritten approval, which approval shall not be unreasonably withheld, conditioned or delayed and provided to Tenantno later than fifteen (15) days after receipt of all of the applicable Plans and Specifications (Landlord’s failure toprovide such approval within such 15-day period being deemed to be an approval thereof). Tenant may subsequentlymodify the Plans and Specifications in connection with the performance of the Tenant’s Work without Landlord’sconsent, unless such modifications (i) have an estimated cost more than $20,000.00 in the aggregate or (ii) affect thestructural integrity of the Building or the utility systems servicing the Building, in which case Tenant shall present suchmodifications to Landlord for its approval in the manner set forth above with respect to the initial Plans andSpecifications. Tenant, in addition to the fees set forth below, shall reimburse Landlord for all actual reasonable costsand expenses, including all third party consultant costs, incurred by Landlord for the review and approval of the Plansand Specifications. 35 Initials 45.3 Tenant’s Work shall be deemed to be “Substantially Completed” when the work shown on the approvedPlans and Specifications has been completed except for minor or insubstantial details of construction, mechanicaladjustments, or finishing touches like plastering or painting, which items shall not adversely affect Tenant's conduct ofits ordinary business activities in the Premises; and Tenant has not commenced business operations within thePremises. 45.4 Tenant shall have the right, in its sole discretion, to select the level of Landlord’s involvement in thebidding and performance of the Tenant’s Work as provided in one of clauses 45.4.1-3 below. Following suchselection, Tenant shall pay to Landlord, as Additional Rent, the applicable fee for the supervision of Tenant’s Work setforth in one of clauses 45.1.1-3 below: 45.4.1 Three percent (3%) fee of the total cost of Tenant’s Work if Landlord is responsible for theoversight of the bidding process, bid comparison, recommendations, selection of general contractors forbidding, oversight of the construction process and review of change orders and coordination with the projectarchitect / engineer for the construction meetings on site and completion of the job. 45.4.2 Two percent (2%) fee of the total cost of Tenant’s Work if Landlord is responsible for all of theitems in the above scope other than the bidding process. 45.4.3 One percent (1%) fee of the total cost of the Tenant’s Work if Landlord is responsible for all ofthe items in the above scope other than (1) the bidding process and (2) coordination with the project architect/engineer for the construction meetings on site and completion of the job. 45.5 In addition to Landlord’s Contribution set forth above, Landlord shall provide Tenant with animprovement allowance equal to $6.50/RSF of the Expansion Premises (as defined below) (i.e., $95,829.50 based on14,743 square feet (“Landlord’s Improvement Contribution”)), to be used by Tenant towards the cost of improvementwork and the purchase and installation of FF&E within the Premises and the Expansion Premises, in accordance withthe following: 45.5.1 Landlord, upon request from Tenant from time to time, shall remit a portion of the Landlord’sImprovement Contribution, in one or more installments up to an aggregate amount of $62,657.75 (equal to$4.25/RSF of the Expansion Premises) to Tenant if at the time each such payment is requested and due,provided that all of the following conditions are met at the time each such payment is requested and due: 45.5.1.1 No Event of Default is continuing; and 45.5.1.2 No mechanic’s lien has been filed against Landlord, Tenant, the Leased Premises, orthe Building, which lien has not yet been discharged of record or otherwise bonded in accordance withapplicable law; and 45.5.1.3 Tenant submits to Landlord all of the following documentation: 36 Initials 45.5.1.3.1 A requisition for payment, provided, however, that Tenant shall submit suchrequisition for payment no more often than once monthly (and subject to the time constraints setforth above), and each such requisition shall cover services performed and materials supplied(for which no prior requests for payment have been made) for the period(s) preceding the monthin which such submission is made; and 45.5.1.3.2 A certification by the architect engaged by Tenant or general contractor forthe Initial Alterations stating that the portion of the work for which Tenant is applying forpayment has been completed in accordance with the Plans and Specifications approved byLandlord and, to the architect’s knowledge or general contractor, all applicable laws (or, withrespect to any FF&E, that such FF&E has been installed in the Premises or the ExpansionPremises, as applicable); and 45.5.1.3.3 Itemized bills from Tenant’s architects, consultants, contractors, engineers,and suppliers for services performed and materials supplied for those portions of the work or theFF&E for which Tenant seeks payment and for which Tenant has not previously submitted arequisition (and where Tenant elects to be reimbursed, such bills shall have been marked “paid”by the architect, consultant, contractor, engineer, or supplier); and 45.5.1.3.4 Executed and acknowledged releases of lien in form and substancereasonably satisfactory to Landlord evidencing payment for any prior work or servicesperformed and materials supplied for which Tenant previously applied for payment. 45.5.2 The progress payments shall be made, at Tenant’s option, either to: 45.5.2.1 Tenant’s architects, consultants, contractors, engineers, and suppliers engaged in theperformance of the Initial Alterations for whom Tenant requests payment; or 45.5.2.2 Tenant, as reimbursement for the amounts paid by Tenant for such services and/orsupplies. 45.5.3 The remainder of Landlord Contribution, equal to $33,171.75 (equal to $2.25/RSF ofthe Expansion Premises), shall be disbursed to Tenant upon September 1, 2019 so long as (i) no Eventof Default is then existing and (ii) Tenant is occupying the Expansion Premises and the Premises. 37 Initials 46. EXPANSION PREMISES 46.1 Provided that no Event of Default is then existing, as of September 1, 2019 (the “ExpansionCommencement Date”), the definition of “Premises”, as set forth on the Reference Page, shall be modified to add Suite200 of the Building, as more particularly depicted in Exhibit “E”, consisting of approximately 14,743 rentable squarefeet of space (the “Expansion Premises”). Effective as of the Expansion Commencement Date, the Lease shall bemodified as follows: 46.1.1 The “Premises” shall consist of approximately 22,069 rentable square feet of space located inSuites 200 and 250 of the Building; 46.1.2 The Tenant’s Proportionate Share shall be 33.53%; and 46.1.3 The Annual Rent and Monthly Installment of Rent shall be in accordance with the rent scheduleset forth on Exhibit “D-2”. 46.2 All other terms and conditions of the Lease shall remain the same except for the above-describedchanges. Upon request by Tenant, Landlord shall enter into an amendment to the Lease further evidencing the abovemodifications; provided, that failure to enter into such amendment shall not negate the effect of such modificationeffective as of the Expansion Commencement Date. Notwithstanding the foregoing, effective as of the PremisesExpansion Date the terms of the Office Lease dated March, 2012 between Landlord’s and Tenant’s respectivepredecessors-in-interest with respect to the Expansion Premises (the “Existing Expansion Premises Lease”) shall beautomatically terminated and of no further force or effect except for such terms thereof as may survive the terminationof such Expansion Premises Lease by their express terms. Until the Expansion Commencement Date, nothing set forthin this Lease shall affect the Existing Expansion Premises Lease and this Lease and the Existing Expansion PremisesLeases shall constitute separate and independent legal obligations of Landlord and Tenant to each other until theExisting Expansion Premises Date. [SIGNATURES APPEAR ON THE FOLLOWING PAGE] 38 Initials LANDLORD:TENANT: NORTHBROOK TC EQUITIES LLCSTRONGBRIDGE U.S., INC.NORTHBROK 134 WEST 93 EQUITIES LLC NORTHBROOK LEMAD EQUITIES LLC NORTHBROOK CH EQUITIES LLC NORTHBROOK CLINTON EQUITIES LLC NORTHBROOK UK1 EQUITIES LLC NORTHBROOK LOKEN LLC NORTHBROOK HS DEVELOPMENT LLC NORTHBROOK HS RK LLC NORTHBROOK TEIDIF LLC AS TENANTS IN COMMON By:/s/ Robert Kanter By:/s/ Robert Lutz Print: Print: Title: Title: Date: Date: 39 Initials EXHIBIT “A” Premises Exhibit A is intended only to show the general layout of the Premises as of the beginning of the Term of this Lease. Itdoes not in any way supersede any of Landlord's rights set forth in Section 17.2 with respect to arrangements and/orlocations of public parts of the Building and changes in such arrangements and/or locations. It is not to be scaled; anymeasurements or distances shown should be taken as approximate. EXHIBIT “B” Initial Alterations/Tenant’s Work EXHIBIT “C” Rules and Regulations 1. No sign, placard, picture, advertisement, name or notice shall be installed or displayed on any part of theoutside or inside of the Building without the prior written consent of the Landlord. Landlord shall have the right toremove, at Tenant's expense and without notice, any sign installed or displayed in violation of this rule. All approvedsigns or lettering on doors and walls shall be printed, painted, affixed or inscribed at the expense of Tenant by a personor vendor chosen by Landlord. In addition, Landlord reserves the right to change from time to time the format of thesigns or lettering and to require previously approved signs or lettering to be appropriately altered. 2. If Landlord objects in writing to any curtains, blinds, shades or screens attached to or hung in or used inconnection with any window or door of the Premises, Tenant shall immediately discontinue such use. No awning shallbe permitted on any part of the Premises. Tenant shall not place anything or allow anything to be placed against or nearany glass partitions or doors or windows which may appear unsightly, in the opinion of Landlord, from outside thePremises. 3. Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances, elevators, escalators or stairways ofthe Building. The halls, passages, exits, entrances, shopping malls, elevators, escalators and stairways are not for thegeneral public, and Landlord shall in all cases retain the right to control and prevent access to the Building of allpersons whose presence in the judgment of Landlord would be prejudicial to the safety, character, reputation andinterests of the Building and its tenants provided that nothing contained in this rule shall be construed to prevent suchaccess to persons with whom any tenant normally deals in the ordinary course of its business, unless such persons areengaged in illegal activities. No tenant and no employee or invitee of any tenant shall go upon the roof of the Building. 4. The directory of the Building will be provided exclusively for the display of the name and location of tenantsonly and Landlord reserves the right to exclude any other names therefrom, but not the name of the Tenant. 5. All cleaning and janitorial services for the Building and the Premises shall be provided exclusively throughLandlord. Tenant shall not cause any unnecessary labor by carelessness or indifference to the good order andcleanliness of the Premises. Landlord shall not in any way be responsible to any Tenant for any loss of property on thePremises, however occurring, or for any damage to any Tenant's property by the janitor or any other employee or anyother person. Landlord shall insure that any cleaning or janitorial service company shall have commercially reasonableinsurance. 6. Landlord will furnish Tenant free of charge with four keys to each door in the Premises. Landlord may make areasonable charge for any additional keys, and Tenant shall not make or have made additional keys, and Tenant shallnot alter any lock or install a new or additional lock or bolt on any door of its Premises. Tenant, upon the termination ofits tenancy, shall deliver to Landlord the keys of all doors which have been furnished to Tenant, and in the event ofloss of any keys so furnished, shall pay Landlord therefor. 7. If Tenant requires telegraphic, telephonic, burglar alarm or similar services, it shall first obtain, and complywith, Landlord's instructions in their installation. 8. No equipment, materials, furniture, packages, supplies, merchandise or other property will be received in theBuilding or carried in the elevators except between such hours and in such elevators as may be designated byLandlord. 9. Tenant shall not place a load upon any floor, which exceeds the load per square foot such floor was designed tocarry and which is allowed by law. Landlord shall have the right to prescribe the weight, size and position to allequipment, materials, furniture or other property brought into the Building. Heavy objects shall, stand on suchplatforms as determined by Landlord to be necessary to properly distribute the weight. Business machines andmechanical equipment belonging to Tenant which cause noise or vibration that may be transmitted to the structure ofthe Building or to any space in the Building to such a degree as to be objectionable to Landlord or to any tenants shallbe placed and maintained by Tenant, at Tenant's expense, on vibration eliminators or other devices sufficient toeliminate noise or vibration. The persons employed to move such equipment in or out of the Building must beacceptable to Landlord. Landlord will not be responsible for loss of, or damage to, any such equipment or otherproperty from any cause, and all damage done to the Building by maintaining or moving such equipment or otherproperty shall be repaired at the expense of Tenant. 10. Tenant shall not use any method of heating or air conditioning other than that supplied by Landlord. Tenantshall not waste electricity, water or air conditioning. Tenant shall keep corridor doors closed. 11 Landlord reserves the right to exclude from the Building between the hours of 6 p.m. and 7 a.m. the followingday, or such other hours as may be established from time to time by Landlord, and on Sundays and legal holidays anyperson unless that person is an employee of Tenant or accompanied by an employee of Tenant, known to the person oremployee in charge of the Building and has a pass or is properly identified. Tenant shall be responsible for all personsfor whom it requests passes and shall be liable to Landlord for all acts of such persons. Landlord shall not be liable fordamages for any error with regard to the admission to or exclusion from the Building of any person. 12. Tenant shall close and lock the doors of its Premises and entirely shut off all water faucets or other waterapparatus and electricity, gas or air outlets before Tenant and its employees leave the Premises. Tenant shall be responsible for any damage or injuries sustained by other tenants oroccupants of the Building or by Landlord for noncompliance with this rule. 13. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not be used for any purpose other thanthat for which they were constructed, no foreign substance of any kind whatsoever shall be thrown into any of them,and the expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by theTenant who, or whose employees or invitees, shall have caused it.14. Tenant shall not install any radio or television antenna, satellite dish, loudspeaker or other device on the roof orexterior walls of the Building. Tenant shall not interfere with radio or television broadcasting or reception from or inthe Building or elsewhere. 15. Except as approved by Landlord, Tenant shall not mark, drive nails, screw or drill into the partitions,woodwork or plaster or in any way deface the Premises. Tenant shall not cut or bore holes for wires. Tenant shall notaffix any floor covering to the floor of the Premises in any manner except as approved by Landlord. Tenant shall repairany damage resulting from noncompliance with this rule. 16. Tenant shall not install, maintain or operate upon the Premises any vending machine. 17. Tenant shall store all its trash and garbage within its Premises. Tenant shall not place in any trash box orreceptacle any material that cannot be disposed of in the ordinary and customary manner of trash and garbage disposal.All garbage and refuse disposal shall be made in accordance with directions issued from time to time by Landlord. 18. No cooking shall be done or permitted by any Tenant on the Premises, except by the Tenant of Underwriters'Laboratory approved microwave oven or equipment for brewing coffee, tea, hot chocolate and similar beverages shallbe permitted provided that such equipment and use is in accordance with all applicable federal, state and city laws,codes, ordinances, rules and regulations. 19. Tenant shall not use in any space or in the public halls of the Building any hand trucks except those equippedwith the rubber tires and side guards or such other material-handling equipment as Landlord may approve. Tenant shallnot bring any other vehicles of any kind into the Building. 20. Tenant shall not use the name of the Building in connection with or in promoting or advertising the business ofTenant except as Tenant's address. 21. The requirements of Tenant will be attended to only upon appropriate application to the office of the Buildingby an authorized individual. Employees of Landlord shall not perform any work or do anything outside of their regularduties unless under special instruction form Landlord, and no employee of Landlord will admit any person (Tenant or otherwise) to any officewithout specific instructions from Landlord.22. Landlord may waive any one or more of these Rules and Regulations for the benefit of any particular tenant ortenants, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of anyother tenant or tenants, nor prevent Landlord from thereafter enforcing any such Rules and Regulations against any orall of the tenants of the Building. 23. These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, inwhole or in part, the terms, covenants, agreements and conditions of any lease of premises in the Building. 24. Landlord reserves the right to make such other and reasonable rules and regulations as in its judgment mayfrom time to time be needed for safety and security, for care and cleanliness of the Building and for the preservation ofgood order in and about the Building. Tenant agrees to abide by all such rules and regulations in this Exhibit “C” statedand any additional rules and regulations which are adopted. 25. Tenant shall be responsible for the observance of all of the foregoing rules by Tenant's employees, agents,clients, customers, invitees and guests.  EXHIBIT “D-1” RENT SCHEDULE YearAnnual MinimumRentMonthly MinimumRentYear 1$150,183.00$12,515.25Year 2$153,846.00$12,820.50Year 3*$157,509.00$13,125.75Year 4**$161,172.00$13,431.00Year 5**$164,835.00$13,736.25 * Amounts for Year 3 are only through Expansion Premises Commencement Date.** Amounts for Years 4 and 5 are only if Expansion Premises Commencement Date does not occur. EXHIBIT “D-2” RENT SCHEDULE AFTER THE EXPANSION PREMISES COMMENCEMENT DATE YearAnnual MinimumRentMonthlyMinimum RentYear 4*$485,518.00$40,459.84Year 5$496,552.50$41,397.38 * Amount for Year 4 is from and after Expansion Premises Commencement Date. EXHIBIT “E” Expansion Premises EXHIBIT 10.20STRONGBRIDGE BIOPHARMA plc2017 INDUCEMENT PLANSTOCK OPTION AWARDStrongbridge Biopharma plc (the “Company”) has granted you a Stock Option (the “Option”) underthe 2017 Inducement Plan (the “Plan”). The terms of the grant are set forth in the Stock Option AwardAgreement provided to you (the “Agreement”). The following provides a summary of the key terms ofthe grant; however, you should read the entire Agreement, along with the terms of the Plan, to fullyunderstand the grant. SUMMARY OF STOCK OPTION AWARD Grantee:[name]Date of Grant:[date]Vesting Schedule:25% of the Option vesting on the one-yearanniversary of the Date of Grant; the remaining75% of the Option vesting in 12 equal, quarterlyinstallments after the one-year anniversary of theDate of Grant (provided employee is employedby the Company on each vesting date)Exercise Price Per Share:$[_____]Total Number Shares Subject to the Option:[_____]Term/Expiration Date:[date] STRONGBRIDGE BIOPHARMA plc2017 INDUCEMENT PLANSTOCK OPTION AWARD AGREEMENTThis STOCK OPTION AWARD AGREEMENT (the “Agreement”), dated as of [date] (the“Date of Grant”), is delivered by Strongbridge Biopharma plc (the “Company”) to [name] (the“Grantee”).RECITALSA.The 2017 Inducement Plan (the “Plan”) provides for the grant of options to purchaseshares of common stock of the Company (“Company Stock”). The Company has decided to make astock option award as a material inducement to the Grantee to enter into employment with theCompany (or its parent or subsidiary, as applicable) (the “Employer”). Capitalized terms that are usedbut not defined herein shall have the respective meanings accorded to such terms in the Plan. B.The Plan is administered and interpreted by a committee (the “Committee”) composedof at least two members designated by the Board of Directors of the Company (the “Board”).NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby,agree as follows:1. Grant of Option. Subject to the terms and conditions set forth in this Agreement and in thePlan, the Company hereby grants to the Grantee a Stock Option (the “Option”) to purchase [_____]shares of Company Stock at an exercise price of $[_____] per share.2. Vesting. The Option shall become vested and exercisable, according to the following vestingschedule, if the Grantee continues to be employed by, or provide service to, the Employer from theDate of Grant until the applicable vesting date:Vesting Date% of Option Vested25% of the Option vesting on the one-year anniversary of theDate of Grant (provided employee is employed by theCompany on each vesting date)25%the remaining 75% of the Option vesting in 12 equal,quarterly installments after the one-year anniversary of theDate of Grant (provided employee is employed by theCompany on each vesting date)75% - 1 - The vesting of the Option shall be cumulative, but shall not exceed 100% of the shares subject to theOption granted above. If the foregoing schedule would produce fractional shares, the portion of theOption that vests shall be rounded down to the nearest whole share.3. Term of Option.(a) The Option shall have a term of ten (10) years from the Date of Grant and shallterminate at the expiration of that period, unless it is terminated at an earlier date pursuant to theprovisions of this Agreement or the Plan.(b) Unless a later termination date is provided for in a Company-sponsored plan, policy orarrangement, or any agreement to which the Employer is a party, the Option shall automaticallyterminate upon the happening of the first of the following events:(i) The expiration of the ninety (90) day period after the Grantee ceases to beemployed by, or provide service to, the Employer, if the termination is for any reason other thanDisability (as defined in the Plan), death or Cause (as defined in the Plan).(ii) The expiration of the one (1) year period after the Grantee ceases to beemployed by, or provide service to, the Employer on account of the Grantee’s Disability.(iii) The expiration of the one (1) year period after the Grantee ceases to beemployed by, or provide service to, the Employer, if the Grantee dies (x) while employed by,or providing service to, the Employer or (y) within ninety (90) days after the Grantee ceases tobe so employed or provide such services on account of a termination described in subparagraph(i) above.(iv) The date on which the Grantee ceases to be employed by, or provide service to,the Employer on account of a termination by the Employer for Cause. In addition,notwithstanding the prior provisions of this Paragraph 3, if the Committee determines that theGrantee has engaged in conduct that constitutes Cause at any time while the Grantee isemployed by, or providing service to, the Employer or after the Grantee’s termination ofemployment or service, any Option held by the Grantee shall immediately terminate, and theGrantee shall automatically forfeit all shares underlying any exercised portion of an Option forwhich the Company has not yet delivered the share certificates, upon refund by the Companyof the Exercise Price paid by the Grantee for such shares.Notwithstanding the foregoing, in no event may the Option be exercised after the date that isimmediately before the tenth anniversary of the Date of Grant. Any portion of the Option that is notvested and exercisable at the time the Grantee ceases to be employed by, or provide service to, theEmployer shall immediately terminate. 4. Exercise Procedures(a) Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may exercise part orall of the vested Option by delivering a written notice of exercise to the Company in the mannerprovided in this Agreement, specifying the number of shares of Company Stock as to which theOption is to be exercised. The Grantee shall pay the Exercise Price (i) in cash, (ii) by- 2 - delivering shares of Company Stock owned by the Grantee (including Company Stock acquired inconnection with the exercise of an Option, subject to such restrictions as the Committee deemsappropriate) and having a Fair Market Value (as defined in the Plan) on the date of exercise equal tothe Exercise Price or by attestation (on a form prescribed by the Committee) to ownership of shares ofCompany Stock having a Fair Market Value on the date of exercise equal to the Exercise Price; (iii) bypayment through a broker in accordance with procedures permitted by Regulation T of the FederalReserve Board; or (iv) by such other method as the Committee may approve. In addition, the Granteemay elect to settle the Option on a “net basis” by taking delivery of the number of Company Stockequal to Fair Market Value of the shares subject to any Option less the exercise price, any tax (orgovernmental obligation) or other administration fees due. The Company may impose from time totime such limitations as it deems appropriate on the use of shares of Company Stock to exercise theOption. (b) The obligation of the Company to deliver shares of Company Stock upon exercise ofthe Option shall be subject to all applicable laws, rules, and regulations and such approvals bygovernmental agencies as may be deemed appropriate by the Company, including such actions asCompany counsel shall deem necessary or appropriate to comply with relevant securities laws andregulations. The Company may require that the Grantee (or other person exercising the Option afterthe Grantee’s death) represent that the Grantee is purchasing shares of Company Stock for theGrantee’s own account and not with a view to or for sale in connection with any distribution of theshares of Company Stock, or such other representation as the Company deems appropriate. (c) All obligations of the Company under this Agreement shall be subject to the rights of theCompany as set forth in the Plan to withhold amounts required to be withheld for any taxes, ifapplicable. The Grantee may elect to satisfy any tax withholding obligation of the Company withrespect to the Option by having shares of Company Stock withheld up to an amount that does notexceed the minimum applicable withholding tax rate for federal (including FICA), state and local taxliabilities.5. Change of Control. Upon a Change of Control (as defined in the Plan), the Option shallautomatically accelerate and become fully vested and exercisable, provided that the Grantee isemployed by, or providing service to, the Employer on the date of such Change of Control.6. Restrictions on Exercise. Except as the Company may otherwise permit pursuant to the Plan,only the Grantee may exercise rights under the Option during the Grantee’s lifetime and, after theGrantee’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solelyby the personal representative or other person entitled to succeed to the rights of the Grantee, or by theperson who acquires the right to exercise the Option by will or by the laws of descent and distribution,or if permitted in any case by the Committee, pursuant to a domestic relations order or otherwise aspermitted by the Committee, to the extent that the Option is vested and exercisable pursuant to thisAgreement. Any such successor must furnish proof satisfactory to the Company of his or her right toreceive the Option under the Grantee’s will or under the applicable laws of descent and distribution.7. Adjustments. The provisions of the Plan applicable to Adjustments (as described in Section 4of the Plan) shall apply to the Option.- 3 - 8. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of whichare incorporated herein by reference, and in all respects shall be interpreted in accordance with thePlan. The grant and exercise of the Option are subject to interpretations, regulations anddeterminations concerning the Plan established from time to time by the Committee in accordance withthe provisions of the Plan, including, but not limited to, provisions pertaining to (i) rights andobligations with respect to withholding taxes, (ii) the registration, qualification or listing of the shares ofCompany Stock, (iii) changes in capitalization of the Company and (iv) other requirements ofapplicable law. The Committee shall have the authority to interpret and construe the Option pursuantto the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.9. No Employment or Other Rights. The grant of the Option shall not confer upon the Granteeany right to be retained by or in the employ or service of the Company and shall not interfere in anyway with the right of the Company to terminate the Grantee’s employment or service at any time. Theright of the Company to terminate at will the Grantee’s employment or service at any time for anyreason is specifically reserved.10. No Shareholder Rights. Neither the Grantee, nor any person entitled to exercise the Grantee’srights in the event of the Grantee’s death, shall have any of the rights and privileges of a shareholderwith respect to the shares of Company Stock subject to the Option, until certificates for shares ofCompany Stock have been issued upon the exercise of the Option.11. Assignment and Transfers. Except as the Committee may otherwise permit pursuant to thePlan, the rights and interests of the Grantee under this Agreement may not be sold, assigned,encumbered or otherwise transferred except, in the event of the death of the Grantee, by will or by thelaws of descent and distribution or if permitted in any specific case by the Committee, pursuant to adomestic relations order or otherwise as permitted by the Committee. In the event of any attempt by theGrantee to alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any righthereunder, except as provided for in this Agreement, or in the event of the levy or any attachment,execution or similar process upon the rights or interests hereby conferred, the Company may terminatethe Option by notice to the Grantee, and the Option and all rights hereunder shall thereupon becomenull and void. The rights and protections of the Company hereunder shall extend to any successors orassigns of the Company and to the Company’s parents, subsidiaries, and affiliates. This Agreementmay be assigned by the Company without the Grantee’s consent.12. Applicable Law. The validity, construction, interpretation and effect of this Agreement shallbe governed by and construed in accordance with the laws of the State of Delaware, without givingeffect to the conflicts of laws provisions thereof.13. Notice. Any notice to the Company provided for in this Agreement shall be addressed to theCompany in care of the Committee, and any notice to the Grantee shall be addressed to such Granteeat the current address shown on the payroll of the Company, or to such other address as the Granteemay designate to the Company in writing. - 4 - IN WITNESS WHEREOF, the Company has caused its duly authorized officer to executethis Agreement, and the Grantee has executed this Agreement, effective as of the Date of Grant. Strongbridge Biopharma plc: By:Name: Matthew PaulsTitle: Chief Executive Officer I hereby accept the Option described in this Agreement, and I agree to be bound by the terms of thePlan and this Agreement. I hereby further agree that all the decisions and determinations of theCommittee shall be final and binding. Grantee: Name: [name]Date: (Signature Page to Stock Option Award Agreement) EXHIBIT 10.21 STRONGBRIDGE BIOPHARMA PLC2017 INDUCEMENT PLANRESTRICTED STOCK UNIT AWARDStrongbridge Biopharma plc (the “Company”) has determined to grant to you an award of restricted stock units (the“RSUs”) under the 2017 Inducement Plan (the “Plan”). The terms of the grant are set forth in the attached RestrictedStock Unit Award Agreement (the “Agreement”). The following provides a summary of the key terms of theAgreement; however, you should read the entire Agreement along with the terms of the Plan, to fully understand theAgreement.SUMMARY OF RESTRICTED STOCK UNIT AWARDGrantee: [NAME] Date of Grant: [DATE] Vesting Schedule: 100% vest on 2-year anniversary of Date of Grant(provided employee is employed by the Company onsuch vesting date) Total Number of Restricted Stock Units Granted: [# UNITS] STRONGBRIDGE BIOPHARMA PLC2017 INDUCEMENT PLANRESTRICTED STOCK UNIT AWARD AGREEMENTThis RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Agreement”), dated as of [DATE] (the“Date of Grant”), is delivered by Strongbridge Biopharma plc (the “Company”) to [NAME] (the “Grantee”).The Company has determined to provide the Grantee an award of restricted stock units under the 2017Inducement Plan (the “Plan”) and in accordance with the terms and conditions set forth in this Agreement. Capitalizedterms that are used but not defined herein shall have the respective meanings accorded to such terms in the Plan.The Plan is administered and interpreted by a committee (the “Committee”) composed of at least two membersdesignated by the Board of Directors of the Company (the “Board”).The Company and Grantee, intending to be legally bound hereby, agree as follows:1. Grant of Restricted Stock Unit Award. Subject to the terms and conditions set forth in this Agreement andthe Plan, the Company hereby awards to the Grantee [# UNITS] Restricted Stock Units (the “RSUs”) under thePlan. The Grantee accepts the RSUs and agrees to be bound by the terms and conditions of this Agreement and thePlan with respect to the award. Each vested RSU entitles the Grantee to receive one share of Company Stock, asdescribed in Paragraph 2 below.2. Vesting of Award/Payment of Shares.(a) The RSUs shall vest in full on the second anniversary of the Date of Grant (the “Vesting Date”), if theGrantee continues to be employed by, or provide service to, the Company (or its parent or subsidiary, as applicable)(the “Employer”) from the Date of Grant until the Vesting Date.(b) If and when the RSUs vest, the Company will issue to the Grantee one share of Company Stock foreach whole RSU that has vested, subject to satisfaction of the Grantee’s tax withholding obligations as described inParagraph 5 below, in accordance with Section 7(c) of the Plan. The RSUs shall cease to be outstanding upon suchissuance of shares.(c) Unless otherwise provided in a Company-sponsored plan, policy or arrangement, or any agreement towhich the Employer is a party, the Grantee shall forfeit the unvested RSUs in the event the Grantee ceases to beemployed by, or provide service to, the Employer prior to the Vesting Date.3. No Stockholder Rights Prior to Settlement; Issuance of Certificates. In accordance with Section 7(e) of thePlan, the Grantee shall have no rights as a stockholder with respect to any  shares of Company Stock represented by the RSUs until the date of issuance of the shares of Company Stock (asevidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of theCompany), if applicable. Except as otherwise required by the Plan, no adjustment shall be made for dividends,distributions, or other rights for which the record date is prior to the date, if any, that shares of Company Stock areissued.4. Change of Control. The provisions of the Plan applicable to a Change of Control (as described in Section 10of the Plan) shall apply to the RSUs.5. Withholding. The Grantee shall be required to pay to the Company, or make other arrangements satisfactoryto the Company to provide for the payment of, any federal, state, local or other taxes that the Employer is required towithhold with respect to the grant or vesting of the RSUs, or the Employer may deduct from other wages paid by theEmployer the amount of any withholding taxes due with respect to the RSUs. The Grantee may elect to satisfy anyincome tax withholding obligation of the Employer with respect to the RSUs by having shares of Company Stockwithheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (includingFICA), state, local and other tax liabilities. Unless the tax withholding obligations of the Company are satisfied, theCompany shall have no obligation to deliver to the Grantee any Company Stock. In the event the Company’sobligation to withhold arises prior to the delivery to the Grantee of shares of Company Stock or it is determined afterthe delivery of shares of Company Stock to the Grantee that the amount of the Company’s withholding obligation wasgreater than the amount withheld by the Company, the Grantee agrees to indemnify and hold the Company harmlessfrom any failure by the Company to withhold the proper amount.6. Adjustments. The provisions of the Plan applicable to adjustments (as described in Section 4 of the Plan) shallapply to the RSUs.7. Assignment and Transfers. Except as the Committee may otherwise permit pursuant to the Plan, the rightsand interests of the Grantee under this Agreement may not be sold, assigned, encumbered or otherwise transferredexcept, in the event of the death of the Grantee, by will or by the laws of descent and distribution. In the event of anyattempt by the Grantee to alienate, assign, pledge, hypothecate, or otherwise dispose of the RSUs or any righthereunder, or in the event of the levy or any attachment, execution or similar process upon the rights or interests herebyconferred, the Company may terminate the RSUs by notice to the Grantee, and the RSUs and all rights hereunder shallthereupon become null and void. The rights and protections of the Company hereunder shall extend to any successorsor assigns of the Company and to the Company’s parents, subsidiaries, and affiliates. This Agreement may beassigned by the Company without the Grantee’s consent.8. Miscellaneous.(a) No Right to Employment. The grant of the RSUs shall not be construed as giving the Grantee the rightto be retained by or in the employ of the Employer or any other employment right.(b) Delivery Subject to Legal Requirements. The obligation of the Company to deliver stock shall besubject to the condition that if at any time the Board shall determine in its discretion-2- that the listing, registration or qualification of the shares upon any securities exchange or under any state or federal law,or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or inconnection with, the issue of shares, the shares may not be issued in whole or in part unless such listing, registration,qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to theBoard. The issuance of shares to the Grantee pursuant to this Agreement is subject to any applicable taxes and otherlaws or regulations of the United States or of any state having jurisdiction thereof.(c) RSUs Subject to Plan. By entering into this Agreement the Grantee agrees and acknowledges that theGrantee has received and read a copy of the Plan. The RSUs are subject to the terms and provisions of the Plan, asthey may be amended from time to time, and such terms and provisions of the Plan are hereby incorporated herein byreference. In the event of a conflict between any term or provision contained herein and a term or provision of thePlan, the applicable terms and provisions of the Plan will govern and prevail.(d) Committee Authority. By entering into this Agreement the Grantee agrees and acknowledges that alldecisions and determinations of the Committee shall be final and binding on the Grantee, his or her beneficiaries andany other person having or claiming and interest in the RSUs.(e) Severability. If any provision of this Agreement is or becomes or is deemed to be invalid, illegal orunenforceable in any jurisdiction or would disqualify this Agreement or the RSUs under any applicable law, suchprovision shall be construed or deemed amended to conform to applicable law (or if such provision cannot be soconstrued or deemed amended without materially altering the purpose or intent of this Agreement and the grant of theRSUs hereunder, such provision shall be stricken as to such jurisdiction and the remainder of this Agreement and theaward shall remain in full force and effect).(d) Notices. Any notice to be given to the Company under the terms of this Agreement shall be addressedto the Company, at the attention of the Committee, at its principal place of business, and any notice to be given toGrantee may be sent to Grantee’s address as it appears in the payroll records of the Company, or at such otheraddresses as either party may designate in writing to the other.(e) Section 409A. This Agreement and the RSUs granted hereunder are intended to fit within the “short-term deferral” exemption from Section 409A of the Code, as set forth in Treasury Regulation Section 1.409A-1(b)(4)or any successor provision, or to comply with, or otherwise be exempt from, Section 409A of the Code. ThisAgreement and the RSUs shall be administered, interpreted and construed in a manner consistent with Section 409A ofthe Code.(f) Governing Law. The validity, construction, interpretation and effect of this Agreement shall begoverned by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflictof laws provisions thereof(g) Interpretation. The Grantee accepts the RSUs subject to all the terms and provisions of this Agreementand the terms and conditions of the Plan.-3- (g) Headings. Headings are given to the paragraphs and subparagraphs of this Agreement solely as aconvenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to theconstruction or interpretation of this Agreement or any provision thereof.(h) Counterparts. This Agreement may be executed in one or more counterparts, each of which will bedeemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constituteone and the same agreement. Facsimile or other electronic transmission of any signed original document orretransmission of any signed facsimile or other electronic transmission will be deemed the same as delivery of anoriginal.(i) Complete Agreement. Except as otherwise provided for herein, this Agreement and those agreementsand documents expressly referred to herein embody the complete agreement and understanding among the parties andsupersede and preempt any prior understandings, agreements or representations by or among the parties, written ororal, which may have related to the subject matter hereof in any way. The terms of this Agreement shall be bindingupon the executors, administrators, heirs, successors and assigns of the Grantee. [Signature Page Follows] -4- IN WITNESS WHEREOF, the Company and Grantee have executed this Agreement as of the grant dateshown above. Strongbridge Biopharma plc By: Name:Matthew Pauls Title:Chief Executive Officer I hereby accept the RSUs described in this Agreement, and I agree to be bound by the terms of the Plan and thisAgreement. I hereby further agree that all the decisions and determinations of the Committee shall be final andbinding. GRANTEE: Name: [NAME] Date: (Signature Page to Restricted Stock Unit Award Agreement)EXHIBIT 10.28 LICENSE AND ASSIGNMENT AGREEMENT dated 16 JANUARY 2018 by AETERNA ZENTARIS GMBHthe Licensor and Thei  Table of contents 1.Definitions and interpretation12.Grant of rights / license133.Governance154.Technology transfer and technical / regulatory assistance185.Development196.Supply227.Commercialization.258.Financial Provisions299.Trademarks3210.Intellectual Property (except Trademarks)3311.Confidentiality3612.Representations, warranties and covenants3813.Indemnity and insurance cover4214.Duration and termination of the agreement4515.Assignment/succession4916.Governing law and disputes5017.Miscellaneous51 Schedule 1CMO Contracts Schedule 2Technology Transfer Critical Materials and Timing Schedule 3FDA Letters Schedule 4Licensor Materials to be Transferred to Licensee Schedule 5Disclosure Schedule Schedule 6Domain Names Schedule 7Licensor Patent Rights Schedule 8Supply Chain Schedule 9Development Plan Schedule 10PIP Budget ii  License and Assignment AgreementThis Agreement is dated 16 January 2018 (“Effective Date”)Between, (the “"),; andStrongbridge Ireland Limited, a corporation incorporated under the laws of Ireland, (the “"),.The Licensor and the Licensee sometimes being referred to in this Agreement as a “Party” or together the “Parties”.RecitalsA. The Licensor owns or has the exclusive right to certain technology, intellectual property rights, regulatory filesand confidential and/or proprietary information relating to the Product (as defined below).B. The Licensor is interested in assigning the ownership of the Product Registrations (as defined below) andgranting an exclusive license under the intellectual property to the Licensee to carry out development,manufacturing, registration and commercialization of the Product in the Territory (as defined below).C. The Licensee, together with its Affiliates (as defined below), are engaged in the development, manufacturingand commercialization of pharmaceutical products in the Territory and possess the resources, skills andexperience there necessary to perform their obligations under this Agreement.The Parties now agree as follows:1. Definitions and interpretation“Adult Indication” means assessing GHD in adults.“Affiliates” means an entity that has a relationship directly or indirectly with another entity such that eitherentity is Controlled by, Controlling, has the power to Control, or under common Control with the other entity, ora third party Controls, or has the power to Control, both of the entities, where “Control” means possession,directly or indirectly, of the power to direct or cause the direction of the activities, management and policies ofthe relevant entity and in the case of a corporate entity shall include but not be limited to the holding of morethan fifty percent (50%) of the share capital of the entity or the equivalent power or authority to elect more thanfifty percent (50%) of the board of directors of such entity or the equivalent management body. The Partiesacknowledge that in the case of certain entities organized under the Laws of certain countries outside of the EU,the maximum percentage ownership permitted by Law for a foreign investor may be less than fifty percent(50%), and that in such case such lower percentage shall be substituted in the preceding sentence, provided thatsuch foreign investor has the power to direct the management and policies of such entity.“Agreement” means this License and Assignment Agreement together with its attached Schedules.“Anti-Bribery Law” means the US Foreign Corrupt Practices Act, UK Bribery Act 2010 and any otherapplicable Law, rule, regulation, or other legally binding measure of any jurisdiction that relates to bribery,corruption, or, for purposes of U.S. Law, transfers of value to licensed healthcare providers.1  “API” means the active pharmaceutical ingredient macimorelin acetate, and any metabolite, salt, ester, hydrate,solvate, isomer, enantiomer, free acid form, free base form, crystalline form, co-crystalline form, amorphousform, pro-drug, racemate, polymorph, chelate, stereoisomer, tautomer, or optically active form of any of theforegoing.“Bankruptcy Event” means, with respect to either Party:(a) a notice having been issued to convene any meeting for the purpose of passing a resolution or seekinga petition to wind up or liquidate that Party, or to seek bankruptcy or official administration, or such aresolution having been passed or such a petition having been issued, including a petition under title 11of the United States Code or any similar statute, Law or regulation (except in relation to a solventreconstruction or reorganization of that Party);(b) an involuntary petition in an insolvency proceeding or any proceeding seeking reorganization,arrangement composition, readjustment, liquidation or similar relief under any statute, Law or regulation,is filed against a Party and is not dismissed or stayed within ninety (90) days of the filing thereof or thatParty admits or accepts;(c) a trustee in bankruptcy, receiver, administrative receiver, receiver and manager, court appointedreceiver, interim receiver, custodian, sequestrator or similar officer is appointed in respect of that Party orover any part of that Party's assets or any third party takes steps to appoint such an officer in respect ofthat Party and is not dismissed, vacated or stayed within ninety (90) days of the appointment thereof andif stayed, is not dismissed or vacated within ninety (90) days of the such stay;(d) a Party takes any step, (including starting negotiations), with a view to readjustment, rescheduling ordeferral of any part of that Party's indebtedness including a moratorium with creditors, or proposes ormakes any general assignment, composition or arrangement with or for the benefit of all or some of thatParty's creditors or makes or suspends or threatens to suspend making payments to all or some of thatParty's creditors or the Party submits to any type of voluntary arrangement with creditors; or(e) a Party takes any step, (including starting negotiations), to file a petition or answer seeking for that Partyany reorganization, arrangement, composition, conservatorship, winding up, readjustment, liquidation orsimilar relief under any statute, Law or regulation.“Business Day” means between 9.00 am and 5.00 pm local time on a day other than a Saturday, Sunday, bankor other public holiday in Germany or any State in the USA.“Calendar Quarter” means each period of three months ending on 31 March, 30 June, 30 September or 31December.“Calendar Year” means each successive period of twelve calendar (12) months commencing on 1 January.“Children” means persons 18 years of age or younger including neonates, infants and adolescents.“Clinical Trial” means the administration of the Product to humans for purposes of generating data oncharacteristics of the Product including, without limitation, any study carried out in order to obtain or maintain aRegulatory Approval in any country of the Territory.“CMO” means a Person that conducts contract manufacture on behalf of another Person.2  “CMO Contracts” means those contracts set out at Schedule 1.“Commercial Information” means all information which is Controlled and relates to the pricing,reimbursement, marketing, promotion and selling of the Product including but not limited to (i)commercialization plans, strategic and implementation; and (ii) pharmaco-economic studies justifying pricing;and (iii) analysis of competitive products and environment including market research reports; and (iv) productpositioning strategies (including unique selling proposition and understanding of competitors' positioningstrategies) and promotional strategies (including Promotional Materials); and (v) Pricing Approval submissionsand the content of bids for tenders; and (vi) virtual product and clinical support approaches and techniques viaweb page; and (vii) medical education strategies; and (viii) strategies used for building relationships with healthinsurance and managed care entities; and (ix) analysis of market sales and prescription data; (x) terms ofcontractual arrangements with purchasers; and (xi) customer lists.“Commercialize” or “Commercialization” means any and all activities directed to commercialization,including marketing, promoting, detailing, importing, distributing, warehousing, offering for sale, having soldand/or selling a pharmaceutical product, including market research, pre-launch marketing and educationalactivities, and sampling.“Commercially Reasonable Efforts” means, in respect of a Party, efforts and resources commonly used by apharmaceutical company of a similar size to that Party, based on market capitalization, to Commercialize (orwhere the phrase 'Commercially Reasonable Efforts' is used in this Agreement in a context other than relating toCommercialization, to perform such other act as the operative language of this Agreement states) a productowned by such a company or to which it has rights, which product is at a similar stage in its development orproduct life and is of similar market potential to the Product, in each case taking into account issues of safetyand efficacy, product profile, the proprietary position, the then-current competitive environment for suchproduct and the likely timing of such product’s entry into the market, the regulatory environment and status ofsuch product, and other relevant scientific, technical and commercial factors, in each case as measured by thefacts and circumstances at the time such efforts are due and in relation to the country or countries to which suchefforts pertain.“Confidential Information” means, subject to the relevant carve-outs set forth in Section 11:(a) the terms and conditions of this Agreement, for which each Party will be considered a Disclosing Partyand a Recipient Party;(b) the Dossier, Know How and Commercial Information within the Licensor IPR Package for which theLicensor will be considered the Disclosing Party and the Licensee shall be the Recipient Party;(c) information within the Licensee IPR Package in relation to which the Licensee will be considered theDisclosing Party and the Licensor the Recipient Party; and(d) any other non-public information, whether or not patentable, disclosed or provided by one Party to theother Party in connection with this Agreement, including, without limitation, information regarding suchParty's strategy, business plans, objectives, research, technology, products, business affairs or financesincluding any non-public data relating to Commercialization of any product and other information of thetype that is customarily considered to be confidential information by parties engaged in activities that aresubstantially similar to the activities being engaged in by the Parties under this Agreement, for which theParty making such disclosure will be considered the Disclosing Party and the receiver will be theRecipient Party.3  “Control” (including variations such as “Controlled” and except as used in the definition of 'Affiliates') meanswith respect to any intellectual property or other rights, possession of the right, whether directly or indirectly,and whether by ownership, license or otherwise, to assign, or grant a license, sub-license or other right to orunder, such intellectual property or other rights without violating the terms of any agreement or otherarrangement with any Third Party.“Cost of Manufacture” means the amounts paid or payable by the relevant Party to the CMO in respect ofrelevant Products or Materials supplied.“CTD Format” means the format of a common technical document recommended by ICH or adopted by anyGovernmental Authority in the Territory responsible for marketing authorization or monitoring the marketing ofthe Product that are formatting requirements or methods for the submission of other or supplemental informationor data to such Government Authority and as may be updated from time to time.“CTM” shall mean Product in a form suitable for administration to humans in a Clinical Trial manufactured inaccordance with the specifications and GMP and as required by any IND appropriately packaged and labelled.“Data Room” means the data room hosted and operated by Merrill for and on behalf of the Licensor, entitled'Macrilen';“Development (and the corresponding verb “to Develop”) means all development and regulatory activitiesregarding the Product and the API in the Territory, including:(a) carrying out the PIP or any other pediatric study required to obtain Regulatory Approval for the Productfor the Pediatric Indication in any country in the Territory; and(b) preparing, submitting, reviewing or developing data or information necessary for the purpose ofsubmission to a Regulatory Authority to obtain or maintain and/or expand Regulatory Approval of theProduct in the Territory including data management, statistical designs and studies, documentpreparation, and other related administrative costs.“Development Costs” means the direct and indirect costs of the PIP currently anticipated to be five million tosix million dollars ($5,000,000 –$6,000,000) as set forth in the PIP Budget, subject to any increases of suchbudget agreed by the Parties.“Development Plan” means the plan for carrying out the PIP attached in Schedule 9, as such plan may beupdated in accordance with Section 5, either in relation to the PIP or otherwise.“Disclosing Party” means the Party which discloses Confidential Information to the other Party.“Disclosure Schedule” means the disclosure schedule, in the form of Schedule 5.“Documents” means analyses, books, CD-ROM, charts, comments, computations, designs, discs, diskettes,files, graphs, ledgers, notebooks, paper, photographs, plans, records, recordings, reports, research notes, tapes,web pages and websites, and any other graphic or written data or other media on which Know How is madeavailable, communicated, or use whether permanently stored or available temporarily through other means, andadvertising and Promotional Materials of any nature whatsoever including preparatory materials for the same.4  “Dossier” means the information and data for the Product in a country in CTD Format (or otherwise) and asregistered with a Regulatory Authority for the Regulatory Approval containing the administrative, safety,efficacy, quality, non-clinical and clinical data, chemistry and manufacturing control data and communicationswith the Regulatory Authority for the Product as it may change from time to time.“EMA” means the European Medicines Agency.“Encumbrance” means a mortgage, charge, pledge, lien, option, restriction, right of first refusal, right of pre-emption, third party right or interest, other encumbrance or security interest of any kind, or another type ofpreferential arrangement (including, without limitation, a title transfer or retention arrangement) having similareffect but for the purposes of this Agreement always excluding a license.“EU” means the countries of the European Union from time to time which are currently Austria, Belgium,Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland,Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain,Sweden and includes the United Kingdom regardless of future treaty or common relationships with the othercountries in the EU or Europe.“Europe” means that group of countries comprised of the EU plus (if they are not Member States) Iceland,Liechtenstein, Norway, Switzerland and UK.“Existing CMO Contracts” has the meaning given to it in Section 6.1.“Existing Indications” means the Adult Indication and the Pediatric Indication.“Exploitation Agreement” means the exploitation agreement between (i) Aeterna Zentaris GmbH (formerlyZentaris GmbH); (ii) The Centre National De La Recherche Scientifique; (iii) The University of Montpellier 1;and (iv) The University of Montpellier 2, entered into in 2005.“FDA” means the U.S. Food and Drug Administration.“Final Report” means the clinical study report including attachments, quality assurance, monitoring reports,and raw data that record the performance or information generated from a Clinical Trial, whether or notcompliant with ICH E3 or conducted under GCP, and that includes such personal health information or personalidentifying information as may be necessary to assure the quality and integrity of the report.“First Commercial Sale Date” means the date of the first commercial sale in an arm's length transaction to aThird Party of the Product for an Existing Indication in each country in the Territory by or on behalf of theLicensee, an Affiliate, Sub-licensee after obtaining Regulatory Approval and any Pricing Approvals for theProduct necessary or desirable in such country. For clarity “First Commercial Sale Date” shall not be any dateon which sale of Product for an Existing Indication occurs in the Territory for use on a compassionate use ornamed patient basis.“Formal Presentation” means a presentation of the results of a Clinical Trial based on the data and conclusionsset out in an Interim Report.“GCP” means the then-current standards, practices and procedures for good clinical practices, including but notlimited to those promulgated or endorsed by:(c) the European Commission Directive 20/2001/EC relating to good clinical practice in clinical trials onmedicinal products for human use;5  (d) the ICH Harmonised Tripartite Guidelines for Good Clinical Practice (E6) and any other guidelines forgood clinical practices for trials on medicinal products in the European Union;(e) the FDA as set forth in the guidelines entitled "Guidance for Industry E6 Good Clinical Practice:Consolidated Guidance," including related regulatory requirements imposed by the FDA and theprovisions of 21 C.F.R. Part 312; and(f) the equivalent applicable Law in any relevant country.“GHD” means growth hormone deficiency.“GLP” means the then-current standards, practices and procedures for good laboratory practices, including butnot limited to those promulgated or endorsed by:(g) the European Commission Directives 2004/9/EC and 2004/10/EC relating to the application of theprinciples of good laboratory practices as well as "The rules governing medicinal products in theEuropean Union," Volume 3, Scientific guidelines for medicinal products for human use (ex - OECDprinciples of GLP);(h) the then-current standards, practices and procedures promulgated or endorsed by the FDA as defined in21 C.F.R. Part 58; and(i) the equivalent applicable Law in any relevant country.“GMP” means the then-current standards, practices and procedures for good laboratory practices, including butnot limited to those promulgated or endorsed by:(j) the European Commission Directives 2004/9/EC and 2004/10/EC relating to the application of theprinciples of good laboratory practices as well as "The rules governing medicinal products in theEuropean Union," Volume 3, Scientific guidelines for medicinal products for human use (ex - OECDprinciples of GLP);(k) the then-current standards, practices and procedures promulgated or endorsed by the FDA as defined in21 C.F.R. Part 58; and(l) the equivalent applicable Law in any relevant country;“Government Authority” shall have the same meaning as Regulatory Authority.“ICH” means the International Council on Harmonisation of Technical Requirements for Registration ofPharmaceuticals for Human Use.“IND” means an Investigational New Drug Application exemption or Clinical Trial Application filed with,acknowledged, or accepted by, Governmental Authorities prior to beginning clinical trials in humans in anycountry, or any comparable application to and acceptance by the Regulatory Authority of a country or group ofcountries prior to beginning clinical trials in humans in that country or in that group of countries.“Interim Report” shall mean a written report that contains an initial analysis of the results of a Clinical Trialonce that Clinical Trial has completed and the data from that Clinical Trial has been collated and analyzed and,in particular reporting, on the extent to which the endpoints of the Clinical Study have been met but which is notthe Final Report, has not yet been subject to quality assurance and precedes the Final Report.“JSC” means the joint steering committee established under Section 3.1.6  “Know How” means technical and other information which is not in the public domain, including informationand data comprising or relating to (i) non-clinical data including pharmacological, toxicological and metabolicdata and results of all non-clinical studies relevant to the product; and (ii) clinical safety and efficacy dataincluding data analyses, study reports and information contained in protocols, filings or other submissions toand responses from ethical committees and Regulatory Authorities; and (iii) safety (pharmacovigilance) data;and (iv) production facilities and processes including any drug master file, specifications, techniques,manufacturing line procedures, chemistry and manufacturing control data, standard operating proceduresquality assurance and quality control processes and techniques, and all other documentation retained to complywith GMP procedures; and (v) information relating to contract manufacturers and the manufacturing supplychain of the Product, including API, fill finish, primary and secondary packaging (items (iv) and (v) togetherbeing “Manufacturing Know How”). Know How includes (a) Documents containing Know How; and (b)includes and covers any legal rights including trade secrets, copyright, database or design rights protecting suchKnow How. The fact that an item is known to the public shall not be taken to preclude the possibility that acompilation including the item, and/or a development relating to the item, is not known to the public.“Knowledge” means a Party's and its Affiliates' understanding in good faith as possessed in the case ofLicensor, by Michael Ward, Gilbert Mueller, Brian Garrison, Richard Sachse or Matthias Gerlach and in the caseof Licensee, by Stephen Long, Matthew Pauls and A. Brian Davis, of the relevant facts and information afterperforming a reasonable investigation with respect to such facts and information.“Launch” means the initial transfer of the Product billed or invoiced by Licensee (or an Affiliate or Sub-licensees) to a non-Sub-licensee Third Party in the Territory following the Effective Date.“Law” or “Laws” means any federal, state, local, municipal, foreign, international, multinational, or otherconstitution, law, statute, treaty, rule, regulation, ordinance, code, binding case law or principle of common law,rule or regulation, promulgated or issued by an Governmental Authority, as well as any Judgments, decrees,injunctions or agreements of any entity in the course of dispute resolution that might have binding orprecedential effect on the Parties, and also includes any industry standard, third party certification, any technicalor scientific standard to which adherence is required by any Governmental Authority and any rules or policiesof non-governmental accreditation, standards, certification, or oversight bodies and includes any obligations orresponsibilities applicable to holders of Product Registrations including, without limitation, pharmacovigilanceand required annual or expedited reporting needed to maintain such Product Registration.“Legal Requirement” means any applicable Law of any Government Authority including any amendment,extension or replacement thereof which is from time to time in force.“License” means the rights and license granted by Licensor to Licensee pursuant to the terms of Section 2.1.“Licensee CMO Contracts” has the meaning given to it in Section 6.2.“Licensee IPR Package” means the intellectual property and other rights at any time during the TermControlled by the Licensee or its Affiliates relating to the Product pursuant to Section 10.3 including but notlimited to:(a) Licensee Patent Rights;(b) Know How;7  (c) Dossiers;(d) Commercial Information; and(e) the Licensee Trademark.“Licensee Know-How” means the Know-How Controlled by the Licensee at the date of termination of thisAgreement solely to the extent related to the Product.“Licensee Materials” means the Materials Controlled by the Licensee at the date of termination of thisAgreement that are necessary to Manufacture the Product.“Licensee Patent Rights” means all Patent Rights generated or developed by or on behalf of the Licenseeand/or its Affiliates at any time during the Term of this Agreement containing claims covering the Product or theManufacturing of the Product.“Licensee Trademarks” means all Trademarks Controlled by the Licensee relating solely to the Product, butexcludes the Licensor Trademark.“Licensor IPR Package” means the intellectual property and other rights Controlled by the Licensor or itsAffiliates relating to the Product (with the exception of the Licensor Materials, Controlled at any time during theTerm) including but not limited to:(a) the Licensor Patent Rights;(b) Know How;(c) Dossiers;(d) the Commercial Information in relation to the Territory; and(e) the Licensor Trademark.“Licensor Materials” means those Materials of the Licensor as set out in Schedule 4.“Licensor Patent Rights” means the Patent Rights Controlled by the Licensor at any time during the Term ofthis Agreement in the countries of the Territory containing claims covering the Product and approved uses of theProduct, which at the Effective Date are those set out in Schedule 7.“Licensor Supply Period” has the meaning given to it in Section 6.4.“Licensor Trademark” means the Macrilen trademark registered in the Territory and any accompanying logos,trade names, trade dress and/or other indicia relating to the Product Controlled by the Licensor.“Losses” means any and all losses, damages, liabilities, costs and expenses (including, without limitation,reasonable attorneys' fees and expenses). In calculating “Losses”, the duty to mitigate on the part of the Partysuffering the Losses shall be taken into account.“Manufacture” or “Manufacturing” means to make, have made, produce, manufacture, process, fill, finish,package, label, perform quality control testing, perform quality assurance, release procedures, ship or store acompound or product or any component thereof. When used as a noun, “Manufacture” or “Manufacturing”means any and all activities involved in Manufacturing a compound or product or any component thereof.“Material” means any quantities of raw materials (including, without limitation, active pharmaceuticalingredients, drug substance, precursors, intermediates, drug product and8  excipients), labels, packaging materials, dedicated physical components, and dedicated equipment, referencestandards or reagents, needed for the Manufacturing of the Product.“NDA” means the new drug application filed with and approved by the FDA for the Product having NDAnumber 205598.“NDA Product” means the Product that is the subject of the NDA.“Net Sales” means:(m) the gross amount invoiced by the Licensee, its Affiliates, Sub-licensees or Sub-distributors for sale ofProducts to third parties, less the following deductions relating to sales of the Products in each case asrequired by applicable GAAP:(i) normal and customary trade, cash and quantity discounts accrued or actually given, credits,price adjustments or allowances for damaged products, returns or rejections of products;(ii) chargeback payments and rebates (or the equivalent thereof) for the Product granted to grouppurchasing organizations, managed health care organizations or to federal, state/provincial, localand other governments, including their agencies, or to trade customers;(iii) reasonable and customary freight, shipping insurance and other transportation expenses directlyrelated to the sale of the Product (if actually borne by the Licensee, its Affiliates, or Sub-licenseeswithout reimbursement from any Third Party);(iv) required distribution commissions/fees payable to any Third Party providing distributionservices to the Licensee; and(n) sales, value-added, excise taxes, tariffs and duties, and other taxes and government charges directlyrelated to the sale, to the extent that such items are included in the gross invoice price of the Product andactually borne by the Licensee, its Affiliates, or Sub-licensees without reimbursement from any ThirdParty (but not including taxes assessed against the income derived from such sale).For these purposes sale of Products shall include the Product as Developed by the Licensee from time to time.Nothing herein shall prevent Licensee or any of its Affiliates or Sub-licensees from making selling, distributingor invoicing Product at a discounted price for shipments to Third Parties in connection with clinical studies,sampling, compassionate sales, or an indigent program or similar bona fide arrangements in which such partyagrees to forego a normal profit margin for good faith business reasons and notwithstanding anything herein tothe contrary, to the extent such distribution is made without charge it shall not be deemed a sale for purposes ofdetermining Net Sales. Sales or other commercial dispositions of Products (1) between Licensee and its Affiliatesand/or its Sub-licensees (except where such Affiliates or Sub-licensees are an end user of the Product), or (2)provided to Third Parties without charge, in connection with research and development, Clinical Trials,compassionate use, humanitarian and charitable donations, or indigent programs or for use, in reasonable andcustomary quantities, as samples, shall in each case, be excluded from the computation of Net Sales, and nopayments will be payable on such sales or such other commercial dispositions.“New Indication” means an indication for the treatment of any disease or condition other than the ExistingIndications.9  “Outstanding CMO Contracts” has the meaning given to it in Section 6.1.“Pediatric Indication” means assessing GHD in Children.“Patent Rights” means:(a) all national, regional and international patents and patent applications, including provisional patentapplications; and(b) all patent applications filed either from such patents, patent applications or provisional applications orfrom an application claiming priority from any of these, including divisionals, continuations,continuations-in-part, provisionals, converted provisionals, and continued prosecution applications; and(c) any and all patents that have issued or in the future issue from the foregoing patent applications inparagraphs (a) and (b) above, including author certificates, inventor certificates, utility models, pettypatents and design patents and certificates of invention; and(d) any and all extensions or restorations by existing or future extension or restoration mechanisms,including revalidations, reissues, re-examinations and extensions (including any supplementaryprotection certificates and the like) of the foregoing patents or patent applications in paragraphs (a) to (c)above inclusive, and(e) any similar rights, including so-called pipeline protection (where the subject matter previously disclosedwas not previously patentable in a particular jurisdiction but subsequently becomes patentable subjectmatter in such jurisdiction), or any importation, revalidation, confirmation or introduction patent orregistration patent or patent of additions to any such foregoing patent applications and patents.“Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership,corporation, limited liability company, business trust, joint stock company, trust, incorporated association, jointventure or similar entity or organization, including a government or political subdivision, department or agencyof a government."PIP" means the pediatric investigation plan, pediatric study plan, the pediatric study, pediatric drugdevelopment and/or any other clinical or pharmacological data collection as submitted to and agreed by EMA(April 11 2017) and which will support authorization of PGHD for the Product by EMA and as further requestedby FDA in FDA’s Pediatric Written Request (PWR) under the Best Pharmaceuticals for Children Act (BPCA)which PWR stipulates that the PIP as submitted and agreed to by EMA will meet the requirements to obtain aperiod of pediatric exclusivity in the U.S..“PIP Budget” means the budget attached hereto as Schedule 10, which budget relates to the PIP and sets out thedirect and indirect costs of the PIP anticipated by the Parties as at the Effective Date as such budget may beupdated from time to time in accordance with Section 5.5.“Pricing Approval” means:(a) such approval, agreement, determination or governmental decision establishing prices for the Productthat can be charged and will be reimbursed by Government Authorities in countries in the Territorywhere Government Authorities or Government Authorities of such country approve or determine pricingfor pharmaceutical products for reimbursement or otherwise; and10  (b) a price established in a supply contract with a Government Authority following a tender process.“Product” means any pharmaceutical product containing the API, including the product developed by theLicensor for the Existing Indications and approved by the FDA for marketing in the United States under theNDA.“Product Registrations” means all applications (including any IND, and the NDA), orphan designations, newdrug applications, abbreviated new drug applications, new drug submissions, and any comparable applicationsand submissions, together with any and all supplements or modifications or amendments thereto, whetherexisting, pending, withdrawn or in draft form, together with all correspondence to or from any Governmental orRegulatory Authority with respect thereto, prepared and submitted to any Governmental or RegulatoryAuthority in the Territory with respect to the Product including the NDA and any supplemental drugapplications filed with and approved by the FDA or other Regulatory Authorities for the Product whetherrelating to the Pediatric Indication, a New Indication and/or other dosages of the Product.“Promotional Materials” means all sales representative training materials and all written, printed, graphic,electronic, audio or video matter, including journal advertisements, sales visual aids, leave-behind items,reprints, direct mail, internet postings and sites and broadcast advertisements intended for use or used by or onbehalf of Licensee or its Affiliates in connection with any promotion of a Product.“Recipient Party” means the Party which receives Confidential Information from the other Party.“Regulatory Approval” means any approval required from a Regulatory Authority to market and sell apharmaceutical product in any country of the Territory including the NDA, but excluding any Pricing Approvalrequired or commercially desirable.“Regulatory Authority” means any supranational, national or local parliament, regional, state, county, city,town, village, municipal, district, commission, department or agency including FDA, EMA, or any competentauthority in the EU, Europe or the United Kingdom or other country in which the Product holds marketingauthorization, authority (including a listing authority in relation to a stock exchange), inspectorate, minister,ministry official, or other public or statutory Person (whether autonomous or not), multinational organization orany other body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police,regulatory or taxing authority or power of any nature over the Parties.“Regulatory Submissions” means any submission by a Person to a Regulatory Authority in connection with theProduct.“Royalty Term” means, Existing Indication by Existing Indication, and country by country of the Territory, theperiod that is from the First Commercial Sale Date until the later of either:(a) the expiry of all Valid Claims of the Licensor Patent Rights in such country;(b) the expiration of any regulatory marketing exclusivity period or other statutory designation thatprovides similar exclusivity for the Commercialization of the Product in such country; and(c) ten (10) full Calendar Years following such First Commercial Sale Date.Where “expiry” in relation to a Valid Claim for purposes of royalty calculations means the cessation of a claimto meet the definition of Valid Claim.11  “Sub-licensee” means a Third Party to whom the Licensee or its Affiliates grants a sublicense in accordance withSection 2.“Supply Chain” has the meaning given to it in Section 6.1.“Taxes” means all taxes of any kind, and all charges, fees, customs, levies, duties, imposts, required deposits orother assessments, including all federal, state, local or foreign net income, capital gains, gross income, grossreceipt, property, franchise, sales, use, excise, withholding, payroll, employment, social security, workers'compensation, unemployment, occupation, capital stock, ad valorem, value added, transfer, gains, windfallprofits, net worth, asset, transaction, and other taxes, and any interest, penalties or additions to tax with respectthereto, imposed upon any individual or entity by any taxing authority or other governmental authority underthe Laws of the applicable country in the Territory.“Term” means the period commencing on the Effective Date and, unless earlier terminated in accordance withthis Agreement, expiring country by country of the Territory at the end of the Royalty Term in such country.“Term Loan Agreement” means the Term Loan Agreement, dated as of July 14, 2017, among StrongbridgeU.S. Inc., a Delaware corporation, Strongbridge Biopharma Public Limited Company, a public limited companyincorporated under the laws of Ireland, the Licensee, Cortendo Cayman Ltd., an exempted companyincorporated in the Cayman Islands, Cortendo AB (Publ), a public limited liability company incorporated underthe laws of Sweden, the subsidiary guarantors from time to time party thereto, the lenders from time to timeparty thereto and CRG Servicing LLC, a Delaware limited liability company, as amended, supplemented orotherwise modified from time to time.“Territory” means the United States of America and Canada.“Third Party” means a party other than either of the Parties or any of their respective Affiliates.“Trademarks” means registered trademarks and applications thereof, unregistered trade or service marks, getup, logos, trade dress and company names in each case with any and all associated goodwill and all rights orforms of protection of a similar or analogous nature including rights which protect goodwill.“Valid Claim” means either:(a) a claim of an issued and unexpired patent included within Patent Rights, which has not been heldrevoked, unenforceable or invalid by a decision of a court or other governmental agency of competentjurisdiction, unappealable or un-appealed within the time allowed for appeal, and which has not beenadmitted to be invalid or unenforceable through reissue or disclaimer or otherwise; or(b) a claim of a pending patent application included within Patent Rights which claim was filed and isbeing prosecuted in good faith and has not been abandoned or finally disallowed without the possibilityof appeal or refiling of the application, provided that no more than seven (7) years have passed since theearliest priority date for such application.“Year” means each complete Calendar Year following the First Commercial Sale Date.1.2 In this Agreement:(a) the table of contents and headings are inserted for ease of reference only and shall not affect theinterpretation of any provision of this Agreement;12  (b) all references to a particular Section, paragraph or Schedule shall be a reference to that Section,paragraph or Schedule, in or to this Agreement as it may be amended from time to time pursuant to thisAgreement;(c) words in one gender include any other gender, words importing individuals import companies and viceversa, words in the singular include the plural and vice versa, and words importing the whole shall betreated as including a reference to any part thereof;(d) references to a company shall include any company, corporation or other body corporate wherever andhowever incorporated or established;(e) reference to the words “include” or “including” (or any similar term) are not to be construed asimplying any limitation and general words introduced by the word “other” (or any similar term) shall notbe given a restrictive meaning by reason of the fact that they are preceded by words indicating aparticular class of acts, matters or things;(f) references to “writing” or “written” includes any method of reproducing words or text in a legible andnon-transitory form and, for the avoidance of doubt, shall include text transmitted by e-mail;(g) references to “indemnify” and to “indemnifying” any person against any Losses by reference to anymatter includes indemnifying and keeping that person indemnified against all Losses from time to timemade, suffered or incurred as a direct or indirect consequence of or which would not have arisen but forthat matter;(h) when calculating the period of time before which, within which or following which any act is to bedone or step taken pursuant to this Agreement, the date that is the reference date in calculating thatperiod shall be excluded. If the last day of that period is not a Business Day, the period in question shallend on the next Business Day; and(i) reference to any statute or regulation includes any modification, amendment or re-enactment that statuteor regulation.2. Grant of rights / license2.1 The Licensor, subject to the terms of this Agreement, grants to the Licensee the exclusive, non-assignable(except in conjunction with an assignment of this Agreement under Section 15) right and license to use theLicensor IPR Package:(a) to Commercialize the Product in the Territory;(b) to Manufacture in any country the quantities of Product required for Commercialization in the Territory;and(c) to Develop the Product for Commercialization in the Territory.2.2 Subject to Section 15.2 and Section 2.3, the Licensee shall have the right to sublicense its rights under theLicense to an Affiliate or Third Party Sub-licensees without the consent of the Licensor, except in the case of aThird Party where in one transaction or a series of related transactions Licensee sublicenses substantially all ofits rights under the License to such Third Party.2.3 The Parties agree that:13  (a) prior to the grant of a sub-license pursuant to Section 2.2, the Licensee shall serve written notice on theLicensor and such notice shall contain the following information:(i) the identity of the proposed Sub-licensee; and(ii) the reasons why the Licensee believes such Sub-licensee will be able to perform its obligation;(b) where the proposed sub-license is to a Third Party where in one transaction or a series of relatedtransactions Licensee seeks to sub-license substantially all of its rights under the License to such ThirdParty and the Licensor has a veto right under Section 2.2 above, then the notice to be provided to theLicensor pursuant to Section 2.3(a) must be provided at least six (6) weeks prior to entry into theproposed sub-license with such Third Party; and(c) the Licensee (in its capacity as sub-licensor) shall remain responsible for all of its obligations hereunderand if the acts or omissions of any such Sub-licensee cause the Licensee to be in breach of thisAgreement the Licensee shall be responsible therefor (with all the express consequences provided forunder this Agreement and any implied consequences) regardless of any remedy which the Licensee mayhave against the Sub-licensee. In particular but without limitation, the Licensee shall perform its financialobligations under this Agreement regardless of a breach by any Sub-Licensee.2.4 During such time as either Party owes Royalties to the other Party under this Agreement, each Party shall not,and shall procure that its Affiliates and Sub-licensees shall not, directly or indirectly, Develop, Manufacture orCommercialize in the Territory any product for assessing GHD in adults or Children other than the Product.2.5 During the Term the Licensee, its Affiliates and Sub-Licensees shall refrain from:(a) seeking or accepting any actual or potential orders for the Product that are known or are reasonablysuspected to be for use outside the Territory and the Licensee shall refer to the Licensor all inquiries thatthe Licensee receives for the Product for sale or ultimate delivery outside the Territory; or(b) establishing any branch or maintaining any distribution depot for the Product outside the Territory.2.6 During the Term:(a) the Licensor, its Affiliates and licensees (other than Licensee) shall refrain from seeking or acceptingany actual or potential orders for the Product that are known or are reasonably suspected to be for useinside the Territory; and(b) the Licensor shall refer to the Licensee all inquiries that the Licensor receives for the Product for sale orultimate delivery inside the Territory.2.7 For clarity, nothing in this Section 2 shall limit or restrict the Licensor, its Affiliates, or any Third Party licenseeof the Licensor, from using the Licensor IPR Package in connection with the development or Commercializationof the Product outside of the Territory or in connection with the Manufacture of the Product outside of theTerritory or inside the Territory for development or Commercialization outside the Territory.14  3. Governance3.1 With effect from the Effective Date the Parties shall establish and run a Joint Steering Committee (“JSC”).3.2 The JSC shall be organized as follows:(a) the JSC shall comprise four (4) persons (“JSC Members”) and the Licensor and the Licenseerespectively shall be entitled to appoint two (2) JSC Members, including one person whose primaryresponsibility shall relate to Development, to remove any JSC Member appointed by it and to appointany person to fill a vacancy arising from the removal or retirement of such JSC Member appointed by it.JSC Members must be appropriate for the primary function of the JSC in terms of their seniority,availability, function in their respective organization, training and experience. There will be achairperson (“JSC Chairperson”) who will be one of the Licensee JSC Members;(b) the Licensee and the Licensor respectively shall each notify the other of any change in the identities oftheir JSC Members. Both sides shall use reasonable efforts to keep an appropriate level of continuity inrepresentation. JSC Members may be represented at any meeting by another person designated in writingby the absent JSC Member;(c) JSC shall hold meetings in person as frequently as the members of the JSC may agree shall benecessary, and otherwise by teleconference or a video-conference, but no less frequently than four (4)times each Calendar Year in total. Dates of meetings shall be agreed by the Parties not less than thirty(30) days beforehand. Each Party shall submit the agenda items and associated materials that it wishes tobe considered no later than seven (7) days prior to the meeting and it is agreed that Licensor JSCMembers shall only be entitled to submit agenda items for inclusion which relate to matters that have orcould potentially have a material impact on the Product, payments to be made pursuant to thisAgreement or the Licensor more generally. The first meeting of the JSC will take place as soon asreasonably practicable after the Effective Date, but in no event later than ninety (90) days after theEffective Date, at such location as the members of the JSC may agree or, failing such agreement, Dublin,Ireland. Special meetings of the JSC may be called by any JSC Member upon reasonable written noticeto the then current chairman of the JSC not more than twice in any Calendar Year absent a materialmatter requiring JSC attention that cannot reasonably be delayed until the next scheduled JSC meeting;(d) if not held by teleconference or videoconference, the venue for meetings of the JSC shall be held atsuch location as the members of the JSC may agree or, failing such agreement, Dublin, Ireland. EachParty shall be responsible for its own expenses including travel and accommodation costs incurred inconnection with JSC meetings; and(e) the JSC Chairperson or its designee shall be responsible for preparing the minutes of any JSC meetingas soon as reasonably practicable thereafter, seeking unanimous approval of those minutes from the JSCMembers, signing and dating the approved minutes and distributing a copy of the signed minutes to eachParty.3.3 The JSC shall have the following purposes:(a) as regards Commercialization:(i) to: (A) provide the Licensor with visibility into the Commercialization of the Product in theTerritory by the Licensee via reports prepared in the ordinary course for the Licensee's internalpurposes, provided that such internal reports15  at a minimum provide the Licensor with the information set out in Section 7.2 at least quarterly,failing which the Licensee shall deliver such information in accordance with Section 7.2irrespective of whether it is prepared in the ordinary course or not; (B) procure that the Licensorhas reasonable access to Commercial Information of the Licensee relating solely to the Product;(C) ensure that the Licensor is informed regarding acceptance of the Product and Product qualitycomplaints; and (D) provide a means for the Licensor to provide input for any activities relatingto Commercialization; and(ii) (to the extent materially relevant to the sale of the Product in the Territory, to provide theLicensee with visibility into the Commercialization of the Product outside the Territory by theLicensor, to include reasonable information in relation to overall sales volume, marketmessaging, branding, product positioning strategies, and the information to be provided to theLicensee as specified in Section 7,and otherwise to act as a forum for general liaison and communication between the Parties in relation toCommercialization of the Product by the Licensee. It is agreed that neither Party shall be required toprovide copies of term sheets or commercial agreements relating to grants to Third Parties of rightsrelated to the Product, by Licensee in the Territory, or by the Licensor outside the Territory;(b) provide each Party with visibility into the other Party's Development activities with respect to theProduct other than in relation to the PIP, and to provide a forum for discussion of such Developmentactivities;(c) oversee and guide the Licensor's activities in carrying out the PIP, to consider reports from the Licensorin respect of the PIP, to provide a means for the Licensee to provide input and, where so providedhereunder, approval for any activities relating to the PIP and for general liaison and communicationbetween the Parties in relation to the PIP;(d) review and approve with respect to the PIP (including any amendments to any of the following):(i) the investigational medicinal Product Dossier;(ii) locations of Clinical Trial sites;(iii) the identity of principal investigators for the Clinical Trial sites;(iv) the investigator brochure;(v) informed consent documentation;(vi) proposed amendments by the Parties to the PIP Budget (it being noted that pursuant to Sections3.5 and 5.5, the JSC may not increase the PIP Budget without the written consent of both Parties);(vii) where a contract is to be entered into with a CRO in relation to the Product after the EffectiveDate, the identity of and the proposed contract with such CRO;(viii) the identity and contracts with major vendors (e.g. site monitors); and(ix) protocols prepared by the Licensor for the PIP;(e) coordinate with respect to:16  (i) the finalization of the each Party’s supply chain for the Product for its respective Territory;(ii) the transition of responsibility for the Manufacture of the Product for the Territory from theLicensor to the Licensee; and(iii) the general improvement of the supply chain of the Product, both inside and outside theTerritory,and for general liaison and communication between the Parties in relation to the Manufacture of theProduct; and(f) shall perform such other functions and responsibilities as are given to it under the express provisions ofthis Agreement but shall have no authority to amend any commercial terms of this Agreement or anymatter that would cause any payments stated in this Agreement to be other than the amount of thoseterms as stated herein.3.4 Each Party shall give reasonable consideration to input provided by the other Party to the JSC on all matters setforth in Section 3.3, provided however that the JSC shall have authority to make decisions solely with respect tothe PIP. Such decisions shall be made by unanimous agreement of the JSC Members wherever possible with theLicensee JSC Members together having one vote on behalf of the Licensee and the Licensor JSC Memberstogether having one vote on behalf of the Licensor. Both Parties will use their reasonable efforts to buildconsensus. All decisions of the JSC shall be minuted by or on behalf of the JSC Chairperson who shall seekunanimous approval of those minutes from the JSC Members, sign and date the approved minutes and promptlysend a copy of the minutes of each JSC meeting to both Parties. The JSC shall exercise this authority in goodfaith and in accordance with the terms of this Agreement, and any decision by the JSC on such matters made inaccordance with this Section 3.4 shall be binding upon the Parties. Subject to Section 3.5 below:(a) in the event that agreement on a PIP-related decision cannot be reached within thirty (30) days, thematter shall be referred for resolution by negotiation between a representative appointed by Licensor,and for Licensee, the President and CEO of Strongbridge Biopharmaceuticals plc or his/her designee,and if the executives cannot reach agreement on the issues under consideration within ten (10) BusinessDays, then the matter shall be referred to a Third-Party pharmaceutical executive mutually andreasonably agreeable to the Parties and having no less than ten (10) years’ experience directingbiopharmaceutical product development programs as set forth in Section 3.4(b);(b) Expedited Expert Referral.(i) the Parties shall agree to the identify of such Third-Party pharmaceutical executive as promptlyas practicable and in no event later than ten (10) days following the expiration of the ten (10) dayperiod set forth in Section 3.4(a);(ii) not later than ten (10) days following the expiration of the ten (10) day period set forth inSection 3.4(b)(i), each Party shall submit to the Third-Party pharmaceutical executive (with acopy to the other Party) a position paper setting forth the desired decision on the applicablematter and the rationale for such desired decision, including any supporting documentationprovided to the JSC in relation to the matter under consideration thereto, such position paper notto exceed 5000 words (not including supporting documentation);(iii) the Parties shall request the Third-Party pharmaceutical executive to render, not later than ten(10) days following the expiration of the ten (10) day period17  set forth in Section 3.4(b)(ii) (or such other time to which the Parties and such executive may allagree), a decision in good faith and based solely on the arguments set forth in such positionpapers (and for the avoidance of doubt, neither Party shall be permitted to contact the Third-Partypharmaceutical executive to provide additional information or arguments), and such decisionshall be restricted to the one of the desired outcomes set forth in the respective position papers ofthe Parties, and shall render such decision without providing more than the identity of the Partywhose desired outcome constitutes such decision;(iv) such decision by the Third-Party pharmaceutical executive shall be final and binding on theParties; and(v) the Party whose desired outcome is not adopted by the Third-Party pharmaceutical executiveshall be responsible for payment of the fee owed to the Third-Party pharmaceutical executive .3.5 The Parties agree that in no event shall the JSC or any dispute resolution process have the authority to increasethe PIP Budget without the express written consent of both Parties in accordance with Section 5.5.4. Technology transfer and technical / regulatory assistanceThe Licensor shall:(a) maintain the Data Room until the first anniversary of the Effective Date (the “Closure Date”) and shallgive nominated representatives of the Licensee access to such Data Room;(b) as soon as reasonably practicable following the Closure Date, the Licensor shall provide to the Licenseetwo identical CD-ROM discs on which are contained copies of all Documents contained, on the ClosureDate, within the Data Room;(c) in accordance with the timing set forth in Schedule 2, to the extent not already in the Data Room, makeavailable to the Licensee the Know How Controlled by it, the Dossier filed in respect of the NDA and theCommercial Information Controlled by it and details about the Licensor Trademarks and Licensor PatentRights, including those items set forth on Schedule 2. Licensor shall provide those materials as soon asreasonably practicable after the Effective Date, and in no event later than any time specified on Schedule2 for any particular item set out thereon; and(d) immediately following execution of this Agreement, and before transfer of the Product Registrations(NDA, IND, ODD), provide the Licensee with a CD-ROM disc or discs containing all FDAcorrespondence related to these applications and the complete electronic copy of the NDA, IND andODD in the exact format and active file links as submitted to the FDA in respect of the NDA and INDand as pdf files in respect of the ODD. This should include the FDA submission acknowledgements iffiled electronically.(e) provide not later than six months after the Effective Date the transfer of a copy of the electronic TrialMaster File(s) for the NDA supporting studies. Note to draft: Parties to discuss and determine how to handle the preservation of and access of Licensee to any clinical samples heldby Licensor.18 11  5. DevelopmentDevelopment Plan5.1 In each Calendar Year that Development regarding the PIP is occurring, each Party shall at its own cost andexpense (subject to Section 5.4) use Commercially Reasonable Efforts to carry out the activities specified in theDevelopment Plan in relation to the PIP as the responsibility of such Party so as to meet the timelines set out inthem.5.2 During the period of Development regarding the PIP by the Licensor, it shall update the Development Plan onor before November 1 in each year and shall submit the same to the JSC for review and approval.PIP5.3 The Licensor shall:(a) be responsible for the conduct of the PIP, subject to and in accordance with the timelines set out in theDevelopment Plan and subject to the direction of the JSC;(b) conduct all activities in relation to the PIP in compliance with all Legal Requirements, ethics committee,informed consent or similar approvals in relation thereto, and in compliance with GCP;(c) provide periodic updates regarding the PIP to the JSC as reasonably requested by the JSC;(d) permit Licensee (at its own cost) and upon reasonable notice to audit, during normal business hours, thetrial master file and shall cooperate with any such audit; and(e) promptly provide to the JSC the results of the PIP in the form of a copy of any Interim Report, a FormalPresentation and a copy of the Final Report as these occur, even if between JSC scheduled meetings.5.4 The Licensee shall reimburse the Licensor for seventy per cent (70%) of the ongoing documentedDevelopment Costs reasonably incurred by the Licensor in accordance with the Development Plan and the PIPBudget. The Licensee shall reimburse its proportion of the Development Costs not later than sixty (60) daysfollowing receipt of the Licensor's invoices and supporting evidence of such Development Costs having beenincurred in connection with the conduct of the PIP, which the Licensor shall submit as and when suchDevelopment Costs arise but no more frequently than on a quarterly basis, save where an invoice is for anamount equal to or greater than $100,000 whereupon the Licensor shall be permitted to invoice on a monthlybasis. Payment shall be made by the Licensee within thirty (30) Business Days of the date of receipt of theLicensor's invoice, into such bank account as the Licensor shall specify from time to time. For the avoidance ofdoubt, the Licensor shall be responsible for the remaining thirty per cent (30%) of such Development Costs inconnection with the conduct of the PIP.5.5 During the period in which the PIP is ongoing, the Parties may, from time to time, together agree in writing toupdate the PIP Budget and where this occurs the proposed changes will be submitted to the JSC for review anddiscussion. Once agreed by the Parties in writing, the revised PIP Budget shall be the 'PIP Budget' for thepurposes of this Agreement.5.6 Upon a Bankruptcy Event of Licensor, Licensee shall have the right, but not the obligation, to assume fullcontrol of the PIP upon written notice to Licensor. Following any such notice, Licensor shall, to the extentpermitted by Law, use its reasonable endeavors to promptly assign to Licensee or its designee all contractsassociated with the PIP and shall cooperate19 st with Licensee to ensure a smooth transition of control of the PIP to Licensee, including by executing suchdocuments requested by Licensee as are necessary to enable such transition. Licensee shall thereafter carry outthe PIP as set forth in the Development Plan on behalf of itself with respect to the Territory and on behalf ofLicensor outside the Territory. Licensee shall pay Licensor's thirty percent (30%) share of the cost and expensesof the PIP as set forth in the PIP Budget and shall be entitled to deduct all such costs and expenses from anyamounts of royalties or milestones owed to Licensor hereunder prior to making any payments to Licensor.Development other than the PIP5.7 Except as expressly set forth above in relation to the PIP and subject to Section 5.7 below, each Party shall:(a) be responsible for the conduct and all associated costs and expenses of the Development activities forthe Product in its own territory and for the avoidance of doubt 'territory' shall mean the USA and Canadafor the Licensee and the rest of the world for the Licensor;(b) conduct all such Development activities in compliance with all Legal Requirements, ethics committee,informed consent or similar approvals in relation thereto, and in compliance with GCP;(c) provide the JSC with a summary and update in reasonable detail of such Development activities at eachmeeting of the JSC; and(d) provide the other Party with a copy of a near-final draft of each Clinical Trial protocol or update to aprotocol for the Product at least forty-five (45) days prior to the date on which such protocols or updatesare provided to any Regulatory Authority or Clinical Trial site, in order to permit such other Party tocomment on such protocol or update, and shall reasonably consider in good faith any comments thereonprovided by such other Party within thirty (30) days following such other Party's receipt of such copy ofsuch protocol or update.5.8 The Parties agree that where any Development activity of the Licensee is, in the Licensor's reasonable opinion,going to have a material adverse impact on the Development, Manufacture or Commercialization of theProduct outside of the Territory for the Existing Indications, then the prior written consent of the of theLicensor will be required, such consent not to be unreasonably withheld, delayed or conditioned.5.9 If Licensee wishes to Develop Product in the Territory for a New Indication, Licensee shall have the right todo so on the following conditions:(a) the Licensee shall be solely responsible for the costs and expenses of the Development activities;(b) the Licensee shall supply the Licensor with all material Know How, Dossiers and other Licensee IPRPackage relating thereto, including a copy of each Final Report promptly following its preparation;(c) subject to paragraph 5.9(d), the Licensee hereby grants to the Licensor a perpetual, irrevocable,exclusive, sub-licensable, right and license to use the Licensee IPR Package for the Product for suchNew Indication to Develop, manufacture and Commercialize the Product outside the Territory; and(d) Licensor shall pay royalties to Licensee under such license on the same payment terms as, and at a rateequal to two percent (2%) less than the rate owed by, Licensee20  to Licensor for sales of Products hereunder, with all applicable definitions and provisions having theParties reversed, mutatis mutandis.Regulatory Approvals5.10 Assignment of the NDA and Domain Names.(a) Subject to the terms and conditions set out in this Agreement, Licensor hereby sells, conveys, andtransfers to Licensee, and Licensee hereby purchases and accepts the sale, conveyance and transfer of allof Licensor's right, title and interest in the Product Registrations (including the NDA and the IND andorphan designation with respect thereto, and all copyrights, data and information contained therein), andthe domain names set forth on Schedule 6, in the Territory on the Effective Date, subject to Licensor’sexpress right to return of the Product Registrations and domain names upon certain terminations of theAgreement as set forth in Section 14.(b) Promptly after the Effective Date, each Party shall file with the FDA letters and applications incompliance with 21 CFR § 314.72 in the forms set forth on Schedule 3 in order to record with the FDAthe change in ownership of the NDA from Licensor to Licensee.(c) Promptly following the first Marketing approval for a Product outside the Territory, to the extentpermitted by applicable Law, Licensee shall ensure that any internet users from outside the Territory whoaccess the domain names listed on Schedule 6 (or any variants of these that are now or in the futurebecome owned by the Licensee or an Affiliate or agent of the Licensee), are redirected to Licensor’swebsite or another website designated by Licensor covering the Licensor Product outside the Territory,provided that Licensor shall provide a link on such website with reasonably prominent instructions sothat visitors to its site from inside the Territory or otherwise with an interest in the Product in theTerritory are directed to jump to Licensor’s website or another website designated by Licensor coveringthe Licensor Product inside the Territory.5.11 The Licensee shall:(a) subject to Section 5.11(b) below, at its sole cost and expense (subject to Section 5.3 with respect tocosts of the PIP), use Commercially Reasonable Efforts to obtain any further Regulatory Approvals forthe Product and any Pricing Approval required or commercially desirable in each country of theTerritory, and such Regulatory Approvals shall, in all instances, be obtained by the Licensee in its ownname and the Licensor shall provide its reasonable assistance to the Licensee to enable the Licensee toobtain the Regulatory Approvals in the Licensee's name; and(b) use Commercially Reasonable Efforts following the Effective Date to obtain Regulatory Approval forthe Product in Canada for the Adult Indication.5.12 The Licensee shall:(a) conduct all Development activities (other than the PIP which is the responsibility of the Licensor) in theTerritory in compliance with all Legal Requirements;(b) be responsible for the preparation of all submissions for the grant of a Regulatory Approval in theTerritory; and(c) as soon as reasonably practicable following its receipt of the final study report for the last necessaryclinical trial for the PIP, prepare and make all submissions for the grant21  of Regulatory Approval in each country in the Territory for the Product for the Pediatric Indication usingCommercially Reasonable Efforts.5.13 The Licensee shall be responsible for all filings and submissions in respect of Regulatory Approvals for theProduct in the Territory as well as attending all meetings with Government Authorities and RegulatoryAuthorities in respect thereof and:(a) shall provide, at the request of the Licensor, copies of all material proposed filings, in advance of thefiling or submission thereof, for review and comment by the Licensor. The Licensee shall consider ingood faith in its revision of the filing or submission, any comments made by Licensor; and(b) shall inform the Licensor in advance of all meetings or conference calls with the Regulatory Authoritieswith respect to Products including on Pricing Approval issues and one Licensor representatives shallhave the right to attend solely as a non-participating observer in the meeting, to the extent permitted bysuch Regulatory Authorities.5.14 The Licensee shall, from the Effective Date, use Commercially Reasonable Efforts to maintain the orphan statusof the NDA Product.6. SupplyCMO Contracts6.1 An illustration of the Licensor's proposed supply chain for the Product for the USA is set out in Schedule 8 ofthis Agreement (the “Supply Chain”). Certain of the CMO Contracts that comprise the Supply Chain have beenentered into by the Licensor or its Affiliates as of the Effective Date (the “Existing CMO Contracts”) whileothers have not been concluded as at the Effective Date (the “Outstanding CMO Contracts”). The Licenseeshall use Commercially Reasonable Efforts to procure a full supply chain of the Product for the USA to enablethe launch of the Product as soon as reasonably practicable after the Effective Date and the Licensee shallprovide such reasonable assistance as the Licensor may reasonably request, subject to the provisions of Section6.3(f).6.2 The Parties agree that the Licensor shall not be required to assign, transfer or novate any of the Existing CMOContracts to the Licensee but the Parties shall have a joint option (meaning, for the avoidance of doubt, that bothParties must consent to the assignment, transfer or novation) to do so, which is jointly exercisable at any timewithin 90 days of the Effective Date. The Licensee shall:(a) in respect of the Outstanding CMO Contracts, be entitled to enter into negotiations with the relevantCMOs in respect of such contracts, in place of the Licensor, and conclude such contracts in its ownname or that of an Affiliate; and(b) in respect of the Existing CMO Contracts, negotiate in good faith with the Licensor's CMOs or withalternative Third Party manufacturers with the intention of concluding its own direct terms with suchCMOs or Third Party manufacturers,and the contracts which the Licensee enters into pursuant to Sections 6.2(a) and (b) are together the “LicenseeCMO Contracts”.6.3 The Parties agree that:(a) the Licensor shall provide to the Licensee such reasonable assistance as the Licensee shall reasonablyrequest to help the Licensee to enter into the Licensee CMO Contracts;22  (b) they shall work together in good faith following the Effective Date to ensure that, where they both usecommon CMOs in their respective supply chains, that they leverage volume discounts from suchcommon CMOs when ordering Materials;(c) each Party shall use reasonable efforts to ensure that they do not enter into any contract with a sharedcontracting party that disadvantages the other Party in such other Party’s dealing with such contractingparty;(d) each Party’s contracts with shared suppliers shall provide that in the event of a shortage or otherrestriction on the supply of a commonly purchased material from such suppliers, the supplier, asbetween the Parties, shall allocate available supply pro rata to the Parties based upon each Partiesforecasts for such material in place prior to any knowledge of a potential or actual shortage thereof;(e) if the Licensor and Licensee together choose to exercise the joint option (meaning, for the avoidance ofdoubt, that both Parties must consent to exercise of the option) referred to in Section 6.2 then the Partiesshall, through the JSC, work together to assign, transfer or novate the Existing CMO Contracts to theLicensee whereupon such Existing CMO Contracts shall become Licensee CMO Contracts; and(f) the Licensee shall reimburse the Licensor for all reasonable costs and expenses (including employeecosts which shall be charged on an hourly basis) associated with assistance requested by Licensee fromand provided by the Licensor (or its Affiliates or any of their respective employees or consultants)pursuant to this Section 6.Interim Licensor Supply Arrangements6.4 The Parties will co-operate and work in good faith during the transition period following the Effective Date, asregards supply arrangements. More particularly, and subject to Sections 6.5 and 6.6 below, insofar as theLicensee requires Materials for the Manufacture of the Product under any Existing CMO Contract then, for theperiod from the Effective Date until the date upon which the Licensee enters into the relevant Licensee CMOContract (“Licensor Supply Period”):(a) the Licensor shall procure that the relevant CMO supplies Materials to the Licensee or one of itsAffiliates or CMOs, subject to the terms and conditions of such Existing CMO Contract, for the purposesof Manufacture by the Licensee or one of its Affiliates or CMOs of the Product for the Territory;(b) the Licensor shall procure that the Licensor Materials set forth on Schedule 4 to be delivered to theLicensor, are instead delivered to such location as the Licensee notifies to the Licensor in writing prior tothat date, and the Licensee shall within 10 Business Days of receipt of any such Licensor Material, payto the Licensor an amount equal to the amount set forth on Schedule 4 for the corresponding LicensorMaterial so received by Licensee;(c) the Licensor shall not, during the Licensor Supply Period, terminate the relevant Existing CMO Contractor amend it in a manner which would be adverse to the interests of the Licensee; and(d) the Licensor shall, at Licensee’s cost and expense, take such actions in respect of such Existing CMOContract as the Licensee may reasonably request, including where a CMO is in breach of the terms of anExisting CMO Contract, to enforce its rights against such CMO for and on behalf of the Licensee.6.5 The Parties agree that:23  (a) the liability of the Licensor to the Licensee pursuant to Section 6.4(a), shall be limited, in all instancesother than a liability arising from the negligence or willful misconduct of the Licensor in connection withthe performance of its obligations under Section 6.4(a), to the amount actually recovered by the Licenseefrom the relevant CMO;(b) Licensor, promptly upon receipt thereof, shall send by electronic means copies of all invoices in respectof Materials supplied by the Licensor pursuant to Section 6.4(a) of this Agreement, which invoicesLicensee shall pay on behalf of Licensor in accordance with the payment terms thereof, provided that ifLicensee fails to make any such payment of a timely sent invoice copy for amounts not in dispute byLicensee (including invoices or portions of invoices previously but no longer in dispute), Licensor shallbe entitled to pay such invoice (including any penalty or interest owed as a result of late payment thereof) and to invoice Licensee for such payment, which Licensee shall pay to Licensor promptly. Licenseeshall indemnify the Licensor and its Affiliates in respect of any claim made by a CMO against theLicensor as a result of the Licensee's failure to make any payments due to a CMO (including anydisputed amounts that the Licensee incorrectly disputes); and(c) the Licensor shall not be required to comply with its obligations pursuant to Section 6.4 to the extentthat this would breach any applicable Laws and/or which would put it in breach of its obligations underany Existing CMO Contract.6.6 The Parties agree that:(a) the Licensee shall use Commercially Reasonable Efforts to take full responsibility for and managementof supply of Products in the Territory as soon as reasonably practicable following the Effective Date; and(b) to the extent that the Licensee does not take responsibility for and management of supply of Productsby the date which is twelve (12) months from the Effective Date, then:(i) the Parties shall enter into a supply agreement to govern such supply arrangements between theParties (the "Supply Agreement"); and(ii) subject to the terms of the Supply Agreement, the Licensor shall have no further obligationsunder Sections 6.4 - 6.9 of this Agreement (which relate to the interim supply arrangements); and(c) with effect from the end of the Licensor Supply Period (or, if earlier, the date which is 9 months fromthe Effective Date), the Licensee shall either itself or through the Supply Agreement be responsible forsupply, and shall manage the Manufacturing of all Materials and Product for sale in the Territory.For the avoidance of doubt, the Licensor shall be responsible for and shall manage the Manufacturing of allMaterials and Product for sale in countries outside of the Territories.6.7 During the Licensor Supply Period, the Licensor will provide letters of access allowing access for the Licenseeto the extent possible to the production sites of its CMOs, in each case where Materials have been manufacturedfor the Licensee pursuant to Section 6.4, in order to enable the Licensee to visit such sites and to review theManufacturing and any documentation relating to the Materials or its Manufacturing maintained at such site tothe extent necessary or required by applicable Law or the requirements of any Regulatory Authority or toprepare for any investigation or inspection that may be carried out by any Regulatory Authority.24  6.8 The Parties shall cooperate and discuss in good faith with a view to agreeing a plan (including timeline and adetailed description of all documentation containing Manufacturing Know-How that will need to be provided tothe Licensee) for the successful transfer of the Manufacturing Know-How Controlled by the Licensor to theLicensee during the Licensor Supply Period and on an ongoing basis thereafter in order to assist the Licensee inManufacturing or having Manufactured the Product. Licensor agrees to make a technical transfer of anyManufacturing Know-How existing as of the Effective Date or created at any point during the Term which itControls to the Licensee in accordance with the timelines agreed in any technical transfer plan (with respect toManufacturing Know-How in existence as of the Effective Date and Controlled by Licensor) and within suchtime as is reasonably practicable after creation of such Manufacturing Know-How or upon the Licensorbecoming aware of the existence of such Manufacturing Know-How (with respect to Manufacturing Know-Howcreated or discovered during the Term). The Licensee agrees to make a technical transfer of any LicenseeManufacturing Know-How which it Controls created at any point during the Term to the Licensor within suchtime as is reasonably practicable after creation of such Licensee Manufacturing Know-How or upon theLicensee becoming aware of the existence of such Licensee Manufacturing Know-How. Except as set forth inSection 6.9, the costs of the transfer of Manufacturing Know-How shall be shared equally by the Parties.6.9 For any change in a Manufacturing process or Material used for the Product (including the Product, itself) thatare made as a result of a requirement of at least one Regulatory Authority in the Territory and at least oneRegulatory Authority outside the Territory, the parties agree to split all costs and expenses related todeveloping and implementing such change (but not the cost of any Material used in the Product) with Licenseebearing seventy percent (70%) of such costs and expenses and Licensor bearing thirty percent (30%) of suchcosts and expensesLicensee Supply of Materials6.10 Where the Licensor seeks to obtain Product or Materials for the Manufacture of the Product for outside theTerritories from the Licensee, then the Parties shall negotiate in good faith to enter into a supply agreement forsuch Product and/or Material on commercially reasonable terms.PIP6.11 Notwithstanding any other provision of this agreement, where the PIP is fully or partially conducted in theTerritory, the Licensor shall be entitled to supply to the relevant Third Parties assisting with the PIP suchamount of CTM as is necessary for the PIP.7. Commercialization.7.1 Licensee shall either itself or through its Affiliates, and Sub-licensees Commercialize the Product in theTerritory using Commercially Reasonable Efforts and 'Commercially Reasonable Efforts' for these purposesshall include, but not be limited to the Licensee:(a) as soon as reasonably practicable following the Effective Date hiring, at a minimum, 15 field specialistswhose role shall solely relate to the Product and maintaining such minimum number of field specialistsfor at least the 12 month period following the first Launch; and(b) ensuring, that notwithstanding the resources required by the Licensee for the preparation for and thelaunch of another product by the Licensee (or its Affiliates), it continues to provide an appropriate levelof resources dedicated to the Commercialization of the Product.25  Information Sharing7.2 The Licensee shall provide Licensor through the JSC with reports and other commercialization planningdocuments for the Product as are generated in the ordinary course for the Licensee's internal purposes. To theextent that such ordinary course reports and planning documents do not provide the Licensor with the followinginformation on a quarterly basis, the Licensee shall be required to provide such information to the Licensorupon a quarterly basis: current sales forecasts and actual volume of sales of the Product in the Territory, thenumber of specialist sales staff dedicated wholly or partially to the Commercialization of the Product, anymaterial decrease in either from time to time and the reasons therefor and the nature and scale of promotionalactivities in the Territory.Pricing 7.3 Licensee will use Commercially Reasonable Efforts to secure required Pricing Approval for the Product in theTerritory for each Existing Indication. The Licensee will have sole authority for determining and establishing theprice and terms of sale (including any rebates or discounts) of Product in the Territory. Each Party shall providethe other Party with copies of any material Documents or other material pertaining to Pricing Approvals in suchproviding Party’s respective territory.Promotional Materials7.4 The Licensee or its Affiliates or Sub-licensees will be responsible for the creation, preparation, production andreproduction of all Promotional Materials and for filing, as required by Legal Requirements, all PromotionalMaterials with Regulatory Authorities in the Territory. Subject to Section 9, the Licensee shall use its owncorporate name and/or logo or those of an Affiliate on Promotional Materials in connection withCommercialization of Product in the Territory, unless otherwise mutually agreed by the Parties.Promotional claims/compliance7.5 The Licensee shall not promote the Product for intended uses or indications other than those in the labelling asapproved by the Regulatory Authority in the Territory from time to time nor shall the Licensee make anymedical or promotional claims for any Product other than as permitted by Legal Requirements (which for theavoidance of doubt shall include the False Claims Act). When distributing information related to any Product orits use for the Existing Indications in the Territory (including information contained in scientific articles,reference publications and publicly available healthcare economic information), the Licensee must comply withall Legal Requirements (which for the avoidance of doubt shall include the False Claims Act) in the applicablecountry.International Congresses / Symposia7.6 For international congresses or symposia:(a) where Licensee wishes to have a presence in a symposium or congress outside the Territory regardingthe Product, Licensee shall notify Licensor in advance of Licensee's proposed presence, providingreasonable detail regarding such planned presence and seeking Licensor’s consent (such consent not tobe unreasonably withheld, delated or conditioned) for such presence. Licensor, as soon as reasonablypracticable, but in no event later than ten (10) days after receiving such notice, shall notify Licensee ofLicensor either withholding consent (with the reasons therefor) or providing consent to such presence;26  (b) where Licensor wishes to have a presence in a symposium or congress inside the Territory regardingthe Product, Licensor shall notify Licensee in advance of Licensor's proposed presence, providingreasonable detail regarding such planned presence and seeking Licensee’s consent (such consent not tobe unreasonably withheld, delated or conditioned) for such presence. Licensee, as soon as reasonablypracticable, but in no event later than ten (10) days after receiving such notice, shall notify Licensor ofLicensee either withholding consent (with the reasons therefor) or providing consent to such presence;and(c) The Parties shall, to the extent reasonable and practicable, coordinate attendance at such conference orsymposium (including displaying brand names, trademarks and logos for the Product, to the extentpermitted by Law).Product Complaints7.7 The Licensee will be responsible for responding to product complaints regarding Product in the Territory andthe Licensor for responding to product complaints regarding Product outside the Territory. If the Licensorreceives complaints about Product for a country in the Territory, it will refer such complaints to the Licensee(and vice versa), and the Licensee will be responsible for responding thereto (and vice versa). Each Party shall,in all instances, keep the other fully appraised of matters in relation to such product complaints including byproviding copies of all correspondence with the complainant.Medical and consumer inquiries7.8 The Licensee will be responsible for responding to medical questions or inquiries from members of the medicaland paramedical professions and consumers regarding Product in the Territory in accordance with Laws. If theLicensor receives questions about Product for a country in the Territory, it will refer such questions to theLicensee, and the Licensee will be responsible for responding thereto. Each Party shall, in all instances, keep theother Party reasonably appraised of matters in relation to any such questions or inquiries that are material and/orfrequently asked, including by providing copies of correspondence with the relevant members of the medical orparamedical professions or consumers.Compliance with Laws7.9 Each Party will perform its obligations under this Agreement in accordance with all Laws. Each Party shallobtain from the requisite Government Authorities any consents, licenses, permits, waivers, approvals,authorizations, clearances, registrations or orders required to be obtained or made by such Party in connectionwith the authorization, execution and delivery by such Party of this Agreement and its performance of itsobligations under this Agreement including but not limited to the importation, exportation, sale and distributionof the Product.Regulatory affairs7.10 Post-Approval Regulatory Submissions.(a) Subject to Section 7.10(b) below, as between the Parties, Licensee shall have sole responsibility, at itsown expense, for preparing, filing and maintaining all Regulatory Submissions for Product in theTerritory after the Effective Date, including Regulatory Submissions in connection with Developmentactivities hereunder (collectively, “Post-Approval Regulatory Submissions”). Licensee shall useCommercially Reasonable Efforts to compile, submit and prosecute all Post-Approval RegulatorySubmissions, in a format acceptable to the applicable Regulatory Authorities in the Territory. All Post-Approval Regulatory Submissions for Product in the Territory shall be filed in the name of Licensee.Licensee shall be responsible for27  all communications and other dealings with the Regulatory Authorities relating to the Post-ApprovalRegulatory Submissions and Licensee shall be the legal and beneficial owner of all Post-ApprovalRegulatory Submissions.(b) Prior to submitting a Post-Approval Regulatory Submission regarding a material matter (such as asupplemental change to the NDA), Licensee shall provide a draft (which may be wholly or partly inelectronic form) to the Licensor for review and comment.7.11 Adverse Event Reporting.(a) Licensor shall be responsible for complying with all Legal Requirements governing adverse events bothinside and outside the Territory that occur prior to the transfer of NDA to Licensee, and Licensor'sresponsibilities shall thereafter continue outside the Territory. Licensor shall submit copies of reports ofadverse events to Licensee simultaneously with submission to the applicable Regulatory Authorities,and, following, transfer of the NDA to Licensee, Licensee shall submit copies of adverse events toLicensor simultaneously with submission to the applicable Regulatory Authorities in the Territory.Licensee shall be responsible for complying with all Legal Requirements governing adverse events inthe Territory that occur after the transfer of the NDA to Licensee. Each Party shall notify the other in atimely manner and in any event within forty eight (48) hours of receiving any notice from a RegulatoryAuthority, independent review committee, data safety monitoring board or another similar Clinical Trialor post-marketing monitoring body alleging concern regarding a patient safety issue or other materialinformation relevant to the safety or efficacy of Product.(b) As will be more fully set forth in the Safety Agreement and agreed to pursuant to Section 7.11(d),Licensor shall be responsible at its own cost for establishing and maintaining a global safety database forthe Product based on procedures and guidelines so agreed by the Parties for the operation of suchdatabase.(c) If during the Product’s Development or Commercialization, the Product becomes subject to adverseeffects or information of the type referred to in the last sentence of Section 7.11(a) is received, in eachcase which Licensee, in good faith, reasonably believes would seriously impact the long-term viability ofProduct in the Territory, Licensee shall determine whether or not there exists such serious impact on thelong-term viability of such Product and, what if anything, the Parties should do to address the matter. IfLicensee, upon consideration of the relevant facts and in its sole discretion, determines that the Partiesare unable to successfully address and resolve the safety issue, Licensee shall provide written notice toLicensor of such determination, which notice shall set forth the reasons therefor, and Licensee mayterminate its rights and obligations under this Agreement upon written notice.(d) As promptly as practicable following the Effective Date, but in no event later than one hundred eighty(180) days thereafter, Licensee and Licensor will develop and agree upon safety data exchangeprocedures in a separate and detailed safety agreement (the “Safety Agreement”). Such agreement willdescribe the coordination of collection, investigation, reporting, and exchange of information concerningadverse events or any other safety problem of any significance, and product quality and productcomplaints involving adverse events, sufficient to permit each Party, its Affiliates, licensees orsublicensees to comply with its legal obligations. The safety data exchange procedures will be promptlyupdated if required by changes in Legal Requirements. In the event of any conflict or inconsistencybetween this Agreement28  and the Safety Agreement with respect to: (i) safety-related matters, the Safety Agreement shall prevail;and (ii) any other matter, this Agreement shall prevail.7.12 Regulatory Correspondence.(a) Notification to Other Parties of Regulatory Correspondence. Each Party shall promptly (and in anyevent, within two (2) Business Days of the date of receipt of notice) notify the other Party in writing of,and shall provide the other Party with copies of, any correspondence and other documentation receivedor prepared by such Party in connection with any of the following events:(i) receipt of a material regulatory letter, warning letter, Form 483, or similar item, from anyRegulatory Authority directed to the Manufacture, packaging, and/or storage of Product, anyLicensee facility or any contract Manufacturing facility associated with Licensee's supply ofProduct;(ii) any recall or correction of any batch of Product; and(iii) any regulatory comments relating to Product requiring a response or action by a Party.(b) Regulatory Correspondence requiring a Licensor response. In the event that Licensor receives anymaterial regulatory letter or comments from any Regulatory Authority directed to its development orManufacture of Product requiring a response or action by Licensor, including, but not limited to, receiptof a Form 483 or a warning letter, Licensee (as applicable) will promptly provide Licensor with any dataor information in Licensee's possession that is required by Licensor in preparing any response relating toLicensor's development of such Product, and will cooperate with Licensor's reasonable requests relatedto Licensor preparing such response.(c) Regulatory Correspondence requiring a Licensee response. In the event that Licensee receives anymaterial regulatory letter or comments from any Regulatory Authority relating to the development orManufacture of Product, Licensor (as applicable) will promptly provide Licensee with any data orinformation required by Licensee in preparing any response relating to Licensor's development orManufacture of Product, and will cooperate fully with Licensee in preparing such response. To the extentreasonably practicable (subject to the time a response is mandated), Licensee shall provide Licensor witha copy of each such response for Licensor's review and comment at least two (2) Business Days prior toLicensee's submission of the response.7.13 Regulatory updates. During the Term, each Party will keep the other Party generally apprised of the status ofany Regulatory Submissions related to Product inside and outside the Territory. Licensee shall immediatelynotify Licensor in writing upon receipt by Licensee of any Regulatory Approval to market Product in theTerritory. Licensor shall immediately notify Licensee in writing upon receipt by Licensor of any RegulatoryApprovals to market Product outside the Territory.8. Financial ProvisionsUpfront fee8.1 The Licensee will pay to the Licensor an upfront fee of twenty four million USD (US$24,000,000) within five(5) days of the Effective Date.29  Regulatory Milestone Payment8.2 The Licensee will pay to the Licensor a milestone payment of five million USD (US$5,000,000) within thirty(30) days of the grant of Regulatory Approval in the USA for the Product for the Pediatric Indication.Commercial Milestone Payments8.3 The following one-time payments shall be paid by the Licensee to the Licensor in USD sixty (60) daysfollowing first achievement of the following Commercialization milestone events:(a) cumulative Net Sales of Product in a Calendar Year reaching twenty five million dollars:Commercialization payment of four million dollars (US$4,000,000);(b) cumulative Net Sales of Product in a Calendar Year reaching fifty million dollars: Commercializationpayment of ten million dollars (US$10,000,000);(c) cumulative Net Sales of Product in a Calendar Year reaching one hundred million dollars:Commercialization payment of twenty million dollars (US$20,000,000);(d) cumulative Net Sales of Product in a Calendar Year reaching two hundred million dollars:Commercialization payment of forty million dollars (US$40,000,000); and(e) cumulative Net Sales of Product in a Calendar Year reaching five hundred million dollars:Commercialization payment of one hundred million dollars (US$100,000,000).8.4 Each of the milestone payments subject to Sections 8.2 and 8.3, shall only be payable by the Licensee upon thefirst occurrence of the applicable event whenever it occurs. Upon the occurrence of the applicable event themilestone payment shall be payable even if more than one occurs in a Calendar Year. Such milestone paymentsare non-refundable in any circumstances whatsoever and are not creditable against the royalties due underSection 8.6.8.5 The Licensee shall report the occurrence of each milestone event under Sections 8.2 and 8.3 to the Licensorwithin forty-five (45) days of its occurrence and at the same time shall make the milestone payment to theLicensor for which Sections 8.2 and/or 8.3 provides.Royalties; Taxes8.6 The Licensee will pay to the Licensor royalties during the Royalty Term as set forth below:Royalty = A + B where:A equals fifteen per cent (15%) of that portion of Net Sales of Product in the Territory, which, during theCalendar Year in question, is less than or equal to seventy five million USD (US$75,000,000); andB equals eighteen per cent (18%) of that portion of Net Sales of Product in the Territory, which, during theCalendar Year in question, is greater than seventy five million USD (US$75,000,000).If, in the United States, if data exclusivity remains following expiry of the last Valid Claim in a United Statespatent or patent application, then the royalty rate calculated above shall be reduced to (A +B)/2 (and theremaining royalty payments shall be payable as a royalty on Know-How). In any country in the Territory where,during the Royalty Term, there are no Valid Claims of Licensor Patent Rights or data exclusivity protection forthe Product for a particular Existing Indication, the royalty rate shall be reduced to five percent (5%) (and the30  remaining royalty payments shall be payable as a royalty on Know-How) irrespective of the amount of NetSales of Product.8.7 To the extent that a New Indication is Developed and Commercialized by or on behalf of Licensee followingthe Effective Date then royalties will be payable upon the Net Sales of Product for such New Indication inaccordance with Section 8.6. For these purposes:(a) the time periods referred to in the definitions of 'Term' and 'Royalty Term' shall relate to the NewIndication(s) and not the Existing Indication (and related definitions, including that of 'First CommercialSale Date' shall be read accordingly);(b) the provisions of Section 8.6 shall otherwise apply mutatis mutandis to Net Sales derived from suchNew Indication; and(c) Net Sales of the Product for such New Indication shall be included in the calculation of the'Commercialization Milestone Payments'.8.8 For the avoidance of doubt, any royalties or other payments owed by Licensor under any agreement to whichLicensor or any Affiliate of Licensor is a party, including the Exploitation Agreement, shall be the soleresponsibility of Licensor.8.9 All royalties due to the Licensor under this Agreement shall be calculated and payable on a Calendar Quarterbasis, and shall be paid by the Licensee to the Licensor in USD within sixty (60) days following the end of eachof 31 March, 30 June, 30 September and 31 December in each year (“60 day Period” and “Quarter End”respectively). Within sixty (60) days of each Quarter End the Licensee shall send to the Licensor a written reportsetting out (i) Product by Product and country by country the amount of Net Sales in such country during suchquarter expressed in the local currency of that country and a breakdown of whether these relate to the AdultIndication, Pediatric Indication or New Indication; and (ii) the amount of the royalties due to the Licensor inrelation to such Quarter. Any sales in a country other than the U.S., for purposes of determining the Net Salesamount shall be calculated using the average rate of exchange of the currency of such country for the applicablecalendar month, as published in The Wall Street Journal, New York edition.8.10 Taxes.(a) Licensor shall be liable for all income and other Taxes (including interest) imposed upon any paymentsmade by Licensee to Licensor under this Agreement (“Agreement Payments”). If applicable Laws, rulesor regulations require the withholding of Taxes, Licensee shall make such withholding payments andshall subtract the amount thereof from the Agreement Payments. Licensee shall submit to Licensorappropriate proof of payment of the withheld Taxes as well as the official receipts within a reasonableperiod of time. Licensee shall provide Licensor reasonable assistance in order to allow Licensor to obtainthe benefit of any present or future treaty against double taxation which may apply to the AgreementPayments.(b) Licensee shall bear and be responsible for and pay all applicable Taxes related to:(i) the transfer to Licensee of the Product Registrations and the license rights granted under thisAgreement; and(ii) the Development and Commercialization by Licensee of the Product in the Territory other thanfor the PIP.8.11 Each Party and its Affiliates shall use all reasonable efforts to maintain complete and accurate records insufficient detail to permit the other Party to confirm the accuracy of the amount to be reimbursed with respectto Development Costs, or other amounts to be paid,31  reimbursed, credited, offset or shared hereunder incurred or generated (as applicable) by such Party's orAffiliate's achievement of sales milestones, royalty payments and other compensation or reimbursementpayable under this Agreement. Upon reasonable prior notice, such records shall be open during regularbusiness hours for a period of three (3) years from the creation of individual records for examination at theauditing Party's expense, and not more often than once each Calendar Year, by an independent certified publicaccountant selected by the auditing Party and reasonably acceptable to the audited Party or Affiliate for the solepurpose of verifying for the auditing Party the accuracy of the financial statements or reports or sales milestonenotices furnished by the audited Party or Affiliate pursuant to this Agreement or of any payments made, orrequired to be made, by or to the audited Party or Affiliate to the other pursuant to this Agreement. Any suchauditor shall not disclose the audited Party's or Affiliate's confidential information to the auditing Party, butshall, instead, report that there was or was not a discrepancy uncovered by the audit and if such a discrepancywas uncovered, the amount and direction of it. Any amounts shown to be owed but unpaid, or overpaid and inneed of reimbursement, shall be paid or refunded (as the case may be) within thirty (30) days after theaccountant's report, plus interest (as set forth in Section 8.13) from the original due date (unless challenged ingood faith by the audited Party, in which case any undisputed portion shall be paid in accordance with theforegoing timetable, any dispute with respect to such challenge shall be resolved in accordance with Section16, any remaining disputed portion shall be paid within thirty (30) days after resolution of the dispute, andinterest shall accrue (as set forth in Section 8.13) with respect to the disputed portion from the original duedate). The auditing Party shall bear the full cost of such audit unless such audit reveals an overpayment to, oran underpayment by, the audited Party or Affiliate that resulted from a discrepancy in a report that the auditedParty or Affiliate provided to the other Party during the applicable audit period, which underpayment oroverpayment was more than ten percent (10%) of the amount set forth in such report, in which case the auditedParty or Affiliate shall bear the full cost of such audit. Each Party, at the request of the other Party, shall makeavailable to the other Party the results of any audit performed by the non-requesting Party on such non-requesting Party's Sub-licensees hereunder.8.12 All payments made to either Party under this Agreement shall be made by wire transfer to the account of suchParty.8.13 If a Party fails to make any payment due to the other Party hereunder on the due date for payment and thepayment is not in dispute between the Parties, without prejudice to the other right or remedy available to theother Party, the Party owed such Payment shall be entitled to charge the Licensee interest (both before and afterjudgment) on the amount unpaid at the annual rate of LIBOR plus two per cent (2%) calculated on a daily basisuntil payment in full is made without prejudice to the Licensor's right to receive payment on the due date.9. Trademarks9.1 The Licensee shall have the option to use the Licensor Trademark in relation to the Commercialization ofProduct in the Territory. The use by the Licensee of the Licensor Trademark shall not constitute or imply anyassignment or transfer of the Licensor Trademark or any goodwill associated with it. Any goodwill accrued inconnection with the use of the Licensor Trademark shall accrue solely to the benefit of the Licensor. TheLicensee shall ensure that each reference to and use of the Licensor Trade Mark by the Licensee in PromotionalMaterials is acceptable to the Licensor and is accompanied by an acknowledgement that the Licensor TradeMark is owned by the Licensor and used by the Licensee under license.32  9.2 The Licensee shall not challenge the validity of the Licensor Trademark and shall not aid or assist third partiesto do so. Whatever use the Licensee makes of the Licensor Trademark shall inure to the sole and exclusivebenefit of the Product in accordance with this Agreement.9.3 Except as required by applicable Law, neither Party shall use the other Party's corporate name, or use anyTrademarks of the other Party (other than the Licensor Trademark) in connection with any PromotionalMaterials or publication without the other Party's prior written consent which shall not be unreasonablywithheld. The above restriction will not apply to representations that the Licensee is the exclusive licensee of theLicensor for the Product in the Territory.9.4 In the case of infringement or misuse of the Licensor Trademark, if the Licensor fails to initiate proceedingswithin three (3) months of the Licensee's notification thereof, the Licensee may give the Licensor noticerequesting the Licensor to take such proceedings within thirty (30) days of the date of this second notice. If theLicensor fails to initiate such proceedings within such period, the Licensee shall be entitled to do so at its owncost and expense in which case it shall have sole conduct of any claim or proceedings. The Licensor shall, andshall procure that its Affiliates shall, reasonably assist and cooperate with the Licensee in any such claim,provided that the Licensee shall reimburse the Licensor for all reasonable out-of-pocket costs and expenses, ifany, relating to such assistance and cooperation. Such reasonable assistance and cooperation of the Licensorand its Affiliates shall include but not be limited to the execution of such documents and the performance ofsuch other acts, including being joined as a party to any proceedings, as may be reasonably required to facilitatesuch claim, including but not limited to such documents and acts that may, upon the Licensee's request, berequired for the registration of the Licensee as exclusive licensee of the Licensor Trademark in the Territory atthe trademark office in the relevant countries of the Territory. The Licensee shall have sole right to settle suchproceedings provided such settlement does not directly or indirectly adversely affect the Licensor's rights andinterests outside of the Territory, and shall be entitled to retain any financial payment awarded in suchproceedings or agreed in any such settlement for its own account.10. Intellectual Property (except Trademarks)10.1 For the purposes of this Section 10, the “Licensor IPR Package” shall exclude the Licensor Trademark and the“Licensee IPR Package” shall exclude Trademarks.10.2 Except as expressly set forth in this Agreement, nothing in this Agreement transfers ownership of the LicensorIPR Package to the Licensee.10.3 The Licensee shall own all the Licensee IPR Package. The Licensee shall use Commercially Reasonable Effortsto procure that, under the terms of any appointment of a Sub-licensee, all Materials, Know How andCommercial Information generated or developed by or upon their behalf shall be Controlled by the Licensee.10.4 The Licensee grants to the Licensor a perpetual, exclusive, sub-licensable, fully paid-up royalty free right andlicense to use the Licensee IPR Package outside the Territory for Development, Manufacture andCommercialization of the Product outside the Territory other than for a New Indication, which license rights arecovered solely by the license set forth in Section 5.9.10.5 The Licensor shall be solely responsible at its own cost and expense for the filing, prosecution, maintenanceand/or defense of the Licensor Patent Rights in the Territory using reasonable efforts to prosecute all patentapplications forming part of the Licensor Patent Rights to grant in the USA, including conducting any necessaryor desirable claims or proceedings (including but not limited to any interference, reissue or re-examination oropposition or revocation proceedings). The Licensor shall keep the Licensee reasonably33  informed of all filings made for the Licensor Patent Rights in the Territory including sending the Licensee acopy of any such filing and otherwise shall keep the Licensee informed of all material developments in relationto such Licensor Patent Rights and shall, upon the Licensee's request, provide the Licensee with copies ofrelevant Documents related to the filing, prosecution and maintenance of such Licensor Patent Rights. TheLicensor shall give full consideration of, and absent a compelling reason to the contrary shall adopt anyreasonable representation made by the Licensee in relation to the prosecution of the Licensor Patent Rights inthe Territory when making any submission to a patent office (including the scope of foreign filings) and in theconduct of any proceedings in relation to such Licensor Patent Rights.10.6 In the event that the Licensor declines to file or, having filed, declines to further prosecute, maintain and/ordefend any pending Licensor Patent Rights in any country of the Territory, the Licensor shall provide theLicensee with written notice thereof. In the case where the Licensor has filed but is declining to furtherprosecute or maintain the Licensor Patent Rights, such notice shall be given at least thirty (30) days prior to theexpiration of any official substantive deadline relating to such activities. In any of such circumstances theLicensee shall have the right to decide that the Licensee should file, continue to file, prosecute and maintainsuch Licensor Patent Rights and in such case the Licensee shall give written notice to the Licensor. The Licensorshall upon receipt of any such notice from the Licensee transfer to the Licensor all its files relating to therelevant Licensor Patent Rights and at the Licensee's cost and expense execute any documents to otherwisetransfer control of such filing, prosecution and maintenance to the Licensor and thereafter the Licensee shall beresponsible for the cost and expense of prosecuting and maintaining such Licensor Patent Rights. In addition theLicensor shall assign such Licensor Patent Rights to the Licensee for zero or nominal consideration, whereuponthey shall not be part of any license rights granted to or through Licensor hereunder.10.7 The Licensee shall be responsible at its own cost and expense and in its sole discretion for the filing,prosecution, maintenance and/or defense of Patent Rights in respect of inventions within Know How developedby the Licensee, its Affiliates or Sub-licensees relating to or potentially covering Product (the “Licensee PatentsRights”). The Licensee shall keep the Licensor informed of all material developments in relation to the LicenseePatent Rights and shall, upon the Licensor's request, provide the Licensor with copies of relevant documentsrelated to the filing, prosecution and maintenance of the Licensee Patent Rights. The Licensee shall consider ingood faith any reasonable representation made by the Licensor in relation to the prosecution of Patent Rightswithin the Licensee Patent Rights when making any submission to a patent office and in the conduct of anyproceedings in relation to such Licensee Patent Rights in Europe.10.8 In the event that the Licensee declines to file or, having filed, declines to further prosecute, maintain and/ordefend any pending Licensee Patent Rights in any country of the Territory or Europe, the Licensee shall providethe Licensor with written notice thereof. In the case where the Licensee has filed but is declining to furtherprosecute or maintain such Licensee Patent Rights, such notice shall be given at least thirty (30) days prior to theexpiration of any official substantive deadline relating to such activities. In any of such circumstances theLicensor shall have the right to decide that the Licensor should file, continue to file or prosecute such LicenseePatent Rights and in such case the Licensor shall give written notice to the Licensee. The Licensee shall uponreceipt of any such notice from the Licensor transfer to the Licensor all its files relating to such Licensee PatentRights and execute any documents necessary to transfer control of such filing, prosecution and maintenance tothe Licensor. In addition the Licensee shall assign such Licensee Patent Rights to the Licensor for zero ornominal consideration, whereupon they shall not be part of any license rights granted to or through Licenseehereunder.34  10.9 If either Party becomes aware of any actual, threatened or suspected infringement or misuse by a Third Party ofany of the Licensor IPR Package relating to the Product in the Territory, it shall promptly inform the other Partyin writing of all available evidence and details available to it concerning said infringement (the “InfringementNotice”). With respect to any actual, threatened or suspected infringement, the Licensee shall have the right, butnot an obligation, at its own cost and expense to bring, defend or maintain any suit or action, in which case itshall have sole conduct of any claim or proceedings including any counterclaim for invalidity orunenforceability or any declaratory judgment action. The Licensor shall provide all necessary assistance to theLicensee in relation to such proceedings (including being joined as a party to any such proceedings) and theLicensee shall on demand by the Licensor indemnify the Licensor against reasonable costs of such activity thatwere approved by Licensee in advance in writing, provided that if the Licensor elects to be separatelyrepresented (which shall be at the Licensor's discretion), such separate representation shall be at the Licensor'ssole cost and expense. The Licensee shall retain any award of costs and damages made or settlement sum paid,after recovery by the Licensor of its actual out-of-pocket costs and expenses. The Licensee will not (i) enter intoany settlement of or make admission or stipulation in any such proceedings that admits any liability of Licensoror materially negatively impacts Licensor's rights hereunder or in the Licensor IPR Package without theLicensor's prior written consent, not to be unreasonably withheld or delayed.10.10 If under Section 10.9, the Licensee fails to take any such proceedings within 90 days of any InfringementNotice, then the Licensor shall have the right, but not the obligation, upon 20 days prior notice to the Licenseeat the Licensor's expense to bring, defend or maintain any suit or action or to control the conduct thereofagainst any actual, threatened or suspected infringement. The Licensee shall provide all necessary assistance tothe Licensor in relation to such proceedings (including being joined as a party to any such proceedings). In anysuch action brought by the Licensor, the Licensor shall retain any award of costs and damages made orsettlement sum paid, after recovery by the Licensee of its actual out-of-pocket costs and expenses. TheLicensor will not enter into any settlement of or make admission or stipulation in any such proceedings thatadmits any liability of Licensee or materially negatively impacts Licensee's rights hereunder or in the LicensorIPR Package without the Licensee's prior written consent, not to be unreasonably withheld or delayed.10.11 If either Party or its Affiliates receives formal notice from a Third Party that the Development, Manufacture orCommercialization of Product in the Territory under this Agreement infringes or otherwise violates theintellectual property rights of such Third Party in the Territory, then such Party must promptly notify the otherParty in writing of this allegation. As soon as reasonably practicable after the receipt of such notice and at alltimes thereafter, the Parties will meet and consider the appropriate course of action with respect to suchallegation of infringement. In any such instance, each Party will at its own cost, expense and liability, have theright to defend any action naming it; however, the Parties will at all times cooperate, share all material noticesand filings in a timely manner, provide all reasonable assistance to each other and use good faith effortsmutually to agree upon an appropriate course of action, including, as appropriate, the preparation of materialcourt filings and any discussions concerning a potential defense and/or settlement of any such claim. The rightsand obligations in this Section 10.11 will apply even if only one Party defends any such claimed infringementaction commenced by a Third Party. Neither Party will enter into any settlement of or make admission orstipulation in any such proceedings that admits any liability of the other Party or materially negatively impactssuch other Party's rights hereunder or in the Licensor IPR Package without such other Party's prior writtenconsent, not to be unreasonably withheld or delayed.10.12 The Parties agree to cooperate in an effort to avoid loss of any of the Patent Rights forming part of the LicensorIPR Package or Licensee IPR Package including by executing any35  documents as may be reasonably required. In particular, the Parties shall cooperate with each other in obtainingpatent term extension or restoration or supplemental protection certificate (“Patent Term Extensions”) or theirequivalents in any country of the Territory. Licensee shall have the sole right and shall use CommerciallyReasonable Efforts to seek any available Patent Term Extensions in the Territory.11. Confidentiality11.1 Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, eachParty agrees that, during the Term and for seven (7) years thereafter, it shall, and shall cause its Affiliates, tokeep confidential and not publish or otherwise disclose to any Third Party, and not use for any purpose otherthan as provided for in this Agreement, any Confidential Information of the other Party or any of its Affiliates,provided that each Party and its Affiliates may disclose the Confidential Information of the other Party or itsAffiliates to the receiving Party's and its Affiliates' officers, directors, employees, agents and advisors who ineach case are bound by commercially reasonable obligations of confidentiality with respect to the use anddisclosure of such Confidential Information. Notwithstanding the foregoing, Confidential Information of a Partyor its Affiliate shall exclude that portion of such information or materials that the receiving Party (or thereceiving Party's Affiliate) can demonstrate by competent written proof:(a) was generally available in the public domain at the time it was disclosed to the receiving party orsubsequently came into the public domain through no fault of the receiving party; or(b) was already known to the receiving Party or its Affiliate, other than under an obligation ofconfidentiality, at the time of disclosure by the other Party or is subsequently disclosed to the receivingParty or its Affiliate by a Third Party without obligations of confidentiality with respect thereto.(c) is independently discovered or developed by the receiving Party or its Affiliate without the aid,application, or use of Confidential Information.11.2 For clarity, specific aspects or details of Confidential Information shall not be deemed to be within the publicdomain or in the possession of the Recipient Party merely because the Confidential Information is embraced bymore general information in the public domain or in the possession of the Recipient Party. Further, anycombination of Confidential Information shall not be considered in the public domain or in the possession of theRecipient Party merely because individual elements of such Confidential Information are in the public domainor in the possession of the Recipient Party unless the combination is in the public domain or in the possession ofthe Recipient Party.11.3 Notwithstanding the above obligations of confidentiality and non-use a Recipient Party may discloseConfidential Information:(a) In responding to a valid order of a court of competent jurisdiction or other competent authority;provided that the receiving Party shall, to the extent reasonably practicable under the circumstances, firsthave given to the disclosing Party notice and a reasonable opportunity to quash the order or obtain aprotective order requiring that the Confidential Information be held in confidence or used only for thepurpose for which the order was issued; and provided further that if such order is not quashed or aprotective order is not obtained, the Confidential Information disclosed shall be limited to theinformation that is legally required to be disclosed;36  (b) to a Regulatory Authority as reasonably necessary to obtain Regulatory Approval in a particularjurisdiction to the extent consistent with the licenses granted under terms of this Agreement; and(c) In complying with Applicable Law, provided that to the extent such disclosure is required to complywith a Legal Requirement, including to the extent such disclosure is required in publicly filed financialstatements or other public statements under rules governing a stock exchange; provided, to the extentpossible bearing in mind such Legal Requirements and subject to the next subsequent sentence of thisSection (c), such Party shall provide the other Party with a copy of the proposed text of such statementsor disclosure five (5) days in advance of the date on which the disclosure is to be made to enable theother Party to review and provide comments, unless a shorter review time is agreed. [If the compliancewith a Legal Requirement requires filing of this Agreement, the filing Party shall to the extent possibleseek confidential treatment of portions of this Agreement from the relevant Government Authority andshall provide the other Party with a copy of the proposed filings at least five (5) days prior to filing forthe other Party to review any such proposed filing.] Each Party agrees that it will obtain its own legaladvice with regard to its compliance with Legal Requirements and will not rely on any statements madeby the other Party relating to such Legal Requirements;(d) (i) to its actual or potential investment bankers; (ii) to existing and potential investors in connection withan offering or placement of securities for purposes of obtaining financing for its business and to actualand prospective lenders for the purpose of obtaining financing for its business; and (iii) to a bona fidepotential acquirer or merger partner for the purposes of evaluating entering into a merger or acquisition,provided, however, any such persons must be obligated to substantially the same extent as set forth inSection 11 to hold in confidence and not make use of such Confidential Information for any purposeother than those permitted by this Agreement; and(e) to its legal advisers for the purpose of seeking advice.11.4 Nothing in this Section 11 restricts either Party from using or disclosing any of its own Confidential Informationfor any purpose whatsoever, subject always to the rights granted in this Agreement and provided always that theLicensee shall not under any circumstances publish the results of any clinical studies on Product without theprior written approval of the Licensor.11.5 Following execution of this Agreement, each Party shall release a separate press release regarding thistransaction and the wording of each press release shall be pre-agreed by the other Party. Other than such pressreleases, save as permitted in Section 11.3 neither Party shall make any public announcement or statement to thepublic containing Confidential Information without the prior written consent of the other. No such publicannouncements or statements shall be made without the prior review and consent of the appropriate individualdesignated for the purpose by the other PartyPublicity11.6 Licensor, along with trial investigators, has submitted for publication a draft publication regarding the pivotaltrial for the NDA Product. Promptly upon Licensor’s receipt thereof, Licensor agrees to provide a copy toLicensee a of all correspondence and editorial feedback regarding such publication for Licensee's review andcomment, which comments Licensor Note to draft: Parties to discuss whether or not the agreement will be afforded confidential treatment.37 22  shall accept and incorporate into such publication prior to any resubmission or finalization thereof.11.7 Subject to Section 7.6, other than with respect to the publication regarding the pivotal trial, the Parties shalleach provide the other Party with copies of any publications or meeting abstracts relating to a Product for suchother Party's review and comment at least thirty (30) days prior to submitting such publication to any journal orsubmitting or presenting it or an abstract thereof at any congress, conference or other public meeting, and eachParty agrees to take reasonably into account any comments received from the other Party thereon.11.8 Following final submission of the publication for the pivotal trial, (a) Licensor and its Affiliates and Sub-licensees shall refrain from engaging any study investigator, practitioners, opinion leaders, patient advocatesand payers in the Territory regarding the Product for any reason, including scientific discourse, without the priorconsent of Licensee (such consent not to be unreasonably withheld, delayed or conditioned); and (b) Licenseeand its Affiliates and Sub-licensees shall refrain from engaging any study investigator, practitioners, opinionleaders, patient advocates and payers outside the Territory regarding the Product for any reason, includingscientific discourse, without the prior consent of the Licensor (such consent not to be unreasonably withheld,delayed or conditioned).12. Representations, warranties and covenants12.1 Mutual Representations and Warranties. Each Party hereby represents, warrants, and covenants (as applicable)to the other Party as of the Effective Date as follows:(a) Corporate Existence and Power. It is a company or corporation duly organized, validly existing, and ingood standing under the Laws of the jurisdiction in which it is incorporated, and has full corporatepower and authority and the legal right to own and operate its property and assets and to carry on itsbusiness as it is now being conducted and as contemplated in this Agreement, including the right togrant or receive, as the case may be, the licenses granted and received hereunder.(b) Authority and Binding Agreement. It has the corporate power and authority and the legal right to enterinto this Agreement and perform its obligations hereunder; it has taken all necessary corporate action onits part required to authorize the execution and delivery of this Agreement and the performance of itsobligations hereunder; and this Agreement has been duly executed and delivered on behalf of suchParty, and constitutes a legal, valid, and binding obligation of such Party that is enforceable against it inaccordance with its terms.(c) No Conflict. It is not a party to and will not enter into any agreement that would prevent it fromgranting the rights or exclusivity granted or intended to be granted to the other Party under thisAgreement or performing its obligations under this Agreement.(d) No Debarment. Such Party is not debarred, has not been convicted, and is not subject to debarment orconviction pursuant to Section 306 of the Federal Food, Drug and Cosmetics Act. To such Party'sKnowledge, in the course of the Development of the API or Products, such Party has not used prior tothe Effective Date and shall not use, during the Term, any employee, agent or independent contractorwho has been debarred by any Regulatory Authority, or, to the best of such Party's Knowledge, is thesubject of debarment proceedings by a Regulatory Authority or has been convicted pursuant toSection 306 of the FD&C Act.(e) Anti-Corruption. Such Party, its Affiliates and their respective directors, officers, employees, agents orother persons or entities acting on its behalf (all the foregoing collectively “Representatives”) haveconducted and will conduct their businesses as38  they relate to this Agreement, in compliance with Anti-Bribery Laws. Without limiting the generality ofthe foregoing, such Party represents and warrants that it has and will have necessary procedures in placeto prevent bribery and corrupt conduct by it and its Representatives in connection with the Development,Manufacture and Commercialization of the Product.12.2 Representations, Warranties and Covenants by Licensor. Licensor hereby represents, warrants and covenants toLicensee, as of the Effective Date, as follows, except as set forth otherwise in the Disclosure Schedule:(a) Licensor owns or has a valid right to grant the licenses hereunder to the Licensor IPR Package existingas of the Effective Date, including the NDA and Licensor Patent Rights, and Licensor has the right tomake the assignments and grant the licenses to Licensee as purported to be granted pursuant to thisAgreement. Neither Licensor nor any of its Affiliates has entered into any agreement granting any right,interest or claim in or to, any Licensor Patent Rights or Licensor Know-How to any Third Party (otherthan pursuant to the CMO Contracts included in the Data Room) that would conflict with the licenses toLicensee as purported to be granted pursuant to this Agreement.(b) All Licensor Patent Rights are listed in Schedule 7. All Licensor Patent Rights are subsisting and are notinvalid or unenforceable, in whole or in part, are being prosecuted in the patent offices indicated inSchedule 7 in accordance with Applicable Law, and all applicable fees have been paid on or before theEffective Date. The Licensor Patent Rights represent all Patent Rights within Licensor' or its Affiliates'ownership or Control that Licensor reasonably believes include claims covering the making, using, andcomposition of matter of the API or the Products, or the Development, Manufacture orCommercialization thereof, as of the Effective Date. Licensor has properly recorded in the relevant U.S.and Canadian patent offices the assignments, or other necessary documents, supporting its legal title tothe Licensor Patent Rights. To the Licensor’ Knowledge, Licensor and its Affiliates have presented, orwill present prior to the pertinent patent office deadlines, all relevant references, documents, orinformation of which it and the inventors are aware to the relevant patent examiner at the pertinent patentoffice, in connection with the prosecution of the pending patent applications included in the LicensorPatent Rights.(c) There are no claims, judgments, or settlements against, or amounts with respect thereto, owed byLicensor or any of its Affiliates relating to the Product Registrations, the Licensor Patent Rights, or theLicensor Know-How. No claim or litigation has been brought or threatened in writing by any Personagainst Licensor alleging, and Licensor has no Knowledge of any reasonable basis for any such claim orallegation, whether or not asserted, that (i) the Licensor Patent Rights or the Licensor Know-How areinvalid or unenforceable, or (ii) the Product Registrations, the Licensor Patent Rights, or the LicensorKnow-How, or the disclosing, copying, making, assigning, or licensing of the Product Registrations, theLicensor Patent Rights, or the Licensor Know-How, or the Development, Manufacture,Commercialization or other exploitation of the API or Products as contemplated herein, does or willviolate, infringe, misappropriate or otherwise conflict or interfere with, any Patent or other intellectualproperty or proprietary right of any Third Party.(d) To Licensor's Knowledge, no Person is infringing or threatening to infringe or misappropriating orthreatening to misappropriate the Licensor Patent Rights, the Licensor Know-How, or the ProductRegistrations. To Licensor’ Knowledge, there are no activities by Third Parties that would constituteinfringement or misappropriation of the Licensor Technology (in the case of pending claims, evaluatingthem as if issued).39  (e) Each Person who, to Licensor’s Knowledge, has or has had any rights in or to any Licensor PatentRights or any Licensor Know-How, has assigned and has executed an agreement assigning its entireright, title, and interest in and to such Licensor Patent Rights and Licensor Know-How to Licensor. ToLicensor's Knowledge, no current officer, employee, agent, or consultant of Licensor or any of itsAffiliates is in violation of any term of any assignment or other agreement regarding the protection ofPatents or other intellectual property or proprietary information of Licensor or such Affiliate or of anyemployment contract relating to the relationship of any such Person with Licensor.(f) None of the intellectual property rights licensed hereunder by Licensor to Licensee and existing as ofthe Effective Date are owned or Controlled in whole or in part by any Third Party other than the rightsunder the CMO Contracts included in the Data Room.(g) With respect to those portions of the Licensor Know-How the confidentiality of which is material to theCommercialization of Products, such portions of the Licensor Know-How have been kept confidential orhave been disclosed to Third Parties only under terms of confidentiality. To Licensor' Knowledge, nobreach of such confidentiality has been committed by any Third Party.(h) There are no pending, and to Licensor's Knowledge there are no threatened, actions, claims, demands,suits, proceedings, arbitrations, grievances, citations, summonses, subpoenas, inquiries or investigationsof any nature, civil, criminal, regulatory or otherwise, in law or in equity, against Licensor or any of itsAffiliates or, to the Knowledge of Licensor, pending or threatened against any Third Party, in each case,relating to the transactions contemplated by this Agreement.(i) Other than the Exploitation Agreement, Licensor has not entered into any agreement with a Third Partypursuant to which Licensor may be obligated to pay a royalty or other consideration with respect to salesof a Product, nor is there any agreement that the Licensor is a party to which conflicts with or restricts inany material manner, the rights assigned or licensed by Licensor to Licensee hereunder.(j) Licensor is not, and to Licensor's Knowledge no other party to such agreement is, in breach of anyobligations owed under the Exploitation Agreement.(k) Licensor has provided or made available to Licensee, prior to the Effective Date, true, complete, andcorrect copies of all material adverse information with respect to the safety and efficacy of the API andProduct which is known to Licensor.(l) To Licensor's Knowledge, Licensor and its Affiliates and licensees have generated, prepared,maintained, and retained all Product Registrations that are required to be maintained or retained pursuantto and in accordance with applicable Law, and all such information is true, complete and correct andwhat it purports to be.(m) Licensor and its Affiliates have conducted, and to Licensor's Knowledge, their respective contractorslicensees and consultants have conducted, all Development of the API or the Products that they haveconducted prior to the Effective Date in accordance with applicable Law. To Licensor’s Knowledge,Licensor has conducted, and has caused its licensees, contractors and consultants to conduct, any and allpre-clinical and clinical studies related to the API and Products in accordance with Applicable Law. ToLicensor's Knowledge, Licensor and its Affiliates and licensees have employed (and, with respect tosuch tests and studies that Licensor will perform, will employ) Persons with appropriate education,knowledge and experience to conduct and to oversee the conduct of the PIP.40  (n) To Licensor's Knowledge, neither Licensor nor any of its Affiliates or licensees, nor any of its or theirrespective officers, employees, or agents has made an untrue statement of material fact or fraudulentstatement to the FDA or any other Regulatory Authority with respect to the Development of the API orthe Products, failed to disclose a material fact required to be disclosed to the FDA or any otherRegulatory Authority with respect to the Development of the API or the Products, or committed an act,made a statement, or failed to make a statement with respect to the Development of the API or theProducts that could reasonably be expected to provide a basis for the FDA to invoke its policy respecting“Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities”, set forth in 56 Fed. Reg.46191 (September 10, 1991) and any amendments thereto or any analogous Laws or policies in theTerritory.(o) The inventions claimed in the Licensor Patent Rights (i) were not conceived or made in connection withany research activities funded, in whole or in part, by the federal government of the United States or anyagency thereof, (ii) are not a “subject invention” as that term is described in 35 U.S.C. Section 201(f),and (iii) are not otherwise subject to the provisions of the Bayh-Dole Act.12.3 Each Party undertakes to inform the other as soon as it becomes aware that any of the following events arereasonably likely to occur:(a) cessation of conducting its business or trading;(b) sale of all or any material portion of its assets or business;(c) entry of a judgment against such Party in an amount that exceeds US$100,000 or the entry of anydeclaratory, injunctive or other equitable remedy or court order that would materially impair such Party'sability to continue to conduct its business or to perform its obligations under this Agreement;(d) any attachment (including prejudgment attachment) of any material assets;(e) failure to pay any wages to such Party's employees when due (except to the extent subject to a bonafide dispute);(f) a financial institution which lends money to such Party declaring an event of default by the companyunder any bank loan or other debt instrument;(g) entry by the Party into any restructuring or workout agreement, or similar agreement, relating to anymaterial indebtedness (being debt exceeding US$100,000); or(h) loss of any permits, licenses or governmental authorizations that are reasonably necessary in order forthe Party to continue to engage in its current business.12.4 Except as expressly set forth herein, each Party expressly disclaims and excludes any and all representationsand warranties, express, implied, statutory or otherwise, including without limitation the warranties ofmerchantability and fitness for a particular purpose.12.5 EXCEPT WITH RESPECT TO (1) AMOUNTS OWED TO A THIRD PARTY WHICH AMOUNTS FALLWITHIN THE INDEMNIFICATION OBLIGATIONS OF A PARTY UNDER SECTIONS 13.1 AND 13.2, (2)DAMAGES AVAILABLE FOR A PARTY'S BREACH OF ITS CONFIDENTIALITY OBLIGATIONSHEREUNDER, OR (3) DAMAGES AVAILABLE IN THE CASE OF A PARTY'S FRAUD, GROSSNEGLIGENCE OR INTENTIONAL MISCONDUCT, NEITHER PARTY SHALL BE LIABLE TO THE OTHERFOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES ARISINGFROM OR RELATING TO ANY41  BREACH OF THIS AGREEMENT OR ANY TORT CLAIMS ARISING HEREUNDER, REGARDLESS OFANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.12.6 Nothing in this Agreement shall be taken to exclude or limit either Party's liability to the extent that suchliability cannot be excluded or limited in Law, including for death or personal injury, fraud or fraudulentmisrepresentation.12.7 The Parties agree that:(a) Licensor shall use all reasonable efforts to negotiate and execute, as soon as reasonably practicable afterthe Effective Date, an amendment to the Exploitation Agreement which provides that upon thetermination of the Exploitation Agreement The Centre National De La Recherche Scientifique will beobligated to enter into an agreement with the Licensee, in respect of the Territory, on substantially thesame terms as those provided to the Licensor under the Exploitation Agreement including in respect ofroyalty payments; and(b) the Licensee shall use all reasonable efforts to assist the Licensor in respect of its obligation at Section12.7(a) above,and it is agreed that the Licensor shall not be obligated pursuant to this Section 12.7 to agree to any increase inthe royalties payable under the Exploitation Agreement.13. Indemnity and insurance cover13.1 Indemnification by Licensee. Subject to Sections 13.3 and 13.4, Licensee shall indemnify, defend and holdLicensor, its Affiliates, and their respective directors, officers, employees consultants, contractors, sub-licenseesand agents (collectively, the “Licensor Indemnitees”) harmless from and against any and all claims, suits,proceedings or causes of action (“Claims”) brought against such Licensor Indemnitee, including any damagesor other amounts payable with respect to such Claims, as well as any reasonable attorneys' fees and costs oflitigation incurred as to any such Claim until the indemnifying Party has acknowledged that it will provideindemnification hereunder with respect to such Claim as provided below (collectively, “Damages”), in eachcase to the extent resulting from or based on:(a) any development work done by Licensee for a Product, or any sale, use, importation, storage, handling,distribution or offer for sale or sale of Product by Licensee or any of its Affiliates or sub-licensees;(b) Licensee's breach of this Agreement or any representation or warranty made by Licensee herein;(c) the willful misconduct of, or violation of applicable Law by, Licensee, its Affiliates or Sub-licensees, ortheir respective employees, contractors or agents in the performance of this Agreement; and/or (d)breach of a contractual or fiduciary obligation owed by Licensee (including without limitationmisappropriation of trade secrets).(d) infringement or misappropriation with respect to the Development, Manufacture, or Commercializationof the Product in the Territory under the Licensee IPR Package or Licensee Trademarks.and the foregoing indemnity obligation shall not apply to the extent such Claims or Damages result from anymatter for which Licensor is required to indemnify Licensee.13.2 Indemnification by Licensor. Subject to Sections 13.3 and 13.4, Licensor shall indemnify, defend and holdLicensee, its Affiliates, and their respective directors, officers, employees42  consultants, contractors, sub-licensees and agents (collectively, the “Licensee Indemnitees”) harmless from andagainst any and all Third Party Claims brought against such Licensee Indemnitee, including any Damagesresulting therefrom, in each case to the extent resulting from or based on:(a) any development work done by Licensor for a Product, or any sale, use, importation, storage, handling,distribution or offer for sale or sale of Product by Licensor or any of its Affiliates or sub-licensees;(b) Licensor's breach of this Agreement or any representation or warranty made by Licensor therein;(c) the willful misconduct of, or violation of applicable Law by, Licensor, its Affiliates or sub-licensees, ortheir respective employees, contractors or agents in the performance of this Agreement;(d) breach of a contractual or fiduciary obligation owed by Licensor (including without limitationmisappropriation of trade secrets); or(e) infringement or misappropriation with respect to the Development, Manufacture, or Commercializationof the NDA Product under the Licensor IPR Package or Licensor Trademarks.and the foregoing indemnity obligation shall not apply to any Damages to the extent such Damages result fromany matter for which Licensee is required to indemnify Licensor pursuant to Section 13.1(b), (c), or (d).13.3 Indemnification of Product Liability Claims. Notwithstanding any other provision of this Agreement, thisSection 13.3 shall govern the allocation of liability with respect to claims of property injury, bodily injury ordeath related to Product in the Territory.(a) Subject to Section 13.4, Licensor shall indemnify and hold the Licensee Indemnitees harmless from andagainst any and all Damages which a Licensee Indemnitee may incur or suffer arising out of any ThirdParty claim of property damage, bodily injury or death (including negligence, tort, strict liability orotherwise) to the extent caused by (i) any Licensor Design Defect or (ii) any sale, use, importation,storage, handling, distribution, offer for sale or sale of Product, or development of a Product conductedby Licensor. A “Licensor Design Defect” shall be a defect in the design or formulation of the NDAProduct as such NDA Product is designed and formulated as set forth in the NDA on the Effective Date.(b) Subject to Section 13.4 and except to the extent provided in subsection (a) above, Licensee shalldefend, indemnify and hold the Licensor Indemnitees harmless from and against any and all Damagesarising out of any Third Party claims of property damage, bodily injury or death (including negligence,tort, strict liability or otherwise) to the extent caused by (i) any sale, use, importation, storage, handling,distribution, offer for sale or sale of Product, or development of such Product conducted by, Licensee; or(ii) any Licensee Design Defect. A “Licensee Design Defect” shall be a defect in the design orformulation of the Product designed or formulated by Licensee that differs from the design orformulation of the NDA Product as of the Effective Date.13.4 Indemnification Procedures. A Party seeking indemnification under Section 13.1, 13.2 or 13.3 hereof (the“Indemnitee”) shall promptly notify the other Party (the “Indemnitor”) in writing of any claim, lawsuit or otheraction in respect of which the Indemnitee, its Affiliates, or any of their respective directors, officers, employeesand agents intend to claim such43  indemnification. The Indemnitee shall permit, and shall cause its Affiliates and their respective directors,officers, employees and agents to permit the Indemnitor to have complete control of such defense (except as setforth below) so long as it promptly assumes the defense and prosecutes the defense with appropriate diligenceand care. Notwithstanding the foregoing, such Indemnitor shall not have the right to defend or direct the defenseof any such claim, lawsuit or other action that (x) is asserted directly by or on behalf of a Third Party that is asupplier or direct customer of the Indemnitee, or (y) seeks an injunction or other equitable relief against theIndemnitee. The Party controlling the defense hereunder (the “Defending Party”) shall have the authority, at itsdiscretion, to settle any such claim, lawsuit or other action only with the prior written consent of the Party who isnot controlling the defense (the “Non-Defending Party”), provided, however, that such consent shall not beunreasonably withheld or delayed so long as such settlement does not adversely affect the Non-DefendingParty's rights hereunder or impose any obligations on the Non-Defending Party in addition to those set forthherein. The Defending Party and the Non-Defending Party, and their respective Affiliates, and their respectivedirectors, officers, employees and agents shall cooperate fully with each other and their respective legalrepresentatives in the investigation and defense of any claim, lawsuit or other action covered by thisindemnification. The Defending Party shall keep the Non-Defending Party reasonably informed of the progressof the action and shall consider the comments and observations of the Non-Defending Party timely given in thecourse of the proceedings. If the Indemnitor is the Defending Party, the Indemnitee shall have the right, but notthe obligation, to be represented by counsel of its own selection and expense. Notwithstanding the foregoing,the Indemnitee may be represented by separate counsel at the expense of the Indemnitor if a conflict of interestexists between the interests of the Indemnitor and Indemnitee so that a single counsel representing Indemnitorcannot adequately defend the rights of the Indemnitee.13.5 Survival of Indemnification Obligations. The provisions of Sections 12.7 shall survive the termination orexpiration of this Agreement.13.6 Each Party shall maintain, at its own cost, the insurance coverages set forth in this Section 13.6; provided,however, the Licensee has the right, in its sole discretion, to self-insure in part or in whole for any suchcoverages:(a) commencing as of the Effective Date, and thereafter for the period of time required under Section 13.7,each Party shall obtain and maintain on an ongoing basis, commercial general liability insurance,including contractual liability, in the minimum amount of ten million dollars ($10,000,000) peroccurrence, combined single limit for bodily injury and property damage liability, and(b) commencing as of the Effective Date, and thereafter for the period of time required under Section 13.7,each Party shall obtain and maintain on an ongoing basis, products liability insurance, includingcontractual liability, in the minimum amount of ten million dollars ($10,000,000) per occurrence,combined single limit for bodily injury and property damage liability.13.7 Except to the extent that the Licensee self-insures as authorized under Section 13.6, the following provisionsapply:(a) All insurance coverages shall be primary insurance with respect to each Party's own participation underthis Agreement, and shall be maintained with an insurance for the Licensee or companies having anA.M. Best's rating (or its equivalent) of A-XII or better.(b) Each Party shall be provided additional insured status under the other party’s commercial generalliability and products liability insurance policies.44  (c) The insurance policies shall be under an occurrence form, but if only a claims-made form is available toa Party, then in such a case, such Party shall maintain the insurance coverage for at least five (5) yearsfollowing such Party's completing performance of its obligations under this Agreement.(d) Each Party's aggregate deductibles under its commercial general liability and products liability andother insurance policies shall be reasonably satisfactory to the other Party, taking into account thedeductibles that are prudent and customary with respect to the activities in which it is engaged under thisAgreement.(e) Each Party's insurance coverage shall include an option to purchase tail coverage for claims arisingduring a period covered by such insurance (the policy period) but for which claims are not broughtduring the policy period, which tail period shall have a duration of at least five (5) years following theend of the policy period. The tail coverage will be purchased if the insurance coverage in place iscancelled or non-renewed.(f) Each Party shall provide to the other Party its respective certificates of insurance evidencing theinsurance coverages set forth in Section 13.6 Each Party shall provide to the other Party at least thirty(30) days prior written notice of any cancellation, non-renewal or material change in any of theinsurance coverages. Each Party shall, upon receipt of written request from the other Party, providerenewal certificates to the other Party for as long as such Party is required to maintain insurancecoverages hereunder.14. Duration and termination of the agreement14.1 The Agreement shall enter into force and effect on the Effective Date and shall remain in full force and effectcountry by country of the Territory for the duration of the Term, subject to earlier termination as provided in thisAgreement. At the expiry of the Royalty Term in each country of the Territory the licenses granted by theParties hereunder shall become perpetual, irrevocable, fully paid up and royalty free in such country.14.2 The Licensee shall be entitled to terminate the Agreement:(a) effective immediately upon prior written notice to the Licensor pursuant to Section 7.11(d), if theLicensee can demonstrate that there are reasonable good faith grounds to believe there is a safetyconcern related to the Product, or(b) effective immediately upon prior written notice to the Licensor in case of withdrawal of the RegulatoryApproval for the Product in the United States for whatever reason which the Licensee reasonablybelieves will be permanent;(c) effective upon two hundred and seventy (270) days' prior written notice to the Licensor, for any reasonor no reason; or(d) pursuant to Section 14.4 below, which relates to a material breach of the Agreement by the Licensor.14.3 The Licensor shall be entitled to terminate this Agreement pursuant to Section 14.4 below, which relates to amaterial breach of the Agreement by the Licensee.14.4 Either Party (the non-breaching Party) shall have the right to terminate this Agreement upon giving ninety (90)days written notice to the other Party on the occurrence of a material breach by such other Party (the breachingParty) which material breach is incapable of remedy or which, in the case of a breach capable of remedy, shallnot have been remedied45  within such ninety (90) day notice period, provided that the non-breaching Party shall have identified in itsnotice the breach in reasonable detail. If the breach relates to:(a) Canada then the Licensor shall only have the right to terminate this Agreement in relation Canada; or(b) the USA then the Licensor shall have the right to terminate this Agreement in its entirety.If the breaching Party in good faith disputes such material breach or disputes the failure to cure or remedy suchmaterial breach and provides written notice of that dispute to the non-breaching Party within the above noticeperiod, then the matter will be addressed under the dispute resolution provisions in Section 16 and the non-breaching Party may not terminate this Agreement until it has been determined under Section 16 that thebreaching Party is in material breach of this Agreement, and the breaching Party further fails to cure such breachwithin sixty (60) days after the conclusion of that dispute resolution procedure.14.5 Rights in Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by either Party are,and shall otherwise be deemed to be, for purposes of section 365(n) of the U.S. Bankruptcy Code, licenses ofright to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code. The Parties agree thateach Party, as licensee of certain rights under this Agreement, shall retain and may fully exercise all of its rightsand elections under the U.S. Bankruptcy Code. The Parties further agree that, in the event of the occurrence of aBankruptcy Event in respect of a Party (such Party, the “Debtor”) under the U.S. Bankruptcy Code, the otherParty shall be entitled to a complete duplicate of (or complete access to, as appropriate) any intellectual propertylicensed to such other Party and all embodiments of such intellectual property, which, if not already in suchother Party's possession, shall be promptly delivered to it:(a) upon any such commencement of a bankruptcy proceeding upon such other Party's written requesttherefor, unless the Debtor elects to continue to perform all of its obligations under this Agreement; or(b) if not delivered following the rejection of this Agreement by the Debtor upon written request thereforby the other Party.14.6 Expiration of, or termination of this Agreement by Licensee pursuant to Section 14.4, shall result in thefollowing:(a) All rights granted by the Licensor to the Licensee in the Licensor IPR Package and LicensorTrademarks under the Agreement shall become fully-paid-up, royalty-free and perpetual.(b) The rights and obligations of the Parties set forth in Section 10 shall continue until the date that is six(6) years after the last to expire Valid claim of a Patent Right Controlled by either Party shall haveexpired.(c) The obligations with respect to monitoring and exchange of safety information set forth in Section 7.11shall continue for as long as both Parties are Developing or Commercializing a Product anywhere in theWorld, with each Party bearing its own costs and expenses with respect thereto.14.7 Termination of this Agreement by Licensee other than pursuant to Section 14.4, or by Licensor pursuant toSection 14.2(b), shall result in the following, which, if the termination is in relation to a country, shall only applyin such country:46  (a) Termination of all rights granted by the Licensor to the Licensee under the Agreement and reversion tothe Licensor of such rights. The Licensee shall immediately cease all use of the Licensor IPR Packageand shall cease all Development, manufacturing and Commercialization activity. All Sub-licensesagreements and arrangements shall terminate simultaneously.(b) The Licensee hereby grants to the Licensor a non-exclusive, perpetual, sub-licensable, fully paid-uproyalty free right and license to use the Licensee IPR Package inside such Country for the Developmentand Commercialization of the Product in such country and for the Manufacture of Products in theTerritory. Termination shall have no impact upon the Licensor's rights to use the Licensee IPR Packageoutside the Territory.(c) The Licensee shall promptly transfer to the Licensor the Licensee Materials, Licensee Know How,Product Registrations and Commercial Information and Documents containing the same (including anyof the same in the possession of a Sub-licensee).(d) Commensurate with Legal Requirements, to the extent held by the Licensee, it shall as soon asreasonably practicable after termination transfer to the Licensor or its nominee all right, title and interestin all relevant Product Registrations held by the Licensee for the relevant Product(s), and the Licenseeshall execute all necessary and appropriate letters to the FDA and other Regulatory Authorities in theTerritory (if any) to ensure that ownership of the Product Registrations are transferred to the Licensor (i)for United States Product Registrations, within 15 days of termination, and for Canadian ProductRegistrations, within 70 days of termination. The date upon which a Product Registration is registered inthe Licensor's name shall be known as the “Transfer Date”. In the event that such a transfer is notpossible under Legal Requirements, the Licensee shall use reasonable efforts at Licensor's sole cost andexpense to ensure that the Licensor has the benefit of the relevant Product Registrations and, to this end,consents to any Regulatory Authority in the Territory cross-referencing to the data and information onfile with any Regulatory Authority as may be necessary to facilitate the granting of second ProductRegistrations to the Licensor in the terminated countries. In such circumstance as soon as the secondProduct Registrations are given to the Licensor, the Licensor will, so far as possible under LegalRequirements, cancel the corresponding first Product Registration. Further from the date of submissionof the appropriate letters to the Regulatory Authorities in the Territory (if any) necessary to ensure thatownership of the Product Registrations is given to the Licensor until the Product Registrations areactually transferred to the Licensor or second Product Registrations are issued by such RegulatoryAuthorities, the Licensee shall, at Licensor's sole cost and expense:(i) submit all necessary filings, correspondence and reports, attend all necessary meetings andotherwise conduct such other activities as are necessary to maintain the Product Registrations;(ii) as soon as practicably possible submit to the Licensor copies of all filings and correspondencethat are submitted to any Regulatory Authority to the extent they relate to all relevant Product(s)in the Territory; and(iii) provide the Licensor with advance written notice of any meetings or telephone calls with anyRegulatory Authority in the Territory relating to Product Registrations and allow the Licensor toparticipate in all such meetings or telephone calls.47  (e) The Licensee shall as soon as reasonably practicable notify the Licensor of the amount of stocks ofProduct owned by it (title not having passed to a customer) and the precise location of such stocks withcorresponding stock numbers, and the amount of such stocks subject to customer orders but not yetdelivered. The Licensor shall have the option (exercisable by written notice to the Licensee to be givennot more than one (1) month termination), either (i) to inspect and purchase from the Licensee a priceequal to Cost of Manufacture all of or any part of stocks of the Product held by the Licensee which arenot subject to orders from customers and are in good and saleable condition or (ii) permit the Licensee tosell all or some of such stocks of Products for a period up to and no later than the Licensee holds its ownRegulatory Approval for Product in the relevant country. All other stocks of Products shall be destroyedby the Licensee.(f) The Licensee shall inform the Licensor of the details of all stocks including batch numbers sold by theLicensee, its Affiliates, or Sub-licensees in the previous six (6) months to distributors or wholesalers andthe names and other details of such distributors or wholesalers.(g) The Licensee shall be entitled to invoice and collect and retain payment for Products sold by Licenseeprior to termination, and shall be responsible for any payments, rebates, administrative fees orchargebacks (“Commercial Payments”) due to customers (including those payments due undermanaged care agreements and agreements with health maintenance organization) for Products sold bythe Licensee, its Affiliates and Sub-Licensees prior to the termination date and the Licensor shall beresponsible for Commercial Payments to customers for Products sold or dispensed thereafter. In theevent that, with respect to Products sold or dispensed during the Calendar Quarter in which thetermination date occurs, the Parties cannot determine the date on which such Products were sold, thenthe Party that has made a Commercial Payment for such Product shall be entitled to obtainreimbursement from the other party on a pro rata basis for such Commercial Payment (with theLicensee's pro rata share constituting the proportion of days in the Calendar Quarter up to and includingthe termination date, and the Licensor's pro rata share constituting the proportion of days in such Quarterfollowing the termination date). Either Party that has made a Commercial Payment, all or a portion ofwhich is the responsibility of the other Party, shall submit a payment request to the other Party, withsupporting documentation, and such other Party shall reimburse the requesting Party for the CommercialPayment (or portion thereof) for which it is responsible within thirty (30) days of receipt of such request.(h) The Licensee shall be responsible for any rebates due to a governmental entity (“GovernmentRebates”) applicable to Product sold by the Licensee, its Affiliates, or Sub-licensees prior to thetermination date. The Parties acknowledge that the request for such payments is submitted to theNational Drug Code holder (or its equivalent outside the USA) of the Product and, as such, the Licenseewill receive, process and pay Government Rebates on all Product bearing Licensee National Drug Codeand shall within 30 days of payment, submit to the Licensor an invoice for the amounts of anyGovernment Rebates made in relation to Product sold after the termination date. In the event that, withrespect to Product sold or dispensed during the Calendar Quarter in which the termination date occurs,the Parties cannot determine the date on which such Product was sold or dispensed, then the Party thathas made a Government Rebate for such Product shall be entitled to obtain reimbursement from theother Party on a pro rata basis for such Government Rebate (with the Licensee's pro rata shareconstituting the proportion of days in the Calendar Quarter up to and including the termination date, andthe Licensor's pro rata share constituting the48  proportion of days in such Calendar Quarter following the termination date). Either Party that has made aGovernment Rebate, all or a portion of which is the responsibility of the other Party, shall submit apayment request to the other Party, with supporting documentation, and such other Party shall reimbursethe requesting Party for the Government Rebate (or portion thereof) for which it is responsible withinthirty (30) days of receipt of such request.(i) The Licensee shall be responsible for returns from any customer in respect of all Product sold by theLicensee, its Affiliates, or Sub-licensees prior to the termination date and the Licensor shall beresponsible for returns in respect of all Product sold or dispensed after the termination date, regardless ofwhen such return occurs. Neither Party shall seek to encourage Product returns or accept Product returnsother than in the ordinary course of business save, in each case, with the written consent of the otherParty. The Licensee shall process all Product returns received by it and shall destroy the returnedProduct. The Licensee shall reimburse the Licensor (within ten (10) days of request therefor) with respectto any returns of Product sold on or prior to the termination date for all costs and expenses relating to thereturn, including the actual cost of destruction and related administrative costs and expenses.(j) The Licensee will transfer to the Licensor the domain name for the internet website established by theLicensee.(k) To the extent permitted by applicable Law, for a period not to exceed ninety (90) days, Licensee willreasonably cooperate at Licensor’s sole cost and expense as reasonably requested by Licensor, inassisting with the smooth transition of the Commercialization of the Product in the Territory fromLicensee to Licensor14.8 Termination of the Agreement shall be without prejudice to any rights that shall have accrued to the benefit ofeither party before such termination, including the right of either party to receive or recover: (i) damagessustained by reason of the breach of the Agreement by the other party, or (ii) any payments for Products whichmay then be owing under the terms of the Agreement (including any invoice). In addition, the followingprovisions of this Agreement shall survive termination of this Agreement:(a) Section 11 (Confidentiality);(b) this Section 14 (Duration and termination of the agreement);(c) Section 16 (Governing law and disputes); and(d) any provision of this Agreement necessary for its interpretation or enforcement.14.9 If:(a) a Court pursuant to Section 16.2Error! Reference source not found. finds that Licensee is obligated totransfer the Product Registrations pursuant to Section 14.7(d) has not done so in a timely manner; or(b) if Licensee agrees in any settlement or otherwise that it is obliged to transfer the Product Registrationspursuant to Section 14.7(d),then the Licensor shall be entitled to equitable relief pursuant to Section 16.2 including specific performance ofsuch obligation, without a need to post bond or other surety.15. Assignment/succession15.1 Subject to Section 15.2, this Agreement shall not be assignable nor shall the rights licensed hereunder or theownership of the NDA (other than pursuant to Section 5.10) be transferable49  in any way by either Party except by prior written consent of the other Party, not to be unreasonably withheld,conditioned or delayed; provided, however, that:(a) other than with respect to assignment of the ownership of the NDA, which assignment shall require theconsent of the other Party, not to be unreasonably withheld, conditioned or delayed, either Party mayassign this Agreement in whole or in part to a corporate Affiliate on reasonable prior written notice to theother Party of such assignment on the condition that the assigning Party shall remain liable hereunder forthe prompt payment and performance of all obligations of the assignee;(b) this Agreement may be assigned by a Party to a Third Party in connection with a sale or transfer of allor substantially all of such Party's business or assets to which this Agreement relates or in connectionwith a merger or consolidation transaction involving such Third Party provided always that such ThirdParty gives a written deed of undertaking to the non-affected Party agreeing to abide by all theobligations under this Agreement of the assigning Party; and(c) Licensee may pledge, grant a security interest, lien or charge in, or other encumbrance upon, any ofLicensee’s rights or interests in this Agreement (and may assign this Agreement or the rights hereunder,in whole or in part in connection with any of the foregoing), including without limitation pursuant to theterms of the Term Loan Agreement (and any amendment, restatement, replacement or refinancingthereof) and any related documents.15.2 If a Bankruptcy Event occurs with respect to the Licensee, then:(a) the Licensee shall not be permitted to assign this Agreement or transfer its rights hereunder; and(b) except as specified in Section 15.1(c), the Licensor shall not be deemed to have consented to: (i) anyassignment by the Licensee of this Agreement; or (ii) the transfer of any of the Licensee rights containedin this Agreement.15.3 This Agreement shall be binding upon, and shall inure to the benefit of, all permitted assigns.16. Governing law and disputes16.1 This Agreement shall be governed by and construed in accordance with the Laws of the State of New York,United States without regard to its conflicts of laws principles.16.2 The Parties consent to the exclusive jurisdiction of the Federal courts and the State courts of the State of NewYork, in each case, located in the borough of Manhattan, City of New York (the "New York Courts") in anydispute, suit or action (each, a “Proceeding”) arising out of or relating to this Agreement or the transactionscontemplated hereby, and hereby irrevocably and unconditionally (i) agrees not to commence any suchProceeding except in such New York Courts, (ii) agrees that any claim in respect of any such Proceeding maybe heard and determined in the New York Courts, (iii) waives, to the fullest extent it may legally and effectivelydo so, any objection which it may now or hereafter have to the laying of venue of any such Proceeding in anysuch New York Court, and (iv) waives, to the fullest extent permitted by Law, the defense of an inconvenientforum to the maintenance of such Proceeding in any such New York Court. Each of the parties agrees that afinal judgment in any such Proceeding shall be conclusive and may be enforced in other jurisdictions by suit onthe judgment or in any other manner provided by Law. THE PARTIES HEREBY IRREVOCABLY WAIVE,AND AGREE TO CAUSE THEIR RESPECTIVE AFFILIATES TO WAIVE, THE RIGHT TO TRIAL BY JURYIN SUCH PROCEEDINGS.50  17. Miscellaneous17.1 Force MajeureNeither Party shall be responsible for any delay or failure to perform its obligations under the Agreement orshall be liable to the other for loss or damages for any default or delay caused by conditions beyond itsreasonable control, including but not limited to acts of God, governmental restrictions, declared or not declaredwars or insurrections, strikes, terrorism, floods or work stoppages. If either of the Parties is so affected it shallgive prompt written notice of such cause to the other Party. The Party giving such notice shall thereupon beexcused from such of its obligations under the Agreement as it is thereby disabled from performing for so longas it is so disabled.17.2 Notices(a) Any notice (which term shall in this Section 17.2 include any other formal written communication)required to be given under this Agreement or in connection with the matters contemplated by it shall,except where otherwise specifically provided, be in writing in the English language.(b) Any such notice shall be addressed as provided in Section 17.2(a) and may be:(i) delivered by hand (which shall include by courier), in which case it shall be deemed to havebeen given upon delivery at the relevant address if it is delivered not later than 17.00 hours on aBusiness Day, or, if it is delivered later than 17.00 hours on a Business Day or at any time on aday which is not a Business Day, at 08.00 hours on the next Business Day; or(ii) sent by electronic mail, in which case it shall be deemed to be given when the E-mail leaves theE-mail gateway of the sender where it leaves such gateway before 17.00 hours on any BusinessDay or in any other case at 08.00 hours on the next Business Day after it leaves such gatewayand the onus shall be on the sender to prove the time that the E-mail left its gateway.(c) The addresses and other details of the Parties for notices are, subject to Section 17.2(d):If to the Licensor, addressed to:Attention: Michael Ward (President & Chief Executive Officer)Address:Æterna Zentaris, 315 Sigma Drive, Charleston, SC 29486E-mail address: mward@aezsinc.com If to the Licensee, addressed to:Attention: Chief Legal OfficerAddress: 10 Earlsfort Terrace, Dublin 2, D02 T380E-mail address: s.long@strongbridgebio.com(d) Any Party to this Agreement may notify the other Party of any change to the address or any of the otherdetails specified in Section 17.2(c), provided that such notification51  shall only be effective on the date specified in such notice or two Business Days after the notice is given,whichever is later.17.3 In proving service of any notice in accordance with Section 17.2, it shall be sufficient to prove that theenvelope containing the notice was properly addressed and delivered by hand to the relevant address or that thee-mail was sent to the correct e-mail address, as the case may be.17.4 No Other RightsExcept as otherwise expressly provided in the Agreement, no other right, express or implied, is granted by theAgreement.17.5 Further ActionsEach party agrees to execute, acknowledge and deliver such further instruments, and to do all such otherreasonable acts, as may be necessary or appropriate in order to carry out the purposes and intent of theAgreement.17.6 AmendmentNo amendment, modification or supplement of any provision of the Agreement shall be valid or effective unlessmade in writing and signed by a duly authorized officer or director of each party.17.7 WaiverNo provision of the Agreement shall be waived by any act, omission or knowledge of any party or its agents oremployees except by an instrument in writing expressly waiving such provision and signed by a duly authorizedofficer or director of the waiving party. The waiver by either Party of a breach or a default of any provision ofthis Agreement by the other Party shall not be construed as a waiver of any succeeding breach of the same orany other provision, nor shall any delay or omission on the part of either Party to exercise or avail itself of anyright, power or privilege that it has or may have hereunder operate as a waiver of any right, power or privilegeby such Party.17.8 CounterpartsThe Agreement may be executed in any number of counterparts, each of which need not contain the signatureof more than one party but all such counterparts taken together shall constitute one and the same agreement. Asigned Agreement received by a party hereto via facsimile will be deemed an original, and binding upon theparty who signed it. Facsimile signatures or signatures sent by email attachment or telecopy shall be valid andbinding to the same extent as original signatures. This agreement shall not be effective until each party hasexecuted at least one counterpart.17.9 SeverabilityWhenever possible, each provision of the Agreement shall be interpreted in such manner as to be effective andvalid under applicable Law, but if any provision of the Agreement is held to be prohibited by or invalid underapplicable Law, such provision shall be ineffective only to the extent of such prohibition or invalidity, withoutinvalidating the remainder of the Agreement.17.10 Independent ContractorsThe relationship between the Licensor and the Licensee created by the Agreement is one of independentcontractors and neither party shall have the power or authority to bind or obligate52  the other. There is no employee-employer relationship or partnership relationship between the Licensor and theLicensee or any of its representatives.17.11 Local Law RequirementsExcept as otherwise specifically provided herein, each party shall at their own expense in their respectivecountries, take such steps as may be required to satisfy any Laws or requirements with respect to declaring,filing, recording or otherwise rendering the Agreement valid.17.12 ExpensesEach party shall bear its own expenses and costs incurred in the negotiations leading up to and in preparation ofthe Agreement and of matters incidental to the Agreement.17.13 Entire Agreement of the PartiesThe Agreement (including the Schedules) shall constitute and contain the complete, final and exclusiveunderstanding and agreement of the parties and cancels and supersedes any and all prior negotiations,correspondence, understanding and agreements, whether oral or written, between the Licensor and the Licenseerespecting the subject matter thereof.17.14 ExclusionThe Parties exclude the application of any international statutes on the sales of goods, including the UnitedNations Convention on International Contracts for the Sales of Goods.17.15 LanguageThe English version of the Agreement shall be deemed the official and governing instrument, notwithstandingany translations thereof. [Signature Page Follows] 53  ExecutionIntending to be legally bound, the parties have caused the Agreement to be executed by their duly authorized officersor directors as of the Effective Date. Aeterna Zentaris GmbH By: Name:Michael Ward Title: Its:CEO Strongbridge Ireland Limited By: Name:A. Brian Davis Title: Its:Director 54  Schedule 1CMO Contracts Objective / PurposeCMOAddressContractExecution DateManufacturing of Boc-AEZS-130,packaging, quality control, batchrelease, stability testing anddistributionFlamma SpAVia Bedeschi 22, 24040Chignolo d’Isola, ItalyQA2017-09-12SAn.a.Manufacturing of AEZS-130 drugsubstance, packaging, labelling,quality control, batch release andstability testingPolyPeptide LaboratoriesFrance SAS7 rue de Boulogne,67100 Strasbourg, FranceQA2017-10-06*SA2013-08-21*Manufacturing drug product, primarypackaging, quality control, stabilitytesting and batch releaseAllphamed PharbilArzneimittel GmbHHildebrandstrasse 12,37081 Goettingen,GermanyQA2017-09-27SA2013-08-08*Labeling, secondary packaging, batchrelease and distributionCorden Pharma GmbHOtto-Hahn-Strasse,68723 Plankstadt,GermanyQA2017-11-21SAIn preparation, draft statusStorage of drug product stabilitysamplesPharbil Pharma GmbHReichenberger Strasse 43,33605 Bielefeld, Germanyn.a.Internally regulated withinNextPharma subsidiariesBatch certification for export from EUand final batch release to US marketAeterna Zentaris GmbHWeismuellerstrasse 50,60314 Frankfurt am Main,Germanyn.a.Internally regulated withinAeterna ZentarisStorage and distribution (3PLservices)ICS AmerisourceBergen3101 Gaylord Parkway,Frisco, TX 75034, USAStatementsof WorkIn preparation, draft status SA: Supply Agreement, QA: Quality Agreement* Update in progress 55  Schedule 2Technology Transfer Critical Materials and Timing To the extent not already in the Data Room: MaterialsTiming for transferCopy of a customer facing slide deck for MCO purposes.As soon as possible on or after the Effective Date Copies of any additional draft/final promotional documents.As soon as possible on or after the Effective Date Any medical affairs planning documents generated, includingany physician lists, conference planning documents, speakertraining materials, etc. As soon as possible on or after the Effective Date Drafts of any presentations or product-related manuscripts inpreparation at the time of deal closing As soon as possible on or after the Effective Date Information pertaining to any requests in the last 12 monthsfor supply of drug product or funding to support clinicalresearch or expanded access to drug in the TerritoryAs soon as possible on or after the Effective Date Copies of batch records and certificates of analysis for anyLicensor Materials to be transferred to Licensee. This shouldinclude the batch records and certificates of analysis of theinput materials used to make each batch of Licensor Materials(drug product, AEZS-130 drug substance, and Boc-AEZS-130intermediate). Prior to or upon transfer of the applicable LicensorMaterial Copies of all pricing, access and reimbursement relatedmaterial. Including requests for proposals, analysis andcontracts. As soon as possible on or after the Effective Date 56  Schedule 3FDA Letters FDA NDA TRANSFER LETTERMonth Date, Year Jean-Marc Guettier, MDDirectorFood and Drug AdministrationCenter for Drug Evaluation and ResearchDivision of Metabolism and Endocrinology Products5901-B Ammendale RoadBeltsville, MD 20705-1266 Re: NDA #205598 Macimorelin (AEZS-130, formally ARD-07) Granules for oral solutionGENERAL CORRESPONDENCE-Transfer of NDA Ownership Dear Dr. Guettier, Reference is made to the NDA 205598 Macimorelin (AEZS-130, formally ARD-07) Granules for oral solution. AeternaZentaris Inc., hereby submits a General Correspondence-Transfer of NDA ownership to notify that we have transferredownership of this application from Aeterna Zentaris Inc., to the new owner: Strongbridge Ireland Limited,10 Earlsfort Terrace, Dublin 2, D02 T380900 Northbrook Drive, Suite 200, Trevose, PA 19053Attn: Susan Thornton, Vice President, Regulatory Affairse-mail: s.thornton@strongbridgebio.comPhone: 484-589-0395 Effective Month Date, Year, all rights and responsibilities regarding NDA 205598 are transferred to StrongbridgeIreland Limited (“Strongbridge”). Strongbridge will concurrently notify the Agency of its acceptance of ownership ofthe designation under separate cover. A complete copy of the NDA 205598, including IND #73,196 and Orphan DrugDesignation #06-2255, has been provided to Strongbridge for their files. If there are any questions, or if additional information is required, please contact me at XXX-XXX-XXXX. Sincerely, {Name}{Title} 57  FDA NDA ACCEPTANCE LETTERMonth Date, Year Jean-Marc Guettier, MDDirectorFood and Drug AdministrationCenter for Drug Evaluation and ResearchDivision of Metabolism and Endocrinology Products5901-B Ammendale RoadBeltsville, MD 20705-1266 Re: NDA #205598 Macimorelin (AEZS-130, formally ARD-07) Granules for oral solutionGENERAL CORRESPONDENCE-Transfer of NDA Ownership Dear Dr. Guettier, Pursuant to 21 CFR §314.72, Strongbridge Ireland Limited, hereby notifies the FDA of a change in ownership of NDA205598 Macimorelin. As indicated in correspondence dated XXXX, from Aeterna Zentaris Inc. (copy enclosed), allrights to NDA 205598 Macimorelin have been transferred from Aeterna Zentaris Inc. to Strongbridge Ireland Limited,effective Month Date, Year with the following associated address: Strongbridge Ireland Limited,10 Earlsfort Terrace, Dublin 2, D02 T380Attn: Susan Thornton, Vice President, Regulatory Affairse-mail: s.thornton@strongbridgebio.comPhone: 484-589-0395Fax: 215-355-7389 Strongbridge Ireland Limited, (“Strongbridge”) has made arrangements with Aeterna Zentaris Inc. to obtain a completecopy of the NDA 205598, including supplements, and records that are required to be kept under 21 CFR 314.81. Inaddition, Strongbridge reserves the right to request a copy of the application from FDA's files under the fee schedule in20.45 of FDA's public information regulations. Strongbridge hereby commits to the agreements, promises, andconditions made by the former owner and contained in the application. Provided herein is a new form FDA 356h signed by the Strongbridge agent of record. If there are any questions, or if additional information is required, please contact me at 484-589-0395. Sincerely, Susan ThorntonVice President, Regulatory AffairsStrongbridge Biopharma (parent company of Strongbridge Ireland Limited)900 Northbrook Drive, Suite 200Trevose, PA 19053 USAOffice: 484-589-0395Mobile: 215-518-2620s.thornton@strongbridgebio.comCC: Meghna Jairath, Regulatory Project Manager58  FDA IND TRANSFER LETTERMonth Date, Year Jean-Marc Guettier, MDDirectorFood and Drug AdministrationCenter for Drug Evaluation and ResearchDivision of Metabolism and Endocrinology Products5901-B Ammendale RoadBeltsville, MD 20705-1266 RE: IND # 73,196 Macimorelin (AEZS-130, Formerly ARD-07) Granules for Oral SolutionGENERAL CORRESPONDENCE-Transfer of IND Ownership Dear Dr. Guettier, Reference is made to IND #73,196 originally submitted on February 7, 2007 for Macimorelin (AEZS-130, FormerlyARD-07) Granules for Oral Solution, as a diagnostic for growth hormone deficiency [GHD]. Aeterna Zentaris Inc.,hereby submits a General Correspondence-Transfer of IND ownership to notify that we have transferred ownership ofthis application from Aeterna Zentaris Inc., to a new sponsor: Strongbridge Ireland Limited,10 Earlsfort Terrace, Dublin 2, D02 T380Attn: Susan Thornton, Vice President, Regulatory Affairse-mail: s.thornton@strongbridgebio.comPhone: 484-589-0395Fax: 215-355-7389 Effective Month Date, Year, all rights and responsibilities regarding IND #73,196 are transferred to StrongbridgeIreland Limited (“Strongbridge”). Strongbridge will concurrently notify the Agency of its acceptance of ownership ofthe designation under separate cover. A complete copy of the IND #73,196 has been provided to Strongbridge for theirfiles. If there are any questions, or if additional information is required, please contact me at XXX-XXX-XXXX. Sincerely, {Name}{Title} 59  FDA IND ACCEPTANCE LETTERMonth Date, Year Jean-Marc Guettier, MDDirectorFood and Drug AdministrationCenter for Drug Evaluation and ResearchDivision of Metabolism and Endocrinology Products5901-B Ammendale RoadBeltsville, MD 20705-1266 Re: IND # 73,196 Macimorelin (AEZS-130, Formerly ARD-07) Granules for Oral SolutionTransfer of IND Ownership Dear Dr. Guettier, Reference is made to IND #73,196 originally submitted on February 7, 2007 for Macimorelin (AEZS-130, FormerlyARD-07) Granules for Oral Solution, as a diagnostic for growth hormone deficiency [GHD]. Pursuant to 21 CFR §312, Strongbridge Ireland Limited, hereby notifies the FDA of a change in ownership of IND#73,196 for Macimorelin. As indicated in correspondence dated XXXX, from Aeterna Zentaris Inc., (copy enclosed),all rights to IND #73,196 for Macimorelin have been transferred from Aeterna Zentaris Inc. to Strongbridge IrelandLimited, effective Month Date, Year with the following associated address: Strongbridge Ireland Limited,10 Earlsfort Terrace, Dublin 2, D02 T380Attn: Susan Thornton, Vice President, Regulatory Affairse-mail: s.thornton@strongbridgebio.comPhone: 484-589-0395Fax: 215-355-7389 Provided herein is a new form FDA 1571 signed by the Strongbridge U.S. Agent of record. Strongbridge has made arrangements with Aeterna Zentaris Inc. to obtain a complete copy of the IND #73,196,including amendments, and records. Strongbridge hereby commits to the agreements, promises, and conditions madeby the former owner and contained in the application. If there are any questions, or if additional information is required, please contact me at 484-589-0395. Sincerely, Susan ThorntonVice President, Regulatory AffairsStrongbridge Biopharma (parent company of Strongbridge Ireland Limited)900 Northbrook Drive, Suite 200Trevose, PA 19053 USAOffice: 484-589-0395Mobile: 215-518-2620s.thornton@strongbridgebio.comCC: Meghna Jairath, Regulatory Project Manager60  FDA ORPHAN DESIGNATION TRANSFER LETTERMonth Date, Year Gayatri R. Rao, MD., JD.Director, Office of Orphan Products DevelopmentFood and Drug AdministrationWO32-527110903 New Hampshire AvenueSilver Spring, MD 200993-002 RE: Designation #06-2255, Macimorelin Acetate as a Diagnosis of Growth Hormone DeficiencyTransfer of Orphan Drug Designation Ownership Dear Dr. Rao, Reference is made to Orphan Drug Designation (ODD) #06-2255, originally approved on May 14, 2007, forMacimorelin acetate as a Diagnosis of Growth Hormone. Aeterna Zentaris Inc., hereby submits a Transfer of OrphanDrug Designation ownership to notify that we have transferred ownership of this application from Aeterna Zentaris Inc.,to a new sponsor: Strongbridge Ireland Limited,10 Earlsfort Terrace, Dublin 2, D02 T380Attn: Susan Thornton, Vice President, Regulatory Affairse-mail: s.thornton@strongbridgebio.comPhone: 484-589-0395Fax: 215-355-7389 Effective Month Date, Year, all rights and responsibilities regarding ODD #06-2255 are transferred to StrongbridgeIreland Limited. Strongbridge Ireland Limited will concurrently notify the Agency of its acceptance of ownership of thedesignation under separate cover. A complete copy of the ODD #06-2255 has been provided to Strongbridge IrelandLimited for their files. If there are any questions, or if additional information is required, please contact me at XXX-XXX-XXXX. Sincerely, {Name}{Title} 61  FDA ORPHAN DESIGNATION ACCEPTANCE LETTERMonth Date, YearGayatri R. Rao, MD., JD.Director, Office of Orphan Products DevelopmentFood and Drug AdministrationWO32-527110903 New Hampshire AvenueSilver Spring, MD 200993-002 RE: Designation #06-2255, Macimorelin Acetate as a Diagnosis of Growth Hormone DeficiencyTransfer of Orphan Drug Designation Ownership Dear Dr. Rao, Reference is made to Orphan Drug Designation (ODD) #06-2255 originally approved on May 14, 2007 forMacimorelin acetate as a Diagnosis of Growth Hormone. Pursuant to 21 CFR §316.27, Strongbridge Ireland Limited hereby notifies the FDA of a change in ownership of IND#73,196 for Macimorelin. As indicated in correspondence dated XXXX, from Aeterna Zentaris Inc., (copy enclosed),all rights to IND #73,196 for Macimorelin have been transferred from Aeterna Zentaris Inc. to Strongbridge IrelandLimited (Strongbridge), effective Month Date, Year with the following associated address: Strongbridge Ireland Limited,10 Earlsfort Terrace, Dublin 2, D02 T380Attn: Susan Thornton, Vice President, Regulatory Affairse-mail: s.thornton@strongbridgebio.comPhone: 484-589-0395Fax: 215-355-7389 Provided herein is a new form FDA 1571 signed by the Strongbridge agent of record. Strongbridge has made arrangements with Aeterna Zentaris Inc. to obtain a complete copy of the ODD #06-2255,including amendments, and records. Strongbridge hereby commits to the agreements, promises, and conditions madeby the former owner and contained in the application. If there are any questions, or if additional information is required, please contact me at 484-589-0395. Sincerely, Susan ThorntonVice President, Regulatory AffairsStrongbridge Biopharma (parent company of Strongbridge Ireland Limited)900 Northbrook Drive, Suite 200Trevose, PA 19053 USAOffice: 484-589-0395Mobile: 215-518-2620s.thornton@strongbridgebio.comCC: Meghna Jairath, Regulatory Project Manager 62  Schedule 4Licensor Materials to be Transferred to Licensee API/ Drug substance BatchUnitsQC-release **tillShipmentfromShipment to3PL***DeliverydateCostsTotal CostBatch T*937g05/2018Polypetide SaS7 rue deBoulogne67100StrasbourgFranceAllpharmedPHARBILGmbH(NextPharma)Hildebrandstr. 1237081GoettingenGermanyWorld Courier(AmerisourceBergen)Jun/ 2017360,000Euro360,000€BatchU****~1kgPlannedQC-testinginFeb/2018Polypetide SaS7 rue deBoulogne67100StrasbourgFranceAllpharmedPHARBILGmbH(NextPharma)Hildebrandstr. 1237081GoettingenGermanyWorld Courier(AmerisourceBergen)Mar/ 2018~370,000Euro370,000€ *: relevant for the first DP-batch in scale (9,000-9,500 sachets)**: QC-testing against the current Drug substance release specification (D-87575\RS_0830)***: AeternaZentaris was responsible for the Shipment (Incoterms2010 EXW)****: relevant for the second DP-batch in scale (9,000-9,500 sachets) 63  Drug product/ finished product BatchUnitsExpirydate*Shipment fromShipment to3PL**DeliverydateCostsTotal CostA1710002A119709/2021CordenPharmaGmbHOtto-HahnStrasse68723Plankstadt,GermanyICS Brooks420InternationalBlvd, Suite 500KY 40109 USSchenker MHG(CordenPharmais responsiblefor theshipment; DDPacc.Incoterms2010)Feb 7th,201844,5Euro/unit +6,500 Eurovalidationfee/batch59,766.50€A1710003A112709/2021CordenPharmaGmbHOtto-HahnStrasse68723Plankstadt,GermanyICS Brooks420InternationalBlvd, Suite 500KY 40109 USSchenker MHG(CordenPharmais responsiblefor theshipment; DDPacc.Incoterms2010)Feb 7th,201844,5Euro/unit+ 6,500Eurovalidationfee/batch56,651.50€n/a9,000-9,500***n/aCordenPharmaGmbHOtto-HahnStrasse68723Plankstadt,GermanyICS Brooks420InternationalBlvd, Suite 500KY 40109 USSchenker MHG(CordenPharmais responsiblefor theshipment; DDPacc.Incoterms2010)Apr/20188,9Euro/unit +6,500 Eurovalidationfee/batch86,600€-91,050€n/a9,000-9,500****n/aCordenPharmaGmbHOtto-HahnStrasse68723Plankstadt,GermanyICS Brooks420InternationalBlvd, Suite 500KY 40109 USSchenker MHG(CordenPharmais responsiblefor theshipment; DDPacc.Incoterms2010)Q3/20188,9Euro/unit +6,500 Eurovalidationfee/batch86,600€-91,050€ *: QC-testing against the current DrugProduct release specification (D-87575\RS_0974_02) and Finished Productspecification (D-87575\PS_1072_01)**: Document: “Process description for handling and flow of CordenPharma Airfreight shipments”***: manufacturing of the first validation batch has been started on Jan 12, 2018; API-batch T is applied****: manufacturing of the second validation batch is planned in Q3/2018; API-batch U will be applied64 th Schedule 5Disclosure ScheduleThis Disclosure Schedule (this “Disclosure Schedule”) is furnished in connection withthat certain Licence and Assignment Agreement (the “Agreement”), dated on or around 16 January 2018, by andamong Aeterna Zentaris GmbH, a corporation incorporated under the laws of Germany (the "Licensor”) andStrongbridge Ireland Limited, a corporation incorporated under the laws of Ireland (the "Licensee"). Capitalized terms used but not defined in this Disclosure Schedule have the meanings setforth for them in the Agreement. The information in this Disclosure Schedule representsexceptions to and qualifications of the representations and warranties set forth in the corresponding numbered sectionsof the Agreement, and is arranged to correspond to the numbered and lettered sections of the Agreement. If there is any inconsistency between the statements in the body of the Agreement andthose in the Disclosure Schedule (other than specific exceptions set forth as such with respect torepresentations or warranties stated in the Agreement), the statements in the body of theAgreement will control. The mention of any matter or event in this Disclosure Schedule is not anadmission or acknowledgement, in and of itself, that such information is material eitherindividually or in combination with other matters or events disclosed herein, or has resulted in orwould result in a material adverse effect, or is outside the ordinary course of business. Theinformation contained in the Disclosure Schedule is disclosed solely for purposes of theAgreement, and no information contained herein shall be deemed an admission to any third partyof any matter whatsoever, including violation of any law or breach of any agreement. [Remainder of page intentionally left blank] 65  Schedule 12.2(b) and (c)Licensor Patent Rights The following papers identified by Licensee: (1) EP1572: A novel peptide-mimetic GH secretagogue with potent and selective GH-releasing activity in man byBroglio et al (2) Targeting the Ghrelin Receptor Orally Active GHS and Cortistatin Analogs Romano Deghenghi et al, Endocrine, vol. 22, no. 1, 13–18, October 2003 (3) GH-releasing hormone and GH-releasing peptide-6 for diagnostictesting in GH-deficient adults by Vera Popovic et al; Lancet 2000; 356: 1137.42 66  Schedule 6Domain Names1. macrilen.com2. macrilen.org 67  Schedule 7Licensor Patent Rights Title:"Growth Hormone Secretagogues" Owner:Aeterna Zentaris GmbH Internal No.:99/25 PH Internal NoCountryApplication NoApplication DatePatent NoGranted DateExpiry DateUS 99/25 PH/2USA09/880,49813.06.2001US 6,861,409B201.03.200501.08.2022US 99/25 PH/3USA10/837,62004.05.2004US 7,297,681B220.11.200701.08.2022CA-PCT 99/25 PHCanada2,407,65913.06.20012,407,65909.11.201013.06.2021 Title:"Methods and kits to diagnose Growth Hormone Deficiency"Owner:Aeterna Zentaris GmbHInternal No.:06/05 Z Internal NoCountryApplication NoApplicationDatePatent NoGranted DateExpiry DateUS-PCT 06/05 ZUSA12/279,80519.02.2007US 8,192,719B205.06.201212.10.2027 Titel:"Method of Assessing Growth Hormone Deficiency Comprising Oral AdministrationOf a Macimorelin Containing Composition and Collecting One or TwoPost-administration Samples"Owner:Aeterna Zentaris GmbHInternal No.:17/01 Z Prio-AnmeldungCountryApplication NoApplication DatePatent NoGranted DateExpiry DateUS-Prio 17/01 ZUS62/609,05921.12.2017 68  Schedule 8Supply Chain 69  Schedule 9Development Plan 1. Pediatric development plan, based on the Pediatric Investigation Plan as agreed with the EMA:o Pediatric development plan to be discussed with FDAo Study 1: Ascending single oral doses of macimorelin in at least 24 stratified pediatric patients from 2 to lessthan 18 years of age with suspected GDHo Study 2: Diagnostic efficacy and safety of macimorelin acetate in at least 50 stratified pediatric patients from 2to less than 18 years of age with suspected GDH.o Estimated approx. costs 3 – 3.5 Mio EURo Estimated approx. 4 years 2. Phase IV study:o Collect data to support label change to two blood draws at 45 and 60 min to diagnose AGHDo A US patent application directed to a Macrilen test with two blood draws was filed 21-Dec-17o Estimated clinical duration approx. 6 monthso Estimated costs approx. 500 TEUR 70  Schedule 10PIP BudgetThe proposal has been approved by EMA, but must be discussed with FDA and adapted if necessary. Study AEZS-130-P01 Open label, single dose trial to investigate the pharmacokinetics, pharmacodynamics, safety and tolerability ofmacimorelin acetate after ascending single oral doses of macimorelin in paediatric patients from two to less than 18years of age with suspected GHD. Date of completion: by July 2020 Patient number: at least 24 subjects Study AEZS-130-P02 Open label, single dose trial to determine the diagnostic efficacy and safety of macimorelin acetate in paediatric patientsfrom two to less than 18 years of age with suspected GHD. Date of completion: July 2022 Patient number: at least 50 subjects Budget proposal total: US$5,000,000 – 6,000,000 71EXHIBIT 10.29 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION.EXECUTION VERSION AMENDMENT 1 TO TERM LOAN AGREEMENTTHIS AMENDMENT 1 TO TERM LOAN AGREEMENT, dated as of January 16, 2018 (this “Amendment” and the date hereof,the “Amendment No. 1 Effective Date”) is made among STRONGBRIDGE U.S. INC., a Delaware corporation (“Lead Borrower”),STRONGBRIDGE BIOPHARMA PUBLIC LIMITED COMPANY, a public limited company incorporated under the laws of Ireland(“Parent”), CORTENDO CAYMAN LTD., an exempted company incorporated in the Cayman Islands (“Cayman Borrower”),STRONGBRIDGE IRELAND LIMITED, a private limited company incorporated under the laws of Ireland (“Irish Borrower”),CORTENDO AB (PUBL), a public limited liability company incorporated under the laws of Sweden with registration number 556537-6554 (“Swedish Borrower” and, together with the Lead Borrower, Parent, Cayman Borrower and Irish Borrower, each, a “Borrower” andcollectively, “Borrowers”), CRG Servicing LLC, as administrative agent and collateral agent (in such capacity, “Administrative Agent”)and the lenders listed on the signature pages hereof under the heading “LENDERS” (each a “Lender” and collectively, the “Lenders”),with respect to the Loan Agreement described below.RECITALSWHEREAS, Borrowers, the Administrative Agent and the Lenders are parties to the Term Loan Agreement, dated as of July 14,2017, with the Subsidiary Guarantors from time to time party thereto (the “Loan Agreement”).WHEREAS, the parties hereto desire to amend the Term Loan Agreement on the terms and subject to the conditions set forthherein.NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree asfollows:SECTION 1. Definitions; Interpretation.(a) Terms Defined in Loan Agreement. All capitalized terms used in this Amendment (including in the recitals hereof) andnot otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.(b) Interpretation. The rules of interpretation set forth in Section 1.03 of the Loan Agreement shall be applicable to thisAmendment and are incorporated herein by this reference. CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. SECTION 2. Amendments to Term Loan Agreement. Subject to Section 3 of this Amendment, the Loan Agreement is, effective as ofthe Amendment No. 1 Effective Date, hereby amended to delete the stricken text (indicated textually in the same manner as the followingexample: stricken text) and to add the underlined text (indicated textually in the same manner as the following example: underlined text)as set forth in the pages of the Loan Agreement attached hereto as Exhibit A hereto, together with all Schedules and Exhibits A, C-1, C-2,C-3, C-4, D and I thereto (the Loan Agreement, as amended by this Amendment, being referred to as the “Amended Loan Agreement”).SECTION 3. Conditions of Effectiveness. The effectiveness of Section 2 of this Amendment shall be subject to the followingconditions precedent being satisfied or waived by the Administrative Agent:(a) Borrowers and all of the Lenders shall have duly executed and delivered this Amendment pursuant to Section 13.04 ofthe Loan Agreement; provided, however, that this Amendment shall have no binding force or effect unless all conditions set forth in thisSection 3 have been satisfied;(b) Borrowers and the Administrative Agent shall have duly executed and delivered the Amended Fee Letter;(c) The Irish Borrower shall have duly executed and delivered or provided the following documents:(i) Co-Borrower Assumption Agreement, pursuant to which the Irish Borrower agrees to become a “Borrower” forall purposes of the Loan Agreement;(ii) Joinder Agreement, pursuant to which the Irish Borrower agrees to become a “Grantor” for all purposes of theSecurity Agreement;(iii) Certified copies of the constitutive documents of the Irish Borrower and of resolutions of the Board of Directors(and/or shareholders, if applicable) or other applicable governing body of the Obligor authorizing the making and performance by it of theLoan Documents to which it is a party; and(iv) A certificate of the Irish Borrower as to the authority, incumbency and specimen signatures of the persons whohave executed the Loan Documents and any other documents in connection herewith on behalf of the Irish Borrower;(d) The Irish Borrower shall have provided to Administrative Agent true and correct copies of that certain License andAssignment Agreement, dated as of the date hereof, between the Irish Borrower and Aeterna Zentaris GmbH, a corporation incorporatedunder the laws of2 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Germany (“AZ”), together with all schedules and exhibits thereto, and all other material documents relating to the transactionscontemplated thereby (collectively, the “Macrilen License Agreement”);(e) The Macrilen License Agreement (i) shall have been duly executed and delivered by the Irish Borrower and AZ, (ii) shallbe in the form provided to the Administrative Agent, and (iii) shall provide for the acquisition of North American marketing rights ofMacrilen under terms reasonably satisfactory to the Administrative Agent and the Lenders, including terms that are intended to mitigateinsolvency risks to the Lenders applicable in the event of an insolvency of the licensor or the Irish Borrower and permitting the collateralassignment of, and grant to the Administrative Agent a senior perfected security interest in, both the license rights and the proceedsrelating thereto;(f) No Default or Event of Default under the Loan Agreement shall have occurred and be continuing or would result from thetransactions contemplated by the Macrilen License Agreement; and(g) Borrowers shall have paid or reimbursed Administrative Agent and the Lenders for all of their reasonable out of pocketcosts and expenses (including the reasonable fees and expenses of counsel to Administrative Agent and the Lenders, and any sales, goodsand services or other similar Taxes applicable thereto, and printing, reproduction, document delivery and travel costs), pursuant to Section13.03(a)(i)(z) of the Loan Agreement.SECTION 4. Representations and Warranties; Reaffirmation.(a) Each Borrower hereby represents and warrants to each Lender as follows:(i) Borrowers have full power, authority and legal right to make and perform this Amendment. This Amendment iswithin each Borrower’s corporate or equivalent powers and have been duly authorized by all necessary corporate or equivalent action and,if required, by all necessary shareholder action. This Amendment has been duly executed and delivered by Borrowers and constitutes alegal, valid and binding obligation of Borrowers, enforceable against Borrowers in accordance with its terms, except as such enforceabilitymay be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting theenforcement of creditors’ rights and (b) the application of general principles of equity (regardless of whether such enforceability isconsidered in a proceeding in equity or at law). This Amendment (w) does not require any consent or approval of, registration or filingwith, or any other action by, any Governmental Authority or any third party, except for such as have been obtained or made and are in fullforce and effect, (x) will not violate any order of any Governmental Authority, (y) will not violate any applicable law or regulation or thecharter, bylaws, constitutional or other organizational documents of Parent and its Subsidiaries and (z)3 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. will not violate or result in a default under any indenture, agreement or other instrument binding upon Parent and its Subsidiaries or assets,or give rise to a right thereunder to require any payment to be made by any such Person.(ii) No Default has occurred and is continuing or will result after giving effect to this Amendment.(iii) The representations and warranties made by or with respect to Borrowers in Section 7 of the Loan Agreement aretrue and correct on and as of the date hereof, and immediately after giving effect to this Amendment, with the same force and effect as ifmade on and as of such date (except that the representation regarding representations and warranties that refer to a specific earlier date isthat they were true and correct on such earlier date), in each case taking into account any changes made to schedules updated inaccordance with Section 7.21 of the Loan Agreement or attached hereto.(iv) There has been no Material Adverse Effect since the date of the Loan Agreement.(b) Each Obligor hereby ratifies, confirms, reaffirms, and acknowledges its obligations under the Loan Documents to whichit is a party and agrees that the Loan Documents remain in full force and effect, undiminished by this Amendment, except as expresslyprovided herein. By executing this Amendment, each Borrower acknowledges that it has read, consulted with its attorneys regarding, andunderstands, this Amendment.(c) Borrowers and Lenders hereby acknowledge and agree that upon an event of an acceleration or other mandatoryprepayment event, the “Redemption Date” for purposes of calculating the Prepayment Premium due and payable upon such acceleration orother mandatory prepayment will be date of such acceleration or such obligation to mandatorily prepay arose.SECTION 5. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.(a) Governing Law. This Amendment and the rights and obligations of the parties hereunder shall be governed by, andconstrued in accordance with, the law of the State of New York, without regard to principles of conflicts of laws that would result in theapplication of the laws of any other jurisdiction; provided that Section 5-1401 of the New York General Obligations Law shall apply.(b) Submission to Jurisdiction. Borrowers agree that any suit, action or proceeding with respect to this Amendment or anyother Loan Document to which it is a party or any judgment entered by any court in respect thereof may be brought initially in the federalor state courts in Houston, Texas or in the courts of its own corporate domicile and irrevocably submits to the non-exclusive jurisdiction ofeach such court for the purpose of any such suit, action,4 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. proceeding or judgment. This Section 5 is for the benefit of the Lenders only and, as a result, no Lender shall be prevented from takingproceedings in any other courts with jurisdiction. To the extent allowed by applicable Laws, the Lenders may take concurrent proceedingsin any number of jurisdictions.(c) Waiver of Jury Trial. BORROWERS, THE ADMINISTRATIVE AGENT, AND EACH LENDER HEREBYIRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BYJURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT, THE OTHER LOANDOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.SECTION 6. Miscellaneous.(a) No Novation; No Waiver. This Amendment shall not constitute a novation of the Loan Agreement or any of the LoanDocuments. Except as expressly stated herein, nothing contained herein shall be deemed to constitute a waiver of compliance with anyterm or condition contained in the Loan Agreement or any of the other Loan Documents or constitute a course of conduct or dealingamong the parties. Except as expressly stated herein, the Lenders reserve all rights, privileges and remedies under the LoanDocuments. Except as amended hereby, the Loan Agreement and other Loan Documents remain unmodified and in full force andeffect. All references in the Loan Documents to the Loan Agreement shall be deemed to be references to the Loan Agreement as amendedhereby.(b) Severability. In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable inany jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation inany other jurisdiction, shall not in any way be affected or impaired thereby.(c) Headings. Headings and captions used in this Amendment (including the Exhibits, Schedules and Annexes hereto, ifany) are included for convenience of reference only and shall not be given any substantive effect.(d) Integration. This Amendment constitutes a Loan Document and, together with the other Loan Documents, incorporatesall negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties heretowith respect to the subject matter hereof.(e) Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shallconstitute one and the same instrument and any of the parties hereto may execute this Amendment by signing any such counterpart.Executed5 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. counterparts delivered by facsimile or other electronic transmission (e.g., “PDF” or “TIF”) shall be effective as delivery of a manuallyexecuted counterpart.(f) Controlling Provisions. In the event of any inconsistencies between the provisions of this Amendment and theprovisions of any other Loan Document, the provisions of this Amendment shall govern and prevail. Except as expressly modified by thisAmendment, the Loan Documents shall not be modified and shall remain in full force and effect.(g) Notices. The Administrative Agent and Lenders hereby designate that all notices, requests, instructions, directions andother communications provided for herein shall be provided in accordance with Section 13.02 of the Loan Agreement to the addressspecified on the signature pages hereto.[Remainder of page intentionally left blank] 6 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of the date first above written. BORROWERS: STRONGBRIDGE U.S. INC. By/s/ Stephen J. Long Name:Stephen J. Long Title:Chief Legal Officer Address for Notices: 900 Northbrook Drive Suite 200 Trevose, PA 19053 Attn:Chief Legal Officer Tel.:610-254-9225 Fax:215-355-7389 Email:s.long@strongbridgebio.com STRONGBRIDGE BIOPHARMA PLC By/s / Stephen J. Long Name:Stephen J. Long Title:Chief Legal Officer Address for Notices: 900 Northbrook Drive Suite 200 Trevose, PA 19053 Attn:Chief Legal Officer Tel.:610-254-9225 Fax:215-355-7389 Email:s.long@strongbridgebio.com CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. CORTENDO AB (PUBL) By/s/ Stephen J. Long Name:Stephen J. Long Title:Authorized Signatory Address for Notices: 900 Northbrook Drive Suite 200 Trevose, PA 19053 Attn:Chief Legal Officer Tel.:610-254-9225 Fax:215-355-7389 Email:s.long@strongbridgebio.com CORTENDO CAYMAN LTD. By/s/ A. Brian Davis Name:A. Brian Davis Title:Director Address for Notices: 900 Northbrook Drive Suite 200 Trevose, PA 19053 Attn:Chief Legal Officer Tel.:610-254-9225 Fax:215-355-7389 Email:s.long@strongbridgebio.com STRONGBRIDGE IRELAND LIMITED By/s / Stephen J. Long Name:Stephen J. Long Title:Secretary Address for Notices: 900 Northbrook Drive Suite 200 Trevose, PA 19053 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Attn:Chief Legal Officer Tel.:610-254-9225 Fax:215-355-7389 Email:s.long@strongbridgebio.com CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. ADMINISTRATIVE AGENT: CRG SERVICING LLC By/s/ Nathan Hukill Name:Nathan Hukill Title:Authorized Signatory Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. LENDERS: CRG PARTNERS III L.P. By CRG PARTNERS III GP L.P., its General Partner By CRG PARTNERS III GP LLC, its General Partner By/s/ Nathan Hukill Name:Nathan Hukill Title:Authorized Signatory Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CRG PARTNERS III – PARALLEL FUND “A” L.P. By CRG PARTNERS III – PARALLEL FUND “A” GP L.P., itsGeneral Partner ByCRG PARTNERS III – PARALLEL FUND “A” GP LLC,its General Partner By/s/ Nathan Hukill Name:Nathan Hukill Title:Authorized Signatory Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. CRG PARTNERS III (CAYMAN) LEV AIV I L.P. By CRG PARTNERS III (CAYMAN) GP L.P., its General Partner By CRG PARTNERS III (CAYMAN) GP LLC, its GeneralPartner By/s/ Nathan Hukill Name:Nathan Hukill Title:Authorized Signatory Witness:/s/ Nicole Nesson Name:Nicole Nesson Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CRG PARTNERS III (CAYMAN) UNLEV AIV I L.P. By CRG PARTNERS III (CAYMAN) GP L.P., its General Partner By CRG PARTNERS III (CAYMAN) GP LLC, its GeneralPartner By/s/ Nathan Hukill Name:Nathan Hukill Title:Authorized Signatory Witness:/s/ Nicole Nesson Name:Nicole Nesson CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CRG PARTNERS III - PARALLEL FUND “B” (CAYMAN) L.P. By CRG PARTNERS III (CAYMAN) GP L.P., its General Partner By CRG PARTNERS III (CAYMAN) GP LLC, its GeneralPartner By/s/ Nathan Hukill Name:Nathan Hukill Title:Authorized Signatory Witness:/s/ Nicole Nesson Name:Nicole Nesson Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. VCOC LENDER: CRG PARTNERS III L.P. By CRG PARTNERS III GP L.P., its General Partner By CRG PARTNERS III GP LLC, its General Partner By/s/ Nathan Hukill Name:Nathan Hukill Title:Authorized Signatory Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Exhibit A to AmendmentAMENDED LOAN AGREEMENT [See attached.] CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION.EXHIBIT A TO AMENDMENT NO. 1MARKED VERSION REFLECTING CHANGESPURSUANT TO AMENDMENT NO. 1ADDED TEXT SHOWN UNDERSCOREDDELETED TEXT SHOWN STRIKETHROUGH TERM LOAN AGREEMENT,dated as ofJuly 14, 2017,as amended by Amendment 1 to Term Loan Agreement, dated as of January 16, 2018amongSTRONGBRIDGE U.S. INC,STRONGBRIDGE BIOPHARMA PLC,CORTENDO AB (PUBL),CORTENDO CAYMAN LTD.,STRONGBRIDGE IRELAND LIMITED,as Borrowers,The Subsidiary Guarantors from Time to Time Party Hereto,The Lenders from Time to Time Party Hereto,andCRG SERVICING LLC,as Administrative Agent and Collateral AgentU.S. $100,000,000 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. SECTION 1 DEFINITIONS11.01Certain Defined Terms11.02Accounting Terms and Principles231.03Interpretation231.04Changes to GAAP231.05Swedish Trust Provision241.06Swedish Limitations24SECTION 2 THE COMMITMENT242.01Commitments242.02Borrowing Procedures242.03Fees252.04Use of Proceeds252.05Defaulting Lenders252.06Substitution of Lenders26SECTION 3 PAYMENTS OF PRINCIPAL AND INTEREST273.01Repayment273.02Interest273.03Prepayments28SECTION 4 PAYMENTS, ETC.304.01Payments304.02Computations314.03Notices314.04Set-Off314.05Pro Rata Treatment32SECTION 5 YIELD PROTECTION, ETC.335.01Additional Costs335.02Illegality345.03Taxes34 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. TABLE OF CONTENTS(continued) PageSECTION 6 CONDITIONS PRECEDENT386.01Conditions to the First Borrowing386.02Conditions to Second Borrowing416.03Conditions to Third Borrowing416.04Conditions to Fourth Borrowing416.05Conditions to Each Borrowing41SECTION 7 REPRESENTATIONS AND WARRANTIES427.01Power and Authority427.02Authorization; Enforceability427.03Governmental and Other Approvals; No Conflicts427.04Financial Statements; Material Adverse Change.437.05Properties437.06No Actions or Proceedings467.07Compliance with Laws and Agreements467.08Taxes477.09Full Disclosure477.10Regulation477.11Solvency487.12Subsidiaries487.13Indebtedness and Liens487.14Material Agreements487.15Restrictive Agreements487.16Real Property497.17Pension Matters497.18Collateral; Security Interest497.19Regulatory Approvals49 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. TABLE OF CONTENTS(continued) Page7.20[Reserved.]497.21Update of Schedules50SECTION 8 AFFIRMATIVE COVENANTS508.01Financial Statements and Other Information508.02Notices of Material Events518.03Existence; Conduct of Business538.04Payment of Obligations548.05Insurance548.06Books and Records; Inspection Rights548.07Compliance with Laws and Other Obligations558.08Maintenance of Properties, Etc558.09Licenses558.10Action under Environmental Laws558.11Use of Proceeds558.12Certain Obligations Respecting Subsidiaries; Further Assurances568.13Termination of Non-Permitted Liens588.14Intellectual Property588.15[Reserved].588.16Post-Closing Items58SECTION 9 NEGATIVE COVENANTS589.01Indebtedness589.02Liens609.03Fundamental Changes and Acquisitions619.04Lines of Business619.05Investments629.06Restricted Payments63 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. TABLE OF CONTENTS(continued) Page9.07Payments of Indebtedness639.08Change in Fiscal Year639.09Sales of Assets, Etc639.10Transactions with Affiliates649.11Restrictive Agreements659.12Amendments to Material Agreements; Organizational Documents659.13Operating Leases659.14Sales and Leasebacks659.15Hazardous Material659.16Accounting Changes659.17Compliance with ERISA659.18Swedish Borrower66SECTION 10 FINANCIAL COVENANTS6610.01Minimum Liquidity6610.02Minimum Revenue6610.03Cure Right66SECTION 11 EVENTS OF DEFAULT6711.01Events of Default6711.02Remedies70SECTION 12 ADMINISTRATIVE AGENT7112.01Appointment and Duties7112.02Binding Effect7312.03Use of Discretion7312.04Delegation of Rights and Duties7312.05Reliance and Liability7312.06Administrative Agent Individually74 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. TABLE OF CONTENTS(continued) Page12.07Lender Credit Decision7412.08Expenses; Indemnities7512.09Resignation of Administrative Agent7512.10Release of Collateral or Guarantors7612.11Release of Swedish Liens7712.12Automatic Releases of Obligors and Liens (other than Swedish Liens).77SECTION 13 MISCELLANEOUS7713.01No Waiver7713.02Notices7813.03Expenses, Indemnification, Etc7813.04Amendments, Etc7913.05Successors and Assigns8013.06Survival8213.07Captions8213.08Counterparts8213.09Governing Law8213.10Jurisdiction, Service of Process and Venue8213.11Waiver of Jury Trial8313.12Waiver of Immunity8313.13Entire Agreement8313.14Severability8313.15No Fiduciary Relationship8413.16Confidentiality8413.17USA PATRIOT Act8513.18Maximum Rate of Interest8513.19Certain Waivers.85 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. TABLE OF CONTENTS(continued) Page13.20Tax Treatment8513.21Original Issue Discount8513.22Co-Borrower Provisions86SECTION 14 GUARANTEE8714.01The Guarantee8714.02Obligations Unconditional8814.03Reinstatement8914.04Subrogation8914.05Remedies8914.06Instrument for the Payment of Money8914.07Continuing Guarantee8914.08Rights of Contribution8914.09General Limitation on Guaranteed Obligations9014.10Irish Companies Act Limitation on Guaranteed Obligations90SECTION 15 INTERCOMPANY SUBORDINATION AGREEMENT9115.01Subordination of Intercompany Obligations.91 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. SCHEDULES AND EXHIBITSSchedule 1-CommitmentsSchedule 6.01-Foreign Security DocumentsSchedule 7.05(b)(i)-Certain Intellectual PropertySchedule 7.05(b)(ii)-Intellectual Property ExceptionsSchedule 7.05(c)-Material Intellectual PropertySchedule 7.06-Certain LitigationSchedule 7.12-Information Regarding SubsidiariesSchedule 7.13(a)-Existing Indebtedness of Parent and its SubsidiariesSchedule 7.13(b)-Liens Granted by the ObligorsSchedule 7.14-Material Agreements of ObligorsSchedule 7.15-Restrictive AgreementsSchedule 7.16-Real Property Owned or Leased by Parent or any SubsidiarySchedule 7.17-Pension MattersSchedule 9.05-Existing InvestmentsSchedule 9.10-Transactions with AffiliatesSchedule 9.14-Permitted Sales and Leasebacks Exhibit A-Form of Assumption AgreementExhibit B-Form of Notice of BorrowingExhibit C-1-Form of U.S. Tax Compliance CertificateExhibit C-2-Form of U.S. Tax Compliance CertificateExhibit C-3-Form of U.S. Tax Compliance CertificateExhibit C-4-Form of U.S. Tax Compliance CertificateExhibit D-Form of Compliance CertificateExhibit F-Form of Landlord ConsentExhibit G-Form of Subordination AgreementExhibit H-Form of Intercreditor Agreement (Permitted Priority Debt)Exhibit I-Form of Warrant CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. TERM LOAN AGREEMENT, dated as of July 14, 2017 and amended by Amendment 1 to Term Loan Agreement, dated as ofJanuary 16, 2018 (this “Agreement”), among STRONGBRIDGE U.S. INC., a Delaware corporation (“Lead Borrower”), STRONGBRIDGEBIOPHARMA PUBLIC LIMITED COMPANY, a public limited company incorporated under the laws of Ireland (“Parent”),STRONGBRIDGE IRELAND LIMITED, a private limited company incorporated under the laws of Ireland (“Irish Borrower”),CORTENDO CAYMAN LTD., an exempted company incorporated in the Cayman Islands (“Cayman Borrower”), CORTENDO AB(PUBL), a public limited liability company incorporated under the laws of Sweden with registration number 556537-6554 (“SwedishBorrower” and together with the Lead Borrower, Parent, Irish Borrower, Cayman Borrower, and each other Person that becomes, or isrequired to become, a “Borrower” after the date hereof pursuant to Section 8.12(a) or (b), each a “Borrower” and collectively,“Borrowers”), the Subsidiary Guarantors from time to time party hereto, the Lenders from time to time party hereto and CRG SERVICINGLLC, a Delaware limited liability company (“CRG Servicing”), as administrative agent and collateral agent for the Lenders (in suchcapacities, together with its successors and assigns, “Administrative Agent”).WITNESSETH:Borrowers have requested the Lenders to make term loans to Borrowers, and the Lenders are prepared to make such loans on andsubject to the terms and conditions hereof. Accordingly, the parties agree as follows:SECTION 1DEFINITIONS1.01 Certain Defined Terms. As used herein, the following terms have the following respective meanings:“Accounting Change Notice” has the meaning set forth in Section 1.04(a).“Act” has the meaning set forth in Section 13.17.“Acquisition” means any transaction, or any series of related transactions, by which any Person directly or indirectly, by means ofa take-over bid, tender offer, amalgamation, merger, purchase or license of assets, or similar transaction having the same effect as any of theforegoing, (a) acquires any business or product, or any division, product or line of business or all or substantially all of the assets of anyPerson engaged in any business or any division, product or line of business, (b) acquires control of securities of a Person engaged in abusiness representing more than 50% of the ordinary voting power for the election of directors or other governing body if the businessaffairs of such Person are managed by a board of directors or other governing body, or (c) acquires control of more than 50% of theownership interest in any1 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Person engaged in any business that is not managed by a board of directors or other governing body.“Administrative Agent” has the meaning set forth in the introduction hereto.“Affected Lender” has the meaning set forth in Section 2.06(a).“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or moreintermediaries, Controls or is Controlled by or is under common Control with the Person specified.“Agreement” has the meaning set forth in the introduction hereto.“Amended Fee Letter” means the amended and restated fee letter agreement dated as of the Amendment No. 1 Effective Dateamong Borrowers and Administrative Agent.“Amended Perfection Certificate” means that certain perfection certificate dated as of the Amendment No. 1 Effective Datedelivered by each Borrower to Administrative Agent.“Amendment No. 1” means Amendment 1 to Term Loan Agreement, dated as of January 16, 2018, by and among the Borrowers,the Administrative Agent and the Lenders party thereto.“Amendment No. 1 Effective Date” has the meaning specified in Amendment No. 1.“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to any Obligor, its Subsidiaries orAffiliates from time to time concerning or relating to bribery or corruption, including the United States Foreign Corrupt Practices Act of1977, as amended, and the rules and regulations thereunder.“Anti-Money Laundering Laws” means any and all laws, statutes, regulations or obligatory government orders, decrees,ordinances or rules applicable to an Obligor, its Subsidiaries or Affiliates related to terrorism financing or money laundering, including anyapplicable provision of the Act and The Currency and Foreign Transaction Reporting Act (also known as the “Bank Secrecy Act,” 31U.S.C. §§5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).“Asset Sale” has the meaning set forth in Section 9.09.“Asset Sale Net Proceeds” means the aggregate amount of the cash proceeds received from any Asset Sale, net of any bona fidecosts incurred in connection with such Asset Sale, plus, with respect to any non-cash proceeds of an Asset Sale, the fair market value ofsuch non cash proceeds as determined by the Majority Lenders, acting reasonably.2 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee of such Lender.“ Assumption Agreement” means a Guarantee or Borrower Assumption Agreement substantially in the form of Exhibit A by anentity that, pursuant to Section 8.12(a), is required to become a “Subsidiary Guarantor” or “Borrower” hereunder.“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy.”“Beneficiary” has the meaning set forth in Section 1.05.“Benefit Plan” means any employee benefit plan as defined in Section 3(3) of ERISA (whether governed by the laws of the UnitedStates or otherwise) to which any Obligor or Subsidiary thereof incurs or otherwise has any obligation or liability, contingent or otherwise.“Borrower” and “Borrowers” have the meanings set forth in the introduction hereto.“Borrower Facility” means the premises located at 900 Northbrook Drive, Suite 200, Trevose, PA 19053, which are leased byBorrower pursuant to the Borrower Lease.“Borrower Landlord” means Insight Pharmaceuticals LLC, a Delaware limited liability company.“Borrower Lease” means the Sublease Agreement dated March 31, 2015 by and between Borrower and Borrower Landlord.“Borrower Party” has the meaning set forth in Section 13.03(b).“Borrowing” means a borrowing consisting of Loans made on the same day by the Lenders according to their respectiveCommitments (including a borrowing of a PIK Loan).“Borrowing Date” means the date of a Borrowing.“Borrowing Notice Date” means, (a) in the case of the first Borrowing, a date that is at least three (3) Business Days prior to theBorrowing Date of such Borrowing, (b) in the case of the second Borrowing, a date that is at least one Business Day prior to the BorrowingDate of such Borrowing and, (c) in the case of a subsequent Borrowing (that is not the first Borrowing or the second Borrowing), a date thatis at least twelve (12) Business Days prior to the Borrowing Date of such Borrowing.“Business Day” means a day (other than a Saturday or Sunday) on which commercial banks are not authorized or required to closein New York City.3 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Capital Lease Obligations” means, as to any Person, the obligations of such Person to pay rent or other amounts under a lease of(or other agreement conveying the right to use) real and/or personal Property which obligations are required to be classified and accountedfor as a capital lease on a balance sheet of such Person under GAAP and, for purposes of this Agreement, the amount of such obligationsshall be the capitalized amount thereof, determined in accordance with GAAP.“Cayman Borrower” has the meaning set forth in the introduction hereto.“Change of Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person orgroup of Persons acting jointly or otherwise in concert of capital stock representing more than 30% of the aggregate ordinary voting powerrepresented by the issued and outstanding capital stock of Parent, (b) during any period of twelve (12) consecutive calendar months, theoccupation of a majority of the seats (other than vacant seats) on the board of directors of Parent by Persons who were neither (i) nominatedby the board of directors of Parent, nor (ii) appointed by directors so nominated, (c) the acquisition of direct or indirect Control of Parentby any Person or group of Persons acting jointly or otherwise in concert; in each case whether as a result of a tender or exchange offer, openmarket purchases, privately negotiated purchases or otherwise, or (d) Lead Borrower ceases to be a wholly owned direct or indirectsubsidiary of Parent.“Claims” means any claims, demands, complaints, grievances, actions, applications, suits, causes of action, orders, charges,indictments, prosecutions, informations (brought by a public prosecutor without grand jury indictment) or other similar processes,assessments or reassessments.“Closing Date” means July 14, 2017.“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgatedthereunder from time to time.“Collateral” means any Property in which a Lien is purported to be granted under any of the Security Documents (or all suchProperty, as the context may require).“Commitment” means, with respect to each Lender, the obligation of such Lender to make Loans to Borrower in accordance withthe terms and conditions of this Agreement, which commitment is in the amount set forth opposite such Lender’s name on Schedule 1under the caption “Commitment”, as such Schedule may be amended from time to time. The aggregate Commitments on the AmendmentNo. 1 Effective Date equal $100,000,000. For purposes of clarification, the amount of any PIK Loans shall not reduce the amount of theavailable Commitment.4 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Commitment Period” means the period from and including the first date on which all of the conditions precedent set forth inSection 6.01 have been satisfied (or waived by the Lenders) and through and including March 19, 2019.“Commodity Account” has the meaning set forth in the Security Agreement.“Compliance Certificate” has the meaning given to such term in Section 8.01(d).“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (howeverdenominated) or that are franchise Taxes or branch profits Taxes.“Contracts” means contracts, licenses, leases, agreements, obligations, promises, undertakings, understandings, arrangements,documents, commitments, entitlements or engagements under which a Person has, or will have, any liability or contingent liability (in eachcase, whether written or oral, express or implied).“Control” means, in respect of a particular Person, the possession, directly or indirectly, of the power to direct or cause thedirection of the management or policies of such Person, whether through the ability to exercise voting power, by contract orotherwise. “Controlling” and “Controlled” have meanings correlative thereto.“Controlled Foreign Corporation” means a “controlled foreign corporation” as defined in Section 957(a) of the Code.“Copyright” has the meaning set forth in the Security Agreement.“CRG Servicing” has the meaning set forth in the introduction hereto.“Cure Amount” has the meaning set forth in Section 10.03(a).“Cure Right” has the meaning set forth in Section 10.03(a).“Default” means any Event of Default and any event that, upon the giving of notice, the lapse of time or both, would constitute anEvent of Default.“Default Rate” has the meaning set forth in Section 3.02(b).“Defaulting Lender” means, subject to Section 2.05, any Lender that (a) has failed to perform any of its funding obligationshereunder, including in respect of its Loans, within three (3) Business Days of the date required to be funded by it hereunder, (b) hasnotified Lead Borrower or any Lender that it does not intend to comply with its funding obligations or has5 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. made a public statement to that effect with respect to its funding obligations hereunder or under other agreements in which it commits toextend credit, (c) has failed, within three Business Days after written request by the Administrative Agent or the Lead Borrower, to confirmin writing to the Administrative Agent and the Lead Borrower that it will comply with its prospective funding obligations hereunder(provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation bythe Administrative Agent and the Lead Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject ofan Insolvency Proceeding, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Personcharged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, orindicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be aDefaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parentcompany thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunityfrom the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permitsuch Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with suchLender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through(d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject toSection 2.05(b)) upon delivery of written notice of such determination to the Lead Borrower and each Lender.“Deposit Account” has the meaning set forth in the Security Agreement.“Dollars” and “$” means lawful money of the United States of America.“Eligible Transferee” means and includes a commercial bank, an insurance company, a finance company, a financial institution,any investment fund that invests in loans or any other “accredited investor” (as defined in Regulation D of the Securities Act) that isprincipally in the business of managing investments or holding assets for investment purposes.“Environmental Law” means any federal, state, provincial or local governmental law, rule, regulation, order, writ, judgment,injunction or decree relating to pollution or protection of the environment or the treatment, storage, disposal, release, threatened release orhandling of hazardous materials, and all local laws and regulations related to environmental matters and any specific agreements enteredinto with any competent authorities which include commitments related to environmental matters.“Equity Cure Right” has the meaning set forth in Section 10.03(a).6 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Equity Interest” means, with respect to any Person, any and all shares, interests, participations or other equivalents, includingmembership interests (however designated, whether voting or nonvoting), of equity of such Person, including, if such Person is apartnership, partnership interests (whether general or limited) and any other interest or participation that confers on a Person the right toreceive a share of the profits and losses of, or distributions of property of, such partnership, but excluding debt securities convertible orexchangeable into such equity.“Equivalent Amount” means, with respect to an amount denominated in one currency, the amount in another currency that couldbe purchased by the amount in the first currency determined by reference to the Exchange Rate at the time of determination.“ERISA” means the United States Employee Retirement Income Security Act of 1974, as amended.“ERISA Affiliate” means, collectively, any Obligor, Subsidiary thereof, and any Person under common control, or treated as asingle employer, with any Obligor or Subsidiary thereof, within the meaning of Section 414(b), (c), (m) or (o) of the Code.“ERISA Event” means (a) a reportable event as defined in Section 4043 of ERISA with respect to a Title IV Plan, excluding,however, such events as to which the PBGC by regulation has waived the requirement of Section 4043(a) of ERISA that it be notifiedwithin 30 days of the occurrence of such event; (b) the applicability of the requirements of Section 4043(b) of ERISA with respect to acontributing sponsor, as defined in Section 4001(a)(13) of ERISA, to any Title IV Plan where an event described in paragraph (9), (10),(11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such plan within the following 30 days; (c) awithdrawal by any Obligor or any ERISA Affiliate thereof from a Title IV Plan or the termination of any Title IV Plan resulting in liabilityunder Sections 4063 or 4064 of ERISA; (d) the withdrawal of any Obligor or any ERISA Affiliate thereof in a complete or partialwithdrawal (within the meaning of Section 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liabilitytherefore, or the receipt by any Obligor or any ERISA Affiliate thereof of notice from any Multiemployer Plan that it is in reorganization orinsolvency pursuant to Section 4241 or 4245 of ERISA; (e) the filing of a notice of intent to terminate, the treatment of a plan amendmentas a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Title IV Plan orMultiemployer Plan; (f) the imposition of liability on any Obligor or any ERISA Affiliate thereof pursuant to Sections 4062(e) or 4069 ofERISA or by reason of the application of Section 4212(c) of ERISA; (g) the failure by any Obligor or any ERISA Affiliate thereof to makeany required contribution to a Plan, or the failure to meet the minimum funding standard of Section 412 of the Code with respect to anyTitle IV Plan (whether or not waived in accordance with Section 412(c) of the Code) or the failure to make by its due date a requiredinstallment under Section 430 of the Code7 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. with respect to any Title IV Plan or the failure to make any required contribution to a Multiemployer Plan; (h) the determination that anyTitle IV Plan is considered an at-risk plan or a plan in endangered to critical status within the meaning of Sections 430, 431 and 432 of theCode or Sections 303, 304 and 305 of ERISA; (i) an event or condition which might reasonably be expected to constitute grounds underSection 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan; (j)the imposition of any liability under Title I or Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 ofERISA, upon any Obligor or any ERISA Affiliate thereof; (k) an application for a funding waiver under Section 303 of ERISA or anextension of any amortization period pursuant to Section 412 of the Code with respect to any Title IV Plan; (l) the occurrence of a non-exempt prohibited transaction under Sections 406 or 407 of ERISA for which any Obligor or any Subsidiary thereof may be directly orindirectly liable; (m) the assertion of a material claim (other than routine claims for benefits) against any Plan or the assets thereof, oragainst any Obligor or any Subsidiary thereof in connection with any such plan; (n) receipt from the IRS of notice of the failure of anyQualified Plan to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any Qualified Plan to fail to qualifyfor exemption from taxation under Section 501(a) of the Code; (o) the imposition of any lien (or the fulfillment of the conditions for theimposition of any lien) on any of the rights, properties or assets of any Obligor or any ERISA Affiliate thereof, in either case pursuant toTitle I or IV, including Section 302(f) or 303(k) of ERISA or to Section 401(a)(29) or 430(k) of the Code; or (p) the establishment oramendment by any Obligor or any Subsidiary thereof of any “welfare plan”, as such term is defined in Section 3(1) of ERISA, that providespost-employment welfare benefits in a manner that would increase the liability of any Obligor.“ERISA Funding Rules” means the rules regarding minimum required contributions (including any installment payment thereof)to Title IV Plans, as set forth in Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.“Event of Default” has the meaning set forth in Section 11.01.“Exchange Rate” means the rate at which any currency (the “Pre-Exchange Currency”) may be exchanged into another currency(the “Post-Exchange Currency”), as set forth on such date on the relevant Reuters screen at or about 11:00 a.m. (Central time) on suchdate. In the event that such rate does not appear on the Reuters screen, the “Exchange Rate” with respect to exchanging such Pre-ExchangeCurrency into such Post-Exchange Currency shall be determined by reference to such other publicly available service for displayingexchange rates as may be agreed upon by Lead Borrower and Administrative Agent or, in the absence of such agreement, such ExchangeRate shall instead be determined by Administrative Agent by any reasonable method as they deem applicable to determine such rate, andsuch determination shall be conclusive absent manifest error.8 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Excluded Foreign Subsidiary” means any Foreign Subsidiary that is (i) a Controlled Foreign Corporation or (ii) a ForeignSubsidiary owned by a Subsidiary described in clause (i).“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld ordeducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes andbranch profits Taxes, in each case (i) imposed as a result of such Recipient being organized under the laws of, or having its principal officeor, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivisionthereof), or (ii) that are Other Connection Taxes, (b) U.S. Federal withholding Taxes that are imposed on amounts payable to a Lender tothe extent that the obligation to withhold amounts existed on the date that such Lender became a “Lender” under this Agreement (otherthan pursuant to an assignment request by Lead Borrower under Section 5.03(g)), or (ii) such Lender changes its applicable lending office,except in each case to the extent such Lender is a direct or indirect assignee of any other Lender that was entitled, at the time theassignment of such other Lender became effective or to such Lender immediately before it changed its applicable lending office, to receiveadditional amounts under Section 5.03, (c) any U.S. Federal withholding Taxes imposed under FATCA, and (d) Taxes attributable to suchRecipient’s failure to comply with Section 5.03(e). “Expense Cap” has the meaning set forth in the Amended Fee Letter.“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor versionthat is substantively comparable and not more onerous to comply with), any regulations or official interpretations thereof and anyagreements entered into pursuant to Section 1471(b)(1) of the Code.“Federal Funds Effective Rate” means, for any day, the weighted average of the rates on overnight federal funds transactionswith members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by theFederal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations forthe day of such transactions received by Administrative Agent from three federal funds brokers of recognized standing selected by it.“First-Tier Foreign Subsidiary” means an Excluded Foreign Subsidiary that is a direct Subsidiary of an Obligor.“Foreign Lender” means a Lender that is not a U.S. Person.“Foreign Subsidiary” means a Subsidiary of any Borrower that is not a U.S. Person.9 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Fully-Diluted Basis” means the Parent’s outstanding capital stock, measured as of the applicable Borrowing Date, including (a)all ordinary shares, (b) all preferred shares on an as-converted to ordinary share basis and (c) all shares of capital stock issuable upon theexercise of all outstanding warrants, options and other rights to purchase or acquire capital stock (inclusive of the warrants granted on suchBorrowing Date) and the conversion or exchange of any securities convertible into or exchangeable for capital stock of the Parent.“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time, set forthin the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, in thestatements and pronouncements of the Financial Accounting Standards Board and in such other statements by such other entity as may bein general use by significant segments of the accounting profession that are applicable to the circumstances as of the date ofdetermination. Subject to Section 1.02, all references to “GAAP” shall be to GAAP applied consistently with the principles used in thepreparation of the financial statements described in Section 7.04(a).“Governmental Approval” means any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation,registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.“Governmental Authority” means any nation, government, branch of power (whether executive, legislative or judicial), state,province or municipality or other political subdivision thereof and any entity exercising executive, legislative, judicial, monetary,regulatory or administrative functions of or pertaining to government, including regulatory authorities, governmental departments,agencies, commissions, bureaus, officials, ministers, courts, bodies, boards, tribunals and dispute settlement panels, and other law-, rule- orregulation-making organizations or entities of any State, territory, county, city or other political subdivision of the United States.“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeingor having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in anymanner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advanceor supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for thepurchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring theowner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any otherfinancial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or otherobligation or (d) as an account party in respect of any letter of credit or letter of guaranty10 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection ordeposit in the ordinary course of business.“Guaranteed Obligations” has the meaning set forth in Section 14.01.“Hazardous Material” means any substance, element, chemical, compound, product, solid, gas, liquid, waste, by-product,pollutant, contaminant or material which is hazardous or toxic, and includes (a) asbestos, polychlorinated biphenyls and petroleum(including crude oil or any fraction thereof) and (b) any material classified or regulated as “hazardous” or “toxic” or words of like importpursuant to an Environmental Law.“Hedging Agreement” means any interest rate exchange agreement, foreign currency exchange agreement, commodity priceprotection agreement or other interest or currency exchange rate or commodity price hedging arrangement.“Indebtedness” of any Person means, without duplication, (a) (i) all obligations of such Person for borrowed money or (ii)obligations of such Person with respect to deposits or advances of any kind by third parties (other than an Obligor), (b) all obligations ofsuch Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest chargesare customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to propertyacquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excludingcurrent accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder ofsuch Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by suchPerson, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness or otherobligations of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as anaccount party in respect of letters of credit and letters of guaranty, (j) obligations under any Hedging Agreement currency swaps, forwards,futures or derivatives transactions, (k) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (l) allobligations of such Person under license or other agreements containing a guaranteed minimum payment or purchase by such Person, and(m) all Equity Interests of such Person subject to repurchase or redemption rights or obligations (excluding repurchases or redemptions atthe sole option of such Person). The Indebtedness of any Person shall include the Indebtedness of any other entity (including anypartnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownershipinterest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liabletherefor.“Indemnified Party” has the meaning set forth in Section 13.03(b).11 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or onaccount of any Obligation and (b) to the extent not otherwise described in clause (a), Other Taxes.“Insolvency Proceeding” means (a) any case, action or proceeding before any court or other Governmental Authority relating tobankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any generalassignment for the benefit of creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect of anyPerson’s creditors generally or any substantial portion of such Person’s creditors, in each case undertaken under U.S. Federal, state orforeign law, including the Bankruptcy Code.“Intellectual Property” means all Patents, Trademarks, Copyrights, and Technical Information, whether registered or not,domestic and foreign. Intellectual Property shall include all:(a) applications or registrations relating to such Intellectual Property;(b) rights and privileges arising under applicable Laws with respect to such Intellectual Property;(c) rights to sue for past, present or future infringements of such Intellectual Property; and(d) rights of the same or similar effect or nature in any jurisdiction corresponding to such Intellectual Property throughout theworld.“Interest-Only Period” means the period from and including the first Borrowing Date and through and including (i) if Borrowershave not achieved the Recorlev Approval Milestone, the fourteenth (14) Payment Date following the first Borrowing Date and (ii) ifBorrowers have achieved the Recorlev Approval Milestone and so long as no Default or Event of Default has occurred and is continuing,the twenty-third (23) Payment Date following the first Borrowing Date.“Interest Period” means, with respect to each Borrowing, (a) initially, the period commencing on and including the BorrowingDate thereof and ending on and excluding the next Payment Date, and, (b) thereafter, each period beginning on and including the last dayof the immediately preceding Interest Period and ending on and excluding the next succeeding Payment Date.“Invention” means any novel, inventive and useful art, apparatus, method, process, machine (including article or device),manufacture or composition of matter, or any novel,12 thrdCONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. inventive and useful improvement in any art, method, process, machine (including article or device), manufacture or composition ofmatter.“Investment” means, for any Person: (a) the acquisition (whether for cash, property, services or securities or otherwise) of capitalstock, bonds, notes, debentures, partnership or other ownership interests or other securities of any other Person or any agreement to makeany such acquisition (including any “short sale” or any sale of any securities at a time when such securities are not owned by the Personentering into such sale); (b) the making of any deposit with, or advance, loan or other extension of credit to, any other Person (includingthe purchase of property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such property tosuch Person), but excluding any such advance, loan or extension of credit having a term not exceeding 90 days arising in connection withthe sale of inventory or supplies by such Person in the ordinary course of business; (c) the entering into of any Guarantee of, or othercontingent obligation with respect to, Indebtedness or other liability of any other Person and (without duplication) any amount committedto be advanced, lent or extended to such Person; or (d) the entering into of any Hedging Agreement.“Irish Borrower” has the meaning set forth in the introduction hereto.“Irish Companies Act” means the Companies Act 2014 of Ireland.“IRS” means the U.S. Internal Revenue Service or any successor agency, and to the extent relevant, the U.S. Department of theTreasury.“Knowledge” means, with respect to any Person, the actual knowledge of any Responsible Officer of such Person and, in the caseof Lead Borrower, so long as he or she is employed by Parent or its Subsidiaries, the actual knowledge of Matthew Pauls, so long as suchPerson is an officer of Lead Borrower.“Landlord Consent” means a Landlord Consent substantially in the form of Exhibit F or such other form as reasonably acceptableto the Administrative Agent.“Laws” means, collectively, all international, foreign, federal, state, provincial, territorial, municipal and local statutes, treaties,rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation oradministration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and allapplicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any GovernmentalAuthority, in each case whether or not having the force of law.“Lead Borrower” has the meaning set forth in the introduction hereto.13 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Lender” means each Person listed as a “Lender” on a signature page hereto, together with its successors, and each assignee of aLender pursuant to Section 13.05(b).“Lien” means any mortgage, lien, pledge, charge or other security interest, or any lease, title retention agreement, mortgage,restriction, easement, right-of-way or other encumbrance of any kind or character whatsoever or any preferential arrangement that has thepractical effect of creating a security interest.“Liquidity” means the balance of unencumbered (other than by Liens described in Sections 9.02(a), 9.02(c) (provided that thereis no default under the documentation governing the Permitted Priority Debt) and 9.02(j)) cash and Permitted Cash Equivalent Investments(which for greater certainty shall not include any undrawn credit lines), in each case, to the extent held in an account over which theSecured Parties have a perfected security interest.“Loan” means (a) each loan advanced by a Lender pursuant to Section 2.01 and (b) each PIK Loan deemed to have been advancedby a Lender pursuant to Section 3.02(d). For purposes of clarification, except as otherwise expressly provided in this Agreement, anycalculation of the aggregate outstanding principal amount of Loans on any date of determination shall include both the aggregateprincipal amount of loans advanced pursuant to Section 2.01 and not yet repaid, and all PIK Loans deemed to have been advanced and notyet repaid, on or prior to such date of determination.“Loan Documents” means, collectively, this Agreement, Amendment No. 1, the Amended Fee Letter, the Security Documents,each Warrant, the Original Perfection Certificate, the Amended Perfection Certificate, any subordination agreement or any intercreditoragreement entered into by Administrative Agent (on behalf of the Lenders) with any other creditors of Obligors or any agent acting onbehalf of such creditors, and any other present or future document, instrument, agreement or certificate executed by Obligors and deliveredto Administrative Agent or any Secured Party in connection with or pursuant to this Agreement or any of the other Loan Documents, all asamended, amended and restated, supplemented or otherwise modified.“Loss” means judgments, debts, liabilities, expenses, costs, damages or losses, contingent or otherwise, whether liquidated orunliquidated, matured or unmatured, disputed or undisputed, contractual, legal or equitable, including loss of value, professional fees,including fees and disbursements of legal counsel on a full indemnity basis, and all costs incurred in investigating or pursuing any Claimor any proceeding relating to any Claim.“Macrilen License Agreement” means that certain License and Assignment Agreement, dated as of the Amendment No. 1Effective Date, between the Irish Borrower and Aeterna14 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Zentaris GmbH, a corporation incorporated under the laws of Germany, together with all schedules and exhibits thereto.“Macrilen Acquisition” means the acquisition by the Irish Borrower of the exclusive North American marketing rights toMacrilen (macimorelin) pursuant to the Macrilen License Agreement.“Majority Lenders” means, at any time, Lenders having at such time in excess of 50% of the aggregate Commitments (or, if suchCommitments are terminated, the outstanding principal amount of the Loans) then in effect, ignoring, in such calculation, theCommitments of and outstanding Loans owing to any Defaulting Lender.“Margin Stock” means “margin stock” within the meaning of Regulations U and X.“Market Capitalization” means, as of any date of determination, the product of (a) the number of shares of Parent’s ordinaryshares outstanding (other than treasury stock), as of such date of determination and (b) the closing sale price for the regular trading sessionof Parent’s ordinary shares on NASDAQ (or other principal exchange on which the Parent’s ordinary shares are traded) on such date ofdetermination.“Material Adverse Change” and “Material Adverse Effect” mean a material adverse change in or effect on (a) the business,condition (financial or otherwise), operations, performance or Property of Parent and its Subsidiaries taken as a whole, (b) the ability of anyObligor to perform its obligations under the Loan Documents, or (c) the legality, validity, binding effect or enforceability of the LoanDocuments or the rights and remedies of Administrative Agent or any Lender under any of the Loan Documents.“Material Agreements” means (a) the agreements which are listed in Schedule 7.14 (as updated by Lead Borrower from time totime in accordance with Section 7.21 to list all such agreements that meet the description set forth in clauses (b) and (c) of this definition),(b) material inbound and outbound license agreements (including, without limitation, the Macrilen License Agreement) and (c) all otheragreements held by the Obligors from time to time, the absence or termination of any of which would reasonably be expected to result in aMaterial Adverse Effect; provided, however, that “Material Agreements” exclude all: (i) licenses implied by the sale of a product; and (ii)paid-up licenses for commonly available software programs under which an Obligor is the licensee. “Material Agreement” means any onesuch agreement.“Material Indebtedness” means, at any time, any Indebtedness of any Obligor, the outstanding principal amount of which,individually or in the aggregate, exceeds $300,000 (or the Equivalent Amount in other currencies).15 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Material Intellectual Property” means, the Obligor Intellectual Property described in Schedule 7.05(c) and any other ObligorIntellectual Property acquired after the Closing Date the loss of which would reasonably be expected to have a Material Adverse Effect.“Maturity Date” means the earlier to occur of (a) the Stated Maturity Date, and (b) the date on which the Loans are acceleratedpursuant to Section 11.02.“Maximum Rate” has the meaning set forth in Section 13.18.“Minimum Required Revenue” has the meaning set forth in Section in 10.02.“Multiemployer Plan” means any multiemployer plan, as defined in Section 400l(a)(3) of ERISA, to which any ERISA Affiliateincurs or otherwise has any obligation or liability, contingent or otherwise.“Non-Consenting Lender” has the meaning set forth in Section 2.06(a).“Non-Disclosure Agreement” has the meaning set forth in Section 13.16.“Notice of Borrowing” has the meaning set forth in Section 2.02.“Obligations” means, with respect to any Obligor, all amounts, obligations, liabilities, covenants and duties of every type anddescription owing by such Obligor to Administrative Agent, any Lender or any other indemnitee hereunder, arising out of, under, or inconnection with, any Loan Document (other than the Warrant), whether direct or indirect (regardless of whether acquired by assignment),absolute or contingent, due or to become due, whether liquidated or not, now existing or hereafter arising and however acquired, andwhether or not evidenced by any instrument or for the payment of money, including, without duplication, (a) if such Obligor is a Borrower,all Loans, (b) all interest, whether or not accruing after the filing of any petition in bankruptcy or after the commencement of anyinsolvency, reorganization or similar proceeding, and whether or not a claim for post-filing or post-petition interest is allowed in any suchproceeding, and (c) all other fees, expenses (including fees, charges and disbursement of counsel), interest, commissions, charges, costs,disbursements, indemnities and reimbursement of amounts paid and other sums chargeable to such Obligor under any Loan Document(other than the Warrant).“Obligor Intellectual Property” means Intellectual Property owned by or licensed to any of the Obligors.“Obligors” means, collectively, each Borrower and the Subsidiary Guarantors and their respective successors and permittedassigns.16 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.“Original Fee Letter” means the fee letter agreement dated as of the Closing Date among Borrowers and Administrative Agent.“Original Perfection Certificate” means that certain perfection certificate dated as of the Closing Date delivered by eachBorrower party thereto to Administrative Agent.“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connectionbetween such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed,delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under,engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or LoanDocument).“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arisefrom any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of asecurity interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposedwith respect to an assignment (other than an assignment made pursuant to Section 5.03(g)).“Parent” has the meaning set forth in the introduction hereto.“Participant” has the meaning set forth in Section 13.05(e).“Participant Register” has the meaning set forth in Section 13.05(f).“Patents” has the meaning set forth in the Security Agreement.“Payment Date” means each March 31, June 30, September 30, December 31 and the Maturity Date, commencing on the first suchdate to occur following the first Borrowing Date; provided that, if any such date shall occur on a day that is not a Business Day, theapplicable Payment Date shall be the immediately preceding Business Day.“PBGC” means the United States Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successorentity performing similar functions.“Permitted Acquisition” means any acquisition by any Obligor, whether by purchase, merger, license or otherwise, of all orsubstantially all of the assets of, all of the Equity Interests of, or a business line or unit or a division or a product of, any Person; providedthat:17 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (a) immediately prior to, and after giving effect thereto, no Default or Event of Default shall have occurred and becontinuing or would result therefrom;(b) all transactions in connection therewith shall be consummated, in all material respects, in accordance with allapplicable Laws and in conformity in all material respects with all applicable Governmental Approvals;(c) in the case of the acquisition of all of the Equity Interests of such Person, all of the Equity Interests (except forany such securities in the nature of directors’ qualifying shares required pursuant to applicable Law) acquired, or otherwise issuedby such Person or any newly formed Subsidiary of Parent in connection with such acquisition, shall be owned 100% by anObligor or any other Subsidiary, and Parent shall have taken, or caused to be taken, each of the actions set forth in Section 8.12, ifapplicable;(d) Parent and its Subsidiaries shall be in compliance with the financial covenants set forth in Section 10.01 andSection 10.02 on a pro forma basis after giving effect to such acquisition;(e) such Person (in the case of an acquisition of Equity Interests) or assets (in the case of an acquisition of assets or adivision) (i) shall be engaged or used, as the case may be, in the same business or lines of business in which Parent and/or itsSubsidiaries are engaged or (ii) shall have a similar customer base as Parent and/or its Subsidiaries; and(f) concurrent with the earlier of the execution of the applicable acquisition agreement or the consummation of suchacquisition, Lead Borrower shall have provided Administrative Agent copies of the acquisition agreement and other materialdocuments relative to the proposed acquisition.“Permitted Cash Equivalent Investments” means (a) marketable direct obligations issued or unconditionally guaranteed by theUnited States or any agency or any State thereof having maturities of not more than two (2) years from the date of acquisition thereof, (b)commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s RatingsGroup or Moody’s Investors Service, Inc., and (c) Investments permitted by Parent’s investment policy in effect on the Closing Date, asamended from time to time, provided that such amendment thereto has been approved in writing by the Administrative Agent.“Permitted Cure Debt” means Indebtedness incurred in connection with the exercise of the Subordinated Debt Cure Right and (a)that is governed by documentation containing18 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. representations, warranties, covenants and events of default no more burdensome or restrictive than those contained in the LoanDocuments, (b) that has a maturity date later than the Stated Maturity Date, (c) in respect of which no cash payments of principal or interestare required prior to the Stated Maturity Date, and (d) in respect of which the holders have agreed in favor of Borrowers, AdministrativeAgent and Lenders (i) that prior to the date on which the Commitments have expired or been terminated and all Obligations have beenpaid in full indefeasibly in cash, such holders will not exercise any remedies available to them in respect of such Indebtedness, (ii) thatsuch Indebtedness is unsecured, and (iii) to terms of subordination in substantially the form attached hereto as Exhibit G or otherwisesatisfactory to Administrative Agent.“Permitted Indebtedness” means any Indebtedness permitted under Section 9.01.“Permitted Liens” means any Liens permitted under Section 9.02.“Permitted Priority Debt” means Indebtedness of Lead Borrower under one working capital revolving credit facility, in anamount not to exceed at any time 80% of the face amount at such time of Lead Borrower’s eligible accounts receivable; provided that (a)such Indebtedness, if secured, is secured solely by Lead Borrower’s accounts receivable, inventory and cash (other than proceeds of (i)Loans, (ii) Intellectual Property, (iii) Collateral that does not secure such Permitted Priority Debt, and (iv) the exercise of any Cure Right),but otherwise is not secured by any other property (including any Intellectual Property or proceeds thereof, or proceeds of Loans, or ofCollateral that does not secure such Permitted Priority Debt, or of the exercise of any Cure Right), (b) the holders or lenders thereof haveexecuted and delivered to Administrative Agent an intercreditor agreement in substantially the form of Exhibit H and with such changes(if any) as are reasonably satisfactory to Administrative Agent, or such other form as reasonably acceptable to the Administrative Agentand (c) the Obligors shall have achieved Revenue from the sale of the Product of at least $30,000,000 during any consecutive twelve (12)month period ended on or prior to the effective date of such revolving credit facility.“Permitted Priority Liens” means (a) Liens permitted under Section 9.02(c), (d), (e), (f), (g), and (j), and (b) Liens permitted underSection 9.02(b); provided that such Liens are also of the type described in Section 9.02(c), (d), (e), (f), (g), and (j).“Permitted Refinancing” means, with respect to any Indebtedness, any extensions, renewals and replacements of suchIndebtedness; provided that such extension, renewal or replacement (a) shall not increase the outstanding principal amount of suchIndebtedness, (b) contains terms relating to outstanding principal amount, amortization, maturity, collateral (if any) and subordination (ifany), and other material terms taken as a whole no less favorable in any material respect to Parent and its Subsidiaries or the Secured Partiesthan the terms of any agreement or instrument governing such existing Indebtedness, (c) shall have an applicable19 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. interest rate which does not exceed the rate of interest of the Indebtedness being replaced, and (d) shall not contain any new requirement togrant any lien or security or to give any guarantee that was not an existing requirement of such Indebtedness.“Permitted Restructuring” means a transaction or series of related transactions consummated for the purpose of achieving a grouprestructuring, which may include transfers or sales of assets among Obligors, service agreements or similar contractual arrangementsbetween the Swedish Borrower and any other Obligor, intercompany loans and other extensions of credit between Obligors, the making ofInvestments by any Obligor in another Obligor, Restricted Payments to Obligors and mergers, consolidations, amalgamations, liquidations,winding up and dissolutions with or into Obligors; provided that, (1) no assets are transferred to the Swedish Borrower (except for (x) theultimate purpose of a dividend, distribution or other Restricted Payment, or a sale or transfer thereof, to another Borrower, and (y) cashpayments in connection with any service agreement or similar contractual arrangement between the Swedish Borrower and any otherObligor to the extent permitted by the proviso in clause (4) below), (2) assets are transferred only among Obligors or entities that becomeObligors and, in the case of new Obligors, that will, concurrently with such transfer, pledge substantially all of their assets to secure theobligations under the Loan Documents, (3) an Obligor will be released from its obligations only by virtue of their merger. dissolution orliquidation into another Obligor (subject to Section 12.11 in the case of the Swedish Borrower), (4) collateral would only be released to theextent necessary to permit the transfer thereof from one Obligor to another Obligor, provided that such collateral will upon such transfer, bepledged by the transferee Obligor (other than the Swedish Borrower to the extent assets are transferred or sold through it, in connectionwith the Permitted Restructuring; provided that no Default or Event of Default shall have occurred and be continuing and such assetsconsist of (i) assets held by the Swedish Borrower on the Closing Date, (ii) assets received from the Cayman Borrower (x) in exchange forassets of the Swedish Borrower of reasonably equivalent value or (y) in connection with, or as a result of, the merger, dissolution orliquidation of the Cayman Borrower, (iii) note receivables (subordinated to the Obligations in accordance with Section 15) owing fromanother Obligor to the Swedish Borrower in connection with the transfer of assets of reasonably equivalent value to such note receivablesfrom the Swedish Borrower to such Obligor, and/or (iv) any service agreement or similar contractual arrangement between the SwedishBorrower and any other Obligor and any cash payments received by the Swedish Borrower pursuant thereto, provided that (A) theaggregate amount of such cash shall not exceed $100,000 and (B) the aggregate amount of cash held at the Swedish Borrower shall notexceed $100,000 at any time), (5) no withholding Tax shall become payable in respect of payments hereunder as a result of any suchtransaction, (6) any Obligor that acquires assets in the Permitted Restructuring or into which any other Obligor or Subsidiary is merged,liquidated or dissolved, shall be organized under the laws of Ireland, the Cayman Islands or other jurisdiction that permits the guarantee ofthe Obligations on a full and unconditional basis or recognizes the joint and severally liability of the Borrowers for the Obligations, andpermits the grant of a security interest in substantially all of its assets and that is20 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. reasonably acceptable to the Administrative Agent, (7) the Lead Borrower shall not be dissolved or liquidated and shall be the survivingentity in any merger, consolidation or amalgamation with another Obligor, (8) any intercompany services agreements or arrangements withthe Swedish Borrower shall be on terms no less favorable to the other Obligors than those that could be obtained on an arm’s length basis,and (9) limitations specified in the last sentence of Section 8.12(c) shall not apply to any actions required to be taken so as to ensure anyassets transferred in a Permitted Restructuring remain or become subject to security interests and Liens in favor, or for the benefit, of theSecured Parties.“Permitted Subordinated Debt” means Indebtedness (a) that is governed by documentation containing representations,warranties, covenants and events of default no more burdensome or restrictive than those contained in the Loan Documents, (b) that has amaturity date later than the Stated Maturity Date, (c) in respect of which no cash payments of principal or interest are required prior to theStated Maturity Date, (d) that converts into equity immediately upon the occurrence of an Event of Default, and (e) in respect of which theholders have agreed in favor of Borrowers and Secured Parties (i) that prior to the date on which the Commitments have expired or beenterminated and all Obligations have been paid in full indefeasibly in cash, such holders will not exercise any remedies available to them inrespect of such Indebtedness, (ii) that such Indebtedness is and shall remain unsecured, and (iii) to terms of subordination in substantiallythe form attached hereto as Exhibit G and with such changes (if any) as are reasonably satisfactory to Administrative Agent, or such otherform as reasonably acceptable to the Majority Lenders.“Person” means any individual, corporation, company, voluntary association, partnership, limited liability company, jointventure, trust, unincorporated organization or Governmental Authority or other entity of whatever nature.“PIK Loan” has the meaning set forth in Section 3.02(d).“PIK Period” means the period beginning on the first Borrowing Date through and including (a) if Borrowers have not achievedthe Recorlev Approval Milestone, the earlier to occur of (i) the fourteenth (14) Payment Date after the first Borrowing Date and (ii) thedate on which any Default shall have occurred (provided that if such Default shall have been cured or waived, the PIK Period shall resumeuntil the earlier to occur of the next Default and the fourteenth (14) Payment Date after the first Borrowing Date) and (b) if Borrowers haveachieved the Recorlev Approval Milestone, the earlier to occur of (i) the twenty-third (23) Payment Date after the first Borrowing Dateand (ii) the date on which any Default shall have occurred (provided that if such Default shall have been cured or waived, the PIK Periodshall resume until the earlier to occur of the next Default and the twenty-third (23) Payment Date after the first Borrowing Date).21 ththrdrdCONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV ofERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which Parent or any ERISA Affiliate is (or, if such plan wereterminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.“Prepayment Premium” has the meaning set forth in Section 3.03(a).“Product” means KEVEYIS®, Recorlev, Veldoreotide, Macrilen and such other products as may be acquired or in-licensed by anyObligor, and each of their respective successors.“Property” of any Person means any property or assets, or interest therein, of such Person.“Proportionate Share” means, with respect to any Lender, the percentage obtained by dividing (a) the Commitment (or, if theCommitments are terminated, the outstanding principal amount of the Loans) of such Lender then in effect by (b) the sum of theCommitments (or, if the Commitments are terminated, the outstanding principal amount of the Loans) of all Lenders then in effect.“Qualified Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) other than a Multiemployer Plan (a) thatis or was at any time maintained or sponsored by any Obligor or any ERISA Affiliate thereof or to which any Obligor or any ERISAAffiliate thereof has ever made, or was ever obligated to make, contributions, and (b) that is intended to be tax qualified under Section401(a) of the Code.“Real Property Security Documents” means the Landlord Consent and any mortgage or deed of trust or any other real propertysecurity document executed or required hereunder to be executed by any Obligor and granting a security interest in real Property owned orleased (as tenant) by any Obligor in favor of the Secured Parties.“Recipient” means Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of anyObligation.“Recorlev Approval Milestone” means (a) Borrowers obtain approval for the marketing and sale of Recorlev for the treatment ofEndogenous Cushing’s syndrome from the United States Food and Drug Administration on or prior to December 31, 2020 and (b) Parentachieves an average Market Capitalization of at least $150,000,000 for the thirty (30) consecutive days beginning on the date the approvalreferenced in clause (a) is obtained.“Redemption Date” has the meaning set forth in Section 3.03(a).22 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Redemption Price” has the meaning set forth in Section 3.03(a).“Register” has the meaning set forth in Section 13.05(d).“Regulation T” means Regulation T of the Board of Governors of the Federal Reserve System, as amended.“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System, as amended.“Regulation X” means Regulation X of the Board of Governors of the Federal Reserve System, as amended.“Regulatory Approvals” means any registrations, licenses, authorizations, permits or approvals issued by any GovernmentalAuthority and applications or submissions related to any of the foregoing.“Related Person” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees,agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.“Requirement of Law” means, as to any Person, any statute, law, treaty, rule or regulation or determination, order, injunction orjudgment of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of itsProperties or revenues.“Responsible Officer” of any Person means each of the president, chief business officer, chief financial officer, chief executiveofficer, chief legal officer, and chief medical officer or controller of such Person.“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to anyEquity Interest of Parent or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinkingfund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such shares ofcapital stock, share capital or other Equity Interest of Parent or any of its Subsidiaries or any option, warrant or other right to acquire anysuch shares of capital stock, share capital or other Equity Interest of Parent or any of its Subsidiaries.“Restrictive Agreement” has the meaning set forth in Section 7.15.“Restructured Debt Securities” has the meaning set forth in Section 15.01.23 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Revenue” of a Person means all revenue properly recognized under GAAP, consistently applied, less all rebates, discounts andother price allowances. “Sanctions” means any international economic sanction administered or enforced by the United States (including OFAC), theUnited Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.“Sanctioned Jurisdiction” means any country or territory to the extent that such country or territory is the subject of anySanction.“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained byOFAC, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevantsanctions authority, (b) any Person operating, organized or resident in a Sanctioned Jurisdiction or (c) any Person owned or Controlled byany such person or Persons described in clauses (a) and (b).“SEC” means the Securities and Exchange Commission, or any other Governmental Authority succeeding to any of its principalfunctions.“Secured Parties” means the Lenders, Administrative Agent, each other Indemnified Party and any other holder of anyObligation.“Securities Purchase Agreement” means the Securities Purchase Agreement, dated as of the Closing Date, among Parent and theLenders.“Security Agreement” means the Security Agreement, dated as of the Closing Date, among the Obligors and AdministrativeAgent, granting a security interest in the Obligors’ personal Property in favor of the Secured Parties.“Security Documents” means, collectively, the Security Agreement, each Short-Form IP Security Agreement, each Real PropertySecurity Document, the Swedish Security Documents and each other foreign security document listed on Schedule 6.01 and each othersecurity document, control agreement or financing statement required or recommended to perfect Liens in favor of the Secured Parties.“Securities Account” has the meaning set forth in the Security Agreement.“Senior Indebtedness” has the meaning set forth in Section 15.01.“Short-Form IP Security Agreements” means short-form copyright, patent or trademark (as the case may be) security agreements,dated as of the Closing Date, entered into by one or24 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. more Obligors in favor of Administrative Agent, for the benefit of the Secured Parties, each in form and substance reasonably satisfactory toAdministrative Agent (and as amended, modified or replaced from time to time).“Solvent” means, with respect to any Person at any time, that (a) the present fair saleable value of the Property of such Person isgreater than the total amount of liabilities (including contingent liabilities) of such Person, (b) the present fair saleable value of theProperty of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as theybecome absolute and matured, (c) such Person has not incurred and does not intend to, and does not believe that it will, incur debts orliabilities beyond such Person’s ability to pay as such debts and liabilities mature and (d) such Person would not be unable to obtain aletter from its auditors that did not contain a going concern qualification.“Specified Financial Covenants” has the meaning set forth in Section 10.03(a).“Stated Maturity Date” means the twenty-fourth (24) Payment Date following the first Borrowing Date.“Subordinated Debt Cure Right” has the meaning set forth in Section 10.03(a).“Subordinated Intercompany Indebtedness” has the meaning set for in Section 15.01.“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company,partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidatedfinancial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation,limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing morethan 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the generalpartnership interests are, as of such date, owned, controlled or held by the parent or one or more subsidiaries of the parent or by the parentand one or more subsidiaries of the parent or (b) that is, as of such date, otherwise Controlled by the parent or one or more subsidiaries ofthe parent or by the parent and one or more subsidiaries of the parent. Unless the context requires otherwise, “Subsidiary” refers to aSubsidiary of Parent.“Subsidiary Guarantors” means each Subsidiary of Parent that becomes, or is required to become, a “Subsidiary Guarantor” afterthe Closing Date pursuant to Section 8.12(a) or (b).“Substitute Lender” has the meaning set forth in Section 2.06(a).“Swedish Borrower” has the meaning set forth in the introduction hereto.25 thCONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “Swedish Obligated Party” has the meaning set forth in Section 1.05.“Swedish Obligor” means an Obligor incorporated under the laws of Sweden.“Swedish Security Documents” means the Swedish share pledge agreement and Swedish IP Pledge Agreement described onSchedule 6.01.“Tax Affiliate” means (a) Parent and its Subsidiaries, (b) each other Obligor and (c) any Affiliate of an Obligor with which suchObligor files or is eligible to file consolidated, combined or unitary Tax returns.“Tax Returns” has the meaning set forth in Section 7.08.“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding),assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicablethereto.“Technical Information” means all trade secrets and other proprietary or confidential information, public information, non-proprietary know-how, any information of a scientific, technical, or business nature in any form or medium, standards and specifications,conceptions, ideas, innovations, discoveries, Invention disclosures, all documented research, developmental, demonstration or engineeringwork and all other information, data, plans, specifications, reports, summaries, experimental data, manuals, models, samples, know-how,technical information, systems, methodologies, computer programs, information technology and any other information.“Title IV Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) other than a Multiemployer Plan (i) that isor was at any time maintained or sponsored by any Obligor or any ERISA Affiliate thereof or to which any Obligor or any ERISA Affiliatethereof has ever made, or was obligated to make, contributions, and (ii) that is or was subject to Section 412 of the Code, Section 302 ofERISA or Title IV of ERISA.“Trademarks” is defined in the Security Agreement.“Transactions” means the execution, delivery and performance by each Obligor of this Agreement and the other Loan Documentsto which such Obligor is intended to be a party and the Borrowings (and the use of the proceeds of the Loans).“U.S. Person” means a “United States Person” within the meaning of Section 7701(a)(30) of the Code.“U.S. Tax Compliance Certificate” has the meaning set forth in Section 5.03(e)(ii)(B)(3).26 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. “VCOC Lender” means CRG Partners III, L.P. and each other lender that is a “venture capital operating company” for purposes ofERISA and that is assigned any of the Loans.“Warrant” means each warrant to purchase Equity Interests of Parent, issued by Parent to the Lenders in connection with theTransactions substantially in the form of Exhibit I. “Withdrawal Liability” means, at any time, any liability incurred (whether or not assessed) by any ERISA Affiliate and not yetsatisfied or paid in full at such time with respect to any Multiemployer Plan pursuant to Section 4201 of ERISA.“Withholding Agent” means any Obligor and Administrative Agent.1.02 Accounting Terms and Principles. All accounting determinations required to be made pursuant hereto shall, unless expresslyotherwise provided herein, be made in accordance with GAAP. All components of financial calculations made to determine compliancewith this Agreement, including Section 10, shall be adjusted to include or exclude, as the case may be, without duplication, suchcomponents of such calculations attributable to any Acquisition consummated after the first day of the applicable period of determinationand prior to the end of such period, as determined in good faith by Parent based on assumptions expressed therein and that were reasonablebased on the information available to Parent at the time of preparation of the Compliance Certificate setting forth such calculations. 1.03 Interpretation. For all purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwiserequires, (a) the terms defined in this Agreement include the plural as well as the singular and vice versa; (b) words importing genderinclude all genders; (c) any reference to a Section, Annex, Schedule or Exhibit refers to a Section of, or Annex, Schedule or Exhibit to, thisAgreement; (d) any reference to “this Agreement” refers to this Agreement, including all Annexes, Schedules and Exhibits hereto, and thewords herein, hereof, hereto and hereunder and words of similar import refer to this Agreement and its Annexes, Schedules and Exhibits asa whole and not to any particular Section, Annex, Schedule, Exhibit or any other subdivision; (e) references to days, months and years referto calendar days, months and years, respectively; (f) all references herein to “include” or “including” shall be deemed to be followed by thewords “without limitation”; (g) the word “from” when used in connection with a period of time means “from and including” and the word“until” means “to but not including”; and (h) accounting terms not specifically defined herein shall be construed in accordance withGAAP (except for the term “property” , which shall be interpreted as broadly as possible, including, in any case, cash, securities, otherassets, rights under contractual obligations and permits and any right or interest in any property, except where otherwise noted); and (i) allreferences to an "examiner" shall be deemed to mean an examiner appointed under Section 509 of the Irish Companies Act and"examinership" shall be construed accordingly. Unless otherwise expressly provided herein, references to organizational documents,agreements27 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (including the Loan Documents) and other contractual instruments shall be deemed to include all permitted subsequentamendments, restatements, extensions, supplements and other modifications thereto.1.04 Changes to GAAP. If, after the Closing Date, any change occurs in GAAP or in the application thereof and such change wouldcause any amount required to be determined for the purposes of the covenants to be maintained or calculated pursuant to Section 8, 9 or10 to be materially different than the amount that would be determined prior to such change, then:(a) Parent will provide a detailed notice of such change (an “Accounting Change Notice”) to Administrative Agent within 30days of such change;(b) either Parent or the Majority Lenders may indicate within 90 days following the date of the Accounting Change Noticethat they wish to revise the method of calculating such financial covenants or amend any such amount, in which case the parties will ingood faith attempt to agree upon a revised method for calculating the financial covenants;(c) until Parent and the Majority Lenders have reached agreement on such revisions, (i) such financial covenants or amountswill be determined without giving effect to such change and (ii) all financial statements, Compliance Certificates and similar documentsprovided hereunder shall be provided together with a reconciliation between the calculations and amounts set forth therein before and aftergiving effect to such change in GAAP;(d) if no party elects to revise the method of calculating the financial covenants or amounts, then the financial covenants oramounts will not be revised and will be determined in accordance with GAAP without giving effect to such change; and(e) any Event of Default arising as a result of such change which is cured by operation of this Section 1.04 shall be deemed tobe of no effect ab initio.1.05 Swedish Trust Provision. If any Obligor incorporated under the laws of Sweden (the “Swedish Obligated Party”) is required tohold an amount on trust on behalf of any other party (the “Beneficiary”), the Swedish Obligated Party shall hold such money as agent forthe Beneficiary in a separate account and shall promptly pay or transfer the same to the Beneficiary or as the Beneficiary may direct.1.06 Swedish Limitations. Notwithstanding the other provisions of this Agreement, the obligations and liabilities of a SwedishObligor under Section 15 shall be limited if (and only if) required by the provisions of the Swedish Companies Act (Sw. aktiebolagslagen(2005:551)) regulating distribution of assets (Chapter 17, Sections 1 – 4 (or their equivalents from time to time)), and it is understood thatthe obligations and liabilities of such Swedish Obligor under.28 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Section 15 shall only apply to the extent permitted by the above mentioned provisions of the Swedish Companies Act. SECTION 2THE COMMITMENT2.01 Commitments. Each Lender agrees severally, on and subject to the terms and conditions of this Agreement (including Section 6),to make up to four term loans (provided that PIK Loans shall be deemed not to constitute “term loans” for purposes of this Section 2.01) toBorrowers, each on a Business Day during the Commitment Period in Dollars in an aggregate principal amount for such Lender not toexceed such Lender’s unfunded Commitment; provided, however, that no Lender shall be obligated to make a Loan in excess of suchLender’s Proportionate Share of the applicable amount of any Borrowing set forth in Section 6 (if any) other than PIK Loans. Amounts ofLoans repaid may not be reborrowed.2.02 Borrowing Procedures. Subject to the terms and conditions of this Agreement (including Section 6), each Borrowing (other thana Borrowing of PIK Loans) shall be made on written notice in the form of Exhibit B given by Lead Borrower to Administrative Agent notlater than 11:00 a.m. (Central time) on the Borrowing Notice Date (a “Notice of Borrowing”). Each Borrowing shall be made by the LeadBorrower.2.03 Fees. The Borrowers shall pay to Administrative Agent and/or the Lenders, as applicable, such fees as described in the AmendedFee Letter.2.04 Use of Proceeds. Each Borrower shall use the proceeds of the Loans for repayment of all outstanding Indebtedness andobligations under the Borrowers’ existing debt facility on the Closing Date, general working capital purposes of the Obligors andcorporate purposes of the Obligors, to pay fees, costs and expenses incurred in connection with the Transactions and to pay fees (includingupfront fees), costs and expenses and make milestone payments in connection with the Macrilen Acquisition; provided that the Lendersshall have no responsibility as to the use of any proceeds of Loans. 2.05 Defaulting Lenders. (a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a DefaultingLender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:29 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver orconsent with respect to this Agreement shall be restricted as set forth in the definition of “Majority Lenders” and Section 13.04.(ii) Reallocation of Payments. Any payment of principal, interest, fees or other amounts received by the Lendersfor the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 11, Section 4.04 or otherwise),shall be applied at such time or times as follows: first, as Lead Borrower may request (so long as no Default exists), to the funding of anyLoan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement; second, if sodetermined by the Majority Lenders and Lead Borrower, to be held in a non-interest bearing deposit account and released in order tosatisfy obligations of such Defaulting Lender to fund Loans under this Agreement; third, to the payment of any amounts owing to theLenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a resultof such Defaulting Lender’s breach of its obligations under this Agreement; fourth, so long as no Default exists, to the payment of anyamounts owing to Borrowers as a result of any judgment of a court of competent jurisdiction obtained by Borrowers against suchDefaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and fifth, to such DefaultingLender or as otherwise directed by a court of competent jurisdiction; provided that if (A) such payment is a payment of the principalamount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share and (B) such Loans were madeat a time when the conditions set forth in Section 6 were satisfied or waived, such payment shall be applied solely to pay the Loans of allnon-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender. Any payments,prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a DefaultingLender pursuant to this Section 2.05(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocablyconsents hereto.(b) Defaulting Lender Cure. If Lead Borrower and the Majority Lenders agree in writing in their sole discretion that aDefaulting Lender should no longer be deemed to be a Defaulting Lender, that Lender will, to the extent applicable, purchase that portionof outstanding Loans of the other Lenders or take such other actions as necessary to cause the Loans to be held on a pro rata basis by theLenders in accordance with their Proportionate Share, whereupon that Lender will cease to be a Defaulting Lender; provided that noadjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of Borrowers while that Lender was aDefaulting Lender; and provided further that, except to the extent otherwise expressly agreed by the affected parties, no change hereunderfrom Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s havingbeen a Defaulting Lender.30 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. 2.06 Substitution of Lenders. (a) Substitution Right. If any Lender (an “Affected Lender”), (i) becomes a Defaulting Lender or (ii) does not consent to anyamendment, waiver or consent to any Loan Document for which the consent of the Majority Lenders is obtained but that requires theconsent of other Lenders (a “Non-Consenting Lender”), then (x) Borrowers may elect to pay in full such Affected Lender with respect to allObligations due to such Affected Lender or (y) either Lead Borrower or Administrative Agent shall identify any willing Lender or Affiliateof any Lender or Eligible Transferee (in each case, a “Substitute Lender”) to substitute for such Affected Lender; provided that anysubstitution of a Non-Consenting Lender shall occur only with the consent of Administrative Agent.(b) Procedure. To substitute such Affected Lender or pay in full all Obligations owed to such Affected Lender, LeadBorrower shall deliver a notice to such Affected Lender. The effectiveness of such payment or substitution shall be subject to the deliveryby Lead Borrower (or, as may be applicable in the case of a substitution, by the Substitute Lender) of (i) payment for the account of suchAffected Lender, of, to the extent accrued through, and outstanding on, the effective date for such payment or substitution, all Obligationsowing to such Affected Lender (which for the avoidance of doubt, shall not include any Prepayment Premium) and (ii) in the case of asubstitution, an Assignment and Assumption executed by the Substitute Lender, which shall thereunder, among other things, agree to bebound by the terms of the Loan Documents.(c) Effectiveness. Upon satisfaction of the conditions set forth in Sections 2.06(a) and (b), Administrative Agent shall recordsuch substitution or payment in the Register, whereupon (i) in the case of any payment in full of an Affected Lender, such AffectedLender’s Commitments shall be terminated and (ii) in the case of any substitution of an Affected Lender, (A) such Affected Lender shallsell and be relieved of, and the Substitute Lender shall purchase and assume, all rights and claims of such Affected Lender under the LoanDocuments, except that the Affected Lender shall retain such rights under the Loan Documents that expressly provide that they survive therepayment of the Obligations and the termination of the Commitments, (B) such Affected Lender shall no longer constitute a “Lender”hereunder and such Substitute Lender shall become a “Lender” hereunder and (C) such Affected Lender shall execute and deliver anAssignment and Assumption to evidence such substitution; provided, however, that the failure of any Affected Lender to execute any suchAssignment and Assumption shall not render such sale and purchase (or the corresponding assignment) invalid.31 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. SECTION 3PAYMENTS OF PRINCIPAL AND INTEREST3.01 Repayment. (a) Repayment. During the Interest-Only Period, no scheduled payments of principal of the Loans shall be due. EachBorrower agrees to repay to the Lenders the outstanding principal amount of the Loans, on each Payment Date occurring after the Interest-Only Period, in equal installments. The amounts of such installments shall be calculated by dividing (i) the sum of the aggregate principalamount of the Loans outstanding on the first day following the end of the Interest-Only Period, by (ii) the number of Payment Datesremaining prior to and including the Stated Maturity Date.(b) Application. Any optional or mandatory prepayment of the Loans shall be applied to the installments thereof underSection 3.01(a) in the inverse order of maturity. To the extent not previously paid, the principal amount of the Loans, together with allother outstanding Obligations, shall be due and payable on the Maturity Date.3.02 Interest. (a) Interest Generally. Subject to Section 3.02(d), each Borrower agrees to pay to the Lenders interest on the unpaidprincipal amount of the Loans and the amount of all other outstanding Obligations, in the case of the Loans, for the period from theapplicable Borrowing Date and, in the case of any other Obligation, from the date such other Obligation is due and payable, in each case,until paid in full, at a rate per annum equal to 12.50%.(b) Default Interest. Notwithstanding the foregoing, upon the occurrence and during the continuance of any Event ofDefault, the interest payable pursuant to Section 3.02(a) shall increase automatically by 4.00% per annum (such aggregate increased rate,the “Default Rate”). Notwithstanding any other provision herein (including Section 3.02(d)), if interest is required to be paid at theDefault Rate, it shall be paid entirely in cash.(c) Interest Payment Dates. Subject to Section 3.02(d), accrued interest on the Loans shall be payable in arrears on eachPayment Date with respect to the most recently completed Interest Period in cash, and upon the payment or prepayment of the Loans (onthe principal amount being so paid or prepaid); provided that interest payable at the Default Rate shall be payable from time to time ondemand.(d) Paid In-Kind Interest. Notwithstanding Section 3.02(a), at any time during the PIK Period, Lead Borrower, on behalf ofBorrowers, may elect to pay the interest on the outstanding principal amount of the Loans payable pursuant to Section 3.01 as follows: (i)only 8.50% of the 12.50% per annum interest in cash and (ii) 4.00% of the 12.50% per annum interest32 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. as compounded interest, added to the aggregate principal amount of the Loans (the amount of any such compounded interest being a “PIKLoan”). The principal amount of each PIK Loan shall accrue interest in accordance with the provisions of this Agreement applicable to theLoans.3.03 Prepayments. (a) Optional Prepayments. Upon prior written notice to Administrative Agent delivered pursuant to Section 4.03, eachBorrower shall have the right at any time to optionally prepay in whole or in part the outstanding principal amount of the Loans (a“Redemption Date”) for an amount equal to the aggregate principal amount of the Loans being prepaid plus the Prepayment Premium plusany accrued but unpaid interest and any fees then due and owing (such aggregate amount, the “Redemption Price”). The applicable“Prepayment Premium” shall be an amount calculated pursuant to Section 3.03(a)(i).(i) If the Redemption Date occurs:(A) on or prior to the fourth (4th) Payment Date, the Prepayment Premium shall be an amount equal to12.00% of the aggregate outstanding principal amount of the Loans being prepaid on such Redemption Date;(B) after the fourth (4th) Payment Date, and on or prior to the eighth (8th) Payment Date, the PrepaymentPremium shall be an amount equal to 6.00% of the aggregate outstanding principal amount of the Loans being prepaid on suchRedemption Date;(C) after the eighth (8th) Payment Date, and on or prior to the twelfth (12th) Payment Date, the PrepaymentPremium shall be an amount equal to 3.00% of the aggregate outstanding principal amount of the Loans being prepaid on suchRedemption Date;(D) after the twelfth (12th) Payment Date, and on or prior to the sixteenth (16th) Payment Date, thePrepayment Premium shall be an amount equal to 2.00% of the aggregate outstanding principal amount of the Loans being prepaid onsuch Redemption Date;(E) after the sixteenth (16th) Payment Date, and on or prior to the twentieth (20th) Payment Date, thePrepayment Premium shall be an amount equal to 1.00% of the aggregate outstanding principal amount of the Loans being prepaid onsuch Redemption Date;(F) after the twentieth (20th) Payment Date, the Prepayment Premium shall be an amount equal to 0.00% ofthe aggregate outstanding principal amount of the Loans being prepaid on such Redemption Date.33 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (ii) To determine the aggregate outstanding principal amount of the Loans, and how many Payment Dates haveoccurred, as of any Redemption Date for purposes of Section 3.03(a):(A) if, as of such Redemption Date, Borrowers shall have made only one Borrowing, the number of PaymentDates shall be deemed to be the number of Payment Dates that shall have occurred following the first Borrowing Date;(B) if, as of such Redemption Date, Borrowers shall have made more than one Borrowing, then theRedemption Price shall equal the sum of multiple Redemption Prices calculated with respect to the Loans of each Borrowing, each ofwhich Redemption Prices shall be calculated based on solely the aggregate outstanding principal amount of the Loans borrowed in suchBorrowing (and PIK Loans subsequently borrowed in respect of interest payments thereon), as though the applicable number of PaymentDates equals the number of Payment Dates that shall have occurred following the applicable Borrowing Date. In the case of any partialprepayment, the amount of such prepayment shall be allocated to Loans made in the various Borrowings (and PIK Loans in respect thereof)in the order in which such Borrowings were made;(iii) No partial prepayment shall be made under this Section 3.03(a) in connection with any event described inSection 3.03(b).The Prepayment Premium payable upon any prepayment shall be in addition to any payments required pursuant to the AmendedFee Letter.(b) Mandatory Prepayments.(i) Asset Sales. In the event of any contemplated Asset Sale or series of Asset Sales (other than any Asset Salepermitted under Section 9.09(a), (b), (c) (other than by the Swedish Borrower to the extent cash proceeds are received by it and held for aperiod of longer than five (5) Business Days), (d), or (h)) yielding Asset Sale Net Proceeds in excess of $1,000,000 in the aggregate, LeadBorrower shall provide ten (10) days’ prior written notice of such Asset Sale to Administrative Agent and, if within such notice periodMajority Lenders or Administrative Agent advise Lead Borrower that the Majority Lenders require a prepayment pursuant to this Section3.03(b)(i), Borrowers shall: (x) if the assets sold represent substantially all of the assets or Revenues from the sale of the Products, orrepresent any specific line of business which either on its own or together with other lines of business sold over the term of this Agreementaccount for Revenue from the sale of the Products generated by such lines of business exceeding 10% of the Revenue from the sale of theProducts in the immediately preceding year, prepay the aggregate outstanding principal amount of the Loans in an amount equal to theRedemption Price applicable on the date of such Asset Sale in accordance with34 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Section 3.03(a), and (y) in the case of all other Asset Sales not described in the foregoing clause (x), prepay the Loans in an amount equalto the entire amount of the Asset Sale Net Proceeds of such Asset Sale, plus any accrued but unpaid interest and any fees (including anyfees payable pursuant to the Amended Fee Letter) then due and owing, credited in the following order:(A) first, in reduction of Borrowers’ obligation to pay any unpaid interest and any fees then due and owing;(B) second, in reduction of Borrowers’ obligation to pay any Claims or Losses referred to in Section 13.03then due and owing;(C) third, in reduction of Borrowers’ obligation to pay any amounts due and owing on account of theunpaid principal amount of the Loans;(D) fourth, in reduction of any other Obligation then due and owing; and(E) fifth, to Borrowers or such other Persons as may lawfully be entitled to or directed by Borrowers toreceive the remainder.(ii) Change of Control. In the event of a Change of Control, Lead Borrower shall immediately provide notice ofsuch Change of Control to Administrative Agent and, if within ten (10) Business Days of receipt of such notice Majority Lenders orAdministrative Agent advise Lead Borrower in writing that the Majority Lenders require a prepayment pursuant to this Section 3.03(b)(ii),Borrowers shall prepay within three (3) Business Days after such written notice the aggregate outstanding principal amount of the Loans inan amount equal to the Redemption Price applicable on the date of such Change of Control in accordance with Section 3.03(a) and payany fees payable pursuant to the Amended Fee Letter.(c) Required AHYDO Payment. Notwithstanding anything herein to the contrary, if, at any Payment Date on or afterSeptember 30, 2022, the aggregate amount of accrued and unpaid original issue discount (as defined in Section 1273(a)(1) of the Code) onany Loan would, but for this Section 3.03(c), exceed an amount equal to the product of the issue price of such Loan multiplied by the yieldto maturity (as defined in Treasury Regulations Section 1.12721(b)(1)(i)) of such Loan, the Borrowers shall prepay at each such applicablePayment Date, the minimum amount of principal plus accrued interest on such Loan necessary to prevent any of the accrued and unpaidinterest and original issue discount on such Loan from being disallowed or deferred as a deduction under Section 163(e)(5) of the Code tothe Borrowers; provided that such payment shall be accompanied by any fees payable under the Amended Fee Letter. Notwithstanding theforegoing, the Back-End Facility Fee (as defined in the Amended Fee Letter) shall be payable pursuant to its terms and shall not beaccelerated. No partial35 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. prepayment of any Loan pursuant to any other provision of this Agreement shall alter the obligation of the Borrowers to make prepaymentsprovided for in this Section 3.03(c). Any payment made pursuant to this Section 3.03(c) shall be applied in accordance with Section4.01(b).SECTION 4PAYMENTS, ETC.4.01 Payments. (a) Payments Generally. Each payment of principal, interest and other amounts to be made by the Obligors under thisAgreement or any other Loan Document shall be made in Dollars, in immediately available funds, without deduction, set off orcounterclaim, to an account to be designated by Administrative Agent by notice to Lead Borrower, not later than 4:00 p.m. (Central time)on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to havebeen made on the next succeeding Business Day).(b) Application of Payments. Unless otherwise expressly provided in this Agreement, each Obligor shall, at the time ofmaking each payment under this Agreement or any other Loan Document, specify to Administrative Agent the amounts payable by suchObligor hereunder to which such payment is to be applied (and in the event that Obligors fail to so specify, or if an Event of Default hasoccurred and is continuing, the Lenders may apply such payment in the manner they determine to be appropriate).(c) Non-Business Days. If the due date of any payment under this Agreement (other than of principal of or interest on theLoans) would otherwise fall on a day that is not a Business Day, unless otherwise provided under the terms of this Agreement, such dateshall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payablefor the period of such extension. If the due date of any payment under this Agreement of principal of or interest on the Loans wouldotherwise fall on a day that is not a Business Day, such payment shall be made in accordance with the definition of “Payment Date.”4.02 Computations. All computations of interest and fees hereunder shall be computed on the basis of a year of 360 days and actualdays elapsed during the period for which payable.4.03 Notices. Each notice of optional prepayment shall be effective only if received by Administrative Agent not later than 4:00 p.m.(Central time) on the date three (3) Business Days (or such shorter period as may be agreed to in Administrative Agent’s sole discretion)prior to the date of prepayment. Each notice of optional prepayment shall specify the amount to be prepaid and the date ofprepayment. Any notice of optional prepayment may state that such36 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. notice is conditioned upon the effectiveness of other credit facilities or the closing of another transaction, the proceeds of which will beused to prepay any outstanding Loans, in which case such prepayment may be conditional upon the effectiveness of such other creditfacilities or the closing of such other transaction.4.04 Set-Off. (a) Set-Off Generally. Upon the occurrence and during the continuance of any Event of Default, each of AdministrativeAgent, each Lender and each of their Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted bylaw, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and otherindebtedness at any time owing by Administrative Agent, any Lender and any of their Affiliates to or for the credit or the account of anyObligor against any and all of the Obligations, whether or not such Person shall have made any demand and although such obligationsmay be unmatured; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set offshall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.05 and,pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of theAdministrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statementdescribing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right ofsetoff. Administrative Agent and each Lender agree promptly to notify Borrowers after any such set-off and application; provided that thefailure to give such notice shall not affect the validity of such set-off and application. The rights of Administrative Agent, each Lender andeach of their Affiliates under this Section 4.04 are in addition to other rights and remedies (including other rights of set-off) that suchPersons may have.(b) Exercise of Rights Not Required. Nothing contained herein shall require Administrative Agent, any Lender or any oftheir respective Affiliates to exercise any such right or shall affect the right of such Person to exercise, and retain the benefits of exercising,any such right with respect to any other indebtedness or obligation of any Obligor.4.05 Pro Rata Treatment. (a) Unless Administrative Agent shall have been notified in writing by any Lender prior to the proposed date of any Borrowingthat such Lender will not make the amount that would constitute its share of such Borrowing available to Administrative Agent,Administrative Agent may assume that such Lender has made such amount available to Administrative Agent on such date in accordancewith Section 2, and Administrative Agent may, in reliance upon such assumption, make available to Borrowers a corresponding amount. Ifsuch amount is not in fact made available to Administrative Agent by the required time on the applicable Borrowing Date37 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. therefor, such Lender and Borrowers severally agree to pay to Administrative Agent forthwith, on demand, such corresponding amountwith interest thereon, for each day from and including the date on which such amount is made available to Borrowers but excluding thedate of payment to Administrative Agent, at a rate equal to the greater of (A) the Federal Funds Effective Rate and (B) a rate reasonablydetermined by Administrative Agent in accordance with banking industry rules on interbank compensation. If Borrowers and such Lendershall pay such interest to Administrative Agent for the same or an overlapping period, Administrative Agent shall promptly remit toBorrowers the amount of such interest paid by Borrowers for such period. If such Lender pays its share of the applicable borrowing toAdministrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such borrowing. Any payment byBorrowers shall be without prejudice to any claim Borrowers may have against a Lender that shall have failed to make such payment toAdministrative Agent.(b) Unless Administrative Agent shall have received notice from Borrowers prior to the date on which any payment is due toAdministrative Agent for the account of the Lenders hereunder that Borrowers will not make such payment, Administrative Agent mayassume that Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption,distribute to the Lenders the amount due. In such event, if Borrowers have not in fact made such payment, then each of the Lendersseverally agrees to repay to Administrative Agent forthwith on demand the amount so distributed to such Lender, with interest thereon, foreach day from and including the date such amount is distributed to it to but excluding the date of payment to Administrative Agent, at thegreater of the Federal Funds Effective Rate and a rate determined by Administrative Agent in accordance with banking industry rules oninterbank compensation. Nothing herein shall be deemed to limit the rights of Administrative Agent or any Lender against any Obligor.(c) If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, orotherwise) on account of the principal of or interest on any Loan made by it or other obligations hereunder, as applicable (other thanpursuant to a provision hereof providing for non-pro rata treatment), in excess of its Proportionate Share, of such payment on account ofthe Loans, such Lender shall (i) notify Administrative Agent of the receipt of such payment, and (ii) within five (5) Business Days of suchreceipt purchase (for cash at face value) from the other Lenders, as applicable (directly or through Administrative Agent), without recourse,such participations in the Loans made by them or make such other adjustments as shall be equitable, as shall be necessary to cause suchpurchasing Lender to share the excess payment ratably with each of the other Lenders in accordance with their respective ProportionateShares, as applicable; provided, however, that (A) if any such participations are purchased and all or any portion of the payment givingrise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, withoutinterest and (B) the provisions of this paragraph shall not be construed to apply to (x) any payment made by any Borrower pursuant to andin accordance with the express terms of this Agreement (including the38 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. application of funds arising from the existence of a Defaulting Lender) or (y) any payment obtained by a Lender as consideration for theassignment or sale of a participation in any of its Loans to any assignee or participant, other than to a Borrower or any of its Affiliates (as towhich the provisions of this paragraph shall apply). Each Borrower agrees that any Lender so purchasing a participation from anotherLender pursuant to this Section 4.05(c) may exercise all its rights of payment (including the right of set-off) with respect to suchparticipation as fully as if such Lender were the direct creditor of such Borrower in the amount of such participation. No documentationother than notices and the like referred to in this Section 4.05(c) shall be required to implement the terms of this Section4.05(c). Administrative Agent shall keep records (which shall be conclusive and binding in the absence of manifest error) of participationspurchased pursuant to this Section 4.05(c) and shall in each case notify the Lenders following any such purchase. Each Borrower consentson behalf of itself and each other Obligor to the foregoing and agrees, to the extent it may effectively do so under applicable law, that anyLender acquiring a participation pursuant to the foregoing arrangements may exercise against each Obligor rights of setoff andcounterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Obligor in the amount of suchparticipation.SECTION 5YIELD PROTECTION, ETC.5.01 Additional Costs. (a) Change in Requirements of Law Generally. If, on or after the Closing Date, the adoption of any Requirement of Law, orany change in any Requirement of Law, or any change in the interpretation or administration thereof by any court or other GovernmentalAuthority charged with the interpretation or administration thereof, or compliance by any of the Lenders (or its lending office) with anyrequest or directive (whether or not having the force of law) of any such Governmental Authority, shall impose, modify or deem applicableany reserve (including any such requirement imposed by the Board of Governors of the Federal Reserve System), special deposit,contribution, insurance assessment or similar requirement, in each case that becomes effective after the Closing Date, against assets of,deposits with or for the account of, or credit extended by, a Lender (or its lending office) or shall impose on a Lender (or its lending office)any other condition affecting the Loans or the Commitment, and the result of any of the foregoing is to increase the cost to such Lender ofmaking or maintaining the Loans, or to reduce the amount of any sum received or receivable by such Lender under this Agreement or anyother Loan Document, by an amount deemed by such Lender to be material (other than (i) Indemnified Taxes, (ii) Taxes described inclauses (b) through (d) of the definition of “Excluded Taxes” and (iii) Connection Income Taxes), then each Borrower shall pay to suchLender on demand such additional amount or amounts as will compensate such Lender for such increased cost or reduction.39 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (b) Change in Capital Requirements. If a Lender shall have determined that, on or after the Closing Date, the adoption ofany Requirement of Law regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereofby any Governmental Authority charged with the interpretation or administration thereof, or any request or directive regarding capitaladequacy (whether or not having the force of law) of any such Governmental Authority, in each case that becomes effective after theClosing Date, has or would have the effect of reducing the rate of return on capital of a Lender (or its parent) as a consequence of a Lender’sobligations hereunder or the Loans to a level below that which a Lender (or its parent) could have achieved but for such adoption, change,request or directive by an amount reasonably deemed by it to be material, then each Borrower shall pay to such Lender on demand suchadditional amount or amounts as will compensate such Lender (or its parent) for such reduction.(c) Notification by Lender. Each Lender (directly or through Administrative Agent) will promptly notify the Lead Borrowerof any event of which it has knowledge, occurring after the Closing Date, which will entitle such Lender to compensation pursuant to thisSection 5.01. Before giving any such notice pursuant to this Section 5.01(c) such Lender shall designate a different lending office if suchdesignation (x) will, in the reasonable judgment of such Lender, avoid the need for, or reduce the amount of, such compensation and (y)will not, in the reasonable judgment of such Lender, be materially disadvantageous to such Lender. A certificate of the Lender claimingcompensation under this Section 5.01, setting forth the additional amount or amounts to be paid to it hereunder, shall be conclusive andbinding on Borrowers in the absence of manifest error.(d) Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Actand all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines ordirectives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor orsimilar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed toconstitute a change in Requirements of Law for all purposes of this Section 5.01, regardless of the date enacted, adopted or issued.5.02 Illegality. Notwithstanding any other provision of this Agreement, in the event that on or after the Closing Date the adoption ofor any change in any Requirement of Law or in the interpretation or application thereof by any competent Governmental Authority shallmake it unlawful for a Lender or its lending office to make or maintain the Loans (and, in the reasonable opinion of such Lender, thedesignation of a different lending office would either not avoid such unlawfulness or would be materially disadvantageous to suchLender), then such Lender shall promptly notify the Lead Borrower thereof following which (a) the Lender’s Commitment shall besuspended until such time as such Lender may again make and maintain the Loans hereunder and (b) if such Requirement of Law shall somandate, the Loans shall be prepaid by Borrowers40 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. on or before such date as shall be mandated by such Requirement of Law in an amount equal to the Redemption Price applicable on thedate of such prepayment in accordance with Section 3.03(a).5.03 Taxes. (a) Payments Free of Taxes. Any and all payments by or on account of any Obligation shall be made without deduction orwithholding for any Taxes, except as required by applicable law. If any applicable law requires the deduction or withholding of any Taxfrom any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction orwithholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance withapplicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Obligor shall be increased as necessary sothat after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sumspayable under this Section 5) the applicable Recipient receives an amount equal to the sum it would have received had no such deductionor withholding been made.(b) Payment of Other Taxes by the Obligors. The Obligors shall timely pay to the relevant Governmental Authority inaccordance with applicable law, or at the option of each Lender, timely reimburse it for, Other Taxes.(c) Evidence of Payments. As soon as practicable after any payment of Taxes by any Obligor to a Governmental Authoritypursuant to this Section 5, such Obligor shall deliver to Administrative Agent the original or a certified copy of a receipt issued by suchGovernmental Authority evidencing such payment.(d) Indemnification. The Obligors shall jointly and severally reimburse and indemnify each Recipient, within 10 days afterdemand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable toamounts payable under this Section 5) payable or paid by such Recipient or required to be withheld or deducted from a payment to suchRecipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly orlegally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability deliveredto Lead Borrower by a Lender shall be conclusive absent manifest error.(e) Status of Lenders.(i) Any Lender that is entitled to an exemption from, or reduction of withholding Tax with respect to paymentsmade under any Loan Document shall make available41 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. to each Borrower (directly or through Administrative Agent) such properly completed and executed documentation reasonably requestedby such Borrower or Administrative Agent as will permit such payments to be made without withholding or at a reduced rate ofwithholding. In addition, any Lender shall make available (directly or through Administrative Agent) such other documentationprescribed by applicable law as reasonably requested by such Borrower or Administrative Agent as will enable Borrowers orAdministrative Agent to determine whether or not such Lender is subject to backup withholding or information reportingrequirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of suchdocumentation (other than such documentation set forth in Section 5.03(e)(ii)(A), (B) or (D)) shall not be required if in the Lender’sreasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expenseor would materially prejudice the legal or commercial position of such Lender.(ii) Without limiting the generality of the foregoing, in the event that Borrower is a U.S. Person:(A) any Lender that is a U.S. Person shall make available to such Borrower (directly or throughAdministrative Agent) on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to timethereafter upon the reasonable request of such Borrower), executed originals of IRS Form W-9 (or successor form) certifying that suchLender is exempt from U.S. Federal backup withholding tax;(B) any Foreign Lender shall, to the extent it is legally entitled to do so, make available to such Borrower(directly or through Administrative Agent and in such number of copies as shall be requested by the recipient) on or prior to the date onwhich such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of suchBorrower), whichever of the following is applicable:(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which theUnited States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN or IRSForm W-8BEN-E, as applicable (or successor form) establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuantto the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or successor form) establishing an exemption from, or reduction of, U.S. Federal withholdingTax pursuant to the “business profits” or “other income” article of such tax treaty;(2) executed originals of IRS Form W-8ECI (or successor form);42 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interestunder Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit C-1 to the effect that such Foreign Lender is not a“bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the applicable Borrower within the meaningof Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. TaxCompliance Certificate”) and (y) executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or successor form); or(4) to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY (or successor form), accompanied by IRS Form W-8ECI (or successor form), IRS Form W-8BEN or IRS Form W-8BEN-E, asapplicable (or successor form), a U.S. Tax Compliance Certificate substantially in the form of Exhibit C-2 or Exhibit C-3, IRS Form W-9(or successor form), and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is apartnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such ForeignLender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit C-4 on behalf of each such direct and indirectpartner.(C) any Foreign Lender shall, to the extent it is legally entitled to do so, make available to such Borrower(directly or through Administrative Agent and in such number of copies as shall be requested by the recipient) on or prior to the date onwhich such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of suchBorrower), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S.Federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law topermit such Borrower to determine the withholding or deduction required to be made; and(D) if a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholdingTax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including thosecontained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall make available to such Borrower (directly orthrough Administrative Agent) at the time or times prescribed by law as reasonably requested by such Borrower or Administrative Agentany necessary forms and information reasonably requested by such Borrower or Administrative Agent to establish that such Lender is notsubject to withholding tax under FATCA or as may be necessary for the Borrowers and the Administrative Agent to comply with theirobligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determinethe amount to deduct and withhold from such payment. Solely for purposes of this43 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.(iii) Each Lender agrees that if any form or certification it previously made available expires or becomes obsolete orinaccurate in any respect, such Lender shall update such form or certification or promptly notify Lead Borrower in writing of its legalinability to do so.(f) Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has receiveda refund of any Taxes as to which it has been indemnified pursuant to this Section 5 (including by the payment of additional amountspursuant to this Section 5), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnitypayments made under this Section 5 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (includingTaxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect tosuch refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paidover pursuant to this paragraph (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the eventthat such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary inthis Section 5.03(f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to thisSection 5.03(f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnifiedparty would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. ThisSection 5.03(f) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relatingto its Taxes that it deems confidential) to the indemnifying party or any other Person.(i) Mitigation Obligations. If any Borrower is required to pay any Indemnified Taxes or additional amounts to anyLender or to any Governmental Authority for the account of any Lender pursuant to Section 5.01 or this Section 5.03, then, except asotherwise provided in Section 5.01(c), such Lender shall (at the request of the Lead Borrower) use commercially reasonable efforts todesignate a different lending office for funding or booking its Loans hereunder or to assign and delegate its rights and obligationshereunder to another of its offices, branches or Affiliates if, in the sole reasonable judgment of such Lender, such designation or assignmentand delegation would (i) eliminate or reduce amounts payable pursuant to Section 5.01 or this Section 5.03, as the case may be, in thefuture, (ii) not subject such Lender to any unreimbursed cost or expense and (iii) not otherwise be disadvantageous to such Lender. EachBorrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation orassignment and delegation.44 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. SECTION 6CONDITIONS PRECEDENT6.01 Conditions to the First Borrowing. The first Borrowing occurred on the Closing Date and was subject to the followingconditions precedent, which were satisfied or waived in writing by the Lenders on or prior to the Closing Date:(a) Borrowing Date. Such Borrowing shall be made on the Closing Date.(b) Amount of First Borrowing. The amount of such Borrowing shall equal $40,000,000.(c) Terms of Material Agreements, Etc. Lenders shall be reasonably satisfied with the terms and conditions of all of theObligors’ Material Agreements.(d) No Law Restraining Transactions. No applicable law or regulation shall restrain, prevent or, in the reasonable judgmentof the Lenders, impose materially adverse conditions upon the Transactions.(e) Payment of Fees. Lenders shall be satisfied with the arrangements to deduct the fees set forth in the Original Fee Letter(including the financing fee required pursuant to the Original Fee Letter) from the proceeds advanced.(f) Lien Searches. Lenders shall be satisfied with reasonable and customary Lien searches regarding each Borrower and theirSubsidiaries made prior to such Borrowing.(g) Documentary Deliveries. The Lenders shall have received the following documents, each of which shall be in form andsubstance reasonably satisfactory to the Lenders:(i) Agreement. This Agreement duly executed and delivered by Borrowers and each of the other parties hereto.(ii) Security Documents.(A) The Security Agreement, duly executed and delivered by each of the Obligors.(B) [Reserved].(C) Each of the Short-Form IP Security Agreements, duly executed and delivered by the applicable Obligor.45 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (D) Original share certificates or other documents or evidence of title with regard to all Equity Interestsowned by the Obligors (to the extent that such Equity Interests are certificated), together with, to the extent customary under the laws ofthe jurisdiction of organization of the issuer of such Equity Interests, share transfer documents, undated and duly executed in blank, lettersof authority, irrevocable proxies and dividend mandates (as applicable).(E) [Reserved].(F) Evidence of filing of UCC-1 financing statements against each Obligor in its jurisdiction of formationor incorporation, as the case may be.(G) [Reserved].(H) [Reserved].(I) Completed Form C1 templates in agreed form for each Security Document to which Parent is a party,prepared by Lenders’ solicitors and approved and verified such by Parent’s solicitors;(J) Each foreign Security Documents listed on Schedule 6.01, duly executed and delivered by each of theObligors party thereto.(K) Without limitation, all other documents and instruments reasonably required to perfect (to the extent itis possible to do so in the relevant jurisdiction) the Secured Parties’ Lien on, and security interest in, the Collateral, and a copy of all othernotices, acknowledgements and documents required to be sent or delivered according to the terms of the Security Documents, required tobe delivered on or prior to such Borrowing Date shall have been duly executed and delivered and be in proper form for filing, and shallcreate in favor of the Secured Parties, a perfected (to the extent it is possible to do so in the relevant jurisdiction) Lien on, and securityinterest in, the Collateral, subject to no Liens other than Permitted Liens.(iii) Original Fee Letter. The Original Fee Letter duly executed and delivered by Borrowers and AdministrativeAgent.(iv) Warrants. For the Lenders, pro rata in accordance with their Proportionate Shares, the Warrants, duly executedby Parent, for 0.80% of the ordinary shares of the Parent on a Fully-Diluted Basis as of the first Borrowing Date (inclusive of the Warrantsgranted on such date) at an exercise price equal to 110% of the closing price of Parent’s ordinary shares on the date immediately prior tothe first Borrowing Date.(v) Original Perfection Certificate. The Original Perfection Certificate duly executed and delivered by theObligors party thereto.46 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (vi) Approvals. Certified copies of any material licenses, consents, authorizations and approvals of, and notices toand filings and registrations with, any Governmental Authority (including all foreign exchange approvals), and of all third-party consentsand approvals, necessary in connection with the making and performance by the Obligors of the Loan Documents and the Transactions.(vii) Corporate Documents. Certified copies of the constitutive documents of each Obligor (if publicly available insuch Obligor’s jurisdiction of formation or incorporation) and of resolutions of the Board of Directors (and/or shareholders, if applicable)or other applicable governing body of each Obligor authorizing the making and performance by it of the Loan Documents to which it is aparty.(viii) Incumbency Certificate. A certificate of each Obligor as to the authority, incumbency and specimen signaturesof the persons who have executed the Loan Documents and any other documents in connection herewith on behalf of the Obligors.(ix) [Reserved].(x) Opinions of Counsel. A favorable opinion, dated such Borrowing Date, of counsels to the Obligors and/or theLenders, as applicable, in each case in form reasonably acceptable to the Lenders and their counsel.(xi) Insurance. Certificates and endorsements of insurance evidencing the existence of all insurance required to bemaintained by the Obligors pursuant to Section 8.05 and the designation of Administrative Agent as the lender’s loss payees or additionalnamed insured, as the case may be, thereunder.(xii) Payoff Letter. A duly executed and delivered payoff letter with respect to Borrowers’ existing debt facility withOxford Finance LLC and Horizon Technology Finance Corporation, together with such documentation required to terminate and releaseall security interests in connection therewith, each in form and substance reasonably satisfactory to Administrative Agent.(xiii) Irish Obligors Certificate. With respect to Parent, a certificate of Parent (signed by a director) confirming that itand each other Obligor are members of a group of companies consisting of Parent as holding company, and each other Obligor, as asubsidiary within the meaning of Sections 7 and 8 of the Irish Companies Act and for the purposes of section 243 of the Irish CompaniesAct.(xiv) Landlord Consent. A Landlord Consent executed by the Borrower Landlord.47 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (xv) Bailee Waiver. A bailee waiver executed by Cardinal Health.(h) Securities Purchase. The transactions contemplated by the Securities Purchase Agreement shall have been consummatedconcurrently with funding of the first Borrowing.6.02 Conditions to Second Borrowing. The obligation of each Lender to make a Loan as part of a second Borrowing is subject to thefollowing conditions precedent, which shall have been satisfied or waived in writing by the Lenders:(a) Borrowing Date. Such Borrowing shall occur within 4 Business Days of the Amendment No. 1 Effective Date.(b) Amount of Borrowing. The amount of such Borrowing shall equal $45,000,000.(c) Macrilen Acquisition. The Macrilen License Agreement remains in effect, without any amendment, supplement or othermodifications thereto (except for amendments, supplements or modifications reasonably acceptable to the Administrative Agent) and theMacrilen Acquisition shall have been consummated in accordance with the Macrilen License Agreement.(d) Payment of Fees. Lenders shall be satisfied with the arrangements to deduct the fees set forth in the Amended Fee Letter(including the financing fee required pursuant to the Amended Fee Letter) from the proceeds advanced.(e) Irish Debenture. An Irish Debenture duly executed and delivered by the Irish Borrower and Administrative Agent.(f) Irish Deed of Confirmation. An Irish Deed of Confirmation with respect to the Irish Debenture entered into by Parent andAdministrative Agent.(g) Swedish Security Affirmation. A Swedish Security Affirmation entered into by Swedish Borrower, Parent andAdministrative Agent.(h) Amended Perfection Certificate. The Amended Perfection Certificate duly executed and delivered by the Obligors.(i) Approvals. Certified copies of any material licenses, consents, authorizations and approvals of, and notices to and filingsand registrations with, any Governmental Authority (including all foreign exchange approvals), and of all third-party consents andapprovals, necessary in connection with the making and performance by the Obligors of the Loan Documents and the Transactions.48 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (j) Corporate Documents. Certified copies of the constitutive documents of each Obligor (if publicly available in suchObligor’s jurisdiction of formation or incorporation) and of resolutions of the Board of Directors (and/or shareholders, if applicable) orother applicable governing body of each Obligor authorizing the making and performance by it of the Loan Documents to which it is aparty.(k) Incumbency Certificate. A certificate of each Obligor as to the authority, incumbency and specimen signatures of thepersons who have executed the Loan Documents and any other documents in connection herewith on behalf of the Obligors.(l) Irish Obligors Certificate. With respect to Parent and Irish Borrower, a certificate of Parent (signed by a director)confirming that it and each other Obligor are members of a group of companies consisting of Parent as holding company, and each otherObligor, as a subsidiary within the meaning of Sections 7 and 8 of the Irish Companies Act and for the purposes of section 243 of the IrishCompanies Act.(m) Opinions of Counsel. One or more favorable opinions of counsels to the Obligors and/or the Lenders, as applicable, ineach case in form reasonably acceptable to the Lenders and their counsel.(n) Warrants. For the Lenders, pro rata in accordance with their Proportionate Shares, the Warrants, duly executed byParent, for 2.25% of the ordinary shares of the Parent on a Fully-Diluted Basis as of the second Borrowing Date (inclusive of the Warrantsgranted on such date) at an exercise price equal to $10.00 per share.6.03 Conditions to Third Borrowing. The obligation of each Lender to make a Loan as part of a third Borrowing is subject to thefollowing conditions precedent, which shall have been satisfied or waived in writing by the Lenders:(a) Second Borrowing. The second Borrowing shall have occurred.(b) Borrowing Date. Such Borrowing shall occur on or prior to September 27, 2018.(c) Amount of Borrowing. The amount of such Borrowing shall not exceed $10,000,000 or be less than $1,000,000 andshall be in increments of $1,000,000.(d) Borrowing Milestone. The Obligors shall have achieved Revenue from the sale of the Product of at least $[****] duringany consecutive three (3) month period ending on or prior to June 30, 2018;49 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (e) Market Capitalization Condition. Parent maintains Market Capitalization of at least $300,000,000 for the twenty (20)consecutive trading days ending on the trading day immediately prior to the third Borrowing Date.(f) Notice of Milestone Achievement and Audit. Lead Borrower shall have delivered to Administrative Agent a noticecertifying satisfaction of the condition set forth in Section 6.03(d) no later than sixty (60) days thereafter, and Administrative Agent shallhave been reasonably satisfied with the results of its audit of the Obligors’ Revenue by examining the Obligors’ books and records.(g) Notice of Borrowing. A Notice of Borrowing shall have been received no later than sixty (60) calendar days aftersatisfaction of the condition set forth in Section 6.03(d).(h) Warrants. For the Lenders, pro rata in accordance with their Proportionate Shares, the Warrants, duly executed byParent, for 0.20% of the ordinary shares of the Parent on a Fully-Diluted Basis as of the third Borrowing Date (inclusive of the Warrantsgranted on such date) at an exercise price equal to 110% of the closing price of Parent’s ordinary shares on the date immediately prior tothe third Borrowing Date.6.04 Conditions to Fourth Borrowing. The obligation of each Lender to make a Loan as part of a fourth Borrowing is subject to thefollowing conditions precedent, which shall have been satisfied or waived in writing by the Lenders:(a) Third Borrowing. The third Borrowing shall have occurred.(b) Borrowing Date. Such Borrowing shall occur on or prior to March 19, 2019.(c) Amount of Borrowing. The amount of such Borrowing shall not exceed $5,000,000 or be less than $1,000,000 and shallbe in increments of $1,000,000.(d) Borrowing Milestone. The Obligors shall have achieved Revenue from the sale of the Product of at least $[****] duringany consecutive three (3) month period ending on or prior to December 31, 2018.(e) Market Capitalization Condition. Parent maintains Market Capitalization of at least $325,000,000 for the twenty (20)consecutive trading days ending on the trading day immediately prior to the fourth Borrowing Date.(f) Notice of Milestone Achievement and Audit. Lead Borrower shall have delivered to Administrative Agent a noticecertifying satisfaction of the condition set forth in Section 6.04(d) no later than sixty (60) days thereafter, and Administrative Agent shallhave been reasonably satisfied with the results of its audit of the Obligors’ Revenue by examining the Obligors’ books and records.50 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (g) Notice of Borrowing. A Notice of Borrowing shall have been received no later than sixty (60) calendar days aftersatisfaction of the condition set forth in Section 6.04(d).(h) Warrants. For the Lenders, pro rata in accordance with their Proportionate Shares, the Warrants, duly executed byParent, for 0.25% of the ordinary shares of the Parent on a Fully-Diluted Basis as of the fourth Borrowing Date (inclusive of the Warrantsgranted on such date) at an exercise price equal to 140% of the ten (10) day volume weighted-average price (VWAP) per share of Parent’sordinary shares for the consecutive ten (10)-trading-day period ending on the trading day prior to the fourth Borrowing Date.6.05 Conditions to Each Borrowing. The obligation of each Lender to make a Loan as part of any Borrowing (including the firstBorrowing) is also subject to satisfaction of the following further conditions precedent on the applicable Borrowing Date, which shall havebeen satisfied or waived in writing by the Lenders:(a) Commitment Period. Except in the case of any PIK Loan, such Borrowing Date shall occur during the CommitmentPeriod.(b) No Default; Representations and Warranties. Both immediately prior to the making of such Loan and after givingeffect thereto and to the intended use thereof:(i) no Default shall have occurred and be continuing or would result from such proposed Loan or the application ofthe proceeds thereof;(ii) the representations and warranties made in Section 7 shall be true and correct on and as of the Borrowing Date,and immediately after giving effect to the application of the proceeds of the Borrowing, with the same force and effect as if made on and asof such date (except that the representation regarding representations and warranties that refer to a specific earlier date shall be that theywere true and correct on such earlier date);and(iii) no Material Adverse Effect has occurred since the end of the period covered by the financial statements mostrecently delivered pursuant to Section 8.01(b) or is reasonably likely to occur after giving effect to such proposed Borrowing.(c) Notice of Borrowing. Except in the case of any PIK Loan, Administrative Agent shall have received a Notice ofBorrowing as and when required pursuant to Section 2.02.Each Borrowing shall constitute a certification by Lead Borrower to the effect that the conditions set forth in this Section 6.05have been fulfilled as of the applicable Borrowing Date.51 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. SECTION 7REPRESENTATIONS AND WARRANTIESEach Obligor represents and warrants to Administrative Agent and the Lenders that:7.01 Power and Authority. Each of Parent and its Subsidiaries (a) is duly organized or incorporated and validly existing under thelaws of its jurisdiction of organization or incorporation, (b) has all requisite corporate or other equivalent power, and has all materialgovernmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or asproposed to be conducted except to the extent that failure to have the same would not reasonably be expected to have a Material AdverseEffect, (c) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makessuch qualification necessary and where failure to so qualify would (either individually or in the aggregate) have a Material Adverse Effect,and (d) has full power, authority and legal right to make and perform each of the Loan Documents to which it is a party and, in the case ofBorrowers, to borrow the Loans hereunder.7.02 Authorization; Enforceability. The Transactions are within each Obligor’s corporate or equivalent powers and have been dulyauthorized by all necessary corporate or equivalent action and, if required, by all necessary shareholder action. This Agreement has beenduly executed and delivered by each Obligor and constitutes, and each of the other Loan Documents to which it is a party when executedand delivered by such Obligor will constitute, a legal, valid and binding obligation of such Obligor, enforceable against such Obligor inaccordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium orsimilar laws of general applicability affecting the enforcement of creditors’ rights and (b) the application of general principles of equity(regardless of whether such enforceability is considered in a proceeding in equity or at law).7.03 Governmental and Other Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registrationor filing with, or any other action by, any Governmental Authority or any third party, except for (i) such as have been obtained or made andare in full force and effect and (ii) filings and recordings in respect of the Liens created pursuant to the Security Documents, (b) will notviolate any applicable law or regulation or the charter, bylaws, constitutional or other organizational documents of Parent and itsSubsidiaries, (c) will not violate any order of any Governmental Authority , (d) will not violate or result in a default under any indenture,agreement or other instrument binding upon Parent and its Subsidiaries or assets, or give rise to a right thereunder to require any paymentto be made by any such Person, and (e) will not result in the creation or imposition of any Lien (other than Permitted Liens) on any asset ofParent and its Subsidiaries.52 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. 7.04 Financial Statements; Material Adverse Change.(a) Financial Statements. Parent has heretofore furnished to the Lenders certain financial statements as provided for inSection 8.01. Such financial statements present fairly, in all material respects, the financial position and results of operations and cashflows of Parent and its Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustmentsand the absence of footnotes in the case of the previously-delivered statements of the type described in Section 8.01(a). Neither Parent norany of its Subsidiaries has any material contingent liabilities or unusual forward or long-term commitments not disclosed in theaforementioned financial statements.(b) No Material Adverse Change. Since March 31, 2017, there has been no Material Adverse Change.7.05 Properties. (a) Property Generally. Each Obligor has good and marketable fee simple title to, or valid leasehold interests in, all its realand personal Property material to its business, subject only to Permitted Liens and except for minor defects in title that do not interferewith its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.(b) Intellectual Property. The Obligors represent and warrant to the Lenders as follows, as of the Amendment No. 1 EffectiveDate, each Borrowing Notice Date and each Borrowing Date:(i) Schedule 7.05(b)(i) (as amended from time to time by Lead Borrower in accordance with Section 7.21) contains:(A) a complete and accurate list of all applied for or registered Patents, owned by or licensed to any Obligor,including the jurisdiction and patent number;(B) a complete and accurate list of all applied for or registered Trademarks, owned by or licensed to anyObligor, including the jurisdiction, trademark application or registration number and the application or registration date; and(C) a complete and accurate list of all applied for or registered Copyrights, owned by or licensed to anyObligor;(ii) Each Obligor is the absolute beneficial owner of all right, title and interest in and to and have the right to use theObligor Intellectual Property with no breaks in chain of title with good and marketable title, free and clear of any Liens or Claims of anykind whatsoever53 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. other than Permitted Liens. Without limiting the foregoing, and except as set forth in Schedule 7.05(b)(ii):(A) other than with respect to the Material Agreements, or as permitted by Section 9.09, the Obligors havenot transferred ownership of Material Intellectual Property, in whole or in part, to any other Person who is not an Obligor;(B) other than (i) the Material Agreements, (ii) customary restrictions in in-bound licenses of IntellectualProperty and non-disclosure agreements, or (iii) as would have been or is permitted by Section 9.09, there are no judgments, covenants notto sue, permits, grants, licenses, Liens (other than Permitted Liens), Claims, or other agreements or arrangements relating to the MaterialIntellectual Property, including any development, submission, services, research, license or support agreements, which bind, obligate orotherwise restrict the Obligors;(C) the use of any of the Obligor Intellectual Property, to any Obligor’s Knowledge, does not breach,violate, infringe or interfere with or constitute a misappropriation of any valid rights arising under any Intellectual Property of any otherPerson;(D) there are no pending or, to any Obligor’s Knowledge, threatened Claims against the Obligors assertedby any other Person relating to the Obligor Intellectual Property, including any Claims of adverse ownership, invalidity (other than anyactions asserted during the ordinary course of examination of a patent application or a trademark application before the United StatesPatent and Trademark Office or any foreign patent and/or trademark office), infringement, misappropriation, violation or other oppositionto or conflict with such Intellectual Property; no Obligor has received any written notice from any Person that any Obligor business, theuse of the Obligor Intellectual Property, or the manufacture, use or sale of any product or the performance of any service by any Obligorinfringes upon, violates or constitutes a misappropriation of, or may infringe upon, violate or constitute a misappropriation of, or otherwiseinterfere with, any other Intellectual Property of any other Person;(E) no Obligor has any Knowledge that the Obligor Intellectual Property is being infringed, violated,misappropriated or otherwise used by any other Person without the express authorization of the Obligors. Without limiting the foregoing,no Obligor has put any other Person on notice of actual or potential infringement, violation or misappropriation of any of the ObligorIntellectual Property; no Obligor has initiated the enforcement of any Claim with respect to any of the Obligor Intellectual Property;(F) all relevant current and former employees and contractors of each Obligor have executed writtenconfidentiality and invention assignment Contracts with such Obligor that irrevocably assign to such Obligor or its designee all of theirrights to any Inventions relating to any Obligor’s business;54 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (G) to the Knowledge of the Obligors, the Obligor Intellectual Property is all the Intellectual Propertynecessary for the operation of Obligors’ business as it is currently conducted or as currently contemplated to be conducted;(H) each Obligor has taken reasonable precautions to protect the secrecy, confidentiality and value of itsObligor Intellectual Property consisting of trade secrets and confidential information;(I) each Obligor has delivered to Administrative Agent accurate and complete copies of all MaterialAgreements relating to the Obligor Intellectual Property;(J) there are no pending or, to the Knowledge of any of the Obligors, threatened in writing Claims againstthe Obligors asserted by any other Person relating to the Material Agreements, including any Claims of breach or default under suchMaterial Agreements;(iii) With respect to the Obligor Intellectual Property consisting of Patents, except as set forth in Schedule 7.05(b)(ii),and without limiting the representations and warranties in Section 7.05(b)(ii):(A) each of the issued claims in such Patents, to Obligors’ Knowledge, is valid and enforceable;(B) the inventors claimed in such Patents have executed written Contracts with an Obligor or itspredecessor-in-interest that properly and irrevocably assign to an Obligor or predecessor-in-interest all of their rights to any of theInventions claimed in such Patents to the extent permitted by applicable law;(C) none of the Patents, or the Inventions claimed in them, have been dedicated to the public except as aresult of intentional decisions made by the applicable Obligor;(D) to any Obligor’s Knowledge, all prior art material to such Patents was adequately disclosed to orconsidered by the respective patent offices during prosecution of such Patents to the extent required by applicable law or regulation;(E) subsequent to the issuance of such Patents, neither any Obligor nor its predecessors in interest havefiled any disclaimer (other than terminal disclaimers that may have been filed during the ordinary course of examination before the UnitedStates Patent and Trademark Office, or the equivalent thereof in any foreign patent office) or filed any other voluntary reduction in thescope of the Inventions claimed in such Patents;55 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (F) no allowable or allowed subject matter of such Patents, to any Obligor’s Knowledge, is subject to anycompeting conception claims of allowable or allowed subject matter of any patent applications or patents of any third party and have notbeen the subject of any interference, re-examination, inter partes review, post grant review or opposition proceedings, nor are the Obligorsaware of any basis for any such interference, re-examination, inter partes review, post grant review or opposition proceedings;(G) no such Patents, to any Obligor’s Knowledge, have ever been finally adjudicated to be invalid,unpatentable or unenforceable for any reason in any administrative, arbitration, judicial or other proceeding, and, with the exception ofpublicly available documents in the applicable Patent Office recorded with respect to any Patents, no Obligor has received any noticeasserting that such Patents are invalid, unpatentable or unenforceable; if any of such Patents is terminally disclaimed to another patent orpatent application, all patents and patent applications subject to such terminal disclaimer are included in the Collateral;(H) no Obligor has received an opinion, whether preliminary in nature or qualified in any manner, whichconcludes that a challenge to the validity or enforceability of any of such Patents is more likely than not to succeed;(I) no Obligor has any Knowledge that any Obligor or any prior owner of such Patents or their respectiveagents or representatives have engaged in any conduct, or omitted to perform any necessary act, the result of which would invalidate orrender unpatentable or unenforceable any such Patents; and(J) all maintenance fees, annuities, and the like due or payable on the Patents have been timely paid or thefailure to so pay was the result of an intentional decision by the applicable Obligor or would not reasonably be expected to result in aMaterial Adverse Change.(iv) none of the foregoing representations and statements of fact contains any untrue statement of material fact oromits to state any material fact necessary to make any such statement or representation not misleading to a prospective Lender seeking fullinformation as to the Obligor Intellectual Property and the Obligors’ business.(c) Material Intellectual Property. Schedule 7.05(c) (as amended from time to time by Lead Borrower in accordance withSection 7.21) contains an accurate list of the Obligor Intellectual Property that is material to any Obligor’s business with an indication asto whether the applicable Obligor owns or has an exclusive or non-exclusive license to such Obligor Intellectual Property.56 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. 7.06 No Actions or Proceedings. (a) Litigation. There is no litigation, investigation or proceeding pending or, to any Obligor’s Knowledge, threatened withrespect to Parent and its Subsidiaries by or before any Governmental Authority or arbitrator (i) that either individually or in the aggregatewould reasonably be expected to have a Material Adverse Effect, except as specified in Schedule 7.06 or (ii) that involves this Agreementor the Transactions.(b) Environmental Matters. The operations and Property of Parent and its Subsidiaries comply with all applicableEnvironmental Laws, except to the extent the failure to so comply (either individually or in the aggregate) would not reasonably beexpected to have a Material Adverse Effect.(c) Labor Matters. Parent and its Subsidiaries have not engaged in unfair labor practices and there are no material laboractions or disputes involving the employees of Parent or its Subsidiaries.7.07 Compliance with Laws and Agreements. Each of the Obligors is in compliance with all laws, regulations and orders of anyGovernmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or itsproperty, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a MaterialAdverse Effect. No Default has occurred and is continuing.7.08 Taxes. All federal, state, material local, foreign income and franchise and other material Tax returns, reports and statements(collectively, the “Tax Returns”) required to be filed by any Tax Affiliate have been timely filed with the appropriate GovernmentalAuthorities, all such Tax Returns are true, correct and complete in all material respects, and all federal and foreign income Taxes and othermaterial Taxes reflected therein or otherwise due and payable have been timely paid (except for those contested in good faith byappropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Tax Affiliatein accordance with GAAP). No Tax Return is under audit or examination by any Governmental Authority and no notice of any materialaudit or examination or any assertion of any claim for Taxes has been given or made by any Governmental Authority. Proper and accurateamounts have been withheld by each Tax Affiliate from their respective employees for all periods in full and complete compliance with theTax, social security and unemployment withholding provisions of applicable Laws and such withholdings have been timely paid to therespective Governmental Authorities. No Tax Affiliate has participated in a “listed transaction” within the meaning of TreasuryRegulation Section 1.6011-4(b)(2).7.09 Full Disclosure. Obligors have disclosed to Administrative Agent and the Lenders all Material Agreements to which any Obligoris subject, and all other matters to any Obligor’s57 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Knowledge, that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect. None of thereports, financial statements, certificates or other information furnished by or on behalf of any Obligor to Administrative Agent or anyLender in connection with the negotiation of this Agreement and the other Loan Documents or delivered hereunder or thereunder (asmodified or supplemented by other information so furnished) contains any material misstatement of material fact or omits to state anymaterial fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;provided that, with respect to projected financial information, Parent represents only that such information was prepared in good faithbased upon assumptions believed to be reasonable at the time.7.10 Regulation. (a) Investment Company Act. Neither Parent nor any of its Subsidiaries is an “investment company” as defined in, or subjectto regulation under, the Investment Company Act of 1940.(b) Margin Stock. Neither Parent nor any of its Subsidiaries is engaged principally, or as one of its important activities, inthe business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and nopart of the proceeds of the Loans will be used to buy or carry any Margin Stock in violation of Regulation T, U or X.(c) OFAC; Sanctions, Etc. Neither Parent nor any of its Subsidiaries or, to the knowledge of any Obligor, any Related Person(i) is currently the subject of any Sanctions or is a Sanctioned Person, (ii) is located (or has its assets located), organized or residing in anySanctioned Jurisdiction, (iii) is or has been (within the previous five (5) years) engaged in any impermissible transaction with any Personwho is now or was then the subject of Sanctions or who is located, organized or residing in any Sanctioned Jurisdiction, (iv) directly orindirectly derives revenues from investments in, or transactions with, Sanctioned Persons, (v) has taken any action, directly or indirectly,that would result in a violation by such Persons of any Anti-Corruption Laws, or (vi) has violated any Anti-Money Laundering Laws. NoLoan, nor the proceeds from any Loan, has been or will be used, directly or indirectly, to lend, contribute or provide to, or has been or willbe otherwise made available to fund, any impermissible activity or business of any Person located, organized or residing in any SanctionedJurisdiction or who is the subject of any Sanctions, or in any other manner that will result in any violation by any Person (including theLender and its Affiliates) of Sanctions or otherwise in violation of any Anti-Corruption Laws or Anti-Money Laundering Laws. Each ofParent and its Subsidiaries has implemented and maintains in effect policies and procedures designed to promote compliance by Parentand its Subsidiaries and their respective directors, officers, employees, agents and Related Persons with the Anti-Corruption Laws.58 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. 7.11 Solvency. Lead Borrower is, and the Obligors on a consolidated basis are, and, immediately after giving effect to the Borrowingand the use of proceeds thereof will be, Solvent.7.12 Subsidiaries. Set forth on Schedule 7.12 is a complete and correct list of all Subsidiaries of the Parent as of the Amendment No. 1Effective Date. Each such Subsidiary is duly organized and validly existing under the jurisdiction of its organization shown in saidSchedule 7.12, and the percentage ownership by the direct parent of each such Subsidiary is as shown in said Schedule 7.12.7.13 Indebtedness and Liens. Set forth in Part I of Schedule 7.13(a) is a complete and correct list of all Indebtedness of each Obligoroutstanding as of the Amendment No. 1 Effective Date. Part I of Schedule 7.13(b) is a complete and correct list of all Liens granted byParent and the other Obligors with respect to their respective Property and outstanding as of the Amendment No. 1 Effective Date.7.14 Material Agreements. Set forth on Schedule 7.14 (as amended from time to time by Lead Borrower in accordance with Section7.21 and as amended effective as of the Amendment No. 1 Effective Date to include the Macrilen License Agreement) is a complete andcorrect list of (i) each Material Agreement and (ii) each agreement creating or evidencing any Material Indebtedness. No Obligor is indefault under any such Material Agreement or agreement creating or evidencing any Material Indebtedness. Except as otherwise disclosedon Schedule 7.14, all Material Agreements of the Obligors are in full force and effect without material modification from the form in whichthe same were disclosed to Administrative Agent and the Lenders.7.15 Restrictive Agreements. None of the Obligors is subject to any indenture, agreement, instrument or other arrangement thatprohibits, restricts or imposes any condition upon (a) the ability of Parent or any Subsidiary to create, incur or permit to exist any Lienupon any of its property or assets (other than (x) customary provisions in contracts (including leases and in‑bound licenses of IntellectualProperty) restricting the assignment thereof and (y) restrictions or conditions imposed by any agreement governing secured PermittedIndebtedness permitted under Section 9.01(h), to the extent that such restrictions or conditions apply only to the property or assetssecuring such Indebtedness), or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of itscapital stock or share capital, as applicable, or to make or repay loans or advances to Parent or any other Subsidiary or to GuaranteeIndebtedness of Parent or any other Subsidiary (each, a “Restrictive Agreement”), except those listed on Schedule 7.15 or otherwisepermitted under Section 9.11.7.16 Real Property. 59 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (a) Generally. Neither Parent nor any of its Subsidiaries owns or leases (as tenant thereof) any real property, except asdescribed on Schedule 7.16 (as amended from time to time by Parent in accordance with Section 7.21).(b) [Reserved].7.17 Pension Matters. Schedule 7.17 sets forth, as of the Amendment No. 1 Effective Date, a complete and correct list of, and thatseparately identifies, (a) all Title IV Plans and (b) all Multiemployer Plans. Each Benefit Plan, and each trust thereunder, intended toqualify for tax exempt status under Section 401 or 501 of the Code or other Requirements of Law so qualifies. Except for those that wouldnot reasonably be expected to have, in the aggregate, have a Material Adverse Effect, (w) each Benefit Plan is in compliance withapplicable provisions of ERISA, the Code and other Requirements of Law, (x) there are no existing or pending (or to the Knowledge of anyObligor or Subsidiary thereof, threatened) claims (other than routine claims for benefits in the normal course), sanctions, actions, lawsuitsor other proceedings or investigation involving any Benefit Plan to which any Obligor or Subsidiary thereof incurs or otherwise has orcould have an obligation or any liability or Claim, (y) no ERISA Event is reasonably expected to occur and, as of the Closing Date, noERISA Event has occurred in connection with which obligations and liabilities (contingent or otherwise) remain outstanding, and (z) noERISA Affiliate would have any Withdrawal Liability as a result of a complete withdrawal from any Multiemployer Plan on the date thisrepresentation is made. Parent and each of its ERISA Affiliates has met all applicable requirements under the ERISA Funding Rules withrespect to each Title IV Plan, and no waiver of the minimum funding standards under the ERISA Funding Rules has been applied for orobtained. As of the most recent valuation date for any Title IV Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is at least 60%, and neither Parent nor any of its ERISA Affiliates knows of any facts or circumstances that couldreasonably be expected to cause the funding target attainment percentage to fall below 60% as of the most recent valuation date. 7.18 Collateral; Security Interest. Each Security Document is effective to create in favor of the Secured Parties a legal, valid andenforceable security interest in the Collateral subject thereto and each such security interest is perfected to the extent required by (and hasthe priority required by) the applicable Security Document. The Security Documents collectively are effective to create in favor of theSecured Parties a legal, valid and enforceable security interest in the Collateral subject thereto, which security interests are first-priority(subject only to Permitted Priority Liens or except as expressly contemplated by the Security Documents).7.19 Regulatory Approvals. Parent and its Subsidiaries hold, and will continue to hold, either directly or through licensees andagents, all Regulatory Approvals, licenses, permits and similar governmental authorizations of a Governmental Authority necessary orrequired for Parent and its Subsidiaries to conduct their operations and business in the manner currently60 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. conducted, except where failure to do so would not reasonably be expected to have a Material Adverse Effect.7.20 [Reserved.]7.21 Update of Schedules. Each of Schedules 7.05(b)(i), 7.05(c), 7.14 and 7.16 may be updated by Lead Borrower from time to timein order to ensure the continued accuracy of such Schedule as of any upcoming date on which representations and warranties are madeincorporating the information contained on such Schedule. Such update may be accomplished by Lead Borrower providing toAdministrative Agent, in writing (including by electronic means), a revised version of such Schedule in accordance with the provisions ofSection 13.02. Each such updated Schedule shall be effective immediately upon the receipt thereof by Administrative Agent. SECTION 8AFFIRMATIVE COVENANTSEach Obligor covenants and agrees with Administrative Agent and the Lenders that, until the Commitments have expired or beenterminated and all Obligations have been paid in full indefeasibly in cash:8.01 Financial Statements and Other Information. Lead Borrower or Parent, as applicable, will furnish to Administrative Agent (and,in the case of Sections 8.01(a) through (d) and (k) and (l), the VCOC Lender):(a) as soon as available and in any event within 45 days after the end of the first three fiscal quarters of each fiscal year (or iflater, on the date required to be filed with the SEC (after giving effect to any extension granted thereby)), the consolidated balance sheetsof Parent and its Subsidiaries as of the end of such quarter, and the related consolidated statements of income, shareholders’ equity andcash flows of Parent and its Subsidiaries for such quarter and the portion of the fiscal year through the end of such quarter, prepared inaccordance with GAAP consistently applied, all in reasonable detail and setting forth in comparative form the figures for the correspondingperiod in the preceding fiscal year, together with a certificate of a Responsible Officer of Parent stating that such financial statements fairlypresent the financial condition of Parent and its Subsidiaries as at such date and the results of operations of Parent and its Subsidiaries forthe period ended on such date and have been prepared in accordance with GAAP consistently applied, subject to changes resulting fromnormal, year-end audit adjustments and except for the absence of notes;(b) as soon as available and in any event within 90 days after the end of each fiscal year (or, if later, on the date required to befiled with the SEC (after giving effect to any61 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. extension granted thereby)), the consolidated balance sheets of Parent and its Subsidiaries as of the end of such fiscal year, and the relatedconsolidated statements of income, shareholders’ equity and cash flows of Parent and its Subsidiaries for such fiscal year, prepared inaccordance with GAAP consistently applied, all in reasonable detail and setting forth in comparative form the figures for the previousfiscal year, accompanied by a report and opinion thereon of Ernst & Young or another firm of independent certified public accountants ofrecognized national standing acceptable to the Lenders, which report and opinion shall be prepared in accordance with generally acceptedauditing standards and shall not be subject to qualification or exception as to the scope of such audit;(c) [reserved];(d) together with the financial statements required pursuant to Sections 8.01(a) and (b), a compliance certificate of aResponsible Officer as of the end of the applicable accounting period (which delivery may, unless a Lender requests executed originals, beby electronic communication including fax or email and shall be deemed to be an original authentic counterpart thereof for all purposes)in the form of Exhibit D (a “Compliance Certificate”) including details of any material issues that are raised by auditors;(e) [reserved];(f) as soon as available, but in no event later than 90 days after the end of each fiscal year, a consolidated financial forecastfor Parent and its Subsidiaries for the following fiscal years, including forecasted consolidated balance sheets, consolidated statements ofincome, shareholders’ equity and cash flows of Parent and its Subsidiaries, provided that if Parent delivers a financial forecast for anylonger period to its board of directors, Parent shall promptly, and in any event within five (5) Business Days after the same are madeavailable to its board of directors, deliver such longer forecast to Administrative Agent;(g) promptly, and in any event within five (5) Business Days, after the same are released, copies of all press releases;(h) promptly, and in any event within ten (10) Business Days after receipt thereof by an Obligor thereof, copies of each noticeor other correspondence received from any securities regulator or exchange to the authority of which an Obligor may become subject fromtime to time concerning any investigation by such agency regarding financial or other operational results of such Obligor;(i) the information regarding insurance maintained by Parent and its Subsidiaries as required under Section 8.05;62 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (j) promptly, and in any event within five (5) Business Days, following Administrative Agent’s request at any time, proofof compliance with Section 10.01; and(k) within five (5) Business Days of delivery, copies of all statements, reports and notices made available to holders ofPermitted Subordinated Debt or Permitted Cure Debt, as applicable. Notwithstanding the foregoing, documents required to be delivered pursuant to the terms of this Section 8.01 (to the extent any suchdocuments are included in materials otherwise filed with the SEC) may be delivered electronically and, if so delivered, shall be deemed tohave been delivered on the date on which the Parent posts such documents, or provides a link thereto, on the Parent’s website on theinternet at the Parent’s website address. For purposes of clarity, to the extent documents are posted electronically in accordance with SECrequirements, any requirement for prompt delivery under this Section 8.01 shall be deemed satisfied.8.02 Notices of Material Events. Lead Borrower will furnish to Administrative Agent written notice of the following promptly, and,unless otherwise provided in this Section, in no event later than five (5) Business Days, after a Responsible Officer first learns of theexistence of:(a) the occurrence of any Default;(b) notice of the occurrence of any event with respect to an Obligor’s property or assets resulting in a Loss aggregating$500,000 (or the Equivalent Amount in other currencies) or more;(c) (A) any proposed acquisition of stock, assets or property by any Obligor that would reasonably be expected to result inenvironmental liability under Environmental Laws, and (B)(1) spillage, leakage, discharge, disposal, leaching, migration or release of anyHazardous Material required to be reported to any Governmental Authority under applicable Environmental Laws, and (2) all actions,suits, claims, notices of violation, hearings, investigations or proceedings pending, or to any Obligor’s Knowledge, threatened against oraffecting Parent or any of its Subsidiaries or with respect to the ownership, use, maintenance and operation of their respective businesses,operations or properties, relating to Environmental Laws or Hazardous Material;(d) the assertion of any environmental matter by any Person against, or with respect to the activities of, Parent or any of itsSubsidiaries and any alleged violation of or non-compliance with any Environmental Laws or any permits, licenses or authorizationswhich could reasonably be expected to involve damages in excess of $100,000 other than any environmental63 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. matter or alleged violation that, if adversely determined, would not (either individually or in the aggregate) have a Material AdverseEffect;(e) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authorityagainst or affecting Parent or any of its Affiliates that, if adversely determined, would reasonably be expected to result in a MaterialAdverse Effect;(f) (i) on or prior to any filing by any ERISA Affiliate of any notice of intent to terminate any Title IV Plan, a copy of suchnotice and (ii) promptly, and in any event within ten days, after any Responsible Officer of any ERISA Affiliate knows or has reason toknow that a request for a minimum funding waiver under Section 412 of the Code has been filed with respect to any Title IV Plan orMultiemployer Plan, a notice (which may be made by telephone if promptly confirmed in writing) describing such waiver request and anyaction that any ERISA Affiliate proposes to take with respect thereto, together with a copy of any notice filed with the PBGC or the IRSpertaining thereto;(g) (i) the termination of any Material Agreement; (ii) the receipt by Parent or any of its Subsidiaries of any material noticeunder any Material Agreement; (iii) the entering into of any new Material Agreement by an Obligor; or (iv) any material amendment to aMaterial Agreement;(h) the reports and notices as required by the Security Documents;(i) within 30 days of the date thereof, or, if earlier, on the date of delivery of any financial statements pursuant to Section8.01, notice of any material change in accounting policies or financial reporting practices by the Obligors;(j) notice of any labor controversy resulting in or threatening to result in any strike, work stoppage, boycott, shutdown orother material labor disruption against or involving an Obligor;(k) a material licensing agreement or arrangement entered into by Parent or any Subsidiary in connection with anyinfringement or alleged infringement of the Intellectual Property of another Person;(l) any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect;(m) concurrently with the delivery of financial statements under Section 8.01(b), the creation or other acquisition of anyIntellectual Property by Parent or any Subsidiary after the Closing Date and during such prior fiscal year which is registered or becomesregistered or the64 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. subject of an application for registration with the U.S. Copyright Office or the U.S. Patent and Trademark Office, as applicable, or with anyother equivalent foreign Governmental Authority;(n) any change to any Obligor’s ownership of Deposit Accounts, Securities Accounts and Commodity Accounts, bydelivering to Administrative Agent an updated Schedule 7 to the Security Agreement setting forth a complete and correct list of all suchaccounts as of the date of such change; or(o) such other information respecting the operations, properties, business or condition (financial or otherwise) of the Obligors(including with respect to the Collateral) as Administrative Agent may from time to time reasonably request.Each notice delivered under this Section 8.02 shall be accompanied by a statement of a financial officer or other executive officer of LeadBorrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken withrespect thereto.Notwithstanding the foregoing, documents required to be delivered pursuant to the terms of clauses (d), (e), (g), (i) and (j) of this Section8.02 (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and, if sodelivered, shall be deemed to have been delivered on the date on which the Parent posts such documents, or provides a link thereto, on theParent’s website on the internet at the Parent’s website address. For purposes of clarity, to the extent documents required to be deliveredpursuant to the terms of clauses (d), (e), (g), (i) and (j) of this Section 8.02 are posted electronically in accordance with SEC requirements,any requirement for prompt delivery under this Section 8.02 shall be deemed satisfied.8.03 Existence; Conduct of Business. Such Obligor will, and will cause each of its Subsidiaries to, do or cause to be done all thingsnecessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchisesmaterial to the conduct of its business; provided that the foregoing shall not prohibit any merger, amalgamation, consolidation,liquidation or dissolution permitted under Section 9.03. 8.04 Payment of Obligations. Such Obligor will, and will cause each of its Subsidiaries to, pay and discharge its obligations,including (i) all Taxes, fees, assessments and governmental charges or levies imposed upon it or upon its properties or assets prior to thedate on which penalties attach thereto, and all lawful claims for labor, materials and supplies which, if unpaid, might become a Lien uponany properties or assets of Parent or any Subsidiary; and (ii) all lawful claims which, if unpaid, would by law become a Lien upon itsproperty not constituting a Permitted Lien; provided that such payment and discharge shall not be required with respect to any such Tax,fees assessments or governmental charges or levies or such claims, so long as the65 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. validity or amount thereof are being contested in good faith by appropriate proceedings and are adequately reserved against in accordancewith GAAP.8.05 Insurance. Such Obligor will maintain, and will cause each of its Subsidiaries to maintain, with financially sound and reputableinsurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the sameor similar businesses operating in the same or similar locations. Upon the request of Administrative Agent or the Majority Lenders, suchObligor shall furnish Administrative Agent from time to time with full information as to the insurance carried by it and, if so requested,copies of all such insurance policies. Such Obligor also shall furnish to Administrative Agent from time to time upon the request ofAdministrative Agent or the Majority Lenders a certificate from such Obligor’s insurance broker or other insurance specialist stating thatall premiums then due on the policies relating to insurance on the Collateral have been paid, and that such policies are in full force andeffect. Such Obligor shall use commercially reasonable efforts to ensure, or cause others to ensure, that all insurance policies requiredunder this Section 8.05 shall provide that they shall not be terminated or cancelled nor shall any such policy be materially changed in amanner adverse to such Obligor without at least 30 days’ prior written notice to such Obligor and Administrative Agent. Receipt of noticeof termination or cancellation of any such insurance policies or reduction of coverages or amounts thereunder and, unless the Borrowershave delivered evidence that it has obtained replacement insurance that satisfies the requirements of this Section, shall entitle theAdministrative Agent to renew any such policies, cause the coverages and amounts thereof to be maintained at levels required pursuant tothe first sentence of this Section 8.05 or otherwise to obtain similar insurance in place of such policies, in each case at the expense of suchObligor (payable on demand). The amount of any such expenses shall accrue interest at the Default Rate if not paid on demand, and shallconstitute “Obligations.”8.06 Books and Records; Inspection Rights. (a) Such Obligor will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, trueand correct entries are made of all dealings and transactions in relation to its business and activities.(b) Such Obligor will, and will cause each of its Subsidiaries to, permit any representatives designated by AdministrativeAgent and each VCOC Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from itsbooks and records, to inspect its facilities and to discuss its affairs, finances and condition with its officers and independent accountants,all at such reasonable times and intervals (but not more often than once a year unless an Event of Default has occurred and is continuing)as Administrative Agent or a VCOC Lender, as applicable, may request.66 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (c) The Obligors shall pay all documented out-of-pocket costs of all such inspections.(d) If Administrative Agent’s or any VCOC Lender’s outside counsel determines in writing that other rights of consultationare necessary under applicable legal authorities promulgated after the Closing Date to preserve the qualification of Administrative Agent’s,the VCOC Lender’s or any Lender’s investment as a “venture capital investment” for purposes of ERISA, the Obligors will work in goodfaith to agree to an amendment to this Section 8.06 to reflect such other rights.8.07 Compliance with Laws and Other Obligations. Such Obligor will, and will cause each of its Subsidiaries to, (i) comply with alllaws, rules, regulations and orders of any Governmental Authority applicable to it or its property (including Environmental Laws) and (ii)comply with all terms of Indebtedness and all other Material Agreements, except in each case where the failure to do so, individually or inthe aggregate, would not reasonably be expected to result in a Material Adverse Effect.8.08 Maintenance of Properties, Etc. (a) Such Obligor shall, and shall cause each of its Subsidiaries to, maintain and preserve all of its properties necessary oruseful in the proper conduct of its business in good working order and condition in accordance with the general practice of other Personsof similar character and size, ordinary wear and tear and damage from casualty or condemnation excepted.(b) [Reserved].8.09 Licenses. Such Obligor shall, and shall cause each of its Subsidiaries to, obtain and maintain all licenses, authorizations,consents, filings, exemptions, registrations and other Governmental Approvals necessary in connection with the execution, delivery andperformance of the Loan Documents, the consummation of the Transactions or the operation and conduct of its business and ownership ofits properties, except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect.8.10 Action under Environmental Laws. Such Obligor shall, and shall cause each of its Subsidiaries to, upon becoming aware of thepresence of any Hazardous Materials or the existence of any environmental liability under applicable Environmental Laws with respect totheir respective businesses, operations or properties, take all actions, at their cost and expense, as shall be necessary or advisable toinvestigate and clean up the condition of their respective businesses, operations or properties, including all required removal, containmentand remedial actions, and restore their respective businesses, operations or properties to a condition in compliance with applicableEnvironmental Laws, except to the extent failure to do so would not reasonably be expected to, individually or in the aggregate, have aMaterial Adverse Effect.67 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. 8.11 Use of Proceeds. The proceeds of the Loans will be used only as provided in Section 2.04. No part of the proceeds of the Loanswill be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board of Governors ofthe Federal Reserve System, including Regulations T, U and X.8.12 Certain Obligations Respecting Subsidiaries; Further Assurances. (a) Subsidiary Guarantors. Such Obligor will take such action, and will cause each of its Subsidiaries to take such action,from time to time as shall be necessary to ensure that all Subsidiaries (other than any Excluded Foreign Subsidiary not required to be aSubsidiary Guarantor or Borrower under Section 8.12(b)(i)), are either, at the discretion of the Administrative Agent, “SubsidiaryGuarantors” or Borrowers hereunder; provided that if adding any such Subsidiary as a Borrower would provide a material tax benefit toBorrowers (as reasonably determined by the Parent or Lead Borrower) and would not be materially less advantageous to the rights orremedies of the Administrative Agent and the Lenders (as compared to such Subsidiary being a Subsidiary Guarantor) (as reasonablydetermined by the Administrative Agent), then such Subsidiary shall become a Borrower hereunder. Without limiting the generality of theforegoing, in the event that Parent or any of its Subsidiaries shall form or acquire any new Subsidiary (other than any new ExcludedForeign Subsidiary not required to be a Subsidiary Guarantor or a Borrower under Section 8.12(b)(i)), such Obligor and its Subsidiaries willwithin thirty (30) days of such formation or acquisition:(i) cause such new Subsidiary to become a “Subsidiary Guarantor” or “Borrower” hereunder (as applicable), and a“Grantor” under the Security Agreement, pursuant to an Assumption Agreement;(ii) take such action or cause such Subsidiary to take such action (including delivering such shares of stock or sharecapital, as applicable, together with undated transfer powers executed in blank or the equivalent thereof in any other jurisdiction) as shallbe necessary to create and perfect (to the extent required by the applicable Security Document) valid and enforceable Liens with thepriority required by the applicable Security Document (subject to Permitted Priority Liens) on substantially all of the property of such newSubsidiary as collateral security for the obligations of such new Subsidiary hereunder;(iii) to the extent that the parent of such Subsidiary is not a party to the Security Agreement or has not otherwisepledged Equity Interests in its Subsidiaries in accordance with the terms of the Security Agreement and this Agreement, cause the parent ofsuch Subsidiary to execute and deliver a pledge agreement in favor of the Secured Parties in respect of all outstanding issued shares of suchSubsidiary; and68 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (iv) deliver such proof of corporate action, incumbency of officers, opinions of counsel and other documents as isconsistent with those delivered by each Obligor pursuant to Section 6.01 or as Administrative Agent or the Majority Lenders shall haverequested.(b) Excluded Foreign Subsidiaries.(i) In the event that, at any time, Excluded Foreign Subsidiaries have, in the aggregate, (A) total revenuesconstituting 5% or more of the total revenues of Parent and its Subsidiaries on a consolidated basis, or (B) total assets constituting 5% ormore of the total assets of Parent and its Subsidiaries on a consolidated basis, promptly (and, in any event, within 30 days after such time)Obligors shall cause one or more of such Excluded Foreign Subsidiaries to become Subsidiary Guarantors or Borrowers in the manner setforth in Section 8.12(a), such that, after such Subsidiaries become Subsidiary Guarantors or Borrowers, the Excluded Foreign Subsidiariesin the aggregate shall cease to have revenues or assets, as applicable, that meet the thresholds set forth in clauses (A) and (B) above;provided that no Excluded Foreign Subsidiary shall be required to become a Subsidiary Guarantor or Borrower if doing so would result inmaterial adverse tax consequences for Parent and its Subsidiaries, taken as a whole.(ii) With respect to each First-Tier Foreign Subsidiary that is not a Subsidiary Guarantor or Borrower, such Obligorshall grant a security interest and Lien in 65% of each class of voting Equity Interest and 100% of all other Equity Interests in such First-Tier Foreign Subsidiaries in favor of the Secured Parties as Collateral for the Obligations. Without limiting the generality of the foregoing,in the event that any Obligor shall form or acquire any new Subsidiary that is a First-Tier Foreign Subsidiary, such Obligor will promptlyand in any event within thirty (30) days of the formation or acquisition of such Subsidiary (or such longer time as consented to byAdministrative Agent in writing) grant a security interest and Lien in 65% of each class of voting Equity Interests and 100% of all otherEquity Interests of such Subsidiary in favor of the Secured Parties as Collateral for the Obligations (provided that in the case of a First-TierForeign Subsidiary that is a Subsidiary Guarantor or Borrower, such Obligor shall grant a security interest and Lien in 100% of the EquityInterests of such Subsidiary in favor of the Secured Parties as Collateral for the Obligations), including entering into any necessary locallaw security documents and delivery of certificated securities issued by such First-Tier Foreign Subsidiary as required by this Agreement orthe Security Agreement.(c) Further Assurances. Such Obligor will, and will cause each of its Subsidiaries to, take such action from time to time asshall reasonably be requested by Administrative Agent or the Majority Lenders to effectuate the purposes and objectives of thisAgreement.Without limiting the generality of the foregoing, each Obligor will, and will cause each Person that is required to be a SubsidiaryGuarantor or Borrower to, take such action from time to time (including executing and delivering such assignments, security agreements,control69 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. agreements, applications and other instruments prepared by the Administrative Agent or its counsel) as shall be reasonably requested byAdministrative Agent or the Majority Lenders to create, in favor of the Secured Parties, perfected security interests and Liens insubstantially all of the property of such Obligor as collateral security for the Obligations; provided that any such security interest or Lienshall be subject to the relevant requirements of, and limitations set forth in, the Security Documents.Notwithstanding any provision under this Agreement or other Loan Documents to the contrary, (i) the Obligors shall not berequired to take any actions in any jurisdiction outside the United States to grant or perfect a security interest in any asset to the extent theAdministrative Agent determines that the costs or burdens thereof are disproportionate to the practical benefit obtained by the SecuredParties by reference to the costs or burdens of creating or perfecting the lien versus the value of the assets being secured, (ii) no mortgageshall be required with respect to any real property having a fair market value of less than $1,000,000; (iii) unless an Event of Default hasoccurred and is continuing under Sections 11.01(a), (b), (d) (solely in respect of Sections 9 and 10), (h), (i), (j), (m), (n), or (p), theSwedish Borrower shall not be required to take any actions in Sweden except as required pursuant to the Swedish Security Documents; (iv)Borrowers shall not be responsible for the reimbursement of legal and filing costs, duties, fees, expenses, stamp taxes, any other Taxes, andother amounts incurred or payable in respect of actions required to perfect the Liens on Intellectual Property in jurisdictions outside of theUnited States in excess of $15,000 in respect for each foreign jurisdiction, or $50,000 in the aggregate for all foreign jurisdictions;provided that the foregoing limitations shall not apply in respect of any such actions required as a result of the Permitted Restructuring;and (v) other than in respect of executing and delivering assignments, security agreements, control agreements, applications and otherinstruments prepared by the Administrative Agent or its counsel relating to Intellectual Property, no Subsidiary Guarantor or Borrowershall be obligated to take, or cause to be taken, any further steps to perfect any security interest or Lien granted in favor of the SecuredParties in the Intellectual Property (other than Material Intellectual Property) owned by the Obligors as of the Closing Date.8.13 Termination of Non-Permitted Liens. In the event that Parent or any of its Subsidiaries shall become aware or be notified byAdministrative Agent or any Lender of the existence of any outstanding Lien against any Property of Parent or any of its Subsidiaries,which Lien is not a Permitted Lien, the applicable Obligor shall use its best efforts to promptly terminate or cause the termination of suchLien.8.14 Intellectual Property. In the event that the Obligors acquire Obligor Intellectual Property during the term of this Agreement, thenthe provisions of this Agreement shall automatically apply thereto and any such Obligor Intellectual Property shall automaticallyconstitute part of the Collateral under the Security Documents, without further action by any party, in each case from and after the date ofsuch acquisition (except that any representations or70 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. warranties of any Obligor shall apply to any such Obligor Intellectual Property only from and after the date, if any, subsequent to suchacquisition that such representations and warranties are brought down or made anew as provided herein).8.15 [Reserved].8.16 Post-Closing Items.(a) Lead Borrower shall cause to be delivered duly executed control agreements in favor of Administrative Agent for thebenefit of the Secured Parties for all Deposit Accounts, Securities Accounts, and Commodity Accounts owned by the Obligors in theUnited States on or promptly after the Closing Date (or such later date as the Administrative Agent may agree in writing).SECTION 9NEGATIVE COVENANTSEach Obligor covenants and agrees with Administrative Agent and the Lenders that, until the Commitments have expired or beenterminated and all Obligations have been paid in full indefeasibly in cash:9.01 Indebtedness. Such Obligor will not, and will not permit any of its Subsidiaries to, create, incur, assume or permit to exist anyIndebtedness, whether directly or indirectly, except:(a) the Obligations;(b) Indebtedness existing on the Closing Date and set forth in Part II of Schedule 7.13(a) and Permitted Refinancingsthereof; provided that, in each case, such Indebtedness is subordinated to the Obligations on terms satisfactory to the Majority Lenders;(c) Permitted Priority Debt;(d) accounts payable to trade creditors for goods and services and current operating liabilities (not the result of the borrowingof money) incurred in the ordinary course of Parent’s or such Subsidiary’s business in accordance with customary terms and paid within thespecified time, unless contested in good faith by appropriate proceedings and reserved for in accordance with GAAP;(e) Indebtedness consisting of guarantees resulting from endorsement of negotiable instruments for collection by any Obligorin the ordinary course of business;71 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (f) Indebtedness of any Obligor to any other Obligor; provided that such Indebtedness is subordinated to the Obligations onterms reasonably acceptable to the Administrative Agent and the Swedish Borrower shall not incur any Indebtedness to another Obligorexcept pursuant to a Permitted Restructuring;(g) Indebtedness owed to Bank of America, N.A., any of its Affiliates or any other financial institution under a corporatecredit card program between Borrowers and such lender not to exceed $250,000 at any time;(h) Indebtedness consisting of capitalized lease obligations and purchase money Indebtedness, in each case incurred by anyBorrower or any of its Subsidiaries to finance the acquisition, repair, improvement or construction of fixed or capital assets of such person,provided that (i) the aggregate outstanding principal amount of all such Indebtedness does not exceed $125,000 at any time and (ii) theprincipal amount of such Indebtedness does not exceed the lower of the cost or fair market value of the property so acquired or built or ofsuch repairs or improvements financed with such Indebtedness (each measured at the time of such acquisition, repair, improvement orconstruction is made);(i) Permitted Cure Debt;(j) Indebtedness approved in advance in writing by the Majority Lenders;(k) Indebtedness consisting of guaranties of performance by the Parent of the contractual obligations (other than anyIndebtedness for borrowed money and any Indebtedness of a type described in clause (b) of the definition of Indebtedness) of any otherObligor in the ordinary course of business;(l) non-cash loans and other credit extensions made by any Obligor to the Swedish Borrower in respect of intercompanyliabilities incurred by the Swedish Borrower in its ordinary course of business as permitted under Section 9.18.9.02 Liens. Such Obligor will not, and will not permit any of its Subsidiaries to, create, incur, assume or permit to exist any Lien onany property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) orrights in respect of any thereof, except:(a) Liens securing the Obligations;(b) any Lien on any property or asset of Parent or any of its Subsidiaries existing on the Closing Date and set forth in Part IIof Schedule 7.13(b); provided that (i) no such Lien shall extend to any other property or asset of Parent or any of its Subsidiaries and (ii)any such72 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Lien shall secure only those obligations which it secures on the Closing Date and extensions, renewals and replacements thereof that donot increase the outstanding principal amount thereof;(c) Liens described in the definition of “Permitted Priority Debt”;(d) Liens securing Indebtedness permitted under Section 9.01(h); provided that such Liens are restricted solely to the fixedor capital assets, the acquisition, repair, improvement or construction of which is being financing under Section 9.01(h);(e) Liens imposed by law which were incurred in the ordinary course of business securing liabilities in the aggregate amountnot to exceed $25,000, including (but not limited to) carriers’, warehousemen’s and mechanics’ liens and other similar liens arising in theordinary course of business and which (x) do not in the aggregate materially detract from the value of the Property subject thereto ormaterially impair the use thereof in the operations of the business of such Person or (y) are being contested in good faith by appropriateproceedings, which proceedings have the effect of preventing the forfeiture or sale of the Property subject to such liens and for whichadequate reserves have been made if required in accordance with GAAP;(f) pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemploymentinsurance or other similar social security legislation;(g) Liens securing Taxes, assessments and other governmental charges, the payment of which is not yet due or is beingcontested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which such reserve or otherappropriate provisions, if any, as shall be required by GAAP shall have been made;(h) servitudes, easements, rights of way, restrictions and other similar encumbrances on real Property imposed by applicableLaws and encumbrances consisting of zoning or building restrictions, easements, licenses, restrictions on the use of property or minorimperfections in title thereto which, in the aggregate, are not material, and which do not in any case materially detract from the value of theproperty subject thereto or interfere with the ordinary conduct of the business of any of the Obligors;(i) with respect to any real Property, (A) such defects or encroachments as might be revealed by an up-to-date survey of suchreal Property; (B) the reservations, limitations, provisos and conditions expressed in the original grant, deed or patent of such property bythe original owner of such real Property pursuant to applicable Laws; and (C) rights of expropriation, access or user or any similar rightconferred or reserved by or in applicable Laws, which, in the aggregate for (A), (B) and (C), are not material, and which do not in any casematerially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of any of theObligors;73 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (j) Bankers liens, rights of setoff and similar Liens incurred on deposits made in the ordinary course of business(k) Liens securing Indebtedness permitted under Section 9.01(g); provided that such Liens only attach to cash collaterallocated in an account of a Borrower held at the lender of such Indebtedness in an amount not to exceed $250,000 at any one time; and(l) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default;provided that no Lien otherwise permitted under any of the foregoing Sections 9.02(b) through (l) shall apply to any Material IntellectualProperty.9.03 Fundamental Changes and Acquisitions. Such Obligor will not, and will not permit any of its Subsidiaries to, (i) enter into anytransaction of merger, amalgamation or consolidation (ii) liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or(iii) make any Acquisition or otherwise acquire any business or substantially all the property from, or capital stock or share capital, asapplicable, of, or be a party to any acquisition of, any Person, except:(a) Investments permitted under Section 9.05(e);(b) the merger, amalgamation or consolidation of any Obligor with or into any other Obligor; provided that, in the case of amerger, amalgamation or consolidation with or into a Borrower, such Borrower shall be the surviving entity and in the case of a merger,amalgamation or consolidation with or into the Lead Borrower, the Lead Borrower shall be the surviving entity;(c) the sale, lease, transfer or other disposition by any Obligor (other than the Lead Borrower) of any or all of its property(upon voluntary liquidation or otherwise) to any other Obligor (other than the Swedish Borrower);(d) the sale, transfer or other disposition of the capital stock or share capital, as applicable, of any Obligor to any otherObligor (other than the Swedish Borrower);(e) (i) the Macrilen Acquisition, and (ii) Permitted Acquisitions for consideration in an amount not exceeding $10,000,000 inthe aggregate; and(f) transactions among Obligors in connection with, and pursuant to, the Permitted Restructuring.74 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. 9.04 Lines of Business. Such Obligor will not, and will not permit any of its Subsidiaries to, engage to any material extent in anybusiness other than the business engaged in on the Closing Date by Parent or any Subsidiary or a business reasonably related thereto.9.05 Investments. Such Obligor will not, and will not permit any of its Subsidiaries to, make, directly or indirectly, or permit to remainoutstanding any Investments except:(a) Investments outstanding on the Closing Date and identified in Schedule 9.05;(b) operating deposit accounts with banks;(c) extensions of credit in the nature of accounts receivable or notes receivable arising from the sales of goods or services inthe ordinary course of business;(d) Permitted Cash Equivalent Investments;(e) Investments by any Obligor in any Subsidiary Guarantor, other than the Swedish Borrower (for greater certainty, Parentshall not be permitted to have any direct or indirect Subsidiaries that are not wholly-owned Subsidiaries);(f) Hedging Agreements entered into in the ordinary course of Parent’s financial planning solely to hedge currency risks (andnot for speculative purposes) and in an aggregate notional amount for all such Hedging Agreements not in excess of $100,000 (or theEquivalent Amount in other currencies);(g) Investments consisting of security deposits with utilities and other like Persons made in the ordinary course of business;(h) Investments consisting of (i) employee loans, travel advances and guarantees in accordance with a Borrower’s usual andcustomary practices with respect thereto (if permitted by applicable law) and (ii) loans to employees, officers or directors relating to thepurchase of equity securities of Parent pursuant to employee stock plans or agreements approved by Parent’s Board of Directors, which inthe aggregate for clause (i) and (ii) shall not exceed $100,000 outstanding at any time (or the Equivalent Amount in other currencies);(i) Investments received in connection with any Insolvency Proceedings in respect of any customers, suppliers or clients andin settlement of delinquent obligations of, and other disputes with, customers, suppliers or clients;(j) non-cash Investments in joint ventures or strategic alliances in the ordinary course of such Obligor’s business consistingof the non-exclusive licensing of technology, the development of technology or the providing of technical support;75 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (k) Investments permitted under Section 9.03;(l) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions inthe ordinary course of any Obligor;(m) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and supplierswho are not Affiliates, in the ordinary course of business;(n) Investments consisting of guaranties of performance by the Parent of the contractual obligations (other than anyIndebtedness for borrowed money and any Indebtedness of a type described in clause (b) of the definition of Indebtedness) of any otherObligor in the ordinary course of business;(o) Investments in Obligors in connection with, and pursuant to, a Permitted Restructuring; and(p) Investments by any Obligor in the Swedish Borrower constituting non-cash loans and other credit extensions by suchObligor to the Swedish Borrower in respect of intercompany liabilities incurred by the Swedish Borrower in its ordinary course of businessas permitted under Section 9.18.9.06 Restricted Payments. Such Obligor will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay ormake, directly or indirectly, any Restricted Payment, except:(a) Parent may declare and pay dividends with respect to its capital stock payable solely in additional ordinary shares;(b) any Obligor may pay dividends to any other Obligor (other than the Swedish Borrower); and(c) Restricted Payments to Obligors in connection with, and pursuant to, the Permitted Restructuring.9.07 Payments of Indebtedness. Such Obligor will not, and will not permit any of its Subsidiaries to, make any payments in respect ofany Indebtedness other than (i) payments of the Obligations, (ii) scheduled payments of other Indebtedness permitted under the terms ofany subordination to the Obligations, (iii) repayment of intercompany Indebtedness permitted in reliance upon Section 9.01(f), (iv)repayment of the Permitted Priority Debt, and (v) in connection with, or as a result of, the Permitted Restructuring. 76 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. 9.08 Change in Fiscal Year. Such Obligor will not, and will not permit any of its Subsidiaries to, change the last day of its fiscal yearfrom that in effect on the Closing Date, except to change the fiscal year of a Subsidiary acquired in connection with an Acquisition toconform its fiscal year to that of Parent. 9.09 Sales of Assets, Etc. Such Obligor will not, and will not permit any of its Subsidiaries to, sell, lease, exclusively license (in termsof geography or field of use), transfer, or otherwise dispose of any of its Property (including accounts receivable, Intellectual Property andcapital stock or share capital, as applicable, of Subsidiaries) to any Person in one transaction or series of transactions (any thereof, an“Asset Sale”), except:(a) transfers of cash in the ordinary course of its business for equivalent value;(b) sales of inventory in the ordinary course of its business on ordinary business terms;(c) development and other collaborative arrangements where such arrangements provide for the licenses or disclosure ofPatents, Trademarks, Copyrights or other Intellectual Property rights in the ordinary course of business and consistent with general marketpractices where such license requires periodic payments based on per unit sales of a product over a period of time; provided that each suchlicense does not effect a legal transfer of title to such Intellectual Property rights and that each such license must be a true license asopposed to a license that is a sales transaction in substance;(d) transfers of Property by any Subsidiary Guarantor to any other Obligor (other than the Swedish Borrower);(e) dispositions of any equipment that is obsolete or worn out or no longer used or useful in the Business;(f) any transaction permitted under Section 9.03 or 9.05;(g) any other Asset Sale the Asset Sale Net Proceeds of which are applied as required under Section 3.03(b)(i);(h) transfers of Property to any Obligor in connection with, and pursuant to, the Permitted Restructuring; and(i) the abandonment, cancellation and discontinuation of Intellectual Property of the Obligors, other than MaterialIntellectual Property, in the Obligors’ reasonable business judgment.77 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. 9.10 Transactions with Affiliates. Such Obligor will not, and will not permit any of its Subsidiaries to, sell, lease, license or otherwisetransfer any assets to, or purchase, lease, license or otherwise acquire any assets from, or otherwise engage in any other transactions with,any of its Affiliates, except:(a) transactions between or among Obligors;(b) any transaction permitted under Section 9.01, 9.05, 9.06 or 9.09;(c) customary compensation and indemnification of, and other employment arrangements with, directors, officers andemployees of Parent or any Subsidiary in the ordinary course of business,(d) Parent may issue Equity Interests to Affiliates in exchange for cash; provided that the terms thereof are no less favorable(including the amount of cash received by Parent) to Parent than those that would be obtained in a comparable arm’s-length transactionwith a Person not an Affiliate of Parent;(e) the transactions set forth on Schedule 9.10; and(f) the Permitted Restructuring.9.11 Restrictive Agreements. Such Obligor will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into,incur or permit to exist any Restrictive Agreement other than (a) restrictions and conditions imposed by law or by this Agreement and (b)Restrictive Agreements listed on Schedule 7.15.9.12 Amendments to Material Agreements; Organizational Documents. Such Obligor will not, and will not permit any of itsSubsidiaries to, enter into any amendment to or modification of any Material Agreement or terminate any Material Agreement (unlessreplaced with another agreement that, viewed as a whole, is on the same or better terms for Parent or such Subsidiary or except to the extentsuch amendment, modification or termination could not reasonably be expected to result in a Material Adverse Effect). Such Obligor willnot, and will not permit any of its Subsidiaries to, enter into any amendment to or modification of its organizational documents in amanner that could be materially adverse to the rights or remedies of Administrative Agent and the Lenders (other than amendments toeffect the dissolution of the Swedish Borrower and/or the Cayman Borrower in connection with the Permitted Restructuring).9.13 Operating Leases. Parent will not, and will not permit any of its Subsidiaries to, make any expenditures in respect of operatingleases, except for:(a) real estate operating leases;78 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (b) operating leases between Parent and any of its wholly-owned Subsidiaries or between any of Parent’s wholly-ownedSubsidiaries; and(c) operating leases that would not cause Parent and its Subsidiaries, on a consolidated basis, to make payments exceeding$250,000 (or the Equivalent Amount in other currencies) in any fiscal year.9.14 Sales and Leasebacks. Except as disclosed on Schedule 9.14, such Obligor will not, and will not permit any of its Subsidiaries to,become liable, directly or indirectly, with respect to any lease, whether an operating lease or a Capital Lease Obligation, of any property(whether real, personal, or mixed), whether now owned or hereafter acquired, (i) which Parent or such Subsidiary has sold or transferred or isto sell or transfer to any other Person and (ii) which Parent or such Subsidiary intends to use for substantially the same purposes as propertywhich has been or is to be sold or transferred.9.15 Hazardous Material. Such Obligor will not, and will not permit any of its Subsidiaries to, use, generate, manufacture, install,treat, release, store or dispose of any Hazardous Material, except in compliance with all applicable Environmental Laws or where thefailure to comply could not reasonably be expected to result in a Material Adverse Change.9.16 Accounting Changes. Such Obligor willnot, and will not permit any of its Subsidiaries to, make any significant change in accounting treatment or reporting practices, except asrequired or permitted by GAAP. 9.17 Compliance with ERISA. No Obligor or any ERISA Affiliate thereof shall cause or suffer to exist (a) any event that could resultin the imposition of a Lien with respect to any Title IV Plan or Multiemployer Plan, (b) any other ERISA Event that would, in theaggregate, have a Material Adverse Effect, or (c) any event that could result in the imposition of a Lien with respect to any Benefit Plan.9.18 Swedish Borrower. The Swedish Borrower shall not incur any liabilities (other than the Obligations under the Loan Documents,intercompany liabilities to other Obligors, obligations incurred in respect of the development of Recorlev and the maintenance of itsIntellectual Property and such immaterial liabilities as are incidental to its legal status) or hold any assets (other than Investments in itsSubsidiaries, subordinated intercompany receivables, Intellectual Property and regulatory approvals; provided that with respect to anyInvestments acquired after the Closing Date, such Investments are pledged subject to documentation satisfactory to the AdministrativeAgent in its reasonable discretion); except for assets and liabilities of another Obligor are distributed or otherwise transferred to it pursuantto, and in accordance with, the Permitted Restructuring.79 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. SECTION 10FINANCIAL COVENANTS10.01 Minimum Liquidity. The Obligors shall maintain at all times Liquidity in an amount which shall exceed the greater of(i) $3,000,000 and (ii) to the extent Borrowers have incurred Permitted Priority Debt, the minimum cash balance, if any, required byBorrowers’ Permitted Priority Debt creditors.10.02 Minimum Revenue. The Obligors shall have annual Revenue from sales of the Products (for each respective calendar year, the“Minimum Required Revenue”):(a) during the twelve month period beginning on January 1, 2017, of at least $[****];(b) during the twelve month period beginning on January 1, 2018, of at least $[****];(c) during the twelve month period beginning on January 1, 2019, of at least $[****];(d) during the twelve month period beginning on January 1, 2020, of at least $[****];(e) during the twelve month period beginning on January 1, 2021, of at least $[****]; and(f) during the twelve month period beginning on January 1, 2022, of at least $[****].10.03 Cure Right. (a) Notwithstanding anything to the contrary contained in Section 11, in the event that Borrowers fail to comply with thecovenants contained in Section 10.02(a) through (f) (such covenants for such applicable periods being the “Specified FinancialCovenants”), Parent shall have the right within 90 (ninety) days of the end of the respective calendar year:(i) to issue additional shares of Equity Interests in exchange for cash (the “Equity Cure Right”), or(ii) to borrow Permitted Cure Debt (the “Subordinated Debt Cure Right” and, collectively with the Equity CureRight, the “Cure Right”),in an amount equal to (x) two (2) multiplied by (y) the Minimum Required Revenue less annual Revenue from sales of the Product (the“Cure Amount”). The cash therefrom immediately shall be contributed as equity or subordinated debt (only as permitted pursuant toSection 9.01), as applicable, to Parent, and upon the receipt by Parent of the Cure Amount pursuant to the exercise of such Cure Right,such Cure Amount shall be deemed to constitute Revenue of Parent from80 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. sales of the Product for purposes of the Specified Financial Covenants and the Specified Financial Covenants shall be recalculated for allpurposes under the Loan Documents. If, after giving effect to the foregoing recalculation, Parent shall then be in compliance with therequirements of the Specified Financial Covenants, Parent shall be deemed to have satisfied the requirements of the Specified FinancialCovenants as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at suchdate, and the applicable breach of the Specified Financial Covenants that had occurred, the related Default and Event of Default, shall bedeemed cured without any further action of Parent or Lenders for all purposes under the Loan Documents.(b) Notwithstanding anything herein to the contrary the Cure Amount received by Parent from investors investing in orlending to Parent pursuant to Section 10.03(a) shall be used to immediately prepay the Loans, including any fees payable pursuant to theAmended Fee Letter and the applicable Prepayment Premium, credited in the order set forth in Sections 3.03(b)(i)(A)-(E).SECTION 11EVENTS OF DEFAULT11.01 Events of Default. Each of the following events shall constitute an “Event of Default”:(a) Borrowers shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at thedue date thereof or at a date fixed for prepayment thereof or otherwise;(b) (i) any Obligor shall fail to pay any interest on any Loan or any fee due under the Loan Documents when and as the sameshall become due and payable, and such failure shall continue unremedied for a period of three (3) Business Days or (ii) any Obligor shallfail to pay any other Obligation (other than an amount referred to in Section 11.01(a) and 11.01(b)(i)) when and as the same shall becomedue and payable, and such failure shall continue unremedied for a period of five (5) Business Days;(c) any representation or warranty made or deemed made by or on behalf of Parent or any of its Subsidiaries in or inconnection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof, or in any report,certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Documentor any amendment or modification hereof or thereof, shall: (i) prove to have been incorrect when made or deemed made to the extent thatsuch representation or warranty contains any materiality or Material Adverse Effect qualifier; or (ii) prove to have been incorrect in anymaterial respect when made or deemed made to the extent that such81 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. representation or warranty does not otherwise contain any materiality or Material Adverse Effect qualifier;(d) any Obligor shall fail to observe or perform any covenant, condition or agreement contained in Section 8.02, 8.03 (withrespect to an Obligor’s existence), 8.11, 8.12, 8.14, 8.16, 9 or 10;(e) any Obligor shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (otherthan those specified in Section 11.01(a), (b) or (d)) or any other Loan Document, and, in the case of any failure that is capable of cure, ifsuch failure shall continue unremedied for a period of 25 or more days;(f) Parent or any of its Subsidiaries shall fail to make any payment (whether of principal or interest and regardless of amount)in respect of any Material Indebtedness, when and as the same shall become due and payable after giving effect to any applicable grace orcure period as originally provided by the terms of such Indebtedness;(g) (i) any material breach of, or “event of default” or similar event by any Obligor under, any Material Agreement, (ii) anymaterial breach of, or “event of default” or similar event under, the documentation governing any Material Indebtedness shall occur, or (iii)any event or condition occurs (A) that results in any Material Indebtedness becoming due prior to its scheduled maturity or (B) thatenables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of such Material Indebtedness orany trustee or agent on its or their behalf to cause such Material Indebtedness to become due, or to require the prepayment, repurchase,redemption or defeasance thereof, prior to its scheduled maturity; provided that this Section 11.01(g) shall not apply to securedIndebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Material Indebtedness.(h) any Obligor:(i) becomes insolvent, or generally does not or becomes unable to pay its debts or meet its liabilities as the samebecome due, or admits in writing its inability to pay its debts generally, or declares any general moratorium on its indebtedness, orproposes a compromise or arrangement or deed of company arrangement between it and any class of its creditors;(ii) commits an act of bankruptcy or makes an assignment of its property for the general benefit of its creditors ormakes a proposal (or files a notice of its intention to do so);(iii) institutes any proceeding seeking to adjudicate it an insolvent, or seeking liquidation, dissolution, winding-up,examinership, reorganization, compromise, arrangement, adjustment, protection, moratorium, relief, stay of proceedings of creditorsgenerally (or any82 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. class of creditors), or composition of it or its debts or any other relief, under any federal, provincial or foreign Law now or hereafter in effectrelating to bankruptcy, winding-up, insolvency, examinership, reorganization, receivership, plans of arrangement or relief or protection ofdebtors or at common law or in equity, or files an answer admitting the material allegations of a petition filed against it in any suchproceeding;(iv) applies for the appointment of, or the taking of possession by, a receiver, interim receiver, receiver/manager,examiner, sequestrator, conservator, custodian, administrator, trustee, liquidator, voluntary administrator, receiver and manager or othersimilar official for it or any substantial part of its property; or(v) takes any action, corporate or otherwise, to approve, effect, consent to or authorize any of the actions describedin this Section 11.01(h) or (i), or otherwise acts in furtherance thereof or fails to act in a timely and appropriate manner in defense thereof;(i) any petition is filed, application made or other proceeding instituted against or in respect of Parent or any Subsidiary:(i) seeking to adjudicate it an insolvent;(ii) seeking a receiving order against it;(iii) seeking liquidation, dissolution, winding-up, examinership, reorganization, compromise, arrangement,adjustment, protection, moratorium, relief, stay of proceedings of creditors generally (or any class of creditors), deed of companyarrangement or composition of it or its debts or any other relief under any federal, provincial or foreign law now or hereafter in effectrelating to bankruptcy, winding-up, insolvency, examinership, reorganization, receivership, plans of arrangement or relief or protection ofdebtors or at common law or in equity; or(iv) seeking the entry of an order for relief or the appointment of, or the taking of possession by, a receiver, interimreceiver, receiver/manager, sequestrator, conservator, custodian, administrator, trustee, liquidator, examiner, voluntary administrator,receiver and manager or other similar official for it or any substantial part of its property, and such petition, application or proceedingcontinues undismissed, or unstayed and in effect, for a period of sixty (60) days after the institution thereof;provided that if an order, decree or judgment is granted or entered (whether or not entered or subject to appeal) against Parent or suchSubsidiary thereunder in the interim, such grace period will cease to apply; provided further that if Parent or such Subsidiary files ananswer admitting the material allegations of a petition filed against it in any such proceeding, such grace period will cease to apply;83 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (j) any other event occurs which, under the laws of any applicable jurisdiction, has an effect equivalent to any of the eventsreferred to in either of Section 11.01(h) or (i);(k) one or more judgments or settlements for the payment of money in an aggregate amount in excess of $250,000 (or theEquivalent Amount in other currencies) shall be rendered against or entered into by any Obligor or any combination thereof and the sameshall remain undischarged for a period of 45 consecutive days during which execution shall not be effectively stayed, or any action shallbe legally taken by a judgment or settlement creditor to attach or levy upon any assets of any Obligor to enforce any such judgment orsettlement;(l) (i) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, couldreasonably be expected to result in liability of Parent and its Subsidiaries in an aggregate amount exceeding (i) $250,000 in any year or(ii) $750,000 for all periods until repayment of all Obligations;(m) a Change of Control shall have occurred;(n) a Material Adverse Change shall have occurred;(o) (i) any Lien created by any of the Security Documents shall at any time not constitute a valid and perfected Lien on theapplicable Collateral (in accordance with the terms of the Security Documents) in favor of the Secured Parties, free and clear of all otherLiens (other than Permitted Liens), other than to the extent such Liens are released in accordance with Section 12.10, Section 12.11 orSection 12.12 as result of, or in connection with, the Permitted Restructuring, (ii) except for expiration in accordance with its terms, any ofthe Security Documents or any Guarantee of any of the Obligations (including that contained in Section 14) shall for whatever reasoncease to be in full force and effect, other than to the extent such Liens are released in accordance with Section 12.10, Section 12.11 orSection 12.12 as result of, or in connection with, the Permitted Restructuring, or (iii) any of the Security Documents, any Guarantee of anyof the Obligations (including that contained in Section 14) or the joint and several obligations of the Borrowers as contemplated bySection 13, or the enforceability thereof, shall be repudiated or contested by any Obligor; and(p) any injunction, whether temporary or permanent, shall be rendered against any Obligor that prevents the Obligors fromselling or manufacturing the Product or its commercially available successors, or any of their other material and commercially availableproducts in the United States for more than sixty (60) consecutive calendar days.11.02 Remedies. (a) Upon the occurrence of any Event of Default, then, and in every such event (other than an Event of Defaultdescribed in Section 11.01(h), (i) or (j)), and at any time thereafter during the continuance of such event, the Majority Lenders may, bynotice to Lead84 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon theCommitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in whichcase any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal ofthe Loans so declared to be due and payable, together with accrued interest thereon and all fees and other Obligations (including feesspecified in the Amended Fee Letter), shall become due and payable immediately (in the case of the Loans, at the Redemption Pricetherefor), without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Obligor.(a) Upon the occurrence of any Event of Default described in Section 11.01(h), (i) or (j), the Commitments shallautomatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and otherObligations, shall automatically become due and payable immediately (in the case of the Loans, at the Redemption Price therefor), withoutpresentment, demand, protest or other notice of any kind, all of which are hereby waived by each Obligor.(b) Prepayment Premium and Redemption Price. (i) For the avoidance of doubt, the Prepayment Premium (as acomponent of the Redemption Price) and the fees specified in the Amended Fee Letter that are payable upon the repayment of the Loansshall be due and payable at any time the Loans become due and payable prior to the Stated Maturity Date for any reason, whether due toacceleration pursuant to the terms of this Agreement (in which case it shall be due immediately, upon the giving of notice to LeadBorrower in accordance with Section 11.02(a), or automatically, in accordance with Section 11.02(b)), by operation of law or otherwise(including where bankruptcy filings or the exercise of any bankruptcy right or power, whether in any plan of reorganization or otherwise,​results or would result in a payment, discharge, modification or other treatment of the Loans or Loan Documents that would otherwiseevade, avoid, or otherwise disappoint the expectations of Lenders in receiving the full benefit of their bargained-for Prepayment Premiumor Redemption Price as provided herein). The Obligors and Lenders acknowledge and agree that any Prepayment Premium and the feesspecified in the Amended Fee Letter due and payable in accordance with this Agreement shall not constitute unmatured interest, whetherunder section 502(b)(3) of the Bankruptcy Code or otherwise, but instead is reasonably calculated to ensure that the Lenders receive thebenefit of their bargain under the terms of this Agreement. In the event that any portion of the Loans becomes due and payable prior to theStated Maturity Date, whether as a result of acceleration or any other required prepayment event, the “Redemption Date” for purposes ofcalculating the Prepayment Premium will be the date of such acceleration or the date of occurrence of the event that triggered suchobligation to prepay.(ii) Each Obligor acknowledges and agrees that the Lenders shall be entitled to recover the full amount of theRedemption Price and the fees specified in the Amended Fee85 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Letter in each and every circumstance such amount is due pursuant to or in connection with this Agreement and the Amended Fee Letter,including in the case of any Obligor’s bankruptcy filing, so that the Lenders shall receive the benefit of their bargain hereunder andotherwise receive full recovery as agreed under every possible circumstance, and each Borrower hereby waives any defense to payment,whether such defense may be based in public policy, ambiguity, or otherwise. Each Obligor further acknowledges and agrees, and waivesany argument to the contrary, that payment of such amounts does not constitute a penalty or an otherwise unenforceable or invalidobligation. Any damages that the Lenders may suffer or incur resulting from or arising in connection with any breach hereof or thereof byany Borrower shall constitute secured obligations owing to the Lenders.SECTION 12ADMINISTRATIVE AGENT12.01 Appointment and Duties. (a) Appointment of Administrative Agent. Each Lender hereby irrevocably appoints CRG Servicing(together with any successor Administrative Agent pursuant to Section 12.09) as Administrative Agent hereunder and authorizesAdministrative Agent to (i) execute and deliver the Loan Documents and accept delivery thereof on its behalf from any Obligor or any ofits Subsidiaries, (ii) take such action on its behalf and to exercise all rights, powers and remedies and perform the duties as are expresslydelegated to Administrative Agent under such Loan Documents, (iii) act as agent of such Lender for purposes of acquiring, holding,enforcing and perfecting all Liens granted by the Obligors on the Collateral to secure any of the Obligations and (iv) exercise such powersas are reasonably incidental thereto.(a) Duties as Collateral and Disbursing Agent. Without limiting the generality of Section 12.01(a), Administrative Agentshall have the sole and exclusive right and authority (to the exclusion of the Lenders), and is hereby authorized, to (i) act as the disbursingand collecting agent for the Lenders with respect to all payments and collections arising in connection with the Loan Documents(including in any proceeding described in Section 11.01(h), (i) or (j) or any other bankruptcy, insolvency or similar proceeding), and eachPerson making any payment in connection with any Loan Document to any Secured Party is hereby authorized to make such payment toAdministrative Agent, (ii) file and prove claims and file other documents necessary or desirable to allow the claims of the Secured Partieswith respect to any Obligation in any proceeding described in Section 11.01(h), (i) or (j) or any other bankruptcy, insolvency or similarproceeding (but not to vote, consent or otherwise act on behalf of such Secured Party), (iii) act as collateral agent for each Secured Party forpurposes of acquiring, holding, enforcing and perfecting all Liens created by the Loan Documents and all other purposes stated therein,(iv) manage, supervise and otherwise deal with the Collateral, (v) take such other action as is necessary or desirable to maintain theperfection and priority of the Liens created or purported to be created by the Loan Documents, (vi) except as may be otherwise specified inany Loan Document, exercise all remedies given to Administrative Agent and the other Secured Parties86 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. with respect to the Collateral, whether under the Loan Documents, applicable Requirements of Law or otherwise, (vii) enter intosubordination agreements with respect to Permitted Cure Debt, intercreditor agreements with respect to Permitted Priority Debt or any othersubordination agreement or intercreditor agreement with respect to Indebtedness of an Obligor, (viii) enter into non-disturbanceagreements and similar agreements and (ix) execute any amendment, consent or waiver under the Loan Documents on behalf of any Lenderthat has consented in writing to such amendment, consent or waiver; provided, however, that Administrative Agent hereby appoints,authorizes and directs each Lender to act as collateral sub-agent for Administrative Agent and the Secured Parties for purposes of theperfection of all Liens with respect to the Collateral, including any deposit account maintained by an Obligor with, and cash and PermittedCash Equivalent Investments held by, such Lender, and may further authorize and direct any Lender to take further actions as collateralsub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateral subject thereto to Administrative Agent, and eachLender hereby agrees to take such further actions to the extent, and only to the extent, so authorized and directed.(b) Limited Duties. Under the Loan Documents, Administrative Agent (i) is acting solely on behalf of the Lenders (except tothe limited extent provided in Section 12.12), with duties that are entirely administrative in nature, notwithstanding the use of the definedterm “Administrative Agent”, the terms “agent”, “administrative agent” and “collateral agent” and similar terms in any Loan Document torefer to Administrative Agent, which terms are used for title purposes only, (ii) is not assuming any obligation under any Loan Documentother than as expressly set forth therein or any role as agent, fiduciary or trustee of or for any Lender or any other Secured Party and (iii)shall have no implied functions, responsibilities, duties, obligations or other liabilities under any Loan Document, and each Lender herebywaives and agrees not to assert any claim against Administrative Agent based on the roles, duties and legal relationships expresslydisclaimed in the foregoing clauses (i) through (iii).12.02 Binding Effect. Each Lender agrees that (i) any action taken by Administrative Agent or the Majority Lenders (or, if expresslyrequired hereby, a greater proportion of the Lenders) in accordance with the provisions of the Loan Documents, (ii) any action taken byAdministrative Agent in reliance upon the instructions of the Majority Lenders (or, where so required, such greater proportion) and (iii)the exercise by Administrative Agent or the Majority Lenders (or, where so required, such greater proportion) of the powers set forthherein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of theSecured Parties.12.03 Use of Discretion. (a) No Action without Instructions. Administrative Agent shall not be required to exercise any discretion ortake, or to omit to take, any action, including with respect to enforcement or collection, except any action it is required to take or omit totake (i) under any Loan Document or (ii) pursuant to instructions from the Majority Lenders (or, where expressly required by the terms ofthis Agreement, a greater proportion of the Lenders).87 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (b) Right Not to Follow Certain Instructions. Notwithstanding Section 12.03(a), Administrative Agent shall not be requiredto take, or to omit to take, any action (i) unless, upon demand, Administrative Agent receives an indemnification satisfactory to it from theLenders (or, to the extent applicable and acceptable to Administrative Agent, any other Secured Party) against all liabilities that, byreason of such action or omission, may be imposed on, incurred by or asserted against Administrative Agent or any Related Person thereofor (ii) that is, in the opinion of Administrative Agent or its counsel, contrary to any Loan Document or applicable Requirement of Law.12.04 Delegation of Rights and Duties. Administrative Agent may, upon any term or condition it specifies, delegate or exercise any ofits rights, powers and remedies under, and delegate or perform any of its duties or any other action with respect to, any Loan Document byor through or to any trustee, co-agent, sub-agent, employee, attorney-in-fact and any other Person (including any other SecuredParty). Any such Person shall benefit from this Section 12 to the extent provided by Administrative Agent. Administrative Agent shall notbe responsible for the negligence or misconduct of any sub-agent except to the extent that a court of competent jurisdiction determines ina final and nonappealable judgment that Administrative Agent acted with gross negligence or willful misconduct in the selection of suchsub-agent.12.05 Reliance and Liability. (a) Administrative Agent may, without incurring any liability hereunder, (i) consult with any of its Related Persons and, whetheror not selected by it, any other advisors, accountants and other experts (including advisors to, and accountants and experts engaged by,any Obligor) and (ii) rely and act upon any document and information and any telephone message or conversation, in each case believedby it to be genuine and transmitted, signed or otherwise authenticated by the appropriate parties. (b) None of Administrative Agent and itsRelated Persons shall be liable for any action taken or omitted to be taken by any of them under or in connection with any LoanDocument, and each Lender and each Obligor hereby waives and shall not assert any right, claim or cause of action based thereon, exceptto the extent of liabilities resulting primarily from the gross negligence or willful misconduct of Administrative Agent or, as the case maybe, such Related Person (each as determined in a final, non-appealable judgment by a court of competent jurisdiction) in connection withthe duties expressly set forth herein. Without limiting the foregoing, Administrative Agent:(i) shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon theinstructions of the Majority Lenders or for the actions or omissions of any of its Related Persons selected with reasonable care (other thanemployees, officers and directors of Administrative Agent, when acting on behalf of Administrative Agent);88 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (ii) shall not be responsible to any Secured Party for the due execution, legality, validity, enforceability,effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be createdunder or in connection with, any Loan Document;(iii) makes no warranty or representation, and shall not be responsible, to any Secured Party for any statement,document, information, representation or warranty made or furnished by or on behalf of any Related Person, in or in connection with anyLoan Document or any transaction contemplated therein, whether or not transmitted by Administrative Agent, including as tocompleteness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by AdministrativeAgent in connection with the Loan Documents; and(iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any provision of anyLoan Document, whether any condition set forth in any Loan Document is satisfied or waived, as to the financial condition of any Obligoror as to the existence or continuation or possible occurrence or continuation of any Default or Event of Default and shall not be deemed tohave notice or knowledge of such occurrence or continuation unless it has received a notice from any Borrower or any Lender describingsuch Default or Event of Default clearly labeled “notice of default” (in which case Administrative Agent shall promptly give notice of suchreceipt to all Lenders);and, for each of the items set forth in clauses (i) through (iv) above, each Lender and each Obligor herebywaives and agrees not to assert any right, claim or cause of action it might have against Administrative Agent based thereon.12.06 Administrative Agent Individually. Administrative Agent and its Affiliates may make loans and other extensions of credit to,acquire Equity Interests of, engage in any kind of business with, any Obligor or Affiliate thereof as though it were not actingAdministrative Agent and may receive separate fees and other payments therefor. To the extent Administrative Agent or any of itsAffiliates makes any Loan or otherwise becomes a Lender hereunder, it shall have and may exercise the same rights and powers hereunderand shall be subject to the same obligations and liabilities as any other Lender and the terms “Lender”, “Majority Lender”, and any similarterms shall, except where otherwise expressly provided in any Loan Document, include Administrative Agent or such Affiliate, as the casemay be, in its individual capacity as Lender or as one of the Majority Lenders, respectively.12.07 Lender Credit Decision. Each Lender acknowledges that it shall, independently and without reliance upon AdministrativeAgent, any Lender or any of their Related Persons or upon any document solely or in part because such document was transmitted byAdministrative Agent or any of its Related Persons, conduct its own independent investigation of the financial89 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. condition and affairs of each Obligor and make and continue to make its own credit decisions in connection with entering into, and takingor not taking any action under, any Loan Document or with respect to any transaction contemplated in any Loan Document, in each casebased on such documents and information as it shall deem appropriate.12.08 Expenses; Indemnities. (a) Each Lender agrees to reimburse Administrative Agent and each of its Related Persons (to the extent not reimbursed by anyObligor) promptly, upon demand for such Lender’s Proportionate Share of any costs and expenses (including fees, charges anddisbursements of financial, legal and other advisors and Other Taxes paid in the name of, or on behalf of, any Obligor) that may be incurredby Administrative Agent or any of its Related Persons in connection with the preparation, syndication, execution, delivery, administration,modification, consent, waiver or enforcement (whether through negotiations, through any work-out, bankruptcy, restructuring or otherlegal or other proceeding or otherwise) of, or legal advice in respect of its rights or responsibilities under, any Loan Document.(b) Each Lender further agrees to indemnify Administrative Agent and each of its Related Persons (to the extent notreimbursed by any Obligor), from and against such Lender’s aggregate Proportionate Share of the liabilities (including Taxes, interests andpenalties imposed for not properly withholding or backup withholding on payments made to on or for the account of any Lender) that maybe imposed on, incurred by or asserted against Administrative Agent or any of its Related Persons in any matter relating to or arising out of,in connection with or as a result of any Loan Document, any Related Document or any other act, event or transaction related, contemplatedin or attendant to any such document, or, in each case, any action taken or omitted to be taken by Administrative Agent or any of itsRelated Persons under or with respect to any of the foregoing; provided, however, that no Lender shall be liable to Administrative Agent orany of its Related Persons to the extent such liability is found in a final, non-appealable judgment by a court of competent jurisdiction tohave resulted from such Administrative Agent’s or such Related Person’s gross negligence or willful misconduct.12.09 Resignation of Administrative Agent. (a) Administrative Agent may resign at any time by delivering notice of such resignationto the Lenders and Lead Borrower, effective on the date set forth in such notice or, if not such date is set forth therein, upon the date suchnotice shall be effective. If Administrative Agent delivers any such notice, the Majority Lenders shall have the right to appoint a successorAdministrative Agent. If, within 30 days after the retiring Administrative Agent having given notice of resignation, no successorAdministrative Agent has been appointed by the Majority Lenders that has accepted such appointment, then the retiring AdministrativeAgent may, on behalf of the Lenders, appoint a successor Administrative Agent from among the Lenders. Each appointment under thisSection 12.09(a) shall be subject to the prior consent of Lead Borrower, which may not be unreasonably withheld but shall not be requiredduring the continuance of an Event of Default.90 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (b) Effective immediately upon its resignation, (i) the retiring Administrative Agent shall be discharged from its duties andobligations under the Loan Documents, (ii) the Lenders shall assume and perform all of the duties of Administrative Agent until asuccessor Administrative Agent shall have accepted a valid appointment hereunder, (iii) the retiring Administrative Agent and its RelatedPersons shall no longer have the benefit of any provision of any Loan Document other than with respect to any actions taken or omitted tobe taken while such retiring Administrative Agent was, or because such Administrative Agent had been, validly acting as AdministrativeAgent under the Loan Documents and (iv) subject to its rights under Section 12.03, the retiring Administrative Agent shall take suchaction as may be reasonably necessary to assign to the successor Administrative Agent its rights as Administrative Agent under the LoanDocuments. Effective immediately upon its acceptance of a valid appointment as Administrative Agent, a successor Administrative Agentshall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Administrative Agent under the LoanDocuments.12.10 Release of Collateral or Guarantors. Each Lender hereby consents to the release and hereby directs Administrative Agent torelease (or, in the case of Section 12.10(b)(ii), release or subordinate) the following:(a) any Subsidiary of Parent from its guaranty of any Obligation of any Obligor if all of the Equity Interests in suchSubsidiary owned by any Obligor or any of its Subsidiaries are disposed of in an Asset Sale permitted under the Loan Documents(including pursuant to a waiver or consent), to the extent that, after giving effect to such Asset Sale, such Subsidiary would not be requiredto guaranty any Obligations pursuant to Section 8.12;(b) subject to Section 12.11, any Lien held by Administrative Agent for the benefit of the Secured Parties against (i) anyCollateral that is disposed of by an Obligor in an Asset Sale permitted by the Loan Documents (including pursuant to a valid waiver orconsent), to the extent all Liens required to be granted in such Collateral pursuant to Section 8.12 after giving effect to such Asset Salehave been granted, (ii) any property subject to a Lien described in Section 9.02(d) and (iii) all of the Collateral and all Obligors, upon (A)termination of the Commitments, (B) payment and satisfaction in full of all Loans and all other Obligations that Administrative Agent hasbeen notified in writing are then due and payable, (C) deposit of cash collateral with respect to all contingent Obligations, in amounts andon terms and conditions and with parties satisfactory to the Majority Lenders and each Indemnitee that is owed such Obligations and (D) tothe extent requested by Administrative Agent, receipt by the Secured Parties of liability releases from the Obligors each in form andsubstance acceptable to Administrative Agent;(c) any Subsidiary of Parent to the extent it is being liquidated, dissolved or merged into another Obligor, or any Lien on anyof the Collateral (including any capital stock or share capital of any Subsidiary) to the extent necessary to transfer such Collateral toanother Obligor,91 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. in each case in connection with, and subject to the requirements set forth in the definition of, the Permitted Restructuring; provided that,with respect to the Swedish Borrower, such release is subject to Section 12.11;Each Lender hereby directs Administrative Agent, and Administrative Agent hereby agrees, upon receipt of reasonable advancenotice from Lead Borrower, to execute and deliver or file such documents and to perform other actions reasonably necessary to release theguaranties and Liens when and as directed in this Section 12.10.12.11 Release of Swedish LiensNotwithstanding any other provisions in this Agreement or in any of the other Loan Documents, therelease of any perfected Lien (or Lien which purports to be or is required to be perfected) under any Swedish Security Document shallalways be subject to the prior written consent of the Administrative Agent (such consent to be given on a case by case basis and at the solediscretion of the Administrative Agent) other than following the discharge in full of all Loans and all other Obligations. Each SecuredParty irrevocably authorizes the Administrative Agent to release such Lien without notification or further reference to the SecuredParties.12.12 Automatic Releases of Obligors and Liens (other than Swedish Liens). Except as otherwise provided in Section 12.11,solely in respect of any Lien granted under any Swedish Security Document, the Lenders and the Administrative Agent, each herebyacknowledges and agrees that any releases of Obligors and terminations of Liens pursuant to Section 12.11(c) shall occur automatically,without any further action by the Obligors or the Secured Parties subject to the following conditions:(a) In the case of any release of an Obligor upon the liquidation, dissolution or merger with and into another Obligor, at thetime of such liquidation, dissolution and merger such other or successor Obligor shall remain an Obligor and shall assume and succeed tothe Obligations of the liquidated, dissolved or merged Obligor;(b) In the case of any transfer of Collateral to another Obligor, (i) the release of the particular Lien on the Collateral isnecessary to transfer such Collateral to such other Obligor and (ii) immediately upon such transfer, such Collateral shall become subject toa first priority perfected (subject to the last paragraph of Section 8.12(c)) Lien granted to the Administrative Agent for the benefit of theSecured Parties by the transferee Obligor (provided that this clause (ii) shall not apply to any transfer to the Swedish Borrower incompliance with the proviso to clause (4) in the definition of Permitted Restructuring).Except as otherwise provided in Section 12.11, solely in respect of any Lien granted under any Swedish Security Document, theSecured Parties hereby agree to execute and deliver, at the expense of the Obligors, all Uniform Commercial Code termination statements,certificates92 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. for terminating the liens on the Motor Vehicles and such other documentation as shall be reasonably requested by any Obligor to effect thetermination and release of the Liens on the Collateral described in the preceding sentence.SECTION 13MISCELLANEOUS13.01 No Waiver. No failure on the part of Administrative Agent or any Lender to exercise and no delay in exercising, and no course ofdealing with respect to, any right, power or privilege under any Loan Document shall operate as a waiver thereof, nor shall any single orpartial exercise of any right, power or privilege under any Loan Document preclude any other or further exercise thereof or the exercise ofany other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.13.02 Notices. All notices, requests, instructions, directions and other communications provided for herein (including anymodifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including by telecopy and e-mail) delivered, if to any Borrower, another Obligor, Administrative Agent or any Lender, to its address specified on the signature pageshereto or its Assumption Agreement, as the case may be, or at such other address as shall be designated by such party in a notice to theother parties. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given uponreceipt of a legible copy thereof, in each case given or addressed as aforesaid. All such communications provided for herein by telecopyshall be confirmed in writing promptly after the delivery of such communication (it being understood that non-receipt of writtenconfirmation of such communication shall not invalidate such communication). Unless the Administrative Agent otherwise prescribes,notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgementfrom the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other writtenacknowledgement).13.03 Expenses, Indemnification, Etc. (a) Expenses. Each Borrower agrees to pay or reimburse (i) Administrative Agent and the Lenders for all of their reasonableout of pocket costs and expenses (including the reasonable fees and expenses of Cooley LLP, special counsel to Administrative Agent andthe Lenders, and any sales, goods and services or other similar Taxes applicable thereto, and printing, reproduction, document delivery andtravel costs) in connection with (x) the negotiation, preparation, execution and delivery of this Agreement and the other Loan Documentsand the making of the Loans (exclusive of post-closing costs), (y) post-closing costs and (z) the negotiation or preparation of anymodification, supplement or waiver of any of the terms of this Agreement or any of the other Loan Documents (whether or notconsummated) and93 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (ii) Administrative Agent and the Lenders for all of their out of pocket costs and expenses (including the fees and expenses of legalcounsel) in connection with any enforcement or collection proceedings resulting from the occurrence of an Event of Default; provided,however, that Borrowers shall not be required to pay or reimburse any amounts pursuant to Section 13.03(a)(i)(x) in excess of the ExpenseCap.(b) Indemnification. Each Borrower hereby indemnifies Administrative Agent, each Lender, their respective Affiliates, andtheir respective directors, officers, employees, attorneys, agents, advisors and controlling parties (each, an “Indemnified Party”) from andagainst, and agrees to hold them harmless against, any and all Claims and Losses of any kind (including reasonable fees and disbursementsof counsel), joint or several, that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or inconnection with or relating to this Agreement or any of the other Loan Documents or the transactions contemplated hereby or thereby orany use made or proposed to be made with the proceeds of the Loans, and any claim, investigation, litigation or proceeding or thepreparation of any defense with respect thereto arising out of or in connection with or relating to any of the foregoing, whether or not anyIndemnified Party is a party to an actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing,whether based in contract, tort or any other theory, and whether or not such investigation, litigation or proceeding is brought by Borrower,any of its shareholders or creditors, and whether or not the conditions precedent set forth in Section 6 are satisfied or the other transactionscontemplated by this Agreement are consummated, except to the extent such Claim or Loss is found in a final, non-appealable judgmentby a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct. No Obligorshall assert any claim against any Indemnified Party, on any theory of liability, for consequential, indirect, special or punitive damagesarising out of or otherwise relating to this Agreement or any of the other Loan Documents or any of the transactions contemplated herebyor thereby or the actual or proposed use of the proceeds of the Loans. Parent, its Subsidiaries and Affiliates and their respective directors,officers, employees, attorneys, agents, advisors and controlling parties are each sometimes referred to in this Agreement as a “BorrowerParty.” No Lender shall assert any claim against any Borrower Party, on any theory of liability, for consequential, indirect, special orpunitive damages arising out of or otherwise relating to this Agreement or any of the other Loan Documents or any of the transactionscontemplated hereby or thereby or the actual or proposed use of the proceeds of the Loans.13.04 Amendments, Etc. Except as otherwise expressly provided in this Agreement, any provision of this Agreement may be modifiedor supplemented only by an instrument in writing signed by each Borrower and the Majority Lenders (or Administrative Agent on behalfof such Majority Lenders); provided however, that:(a) the consent of all of the Lenders shall be required to:94 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (i) amend, modify, discharge, terminate or waive any of the terms of this Agreement if such amendment,modification, discharge, termination or waiver would increase the amount of the Loans, reduce the fees payable hereunder, reduce interestrates or other amounts payable with respect to the Loans, extend any date fixed for payment of principal, interest or other amounts payablerelating to the Loans or extend the repayment dates of the Loans;(ii) amend the provisions of Section 6;(iii) amend, modify, discharge, terminate or waive any Security Document if the effect is to release a material part ofthe Collateral subject thereto other than pursuant to the terms hereof or thereof (including without limitation the Permitted Restructuring);or(iv) amend this Section 13.04 (including without limitation the Permitted Restructuring); and(b) no amendment, waiver or consent shall affect the rights or duties under any Loan Document of, or any payment to,Administrative Agent (or otherwise modify any provision of Section 12 or the application thereof) unless in writing and signed byAdministrative Agent in addition to any signature otherwise required.Notwithstanding anything to the contrary herein, (a) any amendments, modifications and waivers to the definition of PermittedRestructuring and/or the provisions of the Loan Documents relating thereto shall only be subject to the consent of the AdministrativeAgent; and (b) a Defaulting Lender shall not have any right to approve or disapprove any amendment, waiver or consent hereunder (andany amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with theconsent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not beincreased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of allLenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require theconsent of such Defaulting Lender.13.05 Successors and Assigns. (a) General. The provisions of this Agreement and the other Loan Documents shall be binding upon and inure to the benefitof the parties hereto and their respective successors and assigns permitted hereby, except that no Borrower may assign or otherwise transferany of its rights or obligations hereunder or under any of the other Loan Documents without the prior written consent of the Lenders. Anyof the Lenders may assign or otherwise transfer any of their rights or obligations hereunder or under any of the other Loan Documents to anassignee (i) in95 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. accordance with the provisions of Section 13.05(b), (ii) by way of participation in accordance with the provisions of Section 13.05(e) or(iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 13.05(g). Nothing in this Agreement,expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assignspermitted hereby, Participants to the extent provided in Section 13.05(e) and, to the extent expressly contemplated hereby, theIndemnified Parties) any legal or equitable right, remedy or claim under or by reason of this Agreement.(b) Assignments by Lenders. Any of the Lenders may at any time assign to one or more Eligible Transferees (or, if an Eventof Default has occurred and is continuing, to any Person (other than a natural Person)) all or a portion of their rights and obligations underthis Agreement (including all or a portion of the Commitment and the Loans at the time owing to it); provided, however, that no suchassignment shall be made to any Borrower, an Affiliate of any Borrower, or any employees or directors of any Borrower at anytime. Subject to the recording thereof by Administrative Agent pursuant to Section 13.05(d), from and after the effective date specified ineach Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned bysuch Assignment and Assumption, have the rights and obligations of the Lenders under this Agreement and the other Loan Documents,and correspondingly the assigning Lender shall, to the extent of the interest assigned by such Assignment and Assumption, be releasedfrom its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of a Lender’s rights andobligations under this Agreement, such Lender shall cease to be a party hereto) and the other Loan Documents but shall continue to beentitled to the benefits of Section 5 and Section 13.03. Any assignment or transfer by a Lender of rights or obligations under thisAgreement that does not comply with this Section 13.05(b) shall be treated for purposes of this Agreement as a sale by such Lender of aparticipation in such rights and obligations in accordance with Section 13.05(e).(c) Amendments to Loan Documents. Each of Administrative Agent, the Lenders and the Obligors agrees to enter into suchamendments to the Loan Documents, and such additional Security Documents and other instruments and agreements, in each case in formand substance reasonably acceptable to Administrative Agent, the Lenders and the Obligors, as shall reasonably be necessary to implementand give effect to any assignment made under this Section 13.05.(d) Register. Administrative Agent, acting solely for this purpose as an agent of each Borrower, shall maintain at one of itsoffices a register for the recordation of the name and address of any assignee of the Lenders and the Commitment and outstanding principalamount of the Loans owing thereto (the “Register”). The entries in the Register shall be conclusive, absent manifest error, and eachBorrower shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as the “Lender” hereunder for allpurposes of this Agreement,96 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. notwithstanding notice to the contrary. The Register shall be available for inspection by any Borrower, at any reasonable time and fromtime to time upon reasonable prior notice.(e) Participations. Any of the Lenders may at any time, without the consent of, or notice to, any Borrower, sell participationsto any Person (other than a natural person or any Borrower or any of a Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all ora portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of the Commitment and/or the Loansowing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solelyresponsible to the other parties hereto for the performance of such obligations and (iii) each Borrower shall continue to deal solely anddirectly with the Lenders in connection therewith.Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole rightto enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that suchagreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment,modification or waiver that would (i) increase or extend the term of such Lender’s Commitment, (ii) extend the date fixed for the paymentof principal of or interest on the Loans or any portion of any fee hereunder payable to the Participant, (iii) reduce the amount of any suchpayment of principal, or (iv) reduce the rate at which interest is payable thereon to a level below the rate at which the Participant is entitledto receive such interest. Subject to Section 13.05(f), each Borrower agrees that each Participant shall be entitled to the benefits of Section5 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 13.05(b). To the extentpermitted by law, each Participant also shall be entitled to the benefits of Section 4.04(a) as though it were the Lender.(f) Limitations on Rights of Participants. A Participant shall not be entitled to receive any greater payment under Section5.01 or 5.03 than a Lender would have been entitled to receive with respect to the participation sold to such Participant. Each Lender thatsells a participation shall, acting solely for this purpose as a non-fiduciary agent of each Borrower, maintain a register on which it entersthe name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or otherobligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all orany portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest inany commitment, loan, letter of credit or other obligations under any Loan Document) to any Person except to the extent that suchdisclosure is necessary to establish that such commitment, loan, letters of credit or other obligation is in registered form under Section5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, andsuch Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes ofthis Agreement notwithstanding any notice to the97 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. contrary. For the avoidance of doubt, Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility formaintaining a Participant Register.(g) Certain Pledges. The Lenders may at any time pledge or assign a security interest in all or any portion of its rights underthis Agreement and any other Loan Document to secure obligations of the Lenders, including any pledge or assignment to secureobligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release the Lenders from any of their obligationshereunder or substitute any such pledgee or assignee for the Lenders as a party hereto.13.06 Survival. The obligations of the Obligors under Sections 5.01, 5.02, 5.03, 13.03, 13.05, 13.09, 13.10, 13.11, 13.12, 13.13, 13.14, 13.20 and Section 14 (solely to the extent guaranteeing any of the obligations under the foregoing Sections) shall survive therepayment of the Obligations and the termination of the Commitment and, in the case of the Lenders’ assignment of any interest in theCommitment or the Loans hereunder, shall survive, in the case of any event or circumstance that occurred prior to the effective date of suchassignment, the making of such assignment, notwithstanding that the Lenders may cease to be “Lenders” hereunder. In addition, eachrepresentation and warranty made, or deemed to be made by a Notice of Borrowing, herein or pursuant hereto shall survive the making ofsuch representation and warranty.13.07 Captions. The table of contents and captions and section headings appearing herein are included solely for convenience ofreference and are not intended to affect the interpretation of any provision of this Agreement.13.08 Counterparts. This Agreement may beexecuted in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the partieshereto may execute this Agreement by signing any such counterpart.13.09 Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed inaccordance with, the law of the State of New York, without regard to principles of conflicts of laws that would result in the application ofthe laws of any other jurisdiction; provided that Section 5-1401 of the New York General Obligations Law shall apply.13.10 Jurisdiction, Service of Process and Venue. (a) Submission to Jurisdiction. Each Obligor agrees that any suit, action or proceeding with respect to this Agreement orany other Loan Document to which it is a party or any judgment entered by any court in respect thereof may be brought initially in thefederal or state courts in Houston, Texas or in the courts of its own corporate domicile and irrevocably submits to the non-exclusivejurisdiction of each such court for the purpose of any such suit,98 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. action, proceeding or judgment. This Section 13.10(a) is for the benefit of Administrative Agent and the Lenders only and, as a result,neither Administrative Agent nor any Lender shall be prevented from taking proceedings in any other courts with jurisdiction. To theextent allowed by applicable Laws, Administrative Agent and the Lenders may take concurrent proceedings in any number ofjurisdictions.(b) Alternative Process. Nothing herein shall in any way be deemed to limit the ability of Administrative Agent or theLenders to serve any such process or summonses in any other manner permitted by applicable law.(c) Waiver of Venue, Etc. Each Obligor irrevocably waives to the fullest extent permitted by law any objection that it maynow or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement or any otherLoan Document and hereby further irrevocably waives to the fullest extent permitted by law any claim that any such suit, action orproceeding brought in any such court has been brought in an inconvenient forum. A final judgment (in respect of which time for allappeals has elapsed) in any such suit, action or proceeding shall be conclusive and may be enforced in any court to the jurisdiction ofwhich such Obligor is or may be subject, by suit upon judgment.13.11 Waiver of Jury Trial. EACH OBLIGOR, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY IRREVOCABLYWAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANYSUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS ORTHE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.13.12 Waiver of Immunity. To the extent that any Obligor may be or become entitled to claim for itself or its Property or revenues anyimmunity on the ground of sovereignty or the like from suit, court jurisdiction, attachment prior to judgment, attachment in aid ofexecution of a judgment or execution of a judgment, and to the extent that in any such jurisdiction there may be attributed such animmunity (whether or not claimed), such Obligor hereby irrevocably agrees not to claim and hereby irrevocably waives such immunitywith respect to its obligations under this Agreement and the other Loan Documents.13.13 Entire Agreement. This Agreement and the other Loan Documents constitute the entire agreement among the parties withrespect to the subject matter hereof and thereof and supersede any and all previous agreements and understandings, oral or written, relatingto the subject matter hereof. EACH OBLIGOR ACKNOWLEDGES, REPRESENTS AND WARRANTS THAT IN DECIDING TO ENTERINTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR IN TAKING OR NOT TAKING ANY ACTION HEREUNDER ORTHEREUNDER, IT HAS NOT RELIED, AND WILL NOT RELY, ON ANY STATEMENT,99 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. REPRESENTATION, WARRANTY, COVENANT, AGREEMENT OR UNDERSTANDING, WHETHER WRITTEN OR ORAL, OF ORWITH ADMINISTRATIVE AGENT OR THE LENDERS OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT ANDTHE OTHER LOAN DOCUMENTS.13.14 Severability. If any provision hereof is found by a court to be invalid or unenforceable, to the fullest extent permitted byapplicable law the parties agree that such invalidity or unenforceability shall not impair the validity or enforceability of any otherprovision hereof.13.15 No Fiduciary Relationship. Each Obligor acknowledges that Administrative Agent and the Lenders have no fiduciaryrelationship with, or fiduciary duty to, any Borrower arising out of or in connection with this Agreement or the other Loan Documents, andthe relationship between the Lenders and the Borrowers is solely that of creditor and debtor. This Agreement and the other LoanDocuments do not create a joint venture among the parties.13.16 Confidentiality. Each of Administrative Agent and the Lenders agree to maintain the confidentiality of the Information (asdefined below), except that Information may be disclosed (a) to its Related Persons (it being understood that the Persons to whom suchdisclosure is made will be informed of the confidential nature of such Information and shall undertake in writing or shall otherwise beobligated to keep such Information confidential); (b) to the extent required or requested by any regulatory authority purporting to havejurisdiction over such Person or its Related Persons (including any self-regulatory authority, such as the National Association of InsuranceCommissioners); (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any otherparty hereto; (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceedingrelating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; (f) subject to a bindingagreement containing provisions substantially the same as those of this Section 13.16, to (i) any assignee of or Participant in, or anyprospective assignee of or Participant in, any of its rights and obligations under this Agreement or (ii) any actual or prospective party (or itsRelated Persons) to any swap, derivative or other transaction under which payments are to be made by reference to a Borrower and itsobligations, this Agreement or payments hereunder; (g) on a confidential basis to (i) any rating agency in connection with rating anyBorrower or its Subsidiaries or the Loans or (ii) the CUSIP Global Services or any similar agency in connection with the issuance andmonitoring of CUSIP numbers with respect to the Loans; (h) with the consent of the Lead Borrower; or (i) to the extent such Information (x)becomes publicly available other than as a result of a breach of this Section 13.16, or (y) becomes available to Administrative Agent, anyLender or any of their respective Affiliates on a nonconfidential basis from a source other than Borrowers if such source was not, to theknowledge of Administrative Agent or such Lender or their respective Affiliates, as applicable, prohibited from disclosing suchInformation by a legal, contractual or fiduciary obligation. In addition, Administrative Agent and the Lenders may disclose the existenceof this100 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Agreement and the material terms thereof to market data collectors, similar service providers to the lending industry and service providersto Administrative Agent and the Lenders in connection with the administration of this Agreement, the other Loan Documents and theCommitments.For purposes of this Section, “Information” means all information furnished by Parent or any of its Subsidiaries relating to Parent or any ofits Subsidiaries or any of their respective businesses, other than any such information that is available to Administrative Agent or anyLender on a nonconfidential basis prior to disclosure by Parent or any of its Subsidiaries; provided that the source was not, to theknowledge of the Administrative Agent or such Lender, prohibited from disclosing such Information by a legal, contractual or fiduciaryobligation. Any Person required to maintain the confidentiality of Information as provided in this Section 13.16 shall be considered tohave complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of suchInformation as such Person would accord to its own confidential information.13.17 USA PATRIOT Act. Administrative Agent and the Lenders hereby notify the Obligors that pursuant to the requirements of theUSA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) or any Anti-Money Laundering Laws, theyare required to obtain, verify and record information that identifies such Obligor, which information includes the name and address of suchObligor and other information that will allow such Lender to identify such Obligor in accordance with the Act or other Anti-MoneyLaundering Laws.13.18 Maximum Rate of Interest. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid oragreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (ineach case, the “Maximum Rate”). If the Lenders shall receive interest in an amount that exceeds the Maximum Rate, the excess interestshall be applied to the principal of the Loans, and not to the payment of interest, or, if the excessive interest exceeds such unpaid principal,the amount exceeding the unpaid balance shall be refunded to the applicable Obligor. In determining whether the interest contracted for,charged, or received by the Lenders exceeds the Maximum Rate, the Lenders may, to the extent permitted by applicable Law, (a)characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments andthe effects thereof, (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout thecontemplated term of the Indebtedness and other obligations of any Obligor hereunder, or (d) allocate interest between portions of suchIndebtedness and other obligations under the Loan Documents to the end that no such portion shall bear interest at a rate greater than thatpermitted by applicable Law.101 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. 13.19 Certain Waivers.(a) [Reserved].(b) Waiver of Marshaling. WITHOUT LIMITING THE FOREGOING IN ANY WAY, EACH OBLIGOR HEREBYIRREVOCABLY WAIVES AND RELEASES, TO THE EXTENT PERMITTED BY LAW, ANY AND ALL RIGHTS IT MAY HAVE AT ANYTIME (WHETHER ARISING DIRECTLY OR INDIRECTLY, BY OPERATION OF LAW, CONTRACT OR OTHERWISE) TO REQUIRETHE MARSHALING OF ANY ASSETS OF ANY OBLIGOR, WHICH RIGHT OF MARSHALING MIGHT OTHERWISE ARISE FROM ANYPAYMENTS MADE OR OBLIGATIONS PERFORMED.13.20 Tax Treatment. The parties hereto agree (a) that any contingency associated with the Loans is described in Treasury RegulationsSection 1.1272-1(c) and/or Treasury Regulations Section 1.1275-2(h), and therefore no Loan is governed by the rules set out in TreasuryRegulations Section 1.1275-4, (b) except for a Lender described in Sections 871(h)(3) or 881(c)(3) of the Code, absent a Change in aRequirement of Law, all interest on the Loans is “portfolio interest” within the meaning of Sections 871(h) or 881(c) of the Code, andtherefore is exempt from withholding tax under Sections 1441(c)(9) or 1442(a) of the Code, and (c) to adhere to this Section 13.20 forfederal income and any other applicable tax purposes and not to take any action or file any Tax Return, report or declaration inconsistentherewith.13.21 Original Issue Discount. For purposes of Sections 1272, 1273 and 1275 of the Code, each Loan is being issued with originalissue discount; please contact Brian Davis, Chief Financial Officer, 900 Northbrook Drive, Suite 200, Trevose, PA, telephone: 484-254-6865 to obtain information regarding the issue price, the amount of original issue discount and the yield to maturity.13.22 Co-Borrower Provisions.(a) Borrower Agent. Each Borrower appoints Lead Borrower its agent for purposes of the giving and receiving of anynotice, and the agreement to any consent or waiver under this Agreement (Lead Borrower, in such capacity, “Borrower Agent”). Anynotice required by this Agreement to be delivered to any Borrower shall be deemed to have been delivered to such Borrower upon deliveryof such notice to Borrower Agent, and receipt of any notice by Borrower Agent shall constitute receipt of such notice by each Borrower.Any notice or consent to be delivered hereunder by any Borrower shall be deemed to have been delivered by such Borrower upon deliverythereof by Borrower Agent.(b) Joint and Several Nature of the Obligations; Obligations Unconditional. All Loans and other extensions of credithereunder shall be deemed to have been made to all Borrowers. The obligations of Borrowers under the Loan Documents (other than theWarrant)102 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. are absolute and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of theobligations of any other Obligor under this Agreement or any other Loan Document or agreement or instrument referred to herein, or anysubstitution, release or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted byapplicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defenseof a surety or guarantor. The liability of each Borrower hereunder is irrevocable, continuing, absolute and unconditional.(c) Co-Borrower Waivers.(i) Without limiting the generality of the foregoing, it is agreed that the occurrence of any one ormore of the following shall not discharge, alter, impair or otherwise affect the liability of Borrowers hereunder, which shall remain absoluteand unconditional as described above, and each Borrower hereby irrevocably waives any defenses to enforcement it may have (now or inthe future) by reason of:(A) any change in the time, including the time for any performance or compliance with, place or manner ofpayment of, or in any other term of, the Obligations or any other obligation of any other Obligor under any Loan Document, or anyrescission, waiver, amendment or other modification of any Loan Document or any other agreement, including any increase in theObligations resulting from any extension of additional credit or otherwise;(B) any of the acts mentioned in any of the provisions of this Agreement or any other agreement orinstrument referred to herein shall be done or omitted;(C) the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified,supplemented or amended in any respect, or any right under this Agreement or any other agreement or instrument referred to herein shallbe waived or any other guarantee of any of the Obligations or any security therefor shall be released or exchanged in whole or in part orotherwise dealt with;(D) any taking, exchange, substitution, release, impairment or non-perfection of any Collateral, any taking,release, impairment, amendment, waiver or other modification of any guaranty, for the Obligations or any lien or security interest grantedto, or in favor of, the Secured Parties as security for any of the Obligations shall fail to be perfected; and(E) the failure of any other Person to execute or deliver this Agreement, any Loan Document or any otherguaranty or agreement or the release or reduction of liability of any Obligor or other guarantor or surety with respect to the Obligations.(ii) Borrowers hereby expressly waive diligence, presentment, demand of payment, protest and all noticeswhatsoever, and any requirement that any Secured Party exhaust103 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. any right, power or remedy against any Borrower, or proceed against any Borrower, or select one action or election of remedy, under thisAgreement or any other agreement or instrument referred to herein, or against any other Person under any other guarantee of, or security for,any of the Obligations.(d) Subrogation. Borrowers hereby jointly and severally agree that until the payment and satisfaction in full of allObligations and the expiration and termination of the Commitments under this Agreement, they shall not exercise any right or remedy toseek contribution, indemnification or any other form of reimbursement from any other Obligor or any other Person, whether by subrogationor otherwise, for any payment made or security provided in respect of the Obligations. Any agreement providing for contribution,indemnification or any other form of reimbursement prohibited under this Section 13.22(d) shall be null and void. If any payment is madeto any Obligor or any of its Subsidiaries in contravention of this Section 13.22(d)), such Obligor or such Subsidiary shall hold suchpayment in trust for the Lenders and Administrative Agent and such payment shall be promptly, and in any event within five (5) BusinessDays, delivered to Administrative Agent for application to the Obligations, whether matured or unmatured.SECTION 14GUARANTEE14.01 The Guarantee. The Subsidiary Guarantors hereby jointly and severally guarantee to the Secured Parties and their respectivesuccessors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the principal ofand interest on the Loans and all fees and other amounts from time to time owing to the Secured Parties by any Borrower under thisAgreement or under any other Loan Document (other than the Warrant) and by any other Obligor under any of the Loan Documents (otherthan the Warrant), in each case strictly in accordance with the terms thereof (such obligations being herein collectively calledthe “Guaranteed Obligations”). The Subsidiary Guarantors hereby further jointly and severally agree that if any Borrower shall fail to payin full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary Guarantorswill promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewalof any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration orotherwise) in accordance with the terms of such extension or renewal.14.02 Obligations Unconditional; Subsidiary Guarantor Waivers. The obligations of the Subsidiary Guarantors under Section 14.01are absolute and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of theobligations of any Borrower under this Agreement or any other agreement or instrument referred to herein, or any substitution, release orexchange of any other guarantee of or security for any of the104 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever thatmight otherwise constitute a legal or equitable discharge or defense of a surety or guarantor. The liability of each Subsidiary Guarantor isirrevocable, continuing, absolute and unconditional. Without limiting the generality of the foregoing, it is agreed that the occurrence ofany one or more of the following shall not discharge, alter, impair or otherwise affect the liability of the Subsidiary Guarantors hereunder,which shall remain absolute and unconditional as described above, and each Subsidiary Guarantor hereby irrevocably waives any defensesto enforcement it may have (now or in the future) by reason of:(a) any change in the time, including the time for any performance or compliance with, place or manner of payment of, or inany other term of, the Guaranteed Obligations or any other obligation of any Obligor under any Loan Document, or any rescission, waiver,amendment or other modification of any Loan Document or any other agreement, including any increase in the Guaranteed Obligationsresulting from any extension of additional credit or otherwise;;(b) any of the acts mentioned in any of the provisions of this Agreement or any other agreement or instrument referred toherein shall be done or omitted;(c) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall bemodified, supplemented or amended in any respect, or any right under this Agreement or any other agreement or instrument referred toherein shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchangedin whole or in part or otherwise dealt with;(d) any taking, exchange, substitution, release, impairment or non-perfection of any Collateral, any taking, release,impairment, amendment, waiver or other modification of any guaranty, for the Guaranteed Obligations or any lien or security interestgranted to, or in favor of, the Secured Parties as security for any of the Guaranteed Obligations shall fail to be perfected; and(e) the failure of any other Person to execute or deliver this Agreement, any Loan Document or any other guaranty oragreement or the release or reduction of liability of any Obligor or other guarantor or surety with respect to the Guaranteed Obligations.The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all noticeswhatsoever, and any requirement that any Secured Party exhaust any right, power or remedy or proceed against any Borrower under thisAgreement or any other agreement or instrument referred to herein, or against any other Person under any other guarantee of, or security for,any of the Guaranteed Obligations.105 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. 14.03 Reinstatement. The obligations of the Subsidiary Guarantors under this Section 14 shall be automatically reinstated if and to theextent that for any reason any payment by or on behalf of any Borrower in respect of the Guaranteed Obligations is rescinded or must beotherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy orreorganization or otherwise, and the Subsidiary Guarantors jointly and severally agree that they will indemnify the Secured Parties ondemand for all reasonable costs and expenses (including fees of counsel) incurred by the Lenders in connection with such rescission orrestoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted apreference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.14.04 Subrogation. The Subsidiary Guarantors hereby jointly and severally agree that until the payment and satisfaction in full of allGuaranteed Obligations and the expiration and termination of the Commitments under this Agreement, they shall not exercise any right orremedy arising by reason of any performance by them of their guarantee in Section 14.01, whether by subrogation or otherwise, against anyBorrower or any other guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations.14.05 Remedies. The Subsidiary Guarantors jointly and severally agree that, as between the Subsidiary Guarantors and the SecuredParties, the obligations of Borrowers under this Agreement and under the other Loan Documents may be declared to be forthwith due andpayable as provided in Section 11 (and shall be deemed to have become automatically due and payable in the circumstances provided inSection 11) for purposes of Section 14.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or suchobligations from becoming automatically due and payable) as against Borrowers and that, in the event of such declaration (or suchobligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by aBorrower) shall forthwith become due and payable by the Subsidiary Guarantors for purposes of Section 14.01.14.06 Instrument for the Payment of Money. Each Subsidiary Guarantor hereby acknowledges that the guarantee in this Section 14constitutes an instrument for the payment of money, and consents and agrees that the Secured Parties, at their sole option, in the event of adispute by such Subsidiary Guarantor in the payment of any moneys due hereunder, shall have the right to proceed by motion for summaryjudgment in lieu of complaint pursuant to N.Y. Civ. Prac. L&R § 3213.14.07 Continuing Guarantee. The guarantee in this Section 14 is a continuing guarantee, and shall apply to all GuaranteedObligations whenever arising.14.08 Rights of Contribution. The Subsidiary Guarantors hereby agree, as between themselves, that if any Subsidiary Guarantor shallbecome an Excess Funding Guarantor (as106 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. defined below) by reason of the payment by such Subsidiary Guarantor of any Guaranteed Obligations, each other Subsidiary Guarantorshall, on demand of such Excess Funding Guarantor (but subject to the next sentence), pay to such Excess Funding Guarantor an amountequal to such Subsidiary Guarantor’s Pro rata Share (as defined below and determined, for this purpose, without reference to the properties,debts and liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of such GuaranteedObligations. The payment obligation of a Subsidiary Guarantor to any Excess Funding Guarantor under this Section 14.08 shall besubordinate and subject in right of payment to the prior payment in full of the obligations of such Subsidiary Guarantor under the otherprovisions of this Section 14 and such Excess Funding Guarantor shall not exercise any right or remedy with respect to such excess untilpayment and satisfaction in full of all of such obligations.For purposes of this Section 14.08, (i) “Excess Funding Guarantor” means, inrespect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an amount in excess of its Pro rata Share of such GuaranteedObligations, (ii) “Excess Payment” means, in respect of any Guaranteed Obligations, the amount paid by an Excess Funding Guarantor inexcess of its Pro rata Share of such Guaranteed Obligations and (iii) “Pro Rata Share” means, for any Subsidiary Guarantor, the ratio(expressed as a percentage) of (x) the amount by which the aggregate present fair saleable value of all properties of such SubsidiaryGuarantor (excluding any shares of stock or share capital, as applicable, of any other Subsidiary Guarantor) exceeds the amount of all thedebts and liabilities of such Subsidiary Guarantor (including contingent, subordinated, unmatured and unliquidated liabilities, butexcluding the obligations of such Subsidiary Guarantor hereunder and any obligations of any other Subsidiary Guarantor that have beenGuaranteed by such Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable value of all properties of all of theSubsidiary Guarantors exceeds the amount of all the debts and liabilities (including contingent, subordinated, unmatured and unliquidatedliabilities, but excluding the obligations of each Borrower and the Subsidiary Guarantors hereunder and under the other Loan Documents)of all of the Subsidiary Guarantors, determined (A) with respect to any Subsidiary Guarantor that is a party hereto on the first BorrowingDate, as of such Borrowing Date, and (B) with respect to any other Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomesa Subsidiary Guarantor hereunder.14.09 General Limitation on Guaranteed Obligations. In any action or proceeding involving any provincial, territorial or statecorporate law, or any state or federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if theobligations of any Subsidiary Guarantor under Section 14.01 (and/or any Borrower under Section 13.22 to the extent such co-borrowershipwould be deemed to constitute a guarantee by any Borrower under the laws of its jurisdiction of incorporation) would otherwise, takinginto account the provisions of Section 14.08, be held or determined to be void, invalid or unenforceable, or subordinated to the claims ofany other creditors, on account of the amount of its liability under Section 14.01 (and/or Section 13.22, as applicable), then,notwithstanding any other provision hereof to the107 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. contrary, the amount of such liability shall, without any further action by such Subsidiary Guarantor (or, in relation to Section 13.22,Borrower), any Secured Party or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceableand not subordinated to the claims of other creditors as determined in such action or proceeding..14.10 Irish Companies Act Limitation on Guaranteed Obligations. The guarantee in Section 14.01 does not apply to any liability tothe extent that it would result in such guarantee constituting unlawful financial assistance within the meaning of Section 82 of the IrishCompanies Act.SECTION 15INTERCOMPANY SUBORDINATION AGREEMENT15.01 Subordination of Intercompany Obligations.(a) Each Obligor agrees that all Subordinated Intercompany Indebtedness shall be subordinate and junior in right ofpayment, to the extent and in the manner hereinafter set forth, to all Obligations of the Obligors under this Agreement (and otherindebtedness and obligations in connection with any renewal, refunding, restructuring or refinancing thereof, including interest thereonaccruing after the commencement of any proceedings referred to in clause (b) below, whether or not such interest is an allowed claim insuch proceeding, being hereinafter collectively referred to in this Section 15.01 as “Senior Indebtedness”). For purposes hereof,“Subordinated Intercompany Indebtedness” shall mean all obligations, liabilities and Indebtedness of an Obligor owed to anotherObligor, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, including withoutlimitation, principal, premium (if any), interest, fees, charges, expenses, costs, professional fees and expenses and reimbursementobligations.(b) In the event of any insolvency or bankruptcy proceedings, and any receivership, examinership, liquidation,reorganization or other similar proceedings in connection therewith, relative to any Obligor or to its creditors, as such, or to its property,and in the event of any proceedings for voluntary liquidation, dissolution or other winding up of such Obligor, whether or not involvinginsolvency or bankruptcy (other than in connection with, or pursuant to, the Permitted Restructuring), then (x) the holders of SeniorIndebtedness shall be paid in full in cash in respect of all amounts constituting Senior Indebtedness before any other Obligor is entitled toreceive (whether directly or indirectly), or make any demands for, any payment on account of any Subordinated IntercompanyIndebtedness and (y) until the holders of Senior Indebtedness are paid in full in cash in respect of all amounts constituting SeniorIndebtedness, any payment or distribution to which such Obligor would otherwise be entitled (other than debt securities of such Obligorthat are subordinated, to at least the same extent as this Section 15.01, to the108 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. payment of all Senior Indebtedness then outstanding (such securities being hereinafter referred to in this Section 15.01 as “RestructuredDebt Securities”)) shall be made to the holders of Senior Indebtedness.(c) Upon the occurrence and during the continuation of an Event of Default, each Obligor agrees it shall not make, and shallnot be entitled to receive, any payment or distribution of any kind or character with respect to the Subordinated IntercompanyIndebtedness except as expressly permitted under this Section 15.01.(d) If any payment or distribution of any character by any Obligor, whether in cash, securities or other property (other thanRestructured Debt Securities), in respect of any Subordinated Intercompany Indebtedness shall (despite these subordination provisions) bereceived by any such Obligor in violation of clause (a) or (b) before all Senior Indebtedness shall have been paid in full in cash, suchpayment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to the Administrative Agent, asapplicable, on behalf of the holders of Obligations, to the extent necessary to pay all Senior Indebtedness in full in cash.(e) To the fullest extent permitted by law, no present or future holder of Senior Indebtedness shall be prejudiced in its right toenforce the subordination of this Section 15.01 by any act or failure to act on the part of any such Obligor or by any act or failure to act onthe part of such holder or any trustee or agent for such holder.(f) This Section 15.01 is intended to constitute and shall be deemed to constitute a “subordination agreement” within themeaning of Section 510(a) of the Bankruptcy Code and is intended and shall be interpreted to be enforceable against the Obligors to themaximum extent permitted pursuant to applicable non-bankruptcy law. All references to any Obligor shall include such Obligor as debtorand debtor-in-possession and any receiver or trustee for such Obligor in connection with any case under the Bankruptcy Code or inconnection with any Insolvency Proceeding.(g) Nothing contained in this Section 15.01 is intended to or will impair, as between the Obligors, the obligations of anyObligor, which are absolute and unconditional, to pay to such other Obligor the principal of and interest on the intercompanyIndebtedness as and when due and payable in accordance with its terms, or is intended to or will affect the relative rights of such payee andother creditors of such payor other than the holders of Senior Indebtedness.[Signature Pages Follow] 109 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and yearfirst above written. BORROWERS: STRONGBRIDGE U.S. INC. By Name:Stephen J. Long Title:Chief Legal Officer Address for Notices: 900 Northbrook Drive Suite 200 Trevose, PA 19053 Attn:Chief Legal Officer Tel.:610-254-9225 Fax:215-355-7389 Email:s.long@strongbridgebio.com STRONGBRIDGE BIOPHARMA PLC By Name:A. Brian Davis Title:Chief Financial Officer Address for Notices: 900 Northbrook Drive Suite 200 Trevose, PA 19053 Attn:Chief Legal Officer Tel.:610-254-9225 Fax:215-355-7389 Email:s.long@strongbridgebio.com CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. CORTENDO AB (PUBL) By Name:Stephen J. Long Title:Authorized Signatory Address for Notices: 900 Northbrook Drive Suite 200 Trevose, PA 19053 Attn:Chief Legal Officer Tel.:610-254-9225 Fax:215-355-7389 Email:s.long@strongbridgebio.com CORTENDO CAYMAN LTD. By Name:A. Brian Davis Title:Director Address for Notices: 900 Northbrook Drive Suite 200 Trevose, PA 19053 Attn:Chief Legal Officer Tel.:610-254-9225 Fax:215-355-7389 Email:s.long@strongbridgebio.com STRONGBRIDGE IRELAND LIMITED By Name:Stephen J. Long Title:Secretary Address for Notices: 900 Northbrook Drive Suite 200 Trevose, PA 19053 CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Attn:Chief Legal Officer Tel.:610-254-9225 Fax:215-355-7389 Email:s.long@strongbridgebio.com CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. ADMINISTRATIVE AGENT: CRG SERVICING LLC By Name: Title: Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. LENDERS: CRG PARTNERS III L.P. By CRG PARTNERS III GP L.P., its General Partner By CRG PARTNERS III GP LLC, its General Partner By Name: Title: Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CRG PARTNERS III – PARALLEL FUND “A” L.P. By CRG PARTNERS III – PARALLEL FUND “A” GP L.P., its GeneralPartner ByCRG PARTNERS III – PARALLEL FUND “A” GP LLC, itsGeneral Partner By Name: Title: Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. CRG PARTNERS III (CAYMAN) LEV AIV I L.P. By CRG PARTNERS III (CAYMAN) GP L.P., its General Partner By CRG PARTNERS III (CAYMAN) GP LLC, its GeneralPartner By Name:Nathan Hukill Title:Authorized Signatory Witness: Name: Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CRG PARTNERS III (CAYMAN) UNLEV AIV I L.P. By CRG PARTNERS III (CAYMAN) GP L.P., its General Partner By CRG PARTNERS III (CAYMAN) GP LLC, its GeneralPartner By Name:Nathan Hukill Title:Authorized Signatory Witness: Name: CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CRG PARTNERS III - PARALLEL FUND “B” (CAYMAN) L.P. By CRG PARTNERS III (CAYMAN) GP L.P., its General Partner By CRG PARTNERS III (CAYMAN) GP LLC, its General Partner By Name: Title: Witness: Name: Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. VCOC LENDER: CRG PARTNERS III L.P. By CRG PARTNERS III GP L.P., its General Partner By CRG PARTNERS III GP LLC, its General Partner By Name: Title: Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:Portfolio Reporting Tel.:713.209.7350 Fax:713.209.7351 Email:notices@crglp.com CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 1to Term Loan AgreementCOMMITMENTSLenderCommitmentProportionate ShareCRG Partners III – Parallel Fund “A” L.P.$8,300,000.008.30%CRG Partners III L.P.$16,700,000.0016.70%CRG Partners III (Cayman) Lev AIV I L.P.$30,230,000.0030.23%CRG Partners III (Cayman) Unlev AIV I L.P.$5,270,000.005.27%CRG Partners III – Parallel Fund “B” (Cayman) L.P.$39,500,000.0039.50%TOTAL $100,000,000100% CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 6.01 to Term Loan AgreementFOREIGN SECURITY DOCUMENTS1. Swedish share pledge agreement entered into by Strongbridge Biopharma plc with respect to the shares of Cortendo AB(publ)2. Swedish IP Pledge Agreement entered into by Cortendo AB (publ)3. Irish Debenture entered into by Strongbridge Biopharma plc4. Cayman Share Charge entered into by Cortendo AB (publ) with respect to the shares of Cortendo Cayman Ltd.5. Cayman Fixed and Floating Charge entered into by Cortendo Cayman Ltd. CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 7.05(b)(i) to Term Loan AgreementCERTAIN INTELLECTUAL PROPERTY[See attached.] SCHEDULE 7.05(b)(i)-- Intellectual Property CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. COR--003Title / Owner / InventorCountry/NumberMethods And Compositions For TreatingDiabetes, Metabolic Syndrome AndOther ConditionsCortendo ABPer MärinAustralia - 2006204334Canada - 2594433China - 101141964Hong Kong - 1118449Indonesia - 32847Israel - 184459Japan - 5358095 South Korea -1013879100000Mexico - 294589New Zealand - 560481Norway 339007Singapore - 133978South Africa - 2007/06020Europe - 1853266*countries designated (AT,BE, BG, CH, CY, CZ, DE,DK, EE, ES, FI, FR, GB, GR,HU, IE, IT, LT, LU, LV, NL,PL, PT, RO, SE, SL, SK, TR)US 15/088,539 Ketoconazole Enantiomer in HumansCortendo ABTimothy Andrew StewartUS 9,198,906New Zealand – 576569Methods And Compositions For The Treatment Of Cushing’sSyndrome Using 2S,4R KetoconazoleCortendo ABTheodore Richard Koziol (titration)15/468,217Ketoconazole Enantiomer in HumansCortendo ABTimothy Andrew Stewart(combination)US 14/944,258 (continuation application filed on January 9, 2018under US 15/865,631)Pharmaceutical Compositions AndMethods Of TreatingHormone-Refractory CancersFred CohenUS 62/461,289 (Prov) SCHEDULE 7.05(b)(i)-- Intellectual Property CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. COR--005Title / Owner / InventorCountry/NumberConformationally ConstrainedBackbone Cyclized SomatostatinAnalogsCortendo ABVered Hornik Gary GellermanMichel M Afargan*The patents in Europe, are in the process of being assigned fromAspireo to Cortendo AB US 7,060,679Canada 2335488Israel 139956New Zealand 508956South Africa 2000/7496Europe 1085896*countries designated (DE, ES, FR, IT, GB)Pharmaceutical Compositions OfWater Soluble Peptides With PoorSolubility In Isotonic ConditionsAnd Methods For Their UseStrongbridge Biopharma PLCMichel Afargan PCT/IB17/00194US 15/487,731 SCHEDULE 7.05(b)(i)-- Intellectual Property CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. NEXT GENERATIONTitle / Owner / InventorCountry/NumberNovel Functionalized 4-(Phenoxymethyl(-1,3-DioxolaneAnalogs Exhibiting CytochromeP450 Inhibition And Their MethodOf UseCortendo ABWayne ChildersMagid A. Abou-GharbiaBenjamin Eric Blass CA 2898574Novel Cytochrome P450 InhibitorsAnd Their Method Of UseCortendo ABBenjamin Eric Blass Magid A. Abou-Gharbia Wayne ChildersPravin IyerJoshodeep BoruwaUS 15/021,532 SCHEDULE 7.05(b)(i)-- Intellectual Property CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. TRADEMARKSMark / OwnerCountry/NumberNORMOCORT Cortendo ABEurope - CTM 010869048STRONGBRIDGEBIOPHARMA Cortendo ABWO 1279854 US 86/701,398 Australia 1279854China 1279854Europe - CTM 1279854Israel 1279854 India 1279854Japan 1279854Mexico 1279854Turkey 1279854Brazil 910544115Canada 1741329CORYNTHIA Cortendo ABWO 1284986 US 86/758,862 Australia 1284986China 1284986Europe - CTM 1284986Israel 1284986India 1284986Japan 1284986Turkey 1284986Brazil 910758875Canada 1746437RECORLEV Cortendo ABWO 1297646 US 86/865,505 Canada 1761974Brazil 911007903Australia 1297646China 1297646Europe - CTM 1297646Israel 1297646India 1297646Japan 1297646 SCHEDULE 7.05(b)(i)-- Intellectual Property CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Mexico 1297646Turkey 1297646KEVEYIS Taro PharmaceuticalsUS 5,034,655  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 7.05(b)(ii) to Term Loan AgreementINTELLECTUAL PROPERTY EXCEPTIONSNone.  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 7.05(c) to Term Loan AgreementMATERIAL INTELLECTUAL PROPERTY[See attached.]  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. SCHEDULE 7.05(c)-- Material Intellectual PropertyPatents and Patent Applications COR--003 Title / Owner / InventorCountry/NumberMethods And Compositions ForTreating Diabetes, Metabolic SyndromeAnd Other ConditionsCortendo ABPer Märin Canada - 2594433Europe - 1853266*countries designated (DE,ES, FR, GB, IT)US 15/088,539Ketoconazole Enantiomer in Humans Cortendo ABTimothy Andrew Stewart US 9,198,906 COR--005 Title / Owner / InventorCountry/NumberPharmaceutical Compositions Of Water Soluble Peptides With Poor Solubility InIsotonic Conditions And Methods For Their UseStrongbridge Biopharma PLC Michel Afargan PCT/IB17/00194 US 15/487,731  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. SCHEDULE 7.05(c)-- Material Intellectual PropertyTrademarks and Trademark ApplicationsMark / OwnerCountry/NumberSTRONGBRIDGE BIOPHARMACortendo ABUS 86/701,398Europe - CTM 1279854Canada 1741329RECORLEVCortendo ABUS 86/865,505Canada 1761974 Europe - CTM 1297646KEVEYISTaro PharmaceuticalsUS 5,034,655  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 7.06 to Term Loan AgreementCERTAIN LITIGATIONNone.  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 7.12 to Term Loan AgreementINFORMATION REGARDING SUBSIDIARIESSubsidiaryJurisdiction ofOrganizationDirect Equity HolderPercentage of Subsidiaryheld by Direct EquityHolderCortendo AB (publ)SwedenStrongbridge Biopharmaplc100%Strongbridge U.S. Inc.DelawareCortendo AB (publ)100%Cortendo Cayman Ltd.Cayman IslandsCortendo AB (publ)100%Strongbridge IrelandLimitedIrelandStrongbridge Biopharmaplc100%  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 7.13(a)to Term Loan AgreementEXISTING INDEBTEDNESS OF BORROWER AND ITS SUBSIDIARIESPart INone.Part IINone.  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 7.13(b)to Term Loan AgreementLIENS GRANTED BY THE OBLIGORSPart I1. Security deposit in the amount of $39,314.72 in favor of landlord at 900 Northbrook Dr., Suite 200, Trevose, PA,19053.2. Security deposit in the amount of $10,000 in favor of landlord at 555 E. Lancaster Ave., Radnor, PA 19087.3. Sublease on leased property of Strongbridge U.S. Inc. at 555 E. Lancaster Ave., Radnor, PA 19087.Part II1. Security deposit in the amount of $39,314.72 in favor of landlord at 900 Northbrook Dr., Suite 200, Trevose, PA,19053.2. Security deposit in the amount of $10,000 in favor of landlord at 555 E. Lancaster Ave., Radnor, PA 19087.3. Sublease on leased property of Strongbridge U.S. Inc. at 555 E. Lancaster Ave., Radnor, PA 19087.  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 7.14 to Term Loan AgreementMATERIAL AGREEMENTS OF OBLIGORS1. Asset Purchase Agreement, dated as of December 12, 2016, between Taro Pharmaceutical North America, Inc.and Strongbridge Biopharma plc.2. Supply Agreement, dated as of December 12, 2016, between Taro Pharmaceutical North America, Inc. andStrongbridge Biopharma plc.3. License and Assignment Agreement, dated as of January 16, 2018, between Aeterna Zentaris GmbH andStrongbridge Ireland Limited.  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 7.15 to Term Loan AgreementRESTRICTIVE AGREEMENTSNone.  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 7.16 to Term Loan AgreementREAL PROPERTY OWNED OR LEASED BY BORROWER OR ANY SUBSIDIARY1. Owned PropertyNone2. Leased PropertyName of BorrowerAddress/City/State/Zip Code(County)Description of Assets and ValueStrongbridge U.S. Inc.900 Northbrook Dr, Trevose PALeased officeStrongbridge U.S. Inc.555 E Lancaster Ave Radnor PALeased office**This has been subleased out  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 7.17 to Term Loan AgreementPENSION MATTERSNone.  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 9.05 to Term Loan AgreementEXISTING INVESTMENTSNone.  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 9.10 to Term Loan AgreementTRANSACTIONS WITH AFFILIATESNone.  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Schedule 9.14 to Term Loan AgreementPERMITTED SALES AND LEASEBACKSNone.  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Exhibit A to Term Loan AgreementFORM OF [GUARANTEE][CO-BORROWER] ASSUMPTION AGREEMENT[GUARANTEE][CO-BORROWER] ASSUMPTION AGREEMENT dated as of [DATE] by [NAME OF ADDITIONAL[SUBSIDIARY GUARANTOR][BORROWER], a ________ [corporation][limited liability company][other type of business entity] (the“Additional Obligor”), in favor of CRG SERVICING LLC, as administrative agent and collateral agent (the “Administrative Agent”) forthe benefit of the Secured Parties under that certain Term Loan Agreement, dated as of July 14, 2017 (as amended, amended and restated,supplemented or otherwise modified, renewed, refinanced or replaced, the “Loan Agreement”), among STRONGBRIDGE U.S. INC., aDelaware corporation (“U.S. Borrower”), STRONGBRIDGE BIOPHARMA PUBLIC LIMITED COMPANY, a public limited companyincorporated under the laws of Ireland (“Parent”), STRONGBRIDGE IRELAND LIMITED, a private limited company incorporated underthe laws of Ireland (“Irish Borrower”), CORTENDO CAYMAN LTD., an exempted company incorporated in the Cayman Islands(“Cayman Borrower”), CORTENDO AB (PUBL), a public limited liability company incorporated under the laws of Sweden withregistration number 556537-6554 (“Swedish Borrower” and together with the U.S. Borrower, Parent, Irish Borrower, Cayman Borrower,and each other Person that becomes, or is required to become, a “Borrower” after the date hereof pursuant to Section 8.12(a) or (b) thereof,each a “Borrower” and collectively, “Borrowers”), Administrative Agent, the lenders from time to time party thereto and the SubsidiaryGuarantors from time to time party thereto. The terms defined in the Loan Agreement are herein used as therein defined.Pursuant to Section 8.12(a) of the Loan Agreement, the Additional Obligor hereby agrees to become a [“Subsidiary Guarantor”][“Borrower”] for all purposes of the Loan Agreement, and a “Grantor” for all purposes of the Security Agreement. Without limiting theforegoing, the Additional Obligor hereby[, jointly and severally with the other Guarantors, guarantees to the Lenders and their successorsand assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of all Guaranteed Obligations(as defined in Section 14.01 of the Loan Agreement) in the same manner and to the same extent as is provided in Section 14 of the LoanAgreement][assumes all Obligations on an absolute and unconditional, joint and several with the other Borrowers, basis, irrespective ofthe value, genuineness, validity, regularity or enforceability of the Obligations of any Obligor or any substitution, release or exchange ofany other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by applicable law, irrespective of anyother circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, as furtherprovided under Section 13.22 of the Loan Agreement]. In addition, as of the date hereof, the Additional Obligor hereby makes therepresentations and warranties set forth in Sections 7.01, 7.02, 7.03, 7.05(a), 7.06, 7.07, 7.08 and 7.18 of the Loan Agreement, and inSection 2 of the Security Agreement, with respect to itself and its obligations under this Agreement and the other  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Loan Documents, as if each reference in such Sections to the Loan Documents included reference to this Agreement, such representationsand warranties to be made as of the date hereof.The Additional Obligor hereby instructs its counsel to deliver the opinions referred to in Section 8.12(a) of the Loan Agreementto Administrative Agent.IN WITNESS WHEREOF, the Additional Obligor has caused this [Borrower][Guarantee] Assumption Agreement to be dulyexecuted and delivered as of the day and year first above written. [ADDITIONAL SUBSIDIARYGUARANTOR][BORROWER] By Name: Title:  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Exhibit C-1 to Term Loan AgreementFORM OF U.S. TAX COMPLIANCE CERTIFICATE(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)Reference is hereby made to the Term Loan Agreement dated as of July 14, 2017 (as amended by Amendment No. 1 dated as ofJanuary [__], 2018 and as further amended, amended and restated, supplemented or otherwise modified from time to time, the “LoanAgreement”), among STRONGBRIDGE U.S. INC., a Delaware corporation (the “Lead Borrower”), STRONGBRIDGE BIOPHARMAPUBLIC LIMITED COMPANY, a public limited company incorporated under the laws of Ireland (“Parent”), STRONGBRIDGE IRELANDLIMITED, a private limited company incorporated under the laws of Ireland (“Irish Borrower”), CORTENDO CAYMAN LTD., anexempted company incorporated in the Cayman Islands (“Cayman Borrower”), CORTENDO AB (PUBL), a public limited liabilitycompany incorporated under the laws of Sweden with registration number 556537-6554 (“Swedish Borrower” and together with the LeadBorrower, Parent, Irish Borrower, Cayman Borrower and each other Person that becomes, or is required to become, a “Borrower” after thedate thereof pursuant to Section 8.12(a) or (b) thereof, each a “Borrower” and collectively, “Borrowers”), CRG Servicing LLC, asadministrative agent and collateral agent (in such capacities, the “Administrative Agent”), and each lender from time to time party thereto.Pursuant to the provisions of Section 5.03 of the Term Loan Agreement, the undersigned hereby certifies that (i) it is the solerecord and beneficial owner of the Loan(s) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning ofSection 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrowers within the meaning of Section 871(h)(3)(B) of theCode and (iv) it is not a controlled foreign corporation related to the Borrowers as described in Section 881(c)(3)(C) of the Code.The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRSForm W-8BEN or W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided onthis certificate changes, the undersigned shall promptly so inform the Lead Borrower and the Administrative Agent, and (2) theundersigned shall have at all times furnished the Lead Borrower and the Administrative Agent with a properly completed and currentlyeffective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendaryears preceding such payments.Exhibit C-1-1  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them inthe Loan Agreement.[Signature follows]Exhibit C-1-2  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed and delivered as of the date indicatedbelow.[NAME OF NON-U.S. LENDER] By Name: Title: Date: Exhibit C-1-3  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Exhibit C-2 to Term Loan AgreementFORM OF U.S. TAX COMPLIANCE CERTIFICATE(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)Reference is hereby made to the Term Loan Agreement dated as of July 14, 2017 (as amended by Amendment No. 1 dated as ofJanuary 16, 2018 and as further amended, amended and restated, supplemented or otherwise modified from time to time, the “LoanAgreement”), among STRONGBRIDGE U.S. INC., a Delaware corporation (“Lead Borrower”), STRONGBRIDGE BIOPHARMA PUBLICLIMITED COMPANY, a public limited company incorporated under the laws of Ireland (“Parent”), STRONGBRIDGE IRELANDLIMITED, a private limited company incorporated under the laws of Ireland (“Irish Borrower”), CORTENDO CAYMAN LTD., anexempted company incorporated in the Cayman Islands (“Cayman Borrower”), CORTENDO AB (PUBL), a public limited liabilitycompany incorporated under the laws of Sweden with registration number 556537-6554 (“Swedish Borrower” and together with the LeadBorrower, Parent, Irish Borrower, Cayman Borrower and each other Person that becomes, or is required to become, a “Borrower” after thedate thereof pursuant to Section 8.12(a) or (b) thereof, each a “Borrower” and collectively, “Borrowers”), CRG Servicing LLC, asadministrative agent and collateral agent (in such capacities, the “Administrative Agent”), and each lender from time to time party thereto.Pursuant to the provisions of Section 5.03 of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record andbeneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrowers within the meaning of Section 871(h)(3)(B) of the Code,and (iv) it is not a controlled foreign corporation related to the Borrowers as described in Section 881(c)(3)(C) of the Code.The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificatechanges, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished suchLender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to theundersigned, or in either of the two calendar years preceding such payments.Exhibit C-2-1  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them inthe Loan Agreement.[Signature follows]Exhibit C-2-2  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed and delivered as of the date indicatedbelow.[NAME OF NON-U.S. PARTICIPANT] By Name: Title: Date: Exhibit C-2-3  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Exhibit C-3 to Term Loan AgreementFORM OF U.S. TAX COMPLIANCE CERTIFICATE(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)Reference is hereby made to the Term Loan Agreement dated as of July 14, 2017 (as amended by Amendment No. 1 dated as ofJanuary 16, 2018 and as further amended, amended and restated, supplemented or otherwise modified from time to time, the “LoanAgreement”), among STRONGBRIDGE U.S. INC., a Delaware corporation (“Lead Borrower”), STRONGBRIDGE BIOPHARMA PUBLICLIMITED COMPANY, a public limited company incorporated under the laws of Ireland (“Parent”), STRONGBRIDGE IRELANDLIMITED, a private limited company incorporated under the laws of Ireland (“Irish Borrower”), CORTENDO CAYMAN LTD., anexempted company incorporated in the Cayman Islands (“Cayman Borrower”), CORTENDO AB (PUBL), a public limited liabilitycompany incorporated under the laws of Sweden with registration number 556537-6554 (“Swedish Borrower” and together with the LeadBorrower, Parent, Irish Borrower, Cayman Borrower and each other Person that becomes, or is required to become, a “Borrower” after thedate thereof pursuant to Section 8.12(a) or (b) thereof, each a “Borrower” and collectively, “Borrowers”), CRG Servicing LLC, asadministrative agent and collateral agent (in such capacities, the “Administrative Agent”), and each lender from time to time party thereto.Pursuant to the provisions of Section 5.03 of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole recordowner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the solebeneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirectpartners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business withinthe meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of theBorrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlledforeign corporation related to the Borrowers as described in Section 881(c)(3)(C) of the Code.The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms fromeach of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E, as applicable, or (ii)an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E, as applicable, from each of such partner’s/member’sbeneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if theinformationExhibit C-3-1  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all timesfurnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is tobe made to the undersigned, or in either of the two calendar years preceding such payments.Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them inthe Loan Agreement.[Signature follows]Exhibit C-3-2  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed and delivered as of the date indicatedbelow.[NAME OF NON-U.S. PARTICIPANT] By Name: Title: Date: Exhibit C-3-3  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Exhibit C-4 to Term Loan AgreementFORM OF U.S. TAX COMPLIANCE CERTIFICATE(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)Reference is hereby made to the Term Loan Agreement dated as of July 14, 2017 (as amended by Amendment No. 1 dated as ofJanuary 16, 2018 and as further amended, amended and restated, supplemented or otherwise modified from time to time, the “LoanAgreement”), among STRONGBRIDGE U.S. INC., a Delaware corporation (“Lead Borrower”), STRONGBRIDGE BIOPHARMA PUBLICLIMITED COMPANY, a public limited company incorporated under the laws of Ireland (“Parent”), STRONGBRIDGE IRELANDLIMITED, a private limited company incorporated under the laws of Ireland (“Irish Borrower”), CORTENDO CAYMAN LTD., anexempted company incorporated in the Cayman Islands (“Cayman Borrower”), CORTENDO AB (PUBL), a public limited liabilitycompany incorporated under the laws of Sweden with registration number 556537-6554 (“Swedish Borrower” and together with the LeadBorrower, Parent, Irish Borrower, Cayman Borrower and each other Person that becomes, or is required to become, a “Borrower” after thedate thereof pursuant to Section 8.12(a) or (b) thereof, each a “Borrower” and collectively, “Borrowers”), CRG Servicing LLC, asadministrative agent and collateral agent (in such capacities, the “Administrative Agent”), and each lender from time to time party thereto.Pursuant to the provisions of Section 5.03 of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole recordowner of the Loan(s) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficialowners of such Loan(s), (iii) with respect to the extension of credit pursuant to this Loan Agreement or any other Loan Document, neitherthe undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into inthe ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirectpartners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of itsdirect or indirect partners/members is a controlled foreign corporation related to the Borrowers as described in Section 881(c)(3)(C) of theCode.The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of thefollowing forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E, as applicable, from each of suchpartner’s/member’s beneficial owners that is claiming theExhibit C-4-1  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificatechanges, the undersigned shall promptly so inform the Lead Borrower and the Administrative Agent, and (2) the undersigned shall have atall times furnished the Lead Borrower and the Administrative Agent with a properly completed and currently effective certificate in eitherthe calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them inthe Loan Agreement.[Signature follows]Exhibit C-3-2  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed and delivered as of the date indicatedbelow.[NAME OF NON-U.S. LENDER] By Name: Title: Date: Exhibit C-3-3  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Exhibit D to Term Loan AgreementFORM OF COMPLIANCE CERTIFICATE[DATE]This certificate is delivered pursuant to Section 8.01(d) of the Term Loan Agreement, dated as of July 14, 2017 (as the same maybe amended, amended and restated, supplemented or otherwise modified from time to time, the “Loan Agreement”), amongSTRONGBRIDGE U.S. INC., a Delaware corporation (“Lead Borrower”), STRONGBRIDGE BIOPHARMA PUBLIC LIMITEDCOMPANY, a public limited company incorporated under the laws of Ireland (“Parent”), STRONGBRIDGE IRELAND LIMITED, a privatelimited company incorporated under the laws of Ireland, CORTENDO CAYMAN LTD., an exempted company incorporated in the CaymanIslands, CORTENDO AB (PUBL), a public limited liability company incorporated under the laws of Sweden with registration number556537-6554 , CRG Servicing LLC, as administrative agent and collateral agent (in such capacities, the “Administrative Agent”), and thelenders, the other borrowers from time to time party thereto and the subsidiary guarantors from time to time party thereto. Capitalizedterms used herein and not otherwise defined herein are used herein as defined in the Loan Agreement.The undersigned, a duly authorized Responsible Officer of Lead Borrower having the name and title set forth below under hissignature, hereby certifies, on behalf of Lead Borrower for the benefit of the Secured Parties and pursuant to Section 8.01(d) of the LoanAgreement that such Responsible Officer of Lead Borrower is familiar with the Loan Agreement and that, in accordance with each of thefollowing sections of the Loan Agreement, each of the following is true on the date hereof, both before and after giving effect to any Loanto be made on or before the date hereof:In accordance with Section 8.01[(a)/(b)] of the Loan Agreement, attached hereto as Annex A are the financial statements for the[fiscal quarter/fiscal year] ended [__________] required to be delivered pursuant to Section 8.01[(a)/(b)] of the Loan Agreement. Suchfinancial statements fairly present in all material respects the consolidated financial position, results of operations and cash flow of Parentand its Subsidiaries as at the dates indicated therein and for the periods indicated therein in accordance with GAAP [(subject to the absenceof footnote disclosure and normal year-end audit adjustments)] [without qualification as to the scope of the audit. The examination bysuch auditors in connection with such financial statements has been made in accordance with the standards of the United States’ PublicCompany accounting Oversight Board (or any successor entity).] Insert language in brackets only for quarterly certifications.Insert language in brackets only for annual certifications. 121 2  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Attached hereto as Annex B are the calculations used to determine compliance with each financial covenant contained in Section10 of the Loan Agreement.No Default or Event of Default is continuing as of the date hereof[, except as provided for on Annex C attached hereto, withrespect to each of which Lead Borrower proposes to take the actions set forth on Annex C].  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. IN WITNESS WHEREOF, the undersigned has executed this certificate on the date first written above. STRONGBRIDGE U.S. INC. By Name: Title:  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Annex A to Compliance CertificateFINANCIAL STATEMENTS[see attached]  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Annex B to Compliance CertificateCALCULATIONS OF FINANCIAL COVENANT COMPLIANCEI.Section 10.01: Minimum Liquidity A.Amount of unencumbered (other than by Liens described in Sections 9.02(a), 9.02(c) (provided that there is no default under the documentation governingthe Permitted Priority Debt) and 9.02(j)) cash and Permitted Cash EquivalentInvestments (which for greater certainty shall not include any undrawn creditlines), in each case, to the extent held in an account over which the Lendershave a perfected security interest:$__________B.The greater of:$__________ (1) $3,000,000 and (2) to the extent Borrower has incurred Permitted Priority Debt, theminimum cash balance required of Borrower by Borrower’s Permitted PriorityDebt creditors Is Line IA greater than Line IB?:Yes: In compliance; No: Not incomplianceII.Section 10.02(a)-(e): Minimum Revenue—Subsequent Periods A.Revenues during the twelve month period beginning on January 1, 2017$__________ [Is line II.A equal to or greater than $[****]?Yes: In compliance; No: Not incompliance]B.Revenues during the twelve month period beginning on January 1, 2018$__________ Include Part II starting with the Compliance Certificate to be delivered within 90 days of the end of 2017pursuant to Section 8.01(d) of the Loan AgreementInclude bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2017 pursuant to Section8.01(d) of the Loan Agreement. 343 4  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. [Is line II.B equal to or greater than $[****]?Yes: In compliance; No: Not incompliance]C.Revenues during the twelve month period beginning on January 1, 2019$__________ [Is line II.C equal to or greater than $[****]?Yes: In compliance; No: Not incompliance]D.Revenues during the twelve month period beginning on January 1, 2020$__________ [Is line II.D equal to or greater than $[****]?Yes: In compliance; No: Not incompliance]E.Revenues during the twelve month period beginning on January 1, 2021$__________ [Is line II.E equal to or greater than $[****]?Yes: In compliance; No: Not incompliance]F.Revenues during the twelve month period beginning on January 1, 2022$__________ [Is line II.E equal to or greater than $[****]?Yes: In compliance; No: Not incompliance] Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2018 pursuant to Section8.01(d) of the Loan Agreement.Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2019 pursuant to Section8.01(d) of the Loan Agreement.Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2020 pursuant to Section8.01(d) of the Loan Agreement.Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2021 pursuant to Section8.01(d) of the Loan Agreement.Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2022 pursuant to Section8.01(d) of the Loan Agreement. 567895 6 7 8 9  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Exhibit I to Term Loan Agreement[FORM OF WARRANTTHIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BEOFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THEACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATIONREQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OFCOUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE, TRANSFER, PLEDGE ORHYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THISWARRANT MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TOTHE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTEDHEREBY.WARRANT TO PURCHASE ORDINARY SHARESOFSTRONGBRIDGE BIOPHARMA PLCDated as of [__], [__] (the “Issue Date”)Void after the date specified in Section 8Warrant to Purchase[__] Ordinary Shares(subject to adjustment)THIS CERTIFIES THAT, for value received, [__], or its registered assigns (the “Holder”), is entitled, subject to the provisions andupon the terms and conditions set forth herein, to purchase from STRONGBRIDGE BIOPHARMA PLC, a public limited companyincorporated under the laws of Ireland (the “Company”), that number of shares (the “Shares”) of the Company’s ordinary shares, of nominalvalue $0.01 per share (the “Ordinary Shares”), at such times and at the price per Share, set forth in Section 1. The term “Warrant” as usedherein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein. This Warrant is issuedin connection with the transactions described in the Term Loan Agreement, dated as of July 14, 2017, and amended as of January 16, 2018,by and between the Company, the Subsidiary Guarantors from time to time party thereto, the Lenders from time to time party thereto andCRG Servicing LLC.The following is a statement of the rights of the Holder and the conditions to which this Warrant is subject, and to which Holder,by acceptance of this Warrant, agrees:1. Number and Price of Shares; Exercise Period.(a) Number of Shares. Subject to any previous exercise of the Warrant, the Holder shall have the right to purchase up to[__] Shares, as may be adjusted pursuant hereto prior to (or in connection with) the expiration of this Warrant as provided in Section 8.  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (b) Exercise Price. The exercise price per Share shall be equal to [__], subject to adjustment pursuant hereto (the“Exercise Price”), provided however, the exercise price shall never be less than the nominal value of an Ordinary Share.(c) Exercise Period. This Warrant shall be exercisable, in whole or in part, prior to (or in connection with) the expirationof this Warrant as set forth in Section 8.2. Exercise of the Warrant.(a) Exercise. The purchase rights represented by this Warrant may be exercised at the election of the Holder, in whole orin part, in accordance with Section 1, by:(i) the tender to the Company at its principal office (or such other office or agency as the Company maydesignate) of a notice of exercise in the form of Exhibit A (the “Notice of Exercise”), duly completed and executed by or on behalf of theHolder, together with the surrender of this Warrant; and(ii) the payment to the Company of an amount equal to (x) the Exercise Price multiplied by (y) the numberof Shares being purchased, by wire transfer or certified, cashier’s or other check acceptable to the Company and payable to the order of theCompany.(b) Net Issue Exercise. In lieu of exercising this Warrant pursuant to Section 2(a)(ii), if the fair market value of one Shareis greater than the Exercise Price (at the date of calculation as set forth below), the Holder may elect to receive a number of Shares, paid-upto their nominal value, equal to the value of this Warrant (or of any portion of this Warrant being canceled) by surrender of this Warrant atthe principal office of the Company (or such other office or agency as the Company may designate) together with a properly completedand executed Notice of Exercise reflecting such election and the payment to the Company of an amount equal to (x) the nominal value of aShare multiplied by (y) the number of Shares being purchased (the “Nominal Value Payment Amount”), by wire transfer or certified,cashier’s or other check acceptable to the Company and payable to the order of the Company, in which event the Company shall issue tothe Holder that number of Shares computed using the following formula:X=Y (A – B)A LANDLORDWhere:X = The number of Shares to be issued to the HolderY = The number of Shares to be purchased (as specified in paragraph 1 of the applicable Notice of Exercise)A = The fair market value of one Ordinary Share (at the date of such calculation)B = The Exercise Price (as adjusted to the date of such calculation) less the nominal value of one Ordinary ShareFor purposes of the calculation above, the fair market value of one Share shall be determined as follows:  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (i) if the Ordinary Shares are traded on any securities exchange or quoted on an established automated over-the-counter market, the fair market value shall be deemed to be the average of the closing prices over a ten (10) Trading Day periodending five (5) Trading Days before the date of calculation; or(ii) if at any time the Ordinary Shares are not listed on any securities exchange or quoted on an establishedautomated over-the-counter market, the fair market value of Ordinary Shares shall be the price per Ordinary Share which theCompany could obtain from a willing buyer (not a current employee or director) for Ordinary Shares sold by the Company, fromauthorized but unissued Ordinary Shares, as determined in good faith by its Board of Directors, unless the Company shall becomesubject to a Reorganization, in which case the fair market value of the Ordinary Shares shall be deemed to be the per share valuereceived by the holders of the Company’s Ordinary Shares pursuant to such Reorganization.For purposes hereof, the date of calculation shall be the date the Holder sends to the Company a Notice of Exercise. “TradingDay” means a day in which trading in the Ordinary Shares generally occurs on The Nasdaq Global Select Market or if the Ordinary Sharesare not then listed on The Nasdaq Global Select Market, on the principal other U.S. national or regional securities exchange on which theOrdinary Shares are then listed, or if the Ordinary Shares are not then listed on a U.S. national or regional securities exchange, on theprincipal other market on which the Ordinary Shares are then traded. If the Ordinary Shares are not so listed or traded, “Trading Day”means any Business Day. “Business Day” means any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank ofNew York is authorized or required by law or executive order to close or be closed.(c) Exercise Prior to Expiration. To the extent this Warrant is not previously exercised as to all Shares subject hereto,and if the fair market value of one Share is greater than the Exercise Price then in effect, this Warrant shall be deemed automaticallyexercised pursuant to Section 2(b) (even if not surrendered) immediately before its expiration and the Holder shall be deemed to haveprovided, in connection with such exercise, an undertaking to pay the Nominal Value Payment Amount to the Company in cash ondemand. For purposes of such automatic exercise, the fair market value of one Share upon such expiration shall be determined pursuant toSection 2(b). To the extent this Warrant or any portion thereof is deemed automatically exercised pursuant to this Section 2(c), theCompany agrees to promptly notify the Holder of the number of Shares, if any, the Holder is to receive by reason of such automaticexercise.(d) Share Certificates. This Warrant shall be deemed to have been exercised and the Shares issuable upon such exerciseshall be deemed to have been issued immediately prior to the close of business on the date this Warrant is exercised in accordance with itsterms, and the person entitled to receive the Shares issuable upon such exercise shall be treated for all purposes as the holder of record ofsuch Shares as of the close of business on such date. As promptly as reasonably practicable on or after such date, the Company shall issueand deliver to the person or persons entitled to receive the same a certificate or certificates for that number of Shares issuable upon suchexercise. In the event that this Warrant is exercised in part and has not expired, the Company shall execute and deliver a new Warrantreflecting the number of Shares that remain subject to this Warrant.(e) No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon theexercise of this Warrant. In lieu of such fractional share to which the Holder would otherwise be entitled, the Company shall make a cashpayment equal to the Exercise Pricemultiplied by such fraction.(f) Conditional Exercise. The Holder may exercise this Warrant conditioned upon (and effective immediately prior to)consummation of any transaction that would cause the expiration of this Warrant pursuant to Section 8 by so indicating in the notice ofexercise.(g) Reservation of Shares. The Company agrees during the term this Warrant is exercisable to reserve and keep availablefrom its authorized and unissued Ordinary Shares such number of Ordinary Shares as shall  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. from time to time be sufficient to effect the exercise of this Warrant; and if at any time the number of authorized but unissued OrdinaryShares shall not be sufficient for purposes of the exercise of this Warrant in accordance with its terms, without limitation of such otherremedies as may be available to the Holder, the Company will use all reasonable efforts to take such corporate action as may be necessaryto increase its authorized and unissued Ordinary Shares of the Company to a number of Ordinary Shares as shall be sufficient for suchpurposes. The Company represents and warrants that all Shares that may be issued upon the exercise of this Warrant will, when issued inaccordance with the terms hereof, be validly issued, fully paid and nonassessable.(h) Issued Securities. The Company represents and warrants to the Holder that all issued and outstanding OrdinaryShares or any other securities of the Company have been duly authorized and validly issued and are fully paid and nonassessable. Alloutstanding Ordinary Shares and any other securities were issued in full compliance with all federal and state securities laws. In addition,as of the date immediately preceding the date of this Warrant:(i) A description of the Company’s capitalization attached hereto as Schedule A is true and complete, inall material respects, as of the Issue Date.(ii) Except for this Warrant and as otherwise disclosed on Schedule A, there are no other options, warrants,conversion privileges or other rights presently outstanding to purchase or otherwise acquire any authorized but unissued shares of theCompany’s share capital or other securities of the Company.3. Replacement of the Warrant. Subject to the receipt of evidence reasonably satisfactory to the Company of the loss, theft,destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonablysatisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, theCompany at the expense of the Holder shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.4. Transfer of the Warrant.(a) Warrant Register. The Company shall maintain a register (the “Warrant Register”) containing the name and addressof the Holder or Holders. Until this Warrant is transferred on the Warrant Register in accordance herewith, the Company may treat theHolder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary.Any Holder of this Warrant (or of any portion of this Warrant) may change its address as shown on the Warrant Register by written notice tothe Company requesting a change.(b) Warrant Agent. The Company may appoint an agent for the purpose of maintaining the Warrant Register referred toin Section 4(a), issuing the Shares or other securities then issuable upon the exercise of this Warrant, exchanging this Warrant, replacingthis Warrant or conducting related activities.(c) Transferability of the Warrant. Subject to the provisions of this Warrant with respect to compliance with theSecurities Act of 1933, as amended (the “Securities Act”), as set forth in Section 5, title to this Warrant may be transferred by endorsement(by the transferor and the transferee executing the assignment form attached as Exhibit B (the “Assignment Form”)) and delivery in thesame manner as a negotiable instrument transferable by endorsement and delivery.(d) Exchange of the Warrant upon a Transfer. On surrender of this Warrant (and a properly endorsed Assignment Form)for exchange, subject to the provisions of this Warrant with respect to compliance with the Securities Act and limitations on assignmentsand transfers, the Company shall issue to or on the order of the Holder a new warrant or warrants of like tenor, in the name of the Holder oras the Holder (on payment by the Holder  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. of any applicable transfer taxes)may direct, for the number of shares issuable upon exercise hereof, and the Company shall register anysuch transfer upon the Warrant Register. This Warrant (and the securities issuable upon exercise of this Warrant) must be surrendered to theCompany or its warrant or transfer agent, as applicable, as a condition precedent to the sale, pledge, hypothecation or other transfer of anyinterest in any of the securities represented hereby. (e) Taxes. In no event shall the Company be required to pay any tax which may be payable in respect of any transferinvolved in the issue and delivery of any certificate in a name other than that of the Holder, and the Company shall not be required to issueor deliver any such certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company theamount of such tax or shall have established to the satisfaction of the Company that such tax has been paid or is not payable. 5. Compliance with Securities Laws.By acceptance of this Warrant, the Holder agrees to comply with the following: (a) Restrictions on Transfers. Any transfer of this Warrant or the Shares (the “Securities”) must be in compliance with allapplicable federal and state securities laws. The Holder agrees not to make any sale, assignment, transfer, pledge or other disposition of allor any portion of the Securities, or any beneficial interest therein, unless and until the transferee thereof has agreed in writing for thebenefit of the Company to take and hold such Securities subject to, and to be bound by, the terms and conditions set forth in this Warrantto the same extent as if the transferee were the original Holder hereunder, and either: (i) there is then in effect a registration statement under the Securities Act covering such proposeddisposition and such disposition is made in accordance with such registration statement, or (ii) (A) such Holder shall have given prior written notice to the Company of such Holder’s intention tomake such disposition and shall have furnished the Company with a reasonable detailed description of the manner and circumstances ofthe proposed disposition, (B) the transferee shall have made the representations set forth in Section 10 with respect to itself as a Holder and(C) if requested by the Company, such Holder shall have furnished the Company, at the Holder’s expense, with (i) evidence reasonablysatisfactory to the Company that such disposition will not require registration of such Securities under the Securities Act or (ii) a legalopinion to the effect that the transfer of such Securities may be effected in compliance with the terms of the SecuritiesAct. Notwithstanding the foregoing, compliance with clauses (B) and (C) above shall not be required for any transfer in compliance withRule 144 and compliance with clause (C) above shall not be required for any transfer by the Holder to any affiliate of the Holder (or anyfund or partnership under common control with one of more general partners or managing members of, or shares the same managementcompany with, the Holder) or a transfer by the Holder to any of the Holder’s partners, members or other equity owners, or retired partners,members or other equity owners or the estate of any partners, members or other equity owners or retired partners, members or other equityowners. (b) Investment Representation Statement. Unless this Warrant is exercised pursuant to an effective registration statementunder the Securities Act that includes the Shares with respect to which the Warrant was exercised or pursuant to Section 2(b) that results inthe Shares issued upon exercise being eligible for resale under Rule 144, it shall be a condition to any exercise of this Warrant that theHolder shall have confirmed the representations set forth in Section 10 hereof. (c) Securities Law Legend. Subject to Section 5(e), the Securities shall (unless otherwise permitted by the provisions ofthis Warrant) be stamped or imprinted with a legend substantially similar to the following (in addition to any legend required by statesecurities laws): THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, ASAMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED ORHYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS INACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUEROF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THATSUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANYAPPLICABLE STATE SECURITIES LAWS. THIS CERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITSTRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANYINTEREST IN ANY OF THE SECURITIES REPRESENTED HEREBY. (d) Instructions Regarding Transfer Restrictions. Subject to Section 5(e), the Holder consents to the Company making anotation on its records and giving instructions to any transfer agent in order to implement the restrictions on transfer established in thisSection 5. (e) Removal of Legend. The legend referring to federal and state securities laws identified in Section 5(c) stamped on acertificate evidencing the Shares and the transfer instructions and record notations with respect to the Securities shall be removed promptlyupon request by the Holder and the Company shall issue a certificate without such legend to the holder of such Securities if (i) suchSecurities are registered under the Securities Act, (ii) such securities are eligible for resale under Rule 144, or (iii) such holder provides theCompany with an opinion of counsel reasonably acceptable to the Company to the effect that a sale or transfer of such securities may bemade without registration or qualification. (f) Compliance with Securities Laws. The Holder is aware of the restrictions imposed by the United States securities lawson the purchase or sale of securities by any person who has received material, non-public information from the issuer of such securities andon the communication of such information to any other person when it is reasonably foreseeable that such other person is likely topurchase or sell such securities in reliance upon such information. 6. Adjustments. Subject to the expiration of this Warrant pursuant to Section 8, the number and kind of shares purchasablehereunder and the Exercise Price therefor are subject to adjustment from time to time, as follows: (a) Merger or Reorganization. If at any time there shall be any reorganization, recapitalization, merger or consolidation(a “Reorganization”) involving the Company (other than as otherwise provided for herein or as would cause the expiration of this Warrantunder Section 8) in which Ordinary Shares of the Company are converted into or exchanged for securities, cash or other property, then, as apart of such Reorganization, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of thisWarrant, the kind and amount of securities, cash or other property of the successor corporation resulting from such Reorganization(collectively, “Reference Property”), equivalent in value to that which a holder of the Shares deliverable upon exercise of this Warrantwould have been entitled to receive in such Reorganization if the right to purchase the Shares hereunder had been exercised immediatelyprior to such Reorganization. In any such case, appropriate adjustment (as determined in good faith by the Board of Directors of thesuccessor corporation) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of theHolder after such Reorganization to the end that the provisions of this Warrant shall be applicable after the event, as near as reasonablymay be, in relation to any shares or other securities deliverable after that event upon the exercise of this Warrant. Without limiting theforegoing, in connection with any Reorganization, upon the closing thereof, the successor or surviving entity shall assume the obligationsof this Agreement. The provisions of this Section 6(a) shall similarly apply to successive Reorganizations. (b) Reclassification of Shares. If the securities issuable upon exercise of this Warrant are changed into the same or adifferent number of securities of any other class or classes by reclassification, capital reorganization  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. or otherwise (other than as otherwise provided for herein) (a “Reclassification”), then, in any such event, in lieu of the number of Shareswhich the Holder would otherwise have been entitled to receive, the Holder shall have the right thereafter to exercise this Warrant for anumber of Shares of such other class or classes of shares that a holder of the number of securities deliverable upon exercise of this Warrantimmediately before that change would have been entitled to receive in such Reclassification, all subject to further adjustment as providedherein with respect to such other shares. (c) Subdivisions and Combinations. In the event that the outstanding Ordinary Shares are subdivided (by shares split, bypayment of a shares dividend or otherwise) into a greater number of Ordinary Shares, the number of Shares issuable upon exercise of thethis Warrant immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionatelyincreased, and the Exercise Price shall be proportionately decreased, and in the event that the outstanding Ordinary Shares are combined(by reclassification or otherwise) into a lesser number of Ordinary Shares, the number of Shares issuable upon exercise of the this Warrantimmediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately decreased, andthe Exercise Price shall be proportionately increased. (d) Notice of Adjustments. Upon any adjustment in accordance with this Section 6, the Company shall give noticethereof to the Holder, which notice shall state the event giving rise to the adjustment, the Exercise Price as adjusted and the number ofsecurities or other property purchasable upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation ofeach. The Company shall, upon the written request of any Holder, furnish or cause to be furnished to such Holder a certificate setting forth(i) such adjustments, (ii) the Exercise Price at the time in effect and (iii) the number of securities and the amount, if any, of other propertythat at the time would be received upon exercise of this Warrant. 7. Notification of Certain Events.Prior to the expiration of this Warrant pursuant to Section 8, in the event that the Companyshall authorize: (a) the issuance of any dividend or other distribution on the share capital of the Company (other than (i) dividends ordistributions otherwise provided for in Section 6, (ii) repurchases of Ordinary Shares issued to or held by employees, officers, directors orconsultants of the Company or its subsidiaries upon termination of their employment or services pursuant to agreements providing for theright of said repurchase; (iii) repurchases of Ordinary Shares issued to or held by employees, officers, directors or consultants of theCompany or its subsidiaries pursuant to rights of first refusal or first offer contained in agreements providing for such rights; or (iv)repurchases of Ordinary Shares in connection with the settlement of disputes with any shareholder ), whether in cash, property, shares orother securities; (b) the voluntary liquidation, dissolution or winding up of the Company; or (c) any transaction resulting in the expiration of this Warrant pursuant to Section 8(b); the Company shall send to the Holder of this Warrant at least ten (10) calendar days prior written notice of the date on which a record shallbe taken for any such dividend or distribution specified in clause (a) or the expected effective date of any such other event specified inclause (b) or (c), as applicable. The notice provisions set forth in this section may be shortened or waived prospectively or retrospectivelyby the consent of the Holder of this Warrant. 8. Expiration of the Warrant. This Warrant shall expire and shall no longer be exercisable as of the earlier of: (a) 5:00 p.m., Pacific time, on [__], [__]; or  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (b) (i) the acquisition of the Company by another entity by means of any transaction or series of related transactions towhich the Company is a party (including, without limitation, any share acquisition, reorganization, merger or consolidation, but excludingany sale of shares for capital raising purposes and any transaction effected primarily for purposes of changing the Company’s jurisdictionof incorporation) other than a transaction or series of related transactions in which the holders of the voting securities of the Companyoutstanding immediately prior to such transaction or series of related transactions receive voting securities of such other surviving orresulting entity (or if the Company or such other surviving or resulting entity is a wholly-owned subsidiary immediately following suchacquisition, its parent), or (ii) a sale, lease or other disposition of all or substantially all of the assets of the Company and its subsidiariestaken as a whole by means of any transaction or series of related transactions, except where such sale, lease or other disposition is to awholly-owned subsidiary of the Company; provided that the holders of Shares in the transaction described in (i) or (ii) above receive cashor cash equivalents in such transaction with an aggregate value per Ordinary Share greater than two times the Exercise Price. 9. No Rights as a Shareholder. Nothing contained herein shall entitle the Holder to any rights as a shareholder of the Company orto be deemed the holder of any securities that may at any time be issuable on the exercise of the rights hereunder for any purpose nor shallanything contained herein be construed to confer upon the Holder, as such, any right to vote for the election of directors or upon anymatter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon anyrecapitalization, issuance of shares, reclassification of shares, change of nominal value or change of shares to no nominal value,consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or anyother rights of a shareholder of the Company until this Warrant shall have been exercised. 10. Representations and Warranties of the Holder. By acceptance of this Warrant, the Holder represents and warrants to theCompany as follows: (a) No Registration. The Holder understands that the Securities have not been, and will not be, registered under theSecurities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which dependsupon, among other things, the bona fide nature of the investment intent and the accuracy of the Holder’s representations as expressedherein or otherwise made pursuant hereto. (b) Investment Intent. The Holder is acquiring the Securities for investment for its own account, not as a nominee oragent, and not with a view to, or for resale in connection with, any distribution thereof. The Holder has no present intention of selling,granting any participation in, or otherwise distributing the Securities, nor does it have any contract, undertaking, agreement orarrangement for the same. (c) Investment Experience. The Holder has substantial experience in evaluating and investing in private placementtransactions of securities in companies similar to the Company, and has such knowledge and experience in financial or business matters sothat it is capable of evaluating the merits and risks of its investment in the Company and protecting its own interests. (d) Speculative Nature of Investment. The Holder understands and acknowledges that its investment in the Company ishighly speculative and involves substantial risks. The Holder can bear the economic risk of its investment and is able, without impairingits financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of its investment. (e) Accredited Investor. The Holder is an “accredited investor” within the meaning of Regulation D, Rule 501(a),promulgated by the Securities and Exchange Commission and agrees to submit to the Company such further assurances of such status asmay be reasonably requested by the Company. The Holder has furnished or made available any and all information requested by theCompany or otherwise necessary to satisfy any applicable verification requirements as to “accredited investor” status. Any suchinformation is true, correct, timely and complete.  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. (f) Residency. The residency of the Holder (or, in the case of a partnership or corporation, such entity’s principal place ofbusiness) is correctly set forth on the signature page hereto. (g) Restrictions on Resales. The Holder acknowledges that the Securities must be held indefinitely unless subsequentlyregistered under the Securities Act or an exemption from such registration is available. The Holder is aware of the provisions of Rule 144promulgated under the Securities Act, which permit resale of shares purchased in a private placement subject to the satisfaction of certainconditions, which may include, among other things, the availability of certain current public information about the Company; the resaleoccurring not less than a specified period after a party has purchased and paid for the security to be sold; the number of shares being soldduring any three-month period not exceeding specified limitations; the sale being effected through a “broker’s transaction,” a transactiondirectly with a “market maker” or a “riskless principal transaction” (as those terms are defined in the Securities Act or the SecuritiesExchange Act of 1934, as amended, and the rules and regulations promulgated thereunder); and the filing of a Form 144 notice, ifapplicable. The Holder acknowledges and understands that the Company may not be satisfying the current public information requirementof Rule 144 at the time the Holder wishes to sell the Securities and that, in such event, the Holder may be precluded from selling theSecurities under Rule 144 even if the other applicable requirements of Rule 144 have been satisfied. The Holder acknowledges that, in theevent the applicable requirements of Rule 144 are not met, registration under the Securities Act or an exemption from registration will berequired for any disposition of the Securities. The Holder understands that, although Rule 144 is not exclusive, the Securities andExchange Commission has expressed its opinion that persons proposing to sell restricted securities received in a private offering other thanin a registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registrationis available for such offers or sales and that such persons and the brokers who participate in the transactions do so at their own risk. 11. Miscellaneous. (a) Amendments. Except as expressly provided herein, neither this Warrant nor any term hereof may be amended, waived,discharged or terminated other than by a written instrument referencing this Warrant and signed by the Company and the Holder of thisWarrant. (b) Waivers. No waiver of any single breach or default shall be deemed a waiver of any other breach or default theretoforeor thereafter occurring. (c) Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailedby registered or certified mail, postage prepaid, sent by facsimile or electronic mail (if to the Holder) or otherwise delivered by hand,messenger or courier service addressed: (i) if to the Holder, to the Holder at the Holder’s address, facsimile number or electronic mail address asshow on the signature page hereto, or at such other current address as the Holder shall have furnished to the Company; or (ii) if to the Company, to the attention of the Chief Executive Officer or Chief Financial Officer of theCompany at the Company’s address, facsimile number or electronic mail address as shown on the signature page hereto, or at such othercurrent address as the Company shall have furnished to the Holder. Each such notice or other communication shall for all purposes of this Warrant be treated as effective or having beengiven (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courierservice, freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if sent via mail, atthe earlier of its receipt or five days after the same has been deposited in a regularly-maintained receptacle for the deposit of the UnitedStates mail, addressed and mailed as  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. aforesaid, or (iii) if sent via facsimile, upon confirmation of facsimile transfer or, if sent via electronic mail, upon confirmation of deliverywhen directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normalbusiness hours of the recipient, then on the recipient’s next business day. In the event of any conflict between the Company’s books andrecords and this Warrant or any notice delivered hereunder, the Company’s books and records will control absent fraud or error. (d) Governing Law. This Warrant and all actions arising out of or in connection with this Warrant shall be governedby and construed in accordance with the laws of the State of New York, without regard to the conflicts of law provisions of the State of NewYork, or of any other state. (e) Jurisdiction and Venue. The Company agrees that any suit, action or proceeding with respect to this Agreement orany other Loan Document to which it is a party or any judgment entered by any court in respect thereof may be brought initially in thefederal or state courts in Houston, Texas or in the courts of its own corporate domicile and irrevocably submits to the non-exclusivejurisdiction of each such court for the purpose of any such suit, action, proceeding or judgment. This Section 13.10(a) is for the benefit ofthe Holder only and, as a result, Holder shall not be prevented from taking proceedings in any other courts with jurisdiction. Nothingherein shall in any way be deemed to limit the ability of the Holder to serve any such process or summonses in any other manner permittedby applicable law. The Company irrevocably waives to the fullest extent permitted by law any objection that it may now or hereafter haveto the laying of the venue of any suit, action or proceeding arising out of or relating to this Warrant and hereby further irrevocably waivesto the fullest extent permitted by law any claim that any such suit, action or proceeding brought in any such court has been brought in aninconvenient forum. A final judgment (in respect of which time for all appeals has elapsed) in any such suit, action or proceeding shall beconclusive and may be enforced in any court to the jurisdiction of which the Company is or may be subject, by suit upon judgment.(f) Titles and Subtitles. The titles and subtitles used in this Warrant are used for convenience only and are not to beconsidered in construing or interpreting this Warrant. All references in this Warrant to sections, paragraphs and exhibits shall, unlessotherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto. (g) Severability. If any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal,unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from thisWarrant, and such illegal, unenforceable or void provision shall be replaced with a valid and enforceable provision that will achieve, to theextent possible, the same economic, business and other purposes of the illegal, unenforceable or void provision. The balance of thisWarrant shall be enforceable in accordance with its terms. (h) Waiver of Jury Trial. EACH OF THE HOLDER AND THE COMPANY WAIVES, TO THE FULLEST EXTENTPERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER BASED ONCONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS WARRANT. (i) California Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THISWARRANT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA ANDTHE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFORPRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BYSECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THISWARRANT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. (j) Saturdays, Sundays and Holidays. If the last or appointed day for the taking of any action or the  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. expiration of any right required or granted herein shall be a Saturday, Sunday or U.S. federal holiday, then such action may be taken orsuch right may be exercised on the next succeeding day that is not a Saturday, Sunday or U.S. federal holiday. (k) Rights and Obligations Survive Exercise of the Warrant. Except as otherwise provided herein, the rights andobligations of the Company and the Holder under this Warrant shall survive exercise of this Warrant. (l) Entire Agreement. Except as expressly set forth herein, this Warrant (including the exhibits attached hereto)constitutes the entire agreement and understanding of the Company and the Holder with respect to the subject matter hereof and supersedeall prior agreements and understandings relating to the subject matter hereof. (signature page follows)  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. The Company and the Holder sign this Warrant as of the date stated on the first page. COMPANY: STRONGBRIDGE BIOPHARMA PLC By Name: Title: Address for Notices: 900 Northbrook Drive Suite 200 Trevose, PA 19053 Attn: Tel.:(610) 254-9200 Fax: Email: With a copy (which shall not constitute notice) to: Reed Smith LLP 599 Lexington Avenue New York, New York 10022 Attention:Aron Izower Tel.:(212) 549-0393 Fax:(212) 521-5450 Email:aizower@reedsmith.comAGREED AND ACKNOWLEDGED, HOLDER: By Name: Title: Address for Notices: [__] Attn:[__] Tel.:[__] Fax:[__] Email:[__]  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. SCHEDULE ACapitalizationClass & Number ofSharesPar ValueAuthorizedIssuedOutstandingPreferred Shares$0.01[__][__][__]Ordinary Shares$0.01[__][__][__]Deferred OrdinaryShares€0.01[__][__][__] Outstanding Options: [__] with weighted average exercise price of $[__].Outstanding Warrants –·[__] Warrants with exercise price of $[__]·[__] Warrants with exercise price of $[__]Outstanding Restricted Stock Units: [__]  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. EXHIBIT A NOTICE OF EXERCISE TO: [ ] (the “Company”) Attention: CHIEF FINANCIAL OFFICER (1)Exercise. The undersigned elects to purchase the following pursuant to the terms of the attached warrant: Number of shares: Type of security: (2)Method of Exercise. The undersigned elects to exercise the attached warrant pursuant to: [ ]A cash payment,and tenders herewith payment of the purchase price for such shares in full, together with allapplicable transfer taxes, if any. [ ]The net issue exercise provisions of Section 2(b) of the attached warrant.(3)Conditional Exercise. Is this a conditional exercise pursuant to Section 2(f): [ ] Yes[ ] No If “Yes,” indicate the applicable condition:(4)Share Certificate. Please issue a certificate or certificates representing the shares in the name of: [ ]The undersigned [ ]Other—Name: Address: (5)Unexercised Portion of the Warrant. Please issue a new warrant for the unexercised portion of the attached warrant in the nameof: [ ]The undersigned [ ]Other—Name: Address:  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. [ ]Not applicable (6)[Investment Intent. The undersigned represents and warrants that the aforesaid shares are being acquired for investment for itsown account and not with a view to, or for resale in connection with, the distribution thereof, and that the undersigned has nopresent intention of selling, granting any participation in, or otherwise distributing the shares, nor does it have any contract,undertaking, agreement or arrangement for the same, and all representations and warranties of the undersigned set forth inSection 10 of the attached warrant are true and correct as of the date hereof. ] (Print name of the warrant holder) (Signature) (Name and title of signatory, if applicable) (Date) (Fax number) (Email address) Include if exercised pursuant to Section 2(a). 1010  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. EXHIBIT B ASSIGNMENT FORM ASSIGNOR: COMPANY: WARRANT:THE WARRANT TO PURCHASE SHARES OF ORDINARY SHARES ISSUED ON [__], [__] (THE “WARRANT”) DATE: (1) Assignment. The undersigned registered holder of the Warrant (“Assignor”) assigns and transfers to the assignee named below(“Assignee”) all of the rights of Assignor under the Warrant, with respect to the number of shares set forth below: Name of Assignee: Address of Assignee: Number of Shares Assigned: and does irrevocably constitute and appoint ______________________ as attorney to make such transfer on the books ofStrongbridge Biopharma plc, maintained for the purpose, with full power of substitution in the premises. (2) Obligations of Assignee. Assignee agrees to take and hold the Warrant and any shares to be issued upon exercise of the rightsthereunder (the “Securities”) subject to, and to be bound by, the terms and conditions set forth in the Warrant to the same extentas if Assignee were the original holder thereof. (3) [Investment Intent. Assignee represents and warrants that the Securities are being acquired for investment for its own account, notas a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and that Assignee has nopresent intention of selling, granting any participation in, or otherwise distributing the shares, nor does it have any contract,undertaking, agreement or arrangement for the same, and all representations and warranties set forth in Section 10 of the Warrantare true and correct as to Assignee as of the date hereof.] Include to the extent required pursuant to Section 5(a). 1111  CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R.SECTIONS 200.80(b)(4), 200.83 AND 230.406. [****]INDICATES OMITTED MATERIAL THAT IS THE SUBJECTOF A CONFIDENTIAL TREATMENT REQUEST FILEDSEPARATELY WITH THE COMMISSION. THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THECOMMISSION. Assignor and Assignee are signing this Assignment Form on the date first set forth above. ASSIGNOR ASSIGNEE (Print name of Assignor) (Print name of Assignee) (Signature of Assignor) (Signature of Assignee) (Print name of signatory, if applicable) (Print name of signatory, if applicable) (Print title of signatory, if applicable) (Print title of signatory, if applicable) Address: Address: -2- EXHIBIT 10.30Exhibit I to Term Loan AgreementFORM OF WARRANTTHIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BEOFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THEACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATIONREQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OFCOUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE, TRANSFER, PLEDGE ORHYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THISWARRANT MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TOTHE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTEDHEREBY. WARRANT TO PURCHASE ORDINARY SHARESOFSTRONGBRIDGE BIOPHARMA PLC Dated as of [__], [__] (the “Issue Date”)Void after the date specified in Section 8 Warrant to Purchase[__] Ordinary Shares (subject to adjustment) THIS CERTIFIES THAT, for value received, [__], or its registered assigns (the “Holder”), is entitled, subject to the provisions andupon the terms and conditions set forth herein, to purchase from STRONGBRIDGE BIOPHARMA PLC, a public limited companyincorporated under the laws of Ireland (the “Company”), that number of shares (the “Shares”) of the Company’s ordinary shares, of nominalvalue $0.01 per share (the “Ordinary Shares”), at such times and at the price per Share, set forth in Section 1. The term “Warrant” as usedherein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein. This Warrant is issuedin connection with the transactions described in the Term Loan Agreement, dated as of July 14, 2017, and amended as of January 16, 2018,by and between the Company, the Subsidiary Guarantors from time to time party thereto, the Lenders from time to time party thereto andCRG Servicing LLC. The following is a statement of the rights of the Holder and the conditions to which this Warrant is subject, and to which Holder,by acceptance of this Warrant, agrees: 1. Number and Price of Shares; Exercise Period. (a) Number of Shares. Subject to any previous exercise of the Warrant, the Holder shall have the right to purchase up to[__] Shares, as may be adjusted pursuant hereto prior to (or in connection with) the expiration of this Warrant as provided in Section 8. (b) Exercise Price. The exercise price per Share shall be equal to [__], subject to adjustment pursuant hereto (the“Exercise Price”), provided however, the exercise price shall never be less than the nominal value of an Ordinary Share.  (c) Exercise Period. This Warrant shall be exercisable, in whole or in part, prior to (or in connection with) the expirationof this Warrant as set forth in Section 8. 2. Exercise of the Warrant. (a) Exercise. The purchase rights represented by this Warrant may be exercised at the election of the Holder, in whole orin part, in accordance with Section 1, by: (i) the tender to the Company at its principal office (or such other office or agency as the Company maydesignate) of a notice of exercise in the form of Exhibit A (the “Notice of Exercise”), duly completed and executed by or on behalf of theHolder, together with the surrender of this Warrant; and (ii) the payment to the Company of an amount equal to (x) the Exercise Price multiplied by (y) the numberof Shares being purchased, by wire transfer or certified, cashier’s or other check acceptable to the Company and payable to the order of theCompany. (b) Net Issue Exercise. In lieu of exercising this Warrant pursuant to Section 2(a)(ii), if the fair market value of one Shareis greater than the Exercise Price (at the date of calculation as set forth below), the Holder may elect to receive a number of Shares, paid-upto their nominal value, equal to the value of this Warrant (or of any portion of this Warrant being canceled) by surrender of this Warrant atthe principal office of the Company (or such other office or agency as the Company may designate) together with a properly completedand executed Notice of Exercise reflecting such election and the payment to the Company of an amount equal to (x) the nominal value of aShare multiplied by (y) the number of Shares being purchased (the “Nominal Value Payment Amount”), by wire transfer or certified,cashier’s or other check acceptable to the Company and payable to the order of the Company, in which event the Company shall issue tothe Holder that number of Shares computed using the following formula: X=Y (A – B)A Where: X=The number of Shares to be issued to the Holder Y=The number of Shares to be purchased (as specified in paragraph 1 of the applicable Notice of Exercise) A=The fair market value of one Ordinary Share (at the date of such calculation) B=The Exercise Price (as adjusted to the date of such calculation) less the nominal value of one Ordinary Share For purposes of the calculation above, the fair market value of one Share shall be determined as follows: (i) if the Ordinary Shares are traded on any securities exchange or quoted on an established automated over-the-counter market, the fair market value shall be deemed to be the average of the closing prices over a ten (10) Trading Day periodending five (5) Trading Days before the date of calculation; or(i) if at any time the Ordinary Shares are not listed on any securities exchange or quoted on an establishedautomated over-the-counter market, the fair market value of Ordinary Shares shall be the price per Ordinary Share which theCompany could obtain from a willing buyer (not a current employee or director) for Ordinary Shares sold by the Company, fromauthorized but unissued Ordinary Shares, as determined in good faith by its Board of Directors, unless the Company shall becomesubject to a Reorganization, in which case the fair market value of the Ordinary Shares shall be deemed to be the per share valuereceived by the holders of the Company’s Ordinary Shares pursuant to such Reorganization.  For purposes hereof, the date of calculation shall be the date the Holder sends to the Company a Notice of Exercise. “TradingDay” means a day in which trading in the Ordinary Shares generally occurs on The Nasdaq Global Select Market or if the Ordinary Sharesare not then listed on The Nasdaq Global Select Market, on the principal other U.S. national or regional securities exchange on which theOrdinary Shares are then listed, or if the Ordinary Shares are not then listed on a U.S. national or regional securities exchange, on theprincipal other market on which the Ordinary Shares are then traded. If the Ordinary Shares are not so listed or traded, “Trading Day”means any Business Day. “Business Day” means any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank ofNew York is authorized or required by law or executive order to close or be closed. (c) Exercise Prior to Expiration. To the extent this Warrant is not previously exercised as to all Shares subject hereto,and if the fair market value of one Share is greater than the Exercise Price then in effect, this Warrant shall be deemed automaticallyexercised pursuant to Section 2(b) (even if not surrendered) immediately before its expiration and the Holder shall be deemed to haveprovided, in connection with such exercise, an undertaking to pay the Nominal Value Payment Amount to the Company in cash ondemand. For purposes of such automatic exercise, the fair market value of one Share upon such expiration shall be determined pursuant toSection 2(b). To the extent this Warrant or any portion thereof is deemed automatically exercised pursuant to this Section 2(c), theCompany agrees to promptly notify the Holder of the number of Shares, if any, the Holder is to receive by reason of such automaticexercise. (d) Share Certificates. This Warrant shall be deemed to have been exercised and the Shares issuable upon such exerciseshall be deemed to have been issued immediately prior to the close of business on the date this Warrant is exercised in accordance with itsterms, and the person entitled to receive the Shares issuable upon such exercise shall be treated for all purposes as the holder of record ofsuch Shares as of the close of business on such date. As promptly as reasonably practicable on or after such date, the Company shall issueand deliver to the person or persons entitled to receive the same a certificate or certificates for that number of Shares issuable upon suchexercise. In the event that this Warrant is exercised in part and has not expired, the Company shall execute and deliver a new Warrantreflecting the number of Shares that remain subject to this Warrant. (e) No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon theexercise of this Warrant. In lieu of such fractional share to which the Holder would otherwise be entitled, the Company shall make a cashpayment equal to the Exercise Pricemultiplied by such fraction. (f) Conditional Exercise. The Holder may exercise this Warrant conditioned upon (and effective immediately prior to)consummation of any transaction that would cause the expiration of this Warrant pursuant to Section 8 by so indicating in the notice ofexercise. (g) Reservation of Shares. The Company agrees during the term this Warrant is exercisable to reserve and keep availablefrom its authorized and unissued Ordinary Shares such number of Ordinary Shares as shall from time to time be sufficient to effect theexercise of this Warrant; and if at any time the number of authorized but unissued Ordinary Shares shall not be sufficient for purposes ofthe exercise of this Warrant in accordance with its terms, without limitation of such other remedies as may be available to the Holder, theCompany will use all reasonable efforts to take such corporate action as may be necessary to increase its authorized and unissued OrdinaryShares of the Company to a number of Ordinary Shares as shall be sufficient for such purposes. The Company represents and warrants thatall Shares that may be issued upon the exercise of this Warrant will, when issued in accordance with the terms hereof, be validly issued,fully paid and nonassessable. (h) Issued Securities. The Company represents and warrants to the Holder that all issued and outstanding OrdinaryShares or any other securities of the Company have been duly authorized and validly issued and are fully paid and nonassessable. Alloutstanding Ordinary Shares and any other securities were issued in full compliance with all federal and state securities laws. In addition,as of the date immediately preceding the date of this Warrant: (i) A description of the Company’s capitalization attached hereto as Schedule A is true and complete, inall material respects, as of the Issue Date. (ii) Except for this Warrant and as otherwise disclosed on Schedule A, there are no  other options, warrants, conversion privileges or other rights presently outstanding to purchase or otherwise acquire any authorized butunissued shares of the Company’s share capital or other securities of the Company. 3. Replacement of the Warrant. Subject to the receipt of evidence reasonably satisfactory to the Company of the loss, theft,destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonablysatisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, theCompany at the expense of the Holder shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount. 4. Transfer of the Warrant. (a) Warrant Register. The Company shall maintain a register (the “Warrant Register”) containing the name and addressof the Holder or Holders. Until this Warrant is transferred on the Warrant Register in accordance herewith, the Company may treat theHolder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary.Any Holder of this Warrant (or of any portion of this Warrant) may change its address as shown on the Warrant Register by written notice tothe Company requesting a change. (b) Warrant Agent. The Company may appoint an agent for the purpose of maintaining the Warrant Register referred toin Section 4(a), issuing the Shares or other securities then issuable upon the exercise of this Warrant, exchanging this Warrant, replacingthis Warrant or conducting related activities. (c) Transferability of the Warrant. Subject to the provisions of this Warrant with respect to compliance with theSecurities Act of 1933, as amended (the “Securities Act”), as set forth in Section 5, title to this Warrant may be transferred by endorsement(by the transferor and the transferee executing the assignment form attached as Exhibit B (the “Assignment Form”)) and delivery in thesame manner as a negotiable instrument transferable by endorsement and delivery. (d) Exchange of the Warrant upon a Transfer. On surrender of this Warrant (and a properly endorsed Assignment Form)for exchange, subject to the provisions of this Warrant with respect to compliance with the Securities Act and limitations on assignmentsand transfers, the Company shall issue to or on the order of the Holder a new warrant or warrants of like tenor, in the name of the Holder oras the Holder (on payment by the Holder of any applicable transfer taxes)may direct, for the number of shares issuable upon exercisehereof, and the Company shall register any such transfer upon the Warrant Register. This Warrant (and the securities issuable upon exerciseof this Warrant) must be surrendered to the Company or its warrant or transfer agent, as applicable, as a condition precedent to the sale,pledge, hypothecation or other transfer of any interest in any of the securities represented hereby. (e) Taxes. In no event shall the Company be required to pay any tax which may be payable in respect of any transferinvolved in the issue and delivery of any certificate in a name other than that of the Holder, and the Company shall not be required to issueor deliver any such certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company theamount of such tax or shall have established to the satisfaction of the Company that such tax has been paid or is not payable. 5. Compliance with Securities Laws.By acceptance of this Warrant, the Holder agrees to comply with the following: (a) Restrictions on Transfers. Any transfer of this Warrant or the Shares (the “Securities”) must be in compliance with allapplicable federal and state securities laws. The Holder agrees not to make any sale, assignment, transfer, pledge or other disposition of allor any portion of the Securities, or any beneficial interest therein, unless and until the transferee thereof has agreed in writing for thebenefit of the Company to take and hold such Securities subject to, and to be bound by, the terms and conditions set forth in this Warrantto the same extent as if the transferee were the original Holder hereunder, and either: (i) there is then in effect a registration statement under the Securities Act covering such proposeddisposition and such disposition is made in accordance with such registration statement, or  (ii) (A) such Holder shall have given prior written notice to the Company of such Holder’s intention tomake such disposition and shall have furnished the Company with a reasonable detailed description of the manner and circumstances ofthe proposed disposition, (B) the transferee shall have made the representations set forth in Section 10 with respect to itself as a Holder and(C) if requested by the Company, such Holder shall have furnished the Company, at the Holder’s expense, with (i) evidence reasonablysatisfactory to the Company that such disposition will not require registration of such Securities under the Securities Act or (ii) a legalopinion to the effect that the transfer of such Securities may be effected in compliance with the terms of the SecuritiesAct. Notwithstanding the foregoing, compliance with clauses (B) and (C) above shall not be required for any transfer in compliance withRule 144 and compliance with clause (C) above shall not be required for any transfer by the Holder to any affiliate of the Holder (or anyfund or partnership under common control with one of more general partners or managing members of, or shares the same managementcompany with, the Holder) or a transfer by the Holder to any of the Holder’s partners, members or other equity owners, or retired partners,members or other equity owners or the estate of any partners, members or other equity owners or retired partners, members or other equityowners. (b) Investment Representation Statement. Unless this Warrant is exercised pursuant to an effective registration statementunder the Securities Act that includes the Shares with respect to which the Warrant was exercised or pursuant to Section 2(b) that results inthe Shares issued upon exercise being eligible for resale under Rule 144, it shall be a condition to any exercise of this Warrant that theHolder shall have confirmed the representations set forth in Section 10 hereof. (c) Securities Law Legend. Subject to Section 5(e), the Securities shall (unless otherwise permitted by the provisions ofthis Warrant) be stamped or imprinted with a legend substantially similar to the following (in addition to any legend required by statesecurities laws): THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, ASAMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BEOFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THEACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATIONREQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINIONOF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE ORHYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THISCERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENTTO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY OF THE SECURITIESREPRESENTED HEREBY. (d) Instructions Regarding Transfer Restrictions. Subject to Section 5(e), the Holder consents to the Company making anotation on its records and giving instructions to any transfer agent in order to implement the restrictions on transfer established in thisSection 5. (e) Removal of Legend. The legend referring to federal and state securities laws identified in Section 5(c) stamped on acertificate evidencing the Shares and the transfer instructions and record notations with respect to the Securities shall be removed promptlyupon request by the Holder and the Company shall issue a certificate without such legend to the holder of such Securities if (i) suchSecurities are registered under the Securities Act, (ii) such securities are eligible for resale under Rule 144, or (iii) such holder provides theCompany with an opinion of counsel reasonably acceptable to the Company to the effect that a sale or transfer of such securities may bemade without registration or qualification. (f) Compliance with Securities Laws. The Holder is aware of the restrictions imposed by the United States securities lawson the purchase or sale of securities by any person who has received material, non-public information from the issuer of such securities andon the communication of such information to any other person when it is reasonably foreseeable that such other person is likely topurchase or sell such securities in reliance upon such information. 6. Adjustments. Subject to the expiration of this Warrant pursuant to Section 8, the number and kind of  shares purchasable hereunder and the Exercise Price therefor are subject to adjustment from time to time, as follows: (a) Merger or Reorganization. If at any time there shall be any reorganization, recapitalization, merger or consolidation(a “Reorganization”) involving the Company (other than as otherwise provided for herein or as would cause the expiration of this Warrantunder Section 8) in which Ordinary Shares of the Company are converted into or exchanged for securities, cash or other property, then, as apart of such Reorganization, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of thisWarrant, the kind and amount of securities, cash or other property of the successor corporation resulting from such Reorganization(collectively, “Reference Property”), equivalent in value to that which a holder of the Shares deliverable upon exercise of this Warrantwould have been entitled to receive in such Reorganization if the right to purchase the Shares hereunder had been exercised immediatelyprior to such Reorganization. In any such case, appropriate adjustment (as determined in good faith by the Board of Directors of thesuccessor corporation) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of theHolder after such Reorganization to the end that the provisions of this Warrant shall be applicable after the event, as near as reasonablymay be, in relation to any shares or other securities deliverable after that event upon the exercise of this Warrant. Without limiting theforegoing, in connection with any Reorganization, upon the closing thereof, the successor or surviving entity shall assume the obligationsof this Agreement. The provisions of this Section 6(a) shall similarly apply to successive Reorganizations. (b) Reclassification of Shares. If the securities issuable upon exercise of this Warrant are changed into the same or adifferent number of securities of any other class or classes by reclassification, capital reorganization or otherwise (other than as otherwiseprovided for herein) (a “Reclassification”), then, in any such event, in lieu of the number of Shares which the Holder would otherwise havebeen entitled to receive, the Holder shall have the right thereafter to exercise this Warrant for a number of Shares of such other class orclasses of shares that a holder of the number of securities deliverable upon exercise of this Warrant immediately before that change wouldhave been entitled to receive in such Reclassification, all subject to further adjustment as provided herein with respect to such other shares. (c) Subdivisions and Combinations. In the event that the outstanding Ordinary Shares are subdivided (by shares split, bypayment of a shares dividend or otherwise) into a greater number of Ordinary Shares, the number of Shares issuable upon exercise of thethis Warrant immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionatelyincreased, and the Exercise Price shall be proportionately decreased, and in the event that the outstanding Ordinary Shares are combined(by reclassification or otherwise) into a lesser number of Ordinary Shares, the number of Shares issuable upon exercise of the this Warrantimmediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately decreased, andthe Exercise Price shall be proportionately increased. (d) Notice of Adjustments. Upon any adjustment in accordance with this Section 6, the Company shall give noticethereof to the Holder, which notice shall state the event giving rise to the adjustment, the Exercise Price as adjusted and the number ofsecurities or other property purchasable upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation ofeach. The Company shall, upon the written request of any Holder, furnish or cause to be furnished to such Holder a certificate setting forth(i) such adjustments, (ii) the Exercise Price at the time in effect and (iii) the number of securities and the amount, if any, of other propertythat at the time would be received upon exercise of this Warrant. 7. Notification of Certain Events.Prior to the expiration of this Warrant pursuant to Section 8, in the event that the Companyshall authorize: (a) the issuance of any dividend or other distribution on the share capital of the Company (other than (i) dividends ordistributions otherwise provided for in Section 6, (ii) repurchases of Ordinary Shares issued to or held by employees, officers, directors orconsultants of the Company or its subsidiaries upon termination of their employment or services pursuant to agreements providing for theright of said repurchase; (iii) repurchases of Ordinary Shares issued to or held by employees, officers, directors or consultants of theCompany or its subsidiaries pursuant to rights of first refusal or first offer contained in agreements providing for such rights; or (iv)repurchases of Ordinary Shares in connection with the settlement of disputes with any shareholder ), whether in cash, property, shares orother securities;  (b) the voluntary liquidation, dissolution or winding up of the Company; or (c) any transaction resulting in the expiration of this Warrant pursuant to Section 8(b); the Company shall send to the Holder of this Warrant at least ten (10) calendar days prior written notice of the date on which a record shallbe taken for any such dividend or distribution specified in clause (a) or the expected effective date of any such other event specified inclause (b) or (c), as applicable. The notice provisions set forth in this section may be shortened or waived prospectively or retrospectivelyby the consent of the Holder of this Warrant. 8. Expiration of the Warrant. This Warrant shall expire and shall no longer be exercisable as of the earlier of: (a) 5:00 p.m., Pacific time, on [__], [__]; or (b) (i) the acquisition of the Company by another entity by means of any transaction or series of related transactions towhich the Company is a party (including, without limitation, any share acquisition, reorganization, merger or consolidation, but excludingany sale of shares for capital raising purposes and any transaction effected primarily for purposes of changing the Company’s jurisdictionof incorporation) other than a transaction or series of related transactions in which the holders of the voting securities of the Companyoutstanding immediately prior to such transaction or series of related transactions receive voting securities of such other surviving orresulting entity (or if the Company or such other surviving or resulting entity is a wholly-owned subsidiary immediately following suchacquisition, its parent), or (ii) a sale, lease or other disposition of all or substantially all of the assets of the Company and its subsidiariestaken as a whole by means of any transaction or series of related transactions, except where such sale, lease or other disposition is to awholly-owned subsidiary of the Company; provided that the holders of Shares in the transaction described in (i) or (ii) above receive cashor cash equivalents in such transaction with an aggregate value per Ordinary Share greater than two times the Exercise Price. 9. No Rights as a Shareholder. Nothing contained herein shall entitle the Holder to any rights as a shareholder of the Company orto be deemed the holder of any securities that may at any time be issuable on the exercise of the rights hereunder for any purpose nor shallanything contained herein be construed to confer upon the Holder, as such, any right to vote for the election of directors or upon anymatter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon anyrecapitalization, issuance of shares, reclassification of shares, change of nominal value or change of shares to no nominal value,consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or anyother rights of a shareholder of the Company until this Warrant shall have been exercised. 10. Representations and Warranties of the Holder. By acceptance of this Warrant, the Holder represents and warrants to theCompany as follows: (a) No Registration. The Holder understands that the Securities have not been, and will not be, registered under theSecurities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which dependsupon, among other things, the bona fide nature of the investment intent and the accuracy of the Holder’s representations as expressedherein or otherwise made pursuant hereto. (b) Investment Intent. The Holder is acquiring the Securities for investment for its own account, not as a nominee oragent, and not with a view to, or for resale in connection with, any distribution thereof. The Holder has no present intention of selling,granting any participation in, or otherwise distributing the Securities, nor does it have any contract, undertaking, agreement orarrangement for the same. (c) Investment Experience. The Holder has substantial experience in evaluating and investing in private placementtransactions of securities in companies similar to the Company, and has such knowledge and experience in financial or business matters sothat it is capable of evaluating the merits and risks of its investment in the Company and protecting its own interests. (d) Speculative Nature of Investment. The Holder understands and acknowledges that its investment in the Company ishighly speculative and involves substantial risks. The Holder can bear the economic  risk of its investment and is able, without impairing its financial condition, to hold the Securities for an indefinite period of time and tosuffer a complete loss of its investment. (e) Accredited Investor. The Holder is an “accredited investor” within the meaning of Regulation D, Rule 501(a),promulgated by the Securities and Exchange Commission and agrees to submit to the Company such further assurances of such status asmay be reasonably requested by the Company. The Holder has furnished or made available any and all information requested by theCompany or otherwise necessary to satisfy any applicable verification requirements as to “accredited investor” status. Any suchinformation is true, correct, timely and complete. (f) Residency. The residency of the Holder (or, in the case of a partnership or corporation, such entity’s principal place ofbusiness) is correctly set forth on the signature page hereto. (g) Restrictions on Resales. The Holder acknowledges that the Securities must be held indefinitely unless subsequentlyregistered under the Securities Act or an exemption from such registration is available. The Holder is aware of the provisions of Rule 144promulgated under the Securities Act, which permit resale of shares purchased in a private placement subject to the satisfaction of certainconditions, which may include, among other things, the availability of certain current public information about the Company; the resaleoccurring not less than a specified period after a party has purchased and paid for the security to be sold; the number of shares being soldduring any three-month period not exceeding specified limitations; the sale being effected through a “broker’s transaction,” a transactiondirectly with a “market maker” or a “riskless principal transaction” (as those terms are defined in the Securities Act or the SecuritiesExchange Act of 1934, as amended, and the rules and regulations promulgated thereunder); and the filing of a Form 144 notice, ifapplicable. The Holder acknowledges and understands that the Company may not be satisfying the current public information requirementof Rule 144 at the time the Holder wishes to sell the Securities and that, in such event, the Holder may be precluded from selling theSecurities under Rule 144 even if the other applicable requirements of Rule 144 have been satisfied. The Holder acknowledges that, in theevent the applicable requirements of Rule 144 are not met, registration under the Securities Act or an exemption from registration will berequired for any disposition of the Securities. The Holder understands that, although Rule 144 is not exclusive, the Securities andExchange Commission has expressed its opinion that persons proposing to sell restricted securities received in a private offering other thanin a registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registrationis available for such offers or sales and that such persons and the brokers who participate in the transactions do so at their own risk. (h) Authorization. The Holder has full legal capacity, power and authority to execute and deliver this Warrant and toperform its obligations hereunder. This Warrant constitutes the valid and binding obligations of the Holder, enforceable in accordancewith its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement ofcreditors’ rights generally and general principles of equity. 11. Miscellaneous. (a) Amendments. Except as expressly provided herein, neither this Warrant nor any term hereof may be amended, waived,discharged or terminated other than by a written instrument referencing this Warrant and signed by the Company and the Holder of thisWarrant. (b) Waivers. No waiver of any single breach or default shall be deemed a waiver of any other breach or default theretoforeor thereafter occurring. (c) Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailedby registered or certified mail, postage prepaid, sent by facsimile or electronic mail (if to the Holder) or otherwise delivered by hand,messenger or courier service addressed: (i) if to the Holder, to the Holder at the Holder’s address, facsimile number or electronic mail address asshow on the signature page hereto, or at such other current address as the Holder shall have furnished to the Company; or (ii) if to the Company, to the attention of the Chief Executive Officer or Chief  Financial Officer of the Company at the Company’s address, facsimile number or electronic mail address as shown on the signature pagehereto, or at such other current address as the Company shall have furnished to the Holder. Each such notice or other communication shall for all purposes of this Warrant be treated as effective or having beengiven (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courierservice, freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if sent via mail, atthe earlier of its receipt or five days after the same has been deposited in a regularly-maintained receptacle for the deposit of the UnitedStates mail, addressed and mailed as aforesaid, or (iii) if sent via facsimile, upon confirmation of facsimile transfer or, if sent via electronicmail, upon confirmation of delivery when directed to the relevant electronic mail address, if sent during normal business hours of therecipient, or if not sent during normal business hours of the recipient, then on the recipient’s next business day. In the event of any conflictbetween the Company’s books and records and this Warrant or any notice delivered hereunder, the Company’s books and records willcontrol absent fraud or error. (d) Governing Law. This Warrant and all actions arising out of or in connection with this Warrant shall be governed byand construed in accordance with the laws of the State of New York, without regard to the conflicts of law provisions of the State of NewYork, or of any other state. (e) Jurisdiction and Venue. The Company agrees that any suit, action or proceeding with respect to this Agreement orany other Loan Document to which it is a party or any judgment entered by any court in respect thereof may be brought initially in thefederal or state courts in Houston, Texas or in the courts of its own corporate domicile and irrevocably submits to the non-exclusivejurisdiction of each such court for the purpose of any such suit, action, proceeding or judgment. This Section 13.10(a) is for the benefit ofthe Holder only and, as a result, Holder shall not be prevented from taking proceedings in any other courts with jurisdiction. Nothingherein shall in any way be deemed to limit the ability of the Holder to serve any such process or summonses in any other manner permittedby applicable law. The Company irrevocably waives to the fullest extent permitted by law any objection that it may now or hereafter haveto the laying of the venue of any suit, action or proceeding arising out of or relating to this Warrant and hereby further irrevocably waivesto the fullest extent permitted by law any claim that any such suit, action or proceeding brought in any such court has been brought in aninconvenient forum. A final judgment (in respect of which time for all appeals has elapsed) in any such suit, action or proceeding shall beconclusive and may be enforced in any court to the jurisdiction of which the Company is or may be subject, by suit upon judgment.(f) Titles and Subtitles. The titles and subtitles used in this Warrant are used for convenience only and are not to beconsidered in construing or interpreting this Warrant. All references in this Warrant to sections, paragraphs and exhibits shall, unlessotherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto. (g) Severability. If any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal,unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from thisWarrant, and such illegal, unenforceable or void provision shall be replaced with a valid and enforceable provision that will achieve, to theextent possible, the same economic, business and other purposes of the illegal, unenforceable or void provision. The balance of thisWarrant shall be enforceable in accordance with its terms. (h) Waiver of Jury Trial. EACH OF THE HOLDER AND THE COMPANY WAIVES, TO THE FULLEST EXTENTPERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER BASED ONCONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS WARRANT. (i) California Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THISWARRANT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA ANDTHE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFORPRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BYSECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THISWARRANT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.  (j) Saturdays, Sundays and Holidays. If the last or appointed day for the taking of any action or the expiration of anyright required or granted herein shall be a Saturday, Sunday or U.S. federal holiday, then such action may be taken or such right may beexercised on the next succeeding day that is not a Saturday, Sunday or U.S. federal holiday. (k) Rights and Obligations Survive Exercise of the Warrant. Except as otherwise provided herein, the rights andobligations of the Company and the Holder under this Warrant shall survive exercise of this Warrant. (l) Entire Agreement. Except as expressly set forth herein, this Warrant (including the exhibits attached hereto)constitutes the entire agreement and understanding of the Company and the Holder with respect to the subject matter hereof and supersedeall prior agreements and understandings relating to the subject matter hereof. (signature page follows)  The Company and the Holder sign this Warrant as of the date stated on the first page. COMPANY: STRONGBRIDGE BIOPHARMA PLC By Name: Title: Address for Notices: 900 Northbrook Drive Suite 200 Trevose, PA 19053 Attn: Tel.:(610) 254-9200 Fax: Email: With a copy (which shall not constitute notice) to: Reed Smith LLP 599 Lexington Avenue New York, New York 10022 Attention: Aron Izower Tel.: (212) 549-0393 Fax: (212) 521-5450 Email: aizower@reedsmith.com AGREED AND ACKNOWLEDGED, HOLDER: [__] By Name: Title: Address for Notices: [__] Attn:[__] Tel.:[__] Fax:[__] Email:[__]  EXHIBIT 10.7AMENDED AND RESTATED EMPLOYMENT AGREEMENTTHIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the“Agreement”) is made by and between Strongbridge U.S. Inc., a Delaware Corporation (the“Company”), and Matthew Pauls (“Executive”) as of October 13, 2017.W I T N E S S E T H:WHEREAS, the Company and Executive are parties to an amended and restated employmentagreement (such agreement, the “Prior Agreement”); WHEREAS, the Company desires to continue to retain the services of Executive as set forth inthis Agreement, and Executive desires to serve the Company in such capacity, subject to the terms andconditions of this Agreement; and WHEREAS, the Company and Executive intend for this Agreement to replace the PriorAgreement except as otherwise set forth herein. NOW, THEREFORE, for and in consideration of the mutual promises, covenants andobligations contained herein, Company and Executive agree as follows:ARTICLE I EMPLOYMENT AND DUTIESSection 1.01 Employment and Term. Subject to the provisions of Article III of thisAgreement, the Executive shall be employed by the Company for the period commencing on the datehereof and continuing until terminated as described in Section 3.01 (the “Term”) on the terms andsubject to the conditions set forth in this Agreement.Section 1.02 Position and Duties. Executive shall serve as Chief Executive Officer ofthe Company, or in such other positions as the parties may agree and shall report directly to the Boardof Directors of the Company (the “Board”). Executive shall have the duties and responsibilitiescustomarily associated with such position and will perform such other duties as reasonably directed bythe Board consistent with such position(s).Section 1.03 Scope. Executive will devote substantially all of his business time,attention, skills and efforts to the performance of his duties. Executive acknowledges that his dutiesand responsibilities require Executive’s full-time business efforts and agrees to not engage in any otherbusiness activity or interests which materially interfere or conflict with the performance of Executive’sduties. Notwithstanding the foregoing, Executive may (a) without obtaining approval of the Board,serve on one for profit corporate board that does not compete with the Company, (b) upon receipt ofprior written approval by the Board, serve on any other for profit corporate boards that do not competewith the Company, (c) serve on civic or charitable boards or committees of entities that do not competewith the Company, (d) deliver a reasonable number of lectures or fulfill speaking engagements or (e)manage personal investments, so long as such activities do not significantly interfere with the performance of Executive’s duties and so long asExecutive does not own more than five percent (5%) of the voting stock of any publicly heldcorporation.ARTICLE II COMPENSATION AND BENEFITSSection 2.01 Base Salary. During the Term, the Company will pay Executive a basesalary (the “Base Salary”) at an initial rate of $500,000 per year in accordance with the Company’sstandard payroll practices. Base Salary will be reviewed at least annually by the Board or a committeethereof and may be adjusted (in which case such adjusted amount shall be the “Base Salary”). Section 2.02 Annual Incentive. During Executive’s employment with the Company,and as determined by the Board in its sole discretion, Executive shall be eligible for an annual cashincentive (the “Annual Incentive”) with a target of 50% of Base Salary (such percentage, the “TargetAnnual Incentive”). The Annual Incentive shall be based on the achievement of predeterminedperformance goals as determined annually by Executive and the Board, which shall be provided to theExecutive in writing no later than thirty (30) days following the beginning of the year to which theyrelate. The actual Annual Incentive earned in any particular year may be greater or lower than theTarget Annual Incentive, depending on the level of achievement of the applicable performance goalsand the discretion of the Board. The Annual Incentive shall be paid to Executive as soon aspracticable, but in no event later than the date that is two-and-one-half months following the end of thetaxable year (of Executive, or the Company, whichever is later) in which such incentive is earned.Section 2.03 Long-Term Incentive Plans. Executive shall be eligible to receivegrants under the Company’s long-term incentive plans (including stock option, restricted stock andother equity compensation plans and any other long-term incentive plans) at the discretion of theCompany’s Board.Section 2.04 Business and Entertainment Expenses. Subject to the Company’sstandard policies and procedures for expense reimbursement as applied to its executive employeesgenerally, the Company shall reimburse Executive for, or pay on behalf of Executive, reasonable out-of-pocket business expenses incurred by Executive on behalf of the Company. Section 2.05 Other Company Benefits. Executive shall be entitled to participate in allemployee benefit plans, practices and programs maintained by the Company and made available to itssimilarly situated executives, including the Company’s paid time-off policy. Executive shall also beentitled to paid time-off for all holidays in the U.S. in accordance with the applicable Companypolicy. Executive shall agree to comply with a reasonable application process to permit the Companyto insure his life under a standard “key man” insurance policy upon request from the Board. - 2 - ARTICLE III TERMINATIONSection 3.01 General. The Company may terminate Executive’s employment for anyreason or no reason, and Executive may terminate his employment for any reason or no reason, ineither case subject only to the terms of this Agreement. For purposes of this Agreement, the followingterms have the following meanings:(a) “Accrued Obligations” shall mean: (i) Executive’s earned but unpaid BaseSalary through the Termination Date; (ii) payment of any annual, long-term, or other incentive awardwhich relates to a completed fiscal year or performance period, as applicable, and is payable (but notyet paid) on or before the Termination Date; (iii) a lump-sum payment in respect of accrued but unusedvacation days at Executive’s per-business-day Base Salary rate in effect as of the Termination Date;and (iv) any unpaid expense or other reimbursements due pursuant to Section 2.04 hereof.(b) “Cause” shall mean (i) Executive’s conviction of, or plea of guilty or nolocontendere to, any felony or any crime involving theft, embezzlement, dishonesty or moral turpitude;(ii) any act by Executive constituting willful misconduct, deliberate malfeasance, dishonesty, unethicalconduct or gross negligence in the performance of his duties; (iii) Executive’s willful and continuedfailure to perform any of the duties of his position (which has not been cured within thirty (30) daysfollowing the first written notice from the Company describing such failure in reasonable detail); or (iv)any material breach (which has not been cured within 30 days following the first written notice fromthe Company describing such breach in reasonable detail) by Executive of this Agreement or any otheragreement between Executive and the Company or any of its affiliates.(c) “Change in Control” shall mean the occurrence of any of the following:(i) any person or group of persons becomes the beneficial owner, directly orindirectly, of securities of the Company representing more than fifty percent (50%) of thecombined voting power of the Company’s then outstanding securities (a “Majority of theSecurities”); provided that if the person or group of persons is already deemed to own morethan 50% of the total fair market value or total voting power, then the acquisition of additionalstock by such person or group of persons shall not constitute an additional Change in Control;(ii) the stockholders of the Company approve a plan of complete liquidationof the Company;(iii) the sale or disposition of all or substantially all of the Company’s assets;(iv) a merger, consolidation or reorganization of the Company with orinvolving any other entity, other than a merger, consolidation or reorganization that wouldresult in the voting securities of the Company outstanding immediately prior thereto continuingto represent (either by remaining outstanding or by being converted into voting- 3 - securities of the surviving entity) at least a 50% of the combined voting power of the Company(or such surviving entity) outstanding immediately after such merger, consolidation orreorganization owned in approximately the same proportion of such ownership by each of theprior shareholders as prior to the transaction.(v) Notwithstanding the foregoing, the following acquisitions shall notconstitute a Change in Control: (A) an acquisition by the Company or entity controlled by theCompany, or (B) an acquisition by an employee benefit plan (or related trust) sponsored ormaintained by the Company.(d) “Disability” shall mean Executive’s becoming incapacitated for a period of atleast 180 days by accident, sickness or other circumstance that renders Executive mentally orphysically incapable of performing the material duties and services required of Executive hereunder ona full-time basis during such period. A termination of Executive’s employment due to a Disability shallbe effective only if the party terminating Executive’s employment first gives at least 15 days’ writtennotice of such termination to the other party.(e) “Good Reason” shall mean, without Executive’s express written consent, theoccurrence of any one or more of the following: (i) a material diminution by the Company ofExecutive’s Base Salary, other than any diminution that is also applicable in a substantially similarmanner and proportion to the other senior executives of the Company; (ii) the assignment to Executiveof duties or responsibilities which are materially inconsistent with Executive’s position; (iii) a change inthe principal location at which Executive performs his duties for the Company to a new location that ismore than fifty (50) miles from the prior location; or (iv) an action or inaction that constitutes a materialbreach of this Agreement by the Company. A termination of employment by Executive for Good Reason shall be effectuated by giving theCompany written notice (“Notice of Termination for Good Reason”), not later than 30 days followingthe occurrence of the circumstance that constitutes Good Reason, setting forth in reasonable detail thespecific conduct of the Company that constitutes Good Reason and the specific provision(s) of thisAgreement on which Executive relied. The Company shall be entitled, during the 45-day periodfollowing receipt of a Notice of Termination for Good Reason, to cure the circumstances that gave riseto Good Reason, provided that the Company shall be entitled to waive its right to cure or reduce thecure period by delivery of written notice to that effect to Executive (such 45-day or shorter period, the“Cure Period”). If, during the Cure Period, such circumstance is remedied, Executive will not bepermitted to terminate employment for Good Reason as a result of such circumstance. If, at the end ofthe Cure Period, the circumstance that constitutes Good Reason has not been remedied, Executive willbe entitled to terminate employment for Good Reason during the 30-day period that follows the end ofthe Cure Period. If Executive does not terminate employment during such 30-day period, Executivewill not be permitted to terminate employment for Good Reason as a result of such event. (f) “Pro-Rata Annual Incentive” shall mean an amount equal to (i) the AnnualIncentive that Executive would have been entitled to receive for the calendar year that includes theTermination Date if his employment hereunder had continued (as determined by the Board of Directorsbased upon the actual achievement of the applicable performance goals), multiplied by- 4 - (ii) a fraction, the numerator of which is the number of days he was employed hereunder during suchyear and the denominator of which is the number of days in such year.(g) “Termination Date” shall mean the date on which Executive’s employmenthereunder terminates.Section 3.02 Termination Without Cause or by Executive with Good Reason orDue to Executive’s Death. If the Company terminates Executive’s employment without Cause, or theExecutive terminates for Good Reason, or Executive’s employment is terminated due to Executive’sdeath, the Term shall expire on the Termination Date and Executive shall be entitled to: (a) theAccrued Obligations; (b) an amount equal to the sum of (i) 18 months of the annual Base Salary as ineffect immediately prior to the Termination Date and (ii) the Target Annual Incentive, paid in equalinstallments on the normal payroll cycle over the 18-month period that begins on the sixtieth (60) dayfollowing the Termination Date; (c) the Pro-Rata Annual Incentive, payable in a cash lump sum toExecutive on the date Company pays its annual incentive compensation bonuses for the year thatincludes the Termination Date if Executive’s employment continued; and (d) medical, dental benefitsprovided by the Company to Executive and Executive’s spouse and dependents (in each case, asprovided in any applicable plan) at least equal to the levels of benefits provided to other similarlysituated active employees of the Company and its subsidiaries until the earlier of (i) the 18-monthanniversary of the Termination Date or (ii) the date that Executive becomes covered under asubsequent employer’s medical and dental plans.Section 3.03 Reserved.Section 3.04 Termination Without Cause, by Executive with Good Reason, or Dueto Executive’s Death following a Change in Control of the Company. If the Company terminatesExecutive’s employment without Cause, or the Executive terminates for Good Reason, or Executive’semployment is terminated due to Executive’s death, in any case, within twenty-four (24) monthsfollowing the occurrence of Change in Control, the Term shall expire on the Termination Date and, inlieu of the benefits set forth in Section 3.02 or 3.03, Executive shall be entitled to: (a) the AccruedObligations; (b) an amount equal to the sum of (i) 24 months of the annual Base Salary as in effectimmediately prior to the Termination Date and (ii) one (1) times the Target Annual Incentive, paid inequal installments on the normal payroll cycle over the 24-month period that begins on the sixtieth(60) day following the Termination Date; (c) the Pro-Rata Annual Incentive, payable in a cash lumpsum to Executive on the date Company pays its annual incentive compensation bonuses for the yearthat includes the Termination Date if Executive’s employment continued; (d) medical, dental benefitsprovided by the Company to Executive and Executive’s spouse and dependents (in each case, asprovided in any applicable plan) at least equal to the levels of benefits provided to other similarlysituated active employees of the Company and its subsidiaries until the earlier of (i) the 18-monthanniversary of the Termination Date or (ii) the date that Executive becomes covered under asubsequent employer’s medical and dental plans; and (e) the acceleration of vesting of all unvestedequity or equity-based awards held by Executive as of the Termination Date.Section 3.05 Other Terminations. If Executive’s employment hereunder isterminated (a) by Executive without Good Reason, (b) by the Company for Cause; or (c) due toExecutive’s- 5 - ththDisability, the Term shall expire as of the Termination Date and Executive shall be entitled to theAccrued Obligations. Section 3.06 Release. Executive’s entitlement to the payments (other than the AccruedObligations) and benefits described in this Article III is expressly contingent upon Executive providingthe Company with a signed release that is attached hereto as Attachment A (the “Release”). To beeffective, such Release must be delivered by Executive to the Company no later than 45 daysfollowing the Termination Date and must not be revoked during the seven (7) days following suchdelivery. If such Release is not executed in a timely manner or is revoked, all such payments andbenefits shall immediately cease and the Executive shall be required to repay to the Company any suchpayments that have already been paid to the Executive.Section 3.07 Resignation from Positions. Upon the termination of Executive’semployment for any reason, Executive shall immediately resign from each position held with theCompany and its affiliates as of the Termination Date, including any position on the board of directors,if requested to do so by the Company.ARTICLE IV RESTRICTIVE COVENANTSSection 4.01 Confidentiality. (a) Company Information. Executive agrees at all times during the Term of thisAgreement and thereafter, to hold in strictest confidence, and not to use, except in connection with theperformance of Executive's duties, and not to disclose to any person or entity without writtenauthorization of the Company, any Confidential Information of the Company. As used herein,“Confidential Information” means any Company proprietary or confidential information, technicaldata, trade secrets or know-how, including, but not limited to, research, product plans, products,services, customer lists and customers, markets, software, developments, inventions, processes,formulas, technology, designs, drawings, engineering, marketing, distribution and sales methods andsystems, sales and profit figures, finances and other business information disclosed to Executive by theCompany, either directly or indirectly in writing, orally or by drawings or inspection of documents orother tangible property. However, Confidential Information does not include any of the foregoingitems which has become publicly known and made generally available through no wrongful act ofExecutive.(b) Executive-Restricted Information. Executive agrees that during the Term of thisAgreement Executive will not improperly use or disclose any proprietary or confidential information ortrade secrets of any person or entity with whom Executive has an agreement or duty to keep suchinformation or secrets confidential.(c) Third Party Information. Executive recognizes that the Company has receivedand in the future will receive from third parties their confidential or proprietary information subject to aduty on the Company's part to maintain the confidentiality of such information and to use it only forcertain limited purposes. Executive agrees at all times during the Term of this Agreement andthereafter, to hold in strictest confidence, and not to use, except- 6 - in connection with the performance of Executive's duties, and not to disclose to any person or entity, orto use it except as necessary in performing the Executive’s duties, consistent with the Company'sagreement with such third party. Section 4.02 Non-Competition. (a) Executive acknowledges that, during the Term, Executive has had access toinformation concerning the Company’s critical business strategies, engineering and technologydevelopment plans, competitive analyses, organizational structure. Accordingly, in consideration of thecompensation provided under this Agreement, Executive agrees that during the Term and for the one(1) year period thereafter, Executive will not directly or indirectly, own, manage, operate, control(including indirectly through a debt or equity investment), provide services to, or be employed by, anyperson or entity engaged in any business that is (i) located in or provides services or products to aregion in which the Company does business, and (ii) competitive with the business activities of theCompany as they existed during the period that Executive provided services to the Company.(b) Executive acknowledges that the restrictions contained under this Section4.02 are reasonable and necessary to protect the legitimate interests of the Company, that the Companywould not have executed this Agreement in the absence of such restrictions, and that any violation ofany provision of this paragraph will result in irreparable injury to the Company. In the event theprovisions under this Section 4.02 shall ever be deemed to exceed the time, scope or geographiclimitations permitted by applicable laws, then such provisions shall be reformed to the maximum time,scope or geographic limitations, as the case may be, permitted by applicable laws.Section 4.03 Injunctive Relief. Executive agrees that it is impossible to measure inmoney the damages which will accrue to the Company by reason of a failure by Executive to performany of Executive’s obligations under this Article IV. Accordingly, if Company or any of its affiliatesinstitutes any action or proceeding to enforce its rights under this Article IV, to the extent permitted byapplicable law, Executive hereby waives the claim or defense that the Company or its affiliates has anadequate remedy at law, and Executive shall not claim that any such remedy at law exists.ARTICLE V MISCELLANEOUSSection 5.01 Withholding. The Company shall withhold all applicable federal, stateand local taxes, social security and workers’ compensation contributions and other amounts as may berequired by law with respect to compensation payable to Executive.Section 5.02 Modification of Payments. (a) In the event it shall be determined that any payment, right or distribution by theCompany or any other person or entity to or for the benefit of Executive pursuant to the terms of thisAgreement or otherwise, in connection with, or arising out of, his employment with the Company or achange in ownership or effective control of the Company or a substantial portion of- 7 - its assets (a “Payment”) is a “parachute payment” within the meaning of Section 280G of the InternalRevenue Code of 1986, as amended (the “Code”) on account of the aggregate value of the Paymentsdue to Executive being equal to or greater than three times the “base amount,” as defined in Section280G(b)(3) of the Code, (the “Parachute Threshold”) so that Executive would be subject to the excisetax imposed by Section 4999 of the Code (the “Excise Tax”) and the net after-tax benefit thatExecutive would receive by reducing the Payments to the Parachute Threshold is greater than the netafter-tax benefit Executive would receive if the full amount of the Payments were paid to Executive,then the Payments payable to Executive shall be reduced (but not below zero) so that the Payments dueto Executive do not exceed the amount of the Parachute Threshold, reducing first any Payments underSection 3.02(b) hereof.(b) The Company hereby agrees that, for purposes of determining whether anypayment and benefits set forth in Section 3.04 above would be subject to the Excise Tax, the non-compete set forth in in Section 4.02 above shall be treated as an agreement for the performance ofpersonal services. The Company hereby agrees to indemnify, defend, and hold harmless Executivefrom and against any adverse impact, tax, penalty, or excise tax resulting from the Company oraccountant’s attribution of a value to the non-compete set forth in in Section 4.02 above that is less thanthe total compensation amount that would be disclosed under Item 402(c) of Securities and ExchangeCommission Regulation S-K in the year prior to year of the event that triggers the Excise Tax, to theextent the use of such lesser amount results in a larger Excise Tax than Executive would have beensubject to had the Company or accountant attributed a value to the non-compete set forth in in Section4.02 above that is at least equal to the total compensation amount disclosed under Item 402(c) ofSecurities and Exchange Commission Regulation S-K for such year. Section 5.03 Section 409A. (a) Notwithstanding anything herein to the contrary, this Agreement is intended tobe interpreted and applied so that the payment of the benefits set forth herein either shall either beexempt from the requirements of Section 409A of the Code (“Section 409A”) or shall comply with therequirements of such provision. (b) Notwithstanding any provision of this Agreement to the contrary, if Executive isa “specified employee” within the meaning of Section 409A, any payments or arrangements due upona termination of Executive’s employment under any arrangement that constitutes a “nonqualifieddeferral of compensation” within the meaning of Section 409A and which do not otherwise qualifyunder the exemptions under Treas. Regs. Section 1.409A-1 (including without limitation, the short-term deferral exemption or the permitted payments under Treas. Regs. Section 1.409A-1(b)(9)(iii)(A)),shall be delayed and paid or provided, without interest, on the earlier of (i) the date which is six monthsafter Executive’s “separation from service” (as such term is defined in Section 409A and theregulations and other published guidance thereunder) for any reason other than death, and (ii) the dateof Executive’s death. (c) After any Termination Date, Executive shall have no duties or responsibilitiesthat are inconsistent with having a “separation from service” within the meaning of Section 409A and,notwithstanding anything in the Agreement to the contrary, distributions upon termination ofemployment of nonqualified deferred compensation may only be made upon a “separation fromservice” as determined under Section 409A and such date shall be the- 8 - Termination Date for purposes of this Agreement. Each payment under this Agreement or otherwiseshall be treated as a separate payment for purposes of Section 409A. In no event may Executive,directly or indirectly, designate the calendar year of any payment to be made under this Agreementwhich constitutes a “nonqualified deferral of compensation” within the meaning of Section 409A andto the extent an amount is payable within a time period, the time during which such amount is paidshall be in the discretion of the Company. Section 5.04 Merger Clause. Effective as of the date hereof, this Agreement containsthe complete, full, and exclusive understanding of Executive and the Company as to its subject matterand shall, on such date, and supersede any prior employment agreement between Executive and theCompany (and its affiliates), including the Prior Agreement. Any amendments to this Agreement shallbe effective and binding on Executive and the Company only if any such amendments are in writingand signed by both Parties. Section 5.05 Assignment. (a) This Agreement is personal to Executive and, without the prior written consentof the Company, shall not be assigned by Executive otherwise than by will or the laws of descent anddistribution, and any assignment in violation of this Agreement shall be void.(b) Notwithstanding the foregoing Section 5.05(a), this Agreement and all rights ofExecutive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legalrepresentatives, executors, administrators, successors, heirs, distributees, devisees and legatees. IfExecutive should die while any amounts would still be payable to him or her hereunder if he or shehad continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordancewith the terms of this Agreement to Executive’s devisee, legatee or other designee or, should there beno such designee, to Executive’s estate.(c) The Company may assign this Agreement to any affiliate or subsidiary of theCompany without the consent of Executive and shall require any successor (whether direct or indirect,by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets ofthe Company (a “Successor”) to assume and agree to perform this Agreement in the same manner andto the same extent that the Company would have been required to perform it if no such succession hadtaken place. As used in this Agreement, (i) the term “Company” shall mean the Company ashereinbefore defined and any Successor and any permitted assignee to which this Agreement isassigned and (ii) the term “Board” shall mean the Board as hereinbefore defined and the board ofdirectors or equivalent governing body of any Successor and any permitted assignee to which thisAgreement is assigned.Section 5.06 Dispute Resolution. Except for any proceeding brought pursuant toSection 5.05 above, the parties agree that any dispute arising out of or relating to this Agreement or theformation, breach, termination or validity thereof, will be settled by binding arbitration by a panel ofthree arbitrators in accordance with the commercial arbitration rules of the American ArbitrationAssociation. The arbitration proceedings will be located in Philadelphia, Pennsylvania. The arbitratorsare not empowered to award damages in excess of compensatory damages and each party irrevocablywaives any damages in excess of compensatory damages. Judgment upon any arbitration award maybe entered into any court having jurisdiction thereof- 9 - and the parties consent to the jurisdiction of any court of competent jurisdiction located in the EasternDistrict of Pennsylvania.Section 5.07 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMEDTO BE MADE IN THE COMMONWEALTH OF PENNSYLVANIA, INTERPRETATION,CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT IN ALL RESPECTSHALL BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OFPENNSYLVANIA WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.Section 5.08 Amendment; No Waiver. No provision of this Agreement may beamended, modified, waived or discharged except by a written document signed by Executive and dulyauthorized officer of the Company. The failure of a party to insist upon strict adherence to any term ofthis Agreement on any occasion shall not be considered as a waiver of such party’s rights or deprivesuch party of the right thereafter to insist upon strict adherence to that term or any other term of thisAgreement. No failure or delay by any party in exercising any right or power hereunder will operateas a waiver thereof, nor will any single or partial exercise of any other right or power. No agreementsor representations, oral or otherwise, express or implied, with respect to the subject matter hereof havebeen made by any party, which are not set forth expressly in this Agreement.Section 5.09 Severability. If any term or provision of this Agreement is invalid, illegalor incapable of being enforced by any applicable law or public policy, all other conditions andprovisions of this Agreement shall nonetheless remain in full force and effect so long as the economicand legal substance of the transactions contemplated by this Agreement is not affected in any mannermaterially adverse to any party. Upon any such determination that any term or other provision isinvalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modifythis Agreement so as to effect the original intent of the parties as closely as possible in a mutuallyacceptable manner in order that the transactions contemplated hereby be consummated as originallycontemplated to the fullest extent possible.Section 5.10 Survival. The rights and obligations of the parties under the provisionsof this Agreement that relate to post-termination obligations shall survive and remain binding andenforceable, notwithstanding the expiration of the term of this Agreement, the termination ofExecutive’s employment with the Company for any reason or any settlement of the financial rights andobligations arising from Executive’s employment hereunder, to the extent necessary to preserve theintended benefits of such provisions.Section 5.11 Notices. All notices and other communications required or permitted bythis Agreement will be made in writing and all such notices and communications will be deemed tohave been duly given when delivered or (unless otherwise specified) mailed by United States certifiedor registered mail, return receipt requested, postage prepaid, addressed, if to the Company, at itsprincipal office, and if to Executive, at Executive’s last address on file with the Company. Either partymay change such address from time to time by notice to the other.Section 5.12 Headings and References. The headings of this Agreement are insertedfor convenience only and neither constitute a part of this Agreement nor affect in any way the- 10 - meaning or interpretation of this Agreement. When a reference in this Agreement is made to a Section,such reference shall be to a Section of this Agreement unless otherwise indicated.Section 5.13 Counterparts. This Agreement may be executed in one or morecounterparts (including via facsimile), each of which shall be deemed to be an original, but all of whichtogether shall constitute one and the same instrument.[signature page follows]- 11 - IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the date firstwritten above.STRONGBRIDGE U.S. INC.By:Name: A. Brian Davis Title: Chief Financial Officer EXECUTIVE Matthew Pauls- 12 -  ATTACHMENT A GENERAL RELEASE 1. Matthew Pauls (“Executive”), for and in consideration of the commitments ofStrongbridge U.S. Inc. (the “Company”) as set forth in Article III of the Amended and RestatedEmployment Agreement dated as of October 13, 2017 (the “Employment Agreement”), and intendingto be legally bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Companyand its present and former divisions, subsidiaries, parents, predecessor and successor corporations,officers, directors, and their respective successors, predecessors, assigns, heirs, executors, andadministrators (collectively, “Releasees”) from all causes of action, suits, debts, claims and demandswhatsoever in law or in equity, which Executive ever had, now has, or hereafter may have, whetherknown or unknown, or which Executive’s heirs, executors, or administrators may have, by reason ofany matter, cause or thing whatsoever, up to the date of Executive’s execution of this General Release,particularly, but without limitation of the foregoing general terms, any claims arising from or relating inany way to Executive’s employment relationship with the Company and Releasees, the terms andconditions of that relationship, and the termination of that relationship, including, but not limited to, anyclaims arising under any applicable Company employee benefit plan(s), the Age Discrimination inEmployment Act, the Older Workers’ Benefit Protection Act, Title VII of The Civil Rights Act of 1964,the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, theAmericans with Disabilities Act, the Employee Retirement Income Security Act of 1974, the Family andMedical Leave Act, the Worker Adjustment and Retraining Notification Act, Pennsylvania employmentlaws, and any other federal, state and local employment laws, as amended, and any other claims underany federal, state or local common law, statutory, or regulatory provision, now or hereafter recognized,and any claims for attorneys’ fees and costs. This General Release is effective without regard to thelegal nature of the claims raised and without regard to whether any such claims are based upon tort,equity, implied or express contract or discrimination of any sort.2. To the fullest extent permitted by law, and subject to the provisions of Paragraph 3below, Executive represents and affirms that (i) Executive has not filed or caused to be filed onExecutive’s behalf any claim for relief against the Company or any Releasee and, to the best ofExecutive’s knowledge and belief, no outstanding claims for relief have been filed or asserted againstthe Company or any Releasee on Executive’s behalf; and (ii) Executive has no knowledge of anyimproper, unethical or illegal conduct or activities that Executive has not already reported to anysupervisor, manager, department head, human resources representative, agent or other representative ofthe Company, to any member of the Company’s legal or compliance departments, or to the ethicshotline; and (iii) Executive will not file, commence, prosecute or participate in any judicial or arbitralaction or proceeding against the Company or any Releasee based upon or arising out of any act,omission, transaction, occurrence, contract, claim or event existing or occurring on or before the date ofexecution of this General Release.3. The release of claims described in Paragraph 1 of this General Release does notpreclude Executive from filing a charge with the U.S. Equal Employment OpportunityCommission. However, Executive agrees and hereby waives any and all rights to any monetary reliefor other personal recovery from any such charge, including costs and attorneys’ fees. 4. Subject to the provisions of Paragraph 3 of this General Release, in further considerationof the commitments of the Company as described in the Employment Agreement, Executive agrees thatExecutive will not file, claim, sue or cause or permit to be filed, any civil action,US_ACTIVE-123526099.3-RICHERKA 03/12/2018 5:55 AM suit or legal proceeding seeking equitable or monetary relief (including damages, injunctive,declaratory, monetary or other relief) for himself involving any matter released in Paragraph 1. In theevent that suit is filed in breach of this release of claims, it is expressly understood and agreed that thisrelease of claims shall constitute a complete defense to any such suit. In the event any Releasee isrequired to institute litigation to enforce the terms of this paragraph, Releasees shall be entitled torecover reasonable costs and attorneys' fees incurred in such enforcement. Executive further agreesand covenants that should any person, organization, or other entity file, claim, sue, or cause or permit tobe filed any civil action, suit or legal proceeding involving any matter occurring at any time in the past,Executive will not seek or accept personal equitable or monetary relief in such civil action, suit or legalproceeding. Nothing in this General Release shall prohibit or restrict Executive from: (i) making anydisclosure of information required by law; (ii) providing information to, or testifying or otherwiseassisting in any investigation or proceeding brought by any federal regulatory or law enforcementagency or legislative body, any self-regulatory organization, or the Company’s designated legal,compliance or human resources officers; or (iii) filing, testifying, participating in or otherwise assistingin a proceeding relating to an alleged violation of any federal, state or municipal law relating to fraud,or any rule or regulation of the Securities and Exchange Commission or any self-regulatoryorganization.5. Executive understands and agrees that the payments, benefits and agreements providedin the Employment Agreement are being provided to Executive in consideration for Executive’sacceptance and execution of, and in reliance upon Executive’s representations in, the EmploymentAgreement and this General Release, and that they are greater than the payments, benefits andagreements, if any, to which Executive would have received if Executive had not executed theEmployment Agreement and this General Release. In addition, Executive acknowledges and agreesthat Executive has been paid all amounts owed to Executive as of the date of Executive’s signing of thisGeneral Release.6. Executive and the Company agree and acknowledge that the agreement by theCompany described in the Employment Agreement, and the settlement and termination of any assertedor unasserted claims against the Releasees, are not and shall not be construed to be an admission of anyviolation of any federal, state or local statute or regulation, or of any duty owed by any of the Releaseesto Executive.7. This General Release and the obligations of the parties hereunder shall be construed,interpreted and enforced in accordance with and be governed by the laws of Pennsylvania withoutreference to its conflicts of laws principles.8. Executive certifies and acknowledges as follows: a.that Executive has read the terms of this General Release, and that Executiveunderstands its terms and effects, including the fact that Executive has agreed toRELEASE AND FOREVER DISCHARGE the Company and each and everyone of its affiliated entities from any legal action arising out of Executive’srelationship with the Company and the termination of that relationship;b.that Executive has signed this Release voluntarily and knowingly in exchange forthe consideration described herein and in the Employment Agreement,- 14 - which Executive acknowledges is adequate and satisfactory to Executive and towhich Executive acknowledges that Executive would not otherwise be entitled;c.that Executive has been and is hereby advised in writing to consult with an attorneyprior to signing this General Release;d.that Executive does not waive rights or claims that may arise after the date thisGeneral Release is executed;e.that the Company has provided Executive with at least 21 (twenty-one) days withinwhich to consider this General Release, that any modifications, material orotherwise, made to this General Release have not restarted or affected in anymanner the original 21 (twenty-one) day consideration period, and that Executivehas signed on the date indicated below after concluding that this General Release issatisfactory to Executive;f.that Executive acknowledges that this General Release may be revoked byExecutive within seven (7) days after Executive’s execution, and it shall notbecome effective until the expiration of such seven-day revocation period. If thelast day of the revocation period is a Saturday, Sunday, or legal holiday in the statein which Executive resides, then the revocation period shall not expire until the nextfollowing day which is not a Saturday, Sunday, or legal holiday. In the event of atimely revocation by Executive, this General Release and the EmploymentAgreement will be deemed null and void and the Company will have no obligationshereunder; andg.that this General Release may not be signed prior to the third calendar day beforethe last day of the Term of the Employment Agreement. If this General Release issigned prior to the last day of the Term of the Employment Agreement, theCompany reserves the right to have Executive ratify the General Release on or afterthe last day of the Term.- 15 - Intending to be legally bound hereby, Executive executed the foregoing General Release on the dateindicated below. Matthew Pauls ___________________________Signature Date: ______________________ - 16 -EXHIBIT 10.8AMENDED AND RESTATED EMPLOYMENT AGREEMENTTHIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made byand between Strongbridge U.S. Inc., a Delaware corporation (the “Company”), and ___________________(“Executive”) as of October 13, 2017.W I T N E S S E T H:WHEREAS, the Company and Executive are parties to an amended and restated employment agreement(such agreement, the “Prior Agreement”); WHEREAS, the Company desires to continue to retain the services of Executive as set forth in thisAgreement, and Executive desires to serve the Company in such capacity, subject to the terms and conditions of thisAgreement; andWHEREAS, the Company and Executive intend for this Agreement to replace the Prior Agreement except asotherwise set forth herein.NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations containedherein, Company and Executive agree as follows:ARTICLE IEMPLOYMENT AND DUTIESSection 1.01 Employment and Term. Subject to the provisions of Article III of this Agreement, Executiveshall be employed by the Company for the period commencing on the date hereof and continuing until terminated asdescribed in Section 3.01 (the “Term”) on the terms and subject to the conditions set forth in this Agreement.Section 1.02 Position and Duties. Executive shall serve as the __________________ of the Company, or insuch other positions as the parties may agree. Executive shall have the duties and responsibilities customarily associatedwith such position and will perform such other duties as reasonably directed by the Chief Executive Officer of theCompany (the “CEO”) consistent with such position(s).Section 1.03 Scope. Executive will devote substantially all of his business time, attention, skills and efforts tothe performance of his duties. Executive acknowledges that his duties and responsibilities require Executive’s full-timebusiness efforts and agrees to not engage in any other business activity or interests which materially interfere or conflictwith the performance of Executive’s duties. Notwithstanding the foregoing, Executive may (a) serve on corporate,civic or charitable boards or committees of entities that do not compete with the Company, with the approval of theCEO, (b) deliver a reasonable number of lectures or fulfill speaking engagements, with the approval of the CEO, or (c)manage personal investments, so long as such activities do not significantly interfere with the performance ofExecutive’s duties. ARTICLE IICOMPENSATION AND BENEFITSSection 2.01 Base Salary. During the Term, the Company will pay Executive a base salary (the “BaseSalary”) at an initial rate of $___________ per year in accordance with the Company’s standard payroll practices. TheBase Salary will be reviewed at least annually by the Board of Directors of the Company (the “Board”) or a committeethereof and may be adjusted (in which case such adjusted amount shall be the “Base Salary”).Section 2.02 Annual Incentive. During Executive’s employment with the Company, and as determined bythe Board in its sole discretion, Executive shall be eligible for an annual cash incentive (the “Annual Incentive”) with atarget of forty percent (40%) of the Base Salary (such percentage, the “Target Annual Incentive”). The AnnualIncentive shall be based on the achievement of predetermined performance goals as determined annually by the CEOand the Board, which shall be provided to Executive in writing no later than thirty (30) days following the beginning ofthe year to which they relate. The actual Annual Incentive earned in any particular year may be greater or lower thanthe Target Annual Incentive, depending on the level of achievement of the applicable performance goals and thediscretion of the Board. The Annual Incentive shall be paid to Executive as soon as practicable, but in no event laterthan the date that is two-and-one-half months following the end of the taxable year (of Executive, or the Company,whichever is later) in which such incentive is earned. Notwithstanding anything herein to the contrary, Executive’sAnnual Incentive for the 2015 fiscal year shall be based on a full year of employment and not pro-rated.Section 2.03 Long-Term Incentive Plans. Executive shall be eligible to receive grants under the Company’slong-term incentive plans (including stock option, restricted stock and other equity compensation plans and any otherlong-term incentive plans) at the discretion of the CEO and the Board.Section 2.04 Business and Entertainment Expenses. Subject to the Company’s standard policies andprocedures for expense reimbursement as applied to its executive employees generally, the Company shall reimburseExecutive for, or pay on behalf of Executive, reasonable out-of-pocket business expenses incurred by Executive onbehalf of the Company.Section 2.05 Other Company Benefits. Executive shall be entitled to participate in all employee benefitplans, practices and programs maintained by the Company and made available to its similarly situated executives,including the Company’s paid time-off policy. Executive shall also be entitled to paid time-off for all holidays in theU.S. in accordance with the applicable Company policy. - 2 - ARTICLE IIITERMINATIONSection 3.01 General. The Company may terminate Executive’s employment for any reason or no reason,and Executive may terminate his employment for any reason or no reason, in either case subject only to the terms ofthis Agreement. For purposes of this Agreement, the following terms have the following meanings:(a) “Accrued Obligations” shall mean (i) Executive’s earned but unpaid Base Salary through theTermination Date; (ii) payment of any annual, long-term, or other incentive award which relates to a completed fiscalyear or performance period, as applicable, and is payable (but not yet paid) on or before the Termination Date; (iii) alump-sum payment in respect of accrued but unused vacation days at Executive’s per-business-day Base Salary rate ineffect as of the Termination Date; and (iv) any unpaid expense or other reimbursements due pursuant to Section 2.04hereof.(b) “Cause” shall mean (i) Executive’s conviction of, or plea of guilty or nolo contendere to, anyfelony or any crime involving theft, embezzlement, dishonesty or moral turpitude; (ii) any act by Executive constitutingwillful misconduct, deliberate malfeasance, dishonesty, unethical conduct or gross negligence in the performance of hisduties; (iii) Executive’s willful and continued failure to perform any of the duties of his position (which has not beencured within thirty (30) days following the first written notice from the Company describing such failure in reasonabledetail); or (iv) any material breach (which has not been cured within thirty (30) days following the first written noticefrom the Company describing such breach in reasonable detail) by Executive of this Agreement or any other agreementbetween Executive and the Company or any of its affiliates.(c) “Change in Control” shall mean the occurrence of any of the following:(i) any person or group of persons becomes the beneficial owner, directly or indirectly, ofsecurities of the Company representing more than fifty percent (50%) of the combined voting power of theCompany’s then outstanding securities (a “Majority of the Securities”); provided that if the person or group ofpersons is already deemed to own more than 50% of the total fair market value or total voting power, then theacquisition of additional stock by such person or group of persons shall not constitute an additional Change inControl;(ii) the stockholders of the Company approve a plan of complete liquidation of theCompany;(iii) the sale or disposition of all or substantially all of the Company’s assets;(iv) a merger, consolidation or reorganization of the Company with or involving any otherentity, other than a merger, consolidation or reorganization that would result in the voting securities of theCompany outstanding immediately prior thereto- 3 - continuing to represent (either by remaining outstanding or by being converted into voting securities of thesurviving entity) at least a 50% of the combined voting power of the Company (or such surviving entity)outstanding immediately after such merger, consolidation or reorganization owned in approximately the sameproportion of such ownership by each of the prior shareholders as prior to the transaction.(v) Notwithstanding the foregoing, the following acquisitions shall not constitute a Changein Control: (A) an acquisition by the Company or entity controlled by the Company, or (B) an acquisition by anemployee benefit plan (or related trust) sponsored or maintained by the Company.(d) “Disability” shall mean Executive’s becoming incapacitated for a period of at least one hundredeighty (180) days by accident, sickness or other circumstance that renders Executive mentally or physically incapableof performing the material duties and services required of Executive hereunder on a full-time basis during such period.A termination of Executive’s employment due to a Disability shall be effective only if the party terminating Executive’semployment first gives at least fifteen (15) days’ written notice of such termination to the other party.(e) “Good Reason” shall mean, without Executive’s express written consent, the occurrence of anyone or more of the following: (i) a material diminution by the Company of Executive’s Base Salary, other than anydiminution that is also applicable in a substantially similar manner and proportion to the other senior executives of theCompany; (ii) the assignment to Executive of duties or responsibilities which are materially inconsistent withExecutive’s position; (iii) a change in the principal location at which Executive performs his duties for the Company toa new location that is more than fifty (50) miles from the prior location; or (iv) an action or inaction that constitutes amaterial breach of this Agreement by the Company.A termination of employment by Executive for Good Reason shall be effectuated by giving the Company writtennotice (“Notice of Termination for Good Reason”), not later than thirty (30) days following the occurrence of thecircumstance that constitutes Good Reason, setting forth in reasonable detail the specific conduct of the Company thatconstitutes Good Reason and the specific provision(s) of this Agreement on which Executive relied. The Companyshall be entitled, during the forty-five (45) day period following receipt of a Notice of Termination for Good Reason, tocure the circumstances that gave rise to Good Reason, provided that the Company shall be entitled to waive its right tocure or reduce the cure period by delivery of written notice to that effect to Executive (such forty-five (45) day orshorter period, the “Cure Period”). If, during the Cure Period, such circumstance is remedied, Executive will not bepermitted to terminate employment for Good Reason as a result of such circumstance. If, at the end of the Cure Period,the circumstance that constitutes Good Reason has not been remedied, Executive will be entitled to terminateemployment for Good Reason during the thirty (30) day period that follows the end of the Cure Period. If Executivedoes not terminate employment during such thirty (30) day period, Executive will not be permitted to terminateemployment for Good Reason as a result of such event.(f) “Pro-Rata Annual Incentive” shall mean an amount equal to (i) the Annual Incentive thatExecutive would have been entitled to receive for the calendar year that includes the- 4 - Termination Date if his employment hereunder had continued (as determined by the Board based upon the actualachievement of the applicable performance goals), multiplied by (ii) a fraction, the numerator of which is the number ofdays he was employed hereunder during such year and the denominator of which is the number of days in such year.(g) “Termination Date” shall mean the date on which Executive’s employment hereunderterminates.Section 3.02 Termination Without Cause or by Executive with Good Reason or Due to Executive’sDeath. If the Company terminates Executive’s employment without Cause, or Executive terminates for Good Reason,or Executive’s employment is terminated due to Executive’s death, the Term shall expire on the Termination Date andExecutive shall be entitled to: (a) the Accrued Obligations; (b) an amount equal to the sum of (i) twelve (12) months ofthe annual Base Salary as in effect immediately prior to the Termination Date and (ii) the Target Annual Incentive, paidin equal installments on the normal payroll cycle over the twelve (12) month period that begins on the sixtieth (60) dayfollowing the Termination Date; (c) the Pro-Rata Annual Incentive, payable in a cash lump sum to Executive on thedate Company pays its annual incentive compensation bonuses for the year that includes the Termination Date ifExecutive’s employment continued; and (d) medical, dental benefits provided by the Company to Executive andExecutive’s spouse and dependents (in each case, as provided in any applicable plan) at least equal to the levels ofbenefits provided to other similarly situated active employees of the Company and its subsidiaries until the earlier of (i)the one-year anniversary of the Termination Date or (ii) the date that Executive becomes covered under a subsequentemployer’s medical and dental plans.Section 3.03 Reserved.Section 3.04 Termination Without Cause, by Executive with Good Reason, or Due to Executive’s Death following a Change in Control of the Company. If the Company terminates Executive’s employmentwithout Cause, Executive terminates for Good Reason, or Executive’s employment is terminated due to Executive’sdeath, in any case, within twenty four (24) months following the occurrence of Change in Control, the Term shallexpire on the Termination Date and, in lieu of the benefits set forth in Section 3.02 or 3.03, Executive shall be entitledto: (a) the Accrued Obligations; (b) an amount equal to the sum of (i) eighteen (18) months of the annual Base Salaryas in effect immediately prior to the Termination Date and (ii) the Target Annual Incentive, paid in equal installmentson the normal payroll cycle over the eighteen (18) month period that begins on the sixtieth (60) day following theTermination Date; (c) the Pro-Rata Annual Incentive, payable in a cash lump sum to Executive on the date Companypays its annual incentive compensation bonuses for the year that includes the Termination Date if Executive’semployment continued; (d) medical, dental benefits provided by the Company to Executive and Executive’s spouseand dependents (in each case, as provided in any applicable plan) at least equal to the levels of benefits provided toother similarly situated active employees of the Company and its subsidiaries until the earlier of (i) the one-yearanniversary of the Termination Date or (ii) the date that Executive becomes covered under a subsequent employer’smedical and dental plans; and (e) the acceleration of vesting of all unvested equity or equity based awards held byExecutive as of the Termination Date.- 5 - ththSection 3.05 Other Terminations. If Executive’s employment hereunder is terminated (a) by Executivewithout Good Reason; (b) by the Company for Cause; or (c) due to Executive’s Disability, the Term shall expire as ofthe Termination Date and Executive shall be entitled to the Accrued Obligations.Section 3.06 Release. Executive’s entitlement to the payments (other than the Accrued Obligations) andbenefits described in this Article III is expressly contingent upon Executive providing the Company with a signedrelease that is attached hereto as Attachment A (the “Release”). To be effective, such Release must be delivered byExecutive to the Company no later than forty-five (45) days following the Termination Date and must not be revokedduring the seven (7) days following such delivery. If such Release is not executed in a timely manner or is revoked, allsuch payments and benefits shall immediately cease and Executive shall be required to repay to the Company any suchpayments that have already been paid to Executive.ARTICLE IVRESTRICTIVE COVENANTSSection 4.01 Confidentiality.(a) Company Information. Executive agrees at all times during the Term of this Agreement andthereafter, to hold in strictest confidence, and not to use, except in connection with the performance of Executive’sduties, and not to disclose to any person or entity without written authorization of the Company, any ConfidentialInformation of the Company. As used herein, “Confidential Information” means any Company proprietary orconfidential information, technical data, trade secrets or know-how, including, but not limited to, research, productplans, products, services, customer lists and customers, markets, software, developments, inventions, processes,formulas, technology, designs, drawings, engineering, marketing, distribution and sales methods and systems, sales andprofit figures, finances and other business information disclosed to Executive by the Company, either directly orindirectly in writing, orally or by drawings or inspection of documents or other tangible property. However,Confidential Information does not include any of the foregoing items which has become publicly known and madegenerally available through no wrongful act of Executive.(b) Executive-Restricted Information. Executive agrees that during the Term of this AgreementExecutive will not improperly use or disclose any proprietary or confidential information or trade secrets of any personor entity with whom Executive has an agreement or duty to keep such information or secrets confidential.(c) Third Party Information. Executive recognizes that the Company has received and in the futurewill receive from third parties their confidential or proprietary information subject to a duty on the Company’s part tomaintain the confidentiality of such information and to use it only for certain limited purposes. Executive agrees at alltimes during the Term of this Agreement and thereafter, to hold in strictest confidence, and not to use, except inconnection with the performance of Executive’s duties, and not to disclose to any person or entity, or to use it except asnecessary in performing Executive’s duties, consistent with the Company’s agreement with such third party.- 6 - Section 4.02 Non-Competition.(a) Executive acknowledges that, during the Term, Executive has had access to informationconcerning the Company’s critical business strategies, engineering and technology development plans, competitiveanalyses, organizational structure. Accordingly, in consideration of the compensation provided under this Agreement,Executive agrees that during the Term and for the one (1) year period thereafter, Executive will not directly orindirectly, own, manage, operate, control (including indirectly through a debt or equity investment), provide servicesto, or be employed by, any person or entity engaged in any business that is (i) located in or provides services orproducts to a region in which the Company does business, and (ii) competitive with the business activities of theCompany as they existed during the period that Executive provided services to the Company.(b) Executive acknowledges that the restrictions contained under this Section 4.02 are reasonableand necessary to protect the legitimate interests of the Company, that the Company would not have executed thisAgreement in the absence of such restrictions, and that any violation of any provision of this paragraph will result inirreparable injury to the Company. In the event the provisions under this Section 4.02 shall ever be deemed to exceedthe time, scope or geographic limitations permitted by applicable laws, then such provisions shall be reformed to themaximum time, scope or geographic limitations, as the case may be, permitted by applicable laws.Section 4.03 Injunctive Relief. Executive agrees that it is impossible to measure in money the damageswhich will accrue to the Company by reason of a failure by Executive to perform any of Executive’s obligations underthis Article IV. Accordingly, if Company or any of its affiliates institutes any action or proceeding to enforce its rightsunder this Article IV, to the extent permitted by applicable law, Executive hereby waives the claim or defense that theCompany or its affiliates has an adequate remedy at law, and Executive shall not claim that any such remedy at lawexists.ARTICLE VMISCELLANEOUSSection 5.01 Withholding. The Company shall withhold all applicable federal, state and local taxes, socialsecurity and workers’ compensation contributions and other amounts as may be required by law with respect tocompensation payable to Executive.Section 5.02 Modification of Payments.(a) In the event it shall be determined that any payment, right or distribution by the Company orany other person or entity to or for the benefit of Executive pursuant to the terms of this Agreement or otherwise, inconnection with, or arising out of, his employment with the Company or a change in ownership or effective control ofthe Company or a substantial portion of its assets (a “Payment”) is a “parachute payment” within the meaning ofSection 280G of the Internal Revenue Code of 1986, as amended (the “Code”) on account of the aggregate value ofthe Payments due to Executive being equal to or greater than three times the “base amount,” as defined- 7 - in Section 280G(b)(3) of the Code, (the “Parachute Threshold”) so that Executive would be subject to the excise taximposed by Section 4999 of the Code (the “Excise Tax”) and the net after-tax benefit that Executive would receive byreducing the Payments to the Parachute Threshold is greater than the net after-tax benefit Executive would receive ifthe full amount of the Payments were paid to Executive, then the Payments payable to Executive shall be reduced (butnot below zero) so that the Payments due to Executive do not exceed the amount of the Parachute Threshold, reducingfirst any Payments under Section 3.02(b) hereof.(b) The Company hereby agrees that, for purposes of determining whether any payment andbenefits set forth in Section 3.04 above would be subject to the Excise Tax, the non-compete set forth in in Section4.02 above shall be treated as an agreement for the performance of personal services. The Company hereby agrees toindemnify, defend, and hold harmless Executive from and against any adverse impact, tax, penalty, or excise taxresulting from the Company or accountant’s attribution of a value to the non-compete set forth in in Section 4.02 abovethat is less than the total compensation amount that would be disclosed under Item 402(c) of Securities and ExchangeCommission Regulation S-K if Executive had been a “named executive officer” of the Company in the year prior toyear of the event that triggers the Excise Tax, to the extent the use of such lesser amount results in a larger Excise Taxthan Executive would have been subject to had the Company or accountant attributed a value to the non-compete setforth in in Section 4.02 above that is at least equal to the total compensation amount disclosed under Item 402(c) ofSecurities and Exchange Commission Regulation S-K for such year..Section 5.03 Section 409A.(a) Notwithstanding anything herein to the contrary, this Agreement is intended to be interpretedand applied so that the payment of the benefits set forth herein either shall either be exempt from the requirements ofSection 409A of the Code (“Section 409A”) or shall comply with the requirements of such provision.(b) Notwithstanding any provision of this Agreement to the contrary, if Executive is a “specifiedemployee” within the meaning of Section 409A, any payments or arrangements due upon a termination of Executive’semployment under any arrangement that constitutes a “nonqualified deferral of compensation” within the meaning ofSection 409A and which do not otherwise qualify under the exemptions under Treas. Regs. Section 1.409A-1(including without limitation, the short-term deferral exemption or the permitted payments under Treas. Regs. Section1.409A-1(b)(9)(iii)(A)), shall be delayed and paid or provided, without interest, on the earlier of (i) the date which issix (6) months after Executive’s “separation from service” (as such term is defined in Section 409A and the regulationsand other published guidance thereunder) for any reason other than death, and (ii) the date of Executive’s death.(c) After any Termination Date, Executive shall have no duties or responsibilities that areinconsistent with having a “separation from service” within the meaning of Section 409A and, notwithstandinganything in the Agreement to the contrary, distributions upon termination of employment of nonqualified deferredcompensation may only be made upon a -separation from service” as determined under Section 409A and such dateshall be the Termination Date for purposes of this Agreement. Each payment under this Agreement or otherwise shallbe treated as a separate payment for purposes of Section 409A. In no event may- 8 - Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement whichconstitutes a -nonqualified deferral of compensation” within the meaning of Section 409A and to the extent an amountis payable within a time period, the time during which such amount is paid shall be in the discretion of the Company.Section 5.04 Merger Clause. Effective as of the date hereof, this Agreement contains the complete, full, andexclusive understanding of Executive and the Company as to its subject matter and shall, on such date, and supersedeany prior employment agreement between Executive and the Company (and its affiliates), including the PriorAgreement. Any amendments to this Agreement shall be effective and binding on Executive and the Company only ifany such amendments are in writing and signed by both Parties.Section 5.05 Assignment.(a) This Agreement is personal to Executive and, without the prior written consent of theCompany, shall not be assigned by Executive otherwise than by will or the laws of descent and distribution, and anyassignment in violation of this Agreement shall be void.(b) Notwithstanding the foregoing Section 5.05(a), this Agreement and all rights of Executivehereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors,administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts wouldstill be payable to him or her hereunder if he or she had continued to live, all such amounts, unless otherwise providedherein, shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee or other designeeor, should there be no such designee, to Executive’s estate.(c) The Company may assign this Agreement to any affiliate or subsidiary of the Company withoutthe consent of Executive and shall require any successor (whether direct or indirect, by purchase, merger, consolidationor otherwise) to all or substantially all of the business or assets of the Company (a “Successor”) to assume and agree toperform this Agreement in the same manner and to the same extent that the Company would have been required toperform it if no such succession had taken place. As used in this Agreement, (i) the term “Company” shall mean theCompany as hereinbefore defined and any Successor and any permitted assignee to which this Agreement is assignedand (ii) the term “Board” shall mean the Board as hereinbefore defined and the board of directors or equivalentgoverning body of any Successor and any permitted assignee to which this Agreement is assigned.Section 5.06 Dispute Resolution. Except for any proceeding brought pursuant to Section 5.05 above, theparties agree that any dispute arising out of or relating to this Agreement or the formation, breach, termination orvalidity thereof, will be settled by binding arbitration by a panel of three arbitrators in accordance with the commercialarbitration rules of the American Arbitration Association. The arbitration proceedings will be located in Philadelphia,Pennsylvania. The arbitrators are not empowered to award damages in excess of compensatory damages and eachparty irrevocably waives any damages in excess of compensatory damages. Judgment upon any arbitration award maybe entered into any court having jurisdiction thereof and the parties consent to the jurisdiction of any court ofcompetent jurisdiction located in the Eastern District of Pennsylvania.- 9 - Section 5.07 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE MADE INTHE COMMONWEALTH OF PENNSYLVANIA, INTERPRETATION, CONSTRUCTION ANDPERFORMANCE OF THIS AGREEMENT IN ALL RESPECT SHALL BE GOVERNED BY THE LAWSOF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO ITS PRINCIPLES OFCONFLICTS OF LAW.Section 5.08 Amendment; No Waiver. No provision of this Agreement may be amended, modified, waivedor discharged except by a written document signed by Executive and duly authorized officer of the Company. Thefailure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be consideredas a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that termor any other term of this Agreement. No failure or delay by any party in exercising any right or power hereunder willoperate as a waiver thereof, nor will any single or partial exercise of any other right or power. No agreements orrepresentations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by anyparty, which are not set forth expressly in this Agreement.Section 5.09 Severability. If any term or provision of this Agreement is invalid, illegal or incapable of beingenforced by any applicable law or public policy, all other conditions and provisions of this Agreement shallnonetheless remain in full force and effect so long as the economic and legal substance of the transactions contemplatedby this Agreement is not affected in any manner materially adverse to any party. Upon any such determination that anyterm or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faithto modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptablemanner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullestextent possible.Section 5.10 Survival. The rights and obligations of the parties under the provisions of this Agreement thatrelate to post-termination obligations shall survive and remain binding and enforceable, notwithstanding the expirationof the term of this Agreement, the termination of Executive’s employment with the Company for any reason or anysettlement of the financial rights and obligations arising from Executive’s employment hereunder, to the extentnecessary to preserve the intended benefits of such provisions.Section 5.11 Notices. All notices and other communications required or permitted by this Agreement will bemade in writing and all such notices and communications will be deemed to have been duly given when delivered or(unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postageprepaid, addressed, if to the Company, at its principal office, and if to Executive, at Executive’s last address on filewith the Company. Either party may change such address from time to time by notice to the other.Section 5.12 Headings and References. The headings of this Agreement are inserted for convenience onlyand neither constitute a part of this Agreement nor affect in any way the meaning or interpretation of this Agreement.When a reference in this Agreement is made to a Section, such reference shall be to a Section of this Agreement unlessotherwise indicated.- 10 - Section 5.13 Counterparts. This Agreement may be executed in one or more counterparts (including viafacsimile), each of which shall be deemed to be an original, but all of which together shall constitute one and the sameinstrument.[signature page follows] - 11 - IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the date first writtenabove. STRONGBRIDGE U.S. INC. By: Name:Matthew Pauls Title:President EXECUTIVE [NAME] - 12 - ATTACHMENT AGENERAL RELEASE__________________ (“Executive”), for and in consideration of the commitments of Strongbridge U.S. Inc.(the “Company”) as set forth in Article III of the Amended and Restated Employment Agreement dated as of October13, 2017 (the “Employment Agreement”), and intending to be legally bound, does hereby REMISE, RELEASE ANDFOREVER DISCHARGE the Company and its present and former divisions, subsidiaries, parents, predecessor andsuccessor corporations, officers, directors, and their respective successors, predecessors, assigns, heirs, executors, andadministrators (collectively, “Releasees”) from all causes of action, suits, debts, claims and demands whatsoever in lawor in equity, which Executive ever had, now has, or hereafter may have, whether known or unknown, or whichExecutive’s heirs, executors, or administrators may have, by reason of any matter, cause or thing whatsoever, up to thedate of Executive’s execution of this General Release, particularly, but without limitation of the foregoing generalterms, any claims arising from or relating in any way to Executive’s employment relationship with the Company andReleasees, the terms and conditions of that relationship, and the termination of that relationship, including, but notlimited to, any claims arising under any applicable Company employee benefit plan(s), the Age Discrimination inEmployment Act, the Older Workers’ Benefit Protection Act, Title VII of The Civil Rights Act of 1964, the CivilRights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, the Americans with DisabilitiesAct, the Employee Retirement Income Security Act of 1974, the Family and Medical Leave Act, the WorkerAdjustment and Retraining Notification Act, Pennsylvania employment laws, and any other federal, state and localemployment laws, as amended, and any other claims under any federal, state or local common law, statutory, orregulatory provision, now or hereafter recognized, and any claims for attorneys’ fees and costs. This General Release iseffective without regard to the legal nature of the claims raised and without regard to whether any such claims arebased upon tort, equity, implied or express contract or discrimination of any sort.To the fullest extent permitted by law, and subject to the provisions of Paragraph 3 below, Executive representsand affirms that (i) Executive has not filed or caused to be filed on Executive’s behalf any claim for relief against theCompany or any Releasee and, to the best of Executive’s knowledge and belief, no outstanding claims for relief havebeen filed or asserted against the Company or any Releasee on Executive’s behalf; and (ii) Executive has noknowledge of any improper, unethical or illegal conduct or activities that Executive has not already reported to anysupervisor, manager, department head, human resources representative, agent or other representative of the Company,to any member of the Company’s legal or compliance departments, or to the ethics hotline; and (iii) Executive will notfile, commence, prosecute or participate in any judicial or arbitral action or proceeding against the Company or anyReleasee based upon or arising out of any act, omission, transaction, occurrence, contract, claim or event existing oroccurring on or before the date of execution of this General Release.The release of claims described in Paragraph I of this General Release does not preclude Executive from filinga charge with the U.S. Equal Employment Opportunity Commission. However, Executive agrees and hereby waivesany and all rights to any monetary relief or other personal recovery from any such charge, including costs andattorneys’ fees.- 13 - Subject to the provisions of Paragraph 3 of this General Release, in further consideration of the commitments ofthe Company as described in the Employment Agreement, Executive agrees that Executive will not file, claim, sue orcause or permit to be filed, any civil action, suit or legal proceeding seeking equitable or monetary relief (includingdamages, injunctive, declaratory, monetary or other relief) for himself involving any matter released in Paragraph 1. Inthe event that suit is filed in breach of this release of claims, it is expressly understood and agreed that this release ofclaims shall constitute a complete defense to any such suit. In the event any Releasee is required to institute litigation toenforce the terms of this paragraph, Releasees shall be entitled to recover reasonable costs and attorneys’ fees incurredin such enforcement. Executive further agrees and covenants that should any person, organization, or other entity file,claim, sue, or cause or permit to be filed any civil action, suit or legal proceeding involving any matter occurring at anytime in the past, Executive will not seek or accept personal equitable or monetary relief in such civil action, suit or legalproceeding. Nothing in this General Release shall prohibit or restrict Executive from: (i) making any disclosure ofinformation required by law; (ii) providing information to, or testifying or otherwise assisting in any investigation orproceeding brought by any federal regulatory or law enforcement agency or legislative body, any self-regulatoryorganization, or the Company’s designated legal, compliance or human resources officers; or (iii) filing, testifying,participating in or otherwise assisting in a proceeding relating to an alleged violation of any federal, state or municipallaw relating to fraud, or any rule or regulation of the Securities and Exchange Commission or any self-regulatoryorganization.Executive understands and agrees that the payments, benefits and agreements provided in the EmploymentAgreement are being provided to Executive in consideration for Executive’s acceptance and execution of, and inreliance upon Executive’s representations in, the Employment Agreement and this General Release, and that they aregreater than the payments, benefits and agreements, if any, to which Executive would have received if Executive hadnot executed the Employment Agreement and this General Release. In addition, Executive acknowledges and agreesthat Executive has been paid all amounts owed to Executive as of the date of Executive’s signing of this GeneralRelease.Executive and the Company agree and acknowledge that the agreement by the Company described in theEmployment Agreement, and the settlement and termination of any asserted or unasserted claims against the Releasees,are not and shall not be construed to be an admission of any violation of any federal, state or local statute or regulation,or of any duty owed by any of the Releasees to Executive.This General Release and the obligations of the parties hereunder shall be construed, interpreted and enforcedin accordance with and be governed by the laws of Pennsylvania without reference to its conflicts of laws principles.a. Executive certifies and acknowledges as follows: that Executive has read the terms of this General Release,and that Executive understands its terms and effects, including the fact that Executive has agreed toRELEASE AND FOREVER DISCHARGE the Company and each and every one of its affiliated entitiesfrom any legal action arising out of Executive’s relationship with the Company and the termination of thatrelationship;- 14 - b. that Executive has signed this Release voluntarily and knowingly in exchange for the considerationdescribed herein and in the Employment Agreement, which Executive acknowledges is adequate andsatisfactory to Executive and to which Executive acknowledges that Executive would not otherwise beentitled;c. that Executive has been and is hereby advised in writing to consult with an attorney prior to signing thisGeneral Release;d. that Executive does not waive rights or claims that may arise after the date this General Release is executed;e. that the Company has provided Executive with at least 21 (twenty-one) days within which to consider thisGeneral Release, that any modifications, material or otherwise, made to this General Release have notrestarted or affected in any manner the original 21 (twenty-one) day consideration period, and thatExecutive has signed on the date indicated below after concluding that this General Release is satisfactoryto Executive;f. that Executive acknowledges that this General Release may be revoked by Executive within seven (7) daysafter Executive’s execution, and it shall not become effective until the expiration of such seven-dayrevocation period. If the last day of the revocation period is a Saturday, Sunday, or legal holiday in the statein which Executive resides, then the revocation period shall not expire until the next following day which isnot a Saturday, Sunday, or legal holiday. In the event of a timely revocation by Executive, this GeneralRelease and the Employment Agreement will be deemed null and void and the Company will have noobligations hereunder; andg. that this General Release may not be signed prior to the third calendar day before the last day of the Termof the Employment Agreement. If this General Release is signed prior to the last day of the Term of theEmployment Agreement, the Company reserves the right to have Executive ratify the General Release onor after the last day of the Term.- 15 - Intending to be legally bound hereby, Executive executed the foregoing General Release on the date indicatedbelow. [NAME] Signature Date: - 16 -Exhibit 21.1 Subsidiaries of the Company Strongbridge U.S. Inc. (a Delaware corporation)Strongbridge Ireland Limited (a private limited company incorporated under the laws of Ireland)Cortendo AB (publ) (a public limited liability company incorporated under the laws of Sweden)Cortendo Cayman Ltd. (an exempted company incorporated in the Cayman Islands) EXHIBIT 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 333-222818, 333-215532) of our report dated March 12, 2018, with respect to the consolidated financial statements of Strongbridge Biopharmaplc included in this Annual Report (Form 10-K) for the year ended December 31, 2017./s/ Ernst & Young LLPPhiladelphia, PennsylvaniaMarch 12, 2018 Exhibit 31.1 CERTIFICATIONS I, Matthew Pauls, certify that: 1. I have reviewed this Annual Report on Form 10-K of Strongbridge Biopharma plc; 2. Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairlypresent in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for,the periods presented in this Annual Report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including its consolidatedsubsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared; b) Designed such control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this reportour conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered bythis report based on such evaluation; and d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurredduring the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) thathas materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financialreporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controlover financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (orpersons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarizeand report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significantrole in the registrant’s internal control over financial reporting. Date: March 12, 2018 By:/s/ Matthew Pauls Matthew Pauls Chief Executive Officer (Principal Executive Officer)  Exhibit 31.2 CERTIFICATIONS I, A. Brian Davis, certify that: 1. I have reviewed this Annual Report on Form 10-K of Strongbridge Biopharma plc; 2. Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairlypresent in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for,the periods presented in this Annual Report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including its consolidatedsubsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared; b) Designed such control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this reportour conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered bythis report based on such evaluation; and d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurredduring the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) thathas materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financialreporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controlover financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (orpersons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarizeand report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significantrole in the registrant’s internal control over financial reporting. Date: March 12, 2018 By:/s/ A. Brian Davis A. Brian Davis Chief Financial Officer (Principal Financial Officer) Exhibit 32.1 CERTIFICATIONS PURSUANT TO 18 U.S.C. 1350 Pursuant to the requirement set forth in Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. § 1350), as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Matthew Pauls, the Chief Executive Officer (principalexecutive officer) of Strongbridge Biopharma plc (the “Company”), and A. Brian Davis, the Chief Financial Officer(principal financial officer) of the Company, each hereby certifies that, to his knowledge on the date hereof: (a) The Annual Report on Form 10-K of the Company for the period ended December 31, 2017 filed on the datehereof with the Securities and Exchange Commission (the “Annual Report”) fully complies with the requirements ofSection 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (b) The information contained in the Annual Report fairly presents, in all material respects, the financialcondition and results of operations of the Company for the period covered by the Annual Report. These certifications accompanying the Annual Report to which they relate, are not deemed filed with the Securities andExchange Commission and are not to be incorporated by reference into any filing of the Company under the SecuritiesAct of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date ofthe Annual Report), irrespective of any general incorporation language contained in such filing. A signed original ofthis written statement required by Section 906 has been provided to the Company and will be retained and furnished tothe Securities and Exchange Commission or its staff upon request. By:/s/ Matthew Pauls Matthew Pauls Chief Executive Officer(Principal Executive Officer) March 12, 2018 By:/s/ A. Brian Davis A. Brian Davis Chief Financial Officer(Principal Financial Officer) March 12, 2018 

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