Document:

ex10-15.htm

 

Exhibit 10.15

SEPARATION AGREEMENT AND GENERAL RELEASE

THIS SEPARATION AGREEMENT AND GENERAL RELEASE (“Agreement”) entered into on this 22 day of December, 2009 by and between Magyar
Bancorp, Inc., a Delaware corporation with its principal administrative office at 400 Somerset Street, New Brunswick, New Jersey 08901 (hereinafter “Magyar”) and Elizabeth E. Hance (“Hance”).

RECITALS

WHEREAS, Hance is employed by Magyar as President and Chief Executive Officer pursuant to the terms of an Employment Agreement dated March 16, 2006; and

WHEREAS, Magyar has decided to alter the duties and of Hance’s employment as President and Chief Executive Officer as currently provided for in the Employment Agreement between Magyar and Hance; and

WHEREAS, Hance has indicated that if her duties are changed in scope or function, she intends to invoke the provisions of Section 6 of her Employment Agreement and resign her position as President and Chief Executive
Officer; and

WHEREAS, for purposes of this Agreement, Hance is represented by Elizabeth Zuckerman, Esq. and has consulted with Ms. Zuckerman regarding the terms and conditions of this Agreement;

NOW, THEREFORE, for and in consideration of the promises and mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby
agree as follows:

1.           INCORPORATION OF RECITALS.  The above recitals are
incorporated by reference as if set forth at length herein.

 

2.           LAST DAY OF EMPLOYMENT.

 

(a)           Employee’s last day of employment with Magyar shall be December 31, 2009.    Magyar and Hance have agreed upon this separation date in light of Magyar’s decision to alter
the duties of Hance, and Hance’s decision to exercise the provision in her Employment Agreement to resign her employment in the event of a change in duties.  This separation shall not be deemed a termination for cause or termination due to a change in control.  If Hance signs this Agreement prior to December 31, 2009, the signing date shall be deemed her separation date.  Notwithstanding the December 31, 2009 separation date, Hance shall not be required to perform any services
for Magyar on or after the date this Agreement is presented to her for consideration.

 

           (b)           Employee agrees not to apply for employment/reemployment with Magyar and acknowledges that Magyar has no obligation to hire or rehire her.

  

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(c)           Employee agrees that she shall not participate in any way in the 2010 Annual Stockholders Meeting, and thereafter, if she participates in any meetings of stockholders, she shall do so without identifying
herself as a former employee of the Bank and without the use or knowledge of any information gained as a former employee of Magyar, and pursuant to all terms and conditions of Paragraph 8.

 

3.           PAYMENTS TO HANCE.

 

(a)           As consideration for the release of claims and other covenants and actions by Hance hereunder, Magyar agrees to pay Hance severance pay in the amount of three (3) times her current base salary of $264,075.00,
minus applicable payroll deductions.  Such payment shall be made in one lump sum on the first day of the seventh (7th) full month following Hance’s separation date from service, or July 1, 2010.  Hance shall also receive her Bancorp Board Retainer Fee for the fourth quarter of 2009 in the amount of $2500.00.  All such payments shall be reduced by regular and customary payroll deductions.  Magyar
shall also pay Hance’s FICC Trustees and Annual fee for 2009 in the amount of $500. The payment schedule set forth herein shall assume Hance signs the Agreement at least seven (7) days prior to the payment date, such that the revocation period referenced in paragraphs 11 and 12 has expired.  No payments shall be made hereunder prior to the end of the revocation period.

 

(b)           Magyar shall provide Hance and her husband with continued medical and dental coverage for a maximum period of 36 months after Hance’s separation date.   Such coverage shall also
include coverage, at Hance’s sole expense, for coverage for her dependent child under the provisions of COBRA.  Hance’s medical and dental coverage shall be continued under the provisions of COBRA for the maximum period allowable by law, with such COBRA payments, with the exception of payment for her dependent child, being paid by Magyar.  If Hance’s entitlement to COBRA expires prior to the ending coverage date provided herein, Magyar shall provide comparable coverage for
herself and her husband through a private plan paid for by Magyar.  Hance shall have the right to assume the cost of such coverage provided hereunder after the coverage ending date provided above as otherwise allowable by law.  Magyar shall also continue life insurance coverage for Hance at present levels for a period of 36 months.

 

(c)           Hance shall be provided with all benefits required under the terms of Magyar’s Executive Supplemental Retirement Income Agreement; Director Supplemental Retirement Income Agreement; and Director
Deferred Compensation Agreement as summarized below.  However, the plan documents will govern with regard to all obligations of the parties relating to the above plans, and in the event the summary provided herein is different, the plan documents shall govern.

 

	
  
	
(1)
	
Executive Supplemental Retirement Income Agreement.  Under the terms of this Agreement, Magyar shall make a final contribution of $68,994.00 to Hance’s Retirement Trust Fund attributable to Plan Year 2009 in the normal course of business.  No further contributions by Magyar shall be required.  The amount of benefits
payable to Hance shall be solely governed by the terms of the Executive Supplemental Retirement Income

  

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Agreement which is incorporated herein and shall govern for benefits provided thereunder.

 

	
  
	
(2)
	
Director Supplemental Retirement Income and Director Deferred Compensation Agreement.  Under the terms of these Agreements, Magyar has made a final contribution for Plan Year 2009 in the amount of $42,986.00.  In addition, Magyar shall continue to make annual interest contributions to the Director Supplement Retirement Income and
Director Deferred Compensation Agreement in the amounts of 6% and 10% respectively, pursuant to the terms of those agreements which are incorporated herein and shall govern for benefits provided thereunder.  If Hance withdraws funds from either plan prior to retirement, Magyar shall not be required to make additional contributions to either plan.  However, Magyar shall be required to continue to record interest, annuitize this interest, and pay same out to Hance at retirement as provided in
the plan documents.

 

(d)           Notwithstanding paragraphs (a), (b) and (c) above, in no event shall the payments provided for herein constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code.  In
order to avoid such a result, if deemed an “excess parachute payment,” such benefits shall be reduced to an amount $1.00 less than that amount deemed excessive.  The allocation of the reduction required shall be determined by Hance.

 

(e)           Employee acknowledges and understands that other than as specifically outlined herein, she is not entitled to any other payments or benefits from Magyar except as otherwise legally vested or required
by law.  Employee specifically  understands and agrees that she shall not receive and is not entitled to receive any other payments or benefits from Magyar except as specifically outlined herein or as otherwise required by law, and that such payments as specified above, along with the other provisions herein, constitute good and sufficient consideration for entering this Agreement.

 

(f)           Magyar and Hance shall agree on appropriate language to be provided to the SEC regarding Hance’s separation from service with Magyar, which is both acceptable to Hance and meets all Magyar’s
legal and ethical obligations to report.  Such report to the SEC shall also include a copy of a press release which shall be released by the Bank.  The substance of press release shall be that Hance has decided to leave her employment with the Bank to pursue other interests.

 

(g)           The separation of Hance’s employment shall have no effect on any vested rights of Hance under Magyar’s Restricted Stock Award Agreement or Equity Incentive Plan or other legally vested benefit,
including Hance grandfathered pension benefits.  All Magyar’s continuing obligations under such plans shall cease as of Hance’s separation date and no further vesting shall occur.  All parties agree that Hance has received her stock award for 2009, and no further stock awards are due or owing.

 

(h)           All payments hereunder are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. 1828(k), and the regulations promulgated thereunder at 12
C.F.R. part 359.

  

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4.           MUTUAL RELEASE OF CLAIMS.

 

(a)           Hance knowingly and voluntarily releases and forever discharges Magyar and all of the individuals or entities who, as of the date hereof are, or at any time during Hance’s employment were, Magyar
officers, directors, managers, employees, and owners (collectively, “Releasees”) of and from any and all claims, known and unknown, civil or criminal, vested or contingent against Releasees that Hance, Hance’s heirs, executors, administrators, successors, and assigns have or may have as of the date of execution of this Agreement, whether denominated claims, demands, causes of action, obligations, damages, or liabilities arising
from any and all bases, however, denominated (except workers’ compensation claims) to the date of this Agreement, including but not limited to claims of harassment or discrimination, any alleged violation of: Title VII of the Civil Rights Act of 1964, as amended; Sections 1981 through 1988 of Title 42 of the United States Code, as amended; The Employee Retirement Income Security Act of 1974, as amended (except for claims for vested benefits under ERISA); The Americans with Disabilities Act of 1990, as amended;
The Fair Labor Standards Act, as amended; The Occupational Safety and Health Act, as amended; The Family and Medical Leave Act of 1993, as amended; The New Jersey Law Against Discrimination, as amended; The New Jersey Minimum Wage Law, as amended; Equal Pay Law for New Jersey, as amended; The New Jersey Worker Health and Safety Act, as amended; The New Jersey Family Leave Act, as amended; The New Jersey Conscientious Employee Protection Act, as amended; any other federal, state or local civil or human rights
law or any other local, state or federal law, regulation or ordinance; any public policy, contract, tort, or common law; or any allegation for costs, fees, or other expenses including attorneys’ fees incurred in these matters.  Notwithstanding the preceding, the parties hereto understand and agree that the above release will not release or waive any performance obligation of a party under this Agreement.

 

(b)           Hance also acknowledges and agrees to specifically waive any rights, claims or actions of any kind under the Age Discrimination in Employment Act (ADEA) against Releasees and any and all other potentially
liable parties arising out Hance’s employment with or separation from Magyar up to the date of this Agreement.  Hance acknowledges that she has consulted with her attorney before signing this Agreement, and that she has had at least twenty-one (21) days to consider the terms of this Agreement prior to execution, and seven (7) days to revoke once executed.  Immaterial and material changes to this Agreement shall not toll the twenty-one (21) day period of consideration.

 

(c)           Magyar knowingly and voluntarily agrees to waive any and all actions it has or may have against Hance up to and including the date this Agreement is signed relating in any way to Hance’s job as
President and Chief Executive Officer of Magyar.   Magyar specifically acknowledges that it has Director and Officer Insurance coverage, with appropriate tail provisions, to cover reasonable and customary claims against Hance resulting from or relating to the actions or inactions, or alleged actions or inactions of Hance during the term of her employment.

  

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5.           WAIVER OF RIGHT TO FILE CHARGES OR COMPLAINTS. Hance
specifically agrees that she waives any right she may have to file any charge or complaint on her own behalf and/or to participate as a complainant in any charge or complaint which may be made by any other person or organization on her behalf before any federal, state, or local court or administrative agency against Magyar or any of its Releasees except as such waiver is prohibited by law.  Should any such charge or complaint be filed, Hance agrees that she shall not accept any relief or recovery therefrom.   Hance
confirms that no charge, complaint, or action in any forum or form has either been filed by her, on her behalf or in anyway relating to her employment with or separation from Magyar.  Except as prohibited by law, in the event that any such claim is filed, it will be dismissed with prejudice upon presentation of this Agreement and Hance will reimburse Magyar the costs, including attorneys’ fees, of defending any such action.

 

Employee affirms by signing this document that she has filed no actions, charges, complaints, claims or petitions against Releasees  relating to or arising out of her  employment with or separation from Magyar with any federal, state or local agency.   Hance
further acknowledges that she is not currently aware of any illness or injury related to or allegedly related to her employment with or separation from Magyar.

 

6.           NONADMISSION OF WRONGDOING.  Hance and Magyar each
agree that this Agreement shall not be deemed or construed at any time for any purpose as an admission by either party of any liability or unlawful or wrongful conduct of any kind.

 

7.           INDEMNIFICATION.  Hance agrees to indemnify and hold
Releasees harmless from and against any suit, claim, loss, liability, cost, expense, damage, or deficiency (including, without limitation, attorneys’ fees) (a) resulting from or relating to any breach of any representation, warranty covenant or term of this Agreement by Hance; or (b) asserted or threatened by any third party resulting from or relating to the actions or inactions, or alleged actions or inactions of Hance.  Releasee may set off any amounts owed to it pursuant to this Section against
amounts owed to Hance pursuant to the terms of this Agreement.  This paragraph shall not include any payments made by Hance pursuant to her mortgage agreement with Magyar.

 

Magyar agrees to indemnify and hold Hance harmless from and against any suit, claim, loss, liability, cost, expense, damage or deficiency resulting from any claims against Magyar or Hance relating to any actions performed or not performed by Hance as part of her duties at Magyar.  Magyar also shall continue
its obligations under Section 22, Indemnification of Hance’s Employment Agreement.

 

8.           CONFIDENTIALITY

 

(a)           In addition to the understandings and agreements contained in Section 11 of Hance’s Employment Agreement which are specifically incorporated herein and which Employee shall continue to abide by,  Employee
agrees that she shall not directly or indirectly use or disclose to any person, firm or corporation or entity, any Confidential Information (as hereinafter defined) of Magyar except (i) with the prior written consent of Magyar or (ii) to the

  

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extent necessary to comply with law or the valid order of a court of competent jurisdiction, in which event Hance shall notify Magyar, in writing, at least ten (10) business days prior to making such disclosure and when making such disclosure, she shall disclose only such Confidential Information which is legally required.  In
addition, Hance will use her best efforts to prevent any such prohibited use or disclosure by any other person.  In addition, Hance shall not disclose the existence of this Agreement or its terms and conditions to any other individual or entity.

 

“Confidential Information” means all confidential and proprietary information and trade secrets of Magyar, including, but not limited to, customer lists and relationships, customer account information, service and pricing information, account
and financial matters regarding Magyar, procedures and methods, information relating to Magyar work product, all processes and procedures developed by Magyar or any employee of Magyar, and other information of whatever nature that is not generally known to the public or that Hance became aware as a result of her position with Magyar.

 

(b)           Hance’s failure to comply with the confidentiality provisions of this Agreement and/or Section 11 of her Employment Agreement will be considered a material breach of this Agreement, will relieve
Magyar of any obligation to make payments hereunder or provide benefits hereunder, and will entitle Magyar to pursue all available equitable and legal remedies, including but not limited to all damages and specific performance of the terms of this Agreement.

 

9.           NON-DISPARAGEMENT.   Hance agrees that she shall
not at any time in any forum or manner disparage Magyar, it business practices, financial structure or soundness or in any other manner, nor disparage any of its current or former personnel, officers, directors, managers, employees and/or owners.  Hance further agrees that she shall not make, or authorize any person or entity to make, false or disparaging statements or remarks with respect to Magyar, its business, its current or former personnel, officers, directors, managers, employees and/or owners
or its operations or business practices, including but not limited to the circumstances of Hance’s separation from Magyar.  As part of this Agreement, Hance agrees that she shall not discuss the reasons for her separation from service from Magyar or the effective date thereof with any person or entity other than her spouse, and legal and financial advisors.

 

Magyar agrees that is shall not disparage, defame or demean Hance in any forum or manner, and shall not make, or authorize any person or entity to take such action on its behalf.

 

10.           NON-COMPETITION.    Hance agrees to continue
to be bound by Section 11, Non-Competition, contained in her Employment Agreement, including, but not limited to, her agreement not to compete with Magyar for a period of one (1) year following her termination date within 25 miles of any existing branch of Magyar or within 25 miles of any office for which Magyar has filed an application for regulatory approval to establish an office.  Hance further agrees that for a period of one (1) year following her termination date and within 25 miles of any branch
as defined above, Hance shall not work for or advise, consult, or otherwise serve with, directly or indirectly, lending or other business activities of Magyar.

  

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11.           CONSIDERATION OF AGREEMENT AND REVOCATION.  Hance
shall have twenty-one (21) days from receipt of this Agreement to consider its terms before execution.  Hance may revoke this Agreement for a period of seven (7) days following the day she executes this Agreement.  Any revocation within the seven (7) day period must be submitted, in writing, to Magyar, and state “I hereby revoke my acceptance of the Separation Agreement and General Release between Magyar Bancorp and the undersigned.”  The revocation must be actually received
by Joseph J. Lukacs, Jr., Chairman of the Board of Directors, Magyar Bancorp, 400 Somerset Street, PO Box 1365, New Brunswick, New Jersey 08901, via certified mail within seven (7) days of the execution of this Agreement.  If the last day of the revocation period is a weekend or legal holiday, then the revocation period will not expire until the next following day that is not a weekend or legal holiday.

12.           ENFORCEABLE DATE.  This Agreement will not become
effective or enforceable until the revocation period as set forth in Section 11 has expired.  No payments required hereunder by Magyar to Hance shall be made until this seven (7) day revocation period has expired and Hance has not revoked the Agreement.

13.           GOVERNING LAW.  This Agreement will be governed by,
and construed in accordance with, the laws of the State of New Jersey without reference to any conflict of law principles.

14.           ENTIRE AGREEMENT.  This Agreement contains the entire
agreement between the parties concerning the transactions contemplated herein and supersedes all prior agreements or understandings between the parties hereto relating to the subject matter hereof.  No oral representation, agreement, or understanding made by a party hereto will be valid or binding upon such party or any other party hereto with the exception of those portions of the Employment Agreement between Magyar and Hance specifically referenced herein and Hance’s Executive Supplemental Retirement
Income Agreement, Director Supplemental Retirement Income Agreement and Director Deferred Compensation Agreement.  Hance’s Employment Agreement shall become null and void and shall become fully and completely superseded, with the exception of Sections 10, 11 and 22 of the Employment Agreement, with the signing of this Agreement.

15.           SEVERABLE.  The provisions of this Agreement are
severable, and if any part of it is found to be unenforceable, the other provisions will remain fully valid and enforceable.

16.           ACKNOWLEDGEMENT.  HANCE
REPRESENTS AND AGREES THAT SHE FULLY UNDERSTANDS HER RIGHT TO DISCUSS ALL ASPECTS OF THIS AGREEMENT WITH COUNSEL; THAT SHE HAS AVAILED HERSELF OF THE RIGHT TO OBTAIN COUNSEL OF HER OWN CHOOSING; THAT EMPLOYEE HAS CAREFULLY READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS AGREEMENT; AND THAT EMPLOYEE HAS VOLUNTARILY ENTERED INTO THIS AGREEMENT.

  

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17.           NO RELIANCE.  Hance represents and acknowledges that
in executing this Agreement, she does not rely on and has not relied on any representation or statement not set forth herein.

HANCE HAS BEEN ADVISED THAT SHE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS AGREEMENT AND HAS BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT AND SHE HAS OBTAINED COUNSEL OF HER OWN CHOOSING.  HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE
PROMISES SET FORTH HEREIN, AND TO RECEIVE THEREBY THE SUMS AND BENEFITS SET FORTH IN THIS AGREEMENT, HANCE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE AND RELEASE ALL KNOWN AND UNKNOWN CLAIMS SHE HAS OR MIGHT HAVE AGAINST MAGYAR.

IN WITNESS WHEREOF, the parties have knowingly and voluntarily executed this Separation Agreement and General Release as of the date and year first above written.

	  	
MAGYAR BANCORP

	  
	  	
By:
	
/s/ Joseph J. Lukacs, Jr.

	  	  	
Name: Joseph J. Lukacs, Jr.

	  	  	
Title: Chairman

	  	  	  
	  	 	
EMPLOYEE:

	  	  	  
	  	 	
/s/ Elizabeth E. Hance

	  	 	
ELIZABETH E. HANCE

STATE OF NEW JERSEY:

              :SS.:

COUNTY OF Mercer:

On this 22 day of December, 2009, before me, the undersigned, personally appeared ELIZABETH E. HANCE who, I am satisfied, is the person who signed the foregoing instrument, and she did acknowledge that she signed, sealed and delivered the same as her voluntary act and
deed for the uses and purposed expressed in the instrument.

Edna M. Horan

Notary Public

38ex101to10q07380_12312009.htm

    Exhibit
10.1

     

    DRUG SUPPLY
AGREEMENT

    

    

    Les Laboratoires
Servier

    22 rue
Garnier

    92200 Neuilly sur
Seine Cedex

    France

    

    Product
Names:     [**]PCI-24781 (Pharmacyclics)

    

    

     

    
      	
              1)

            	
              Introduction

            

    

     

    [**]

    Pharmacyclics and
Servier have entered into a Collaboration Agreement, effective April 9, 2009 to
co-develop the HDAC Inhibitor identified as [**]or PCI-24781
(Pharmacyclics).  Pursuant to Section 4.3 of the Collaboration
Agreement, Pharmacyclics has agreed to use “Reasonable Efforts” (as defined in
the Collaboration Agreement) to manufacture or have manufactured quantities of
[**]for clinical use by Servier.  With this agreement (the
“Agreement”), Pharmacyclics will facilitate the manufacture of a targeted amount
of [**] cGMP quality [**]through its Third Party Manufacturing
organizations. The terms of this Agreement shall not amend the Collaboration
Agreement signed on April 9th,
2009, which specifies under Section 4.3 that a supply agreement shall be
negotiated between the parties containing terms consistent with such Section 4.3
and such other terms as are reasonable and customary for arrangements of this
type.

    

    

    

    

     

       

    

    

    

    

     

    
      	
              2)

            	
              Scope of
      Work: Deliverables, Timing,
Resources

            

    

    

    The table below has
the project divided into phases to show activities required to complete the
manufacture of a targeted amount of [**] of [**]. The table outlines the
timing and activities.

     

    
      
        [**]
Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                Campaign

              	
                Activity

              	
                Timing

              
	
                Phase
      1

                [**]

              	
                 

                ·    
      [**]

                ·    
      [**]

              	
                [**])

              
	 
    	

                 

              	 
    
	
                Phase
      2

                [**]

              	
                 

                ·    
      Preparation and procurement of raw materials

                ·    
      [**] drafts batch record for pilot plant scale manufacturing of
      [**].  Timing dependent on customer review and
      approval.

                ·    
      [**]

                ·    
      QC testing and release at Pharmacyclics.

                ·    
      QA release.

              	
                [**]

                [**]

                 

                 

                 

                [**]

                [**]

                [**]

              

      

    

     

    [**], is under
contract with Pharmacyclics to manufacture [**].  For Phase 1 of this
Agreement, [**] using their pilot plant facilities.

     

    [**], is under
contract with Pharmacyclics to manufacture [**].  For Phase 2, [**]
will complete the [**]. Each batch will be performed at [**].

    

    Pharmacyclics shall
use Reasonable Efforts to ensure the Third Party Manufacturers produce the
[**]according to cGMP and deliver product according to the timeline
below.  Pharmacyclics will arrange to have a QC release testing sample
provided to Servier after a batch is manufactured.  A copy of the
completed manufacturing batch record will also be provided for Servier QA
review.; Pharmacyclics will also perform all QC release testing and provide a
certificate of analysis of [**] (as required with GMP – part 2).

    

    With the change in
product specification requested by Servier after issuance of PO [**], a
contingency plan has been established to address potential failure of the drug
substance to conform to the new specifications set forth in Section 3(b)
below.  [**] will produce the first [**]batch of drug substance as an
engineering batch under cGMP.  Successful manufacture of the
engineering batch will lead directly to manufacture of the second [**]batch of
drug substance and completion of the campaign.  Pricing for successful
manufacture of [**] batches of drug substance will be as described in Section
6.

     

    In the event the
engineering batch fails to produce drug substance conforming to specification,
[**], Pharmacyclics and Servier will discuss the necessary actions to be taken
to remedy such situation. In any event, prior to [**] initiating any additional
development work after a failed engineering batch and in conformance with
Section 7(e) below, Pharmacyclics will review the failed engineering batch with
Servier and [**] and obtain Servier’s prior approval for the planned development
work and the estimated additional costs.

     

    
      
        
          [**]
Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    Below is a Gantt
chart showing timing of events for manufacture of [**].  The timeline
provides a best estimate of when Third Party Manufacturers will be able to
schedule pilot plant time. Item 22 of the Gantt shall only be initiated after a
meeting between Servier, [**] and Pharmacyclics has taken place.

    

    [**]

     

    
      	
              3)

            	
              Analytical
      Methods and Specifications

            

    

    

    
      	
               
      

            	
              a.

            	
              Method
      Transfer:

            

    

    All analytical
methods necessary for manufacture have been qualified by [**], [**][**] and
Pharmacyclics.  Any testing to be performed by Servier will require
analytical method transfer from Pharmacyclics to Servier. Such method transfer
is outside the scope of this Agreement. However, such transfer is the
responsibility of Pharmacyclics as indicated in Section 4.2 “Exchange of Data”
of the Collaboration Agreement.

    

    
      	
               
      

            	
              b.

            	
              Specifications
      for [**]:

            

    

    

    [**]

    
      	 
    
	 
    
	 
    

    

    

    

    
      	
              4)

            	
              Documentation
      / Reports

            

    

    

    Upon request,
development and/or campaign reports will be provided to Servier by Pharmacyclics
no later than five (5) months after delivery of product. These reports will be
accompanied by a copy of the batch records used by [**] and [**] for the
manufacture of the DS batches

     

    
      
        
          [**]
Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    
      	
              5)

            	
              Packaging/Labeling/Shipment

            

    

     

    Drug substance
shipments will be FOB – [**] (as defined by the 2000 Incoterms of the ICC) to a
destination to be provided by Servier.  Servier will be the importer
of record and will pay all taxes due in France as well as being responsible for
any and all customs requirements and payments.  Risk of loss will
transfer to Servier upon [**]’s delivery of the shipment of [**] to the
designated carrier, provided that Pharmacyclics agrees to obtain all necessary
insurance for the proper shipment of the Drug substance at Servier’s expense and
under Servier’s behalf. Pharmacyclics will invoice Servier separately for any
and all shipping and insurance costs.

    

    
      	
              6)

            	
              Pricing

            

    

    

    [**]

    

    

    
      	
              7)

            	
              Terms
      and Conditions

            

    

     

    
      	
               
      

            	
              a)

            	
              This
      Agreement will serve as the supply agreement referred to in Section 4.3 of
      the Collaboration Agreement. A purchase order has been signed and purchase
      will be made under purchase order [**]. Terms or conditions of any
      purchase order, acknowledgement, or other form given or received that are
      additional to or inconsistent with this Agreement or such purchase order
      [**] shall have no effect and such terms and conditions are hereby
      excluded.

            

    

     

    
      	
               
      

            	
              b)

            	
              The current
      estimated costs per the contracts established to produce the desired [**]
      of [**] are $[**]

            

    

    The project has
been initiated by the receipt of PO [**] from Servier.

    The PO is intended
to cover the whole project and is in the amount of $[**].

    

    i)
Pharmacyclics will invoice an initial upfront prepayment for[**]% of the project
in the amount of $[**].

    

    ii) Pharmacyclics
will invoice an additional [**]% upon completion of manufacture of
[**].

    

    iv) The remaining
balance will be invoiced on acceptance by Servier and delivery of
[**].

     

    
      
        
          [**]
Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    

    v)
PO’s and remittances (prepayments, payments, and final payments) should be sent
to the attention of:

    

    Ramses Erdtmann,
Vice President of Finance

    Pharmacyclics
Inc

    995 E. Arques
Ave.

    Sunnyvale, CA
94085

    Phone:        (408)
215-3325

    Fax:            (408)
774-0340

    Email:         rerdtmann@pcyc.com

    

    vi) Key invoicing
contacts for Servier:

    

    Stéphane
DEPIL

    

    
      	
               
      

            	
              c)

            	
              All prices
      are in US dollars.

            

    

    

    
      	
               
      

            	
              d)

            	
              This
      Agreement is effective as of the signature date of this agreement
      (“Effective Date”) and unless terminated otherwise in accordance with
      Section (i) below, shall be in effect until the first to occur of
      (i) delivery to Servier of the [**] batches of [**] as contemplated
      in Section 2 above, or (ii) termination of the Collaboration
      Agreement.

            

    

    

    
      	
               
      

            	
              e)

            	
              Pharmacyclics
      and its Third Party Manufacturer(s) will, in accordance with the
      Collaboration Agreement, apply Reasonable Efforts using the current
      synthetic route or process.  In the event that yields or
      purities obtained are contrary to those provided due to but not limited to
      difficulties of scale, chemistry inconsistencies or misrepresentation,
      Pharmacyclics and Servier will mutually agree to discuss pathways to
      proceed with the project. These discussions may potentially require scope
      changes to the program, extension of the project timeline, and additional
      monetary funds.

            

    

    

    
      	
               
      

            	
              f)

            	
              If there are
      unforeseen complications due to the nature of the project that
      significantly hinders Third Party Manufacturer’s ability to proceed with
      the completion of this project, Pharmacyclics will notify Servier of any
      such difficulties and the parties agree to act in good faith to resolve
      difficulties in an amicable manner. The project may require scope changes
      to the program, additional monetary funds and timeline extensions to
      properly proceed with the project.

            

    

     

    
      
        [**]
Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    
      	
               
      

            	
              g)

            	
              Servier
      understands that the quantity requirement stated in the Agreement is a
      nominal target output based on conversion of appropriate amounts of
      starting materials.  Servier will purchase the material at the
      following conditions:

            

    

     

    
      	
               
      

            	
              -

            	
              [**]

            

    

     

    
      	
               
      

            	
              -

            	
              [**]

            

    

     

    
      	
               
      

            	
              -

            	
              [**].

            

    

    

    
      	
               
      

            	
              h)

            	
              Servier has
      reviewed and agrees to accept [**] that conforms to the specifications
      listed in Section 3) b. above.

            

    

    

    To ensure that the
quality of the product is met, Third Party Manufacturer will supply both
Pharmacyclics and Servier with an analytical sample from the main batch to
verify conformance to specifications.  If the product does not conform
to the specifications and investigation shows that the Third Party Manufacturer
failed to follow cGMP and/or the manufacturing process, Pharmacyclics through
it’s Third Party Manufacturer will cause a new batch of product to be produced
and Servier shall have no cost and expense with respect to the non-conforming
batch.

    

    
      	
               
      

            	
              i)

            	
              In the event
      of a party’s material breach of this Agreement, the non-breaching party
      shall have the right to provide notice of its intention to terminate this
      Agreement.  Such notice shall specify in reasonable detail the
      facts and circumstances constituting the material breach of this
      Agreement. Upon the expiration of ninety (90) days after receipt by the
      breaching party of such notice, if the breaching party has not cured such
      material breach, the non-breaching party shall have the right to terminate
      this Agreement by giving a notice of termination, which shall be effective
      on the date such notice is given.

            

    

     

    
      	
               
      

            	
              j)

            	
              In the event
      of project termination not due to a material default of Pharmacyclics or
      [**], Servier agrees to pay Pharmacyclics all direct costs incurred such
      as pass through costs associated
with:

            

    

     

    a)  All
work already completed up to the time of termination.

     

    b)  The
price of all material/capital commitments already made.

     

    c)  Payment
to cover all committed plant time. In the event that Manufacturer(s) is able to
re-schedule other projects for parts of this time, Manufacturer(s) would
reimburse Pharmacyclics at which time Pharmacyclics would reimburse Servier
accordingly.

     

    
      
        [**]
Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    The pricing quoted
for this [**] order assumes that the manufacturer can scale as customary and
will not have a loss of product. Pricing for a smaller batch ([**]) is at a
significantly higher per [**] pricing. Both parties agree to pursue the
cost effective [**] route. In case, however, the scaling creates difficulties
and can not be done, Pharmacyclics will first inform Servier, and in such
unlikely event Pharmacyclics will get together with Servier and its Manufacturer
to discuss further solutions either by improving the process or reverting back
to the [**] manufacturing process.

    
      

      
        	
                8)

              	
                Warranty
      and Limitation of Liability

              

      

    

    

    
      	
               
      

            	
              A.

            	
              Pharmacyclics
      represents and warrants to Servier that  (a) it has the full
      power and right to enter into this Agreement and that there are no
      outstanding agreements, assignments, licenses, encumbrances or rights of
      any kind held by other parties, private or public, inconsistent with the
      provisions of this Agreement, (b) the services shall be performed with
      requisite care, skill and diligence, in accordance with Applicable Laws
      and industry standards, and by individuals who are appropriately trained
      and qualified.

            

    

    

    
      	
               
      

            	
              B.

            	
              Pharmacyclics
      represents and warrants to Servier that, at the time of delivery to
      Servier, the product supplied under this Agreement (a) will have been
      manufactured in accordance with cGMP and all other Applicable Laws, the
      Manufacturing Process, the applicable Quality Agreement, and
      Specifications, and (b) will not be adulterated or misbranded under the
      Food, Drug and Cosmetic Act or other Applicable Laws as the direct result
      of Pharmacyclics’ Third Party Manufacturer’s failure to manufacture in
      accordance with cGMP or the manufacturing
  process.

            

    

    

    
      	
               
      

            	
              C.

            	
              Pharmacyclics
      represents and warrants to Servier it has not used nor shall use in any
      capacity  the services of any persons employed by it’s Third
      Party Manufacturer who have been debarred under 21 U.S.C. U.S.C. § 335(a)
      or 335(b) in connection with the manufacture of the
    product.

            

    

    

    
      	
               
      

            	
              D.

            	
              Pharmacyclics
      has contracted with Third Party Manufacturers to have [**] manufactured on
      Servier's behalf. Pharmacyclics' Third Party Manufacturers' liability
      under such contracts is limited to replacement of non-conforming products;
      therefore Pharmacyclics can only provide the same limited recourse to
      Servier.  Consequently, notwithstanding anything to the contrary
      in this Agreement, Servier's sole recourse under this Supply Agreement is
      the replacement of a batch(s) by Pharmacyclics, free of
      charge.

            

    

    

    
      	
               
      

            	
              E.

            	
              This
      Agreement is subject to the disclaimer of consequential damages contained
      in Section 10.4.1 (Limitation of Liability) of the Collaboration
      Agreement

            

    

     

    
      
        [**]
Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      
        

        
          	
                  9)

                	
                  Miscellaneous.

                

        

      

       

    

    
      	
               
      

            	
              The
      relationship of the parties shall be that of independent
      contractors.  This Agreement, including its exhibits, together
      with the Collaboration Agreement, sets forth the entire agreement between
      the parties with respect to the subject matter contained herein and
      supersedes any previous understandings, commitments or agreements, whether
      oral or written.  This Agreement may only be amended with a
      writing signed by authorized representatives of both parties hereto that
      specifically and expressly refers to this Agreement.  A waiver
      by any party of any of the terms and conditions of this Agreement in any
      instance will not be deemed or construed to be a waiver of such term or
      condition for the future, or of any subsequent breach hereof. The parties
      may not assign or otherwise transfer its rights and obligations hereunder
      without the prior written approval of the other party, provided that no
      such consent shall be required for a party to transfer or assign this
      Agreement to a party that succeeds to all or substantially all of the
      assigning party’s business or assets relating to this Agreement whether by
      sale, merger, operation of law or otherwise; provided that such assignee
      or transferee promptly agrees in writing to be bound by the terms and
      conditions of this Agreement.  This Agreement may be executed in
      counterparts, each of which shall be deemed an original, but which
      together shall constitute one and the same
  document.

            

    

     

    
      
        [**]
Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
              PHARMACYCLICS,
      INC.

              995 E. Arques
      Avenue

              Sunnyvale,
      California  94085-4521

            	 	
              Les
      Laboratoires Servier

              22
      Rue Garnier

              92200 Neuilly
      sur Seine Cedex

              France

            
	 	 	 
	 	 	 
	 
    	 
    	
               

            
	
              By:

            	/s/ Robert W.
      Duggan	 
    	
              By:

            	/s/ Christian
      Bazantay
	 
    	
              Name:

            	Robert W.
      Duggan  	 
    	 
    	
              Name:

            	Christian
      Bazantay  
	 
    	
              Title:

            	Chairman
      & CEO	 
    	 
    	
              Title:

            	Proxy
	 	 	 
	 	 	 
	 	 	 
	
              Date: 
      18th, December 2009

            	 
    	
              Date: 
      10th December, 2009

            

    

    

    
      
        [**]
Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    ADDENDUM

    

     

    
      	
              1)

            	
              Quality
      Standards

            

    

     

    This section
summarizes some of the essential quality features supporting the cGMP production
work by Pharmacyclics Third Party Manufacturers.

     

    cGMP Manufacturing
Standards - cGMP manufacture will be conducted in accordance with FDA ICH
guidelines,  as it applies to the scope of the project.

     

    
      	
               
      

            	
              i)

            	
              MATERIALS

            

    

     

    
      	
               
      

            	
              (1)

            	
              Materials
      will be ordered against defined
specifications.

            

    

     

    
      	
               
      

            	
              (2)

            	
              All raw
      materials will be received with a supplier’s Certificate of
      Analysis.  Pharmacyclics will review and approve raw material
      specifications for defined raw
materials.

            

    

     

    
      	
               
      

            	
              (3)

            	
              All raw
      material batches, for use in cGMP production, will be sampled from their
      final packaging and QC released prior to
use.

            

    

     

    
      	
               
      

            	
              (4)

            	
              All raw
      material tests and methods will be fully
  documented.

            

    

     

    
      	
               
      

            	
              (5)

            	
              The identity
      and quality status of all materials will be
  traceable.

            

    

     

    
      	
               
      

            	
              (6)

            	
              All
      materials, intermediates, and finished products will be labeled with an
      identity and test status.

            

    

     

    
      	
               
      

            	
              ii)

            	
              EQUIPMENT

            

    

     

    
      	
               
      

            	
              (1)

            	
              All equipment
      used for cGMP manufacturing will be maintained in a qualified and
      controlled state.

            

    

     

    
      	
               
      

            	
              (2)

            	
              Equipment
      will be qualified and maintained to ensure
  performance.

            

    

     

    
      	
               
      

            	
              (3)

            	
              If equipment
      is used for measurement or inspection, it will be calibrated or verified
      to ensure operation within defined
  specifications.

            

    

     

    
      	
               
      

            	
              (4)

            	
              Multi purpose
      equipment may be utilized, following Standard Operating Procedures
      including appropriately validated or verified cleaning
      procedures.

            

    

     

    
      	
               
      

            	
              iii)

            	
              Appropriately
      trained personnel will carry out
manufacture.

            

    

     

     

    
      	
              2)

            	
              QA
      / Product Release

            

    

     

    Third Party
Manufacturer(s) will ensure that manufacturing has been performed in accordance
with cGMP regulations. The following will apply:

    

    
      
        [**]
Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              a)

            	
              Full details
      of all cleaning, processing, and testing will be
  recorded.

            

    

     

    
      	
               
      

            	
              b)

            	
              Product
      specific Batch Records will be used in all manufacturing operations.
      Deviations will be documented and subject to Quality Assurance
      approval.  Pharmacyclics Operations and Quality Assurance will
      review and approve Mater Batch Record and any major deviation from
      approved procedures in the Master Batch Record.  Pharmacyclics
      will approve any process changes.

            

    

     

    
      	
               
      

            	
              c)

            	
              Process
      change control will apply. All relevant observations made during the
      processing will be documented. Any deviations from the batch record will
      be documented.

            

    

     

    
      	
               
      

            	
              d)

            	
              Full batch
      record documentation will be completed and approved by Quality
      Assurance.  Pharmacyclics Chemical Operations and Quality
      Assurance will also review and approve batch history
    records.

            

    

     

    
      	
               
      

            	
              e)

            	
              Intermediate
      product(s) will be tested and the batch records reviewed by appropriate
      Third Party Manufacturer.

            

    

     

    
      	
               
      

            	
              f)

            	
              Third Party
      manufacture(s) will retain analytical samples per
  SOP.

            

    

     

    
      	
               
      

            	
              g)

            	
              Copies of
      completed batch records may be provided upon
  request.

            

    

     

    
       

      
        	
                3)

              	
                Final
      Product Specifications

              

      

       

    

    
      	
               
      

            	
              a)

            	
              Product shall
      comply with the product specifications provided by Pharmacyclics and
      Servier.

            

    

     

    
      	
               
      

            	
              b)

            	
              Additional
      test methods and/or specifications could be added, after appropriate data
      gathering, technical, and business
discussions.

            

    

    

    
      
        [**]
Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

        
        

      

      
        11

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