LISTING PARTICULARS
Dated 7 November 2014
$575,000,000
JAZZ INVESTMENTS I LIMITED
1.875% Exchangeable Senior Notes due 2021
Guaranteed on a senior unsecured basis by
JAZZ PHARMACEUTICALS PLC
Exchangeable for ordinary shares of
Jazz Pharmaceuticals plc
Jazz Investments I Limited (the “Issuer”), a Bermuda exempted company limited by shares, has issued
$575,000,000 principal amount of its 1.875% exchangeable senior notes due 15 August 2021 (the
“Notes”). The Notes are fully and unconditionally guaranteed on a senior unsecured basis by Jazz
Pharmaceuticals plc, a public limited company formed under the laws of Ireland (the “Parent”, and
together with the Issuer and the Parent’s consolidated subsidiaries, “we”, “our” and the “Company”), the
parent company of the Issuer.
This document supplements, and should be read in conjunction with, the Offering Memorandum dated 7
August 2014 relating to the Notes (the “Offering Memorandum”) attached hereto as Annex I, the
Parent’s Annual Report on Form 10-K for the fiscal year ended 31 December 2012 that Parent filed with
the U.S. Securities and Exchange Commission (the “SEC”) on 26 February 2013, as amended by
Amendment No. 1 to Annual Report on Form 10-K/A filed with the SEC on 24 April 2013, the Parent’s
Annual Report on Form 10-K for the fiscal year ended 31 December 2013 that Parent filed with the SEC
on 25 February 2014, as amended by Amendment No. 1 to Annual Report on Form 10-K/A filed with the
SEC on 28 April 2014, which annual reports are incorporated herein by reference (together, the “Annual
Reports”), the Parent's Quarterly Report on Form 10-Q for the quarterly period ended 31 March 2014
that the Parent filed with the SEC on 8 May 2014, the Parent's Quarterly Report on Form 10-Q for the
quarterly period ended 30 June 2014 that the Parent filed with the SEC on 5 August 2014, and the Parent's
Quarterly Report on Form 10-Q for the quarterly period ended 30 September 2014 that the Parent filed
with the SEC on 4 November 2014, which quarterly reports are incorporated herein by reference
(together, the "Quarterly Reports").
This document together with the Offering Memorandum comprises the listing particulars (the “Listing
Particulars”), which have been approved by the Irish Stock Exchange plc (the “Irish Stock Exchange”),
for the purposes of listing the Notes on the Global Exchange Market of the Irish Stock Exchange.
Application has been made for the Notes to be admitted to the Official List of the Irish Stock Exchange
and to be traded on its Global Exchange Market. No assurance can be given that such an application to
admit the Notes will be successful or that the listing, if granted, will be maintained. The Issuer and the
Parent accept responsibility for the information contained in these Listing Particulars. To the best of the
knowledge of the Issuer and the Parent (having taken all reasonable care to ensure that such is the case)
the information contained in these Listing Particulars is in accordance with the facts and does not omit
anything likely to materially affect the import of such information.
Where there is conflict between the terms of the Listing Particulars and the Offering Memorandum, the
Listing Particulars will supersede the Offering Memorandum. Capitalised terms used in this document
and not defined herein shall have the meanings ascribed to them in the Offering Memorandum. All
references in these Listing Particulars to “$” or to “dollars” refer to U.S. dollars.
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The Company has not undertaken to update any information contained in the attached Offering
Memorandum, the Annual Reports or the Quarterly Reports, and the inclusion of the Offering
Memorandum as an Annex hereto and the incorporation by reference of the Annual Reports and the
Quarterly Reports to this document does not create any implication that the information therein remains
correct after their respective dates (except as specifically stated below) or that there have been no changes
in the information presented in the Offering Memorandum, the Annual Reports or the Quarterly Reports
subsequent to their respective dates.
These Listing Particulars do not constitute a prospectus for the purpose of Directive 2003/71/EC (as
amended by Directive 2010/73/EU) (the “Prospectus Directive”) and have not been approved by a
competent authority for the purposes of the Prospectus Directive.
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TABLE OF CONTENTS
SUMMARY...............................................................................................................................
BUSINESS DESCRIPTIONS ....................................................................................................
POST ISSUANCE INFORMATION..........................................................................................
INCORPORATION OF DOCUMENTS BY REFERENCE........................................................
IRISH TAXATION....................................................................................................................
GENERAL INFORMATION.....................................................................................................
DIRECTORY.............................................................................................................................
ANNEX I—Offering Memorandum dated 7 August 2014:
SUMMARY .............................................................................................................................
RISK FACTORS .......................................................................................................................
PRICE RANGE OF ORDINARY SHARES ......................................................................................
DESCRIPTION OF NOTES .........................................................................................................
DESCRIPTION OF SHARE CAPITAL ...........................................................................................
CERTAIN MATERIAL IRISH TAX CONSIDERATIONS...................................................................
TRANSFER RESTRICTIONS ......................................................................................................
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE ..................................................
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1.
SUMMARY
The Notes were issued as a separate series of senior debt securities under an indenture, dated as of
13 August 2014 (the “Indenture”), among the Issuer, the Parent, as guarantor, and U.S. Bank National
Association, as trustee (the “Trustee”). The Notes are summarised under the section “Description of
notes” in the Offering Memorandum.
Guarantee
The Notes have the benefit of a guarantee by the Parent (the “Guarantee”). The Notes and the Issuer’s
obligations under the Indenture are fully and unconditionally guaranteed, on a senior unsecured basis, by
the Parent. The Guarantee of the Notes is the Parent’s general unsecured obligation and ranks:

senior in right of payment to all of the Parent’s future indebtedness that is expressly subordinated in
right of payment to the Guarantee;

equally in right of payment with all of the Parent’s existing and future liabilities that are not so
subordinated (other than certain liabilities that are preferred under Irish law);

effectively junior in right of payment to any of the Parent’s secured indebtedness to the extent of
the value of the assets securing such indebtedness (and to certain liabilities that are preferred under
Irish law); and

structurally junior in right of payment to all existing and future indebtedness and other liabilities of
the Parent’s other subsidiaries.
The Guarantee is described under the section “Description of notes—Guarantee” in the Offering
Memorandum.
Governing Law
The Indenture and the Notes, and any claim, controversy or dispute arising under or related to the
Indenture or the Notes, are governed by and construed in accordance with the laws of the State of New
York.
Claims against the Issuer in respect of interest and principal under the Notes are prescribed in accordance
with the New York Statute of Limitations which provides, inter alia, that claims under contracts must be
taken within six years.
Exchange Rights
The Notes are exchangeable for cash, Ordinary Shares of the Parent (“Ordinary Shares”), or a
combination of Ordinary Shares and cash upon the occurrence of certain events and during certain
periods, as more fully described under “Description of notes—Exchange rights” in the Offering
Memorandum.
Transferability
The Notes, the Guarantee and the Ordinary Shares, if any, deliverable upon exchange thereof have not
been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”). As a result, the
Notes, the Guarantee and the Ordinary Shares deliverable upon exchange thereof may not be offered or
sold within the United States or to, or for the account or benefit of, U.S. persons, except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The
transfer restrictions applicable to the Notes and any Ordinary Shares deliverable upon exchange thereof
are summarised under the section “Transfer restrictions” in the Offering Memorandum.
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Ordinary Shares
The Ordinary Shares are described under the section “Description of share capital” in the Offering
Memorandum. Details of historic price ranges of the Ordinary Shares are set out under “Price range of
ordinary shares” in the Offering Memorandum.
The Ordinary Shares are listed on The NASDAQ Global Select Market tier of The NASDAQ Stock
Market (NASDAQ) under the symbol “JAZZ”. NASDAQ was originally founded in 1971 by the National
Association of Securities Dealers (NASD). In 2006, NASDAQ completed its separation from the NASD
and began to operate as a U.S. national securities exchange. It is currently owned and operated by the
NASDAQ OMX Group. NASDAQ is regulated by the Financial Industry Regulatory Authority, Inc.
(FINRA).
According to the NASDAQ OMX Group, NASDAQ trades more U.S. equities than any other U.S.
exchange. The average daily share volume of U.S. equities on NASDAQ in September 2014 was
approximately 1.02 billion1. Prices are quoted on the NASDAQ real-time and are available through
recognised information providers (e.g., Bloomberg, Reuters). Prices of the Ordinary Shares are quoted
real-time in U.S. dollars and cents, with the real-time NASDAQ Last Sale Price being the price at which
the stock last traded during regular market hours.
2.
BUSINESS DESCRIPTIONS
DESCRIPTIONS OF THE ISSUER AND THE PARENT
A. The Issuer
General
The Issuer is a Bermuda exempted company limited by shares incorporated on 19 July 2013 under
registration number EC47970, and is a wholly-owned finance subsidiary of the Parent. At the date of
these Listing Particulars, the Issuer is not aware of any arrangement the operation of which may at a date
subsequent to the date of these Listing Particulars result in a change of control of the Issuer. The Issuer’s
registered office is located at Clarendon House, 2 Church Street, Hamilton, Bermuda (telephone number:
+441 295 1422).
The objects for which the Issuer was formed and incorporated are unrestricted and the Issuer may do all
things as are incidental or conducive to the attainment of such objects and, in respect thereof, shall have
the capacity, rights, powers and privileges of a natural person pursuant to clauses 6 and 7 respectively of
its memorandum of association. Accordingly, the Issuer is permitted, inter alia, to lend money or other
property to any company or person either with or without security and to carry on the business of
financing and re-financing of any assets whatsoever and in any currency, with or without security,
including, without limitation, by way of debentures, loan participation notes, credit and derivative-linked
securities, securitisation and collateralised debt obligations.
Business Overview
The Issuer is engaged in obtaining financing in the capital markets. The Issuer has no assets, operations,
revenues or cash flows other than those related to the issuance, administration and repayment of the Notes
being offered pursuant to the Offering Memorandum, an intercompany loan made by the Issuer with the
proceeds from the offering of the Notes, and the guarantee on a senior secured basis by the Issuer of the
Parent’s and certain of its subsidiaries’ indebtedness under the amended credit agreement described under
“Description of certain other indebtedness” in the Offering Memorandum.
1
Source: Nasdaq OMX – Market Share Statistics – September 2014
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Management
The directors of the Issuer (the “Directors”) and their principal activities at the Company are as follows:
Name
Business Address
Principal Activities
Mr. Hugh Kiely................................One Burlington Road, Dublin 4, Vice President, Global Taxation
Ireland
Mr.
Shawn One Burlington Road, Dublin 4, Vice President, Financial
Mindus……………….......
Ireland
Planning & Analysis and Head of
Ireland Finance
Ms. Bridget O'Brien ............................
One Burlington Road, Dublin 4, Vice President, Finance
Ireland
The Issuer is not aware of any potential conflicts of interest between the duties to the Issuer of the persons
listed under “Directors” above and their private interests or other duties.
Material Contracts
On 23 January 2014, the Parent, as guarantor, and three of its wholly-owned subsidiaries, as borrowers,
entered into a second amendment to the Parent’s and certain of its subsidiaries’ credit agreement with
Barclays Bank PLC, as administrative agent, and certain other lenders. The amended credit agreement
provides for approximately $904.4 million principal amount of term loans and a revolving credit facility
of $425.0 million. The borrowers’ obligations under the amended credit agreement and any hedging or
cash management obligations entered into with a lender or an affiliate of a lender are guaranteed on a
senior basis by the Parent and certain of its subsidiaries (including the Issuer). The borrowers’ obligations
under the amended credit agreement are secured, subject to customary permitted liens and other agreed
upon exceptions, by a perfected security interest in (a) all tangible and intangible assets of the Parent, the
borrowers and the subsidiary guarantors (including the Issuer), except for certain customary excluded
assets, and (b) all of the equity interests of the subsidiaries of the Parent, the borrowers and the subsidiary
guarantors (including the Issuer) held by such parties (limited, in the case of the equity interests of certain
foreign subsidiaries and certain domestic subsidiaries that hold no assets other than equity interests of
foreign subsidiaries, to 65% of the voting equity interests of such subsidiaries). The amended credit
agreement also includes customary events of default, including cross defaults on the Parent’s and certain
of its subsidiaries’ material indebtedness and an event of default upon a change of control. The amended
credit agreement is described in the Offering Memorandum under “Description of certain other
indebtedness.”
The Issuer has guaranteed on a secured basis all of the obligations of the borrowers under the amended
credit agreement and the Notes rank effectively junior to the Issuer’s guarantee of those obligations to the
extent of the value of the assets securing such guarantee. In the event of the Issuer’s bankruptcy,
liquidation, reorganization or other winding up, the Issuer’s assets that secure secured debt will be
available to pay obligations on the Notes only after all indebtedness under such secured debt has been
repaid in full from such assets. There may not be sufficient assets remaining to pay amounts due on any or
all the Notes then outstanding.
The Indenture does not restrict the Parent from incurring additional debt, securing existing or future debt,
recapitalizing the Issuer's debt or the debt of the Parent and its other subsidiaries or taking a number of
other actions that are not limited by the terms of the Indenture that could have the effect of diminishing
the Issuer’s or the Parent’s ability to make payments on the Notes when due. The Issuer may not be able
to pay the cash portions of any settlement amount upon exchange of the Notes, or to pay cash for the
fundamental change repurchase price if a holder requires the Issuer to repurchase Notes as summarised
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under “Description of notes—Fundamental change permits holders to require us to repurchase notes” in
the Offering Memorandum.
Share Capital
As of the date of hereof, the Issuer had an authorized share capital of US$10,000, divided into shares of
US$1.00 each. The Issuer’s entire issued share capital is legally and beneficially owned by the Parent.
B. The Parent
General
The Parent is a public limited company formed under the laws of Ireland (registered number 399192) and
its Ordinary Shares are listed in the United States on The NASDAQ Global Select Market. The Jazz
Pharmaceuticals plc corporate entity was originally formed as a private limited liability company in
March 2005 under the name Azur Pharma Limited, and was subsequently re-registered as a public limited
company under the name Azur Pharma Public Limited Company in October 2011. On 18 January 2012,
the businesses of Jazz Pharmaceuticals, Inc. and Azur Pharma Public Limited Company were combined
in a merger transaction (the “Merger”) in connection with which Azur Pharma Public Limited Company
was re-named Jazz Pharmaceuticals plc and became the parent company of and successor to Jazz
Pharmaceuticals, Inc. Jazz Pharmaceuticals, Inc. was treated as the acquiring company in the Merger for
U.S. generally accepted accounting principles (GAAP) accounting purposes and the transaction was
accounted for as a reverse acquisition under the acquisition method of accounting for business
combinations. The Parent’s predecessor, Jazz Pharmaceuticals, Inc., was originally incorporated in the
State of California in March 2003 and was reincorporated in the State of Delaware in January 2004.
The Parent’s principal offices are located at One Burlington Road, Dublin 4, Ireland, and its telephone
number is 353-1-634-7800. The Company has offices in Palo Alto, California and Philadelphia,
Pennsylvania in the United States and non-U.S. offices in Oxford, United Kingdom, Lyon, France, Villa
Guardia (Como), Italy, Zug, Switzerland and elsewhere in Europe.
The principal objects of the Parent are set forth in clause 3 of its memorandum and articles of association,
and permit the Parent, inter alia, to carry on all or any of the businesses of manufacturers, buyers, sellers,
and distribution agents of any dealers in all kinds of patent, pharmaceuticals, medicinal, and medication
preparations, patent medicines, drugs, herbs, and of and in pharmaceutical, medicinal, proprietary and
industrial preparations, compounds and articles of all kinds.
Business Overview
The Company’s business is summarised in the section “Summary—Jazz Pharmaceuticals overview” in
the Offering Memorandum.
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Management
The executive officers of the Parent (the “Executive Officers”) as of 1 August 2014 and their principal
activities at the Company are as follows:
Name
Business Address
Principal Activities
Mr. Bruce C. Cozadd...........................
One Burlington Road, Dublin 4, Chairman and Chief Executive
Ireland
Officer
Mr. Russell J. Cox...............................
One Burlington
Ireland
Ms. Suzanne Sawochka Hooper...........
One Burlington
Ireland
Mr. Iain McGill................................One Burlington
Ireland
Mr. Michael P. Miller..........................
One Burlington
Ireland
Mr. Jeffrey K. Tobias, M.D. ................
One Burlington
Ireland
Road, Dublin 4, Executive Vice President and
Chief Operating Officer
Road, Dublin 4, Executive Vice President and
General Counsel
Road, Dublin 4, Head of EUSA International and
Senior Vice President
Road, Dublin 4, Senior Vice President, U.S.
Commercial
Road, Dublin 4, Executive Vice President,
Research and Development and
Chief Medical Officer
Mr. Paul Treacy ................................
One Burlington Road, Dublin 4, Senior Vice President, Technical
Ireland
Operations
Ms. Karen J. Wilson............................
One Burlington Road, Dublin 4, Senior Vice President, Finance
Ireland
and Principal Accounting Officer
Mr. Matthew P. Young........................
One Burlington Road, Dublin 4, Senior Vice President and Chief
Ireland
Financial Officer
The Parent is not aware of any potential conflicts of interest between the duties to the Parent of the
persons listed under “Executive Officers” above and their private interests or other duties.
Share capital
A detailed description of the share capital of the Parent is included in the Offering Memorandum under
“Description of share capital.”
Auditors
KPMG, Dublin, or KPMG, serves as the Parent’s independent registered public accounting firm to audit
the financial statements of the Company. Its address is 1 Stokes Place, St Stephen’s Green, Dublin 2,
Ireland. KPMG is a member of the Institute of Chartered Accountants in Ireland.
FINANCIAL STATEMENTS
The Company has prepared consolidated audited financial statements as of 31 December 2012 and 31
December 2013 in accordance with U.S. GAAP, forming part of the Annual Reports which are
incorporated herein by reference.
The financial statements forming part of the Annual Reports reflect all assets and liabilities of the
Company required to be reflected thereon as of their respective dates.
As the Issuer was incorporated on 19 July 2013, it has not yet prepared year-end accounts, and it is the
intention of the Issuer, in accordance with the laws of Bermuda, to waive the requirement to have such
accounts audited.
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3.
POST ISSUANCE INFORMATION
Once the Notes are admitted to listing on the Global Exchange Market of the Irish Stock Exchange, the
Parent will be required to file its audited annual financial statements with the Irish Stock Exchange,
immediately upon publication. The Parent is also required to file its annual reports with the SEC.
Additional information about the Parent and copies of the Parent’s filings with the SEC are available on
the Parent’s website at www.jazzpharmaceuticals.com. The Parent has included its website address as an
inactive textual reference only. Neither the contents of the Parent’s website, nor any other website that
may be accessed from the Parent’s website, is incorporated in or otherwise considered a part of these
Listing Particulars.
4.
INCORPORATION OF DOCUMENTS BY REFERENCE
For the purposes of listing the Notes on the Global Exchange Market of the Irish Stock Exchange, we
incorporate the Annual Reports and the Quarterly Reports by reference into these Listing Particulars. The
Annual Reports and the Quarterly Reports have also been filed with the Irish Stock Exchange. Except for
the Annual Reports and the Quarterly Reports and except as set forth below under “General Information”
the documents incorporated into the Offering Memorandum (see the section “Incorporation of certain
information by reference” in the Offering Memorandum) do not form part of these Listing Particulars and
are not relevant for the purposes of listing the Notes on the Global Exchange Market of the Irish Stock
Exchange.
Any statement contained in the Annual Reports or the Quarterly Reports incorporated by reference in
these Listing Particulars shall be considered to be modified or superseded for purposes of these Listing
Particulars to the extent that a statement contained in these Listing Particulars modifies or supersedes
such statement. Any statement that is modified or superseded shall not, except as so modified or
superseded, constitute a part of these Listing Particulars.
5.
IRISH TAXATION
A summary of certain Irish taxation matters is set out under the heading “Certain material Irish tax
considerations” in the Offering Memorandum.
6.
GENERAL INFORMATION
The Issuer is not and will not be regulated by the Central Bank of Ireland (the “Central Bank”) as a
result of issuing the Notes. Any investment in the Notes does not have the status of a deposit and is not
within the scope of the Deposit Protection Scheme operated by the Central Bank
Application has been made to the Irish Stock Exchange for the $575,000,000 aggregate principal amount
of the Notes to be admitted to the Official List and to trading on its Global Exchange Market. The Issuer
will use its commercially reasonable efforts to procure the listing of the Notes on the Global Exchange
Market prior to the first interest payment date. The Issuer does not anticipate that an active secondary
market will develop in the Notes. No application has been made for the listing of the Notes on any other
stock exchange.
Neither the admission of the Notes to the Global Exchange Market of the Irish Stock Exchange, nor the
approval of the Listing Particulars shall constitute a warranty or representation by the Irish Stock
Exchange as to the competence of service providers to or any other party connected with the Issuer, the
adequacy of information contained in these Listing Particulars or the suitability of the Issuer for
investment purposes.
The Notes have been accepted for clearance through DTC with the CUSIP No. 472145 AA9 and the ISIN
US472145AA96.
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Except as disclosed or contemplated in the Offering Memorandum, the documents incorporated by
reference in the Offering Memorandum and the Quarterly Reports, neither the Issuer nor the Parent is
involved, nor has been involved, in any governmental, legal or arbitration proceedings (including any
such proceedings which are pending or threatened of which either the Issuer or the Parent is aware) which
may have or have had during the last 12 months a significant effect on either of the Issuer’s or the
Parent’s financial position.
Each of the Issuer and the Parent has obtained all necessary consents, approvals and authorizations in
Ireland (if any) in connection with the issue and performance of the Notes. The issuance of the Notes and
the listing of the Notes on the Global Exchange Market of the Irish Stock Exchange was authorized by a
Pricing Officer duly-authorized by the Issuer's board of directors and by the Issuer’s board of directors by
resolutions adopted on 7 August 2014 and 1 August 2014, respectively. The issuance of the Notes and
related Guarantee, and the delivery of Ordinary Shares upon exchange of the Notes, if any, has been
authorized by the Transaction Committee, a duly-authorized committee of the board of directors of the
Parent, and by the board of directors of the Parent by resolutions adopted on 7 August 2014 and 31 July
2014, respectively.
Except as disclosed or contemplated in the Offering Memorandum, the documents incorporated by
reference in the Offering Memorandum and the Quarterly Reports, there has been no material adverse
change in the Parent’s prospects since 31 December 2013, which is the date as of which the Company’s
most recent audited annual financial statements have been prepared. Except as disclosed or contemplated
in the Offering Memorandum, the documents incorporated by reference in the Offering Memorandum and
the Quarterly Reports, there has been no significant change in the Parent’s financial or trading position
since 30 September 2014, which is the date as of which the Company’s most recent interim quarterly
financial statements have been filed with the SEC and made publicly available.
The estimated total expenses related to the admission of the Notes to trading on the Global Exchange
Market of the Irish Stock Exchange are approximately €5,000.
For so long as the Notes are listed on the Global Exchange Market of the Irish Stock Exchange, copies of
the following documents may be physically inspected and will be available for inspection free of charge
at the registered office of the Parent during usual business hours on any weekday (Saturdays, Sundays and
public holidays excepted):

these Listing Particulars, including the Offering Memorandum (attached as Annex I) and the
Annual Reports (which Annual Reports contain the audited consolidated financial statements of the
Company, together with the audit report in connection therewith, for the financial years ended 31
December 2012 and 31 December 2013) and the Quarterly Reports;

the constitutional documents of each of the Issuer and the Parent;

the purchase agreement among the Issuer, the Parent and J.P. Morgan Securities LLC, and Barclays
Capital Inc., as representatives of the several initial purchasers in the offering of the Notes; and

the Indenture governing the Notes (which includes the form of the Notes and Guarantee).
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DIRECTORY
THE ISSUER
Jazz Investments I Limited
Clarendon House
2 Church Street
Hamilton, Bermuda
THE PARENT
Jazz Pharmaceuticals plc
One Burlington Road
Dublin 4
Ireland
INDENTURE TRUSTEE, PAYING
AGENT,
BID SOLICITATION AGENT AND
EXCHANGE AGENT
U.S. Bank National Association
Global Corporate Trust Services
Mailcode: EP-MN-WS3C
60 Livingston Avenue
St. Paul MN 55107-2292
USA
IRISH LISTING AGENT
A&L Listing Limited
25-28 North Wall Quay
IFSC
Dublin 1
Ireland
UNITED STATES LEGAL COUNSEL TO
THE COMPANY
Cooley LLP
101 California Street
5th Floor
San Francisco, California 94111
USA
IRISH LEGAL COUNSEL TO THE
COMPANY
A&L Goodbody
North Wall Quay
IFSC
Dublin 1
Ireland
BERMUDA LEGAL COUNSEL TO THE
ISSUER
Conyers Dill & Pearman Limited
Clarendon House
2 Church Street
PO Box HM 666
Hamilton, HM CX, Bermuda
AUDITORS FOR THE COMPANY
KPMG, Dublin
Independent Registered Public Accounting
Firm
1 Stokes Place
St Stephen’s Green
Dublin 2
Ireland
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ANNEX 1—OFFERING MEMORANDUM DATED 7 AUGUST 2014
21210614
Offering memorandum
Strictly confidential
Jazz Investments I Limited
$500,000,000
1.875% Exchangeable Senior Notes due 2021
Interest payable February 15 and August 15
Guaranteed on a senior unsecured basis by Jazz Pharmaceuticals plc
Exchangeable for ordinary shares of Jazz Pharmaceuticals plc
We are offering $500,000,000 principal amount of our 1.875% Exchangeable Senior Notes due 2021 (the “notes”). The notes will bear cash interest from
August 13, 2014 at an annual rate of 1.875%, payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2015.
The notes will mature on August 15, 2021. The notes will be fully and unconditionally guaranteed on an unsecured senior basis by Jazz Pharmaceuticals
Public Limited Company, or Jazz Pharmaceuticals plc, our parent company (the “Parent”).
Holders may exchange all or any portion of their notes at their option at any time prior to the close of business on the business day immediately
preceding February 15, 2021 only upon satisfaction of one or more of the following conditions: (1) during any calendar quarter commencing after the
calendar quarter ending on December 31, 2014 (and only during such calendar quarter), if the last reported sale price of ordinary shares of the Parent
(“ordinary shares”) for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading
day of the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price on each applicable trading day; (2) during the
five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount
of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of ordinary shares and the
applicable exchange rate on such trading day; (3) if we provide a notice of redemption, at any time prior to the close of business on the second scheduled
trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after February 15, 2021, a holder
may exchange any of its notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date,
regardless of the foregoing conditions. We will settle exchanges of notes by paying or delivering, as the case may be, cash, ordinary shares or a
combination of cash and ordinary shares, at our election, as described in this offering memorandum.
The exchange rate will initially be 5.0057 ordinary shares per $1,000 principal amount of notes (equivalent to an initial exchange price of approximately
$199.77 per ordinary share). The exchange rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest.
In addition, following certain corporate events that occur prior to the maturity date or upon our issuance of a notice of redemption, we will increase the
exchange rate for a holder who elects to exchange its notes in connection with such a corporate event or during the related redemption period in certain
circumstances.
We may redeem the notes at our option, prior to August 15, 2021, in whole but not in part, in connection with certain tax-related events. We also may
redeem the notes at our option on or after August 20, 2018, in whole or in part, if the last reported sale price of ordinary shares has been at least 130%
of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and
including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal
amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the notes.
If the Parent undergoes a fundamental change, subject to certain conditions, holders may require us to repurchase for cash all or part of their notes at a
repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the
fundamental change repurchase date.
The notes will be fully and unconditionally guaranteed, on a senior unsecured basis, by the Parent. The notes and the guarantee will be our and the
Parent’s senior unsecured obligations and will rank senior in right of payment to all of our or the Parent’s future indebtedness that is expressly
subordinated in right of payment to the notes; equally in right of payment with all of our or the Parent’s existing and future liabilities that are not so
subordinated (other than certain liabilities that are preferred under Bermuda or Irish law); effectively junior in right of payment to any of our or the
Parent’s secured indebtedness to the extent of the value of the assets securing such indebtedness and to certain liabilities that are preferred under
Bermuda or Irish law; and structurally junior in right of payment to all existing and future indebtedness and other liabilities (including trade payables) of
our or the Parent’s subsidiaries.
Neither we nor the Parent intend to file a shelf registration statement for resale of the notes or any ordinary shares deliverable upon exchange of the
notes, if any. We will, however, be required to pay additional interest in respect of the notes under specified circumstances. See “Description of notes—No
registration rights; additional interest” for further information.
Neither we nor the Parent intend to apply to list the notes on any securities exchange or any automated dealer quotation system, except that application
will be made to the Irish Stock Exchange plc (the “Irish Stock Exchange”) for the notes to be admitted to the Official List of the Irish Stock Exchange and
to trading on its Global Exchange Market (the “GEM”) and we will use our commercially reasonable efforts to procure the listing of the notes on the GEM
prior to the first interest payment date. The ordinary shares are listed on The NASDAQ Global Select Market under the symbol “JAZZ.” The last reported
sale price of ordinary shares on The NASDAQ Global Select Market on August 7, 2014 was $135.44 per share.
See “Risk factors” beginning on page 13 of this offering memorandum for a discussion of certain risks that you should consider in connection with an
investment in the notes and the ordinary shares deliverable upon exchange of the notes, if any.
We have granted the initial purchasers the right to purchase, exercisable within a 30-day period, up to an additional $75,000,000 principal amount of
notes, solely to cover any over-allotments.
None of the notes, the guarantee or the ordinary shares deliverable upon exchange of the notes, if any, have been registered under the Securities Act of
1933, as amended (the “Securities Act”), or any state securities laws. The notes are being offered and sold only to qualified institutional buyers (as
defined in Rule 144A under the Securities Act).
We expect that delivery of the notes will be made to investors in book-entry form through The Depository Trust Company on or about August 13, 2014.
J.P. Morgan
BofA Merrill Lynch
Barclays
Citigroup
Morgan Stanley
August 7, 2014
Table of contents
Page
Page
Notice to investors . . . . . . . . . . . . . . . . . . . . .
ii
Description of certain other indebtedness . . .
144
Notice to New Hampshire residents . . . . . . . .
iii
Bermuda notice . . . . . . . . . . . . . . . . . . . . . . .
iii
Certain material Bermuda tax
considerations . . . . . . . . . . . . . . . . . . . . . .
146
Notice to Irish investors . . . . . . . . . . . . . . . . .
iii
Certain material Irish tax considerations . . . .
147
Special note regarding forward looking
statements . . . . . . . . . . . . . . . . . . . . . . . . .
iv
Certain material U.S. federal income tax
considerations . . . . . . . . . . . . . . . . . . . . . .
152
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Transfer restrictions . . . . . . . . . . . . . . . . . . .
159
Risk factors . . . . . . . . . . . . . . . . . . . . . . . . . .
13
Plan of distribution . . . . . . . . . . . . . . . . . . . .
161
Use of proceeds . . . . . . . . . . . . . . . . . . . . . . .
83
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . .
84
Enforceability of civil liabilities under U.S.
federal securities laws . . . . . . . . . . . . . . . .
166
Price range of ordinary shares . . . . . . . . . . . .
86
Legal matters . . . . . . . . . . . . . . . . . . . . . . . . .
167
Dividend policy . . . . . . . . . . . . . . . . . . . . . . .
86
Independent registered public accounting
firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
167
Ratio of earnings to fixed charges . . . . . . . . .
87
Where you can find more information . . . . . .
167
Description of notes . . . . . . . . . . . . . . . . . . . .
88
Description of share capital . . . . . . . . . . . . . .
130
Incorporation of certain information by
reference . . . . . . . . . . . . . . . . . . . . . . . . . .
168
Unless otherwise indicated or the context otherwise requires, references in this offering memorandum to (i) “we,”
“us,” “our,” or “the Issuer” refer only to Jazz Investments I Limited, the issuer of the notes in this offering, and not to
its parent company, Jazz Pharmaceuticals plc or any of Jazz Pharmaceuticals plc’s other subsidiaries, (ii) the “Parent”
or “Guarantor” refer only to Jazz Pharmaceuticals plc and not to any of its subsidiaries, and (iii) “Jazz
Pharmaceuticals” or “our company” refer to Jazz Pharmaceuticals plc together with its consolidated subsidiaries,
including the Issuer and Jazz Pharmaceuticals plc’s predecessor, Jazz Pharmaceuticals, Inc., or JPI, except that all
such terms used in reference to the time period prior to January 18, 2012 are references to JPI and its consolidated
subsidiaries. All references in this offering memorandum to “Azur Pharma” are references to Jazz Pharmaceuticals
plc (f/k/a Azur Pharma Public Limited Company) and its consolidated subsidiaries prior to January 18, 2012. All
references in this offering memorandum to the “initial purchasers” are references to the initial purchasers of the
notes under the purchase agreement to be entered into among the Issuer, the Parent, and J.P. Morgan Securities LLC
and Barclays Capital Inc., as representatives of the several initial purchasers listed therein. Finally, unless otherwise
indicated or the context otherwise requires, the words “ordinary share” and “ordinary shares” refer only to the
ordinary shares of Jazz Pharmaceuticals plc.
None of us, the Parent or the initial purchasers has authorized anyone to provide you with information that is
different from that contained or incorporated by reference in this offering memorandum. We, the Parent and
the initial purchasers take no responsibility for, and can provide no assurance as to the reliability of, any other
information that others may give you. We and the Parent are not, and the initial purchasers are not, making an
offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this offering memorandum and the documents incorporated by reference herein
are accurate only as of the date of those respective documents. Jazz Pharmaceuticals’ business, financial
condition, results of operations and prospects may have changed since those dates. You should read this
offering memorandum and the documents incorporated by reference herein and any related term sheet that
we deliver to you in their entirety before making an investment decision. See “Where you can find more
information” and “Incorporation of certain information by reference.”
i
Notice to investors
We and the Parent are relying on exemptions from registration under the Securities Act for offers and sales of
securities that do not involve a public offering. The initial purchasers are relying on exemptions from the
provisions of Section 5 of the Securities Act provided by Rule 144A in connection with the initial resale of the
notes. The sale of the securities offered by this offering memorandum has not been registered under the
Securities Act or under the securities laws of any other jurisdiction. Unless their sale is registered, the notes
may be offered only in transactions that are exempt from these securities laws. By purchasing notes, you will be
deemed to have made the acknowledgments, representations, warranties and agreements described in this
section and under the heading “Transfer restrictions” in this offering memorandum. You should understand
that you may be required to bear the financial risks of your investment for an indefinite period of time.
This offering memorandum is based on information provided by us, the Parent and by other sources that we
and the Parent believe are reliable. Neither we nor the Parent can assure you that the information provided by
other sources is accurate or complete. This offering memorandum summarizes and incorporates certain
documents and other information, and we refer you to them for a more complete understanding of what we
discuss in this offering memorandum. In making an investment decision, you must rely on your own
examination of us, the Parent and the terms of the offering and the notes, including the merits and risks
involved.
You acknowledge that (i) you have not relied on the initial purchasers or any person affiliated with the initial
purchasers in connection with your investigation of the accuracy of such information or your investment
decision; (ii) you have reviewed this offering memorandum, including the information incorporated herein by
reference, and have been afforded an opportunity to request from us and the Parent and to review all
additional information considered by you to be necessary to verify the accuracy of, or to supplement, the
information contained or incorporated by reference in this offering memorandum; and (iii) no person has been
authorized to give any information or to make any representation concerning us, the Parent or the notes or the
ordinary shares deliverable upon exchange of the notes, if any, other than as contained or incorporated by
reference in this offering memorandum and information given by our or the Parent’s duly authorized officers
and employees in connection with your examination of us and the Parent and the terms of the offering and the
notes, and none of us, the Parent or the initial purchasers takes any responsibility for, or can provide any
assurance as to the reliability of, any other information that others may give you.
Neither we nor the Parent is making any representation to any purchaser of the notes regarding the legality of
an investment in the notes by such purchaser under any legal investment or similar laws or regulations. You
should not consider any information in this offering memorandum to be legal, business or tax advice. You
should consult your own attorney, business advisor or tax advisor for legal, business and tax advice regarding
an investment in the notes and the ordinary shares deliverable upon exchange of the notes, if any.
This offering memorandum is highly confidential and has been prepared by us and the Parent solely for use in
connection with the proposed private placement of the notes described in this offering memorandum. We and
the initial purchasers reserve the right to withdraw this offering at any time before closing, to reject any offer
to purchase, in whole or in part, for any reason, or to sell less than the amount of notes offered by this offering
memorandum. This offering memorandum is personal to each offeree and does not constitute an offer to any
other person or to the public generally to subscribe for or otherwise acquire notes. Distribution of this offering
memorandum to any person other than the offeree and those persons, if any, retained to advise such offeree
with respect thereto is unauthorized, and any disclosure of any of its contents without our prior written consent
is prohibited.
Notwithstanding anything herein to the contrary, except as reasonably necessary to comply with applicable
securities laws, you (and each of your employees, representatives or other agents) may disclose to any and all
ii
persons, without limitation of any kind, the U.S. federal income tax treatment and the tax structure of the
offering and all materials of any kind (including opinions and other tax analyses) that are provided to you
relating to such tax treatment and tax structure. For this purpose, “tax structure” is limited to facts relevant to
the U.S. federal income tax treatment of the offering and does not include information relating to our identity.
Neither the U.S. Securities and Exchange Commission, or the SEC, nor any state securities commission has
approved or disapproved of these securities or determined if this offering memorandum is truthful or
complete. Any representation to the contrary is a criminal offense.
Notice to New Hampshire residents
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED
UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES ANNOTATED, 1955, AS AMENDED (“RSA
421-B”), WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED
OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY
OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING.
NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY
OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR
QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY, OR
TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER,
CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
Bermuda notice
THE BERMUDA MONETARY AUTHORITY AND THE MINISTER OF FINANCE ACCEPT NO RESPONSIBILITY FOR THE
FINANCIAL SOUNDNESS OF ANY PROPOSAL OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR
OPINIONS EXPRESSED HEREIN.
THE ISSUER HAS RECEIVED A DIRECTION FROM THE BERMUDA MINISTER OF FINANCE TO THE EFFECT THAT
PART III OF THE BERMUDA COMPANIES ACT 1981 SHALL NOT APPLY TO THE OFFERING HEREBY BEING MADE,
AND ACCORDINGLY, NO FILING IN RESPECT OF THE OFFERING WILL BE MADE IN BERMUDA.
THE NOTES OFFERED HEREBY MAY BE OFFERED OR SOLD IN BERMUDA ONLY IN COMPLIANCE WITH THE
PROVISIONS OF THE BERMUDA INVESTMENT BUSINESS ACT 2003, WHICH REGULATES THE SALE OF SECURITIES
IN BERMUDA.
Notice to Irish investors
No action may be taken with respect to the notes in Ireland otherwise than in conformity with the provisions of
(a) the European Communities (Markets in Financial Instruments) Regulations 2007 (Nos. 1 to 3) (as amended),
including, without limitation, Regulations 7 and 152 thereof or any codes of conduct used in connection
therewith and the provisions of the Investor Compensation Act 1998, (b) the Irish Companies Acts 1963 to 2013
(the “Companies Acts”), the Central Bank Acts 1942 to 2013 (as amended) and any codes of conduct rules made
under Section 117(1) of the Central Bank Act 1989 and (c) the Prospectus (Directive 2003/71/EC) Regulations
2005 (as amended) and any rules issued under Section 51 of the Investment Funds, Companies and
Miscellaneous Provisions Act 2005, by the Central Bank of Ireland (the “Central Bank”).
iii
Special note regarding forward-looking statements
This offering memorandum and the documents incorporated by reference herein contain forward-looking
statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934, as amended, or the Exchange Act. These statements are based on the Issuer’s and the Parent’s
current expectations, assumptions, estimates and projections about Jazz Pharmaceuticals’ business and
industry, and involve known and unknown risks, uncertainties and other factors that may cause results, levels
of activity, performance or achievements to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by the forward-looking statements. Forward-looking
statements include, but are not limited to, statements about:
• future sales of and revenue from Xyrem, Erwinaze, Defitelio and Jazz Pharmaceuticals’ other products;
• Jazz Pharmaceuticals’ ability to protect its intellectual property and defend its patents;
• the impact of regulatory requirements, obligations and restrictions on Jazz Pharmaceuticals’ business;
• Jazz Pharmaceuticals’ ability to obtain adequate clinical and commercial supplies of its products and product
candidates from current and new sole source suppliers and manufacturers;
• Jazz Pharmaceuticals’ plans to acquire, in-license and/or develop additional products or product candidates
to grow its business;
• Jazz Pharmaceuticals’ ability to achieve the anticipated financial and other benefits from its strategic
acquisition and business combination transactions;
• Jazz Pharmaceuticals’ ability to obtain appropriate pricing and reimbursement for its products;
• Jazz Pharmaceuticals’ ability to manage the growth of its business and the risks attendant to its substantially
expanded international operations;
• the anticipated use of proceeds from this offering;
• the sufficiency of Jazz Pharmaceuticals’ cash resources and its expectations regarding its future cash flow,
expenses, revenues, financial results and capital requirements; and
• anticipated trends in Jazz Pharmaceuticals’ business and industry, and other characterizations of future
events or circumstances.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,”
“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “intend,” “continue,”
“potential,” “possible,” “foreseeable,” “likely” and similar expressions intended to identify forward-looking
statements. These statements involve known and unknown risks, uncertainties and other factors which may
cause Jazz Pharmaceuticals’ actual results, performance, time frames or achievements to be materially
different from any future results, performance, time frames or achievements expressed or implied by the
forward-looking statements. While the Issuer and the Parent believe that they have a reasonable basis for each
forward-looking statement, the Issuer and the Parent caution you that these statements are based on a
combination of facts and factors currently known by the Issuer, the Parent and their projections of the future,
about which the Issuer and the Parent cannot be certain. Many of these risks, uncertainties and other factors
are discussed in greater detail under the section captioned “Risk factors” beginning on page 13 of this offering
memorandum. Given these risks, uncertainties and other factors, you should not place undue reliance on these
forward-looking statements. Also, these forward-looking statements represent the Issuer’s and the Parent’s
iv
estimates and assumptions only as of the date such forward-looking statements are made. You should read
carefully this offering memorandum and the information incorporated herein by reference as described under
the heading “Incorporation of certain information by reference” in this offering memorandum and with the
understanding that Jazz Pharmaceuticals’ actual future results may be materially different from what the Issuer
and the Parent expect. The Issuer and the Parent hereby qualify all forward-looking statements by these
cautionary statements. The Issuer and the Parent claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995 for all forward-looking statements.
Except as required by law, neither the Issuer nor the Parent assume any obligation to update these forwardlooking statements publicly, or to update the reasons actual results could differ materially from those
anticipated in these forward-looking statements, even if new information becomes available in the future.
v
Summary
The following summary highlights some of the information contained elsewhere in or incorporated by reference
into this offering memorandum. Because this is only a summary, however, it does not contain all of the
information that may be important to you. You should carefully read this offering memorandum and any related
term sheet that we deliver to you, including the documents incorporated by reference, which are described under
“Incorporation of certain information by reference” in this offering memorandum. You should also carefully
consider the matters discussed under “Risk factors” beginning on page 13 of this offering memorandum.
Jazz Pharmaceuticals overview
Jazz Pharmaceuticals is a specialty biopharmaceutical company focused on improving patients’ lives by
identifying, developing and commercializing differentiated products that address unmet medical needs.
Jazz Pharmaceuticals’ strategy is to continue to create shareholder value by:
• Growing sales of the existing products in its portfolio, including by identifying new growth opportunities;
• Acquiring additional marketed specialty products or products close to regulatory approval to leverage
Jazz Pharmaceuticals’ existing expertise and infrastructure; and
• Pursuing targeted development of a pipeline of post-discovery specialty product candidates.
Jazz Pharmaceuticals has a portfolio of approved products that address medical needs in the following
therapeutic areas:
• Narcolepsy: Xyrem (sodium oxybate) oral solution, the only product approved by the U.S. Food and Drug
Administration, or FDA, for the treatment of both cataplexy and excessive daytime sleepiness in patients with
narcolepsy;
• Hematology/Oncology: Erwinaze (asparaginase Erwinia chrysanthemi), called Erwinase in markets outside
of the United States, a treatment for patients with acute lymphoblastic leukemia, or ALL, who have developed
hypersensitivity to E. coli-derived asparaginase, and Defitelio (defibrotide), a product approved in Europe for
the treatment of severe hepatic veno-occlusive disease, or VOD, in adults and children undergoing
hematopoietic stem cell transplantation, or HSCT, therapy;
• Pain: Prialt (ziconotide) intrathecal infusion, the only non-opioid intrathecal analgesic indicated for the
management of severe chronic pain for patients who are intolerant of or refractory to other treatment; and
• Psychiatry: A portfolio of products, including FazaClo (clozapine, USP) HD and FazaClo LD orally
disintegrating clozapine tablets and Versacloz (clozapine) oral suspension, a product Jazz Pharmaceuticals
launched in the United States in February 2014, each indicated for treatment-resistant schizophrenia and for
reducing the risk of recurrent suicidal behavior in patients with schizophrenia or schizoaffective disorders.
Jazz Pharmaceuticals also commercializes a portfolio of other products, mostly in markets outside of the
United States. These products are primarily in the oncology, critical care and oncology supportive care
therapeutic areas.
Jazz Pharmaceuticals’ development pipeline projects include the clinical development of new product
candidates, line extensions for existing products and the generation of additional clinical data for existing
products. These projects are concentrated in Jazz Pharmaceuticals’ sleep and hematology/oncology therapeutic
areas, where Jazz Pharmaceuticals believes it will be able to leverage its existing specialty commercial
expertise and infrastructure, as well as its strong clinical, medical and commercial teams.
1
Over the past two years, Jazz Pharmaceuticals has made targeted investments to strengthen its capabilities and
enhance and diversify its commercial and development portfolio. Jazz Pharmaceuticals intends to continue to
leverage its commercial, medical and scientific experience to seek to maximize the potential of its existing and
potential products. Jazz Pharmaceuticals’ investments have allowed it to build a scalable infrastructure to
support future growth and to continue to create shareholder value.
About Jazz Investments I Limited
We are a Bermuda exempted company limited by shares incorporated on July 19, 2013 and are resident in
Ireland for tax purposes, and are a wholly-owned finance subsidiary of the Parent. We have no assets,
operations, revenues or cash flows other than those related to the issuance, administration and repayment of
the notes being offered hereby, an intercompany loan expected to be made by us with the net proceeds from
the offering, and the guarantee on a senior secured basis by us of the Parent’s and certain of its subsidiaries’
indebtedness under the amended credit agreement described under “Description of certain other
indebtedness”. Our registered office is located at Clarendon House, 2 Church Street, Hamilton, Bermuda. We
have filed an election to be classified for U.S. federal tax purposes as a disregarded entity, and will remain so
for so long as any of the notes is outstanding.
Jazz Pharmaceuticals corporate information
The Parent is a public limited company formed under the laws of Ireland (registered number 399192) and is the
ultimate parent company to the Jazz Pharmaceuticals group of companies. The Jazz Pharmaceuticals plc
corporate entity was originally formed as a private limited liability company in March 2005 under the name
Azur Pharma Limited, and was subsequently re-registered as a public limited company under the name Azur
Pharma Public Limited Company in October 2011. On January 18, 2012, the businesses of JPI and Azur Pharma
were combined in a merger transaction, which is referred to in this offering memorandum as the Azur Merger,
in connection with which Azur Pharma was re-named Jazz Pharmaceuticals plc and became the parent company
of and successor to JPI. JPI was treated as the acquiring company in the Azur Merger for accounting purposes
and the transaction was accounted for as a reverse acquisition under the acquisition method of accounting for
business combinations. The Parent’s predecessor, JPI, was originally incorporated in California in March 2003
and was reincorporated in Delaware in January 2004. In the Azur Merger, all outstanding shares of JPI’s
common stock were canceled and converted into the right to receive, on a one-for-one basis, ordinary shares.
Ordinary shares trade on the same exchange, The NASDAQ Global Select Market, and under the same trading
symbol, “JAZZ,” as the JPI common stock prior to the Azur Merger.
The Parent’s principal offices are located at One Burlington Road, Dublin 4, Ireland, and its telephone number is
353-1-634-7800. Jazz Pharmaceuticals has offices in Palo Alto, California and Philadelphia, Pennsylvania in the
United States and non-U.S. offices in Oxford, United Kingdom, Lyon, France, Villa Guardia (Como), Italy, Zug,
Switzerland and elsewhere in Europe. The Parent’s website address is www.jazzpharmaceuticals.com.
Information contained in, or accessible through, the website is not incorporated in and does not constitute a
part of this offering memorandum.
Jazz Pharmaceuticals owns or has rights to various copyrights, trademarks, and trade names used in its
business in the United States and/or other countries, including the following: Jazz Pharmaceuticals®, Xyrem®
(sodium oxybate) oral solution, Xyrem Success Program®, Erwinaze® (asparaginase Erwinia chrysanthemi),
Erwinase®, Defitelio® (defibrotide), Prialt® (ziconotide) intrathecal infusion, FazaClo® (clozapine, USP), Versacloz®
(clozapine) oral suspension, LeukotacTM (inolimomab) and ProstaScint® (capromab pendetide). All other service
marks, trademarks and trade names appearing or incorporated by reference in this offering memorandum are
the property of their respective owners.
2
The offering
The summary below describes the principal terms of the notes. Certain of the terms and conditions described
below are subject to important limitations and exceptions. The “Description of notes” and “Transfer restrictions”
sections of this offering memorandum contain a more detailed description of the terms and conditions of the
notes. Except as otherwise noted, all information in this offering memorandum assumes no exercise of the initial
purchasers’ over-allotment option.
Issuer . . . . . . . . . . . . . . . .
Jazz Investments I Limited, a Bermuda exempted company limited by shares.
The Issuer has no assets, operations, revenues or cash flows other than those
related to the issuance, administration and repayment of the notes being offered
hereby, an intercompany loan expected to be made by the Issuer with the net
proceeds from the offering, and the guarantee on a senior secured basis by us of
the Parent’s and certain of its subsidiaries’ indebtedness under the amended
credit agreement.
Parent . . . . . . . . . . . . . . . .
Jazz Pharmaceuticals plc, a public limited company formed under the laws of
Ireland.
Ordinary shares . . . . . . . .
Ordinary shares of the Parent, nominal value $0.0001 per share.
Securities . . . . . . . . . . . . .
$500,000,000 principal amount of 1.875% Exchangeable Senior Notes due 2021
(or $575,000,000 if the initial purchasers exercise their over-allotment option in
full).
Maturity . . . . . . . . . . . . . .
August 15, 2021, unless earlier exchanged, repurchased or redeemed.
Interest . . . . . . . . . . . . . . .
1.875% per year. Cash interest will accrue from August 13, 2014 and will be
payable semiannually in arrears on February 15 and August 15 of each year,
beginning on February 15, 2015. We will pay additional interest, if any, at our
election as the sole remedy relating to the failure to comply with our or the
Parent’s reporting obligations as described under “Description of notes—Events
of default” and under the circumstances described under “Description of notes—
No registration rights; additional interest.”
Guarantee . . . . . . . . . . . . .
The notes will be fully and unconditionally guaranteed, on a senior unsecured
basis, by the Parent.
Exchange rights . . . . . . . . .
Holders may exchange all or any portion of their notes at their option at any
time prior to the close of business on the business day immediately preceding
February 15, 2021 only upon satisfaction of one or more of the following
conditions:
• during any calendar quarter commencing after the calendar quarter ending on
December 31, 2014 (and only during such calendar quarter), if the last
reported sale price (as defined in this offering memorandum under
“Description of notes—Exchange rights—Exchange upon satisfaction of sale
price condition”) per ordinary share for at least 20 trading days (whether or
not consecutive) during the period of 30 consecutive trading days ending on
the last trading day of the immediately preceding calendar quarter is greater
than or equal to 130% of the exchange price on each applicable trading day;
3
• during the five business day period after any five consecutive trading day
period (the “measurement period”) in which the “trading price” (as defined
under “Description of notes—Exchange rights—Exchange upon satisfaction of
trading price condition”) per $1,000 principal amount of notes for each
trading day of the measurement period was less than 98% of the product of
the last reported sale price of ordinary shares and the applicable exchange
rate on such trading day;
• if we provide a notice of redemption, at any time prior to the close of business
on the second scheduled trading day immediately preceding the redemption
date; or
• upon the occurrence of specified corporate events described under
“Description of notes—Exchange rights—Exchange upon specified distributions
and corporate events.”
On or after February 15, 2021, a holder may exchange any of its notes at any
time prior to the close of business on the second scheduled trading day
immediately preceding the maturity date regardless of the foregoing conditions.
The exchange rate will initially be 5.0057 ordinary shares per $1,000 principal
amount of notes (equivalent to an initial exchange price of approximately
$199.77 per ordinary share), subject to adjustment as described in this offering
memorandum.
We will settle exchanges of notes by paying or causing to be delivered, as the
case may be, cash, ordinary shares or a combination of cash and ordinary
shares, at our election. If we satisfy our exchange obligation solely in cash or
through payment and delivery, as the case may be, of a combination of cash and
ordinary shares, the amount of cash and ordinary shares, if any, due upon
exchange will be based on a daily exchange value (as described herein)
calculated on a proportionate basis for each trading day in a 30 trading day
observation period (as described herein). See “Description of notes—Exchange
rights—Settlement upon exchange.”
In addition, following certain corporate events that occur prior to the maturity
date or upon our issuance of a notice of redemption, we will increase the
exchange rate for a holder who elects to exchange its notes in connection with
such a corporate event or during the related redemption period in certain
circumstances as described under “Description of notes—Exchange rate
adjustments—Adjustment to exchange rate upon exchange upon a make-whole
fundamental change or a redemption.”
Upon exchange, you will not receive any separate cash payment or additional
ordinary shares for accrued and unpaid interest, if any, except in limited
circumstances. Instead, interest will be deemed to be cancelled, extinguished
and forfeited upon exchange of a note.
4
Redemption at our
option . . . . . . . . . . . . . . . .
We may redeem the notes at our option prior to August 15, 2021, in whole but
not in part, if we have, or on the next interest payment date would, become
obligated to pay to the holder of any note additional amounts as a result of
certain tax-related events at a redemption price equal to 100% of the principal
amount plus accrued and unpaid interest, including additional interest, if any, to,
but excluding, the redemption date; provided that we may only redeem the notes
if (x) we cannot avoid these obligations by taking commercially reasonable
measures available to us and (y) we deliver to the trustee an opinion of outside
legal counsel of recognized standing in the relevant taxing jurisdiction and an
officers’ certificate attesting to such tax-related event and obligation to pay
additional amounts. See “Description of notes—Optional redemption—Optional
redemption for changes in the tax laws of a relevant taxing jurisdiction.”
We also may redeem the notes at our option on or after August 20, 2018, in
whole or in part, if the last reported sale price per ordinary share has been at
least 130% of the exchange price then in effect for at least 20 trading days
(whether or not consecutive) during any 30 consecutive trading day period
ending on, and including, the trading day immediately preceding the date on
which we provide notice of redemption at a redemption price equal to 100% of
the principal amount of the notes to be redeemed, plus accrued and unpaid
interest to, but excluding, the redemption date.
No “sinking fund” is provided for the notes.
We will give written notice of redemption not less than 50 or more than
60 calendar days before the redemption date to the trustee, the paying agent
and each holder of notes. See “Description of notes—Optional redemption.”
Additional amounts . . . . .
We, the Parent or any successor to us or the Parent, as applicable, will make all
payments and deliveries on account of the notes without withholding or
deduction for taxes imposed by a relevant jurisdiction, unless such withholding
or deduction is required by law. If any such withholding or deduction is required,
we, the Parent or any successor to us or the Parent, as applicable, will, in certain
cases and subject to certain exceptions, pay such additional amounts as may be
necessary so that the net amount received by beneficial owners of the notes
after such withholding or deduction will not be less than the amount that would
have been received in the absence of such withholding or deduction. See
“Description of notes—Additional amounts.”
Fundamental change . . . .
If the Parent undergoes a “fundamental change” (as defined in this offering
memorandum under “Description of notes—Fundamental change permits
holders to require us to repurchase notes”), subject to certain conditions,
holders may require us to repurchase all or part of their notes at a repurchase
price equal to 100% of the principal amount of the notes to be repurchased, plus
accrued and unpaid interest to, but excluding, the fundamental change
repurchase date. See “Description of notes—Fundamental change permits
holders to require us to repurchase notes.”
5
Ranking . . . . . . . . . . . . . . .
The notes and the guarantee will be our and the Parent’s senior unsecured
obligations and will rank:
• senior in right of payment to all of our or the Parent’s future indebtedness
that is expressly subordinated in right of payment to the notes;
• equally in right of payment with all of our or the Parent’s existing and future
liabilities that are not so subordinated (other than certain liabilities that are
preferred under Bermuda or Irish law);
• effectively junior in right of payment to any of our or the Parent’s secured
indebtedness to the extent of the value of the assets securing such indebtedness
and to certain liabilities that are preferred under Bermuda or Irish law; and
• structurally junior in right of payment to all existing and future indebtedness
and other liabilities (including trade payables) of our or the Parent’s
subsidiaries.
We have guaranteed on a secured basis all of the obligations of certain of the
Parent’s subsidiaries under the amended credit agreement and the notes will
rank junior to our guarantee of those obligations to the extent of the value of the
assets securing such guarantee.
As of June 30, 2014, the Parent and its subsidiaries had total consolidated
indebtedness of $1.2 billion, substantially all of which was secured indebtedness of
certain of the Parent’s subsidiaries guaranteed on a senior secured basis by us, the
Parent and most of the Parent’s other subsidiaries and to which the notes would
have been effectively subordinated to the extent of the value of the assets securing
the guarantees by us and the Parent and structurally subordinated to the
indebtedness of certain of the Parent’s subsidiaries and the guarantees provided
by the Parent’s other subsidiaries. After giving effect to the issuance of the notes
(assuming no exercise of the initial purchasers’ over-allotment option) and the use
of a portion of the net proceeds therefrom to repay outstanding borrowings under
the revolving credit facility provided for under the amended credit agreement as
described in “Use of proceeds,” the total consolidated indebtedness of the Parent
would have been $1.4 billion as of June 30, 2014, of which $899.9 million would
have been secured indebtedness of certain of the Parent’s subsidiaries guaranteed
on a senior secured basis by us, the Parent and most of the Parent’s other
subsidiaries, and $500.0 million would have been indebtedness of us guaranteed
by the Parent. See “Description of certain other indebtedness” and “Use of
proceeds.” The indenture governing the notes does not limit the amount of debt
that we, the Parent or our respective subsidiaries may incur.
No registration rights;
additional amounts . . . . . .
Neither we nor the Parent intend to file a shelf registration statement for the
resale of the notes or any ordinary shares deliverable upon exchange of the notes.
As a result, holders may resell their notes or any ordinary shares deliverable upon
the exchange of the notes only pursuant to an exemption from the registration
requirements of the Securities Act, and other applicable securities laws.
6
If, at any time during the six-month period beginning on, and including, the date
which is six months after the last date of original issuance of the notes offered
hereby, the Parent fails to have timely filed any document or report that the
Parent is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act, as applicable (after giving effect to all applicable grace periods
thereunder and other than reports on Form 8-K), or the notes are not otherwise
freely tradable, including pursuant to Rule 144, by holders other than our
affiliates or holders that were our affiliates during the three months immediately
preceding the date of the proposed transfer (as a result of restrictions pursuant
to U.S. federal securities laws or the terms of the indenture or the notes), we will
pay additional interest on the notes. Additional interest will accrue at a rate of
0.25% per annum of the principal amount of notes for the first 90 days for which
the Parent’s failure to file has occurred and is continuing and at a rate of
0.50% per annum of the principal amount of notes for the remaining portion of
such period; provided that such additional interest shall cease to accrue on the
date that is one year from the last original issuance date of the notes.
Further, if, and for so long as, the restrictive legend on the notes has not been
removed, the notes are assigned a restricted CUSIP number or the notes are not
otherwise freely tradable by holders other than our affiliates or holders that
were our affiliates during the three months immediately preceding the date of
the proposed transfer (without restrictions pursuant to U.S. federal securities
laws or the terms of the indenture or the notes) as of the 375th day after the last
date of original issuance of the notes offered hereby, we will pay additional
interest on the notes. Additional interest will accrue on the notes from the 376th
day after last date of original issuance of the notes offered hereby at a rate
equal to 0.50% per annum of the principal amount of notes outstanding until
such restrictive legend is removed, the notes are assigned an unrestricted CUSIP
number and the notes are freely tradable. Notwithstanding the foregoing, we
will not be required to pay additional interest if we and the Parent have filed a
shelf registration statement, and such registration statement is available, for the
resale of the notes and any ordinary shares deliverable upon exchange of the
notes as described under “Description of notes—No registration rights;
additional interest.”
Any additional interest that we are required to pay pursuant to the two
immediately preceding paragraphs will be payable in arrears on each interest
payment date following accrual in the same manner as regular interest on the
notes. In no event will additional interest payable pursuant to the above
provisions, together with any additional interest payable at our election for
failure to comply with our or the Parent’s reporting obligations as described
under “Description of notes—Events of Default,” accrue at a rate per year in
excess of 0.50% per annum, regardless of the number of events or
circumstances giving rise to requirements to pay such additional interest. See
“Description of notes—No registration rights; additional interest.”
Use of proceeds . . . . . . . .
We estimate that the net proceeds from this offering will be approximately
$485.9 million (or $559.0 million if the initial purchasers exercise their
7
over-allotment option in full), after deducting the initial purchasers’ discount
and estimated expenses.
Jazz Pharmaceuticals intends to use a portion of the net proceeds from this
offering to repay outstanding borrowings under the revolving credit facility
provided for under the amended credit agreement and to use the remainder of
the net proceeds for general corporate purposes, including potential business
development activities. See “Use of proceeds.”
Book-entry form . . . . . . . .
Transfer restrictions;
absence of a public market
for the notes . . . . . . . . . . .
The notes will be issued in book-entry form and will be represented by permanent
global certificates deposited with, or on behalf of, The Depository Trust Company
(“DTC”) and registered in the name of a nominee of DTC. Beneficial interests in any
of the notes will be shown on, and transfers will be effected only through, records
maintained by DTC or its nominee and any such interest may not be exchanged for
certificated securities, except in limited circumstances.
The sale of the notes and any ordinary shares deliverable upon exchange thereof
have not been registered under the Securities Act and the notes and any such
ordinary shares are subject to restrictions on transferability and resale. See
“Transfer restrictions.”
The notes are new securities and there is currently no established market for the
notes. Accordingly, neither we nor the Parent can assure you as to the
development or liquidity of any market for the notes. The initial purchasers have
advised us that they currently intend to make a market in the notes. However,
they are not obligated to do so, and they may discontinue any market making
with respect to the notes without notice. Neither we nor the Parent intend to
apply for a listing of the notes on any securities exchange or any automated
dealer quotation system, except that application will be made to the Irish Stock
Exchange for the notes to be admitted to the Official List and to trading on the
GEM and we will use our commercially reasonable efforts to procure the listing
of the notes on the GEM prior to the first interest payment date.
Bermuda tax
consequences . . . . . . . . . .
Irish tax consequences . . .
U.S. federal income tax
consequences . . . . . . . . . .
For the Bermuda tax consequences of the holding, disposition and exchange of
the notes, and the holding and disposition of ordinary shares, see “Certain
material Bermuda tax considerations.”
For the Irish tax consequences of the holding, disposition and exchange of the
notes, and the holding and disposition of ordinary shares, see “Certain material
Irish tax considerations.”
For the U.S. federal income tax consequences of the holding, disposition and
exchange of the notes, and the holding and disposition of ordinary shares, see
“Certain material U.S. federal income tax considerations.”
8
NASDAQ Global Select
Market symbol for ordinary
shares . . . . . . . . . . . . . . . .
Trustee, paying agent, bid
solicitation agent and
exchange agent . . . . . . . . .
The ordinary shares are listed on The NASDAQ Global Select Market under the
symbol “JAZZ.”
U.S. Bank National Association
9
Summary consolidated financial data of Jazz Pharmaceuticals
The tables below present summary consolidated financial data of Jazz Pharmaceuticals. The summary
consolidated financial data as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012
and 2011 are derived from the audited consolidated financial statements included in the Parent’s annual report on
Form 10-K for the year ended December 31, 2013 that is incorporated by reference in this offering memorandum.
The summary consolidated financial data as of June 30, 2014 and for the six months ended June 30, 2014 and 2013
are derived from the unaudited consolidated financial statements included in the Parent’s quarterly report on
Form 10-Q for the quarterly period ended June 30, 2014 that is incorporated by reference in this offering
memorandum. Results for the six months ended June 30, 2014 are not necessarily indicative of full year results or
results for any future period. The summary consolidated financial data for the year ended December 31, 2011 are
that of JPI (the Parent’s predecessor) and its consolidated subsidiaries, while the summary consolidated financial
data as of and for the years ended December 31, 2013 and 2012, and as of and for the six months ended June 30,
2014 and 2013, are that of Jazz Pharmaceuticals and its consolidated subsidiaries.
The foregoing information is only a summary and is not necessarily indicative of the results of Jazz Pharmaceuticals’
future operations. You should read this data together with the consolidated financial statements and related notes
and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the
Parent’s periodic reports on file with the SEC and incorporated by reference in this offering memorandum. For more
details on how you can obtain the documents incorporated by reference in this offering memorandum, see “Where
you can find more information” and “Incorporation of certain information by reference.”
(In thousands, except per share amounts)
2013
2012(1)
Years ended
December 31,
Six months ended
June 30,
2011
2014(2)
2013
(Unaudited)
Consolidated statements of operations data:
Revenues:
Product sales, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $865,398 $580,527 $266,518 $534,086 $401,216
Royalties and contract revenues . . . . . . . . . . . . . . . . . . . .
7,025
5,452
5,759
4,063
3,273
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
872,423
585,979
272,277
538,149
404,489
Operating expenses:
Cost of product sales (excluding amortization of acquired
developed technologies) . . . . . . . . . . . . . . . . . . . . . . . .
102,146
78,425
13,942
61,616
52,251
Selling, general and administrative . . . . . . . . . . . . . . . . . .
304,303
223,882
108,936
206,919
148,034
Research and development . . . . . . . . . . . . . . . . . . . . . . . .
46,620
20,477
14,120
38,199
15,997
—
—
—
127,000
4,000
Acquired in-process research and development(3) . . . . . . .
Intangible asset amortization . . . . . . . . . . . . . . . . . . . . . .
79,042
65,351
7,448
63,977
38,954
Intangible asset impairment . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
32,806
—
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . .
532,111
388,135
144,446
530,517
259,236
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
340,312
197,844
127,831
7,632
145,253
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(26,916) (16,869)
(1,600) (21,505) (14,541)
Foreign currency gain (loss) . . . . . . . . . . . . . . . . . . . . . . . .
(1,697)
(3,620)
—
197
(114)
Loss on extinguishment and modification of debt . . . . . . . .
(3,749)
—
(1,247)
—
(3,749)
Income (loss) from continuing operations before income tax
provision (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
307,950
177,355
124,984
(13,676) 126,849
Income tax provision (benefit) . . . . . . . . . . . . . . . . . . . . . .
91,638
(83,794)
—
36,377
41,239
Income (loss) from continuing operations . . . . . . . . . . . . . . .
216,312
261,149
124,984
(50,053)
85,610
Income from discontinued operations, net of taxes . . . . . . . .
—
27,437
—
—
—
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
216,312
288,586
124,984
(50,053)
85,610
Net loss attributable to noncontrolling interests, net of tax . .
—
—
—
(1,062)
—
Net income (loss) attributable to Jazz Pharmaceuticals plc . . $216,312 $288,586 $124,984 $ (48,991) $ 85,610
10
Years ended
December 31,
Six months ended
June 30,
2011
2014(2)
2013
(Unaudited)
(In thousands, except per share amounts)
2013
Basic income (loss) per ordinary share attributable to Jazz
Pharmaceuticals plc(4):
Income (loss) from continuing operations . . . . . . . . . . . . . $
Income from discontinued operations . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3.71 $
—
3.71 $
4.61 $
0.48
5.09 $
3.01 $
—
3.01 $
(0.83) $
—
(0.83) $
1.46
—
1.46
Diluted income (loss) per ordinary share attributable to Jazz
Pharmaceuticals plc (4):
Income (loss) from continuing operations . . . . . . . . . . . . . $
Income from discontinued operations . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3.51 $
—
3.51 $
4.34 $
0.45
4.79 $
2.67 $
—
2.67 $
(0.83) $
—
(0.83) $
1.39
—
1.39
Weighted-average ordinary shares used in per share
computations(4):
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58,298
61,569
2012(1)
56,643
60,195
41,499
46,798
(In thousands)
2013
59,025
59,025
As of
December 31,
2012(1)
58,548
61,541
As of
June 30,
2014(2)
(Unaudited)
Consolidated balance sheet data:
Cash, cash equivalents, investments and marketable securities . . . .
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, current and non-current . . . . . . . . . . . . . . . . . . . .
Retained earnings (accumulated deficit) . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1)
$ 636,504
660,589
2,238,221
549,976
18,532
1,295,534
$ 387,196 $ 268,255
360,034
347,144
1,966,493
3,155,749
456,761
1,196,433
(61,296)
(53,946)
1,121,292
1,280,087
On January 18, 2012, the businesses of JPI and Azur Pharma were combined in the Azur Merger pursuant to which all outstanding shares of JPI’s
common stock were canceled and converted into the right to receive ordinary shares on a one-for-one basis. JPI was treated as the acquiring
company in the Azur Merger for accounting purposes, and as a result, the historical consolidated financial statements of JPI became the Parent’s
consolidated financial statements. On June 12, 2012, the Parent completed the acquisition of EUSA Pharma Inc., or EUSA Pharma, referred to as
the EUSA Acquisition in this offering memorandum. At the closing of the EUSA Acquisition, the Parent paid $678.4 million in cash, and agreed to
make an additional contingent payment of $50.0 million in cash if Erwinaze achieved U.S. net sales of $124.5 million or more in 2013. In 2013, net
sales of Erwinaze in the United States exceeded $124.5 million and as a result, the Parent made this payment in the first quarter of 2014. In
connection with the EUSA Acquisition, on June 12, 2012, the Parent, as guarantor, and JPI, as borrower, entered into a $575.0 million credit
agreement with Barclays Bank PLC, as administrative agent and certain other lenders, or the original credit agreement, consisting of $475.0
million principal amount of term loans and a $100.0 million revolving credit facility. Jazz Pharmaceuticals used all of the proceeds of the term
loans, together with cash on hand, to finance the EUSA Acquisition. The results of operations of the acquired Azur Pharma and EUSA Pharma
businesses, along with the estimated fair values of the assets acquired and liabilities assumed in each transaction, are included in Jazz
Pharmaceuticals’ consolidated financial statements since the effective dates of the Azur Merger and the EUSA Acquisition, respectively.
(2) On January 23, 2014, pursuant to a tender offer, the Parent became the indirect majority shareholder of Gentium S.p.A., or Gentium, thereby
acquiring control of Gentium on that date, which acquisition is referred to in this offering memorandum as the Gentium Acquisition. In February
2014, Jazz Pharmaceuticals completed a subsequent offering period of the tender offer, resulting in total purchases pursuant to the tender offer
of approximately 98% of Gentium’s fully diluted ordinary shares and American Depositary Shares, or ADSs. In June 2014, Jazz Pharmaceuticals
acquired additional Gentium ordinary shares, representing a further 1.7% interest in Gentium, for cash consideration of $17.5 million. As of
June 30, 2014, the aggregate acquisition cost of the Gentium ordinary shares and ADSs was $993.7 million, comprising cash payments of
$1,010.8 million offset by proceeds from the exercise of Gentium share options of $17.1 million. The results of operations of the acquired
Gentium business, along with the estimated fair values of the assets acquired and liabilities assumed in the transaction, have been included in
Jazz Pharmaceuticals’ consolidated financial statements since the completion of the Gentium Acquisition on January 23, 2014. Jazz
Pharmaceuticals records noncontrolling interests in its consolidated financial statements which represent the ownership interest of minority
shareholders in the equity of Gentium. In connection with the Gentium Acquisition, on January 23, 2014, the Parent and certain of its
subsidiaries entered into a second amendment to a credit agreement with Barclays Bank PLC, as administrative agent, and certain other
11
lenders. The credit agreement, as amended to date, is referred to in this offering memorandum as the amended credit agreement. The amended
credit agreement provides for (i) a tranche of incremental term loans in the aggregate principal amount of $350.0 million, (ii) a tranche of term
loans to refinance the $554.4 million aggregate principal amount of previously outstanding term loans and (iii) a $425.0 million revolving credit
facility. See “Description of certain other indebtedness.” Jazz Pharmaceuticals used the proceeds from the incremental term loans and
$300.0 million of loans under the revolving credit facility together with cash on hand to finance the Gentium Acquisition.
(3) During the six months ended June 30, 2014, acquired in-process research and development expense previously classified as research and
development expense was reclassified to acquired in-process research and development expense to conform to current period presentation.
(4) All references in the tables above to “ordinary shares” refer to JPI’s common stock with respect to the year ended December 31, 2011 and to the
Parent’s ordinary shares with respect to the years ended December 31, 2013 and 2012 and the six month periods ended June 30, 2014 and 2013.
Jazz Pharmaceuticals’ earnings per share in the year ended December 31, 2011 was not impacted by the Azur Merger since each share of JPI
common stock issued and outstanding immediately prior to the effective time of the Azur Merger was canceled and converted into the right to
receive one ordinary share upon the consummation of the Azur Merger.
12
Risk factors
An investment in the notes involves significant risks. Prior to making a decision about investing in the notes, and in
consultation with your own financial and legal advisors, you should carefully consider, among other matters, the
following risk factors together with the other information in this offering memorandum, the information and
documents incorporated by reference, and in any related term sheet that we deliver to you in connection with this
offering. Any of these risks could seriously harm Jazz Pharmaceuticals’ consolidated business, financial condition,
results of operations or cash flow, resulting in the decline of the trading price of the notes and ordinary shares and
a loss of all or part of your investment.
Risks relating to Xyrem and the significant impact of Xyrem sales
Xyrem is Jazz Pharmaceuticals’ largest selling product, and Jazz Pharmaceuticals’ inability to maintain or
increase sales of Xyrem would have a material adverse effect on Jazz Pharmaceuticals’ consolidated business,
financial condition, results of operations and growth prospects.
Xyrem is Jazz Pharmaceuticals’ largest selling product and its consolidated financial results are significantly
influenced by sales of Xyrem, which accounted for 66.2% of Jazz Pharmaceuticals’ consolidated net product
sales for the three months ended June 30, 2014 and 65.8% of Jazz Pharmaceuticals’ consolidated net product
sales for the year ended December 31, 2013. Jazz Pharmaceuticals’ future plans assume that sales of Xyrem will
increase. While Xyrem product sales grew from 2011 to 2012 and from 2012 to 2013, neither we nor the Parent
can assure you that Jazz Pharmaceuticals can maintain sales of Xyrem at or near current levels, or that Xyrem
sales will continue to grow. Jazz Pharmaceuticals has periodically increased the price of Xyrem, most recently in
August 2014, and neither we nor the Parent can assure you that price adjustments Jazz Pharmaceuticals has
taken or may take in the future will not negatively affect Xyrem sales volumes.
In addition to other risks described herein, Jazz Pharmaceuticals’ ability to maintain or increase Xyrem product
sales is subject to a number of risks and uncertainties, the most important of which are discussed below,
including those related to:
• the potential introduction of a generic version of Xyrem or an alternative sodium oxybate product for
treating cataplexy and/or excessive daytime sleepiness in narcolepsy;
• changed or increased regulatory restrictions, including changes to Jazz Pharmaceuticals’ risk management
program and the terms of the final risk evaluation and mitigation strategy, or REMS, documents for Xyrem,
and the pressure to develop a single shared system REMS with potential generic competitors, or regulatory
actions by the FDA, including actions as a result of, or related to the matters raised in, the Form FDA 483 Jazz
Pharmaceuticals received in April 2014, as discussed in more detail in the risk factors below;
• Jazz Pharmaceuticals’ manufacturing partners’ ability to obtain sufficient quota from the U.S. Drug
Enforcement Administration, or the DEA, to satisfy Jazz Pharmaceuticals’ needs for Xyrem;
• any supply, manufacturing or distribution problems arising with any of Jazz Pharmaceuticals’ manufacturing
and distribution partners, all of whom are sole source providers for Jazz Pharmaceuticals;
• the availability of reimbursement from third party payors;
• changes in healthcare laws and policy, including changes in requirements for rebates, reimbursement and
coverage by federal healthcare programs;
• continued acceptance of Xyrem as safe and effective by physicians and patients, even in the face of negative
publicity that surfaces from time to time; and
13
• changes to Jazz Pharmaceuticals’ label, including new safety warnings or changes to its boxed warning, that
further restrict how Jazz Pharmaceuticals markets and sells Xyrem.
These and the other risks described below related to Xyrem product sales and protection of Jazz
Pharmaceuticals’ proprietary rights could have a material adverse effect on its ability to maintain or increase
sales of Xyrem.
If sales of Xyrem were to decline significantly, Jazz Pharmaceuticals might need to reduce its operating
expenses or to seek to raise additional funds, which would have a material adverse effect on Jazz
Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects, or Jazz
Pharmaceuticals might not be able to acquire, in-license or develop new products in the future to grow its
consolidated business.
If generic versions of Xyrem or other sodium oxybate products that compete with Xyrem are approved and
launched, sales of Xyrem would be adversely affected.
Although Xyrem is covered by patents covering its formulation, distribution system and method of use, four
third parties have filed ANDAs seeking FDA approval of generic versions of Xyrem, and additional third parties
may also seek to introduce generic versions of Xyrem or other sodium oxybate products for treatment of
cataplexy and/or excessive daytime sleepiness in narcolepsy. If one or more companies receive FDA approval of
an ANDA for generic versions of Xyrem or a new drug application, or NDA, for other sodium oxybate products, it
is possible that such company or companies could introduce generic versions of Xyrem or other sodium oxybate
products before Jazz Pharmaceuticals’ patents expire if they do not infringe Jazz Pharmaceuticals’ patents, if it
is determined that Jazz Pharmaceuticals’ patents are invalid or unenforceable, or if such company or
companies decide, before applicable ongoing patent litigation is concluded, to launch competition to Xyrem at
risk of potentially being held liable for damages for patent infringement.
In October 2010, December 2012, November 2013 and June 2014, Jazz Pharmaceuticals received a Paragraph IV
Certification from each of Roxane, Amneal, Par and Ranbaxy, respectively, that each had filed an ANDA with the
FDA requesting approval to market a generic version of Xyrem before the expiration of the Orange-Book-listed
patents relating to Xyrem. Jazz Pharmaceuticals has sued all four ANDA filers seeking to prevent them from
introducing a generic version of Xyrem that would infringe Jazz Pharmaceuticals’ patents, but neither we nor
the Parent can assure you that any of the lawsuits will prevent the introduction of a generic version of Xyrem
for any particular length of time, or at all. Additional ANDAs could also be filed requesting approval to market
generic versions of Xyrem. If any of these applications is approved, and a generic version of Xyrem is
introduced, Jazz Pharmaceuticals’ sales of Xyrem would be adversely affected. Although no trial date has been
set in any of the ANDA suits, Jazz Pharmaceuticals anticipates that trial on some of the patents in the Roxane
case could occur as early as the first quarter of 2015. However, the actual timing of events may be significantly
earlier or later than contemplated by current scheduling orders, and neither we nor the Parent can predict the
timing or outcome of events in this or the other ANDA litigation. In addition, between late June and early August
2014, petitions for CBM post-grant patent review by the PTAB were filed by certain of the ANDA filers with
respect to the validity of Jazz Pharmaceuticals’ patents covering the distribution system for Xyrem. To date,
these petitions have not been accepted by the PTAB. Neither we nor the Parent can predict the outcome of the
PTAB’s decision on whether to institute any of the petitioned CBM review proceedings, whether additional postgrant patent review challenges will be filed, the outcome of any CBM review or other proceeding if the PTAB
decides to institute one or more CBM review or other proceedings, or the impact any CBM review or other
proceeding might have on ongoing ANDA litigation proceedings. In accordance with the Hatch-Waxman Act, as a
result of Jazz Pharmaceuticals having filed a timely lawsuit against Roxane, FDA approval of Roxane’s ANDA
had been stayed until April 18, 2013, which was 30 months after Jazz Pharmaceuticals’ October 18, 2010 receipt
of Roxane’s Paragraph IV Certification, but that stay has expired. Jazz Pharmaceuticals does not know the
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status of Roxane’s ANDA and neither we nor the Parent can predict what actions the FDA or Roxane may take
with respect to Roxane’s ANDA. If Roxane’s ANDA is approved by the FDA, Roxane may seek to launch a generic
version of Xyrem prior to a District Court, or potential appellate court, decision in Jazz Pharmaceuticals’
ongoing patent litigation. While, in the event of such commercialization, Roxane would be liable to Jazz
Pharmaceuticals for damages in the event Jazz Pharmaceuticals ultimately prevails in the patent litigation, Jazz
Pharmaceuticals expects that the introduction of generic competition for Xyrem would have a material adverse
effect on Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and growth
prospects. See the next risk factor entitled “The manufacture, distribution and sale of Xyrem are subject to
significant regulatory oversight and restrictions and the requirements of a risk management program, and
these restrictions and requirements, as well as the potential impact of changes to those restrictions and
requirements, subject Jazz Pharmaceuticals to increased risks and uncertainties, any of which could negatively
impact sales of Xyrem.”
Other companies could also develop products that are similar, but not identical, to Xyrem, such as an
alternative formulation or an alternative formulation combined with a different delivery technology, and seek
approval in the United States by referencing Xyrem and relying, to some degree, on the FDA’s approval of
Xyrem and related determinations of safety and efficacy. For example, in April 2014, Jazz Pharmaceuticals
learned about the completion of a “first in man” clinical trial by a company using its proprietary technology for
delivery of a sodium oxybate formulation to eliminate second nighttime dosing for narcolepsy patients. This
company has stated its intent to submit an NDA, referencing Xyrem, to the FDA by the end of 2016. If this
company is successful in developing a sodium oxybate formulation that could be effectively used with its
delivery technology and is able to obtain FDA or other regulatory approval for its product to treat narcolepsy
patients, Jazz Pharmaceuticals expects the launch of such a product would have a material adverse effect on
Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects.
A generic manufacturer or manufacturer of an alternative sodium oxybate product would need to obtain quota
from the DEA in order to manufacture both the active pharmaceutical ingredient and the finished product for a
generic version of Xyrem. The DEA publishes an annual aggregate quota for the active pharmaceutical
ingredient of Xyrem, and Jazz Pharmaceuticals’ supplier is required to request and justify allocation of
sufficient annual manufacturing quota as well as additional manufacturing quota if needed throughout the
year. Through 2011, Jazz Pharmaceuticals’ active pharmaceutical ingredient supplier obtained substantially all
of the published annual aggregate quota for use in the manufacture of Xyrem. However, for the last three
years, Jazz Pharmaceuticals’ supplier was allocated only a portion of the published annual aggregate quota for
the active pharmaceutical ingredient. Consequently, a generic manufacturer or manufacturer of an alternative
sodium oxybate product may be able to obtain a portion of the annual aggregate active pharmaceutical
ingredient quota. In addition, Jazz Pharmaceuticals’ supplier was initially allocated only a portion of the quota it
requested for 2013 to make the active pharmaceutical ingredient of Xyrem. Similarly, Jazz Pharmaceuticals’
finished product manufacturer for Xyrem was initially allocated only a portion of the quota it requested to make
finished product. As a result, in 2013, both Jazz Pharmaceuticals’ active pharmaceutical ingredient supplier and
its finished product manufacturer had to request and justify increased quotas from the DEA. For 2014, both Jazz
Pharmaceuticals’ active pharmaceutical ingredient supplier and finished product manufacturer have been
allocated most, but not all, of their respective requested quotas. If, in the future, Jazz Pharmaceuticals and its
supplier and manufacturer cannot obtain the quotas that are needed on a timely basis, or at all, Jazz
Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects could
be materially and adversely affected.
After any introduction of a generic competitor, a significant percentage of the prescriptions written for Xyrem
may be filled with the generic version, resulting in a loss in sales of Xyrem. Generic competition often results in
decreases in the prices at which branded products can be sold, particularly when there is more than one
15
generic available in the marketplace. In addition, legislation enacted in the United States allows for, and in a
few instances in the absence of specific instructions from the prescribing physician mandates, the dispensing of
generic products rather than branded products where a generic version is available. Jazz Pharmaceuticals
expects that generic competition for Xyrem would have a material adverse effect on Jazz Pharmaceuticals’
consolidated business, financial condition, results of operations and growth prospects.
The manufacture, distribution and sale of Xyrem are subject to significant regulatory oversight and
restrictions and the requirements of a risk management program, and these restrictions and requirements, as
well as the potential impact of changes to those restrictions and requirements, subject Jazz Pharmaceuticals to
increased risks and uncertainties, any of which could negatively impact sales of Xyrem.
As a condition of approval of Xyrem, the FDA mandated that Jazz Pharmaceuticals maintain a risk management
and controlled distribution system, which is referred to in this offering memorandum as the Xyrem Risk
Management Program. The Xyrem Risk Management Program, which includes parts of the Xyrem Success
Program, was implemented at the time Xyrem was approved to ensure the safe distribution of Xyrem and
minimize the risk of misuse, abuse and diversion of sodium oxybate. Jazz Pharmaceuticals’ Xyrem Risk
Management Program includes a number of elements including patient and physician education, a database of
information so that Jazz Pharmaceuticals may track and report certain information, and the use of a single
central pharmacy to distribute Xyrem. Elements of the Xyrem Risk Management Program, adopted in 2002
before the FDA had authority to require REMS, are deemed to be an approved REMS pursuant to the Food and
Drug Administration Amendments Act of 2007, or the FDAAA. The Xyrem Risk Management Program, however,
is not in the form that is now required for REMS documents. The FDAAA requires that deemed REMS and related
documents be updated to comply with the current requirements for REMS documents. Jazz Pharmaceuticals has
not reached agreement with the FDA on certain significant terms of Jazz Pharmaceuticals’ REMS for Xyrem. For
example, Jazz Pharmaceuticals disagrees with the FDA’s current position that, as part of the current REMS
process, the Xyrem deemed REMS should be modified to enable the distribution of Xyrem through more than
one pharmacy, or potentially through retail pharmacies and wholesalers, as well as with certain modifications
proposed by the FDA that would, in the FDA’s view, be sufficient to ensure that the REMS includes only those
elements necessary to ensure that the benefits of Xyrem outweigh its risks, and that would, in the FDA’s view,
reduce the burden on the healthcare system.
The FDA notified Jazz Pharmaceuticals that the FDA would exercise its claimed authority to modify Jazz
Pharmaceuticals’ REMS and that it would finalize the REMS as modified by the FDA unless Jazz Pharmaceuticals
initiated dispute resolution procedures with respect to the modification of the Xyrem deemed REMS. Given
these circumstances, Jazz Pharmaceuticals initiated dispute resolution procedures with the FDA at the end of
February 2014. Jazz Pharmaceuticals received the FDA’s denial of its initial dispute resolution submission in the
second quarter of 2014 and has submitted a request for further supervisory review to the next administrative
level of the FDA. Jazz Pharmaceuticals expects to receive the FDA’s response to this further appeal in the third
quarter of 2014. Neither we nor the Parent can predict whether, or on what terms, Jazz Pharmaceuticals will
reach agreement with the FDA on final REMS documents for Xyrem, the outcome or timing of the current
dispute resolution procedure, whether Jazz Pharmaceuticals will initiate additional dispute resolution
proceedings with the FDA or other legal proceedings prior to finalizing the REMS documents, or the outcome or
timing of any such proceedings. Jazz Pharmaceuticals expects that final REMS documents for Xyrem will include
modifications to, and/or requirements that are not currently implemented in, the Xyrem Risk Management
Program. Any such modifications or additional requirements could potentially make it more difficult or
expensive for Jazz Pharmaceuticals to distribute Xyrem, make it easier for future generic competitors, and/or
negatively affect sales of Xyrem.
Section 505-1(i)(1) of the U.S. Federal Food, Drug and Cosmetic Act, or the FDCA, generally provides that (i) an
ANDA with a referenced drug subject to the REMS requirements is required to have a REMS with the same
16
elements as the referenced drug, such as a medication guide, a patient package insert and other “elements to
assure safe use,” or ETASU, and (ii) the ANDA drug and the referenced drug shall use a single shared system to
assure safe use. However, the FDA may waive this requirement for a single shared system and permit the ANDA
holder to submit separate but comparable REMS documents if the FDA either determines that the burden of
creating a single shared system outweighs its benefit, or if the ANDA applicant certifies that it has been unable
to obtain a license to any aspects of the REMS for the referenced drug product that are covered by a patent or a
trade secret. The FDCA provides that the FDA may seek to negotiate a license between the ANDA sponsor and
the sponsor of the listed product before granting a waiver of the single shared system requirement.
Accordingly, Jazz Pharmaceuticals expects to face pressure to license or share its Xyrem Risk Management
Program, which is the subject of multiple issued patents, or elements of it, with generic competitors. Neither we
nor the Parent can predict the outcome or impact on Jazz Pharmaceuticals’ consolidated business of any future
action that Jazz Pharmaceuticals may take with respect to licensing or sharing its REMS, or the FDA’s response
to a certification that a third party has been unable to obtain a license.
In the FDA’s December 2012 response denying a Citizen Petition that Jazz Pharmaceuticals filed in July 2012, the
FDA stated that when an NDA holder has a deemed REMS, the FDA directs the ANDA applicant(s) to work with
the NDA holder to create a single shared system to implement the ETASU that will be approved as a final REMS.
More broadly, the FDA has stated that it expects the negotiation of a single shared REMS between an NDA
holder and ANDA applicants to proceed concurrently with the FDA’s review of ANDA applications. The FDA has
further stated that it typically monitors the progress of industry working groups attempting to develop shared
REMS systems, and that it has acted to help ensure that sponsors were cooperating and that there were no
obstacles to developing a single shared system. In January 2014, the FDA held an initial meeting with Jazz
Pharmaceuticals and the then-current Xyrem ANDA applicants to facilitate the development of a single shared
system REMS, and Jazz Pharmaceuticals expects these interactions to continue among the parties and the new
ANDA applicant. Neither we nor the Parent can predict the timing, outcome or impact on Jazz Pharmaceuticals’
consolidated business of discussions with the FDA and/or any ANDA applicant with respect to the potential
creation of a single shared system REMS for Xyrem (sodium oxybate), including the impact of the ongoing
process with respect to potential modifications to the Xyrem deemed REMS as discussed above, or the impact of
any single shared system REMS on Jazz Pharmaceuticals’ ongoing litigation with each of the ANDA applicants.
See the risk factor entitled “Jazz Pharmaceuticals may incur substantial costs as a result of litigation or other
proceedings relating to patents and other intellectual property rights, and Jazz Pharmaceuticals may be unable
to protect its rights to, or commercialize, its products.”
If Jazz Pharmaceuticals does not develop a single shared system REMS or license or share its REMS with a
generic competitor within a time frame or on terms that the FDA considers acceptable, the FDA may assert that
its waiver authority permits it to allow the generic competitor to market a generic drug with a REMS that does
not include the same elements that are in Jazz Pharmaceuticals’ deemed REMS or, when Xyrem REMS
documents are approved, with a separate REMS that includes different, but comparable, ETASU.
The Federal Trade Commission, or the FTC, has been paying increasing attention to the use of REMS by
companies selling branded products, in particular to whether REMS may be deliberately being used to reduce
the risk of competition from generic drugs in a way that may be deemed to be anticompetitive. It is possible
that the FTC or others could claim that Jazz Pharmaceuticals’ REMS or other practices are being used in an
anticompetitive manner. The FDCA further states that a REMS shall not be used by an NDA holder to block or
delay generic drugs from entering the market. Three of the ANDA applicants have asserted that Jazz
Pharmaceuticals’ patents covering the distribution system for Xyrem should not have been listed in the Orange
Book, and that the Xyrem REMS is blocking competition. Neither we nor the Parent can predict the outcome of
these claims in the ongoing litigation, or the impact of any similar claims that may be made in the future.
17
It is also possible that the FDA may take the position that a potential generic competitor does not need a REMS
that has the same ETASU as Jazz Pharmaceuticals’ Xyrem deemed REMS in order to obtain approval of its
ANDA. In the denial of Jazz Pharmaceuticals’ Citizen Petition described above, the FDA stated that if the FDA
determines that an ANDA may be ready for approval before final approval of the REMS of a sponsor holding a
deemed REMS, the FDA will direct the ANDA applicant to submit a proposed risk management plan with ETASU
that are comparable to the ETASU that are approved for the referenced drug in order to have adequate risk
management elements in place for the ANDA until the final REMS is approved. The legal basis for this position is
uncertain. However, it is possible that the FDA may rely on this position as a basis to grant approval of an ANDA
with a risk management plan rather than a final REMS. The 30-month stay of FDA approval of Roxane’s ANDA
expired on April 18, 2013, and Jazz Pharmaceuticals has not yet received approval of final REMS documents for
Xyrem. Accordingly, it is possible that, consistent with the position that the FDA articulated in its denial of Jazz
Pharmaceuticals’ Citizen Petition, the FDA could approve Roxane’s ANDA with a risk management plan that is
separate from Jazz Pharmaceuticals’ Xyrem deemed REMS, rather than with a final REMS or a shared REMS for
both the generic and Xyrem. Jazz Pharmaceuticals expects that the approval of an ANDA that results in the
launch of a generic version of Xyrem would have a material adverse effect on Jazz Pharmaceuticals’
consolidated business, financial condition, results of operations and growth prospects. See the risk factor
entitled “Jazz Pharmaceuticals may incur substantial costs as a result of litigation or other proceedings relating
to patents and other intellectual property rights, and Jazz Pharmaceuticals may be unable to protect its rights
to, or commercialize, its products.”
Currently, Jazz Pharmaceuticals’ Xyrem deemed REMS requires that all of the Xyrem sold in the United States
must be dispensed and shipped directly to patients through a single central pharmacy. The process under which
patients receive Xyrem under Jazz Pharmaceuticals’ program is complex and includes multiple mandatory
steps, such as the enrollment of the patient in the Xyrem Success Program and calls between the central
pharmacy and the patient before each prescription of Xyrem is filled and sent to the patient. While Jazz
Pharmaceuticals has an exclusive agreement with the central pharmacy for Xyrem, Express Scripts Specialty
Distribution Services and its affiliate CuraScript, Inc., or ESSDS, through June 2015, if the central pharmacy does
not fulfill its contractual obligations to Jazz Pharmaceuticals, refuses or fails to adequately serve patients, or
fails to promptly and adequately address operational challenges, whether expected or unexpected, the
fulfillment of Xyrem prescriptions and Jazz Pharmaceuticals’ sales would be adversely affected. If Jazz
Pharmaceuticals changes its central pharmacy, new contracts might be required with government and other
insurers who pay for Xyrem, and the terms of any new contracts could be less favorable to Jazz
Pharmaceuticals than current agreements. In addition, any new central pharmacy would need to be registered
with the DEA and would also need to implement the particular processes, procedures and activities necessary to
distribute Xyrem under Jazz Pharmaceuticals’ Xyrem Risk Management Program or any REMS that Jazz
Pharmaceuticals is subject to in the future. Transitioning to a new pharmacy could result in product shortages,
which would adversely affect sales of Xyrem in the United States, result in additional costs and expenses for
Jazz Pharmaceuticals, and/or take a significant amount of time, any of which could materially and adversely
affect Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and growth
prospects.
As required by the FDA and other regulatory agencies, the adverse event information that Jazz Pharmaceuticals
collects for Xyrem is regularly reported to the FDA and could result in the FDA requiring changes to the Xyrem
label or taking or requiring Jazz Pharmaceuticals to take other actions that could have an adverse effect on
Xyrem’s commercial success. Jazz Pharmaceuticals’ Xyrem deemed REMS includes unique features that provide
more extensive information about adverse events, including deaths, than is generally available for other
products that are not subject to similar risk management programs. For example, in April 2011, Jazz
Pharmaceuticals learned that deaths of patients who had been prescribed Xyrem between 2003 and 2010 had
not always been reported to Jazz Pharmaceuticals by ESSDS and therefore to the FDA by Jazz Pharmaceuticals,
18
as required. Jazz Pharmaceuticals reported these cases to the FDA when it discovered them, investigated the
related data from ESSDS as well as additional data Jazz Pharmaceuticals gathered, and submitted an analysis of
the data to the FDA. In October 2011, Jazz Pharmaceuticals received a warning letter from the FDA regarding
certain aspects of its adverse event reporting system for Xyrem and drug safety procedures related to the
deaths that Jazz Pharmaceuticals discovered in April 2011 which had not been reported. Jazz Pharmaceuticals
completed the actions and submitted the data required to address the observations in the 2011 warning letter
and arising from a subsequent inspection. In August 2013, Jazz Pharmaceuticals received a close-out letter from
the FDA.
In April 2014, Jazz Pharmaceuticals received a Form FDA 483 at the conclusion of a pharmacovigilance
inspection conducted by the FDA. The Form FDA 483 included observations relating to certain aspects of Jazz
Pharmaceuticals’ adverse drug experience reporting system for all of its products, including Xyrem. Since May
2012, all of the approximately 3,500 adverse drug experiences, or ADEs, reported to Jazz Pharmaceuticals for
all products that were categorized as “serious and unexpected” had been reported to the FDA. However,
reports related to 92 of these ADEs had been submitted beyond the 15-day regulatory deadline. The Form FDA
483 included an observation related to these late filings. In addition, the Form FDA 483 included observations
regarding Jazz Pharmaceuticals’ lack of written procedures for certain aspects of its evaluation of ADEs and
certain deficiencies in its investigation of ADEs. Jazz Pharmaceuticals has responded to the Form FDA 483 with
a description of the corrective actions and improvements that it had implemented before or shortly following
the inspection and additional improvements that Jazz Pharmaceuticals plans to implement to address the
observations in the Form FDA 483. In light of the fact that Jazz Pharmaceuticals has previously received
observations relating to adverse drug experience reporting, Jazz Pharmaceuticals does not know whether the
FDA will take further action, including the issuance of a warning letter as a follow-up to its inspection, or
require Jazz Pharmaceuticals to take further action, with respect to the matters covered in the Form FDA 483.
Such actions may be costly or time consuming and/or negatively affect the commercial success of Xyrem and
Jazz Pharmaceuticals’ other products. In addition, neither we nor the Parent can assure you that Jazz
Pharmaceuticals will be able to adequately address the matters raised by the FDA in the Form FDA 483 or
otherwise, and the failure to do so could have a material adverse effect on Jazz Pharmaceuticals’ consolidated
business, financial condition and results of operations.
Any failure to demonstrate our company’s substantial compliance with applicable regulatory requirements to
the FDA’s or any other regulatory authority’s satisfaction could result in such regulatory authorities taking
actions in the future, which could have a material adverse effect on Xyrem sales and therefore on Jazz
Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects. See
also the risk factor entitled “Jazz Pharmaceuticals is subject to significant ongoing regulatory obligations and
oversight, which may result in significant additional expense and limit its ability to commercialize its products.”
The FDA has required that Xyrem’s label include a boxed warning regarding the risk of abuse. A boxed warning
is the strongest type of warning that the FDA can require for a drug product and warns prescribers that the
drug carries a significant risk of serious or even life-threatening adverse effects. A boxed warning also means,
among other things, that the product cannot be advertised through reminder ads, or ads that mention the
pharmaceutical brand name but not the indication or medical condition it treats. In addition, Xyrem’s FDA
approval under the FDA’s Subpart H regulations requires that all of the promotional materials for Xyrem be
provided to the FDA for review at least 30 days prior to the intended time of first use. Neither we nor the Parent
can predict whether the FDA will require additional warnings, including boxed warnings, to be included on
Xyrem’s label. Warnings in the Xyrem label and any limitations on Jazz Pharmaceuticals’ ability to advertise and
promote Xyrem may have affected, and could in the future negatively affect, Xyrem sales and therefore Jazz
Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects.
19
Risks relating to Jazz Pharmaceuticals’ consolidated business
While Xyrem remains Jazz Pharmaceuticals’ largest product, Jazz Pharmaceuticals’ success also depends on its
ability to effectively commercialize its other products. Jazz Pharmaceuticals’ inability to do so could have a
material adverse effect on Jazz Pharmaceuticals’ consolidated business, financial condition, results of
operations and growth prospects.
In addition to Xyrem, Jazz Pharmaceuticals is commercializing a portfolio of products, including its other key
products Erwinaze, Defitelio and Prialt. See the discussion regarding the launch of Defitelio in the risk factor
entitled “Jazz Pharmaceuticals may not be able to successfully commercialize Defitelio in Europe, or obtain
marketing approval in other countries, including the United States, which could have a material adverse effect
on Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and growth
prospects.”
Erwinaze, a biologic product, is used in conjunction with chemotherapy to treat patients with ALL with
hypersensitivity to E. coli-derived asparaginase. Erwinaze is exclusively licensed to Jazz Pharmaceuticals, and
manufactured for Jazz Pharmaceuticals, by Public Health England, a U.K. national executive agency, or PHE, and
was approved by the FDA under a biological license application, or BLA, and launched in the U.S. market in
November 2011. It is also being sold under marketing authorizations, named patient programs, temporary use
authorizations or similar authorizations in multiple countries in Europe and elsewhere.
Erwinaze represents an important part of Jazz Pharmaceuticals’ strategy to grow sales of its existing products.
However, Jazz Pharmaceuticals’ ability to successfully and sustainably maintain and grow sales of Erwinaze is
subject to a number of challenges, including the limited population of patients with ALL and the incidence of
hypersensitivity reactions to E. coli-derived asparaginase within that population, Jazz Pharmaceuticals’ ability
to obtain data on the use of Erwinaze in young adults age 18 to 39 with ALL who are hypersensitive to E. coliderived asparaginase, as well as Jazz Pharmaceuticals’ need to apply for and receive marketing authorizations,
through the European Union’s, or EU’s, mutual recognition procedure or otherwise, in certain additional
countries so Jazz Pharmaceuticals can launch promotional efforts in those countries. Another significant
challenge to Jazz Pharmaceuticals’ ability to maintain the current sales level and continued growth in sales is
Jazz Pharmaceuticals’ need to ensure sufficient supply of Erwinaze on a timely basis. See the discussion
regarding Erwinaze supply issues in the risk factor entitled “Jazz Pharmaceuticals depends on single source
suppliers and manufacturers for each of its products, product candidates and their active pharmaceutical
ingredients. The loss of any of these suppliers or manufacturers, or delays or problems in the supply or
manufacture of Jazz Pharmaceuticals’ products for commercial sale or its product candidates for use in its
clinical trials, could materially and adversely affect Jazz Pharmaceuticals’ consolidated business, financial
condition, results of operations and growth prospects.”
Jazz Pharmaceuticals also faces numerous other risks that may impact Erwinaze sales, including regulatory
risks, the development of new asparaginase treatments that could reduce the rate of hypersensitivity in
patients with ALL, the development of new treatment protocols for ALL that may not include asparaginasecontaining regimens, difficulties with obtaining and maintaining favorable pricing and reimbursement
arrangements and potential competition from biosimilar products. In addition, if Jazz Pharmaceuticals fails to
comply with its obligations under its agreement with PHE and loses exclusive rights to Erwinaze, or otherwise
fails to maintain and grow sales of Erwinaze, Jazz Pharmaceuticals’ growth prospects could be negatively
affected.
Prialt, an intrathecally administered infusion of ziconotide, was approved by the FDA in December 2004 for the
management of severe chronic pain in patients for whom intrathecal therapy is warranted and who are
intolerant of or refractory to other treatment, such as systemic analgesics, adjunctive therapies or intrathecal
20
morphine. Jazz Pharmaceuticals distributes Prialt through an exclusive wholesale distributor and pharmacy.
Jazz Pharmaceuticals faces many challenges in maintaining and growing sales of Prialt, including acceptance of
intrathecal administration by patients and physicians and challenges for physicians with timely reimbursement
for use of Prialt. In addition, the FDA has required that the label for Prialt include a boxed warning regarding
the risk of psychiatric symptoms and neurological impairment. Neither we nor the Parent can predict whether
the FDA will require additional warnings, or place any additional limitations on Jazz Pharmaceuticals’ ability to
advertise and promote Prialt, which could negatively impact Prialt sales.
Failure to maintain or increase prescriptions and revenue from sales of Jazz Pharmaceuticals’ products,
including Erwinaze and Defitelio, could have a material adverse effect on Jazz Pharmaceuticals’ consolidated
business, financial condition, results of operations and growth prospects. Jazz Pharmaceuticals may choose to
increase the price of its products, and neither we nor the Parent can assure you that price adjustments will not
negatively affect its sales volumes. In addition, sales of Erwinaze may fluctuate significantly from quarter to
quarter, depending on the number of patients receiving treatment, the availability of supply to meet the
demand for the product, the dosing requirements of treated patients and other factors. The market price of
ordinary shares may decline if the sales of Jazz Pharmaceuticals’ products do not continue or grow at the rates
anticipated by financial analysts or investors, which could adversely affect the value of your notes.
In addition, if Jazz Pharmaceuticals fails to obtain approvals for certain of its products in new indications or
formulations, Jazz Pharmaceuticals will be unable to commercialize its products in new indications or
formulations, which could have a material adverse effect on Jazz Pharmaceuticals’ consolidated business,
financial condition, results of operations and growth prospects.
Jazz Pharmaceuticals may not be able to successfully commercialize Defitelio in Europe, or obtain marketing
approval in other countries, including the United States, which could have a material adverse effect on Jazz
Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects.
Jazz Pharmaceuticals acquired Defitelio/defibrotide as a result of the Gentium Acquisition. In October 2013, the
European Commission, or EC, granted marketing authorization under exceptional circumstances for Defitelio for
the treatment of severe VOD in adults and children undergoing HSCT therapy. Jazz Pharmaceuticals
commenced the launch of Defitelio in Europe in March 2014, and as of July 2014, Jazz Pharmaceuticals had
launched Defitelio in Germany, Austria, Italy (with reimbursement under Law 648/96) and the United Kingdom.
Jazz Pharmaceuticals expects to launch Defitelio in additional European countries on a rolling basis during the
remainder of 2014 and in 2015, subject to receipt of pricing and reimbursement approvals as described below.
Any delay in the planned timing of the launch of Defitelio in additional countries would negatively affect
anticipated revenue from Defitelio in 2014 and could negatively affect Jazz Pharmaceuticals’ growth prospects
in Europe.
Jazz Pharmaceuticals is in the process of making pricing and reimbursement submissions with respect to
Defitelio, and discussing them with regulatory authorities, in those European countries where Jazz
Pharmaceuticals has not yet launched Defitelio, including in countries where pricing and reimbursement
approvals are required for launch. Neither we nor the Parent can predict the timing of Defitelio’s launch in
countries where Jazz Pharmaceuticals is engaged in pricing and reimbursement submissions. If Jazz
Pharmaceuticals experiences delays and unforeseen difficulties in obtaining favorable pricing and
reimbursement approvals, planned launches in the affected countries would be delayed and Jazz
Pharmaceuticals’ anticipated revenue from Defitelio in 2014 and Jazz Pharmaceuticals’ growth prospects in
Europe could be negatively affected.
Jazz Pharmaceuticals’ anticipated revenue and growth prospects would also be negatively affected in the event
that Jazz Pharmaceuticals is unable to ultimately obtain favorable pricing and reimbursement approvals in
21
countries that represent significant markets. Jazz Pharmaceuticals has developed estimates of anticipated
pricing, which are based on its research and understanding of the product and target market. However, due to
efforts to provide for containment of health care costs, one or more countries may not support Jazz
Pharmaceuticals’ estimated level of governmental pricing and reimbursement for Defitelio, particularly in light
of the budget crises faced by a number of countries in Europe, which would negatively impact anticipated
revenue from Defitelio. While Jazz Pharmaceuticals has launched Defitelio in Italy under Law 648/96, which
provides reimbursement for Defitelio by the Italian National Health System until final pricing and
reimbursement approval is obtained, Jazz Pharmaceuticals cannot predict the timing for final approval or
actual terms of commercial pricing and reimbursement Jazz Pharmaceuticals may receive in Italy. In addition,
until 2008, Gentium sold forms of defibrotide in Italy to treat vascular disease with risk of thrombosis at a price
that was substantially lower than the anticipated commercial price for Defitelio. Although Jazz
Pharmaceuticals’ current pricing and reimbursement discussion relates to an unrelated indication, regulators in
Italy may use the price of the past sales of defibrotide by Gentium as a reference price for Defitelio, which may
make it more difficult for Jazz Pharmaceuticals to justify its requested higher commercial price, which would
also negatively impact anticipated revenue from Defitelio in Italy.
Furthermore, after initial price and reimbursement approvals, reductions in prices and changes in
reimbursement levels can be triggered by multiple factors, including reference pricing systems and publication
of discounts by third party payors or authorities in other countries. In the EU, prices can be reduced further by
parallel distribution and parallel trade, or arbitrage between low-priced and high-priced countries. If any of
these events occurs, Jazz Pharmaceuticals’ anticipated revenue from Defitelio would be negatively affected.
Due to the recent commercial launch of Defitelio in Europe and the limited amount of historical sales data,
which has been limited to sales from named patient programs, Jazz Pharmaceuticals’ Defitelio sales will be
difficult to predict from period to period, particularly since Jazz Pharmaceuticals may experience delays and
unforeseen difficulties in obtaining favorable pricing and reimbursement approvals in additional countries. As a
result, you should not rely on Defitelio sales results in any period as being indicative of future performance. In
addition, if sales of Defitelio do not reach the levels Jazz Pharmaceuticals expects, Jazz Pharmaceuticals’
anticipated revenue from Defitelio would be negatively affected which could have a material adverse effect on
Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects.
Defitelio was authorized under “exceptional circumstances” because it was not possible to obtain complete
information about the product due to the rarity of the disease and because ethical considerations prevented
conducting a study directly comparing Defitelio with a placebo. A marketing authorization granted under
exceptional circumstances is subject to approval conditions and an annual reassessment of the risk-benefit
balance by the European Medicines Agency, or EMA. As such, if Jazz Pharmaceuticals fails to meet the approval
condition for Defitelio, which requires that Jazz Pharmaceuticals set up a patient registry to investigate the long
term safety, health outcomes and patterns of utilization of Defitelio during normal use, or if it is determined
that the balance of risks and benefits of using Defitelio changes materially, the EMA could vary, suspend or
withdraw the marketing authorization for Defitelio. This could negatively impact Jazz Pharmaceuticals’
anticipated revenue from Defitelio and could have a material adverse effect on Jazz Pharmaceuticals’
consolidated business, financial condition, results of operations and growth prospects.
At the time of the Gentium Acquisition, Gentium had licensed to Sigma-Tau Pharmaceuticals, Inc., or Sigma-Tau,
the rights to commercialize defibrotide for the treatment and prevention of VOD in North America, Central
America and South America, subject to receipt of marketing authorization, if any, in the applicable territory. On
July 1, 2014, Jazz Pharmaceuticals entered into a definitive agreement to acquire the rights to defibrotide in the
Americas from Sigma-Tau, and Jazz Pharmaceuticals completed the transaction on August 4, 2014. Defibrotide
has been, and continues to be, distributed to patients diagnosed with VOD in the United States through an
expanded access program pursuant to a treatment investigational new drug application, or IND, protocol.
22
Jazz Pharmaceuticals is engaged in activities related to the potential approval of defibrotide in the United
States. A prior NDA submission by Gentium seeking approval in the United States for defibrotide for the
treatment of VOD was voluntarily withdrawn from consideration in 2011 in order to address issues raised by the
FDA. Based on a meeting with the FDA in April 2014 to discuss issues related to the possible submission of an
NDA for defibrotide for the treatment of severe VOD in patients undergoing HSCT therapy, Jazz Pharmaceuticals
believes that it may be possible to submit an NDA without the need for data from an additional clinical trial.
Jazz Pharmaceuticals is continuing to seek to address the FDA’s comments and questions and plans to have
additional discussions with the FDA during 2014 prior to finalizing its strategy for seeking approval of
defibrotide in the United States. Although Jazz Pharmaceuticals anticipates that, if its additional FDA meetings
are successful, Jazz Pharmaceuticals could submit an NDA to the FDA in the first half of 2015, Jazz
Pharmaceuticals’ ability to do so is subject to its ability to acquire and remediate key information in the data
package and further assumes that Jazz Pharmaceuticals will not be required to complete any additional clinical
trials prior to the submission. However, Jazz Pharmaceuticals may be unable to acquire and remediate key
information in the data package in a timely manner and/or Jazz Pharmaceuticals may be required to conduct
additional time-consuming and costly clinical trials in order to submit an NDA to the FDA or to otherwise obtain
any regulatory approval of defibrotide in the United States.
Jazz Pharmaceuticals is also assessing the potential for approval of defibrotide in other countries and for
development of defibrotide in indications in addition to the treatment of severe VOD. Jazz Pharmaceuticals
cannot know when, if ever, defibrotide will be approved in the United States or in any other country or under
what circumstances, and what, if any, additional clinical or other development activities will be required in
order to potentially obtain such regulatory approval and the cost associated with such required activities, if
any. If Jazz Pharmaceuticals fails to obtain approval for defibrotide in the United States in a timely manner, in
other countries or for new indications, Jazz Pharmaceuticals’ anticipated revenue from defibrotide and Jazz
Pharmaceuticals’ growth prospects would be negatively affected.
The Marketing Authorization Application, or MAA, Gentium initially filed with the EMA in 2011 sought approval
for defibrotide for the treatment and prevention of VOD in adults and children. The approval Gentium received
from the EC in October 2013 was for the narrower indication of treatment of severe VOD in adults and children
undergoing HSCT therapy. The scope of any future approvals Jazz Pharmaceuticals receives may negatively
affect defibrotide’s growth prospects.
While Jazz Pharmaceuticals has limited revenue from sales of defibrotide on a named patient basis, neither we
nor the Parent can predict whether historical revenues from named patient programs will continue or whether
Jazz Pharmaceuticals will be able to continue to distribute defibrotide on a named patient basis.
Defibrotide is currently available in approximately 40 countries on a named patient basis. In certain European
countries, reimbursement for products that have not yet received marketing authorization is provided through
national named patient or compassionate use programs. Such reimbursement may cease to be available if
authorization for named patient or compassionate use programs expires or is terminated. While Gentium had
generated and Jazz Pharmaceuticals continues to generate revenue from the distribution of defibrotide through
named patient programs, neither we nor the Parent can predict whether historical revenues from these
programs will continue, whether Jazz Pharmaceuticals will be able to continue to distribute defibrotide on a
named patient basis in these countries, whether the rolling launch of Defitelio in Europe will proceed as
planned, or whether commercial revenues will exceed revenues historically generated from sales on a named
patient basis. Any failure to maintain revenues from sales of defibrotide on a named patient basis and/or to
generate revenues from commercial sales of Defitelio exceeding historical defibrotide sales on a named patient
basis could have a material adverse effect on Jazz Pharmaceuticals’ consolidated business, financial condition,
results of operations and growth prospects.
23
Jazz Pharmaceuticals depends on single source suppliers and manufacturers for each of its products, product
candidates and their active pharmaceutical ingredients. The loss of any of these suppliers or manufacturers, or
delays or problems in the supply or manufacture of Jazz Pharmaceuticals’ products for commercial sale or its
product candidates for use in its clinical trials, could materially and adversely affect Jazz Pharmaceuticals’
consolidated business, financial condition, results of operations and growth prospects.
The manufacture of pharmaceutical products requires significant expertise and capital investment, including
the development of process controls required to consistently produce the active pharmaceutical ingredient and
the finished product in sufficient quantities while meeting detailed product specifications on a repeated basis.
Manufacturers of pharmaceutical products often encounter difficulties in production, including difficulties with
production costs and yields, process controls, quality control and quality assurance, including testing of
stability, impurities and impurity levels and other product specifications by validated test methods, and
compliance with strictly enforced U.S., state and non-U.S. regulations. If Jazz Pharmaceuticals or any of its third
party suppliers or manufacturers encounter these or any other manufacturing, quality or compliance difficulties
with respect to any of Jazz Pharmaceuticals’ products, Jazz Pharmaceuticals may be unable to meet the
commercial demand for such products, which could adversely affect Jazz Pharmaceuticals’ consolidated
business, financial condition, results of operations and growth prospects.
Other than the manufacturing plant in Italy where Jazz Pharmaceuticals produces some active pharmaceutical
ingredients, including the defibrotide drug substance, Jazz Pharmaceuticals does not currently have its own
manufacturing capability for its products or product candidates, or their active pharmaceutical ingredients, or
the capability to package its products. The availability of Jazz Pharmaceuticals’ products for commercial sale
depends upon its ability to procure the ingredients, raw materials, packaging materials and finished products
that it needs from third parties. In part due to the limited market size for Jazz Pharmaceuticals’ products and
product candidates, Jazz Pharmaceuticals has entered into supply and manufacturing agreements with
suppliers and manufacturers, each of which is currently Jazz Pharmaceuticals’ single source for each of its
marketed products and for the active pharmaceutical ingredients used in some of these products.
Jazz Pharmaceuticals maintains limited inventories of certain of its products, including Xyrem and Erwinaze, as
well as the ingredients or raw materials used to make its products. Jazz Pharmaceuticals’ limited inventory puts
our company at significant risk of not being able to meet product demand. During 2013, Jazz Pharmaceuticals’
supply of Erwinaze was nearly completely absorbed by demand for the product. In the past, Jazz
Pharmaceuticals has experienced a disruption of supply of Erwinase in the European market due to
manufacturing challenges, including shortages related to the failure of a batch to meet certain specifications in
2013, and Jazz Pharmaceuticals may experience similar or other manufacturing challenges in the future. If Jazz
Pharmaceuticals’ continued efforts to avoid supply shortages are not successful, Jazz Pharmaceuticals could
experience Erwinaze supply interruptions in the future, which could have a material adverse effect on its sales
of and revenues from Erwinaze and limit its potential future maintenance and growth of the market for this
product. Other difficulties or delays in production, such as those described elsewhere in this risk factor, could
also result in supply interruptions in the future. If, for any reason, Jazz Pharmaceuticals’ suppliers and
manufacturers, including any new suppliers, do not continue to supply Jazz Pharmaceuticals with its products
or product candidates in a timely fashion and in compliance with applicable quality and regulatory
requirements, or otherwise fail or refuse to comply with their obligations to Jazz Pharmaceuticals under its
supply and manufacturing arrangements, Jazz Pharmaceuticals may not have adequate remedies for any
breach, and their failure to supply Jazz Pharmaceuticals could result in a shortage of its products or product
candidates, which could adversely affect Jazz Pharmaceuticals’ consolidated business, financial condition,
results of operations and growth prospects.
In addition, if one of Jazz Pharmaceuticals’ suppliers or manufacturers fails or refuses to supply Jazz
Pharmaceuticals for any reason, it would take a significant amount of time and expense to qualify a new
24
supplier or manufacturer. The loss of one of Jazz Pharmaceuticals’ suppliers or manufacturers could require
Jazz Pharmaceuticals to obtain regulatory clearance in the form of a “prior approval supplement” and to incur
validation and other costs associated with the transfer of the active pharmaceutical ingredient or product
manufacturing process. Jazz Pharmaceuticals believes that it could take up to two years, or longer in certain
cases, to qualify a new supplier or manufacturer, and Jazz Pharmaceuticals may not be able to obtain active
pharmaceutical ingredients or finished products from new suppliers or manufacturers on acceptable terms and
at reasonable prices, or at all. Should Jazz Pharmaceuticals lose either an active pharmaceutical ingredient
supplier or a finished product manufacturer, Jazz Pharmaceuticals could run out of salable product to meet
market demands or investigational product for use in clinical trials while it waits for FDA or similar
international regulatory body approval of a new supplier or manufacturer.
Jazz Pharmaceuticals’ current supplier of sodium oxybate, Siegfried USA LLC, or Siegfried, was approved by the
FDA in late 2011 and became Jazz Pharmaceuticals’ sole supplier in 2012. Jazz Pharmaceuticals expects that
Siegfried will continue to be its sole supplier of sodium oxybate for the foreseeable future, and neither we nor
the Parent can assure you that Siegfried can or will continue to supply on a timely basis, or at all, sufficient
quantities of active pharmaceutical ingredient to enable the manufacture of the quantities of Xyrem that Jazz
Pharmaceuticals needs.
Erwinaze is licensed to Jazz Pharmaceuticals, and manufactured for Jazz Pharmaceuticals, by PHE, which is Jazz
Pharmaceuticals’ sole supplier for Erwinaze. The FDA’s approval of the BLA for Erwinaze includes a number of
post-marketing commitments related to the manufacture of Erwinaze by Jazz Pharmaceuticals and the PHE.
Inability by PHE to comply with regulatory requirements, including follow through on manufacturing-related
post-marketing commitments that are part of the BLA approval and monitored by the FDA, could adversely
affect PHE’s ability to supply Erwinaze to Jazz Pharmaceuticals and could result in FDA approval being revoked
or product recalls, either of which could have a material adverse effect on Jazz Pharmaceuticals’ sales of and
revenues from Erwinaze and limit its potential future maintenance and growth of the market for this product. In
addition, if the FDA or any non-U.S. regulatory authority mandates any changes to the specifications for
Erwinaze, Jazz Pharmaceuticals may face challenges having product produced to meet such specifications, and
PHE may charge Jazz Pharmaceuticals more to supply Erwinaze meeting such specifications, which may result
in additional costs to Jazz Pharmaceuticals and may decrease any profit it would otherwise achieve with
Erwinaze.
Neither we nor the Parent can assure you that PHE will be able to continue to supply Jazz Pharmaceuticals’
ongoing commercial needs of Erwinaze in a timely manner, or at all, especially if Jazz Pharmaceuticals’ demand
for product continues to increase. If PHE experiences a disruption in supply or capacity constraints as a result of
increased demand or otherwise, Jazz Pharmaceuticals does not have the right to engage a backup supplier for
Erwinaze except in very limited circumstances, such as following the termination of the agreement by Jazz
Pharmaceuticals due to the uncured material breach by PHE or the cessation of PHE’s business. If Jazz
Pharmaceuticals is required to engage a backup or alternative supplier, the transfer of technical expertise and
manufacturing process to the backup or alternative supplier would be difficult, costly and time-consuming,
might not be successful and would increase the likelihood of a delay or interruption in manufacturing or a
shortage of supply of Erwinaze. While Jazz Pharmaceuticals continues to work with PHE to evaluate potential
steps to increase the supply of Erwinaze over the longer term to address expected growing worldwide demand,
Jazz Pharmaceuticals’ ability to increase sales of Erwinaze may be limited by its ability to obtain an increased
supply of the product. Any inability of PHE to supply sufficient quantities of Erwinaze to meet commercial needs
at historic levels or higher could have a material adverse effect on Jazz Pharmaceuticals’ consolidated business,
financial condition, results of operations and growth prospects.
Jazz Pharmaceuticals believes that it is currently the sole worldwide producer of the defibrotide drug
compound, and Jazz Pharmaceuticals conducts all of its manufacturing operations for the defibrotide drug
25
compound in a single facility located in Villa Guardia, near Como, Italy. This facility could be damaged by fire,
flood, earthquake, power loss, telecommunication and information system failure, terrorism or similar events.
Any of these events could cause a delay or interruption in manufacturing and potentially a supply shortage of
defibrotide, which could negatively impact Jazz Pharmaceuticals’ anticipated revenues. In addition, Jazz
Pharmaceuticals has contracted with Patheon UK Limited, or Patheon, to process the defibrotide compound
into its finished form at Patheon’s manufacturing facility in Italy. Patheon is currently the sole processor of
finished Defitelio. If Patheon does not or is not able to perform these services for any reason, it may take time
and resources to implement and execute the necessary technology transfer to another processor, and such
delay could negatively impact Jazz Pharmaceuticals’ product launch and anticipated revenues and potentially
cause Jazz Pharmaceuticals to breach contractual obligations with customers or to violate local laws requiring
Jazz Pharmaceuticals to deliver the product to those in need. Jazz Pharmaceuticals has initiated work with
Fresenius Kabi Austria GmbH, or Fresenius Kabi, to conduct a technology transfer of Jazz Pharmaceuticals’
manufacturing process for the finished form of Defitelio to their manufacturing site in Austria. Subject to a
successful technology transfer, including manufacture of process validation batches, and receipt of all
necessary regulatory approvals, Jazz Pharmaceuticals intends to qualify Fresenius Kabi as a second source of
Defitelio. The process of technology transfer is complicated, and Fresenius Kabi may not be able to successfully
obtain regulatory approval to produce Defitelio commercially, which could negatively impact Jazz
Pharmaceuticals’ anticipated revenues if Patheon for any reason does not or cannot provide Jazz
Pharmaceuticals with sufficient quantities of finished product to meet its clinical and commercial needs.
Jazz Pharmaceuticals is in the process of changing its supplier for ziconotide, the active pharmaceutical
ingredient in Prialt, and has commenced the transfer to the new supplier. Jazz Pharmaceuticals believes that it
has sufficient supply of ziconotide to meet its commercial requirements for finished product for a number of
years, which Jazz Pharmaceuticals expects to be sufficient time to complete the transfer to the new supplier. In
addition, Jazz Pharmaceuticals’ new manufacturer of finished product was approved by the FDA in December
2012 and started to supply Jazz Pharmaceuticals with Prialt finished product in January 2014. There can be no
assurance that the new supplier of ziconotide will be approved by the FDA or non-U.S. regulatory authorities or
that the new manufacturer of Prialt finished product will be able to meet Jazz Pharmaceuticals’ demand in the
future. Any failure to obtain and maintain sufficient commercial supplies could have a material adverse effect
on Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and growth
prospects.
For FazaClo HD, FazaClo LD and Versacloz, Jazz Pharmaceuticals has single sources of supply for both the active
pharmaceutical ingredient and finished product, and should it become necessary to change suppliers, the
process could take two years or longer.
In order to commence Jazz Pharmaceuticals’ planned Phase 3 clinical program for JZP-110 (formerly known as
ADX-N05), Jazz Pharmaceuticals needs to have sufficient quantities of clinical product manufactured. Jazz
Pharmaceuticals is working with its new supplier for JZP-110 to transfer the manufacturing methods to start
production of JZP-110 as early as practicable. In addition, Jazz Pharmaceuticals relies on Concert
Pharmaceuticals, Inc., or Concert, to transfer Concert’s manufacturing methods to Jazz Pharmaceuticals and its
contract manufacturers to produce sufficient quantity of JZP-386 required for Jazz Pharmaceuticals’ planned
studies. While Jazz Pharmaceuticals believes that it will be able to obtain sufficient supplies of JZP-110 and
JZP-386 before the commencement of the applicable planned clinical trials, there can be no assurance that Jazz
Pharmaceuticals’ suppliers will be able to produce sufficient clinical supplies of JZP-110 or JZP-386 in a timely
manner or at all. Any delay in receiving sufficient supplies of JZP-110 or JZP-386 for Jazz Pharmaceuticals’
planned studies could negatively impact its development programs.
The DEA limits the quantity of certain Schedule I controlled substances that may be produced in the United
States in any given calendar year through a quota system. Because the active pharmaceutical ingredient of
26
Xyrem, sodium oxybate, is a Schedule I controlled substance, Jazz Pharmaceuticals’ supplier of sodium oxybate,
as well as its finished product manufacturer, must each obtain separate DEA quotas in order to supply Jazz
Pharmaceuticals with sodium oxybate and Xyrem. Since the DEA typically grants quotas on an annual basis,
Jazz Pharmaceuticals’ sodium oxybate supplier and Xyrem manufacturer are required to request and justify
allocation of sufficient annual DEA quotas as well as additional DEA quotas if Jazz Pharmaceuticals’ commercial
or clinical requirements exceed the allocated quotas throughout the year. In the past, Jazz Pharmaceuticals has
had to engage in lengthy efforts to obtain the needed quotas after the original annual quotas had first been
allocated. For example, in 2013, Jazz Pharmaceuticals’ supplier was initially allocated only a portion of the
quota it requested to make the active pharmaceutical ingredient of Xyrem. Similarly, Jazz Pharmaceuticals’
finished product manufacturer for Xyrem was initially allocated only a portion of the quota the manufacturer
requested to make finished product. As a result, in 2013, both Jazz Pharmaceuticals’ active pharmaceutical
ingredient supplier and its finished product manufacturer had to request and justify increased quotas from the
DEA for 2013. For 2014, both Jazz Pharmaceuticals’ active pharmaceutical ingredient supplier and finished
product manufacturer have been allocated most, but not all, of their respective requested quotas. If, in the
future, Jazz Pharmaceuticals and its supplier and manufacturer cannot obtain the quotas that are needed on a
timely basis, or at all, Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations
and growth prospects could be materially and adversely affected.
In addition, the FDA and similar international regulatory bodies must approve manufacturers of the active and
inactive pharmaceutical ingredients and certain packaging materials used in Jazz Pharmaceuticals’ products. If
there are delays in qualifying new manufacturers or facilities or a new manufacturer is unable to obtain a
sufficient quota from the DEA, if required, or to otherwise meet FDA or similar international regulatory body’s
requirements for approval, there could be a shortage of the affected products for the marketplace or for use in
clinical studies, or both, particularly since Jazz Pharmaceuticals does not have secondary sources for supply
and manufacture of the active pharmaceutical ingredients for Jazz Pharmaceuticals’ products or backup
manufacturers for its finished products.
Failure by Jazz Pharmaceuticals’ third party manufacturers to comply with regulatory requirements could
adversely affect their ability to supply products or ingredients to Jazz Pharmaceuticals. All facilities and
manufacturing techniques used for the manufacture of pharmaceutical products must be operated in
conformity with the FDA’s current Good Manufacturing Practices, or cGMP, requirements. In complying with
cGMP requirements, Jazz Pharmaceuticals’ suppliers must continually expend time, money and effort in
production, record-keeping and quality assurance and control to ensure that Jazz Pharmaceuticals’ products
and product candidates meet applicable specifications and other requirements for product safety, efficacy and
quality. DEA regulations also govern facilities where controlled substances such as sodium oxybate, Xyrem’s
active pharmaceutical ingredient, are manufactured. Manufacturing facilities of Jazz Pharmaceuticals’ suppliers
have been and are subject to periodic unannounced inspection by the FDA, the DEA and other regulatory
authorities, including state authorities and similar authorities in non-U.S. jurisdictions. For example, the FDA
inspected the PHE facility where Erwinaze is manufactured in 2013 and will do so again in the future. Failure to
comply with applicable legal requirements subjects the suppliers to possible legal or regulatory action,
including shutdown, which may adversely affect their ability to supply Jazz Pharmaceuticals with the
ingredients or finished products it needs.
Jazz Pharmaceuticals’ ability to develop and deliver products in a timely and competitive manner depends on
its third party suppliers and manufacturers being able to continue to meet its ongoing commercial needs. Any
delay in supplying, or failure to supply, products by any of Jazz Pharmaceuticals’ suppliers could result in its
inability to meet the commercial demand for its products, or its needs for use in clinical trials, and could
adversely affect Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and
growth prospects.
27
Jazz Pharmaceuticals may not realize the anticipated financial and strategic benefits from the recent Gentium
Acquisition or be able to successfully integrate the acquired business.
The Gentium Acquisition creates numerous uncertainties and risks, and has required, and will continue to
require, significant efforts and expenditures, including with respect to integrating the acquired business with
Jazz Pharmaceuticals’ historical consolidated business. Jazz Pharmaceuticals may encounter unexpected
difficulties, or incur unexpected costs, in connection with its transition activities and integration efforts, which
include:
• the potential disruption of Jazz Pharmaceuticals’ historical core business;
• the risk that Jazz Pharmaceuticals’ relative lack of experience in the hematology/oncology market will not
allow Jazz Pharmaceuticals to achieve anticipated sales of Defitelio;
• the strain on, and need to continue to expand, Jazz Pharmaceuticals’ existing operational, technical, financial
and administrative infrastructure;
• the difficulties in assimilating employees and corporate cultures, including Jazz Pharmaceuticals’ lack of
experience in maintaining positive interactions with unionized employees;
• the failure to retain key managers and other personnel, including the employees from the acquired Gentium
business who might experience uncertainty about their future roles with our company;
• the challenges in controlling additional costs and expenses in connection with and as a result of the
acquisition;
• the diversion of our company’s management’s attention to integration of operations and corporate and
administrative infrastructures;
• any unanticipated liabilities for activities of or related to Gentium or its operations, products or product
candidates; and
• the challenges and risks associated with Gentium not being Jazz Pharmaceuticals’ wholly owned subsidiary,
including needing to consider the rights of, and duties owed to, the minority shareholders of Gentium under
Italian law when making future decisions that might impact Gentium, its business or operations.
If any of these factors impairs Jazz Pharmaceuticals’ ability to integrate the acquired Gentium business
successfully, Jazz Pharmaceuticals may be required to spend time or money on integration activities that
otherwise would be spent on the development and expansion of Jazz Pharmaceuticals’ consolidated business. If
Jazz Pharmaceuticals fails to integrate or otherwise manage the acquired business successfully and in a timely
manner, resulting operating inefficiencies could increase costs and expenses more than Jazz Pharmaceuticals
planned, could negatively impact the market price of ordinary shares and the value of your notes, and could
otherwise distract Jazz Pharmaceuticals from execution of its strategy. Failure to maintain effective financial
controls and reporting systems and procedures could also impact the Parent’s ability to produce timely and
accurate financial statements.
Jazz Pharmaceuticals has grown rapidly, and Jazz Pharmaceuticals’ consolidated business and corporate
structure have become substantially more complex. There can be no assurance that Jazz Pharmaceuticals will
effectively manage the increased complexity without experiencing operating inefficiencies or control
deficiencies. Significant management time and effort is required to effectively manage the increased complexity
of our company, and Jazz Pharmaceuticals’ failure to successfully do so could have a material adverse effect on
Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects.
28
Jazz Pharmaceuticals has substantially expanded its international footprint and operations, and it may expand
further in the future, but Jazz Pharmaceuticals does not yet have substantial historical experience in
international markets and may not achieve the results that it or its shareholders expect.
Jazz Pharmaceuticals is headquartered in Dublin, Ireland and has multiple offices in the United States, the
United Kingdom, Italy and other countries in Europe. Jazz Pharmaceuticals’ headcount has grown from
approximately 260 employees at the end of 2011 to approximately 830 in July 2014. This includes employees in
fourteen countries in North America and Europe, a European commercial presence, and a complex distribution
network for products in Europe and additional territories. In addition, Jazz Pharmaceuticals may expand its
international operations into other countries in the future, either organically or by acquisition. While Jazz
Pharmaceuticals has acquired significant management and other personnel with substantial international
experience, conducting Jazz Pharmaceuticals’ consolidated business in multiple countries subjects Jazz
Pharmaceuticals to a variety of risks and complexities that may materially and adversely affect Jazz
Pharmaceuticals’ consolidated business, results of operations and financial condition, including, among other
things:
• the increased complexity and costs inherent in managing international operations;
• diverse regulatory, financial and legal requirements, and any future changes to such requirements, in one or
more countries where Jazz Pharmaceuticals is located or does business;
• country-specific tax, labor and employment laws and regulations;
• applicable trade laws, tariffs, export quotas, custom duties or other trade restrictions and any changes to
them;
• challenges inherent in efficiently managing employees in diverse geographies, including the need to adapt
systems, policies, benefits and compliance programs to differing labor and other regulations, as well as
maintaining positive interactions with unionized employees in one of Jazz Pharmaceuticals’ international
locations;
• changes in currency rates; and
• regulations relating to data security and the unauthorized use of, or access to, commercial and personal
information.
Failure to effectively manage these risks could have a material adverse effect on Jazz Pharmaceuticals’
consolidated business. For example, although the EC granted marketing authorization under exceptional
circumstances for Defitelio for the treatment of severe VOD in adults and children undergoing HSCT therapy in
October 2013, before launching Defitelio in certain European countries, country-specific pricing and
reimbursement approvals must be obtained. See the discussion regarding the launch of Defitelio in the risk
factor entitled “Jazz Pharmaceuticals may not be able to successfully commercialize Defitelio in Europe, or
obtain marketing approval in other countries, including the United States, which could have a material adverse
effect on Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and growth
prospects.”
In recent years, the global economy has been impacted by the effects of an ongoing global financial crisis,
including the European sovereign debt crisis, which has caused extreme disruption in the financial markets,
including severely diminished liquidity and credit availability. In addition, Jazz Pharmaceuticals expects to
continue to grow its consolidated product sales in Europe. Continuing worldwide economic instability, including
challenges faced by the Eurozone and certain of the countries in Europe and the ongoing budgetary difficulties
faced by a number of EU member states, including Greece and Spain, has led and may continue to lead to
29
substantial delays in payment and payment partially with government bonds rather than cash for medicinal
drug products, which could negatively impact Jazz Pharmaceuticals’ consolidated revenues and profitability.
The commercial success of Jazz Pharmaceuticals’ products depends upon their market acceptance by
physicians, patients, third party payors and the medical community.
Physicians may not prescribe Jazz Pharmaceuticals’ products, in which case Jazz Pharmaceuticals would not
generate the revenues it anticipates from product sales. Market acceptance of any of Jazz Pharmaceuticals’
products by physicians, patients, third party payors and the medical community depends on:
• the clinical indications for which a product is approved, including any restrictions placed upon the product in
connection with its approval, such as a REMS, patient registry or labeling restrictions;
• the prevalence of the disease or condition for which the product is approved and the severity of side effects;
• acceptance by physicians and patients of each product as a safe and effective treatment;
• perceived advantages over alternative treatments;
• relative convenience and ease of administration;
• the cost of treatment in relation to alternative treatments, including generic products;
• the extent to which the product is approved for inclusion on formularies of hospitals and managed care
organizations; and
• the availability of adequate reimbursement by third parties.
Because of Jazz Pharmaceuticals’ dependence upon market acceptance of its products, any adverse publicity
associated with harm to patients or other adverse effects resulting from the use or misuse of Jazz
Pharmaceuticals’ products or any similar products distributed by other companies, including generic versions of
Jazz Pharmaceuticals’ products, could materially and adversely affect Jazz Pharmaceuticals’ consolidated
business, financial condition, results of operations and growth prospects. For example, from time to time, there
is negative publicity about illicit gamma-hydroxybutyrate, or GHB, and its effects, including with respect to
illegal use, overdoses, serious injury and death. Because sodium oxybate, the active pharmaceutical ingredient
in Xyrem, is a derivative of GHB, Xyrem sometimes also receives negative mention in publicity relating to GHB.
Patients, physicians and regulators may therefore view Xyrem as the same as or similar to illicit GHB. In
addition, there are regulators and some law enforcement agencies that oppose the prescription and use of
Xyrem generally because of its connection to GHB. Xyrem’s label includes information about adverse events
from GHB. Similarly, negative publicity resulting from Jazz Pharmaceuticals’ receipt of a Form FDA 483 in April
2014 or other related regulatory actions could adversely affect sales of Jazz Pharmaceuticals’ products.
In addition, Jazz Pharmaceuticals has periodically increased the price of Xyrem and may do so again in the
future. Jazz Pharmaceuticals also has made and may in the future make similar price increases on its other
products. Price increases of Jazz Pharmaceuticals’ products and publicity regarding price increases of any
products distributed by other pharmaceutical companies could negatively affect market acceptance of Jazz
Pharmaceuticals’ products.
30
Conducting clinical trials is costly and time-consuming, and the outcomes are uncertain. A failure to prove that
Jazz Pharmaceuticals’ product candidates are safe and effective in clinical trials would require Jazz
Pharmaceuticals to discontinue their development, which could materially and adversely affect Jazz
Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects.
Jazz Pharmaceuticals has made significant investments into expanding its product development pipeline and
expects to substantially increase its research and development organization to pursue targeted development
activities in 2014 and beyond. Significant clinical, development and financial resources will be required to
progress product candidates to obtain necessary regulatory approvals and to develop them into commercially
viable products. Jazz Pharmaceuticals has a number of product candidates under development, including
JZP-110 and JZP-386 in the sleep area and JZP-416 (pegcrisantaspase; formerly known as Asparec) and
Leukotac (inolimomab) in the hematology/oncology area. As a condition to regulatory approval, each drug
product candidate must undergo extensive and expensive clinical trials to demonstrate to a statistically
significant degree that the product candidate is safe and effective. Clinical testing can take many years to
complete and failure can occur any time during the clinical trial process. If a product candidate fails at any
stage of development, it will not receive regulatory approval, Jazz Pharmaceuticals will not be able to
commercialize it, and Jazz Pharmaceuticals will not receive any return on its investment from that product
candidate.
Jazz Pharmaceuticals’ development pipeline projects include not only new product candidates, but also projects
involving line extensions for existing products and the generation of additional clinical data for existing
products. Specifically, in the hematology/oncology therapeutic area, Jazz Pharmaceuticals has ongoing projects
involving Erwinaze and is evaluating potential development of defibrotide in indications in addition to the
treatment of severe VOD in adults and children undergoing HSCT therapy. Jazz Pharmaceuticals also may be
required to conduct an additional clinical trial prior to submission of its NDA for defibrotide for the treatment of
severe VOD in patients undergoing HSCT therapy in the United States. See the discussion regarding Jazz
Pharmaceuticals’ activities related to the potential approval of defibrotide in the United States in the risk factor
entitled “Jazz Pharmaceuticals may not be able to successfully commercialize Defitelio in Europe, or obtain
marketing approval in other countries, including the United States, which could have a material adverse effect
on Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and growth
prospects.” In the sleep area, Jazz Pharmaceuticals has worked with the FDA and several leading specialists to
design a clinical study to generate additional data on the treatment of pediatric narcolepsy patients with Xyrem
and plans to open clinical sites for this study in the second half of 2014. Jazz Pharmaceuticals’ development
efforts may not be successful, and any adverse events or other information generated during the course of Jazz
Pharmaceuticals’ studies related to existing products could result in action by the FDA or any non-U.S.
regulatory agency, which may restrict Jazz Pharmaceuticals’ ability to sell, or sales of, currently marketed
products, or such events or other information could otherwise have a material adverse effect on a related
commercial product. Any failure or delay in completing clinical trials for line extensions or the generation of
additional clinical data could materially and adversely affect the maintenance and growth of the markets for
the related marketed products, which could adversely affect Jazz Pharmaceuticals’ consolidated business,
financial condition, results of operations and overall growth prospects.
Jazz Pharmaceuticals also intends to pursue clinical development of other product candidates that it may
acquire or in-license in the future. Any failure or delay in completing clinical trials for Jazz Pharmaceuticals’
product candidates would prevent or delay the commercialization of its product candidates, which could
materially and adversely affect Jazz Pharmaceuticals’ consolidated business, financial condition, results of
operations and growth prospects.
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Clinical trials can be delayed or halted for a variety of reasons, including:
• delays or failures in obtaining regulatory authorization to commence a trial because of safety concerns of
regulators relating to Jazz Pharmaceuticals’ product candidates or similar product candidates of its
competitors or failure to follow regulatory guidelines;
• delays or failures in obtaining clinical materials and manufacturing sufficient quantities of the product
candidate for use in trials;
• delays or failures in reaching agreement on acceptable terms with prospective study sites;
• delays or failures in obtaining approval of Jazz Pharmaceuticals’ clinical trial protocol from an institutional
review board, also known as Ethics Committees in Europe, to conduct a clinical trial at a prospective study
site;
• delays in recruiting patients to participate in a clinical trial;
• failure of Jazz Pharmaceuticals’ clinical trials and clinical investigators to be in compliance with the FDA and
other regulatory agencies’ Good Clinical Practice Guidelines;
• unforeseen safety issues, including negative results from ongoing preclinical studies and clinical trials and
adverse events associated with product candidates;
• inability to monitor patients adequately during or after treatment;
• difficulty monitoring multiple study sites;
• failure of Jazz Pharmaceuticals’ third party clinical trial managers to satisfactorily perform their contractual
duties, comply with regulations or meet expected deadlines; or
• insufficient funds to complete the trials.
Jazz Pharmaceuticals is required to demonstrate the safety and efficacy of products that it develops for each
intended use through extensive preclinical studies and clinical trials. The results at any stage of the
development process may lack the desired safety, efficacy or pharmacokinetic characteristics. Results of limited
preclinical studies, including studies of Jazz Pharmaceuticals’ product candidates in animal models, may not
predict the results of human clinical trials of those product candidates. Similarly, results from early clinical
trials may not be predictive of results obtained in later and larger clinical trials, and product candidates in later
clinical trials may fail to show the desired safety and efficacy despite having progressed successfully through
initial clinical testing. In that case, the FDA or the equivalent in jurisdictions outside of the United States may
determine Jazz Pharmaceuticals’ data is not sufficiently compelling to warrant marketing approval and may
require Jazz Pharmaceuticals to engage in additional clinical trials or provide further analysis which may be
costly and time-consuming. A number of companies in the pharmaceutical industry, including Jazz
Pharmaceuticals, have suffered significant setbacks in clinical trials, even in advanced clinical trials after
showing positive results in preclinical studies or earlier clinical trials.
Jazz Pharmaceuticals is currently undertaking a Phase 1 clinical trial of JZP-416 in Europe. Under Jazz
Pharmaceuticals’ license agreement with Alizé Pharma II, or Alizé, under which Jazz Pharmaceuticals obtained
rights to develop and commercialize JZP-416, Jazz Pharmaceuticals is subject to contractual obligations to meet
certain development milestones within the applicable timeframes provided under the license agreement. Jazz
Pharmaceuticals’ ability to meet some of these milestones is uncertain, and depends upon a number of factors,
including Jazz Pharmaceuticals’ ability to obtain clinical material, to recruit study centers with appropriate
expertise and patient populations and to develop a clinical program meeting the development requirements of
32
both the FDA and European regulatory authorities in a timely fashion. If Jazz Pharmaceuticals’ development
activities are delayed and it fails to meet its licensing obligations to Alizé, Jazz Pharmaceuticals may lose its
rights to develop and commercialize JZP-416. Jazz Pharmaceuticals has reviewed its development plans with
the FDA and is working with investigators to initiate Jazz Pharmaceuticals’ first study of JZP-416 in children by
the end of 2014.
In June 2013, the FDA granted Fast Track designation to the investigation of JZP-416 for ALL. Defibrotide has
also been granted Fast Track designation by the FDA to treat severe VOD. The Fast Track program is designed
to enable more frequent interactions with the FDA during drug development and to expedite new drug
candidate review. Although Jazz Pharmaceuticals has obtained Fast Track designation from the FDA for JZP-416
and defibrotide, receipt of Fast Track designation may not result in a faster development process, review or
approval compared to drugs considered for approval under conventional FDA procedures, and Fast Track
designation may be withdrawn by the FDA at any time. In addition, Fast Track designation does not guarantee
that Jazz Pharmaceuticals will be able to take advantage of the expedited review procedures and does not
increase the likelihood that either JZP-416 or defibrotide will receive any regulatory approvals.
Jazz Pharmaceuticals relies on third parties to conduct its clinical trials, and if they do not properly and
successfully perform their legal and regulatory obligations, as well as their contractual obligations to it, Jazz
Pharmaceuticals may not be able to obtain regulatory approvals for its product candidates.
Jazz Pharmaceuticals relies on contract research organizations and other third parties to assist it in designing,
managing, monitoring and otherwise carrying out Jazz Pharmaceuticals’ clinical trials, including with respect to
site selection, contract negotiation and data management. Jazz Pharmaceuticals does not control these third
parties and, as a result, they may not treat Jazz Pharmaceuticals’ clinical studies as a high priority, or in the
manner in which Jazz Pharmaceuticals would prefer, which could result in delays. Jazz Pharmaceuticals is
responsible for confirming that each of its clinical trials is conducted in accordance with its general
investigational plan and protocol, as well as the FDA’s and non-U.S. regulatory agencies’ requirements,
commonly referred to as good clinical practices, for conducting, recording and reporting the results of clinical
trials to ensure that the data and results are credible and accurate and that the trial participants are
adequately protected. The FDA and non-U.S. regulatory agencies enforce good clinical practices through
periodic inspections of trial sponsors, principal investigators and trial sites. If Jazz Pharmaceuticals, contract
research organizations or other third parties assisting Jazz Pharmaceuticals or its study sites fail to comply with
applicable good clinical practices, the clinical data generated in Jazz Pharmaceuticals’ clinical trials may be
deemed unreliable and the FDA or its non-U.S. counterparts may require Jazz Pharmaceuticals to perform
additional clinical trials before approving Jazz Pharmaceuticals’ marketing applications. Neither we nor the
Parent can assure you that, upon inspection, the FDA or non-U.S. regulatory agencies will determine that any of
Jazz Pharmaceuticals’ clinical trials comply with good clinical practices. In addition, Jazz Pharmaceuticals’
clinical trials must be conducted with product produced under the FDA’s cGMP regulations and similar
regulations outside of the United States. Jazz Pharmaceuticals’ failure, or the failure of its product
manufacturers, to comply with these regulations may require Jazz Pharmaceuticals to repeat or redesign
clinical trials, which would delay the regulatory approval process.
If third parties do not successfully carry out their duties under their agreements with Jazz Pharmaceuticals, if
the quality or accuracy of the data they obtain is compromised due to failure to adhere to Jazz Pharmaceuticals’
clinical protocols or regulatory requirements, or if they otherwise fail to comply with clinical trial protocols or
meet expected deadlines, Jazz Pharmaceuticals’ clinical trials may not meet regulatory requirements. If Jazz
Pharmaceuticals’ clinical trials do not meet regulatory requirements or if these third parties need to be
replaced, Jazz Pharmaceuticals’ clinical trials may be extended, delayed, suspended or terminated. If any of
these events occur, Jazz Pharmaceuticals may not be able to obtain regulatory approval of its product
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candidates or succeed in its efforts to create approved line extensions for certain of its existing products or
generate additional useful clinical data in support of these products.
Jazz Pharmaceuticals may not be able to successfully identify and acquire, in-license or develop additional
products or product candidates to grow Jazz Pharmaceuticals’ consolidated business, and, even if Jazz
Pharmaceuticals is able to do so, it may not be able to successfully manage the risks associated with
integrating any products or product candidates Jazz Pharmaceuticals may acquire in the future into its product
portfolio or Jazz Pharmaceuticals may otherwise fail to realize the anticipated benefits of these acquisitions.
Jazz Pharmaceuticals intends to grow its consolidated business over the long term by acquiring or in-licensing
and developing additional products and product candidates that Jazz Pharmaceuticals believes have significant
commercial potential. Future growth through acquisition or in-licensing will depend upon the availability of
suitable products and product candidates for acquisition or in-licensing on acceptable prices, terms and
conditions. Any growth through development will depend upon Jazz Pharmaceuticals identifying and obtaining
product candidates, its ability to develop those product candidates and the availability of funding to complete
the development of, obtain regulatory approval for and commercialize these product candidates. Even if
appropriate opportunities are available, Jazz Pharmaceuticals may not be able to successfully identify them, or
Jazz Pharmaceuticals may not have the financial resources necessary to pursue them. Other companies, many
of which may have substantially greater financial, marketing and sales resources, compete with Jazz
Pharmaceuticals for these opportunities.
Neither we nor the Parent can assure you that Jazz Pharmaceuticals will be able to successfully manage these
risks or other anticipated and unanticipated problems in connection with an acquisition or in-licensing. Jazz
Pharmaceuticals may not be able to realize the anticipated benefits of any acquisition or in-licensing for a
variety of reasons, including the possibility that a product candidate proves not to be safe or effective in later
clinical trials, a product fails to reach its forecasted commercial potential or the integration of a product or
product candidate gives rise to unforeseen difficulties and expenditures. Any failure in identifying and
managing these risks and uncertainties effectively would have a material adverse effect on Jazz
Pharmaceuticals’ consolidated business.
Jazz Pharmaceuticals faces substantial competition from other companies, including companies with greater
resources, including larger sales organizations and more experience working with large and diverse product
portfolios, than our company has.
The commercial potential of Jazz Pharmaceuticals’ current products and any future products may be reduced or
eliminated if Jazz Pharmaceuticals’ competitors develop or acquire and commercialize generic or branded
products that are safer or more effective, have fewer side effects, are easier to administer or are less expensive
than Jazz Pharmaceuticals’ products. Many of Jazz Pharmaceuticals’ competitors, particularly large
pharmaceutical and life sciences companies, have substantially greater financial, operational and human
resources than Jazz Pharmaceuticals does. They can spend more on, and have more expertise in, research and
development, regulatory, manufacturing, distribution and sales activities. As a result, Jazz Pharmaceuticals’
competitors may obtain FDA or other regulatory approvals for their product candidates more rapidly than Jazz
Pharmaceuticals may and may market their products more effectively than our company does. Smaller or
earlier stage companies may also prove to be significant competitors, particularly through collaborative
arrangements with large, established companies.
In addition, many of Jazz Pharmaceuticals’ competitors are able to deploy more personnel to market and sell
their products than our company does. Jazz Pharmaceuticals currently has a relatively small number of sales
representatives compared with the number of sales representatives of most other pharmaceutical companies
with marketed products. Each of Jazz Pharmaceuticals’ sales representatives is responsible for a territory of
significant size. The continued growth of Jazz Pharmaceuticals’ current products and the launch of any future
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products may require expansion of Jazz Pharmaceuticals’ sales force and sales support organization
internationally, and Jazz Pharmaceuticals may need to commit significant additional funds, management and
other resources to the growth of its sales organization. Jazz Pharmaceuticals may not be able to achieve any
necessary growth in a timely or cost-effective manner or realize a positive return on its investment, and Jazz
Pharmaceuticals may not have the financial resources to achieve the necessary growth in a timely manner or at
all. Jazz Pharmaceuticals also has to compete with other pharmaceutical and life sciences companies to recruit,
hire, train and retain sales and marketing personnel, and turnover in Jazz Pharmaceuticals’ sales force and
marketing personnel could negatively affect sales of Jazz Pharmaceuticals’ products. If Jazz Pharmaceuticals’
specialty sales force and sales organization are not appropriately sized to adequately promote any current or
potential future products, the commercial potential of Jazz Pharmaceuticals’ current products and any future
products may be diminished.
In 2012 Jazz Pharmaceuticals added Erwinaze, as well as other smaller products in the oncology supportive care
market, to its product portfolio. Jazz Pharmaceuticals is further expanding its hematology/oncology product
offering with the launch of Defitelio in Europe on a rolling basis during 2014 and 2015. Jazz Pharmaceuticals
competes with a significant number of pharmaceutical and life sciences companies with extensive sales,
marketing and promotional experience in the oncology and oncology supportive care markets, and Jazz
Pharmaceuticals’ failure to compete effectively in this area could negatively affect its sales of Erwinaze,
Defitelio and other products.
Jazz Pharmaceuticals also faces competition, and may in the future face additional competition, from
manufacturers of generic drugs. Generic competition often results in decreases in the prices at which branded
products can be sold, particularly when there is more than one generic available in the marketplace. In
addition, legislation enacted in the United States allows for, and in a few instances in the absence of specific
instructions from the prescribing physician mandates, the dispensing of generic products rather than branded
products where a generic version is available. Other companies could also develop products that are similar,
but not identical, to Jazz Pharmaceuticals’ marketed products, such as an alternative formulation of Jazz
Pharmaceuticals’ product or an alternative formulation combined with a different delivery technology, and seek
approval in the United States by referencing Jazz Pharmaceuticals’ products and relying, to some degree, on
the FDA’s finding that Jazz Pharmaceuticals’ products are safe and effective. See the risk factor entitled “If
generic versions of Xyrem or other sodium oxybate products that compete with Xyrem are approved and
launched, sales of Xyrem would be adversely affected.”
Jazz Pharmaceuticals’ products and product candidates may also compete in the future with new products
currently under development by others. Any products that Jazz Pharmaceuticals develops are likely to be in a
highly competitive market, and many of Jazz Pharmaceuticals’ competitors may succeed in developing products
that may render Jazz Pharmaceuticals’ products obsolete or noncompetitive.
If Jazz Pharmaceuticals fails to attract, retain and motivate key personnel or to retain the members of its
executive management team, Jazz Pharmaceuticals’ consolidated operations and its future growth may be
adversely affected.
Jazz Pharmaceuticals’ success and its ability to grow depends in part on its continued ability to attract, retain
and motivate highly qualified personnel and on its ability to develop and maintain important relationships with
leading academic institutions, clinicians and scientists. Jazz Pharmaceuticals is highly dependent upon its
executive management team and other critical personnel, all of whom work on many complex matters that are
essential to Jazz Pharmaceuticals’ success. Jazz Pharmaceuticals does not carry “key person” insurance. The
loss of services of one or more members of Jazz Pharmaceuticals’ executive management team or other key
personnel could delay or prevent the successful completion of some of its vital activities. Any employee may
35
terminate his or her employment at any time without notice or with only short notice and without cause or good
reason. The resulting loss of institutional knowledge may negatively impact Jazz Pharmaceuticals’ consolidated
operations and future growth.
In addition, to grow, Jazz Pharmaceuticals will need additional personnel. Competition for qualified personnel in
the pharmaceutical industry is very intense. If Jazz Pharmaceuticals is unable to attract, retain and motivate
quality individuals, Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and
growth prospects could be adversely affected.
Jazz Pharmaceuticals also depends on the unique abilities, industry experience and institutional knowledge of
the members of the Parent’s board of directors to efficiently set company strategy and effectively guide Jazz
Pharmaceuticals’ executive management team. Neither we nor the Parent can be certain that future board
turnover will not negatively affect Jazz Pharmaceuticals’ consolidated business.
Significant disruptions of information technology systems or breaches of data security could adversely affect
Jazz Pharmaceuticals’ consolidated business.
Jazz Pharmaceuticals is increasingly dependent on information technology systems and infrastructure,
including mobile technologies, to operate Jazz Pharmaceuticals’ consolidated business. In the ordinary course
of Jazz Pharmaceuticals’ consolidated business, Jazz Pharmaceuticals collects, stores and transmits large
amounts of confidential information, including intellectual property, proprietary business information and
personal information. It is critical that Jazz Pharmaceuticals does so in a secure manner to maintain the
confidentiality and integrity of such confidential information. Jazz Pharmaceuticals has also outsourced
elements of its information technology infrastructure, and as a result Jazz Pharmaceuticals manages a number
of third party vendors who may or could have access to Jazz Pharmaceuticals’ confidential information. The size
and complexity of Jazz Pharmaceuticals’ information technology systems, and those of third party vendors with
whom Jazz Pharmaceuticals contracts, make such systems potentially vulnerable to breakdown, malicious
intrusion, security breaches and other cyber-attacks. In addition, the prevalent use of mobile devices that
access confidential information increases the risk of data security breaches, which could lead to the loss of
confidential information, trade secrets or other intellectual property. While Jazz Pharmaceuticals has
implemented security measures to protect its data security and information technology systems, such measures
may not prevent such events. Significant disruptions of Jazz Pharmaceuticals’ information technology systems
or breaches of data security could adversely affect Jazz Pharmaceuticals’ consolidated business.
Risks related to intellectual property
It is difficult and costly to protect Jazz Pharmaceuticals’ proprietary rights, and Jazz Pharmaceuticals may not
be able to ensure their protection.
Jazz Pharmaceuticals’ commercial success depends in part on obtaining and maintaining patent protection and
trade secret protection of its products and product candidates and their use and the methods used to
manufacture and distribute them, as well as successfully defending these patents against third party
challenges, and successfully protecting Jazz Pharmaceuticals’ trade secrets. Jazz Pharmaceuticals’ ability to
protect its products and product candidates from unauthorized making, using, selling, offering to sell or
importation by third parties depends on the extent to which Jazz Pharmaceuticals has rights under valid and
enforceable patents, or has trade secrets that cover these activities.
The patent position of pharmaceutical companies can be highly uncertain and involve complex legal, regulatory
and factual questions. Jazz Pharmaceuticals owns a portfolio of United States and non-U.S. patents and patent
applications and has licensed rights to a number of issued patents and patent applications that cover its
products and product candidates, including Xyrem and Defitelio. Changes in either the patent laws or in
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interpretations of patent laws in the United States and other countries may diminish the value of Jazz
Pharmaceuticals’ intellectual property. Even if Jazz Pharmaceuticals is able to obtain patents covering its
products and product candidates, any patent may be challenged, invalidated, held unenforceable or
circumvented, potentially including by FDA approval of an ANDA that avoids infringement of our intellectual
property.
On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The
final substantive provisions of the Leahy-Smith Act, including the first to file system, became effective on
March 16, 2013. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These
changes include provisions that affect the way patent applications are being filed and prosecuted and may also
affect patent litigation. For example, the Leahy-Smith Act enacted proceedings involving post-issuance patent
review procedures, such as inter partes review, CBM reviews, and post grant reviews. These proceedings are
conducted before the PTAB. Each proceeding has different eligibility criteria and different patentability
challenges that can be raised. The Leahy-Smith Act and its implementation could increase the uncertainties and
costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued
patents, all of which could have a material adverse effect on Jazz Pharmaceuticals’ consolidated business,
financial condition, results of operations and growth prospects.
Although Xyrem is covered by patents covering its formulation, distribution system and method of use, third
parties are seeking to introduce generic versions of Xyrem, and additional third parties may also attempt to
invalidate or design around the patents, or assert that they are invalid or otherwise unenforceable, and seek to
introduce generic versions of Xyrem or other sodium oxybate products for treatment of cataplexy and/or
excessive daytime sleepiness in narcolepsy. If one or more companies receive FDA approval of an ANDA for
generic versions of Xyrem or an NDA for other sodium oxybate products, it is possible that such company or
companies could introduce generic versions of Xyrem or other sodium oxybate products before Jazz
Pharmaceuticals’ patents expire if they do not infringe Jazz Pharmaceuticals’ patents, if it is determined that
Jazz Pharmaceuticals’ patents are invalid or unenforceable, or if such company or companies decide, before
applicable ongoing patent litigation is concluded, to launch competition to Xyrem at risk of potentially being
held liable for damages for patent infringement.
In October 2010, December 2012, November 2013 and June 2014, Jazz Pharmaceuticals received a Paragraph IV
Certification from each of Roxane, Amneal, Par and Ranbaxy, respectively, that each had filed an ANDA with the
FDA requesting approval to market a generic version of Xyrem before the expiration of the Orange-Book-listed
patents relating to Xyrem. If any one of these applications is approved, and a generic version of Xyrem is
introduced, Jazz Pharmaceuticals’ sales of Xyrem would be adversely affected. Additional ANDAs could also be
filed requesting approval to market generic versions of Xyrem; if those applications for generics were approved
and the generics were launched, sales of Xyrem would decrease. Jazz Pharmaceuticals has sued all four ANDA
filers seeking to prevent them from introducing a generic version of Xyrem that would infringe Jazz
Pharmaceuticals’ patents, but neither we nor the Parent can assure you that the lawsuits will prevent the
introduction of a generic version of Xyrem for any particular length of time, or at all. In addition, between late
June and early August 2014, petitions for CBM post-grant patent review by the PTAB were filed by certain of the
ANDA filers with respect to the validity of Jazz Pharmaceuticals’ patents covering the distribution system for
Xyrem. To date, these petitions have not been accepted by the PTAB. Neither we nor the Parent can predict the
outcome of the PTAB’s decision on whether to institute any of the petitioned CBM review proceedings, whether
additional post-grant patent review challenges will be filed, the outcome of any CBM review or other proceeding
if the PTAB decides to institute one or more CBM review or other proceedings, or the impact any CBM review or
other proceeding might have on ongoing litigation proceedings.
In April 2014, Jazz Pharmaceuticals became aware of the completion of a “first in man” clinical trial by a
company using its proprietary technology for delivery of a sodium oxybate formulation to eliminate second
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nighttime dosing for narcolepsy patients. This company has stated its intent to submit an NDA referencing
Xyrem to the FDA by the end of 2016. See the risk factor entitled “If generic versions of Xyrem or other sodium
oxybate products that compete with Xyrem are approved and launched, sales of Xyrem would be adversely
affected.”
Azur Pharma received Paragraph IV certifications from three generic manufacturers, two in 2008 and one in
2010, relating to generic versions of FazaClo LD. Azur Pharma and CIMA Labs Inc., or CIMA, a subsidiary of Teva
Pharmaceutical Industries Limited, or Teva, Jazz Pharmaceuticals’ licensor and the entity whose drug-delivery
technology is incorporated into FazaClo LD, filed lawsuits in response to each certification. In July 2011, Azur
Pharma, CIMA, Barr Laboratories, Inc., or Barr (one of the three generic manufacturers), and Teva, which had
acquired Barr, entered into an agreement settling the patent litigation and granting an affiliate of Teva a
sublicense of Jazz Pharmaceuticals’ rights to have manufactured, market and sell a generic version of FazaClo
LD and FazaClo HD, as well as an option for supply of authorized generic product. The sublicense for FazaClo LD
commenced in July 2012, and the sublicense for FazaClo HD will commence in May 2015, or earlier upon the
occurrence of certain events. In August 2011, Azur Pharma received a Paragraph IV certification notice from
Teva advising that Teva had filed an ANDA with the FDA seeking approval to market a generic version of
FazaClo HD. As noted above, FazaClo HD was covered under the July 2011 settlement agreement with Teva. Teva
exercised its option for supply of an authorized generic product for FazaClo LD and launched the authorized
generic product at the end of August 2012, which is having a negative impact on Jazz Pharmaceuticals’ sales of
FazaClo LD and, to some extent, FazaClo HD and is expected to continue to do so.
The two formulation patents covering FazaClo HD and FazaClo LD that Jazz Pharmaceuticals licenses from CIMA
were under reexamination by the USPTO and both of the reexamination proceedings proceeded to appeal at the
USPTO. The ANDA lawsuits with the other two generic manufacturers had been stayed pending the outcome of
these reexamination proceedings. In September 2013 and January 2014, reexamination certificates were issued
for the two patents, and the patentability of the claims of the patents confirmed. The court lifted the stay of
litigation in the remaining two ANDA lawsuits in March 2014, and trial is currently set for the third quarter of
2015. Neither we nor the Parent can predict the timing or outcome of the patent litigation, or the impact on the
entry of additional generic competitors for FazaClo HD or FazaClo LD.
The existence of a patent will not necessarily prevent other companies from developing similar or
therapeutically equivalent products or protect Jazz Pharmaceuticals from claims of third parties that its
products infringe their issued patents, which may require licensing and the payment of significant fees or
royalties. Competitors may successfully challenge Jazz Pharmaceuticals’ patents, produce similar products that
do not infringe Jazz Pharmaceuticals’ patents, or manufacture products in countries where Jazz
Pharmaceuticals has not applied for patent protection or that do not respect Jazz Pharmaceuticals’ patents.
Accordingly, neither we nor the Parent can predict the breadth of claims that may be allowed or enforced in
Jazz Pharmaceuticals’ patents, its licensed patents or in third party patents.
The degree of future protection to be afforded by Jazz Pharmaceuticals’ proprietary rights is uncertain because
legal means afford only limited protection and may not adequately protect Jazz Pharmaceuticals’ rights or
permit it to gain or keep its competitive advantage. For example:
• others may be able to make products that are similar to Jazz Pharmaceuticals’ product candidates but that
are not covered by the claims of Jazz Pharmaceuticals’ patents, or for which Jazz Pharmaceuticals is not
licensed under its license agreements;
• Jazz Pharmaceuticals or its licensors or partners might not have been the first to invent or file, as
appropriate, subject matters covered by Jazz Pharmaceuticals’ issued patents or pending patent applications
or the pending patent applications or issued patents of Jazz Pharmaceuticals’ licensors or partners;
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• others may independently develop similar or alternative products without infringing Jazz Pharmaceuticals’
intellectual property rights;
• Jazz Pharmaceuticals’ pending patent applications may not result in issued patents;
• Jazz Pharmaceuticals’ issued patents and the issued patents of its licensors or partners may not provide Jazz
Pharmaceuticals with any competitive advantages, or may be held invalid or unenforceable as a result of
legal challenges by third parties;
• Jazz Pharmaceuticals’ issued patents may not cover its competitors’ products;
• Jazz Pharmaceuticals’ issued patents and the issued patents of its licensors or partners may be vulnerable to
legal challenges as a result of changes in applicable law;
• Jazz Pharmaceuticals may not develop additional proprietary products that are patentable; or
• the patents of others may have an adverse effect on Jazz Pharmaceuticals’ consolidated business.
Jazz Pharmaceuticals also may rely on trade secrets and other unpatented proprietary information to protect
its technology, especially where Jazz Pharmaceuticals does not believe patent protection is appropriate or
obtainable. However, trade secrets are difficult to protect. Although Jazz Pharmaceuticals uses reasonable
efforts to protect its trade secrets and other unpatented proprietary information, Jazz Pharmaceuticals’
employees, consultants, advisors and partners may unintentionally or willfully disclose Jazz Pharmaceuticals’
proprietary information to competitors, and Jazz Pharmaceuticals may not have adequate remedies for such
disclosures.
If Jazz Pharmaceuticals’ employees, consultants, advisors and partners develop inventions or processes
independently, or jointly with Jazz Pharmaceuticals, that may be applicable to Jazz Pharmaceuticals’ products
under development, disputes may arise about ownership or proprietary rights to those inventions and
processes. Enforcing a claim that a third party illegally obtained and is using any of Jazz Pharmaceuticals’
inventions or trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition,
courts outside of the United States are sometimes less willing to protect trade secrets. Moreover, Jazz
Pharmaceuticals’ competitors may independently develop equivalent knowledge, methods and know-how.
Certain of the products Jazz Pharmaceuticals sells have no patent protection and, as a result, potential
competitors face fewer barriers in introducing competing products. For example, Erwinaze has no patent
protection, and Jazz Pharmaceuticals relies on trade secrets and other unpatented proprietary information to
protect its commercial position, which Jazz Pharmaceuticals may be unable to do. Another method of
protection is regulatory exclusivity. Erwinaze, as a biologic product approved under a BLA, is subject to the U.S.
Biologics Price Competition and Innovation Act, or the BPCIA. The BPCIA establishes a period of twelve years of
data exclusivity for reference products in order to preserve incentives for future innovation, protecting data
included by the applicant in a BLA by prohibiting others from gaining FDA approval based in part on reliance
on, or reference to, the data in the BLA during a twelve-year period. The FDA is in the process of implementing
the BPCIA and has not established final guidelines for administering the review and approval of applications for
data exclusivity. Although Jazz Pharmaceuticals expects that Erwinaze would receive data exclusivity in the
United States through 2023 under the BPCIA, neither we nor the Parent can provide assurance that Jazz
Pharmaceuticals will receive this exclusivity. While Erwinaze has orphan drug marketing exclusivity for a sevenyear period from its FDA approval in the United States until November 2018, and is expected to receive data
exclusivity in the United States through 2023 under the BPCIA, it is possible that a potential competitor might
obtain earlier approval from the FDA based upon an approval application that does not rely on or refer to data
in Jazz Pharmaceuticals’ BLA for Erwinaze. In the EU, the regulatory data protection and thus regulatory
39
exclusivity period for Erwinaze has lapsed. This also means that any new marketing authorizations for Erwinaze
in other EU member states will not receive any regulatory data protection. If a biosimilar product to Erwinaze is
approved in the future in the United States or in other countries where it is sold, a significant percentage of the
prescriptions written for Erwinaze may be filled with the biosimilar version, resulting in a loss in sales of
Erwinaze, and there may be a decrease in the price at which Erwinaze can be sold. Competition from a
biosimilar product to Erwinaze could have a material adverse effect on Jazz Pharmaceuticals’ consolidated
business, financial condition, results of operations and growth prospects. In addition, although there are patent
applications for JZP-416 pending in the United States and many other countries, it is not yet covered by any U.S.
patents. JZP-416 was granted orphan drug designation in Europe and the United States subject to certain
conditions. If Jazz Pharmaceuticals fails to obtain orphan drug marketing exclusivity and/or data exclusivity,
and if Jazz Pharmaceuticals also fails to successfully execute on other strategies to protect its intellectual
property with respect to JZP-416, including protection by one or more issued patents, JZP-416 would be subject
to competition from a biosimilar product, which could have a material adverse effect on Jazz Pharmaceuticals’
ability to recognize any return on its investment in the development of this product as well as on Jazz
Pharmaceuticals’ future growth prospects.
Jazz Pharmaceuticals’ research and development collaborators may have rights to publish data and other
information to which Jazz Pharmaceuticals has rights. In addition, Jazz Pharmaceuticals sometimes engages
individuals or entities to conduct research that may be relevant to Jazz Pharmaceuticals’ consolidated business.
While the ability of these individuals or entities to publish or otherwise publicly disclose data and other
information generated during the course of their research is subject to contractual limitations, these
contractual provisions may be insufficient or inadequate to protect Jazz Pharmaceuticals’ trade secrets and
may impair its patent rights. If Jazz Pharmaceuticals does not apply for patent protection prior to such
publication, or if Jazz Pharmaceuticals cannot otherwise maintain the confidentiality of its innovations and
other confidential information, then Jazz Pharmaceuticals’ ability to obtain patent protection or protect its
proprietary information may be jeopardized. Moreover, a dispute may arise with Jazz Pharmaceuticals’
research and development collaborators over the ownership of rights to jointly developed intellectual property.
Such disputes, if not successfully resolved, could lead to a loss of rights and possibly prevent Jazz
Pharmaceuticals from pursuing certain new products or product candidates.
Jazz Pharmaceuticals may incur substantial costs as a result of litigation or other proceedings relating to
patents and other intellectual property rights, and Jazz Pharmaceuticals may be unable to protect its rights to,
or commercialize, its products.
Jazz Pharmaceuticals’ ability, and that of its partners, to commercialize any approved products will depend, in
part, on Jazz Pharmaceuticals’ ability to obtain patents, enforce those patents and operate without infringing
the proprietary rights of third parties. The patent positions of pharmaceutical companies can be highly
uncertain and involve complex legal and factual questions. Jazz Pharmaceuticals has filed multiple U.S. patent
applications and non-U.S. counterparts, and may file additional U.S. and non-U.S. patent applications. There can
be no assurance that any issued patents Jazz Pharmaceuticals owns or controls will provide sufficient
protection to conduct Jazz Pharmaceuticals’ consolidated business as presently conducted or as proposed to be
conducted. Moreover, for a variety of reasons, including the existence of relevant prior research performed and
the existence of conflicting patent applications submitted in the same manner or similar fields, there can be no
assurance that any patents will issue from the patent applications owned by Jazz Pharmaceuticals, or that Jazz
Pharmaceuticals will remain free from infringement claims by third parties.
If Jazz Pharmaceuticals chooses to go to court to stop a third party from infringing its patents, Jazz
Pharmaceuticals’ licensed patents or its partners’ patents, that third party has the right to ask the court to rule
that these patents are invalid and/or should not be enforced against that third party. Under the Leahy-Smith
40
Act, a third party may also have the option to challenge the validity of certain patents with the PTAB. These
lawsuits and proceedings are expensive and consume time and other resources, even if Jazz Pharmaceuticals
were successful in stopping the infringement of these patents. In addition, there is a risk that a court will decide
that these patents are not valid or infringed, or the PTAB will decide that certain patents are not valid, and that
Jazz Pharmaceuticals does not have the right to stop the other party from using the patented subject matter.
For example, between late June and early August 2014, petitions for CBM post-grant patent review by the PTAB
were filed by certain of the ANDA filers with respect to the validity of Jazz Pharmaceuticals’ patents covering
the distribution system for Xyrem. To date, these petitions have not been accepted by the PTAB. Neither we nor
the Parent can predict the outcome of the PTAB’s decision on whether to institute any of the petitioned CBM
review proceedings, whether additional post-grant patent review challenges will be filed, the outcome of any
CBM review or other proceeding if the PTAB decides to institute one or more CBM review or other proceedings,
or the impact any CBM review or other proceeding might have on ongoing ANDA litigation proceedings. There is
also the risk that, even if the validity of these patents is upheld and infringement of these patents found, the
court will refuse to stop the other party on the grounds that it is in the public interest to permit the infringing
activity. Jazz Pharmaceuticals is prosecuting lawsuits against the generic manufacturers who delivered
Paragraph IV certifications to Jazz Pharmaceuticals with respect to Xyrem, FazaClo HD and FazaClo LD. Neither
we nor the Parent can assure you that these, or other lawsuits or proceedings Jazz Pharmaceuticals may file or
defend in the future, will be successful in stopping the infringement of Jazz Pharmaceuticals’ patents, that any
such litigation will be cost-effective, or that the litigation will have a satisfactory result for Jazz
Pharmaceuticals.
A third party may claim that Jazz Pharmaceuticals or its manufacturing or commercialization partners are using
inventions covered by the third party’s patent rights, or that Jazz Pharmaceuticals or such partners are
infringing, misappropriating or otherwise violating other intellectual property rights, and may go to court to
stop Jazz Pharmaceuticals from engaging in its normal operations and activities, including making or selling its
products. Such lawsuits are costly and could affect Jazz Pharmaceuticals’ consolidated results of operations and
divert the attention of management and development personnel. There is a risk that a court could decide that
Jazz Pharmaceuticals or its partners are infringing, misappropriating or otherwise violating third party patent
or other intellectual property rights, which could be very costly to Jazz Pharmaceuticals and have a material
adverse effect on Jazz Pharmaceuticals’ consolidated business.
In the pharmaceutical and life sciences industry, like other industries, it is not always clear to industry
participants, including Jazz Pharmaceuticals, which patents cover various types of products or methods. The
coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. If
Jazz Pharmaceuticals is sued for patent infringement, Jazz Pharmaceuticals would need to demonstrate that its
products or methods do not infringe the patent claims of the relevant patent and/or that the patent claims are
invalid or unenforceable, which Jazz Pharmaceuticals may not be able to do.
Because some patent applications in the United States may be maintained in secrecy until the patents are
issued, because patent applications in the United States and many non-U.S. jurisdictions are typically not
published until 18 months after their priority date, and because publications in the scientific literature often lag
behind actual discoveries, neither we nor the Parent can be certain that others have not filed patent
applications for inventions covered by Jazz Pharmaceuticals’ or its licensors’ issued patents or pending
applications, or that Jazz Pharmaceuticals or its licensors were the first inventors. Jazz Pharmaceuticals’
competitors may have filed, and may in the future file, patent applications covering subject matter similar to
that of Jazz Pharmaceuticals. Any such patent application may have priority over Jazz Pharmaceuticals’ or its
licensors’ patents or applications and could further require Jazz Pharmaceuticals to obtain rights to issued
patents covering such subject matter. If another party has filed a U.S. patent application on inventions similar
to our company’s, Jazz Pharmaceuticals may have to participate in an interference proceeding declared by the
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USPTO to determine priority of invention in the United States. The costs of these proceedings could be
substantial, and it is possible that such efforts would be unsuccessful, resulting in a loss of Jazz
Pharmaceuticals’ U.S. patent position with respect to such inventions. Patent interferences are limited or
unavailable for patent applications filed after March 16, 2013.
Some of Jazz Pharmaceuticals’ competitors may be able to sustain the costs of complex patent and other
intellectual property litigation more effectively than Jazz Pharmaceuticals can because they have substantially
greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation
could have a material adverse effect on Jazz Pharmaceuticals’ ability to raise the funds necessary to continue
its consolidated operations.
Jazz Pharmaceuticals owns patents that cover the formulation and method of use covering the administration
for Xyrem. In July 2014, the USPTO issued Jazz Pharmaceuticals a new method of use patent relating to the safe
and effective use of Xyrem by decreasing the dose of Xyrem when used concomitantly with divalproex sodium,
which information was added to the Xyrem label in April 2014. Jazz Pharmaceuticals has listed this new patent
in the Orange Book. While Jazz Pharmaceuticals believes the additional safety information is critical for the safe
use of Xyrem and should be required to be included in the label for any proposed generic form of Xyrem,
neither we nor the Parent know whether the FDA will require any proposed generic form of Xyrem to include
this information in its product label or whether Jazz Pharmaceuticals will be successful in maintaining the
validity of the applicable patent and protecting the patent from infringement.
Jazz Pharmaceuticals also owns method of use patents and trade secrets that cover elements of the Xyrem
deemed REMS, including patents that cover the use of a single central pharmacy to distribute Xyrem. Jazz
Pharmaceuticals has not reached agreement with the FDA on certain significant terms of Jazz Pharmaceuticals’
REMS for Xyrem. For example, Jazz Pharmaceuticals disagrees with the FDA’s current position that, as part of
the current REMS process, the Xyrem deemed REMS should be modified to enable the distribution of Xyrem
through more than one pharmacy, or potentially through retail pharmacies and wholesalers, as well as with
certain modifications proposed by the FDA that would, in the FDA’s view, be sufficient to ensure that the REMS
includes only those elements necessary to ensure that the benefits of Xyrem outweigh its risks, and that would,
in the FDA’s view, reduce the burden on the healthcare system.
The FDA notified Jazz Pharmaceuticals that the FDA would exercise its claimed authority to modify Jazz
Pharmaceuticals’ REMS and that the FDA would finalize the REMS as modified by the FDA unless Jazz
Pharmaceuticals initiated dispute resolution procedures with respect to the modification of the Xyrem deemed
REMS. Given these circumstances, Jazz Pharmaceuticals initiated dispute resolution procedures with the FDA at
the end of February 2014. Jazz Pharmaceuticals received the FDA’s denial of its initial dispute resolution
submission in the second quarter of 2014 and has submitted a request for further supervisory review to the
next administrative level of the FDA. Jazz Pharmaceuticals expects to receive the FDA’s response to this further
appeal in the third quarter of 2014. Neither we nor the Parent can predict whether, or on what terms, Jazz
Pharmaceuticals will reach agreement with the FDA on final REMS documents for Xyrem, the outcome or timing
of the current dispute resolution procedure, whether Jazz Pharmaceuticals will initiate additional dispute
resolution proceedings with the FDA or other legal proceedings prior to finalizing the REMS documents, or the
outcome or timing of any such proceedings. See the risk factor entitled “The manufacture, distribution and sale
of Xyrem are subject to significant regulatory oversight and restrictions and the requirements of a risk
management program, and these restrictions and requirements, as well as the potential impact of changes to
those restrictions and requirements, subject Jazz Pharmaceuticals to increased risks and uncertainties, any of
which could negatively impact sales of Xyrem.”
Jazz Pharmaceuticals expects that final REMS documents for Xyrem will include modifications to, and/or
requirements that are not currently implemented in, the Xyrem Risk Management Program. Any such
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modifications or additional requirements could potentially make it more difficult or expensive for Jazz
Pharmaceuticals to distribute Xyrem, make it easier for future generic competitors, and/or negatively affect
sales of Xyrem. In particular, depending on the extent to which certain provisions of Jazz Pharmaceuticals’
Xyrem deemed REMS which are currently protected by Jazz Pharmaceuticals’ method of use patents covering
the distribution of Xyrem are changed, the ability of Jazz Pharmaceuticals’ existing patents to protect its Xyrem
distribution system from generic competitors may be reduced. Certain claims of Jazz Pharmaceuticals’ patents
may not provide as much protection in the context of a modified REMS structure. In addition, the extent of
protection provided by Jazz Pharmaceuticals’ method of use patents covering the distribution of Xyrem
depends on the nature of the distribution system that may be used by any generic competitor, including
whether the distribution system is as restricted as the distribution system set forth in Jazz Pharmaceuticals’
current Xyrem deemed REMS. If a generic competitor is able to obtain ANDA approval for a generic version of
Xyrem based on a risk management plan or REMS that does not fall within the scope of any of the claims of Jazz
Pharmaceuticals’ distribution patents, those patents will not be a barrier to the generic version’s entry into the
market. Jazz Pharmaceuticals cannot be certain whether its existing distribution patents or patents that may be
granted in the future will be construed to cover any generic REMS or risk management plan that might be
approved by the FDA. The interpretation of intellectual property protections and the effect of these protections
are extremely complex, and neither we nor the Parent can predict the impact of any of these matters on Jazz
Pharmaceuticals’ consolidated business.
Risks related to Jazz Pharmaceuticals’ industry
The regulatory approval process is expensive, time-consuming and uncertain and may prevent Jazz
Pharmaceuticals or its partners from obtaining approvals for the commercialization of some or all of Jazz
Pharmaceuticals’ product candidates.
The research, testing, manufacture, labeling, advertising and promotion, distribution and export of
pharmaceutical products are subject to extensive regulation, and regulations differ from country to country.
Approval in one jurisdiction does not ensure approval in other jurisdictions. The regulatory approval process is
lengthy, expensive and uncertain, and Jazz Pharmaceuticals may be unable to obtain approval for its product
candidates. For example, Jazz Pharmaceuticals is not permitted to market its product candidates in the United
States or in the EU member states until Jazz Pharmaceuticals receives approval from the FDA, the EC, or the
competent authorities of the EU member states, respectively, generally of an NDA, a BLA or a marketing
authorization application. The application must contain information demonstrating the quality, safety and
efficacy of the medicinal product, including data from the preclinical and clinical trials, information pertaining
to the preparation and manufacture of the drug or biologic, analytical methods, product formulation, details on
the manufacture of finished products, proposed product packaging, labeling and information concerning the
stability of the medicinal product. Submission of an application for marketing authorization does not assure
approval for marketing in any jurisdiction, and Jazz Pharmaceuticals may encounter significant difficulties or
costs in its efforts to obtain approval to market products. If Jazz Pharmaceuticals is unable to obtain regulatory
approval of its product candidates, Jazz Pharmaceuticals will not be able to commercialize them and recoup its
research and development costs. Any delay or failure in obtaining approval of a drug candidate, or receiving
approval for narrower indications than sought, can have a negative impact on Jazz Pharmaceuticals’
consolidated financial performance.
If the FDA, the EC or the competent authorities of the EU member states determine that a REMS or the
imposition of post-marketing obligations is necessary to ensure that the benefits of the drug outweigh the risks,
Jazz Pharmaceuticals may be required to include a proposed REMS as part of an NDA or to propose postmarketing obligations to be included in the marketing authorization for Jazz Pharmaceuticals’ products in the
EU. Jazz Pharmaceuticals may also be required to include a package insert directed to patients, a plan for
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communication with healthcare providers, restrictions on a drug’s distribution, or a medication guide to provide
information to consumers about the drug’s risks and benefits. For example, the FDA requires a REMS for Xyrem,
discussed in detail under the risk factor “The manufacture, distribution and sale of Xyrem are subject to
significant regulatory oversight and restrictions and the requirements of a risk management program, and
these restrictions and requirements, as well as the potential impact of changes to those restrictions and
requirements, subject Jazz Pharmaceuticals to increased risks and uncertainties, any of which could negatively
impact sales of Xyrem” above, and other products that Jazz Pharmaceuticals sells are or may become subject to
a REMS specific to Jazz Pharmaceuticals’ product or shared with other products in the same class of drug.
Neither we nor the Parent can predict the impact that any new REMS requirements applicable to any of Jazz
Pharmaceuticals’ products would have on Jazz Pharmaceuticals’ consolidated business.
As another example, the marketing authorization in the EU for Defitelio requires Jazz Pharmaceuticals to
comply with a number of post-marketing obligations, including obligations relating to the establishment of a
patient registry. Jazz Pharmaceuticals may be unable to comply with the post-marketing obligations imposed as
part of the marketing authorization for Defitelio. Failure to comply with these requirements may lead to the
suspension, variation or withdrawal of the marketing authorization for Defitelio in the EU.
Changes in healthcare law and implementing regulations, including those based on recently enacted
legislation, as well as changes in healthcare policy, may impact Jazz Pharmaceuticals’ consolidated business in
ways that neither we nor the Parent can currently predict, and these changes could have a material adverse
effect on Jazz Pharmaceuticals’ consolidated business and financial condition.
In March 2010, the U.S. President signed the Patient Protection and Affordable Care Act, as amended by the
Health Care and Education Reconciliation Act of 2010, together the Healthcare Reform Act. This law
substantially changes the way healthcare is financed by both governmental and private insurers, and
significantly impacts the pharmaceutical industry. The Healthcare Reform Act contains a number of provisions
that are expected to impact Jazz Pharmaceuticals’ consolidated business and operations, in some cases in ways
neither we nor the Parent can currently predict. Changes that may affect Jazz Pharmaceuticals’ consolidated
business include those governing enrollment in federal healthcare programs, reimbursement changes, benefits
for patients within a coverage gap in the Medicare Part D prescription drug program (commonly known as the
“donut hole”), rules regarding prescription drug benefits under the health insurance exchanges, expansion of
the 340B program, fraud and abuse and enforcement. These changes will impact existing government
healthcare programs and will result in the development of new programs, including Medicare payment for
performance initiatives and improvements to the physician quality reporting system and feedback program.
The Healthcare Reform Act made significant changes to the Medicaid Drug Rebate program and expanded the
Public Health Service’s 340B drug pricing discount program. Details of these changes are discussed under the
risk factor “If Jazz Pharmaceuticals fails to comply with its reporting and payment obligations under the
Medicaid Drug Rebate program or other governmental pricing programs, Jazz Pharmaceuticals could be subject
to additional reimbursement requirements, penalties, sanctions and fines which could have a material adverse
effect on Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and growth
prospects.”
Many of the Healthcare Reform Act’s most significant reforms do not take effect until 2014. In 2012, the Centers
for Medicare and Medicaid Services, or CMS, issued proposed regulations to implement the changes to the
Medicaid Drug Rebate program under the Healthcare Reform Act but has not yet issued final regulations. CMS is
expected to release the final regulations in 2014.
In 2012, the Supreme Court of the United States heard challenges to the constitutionality of certain provisions
of the Healthcare Reform Act. The Supreme Court’s decision upheld most of the Healthcare Reform Act;
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however, the Supreme Court struck down a provision in the Healthcare Reform Act that penalized states that
choose not to expand their Medicaid programs through an increase in the Medicaid eligibility income limit from
a state’s current eligibility levels to 133% of the federal poverty limit. As a result of the Supreme Court’s ruling,
some states have elected not to expand their Medicaid programs by raising the income limit to 133% of the
federal poverty level. For each state that does not choose to expand its Medicaid program, there may be fewer
insured patients overall, which could impact Jazz Pharmaceuticals’ consolidated sales, business and financial
condition. Where patients receive insurance coverage under any of the new options made available through the
Healthcare Reform Act, the possibility exists that manufacturers may be required to pay Medicaid rebates on
drugs used under these circumstances, a decision that could impact manufacturer revenues. In addition, the
federal government has also announced delays in the implementation of key provisions of the Healthcare
Reform Act, including the employer mandate. The implications of these delays for Jazz Pharmaceuticals’
consolidated sales, business and financial condition, if any, are not yet clear.
Moreover, legislative changes to the Healthcare Reform Act remain possible. Jazz Pharmaceuticals expects that
the Healthcare Reform Act, as currently enacted or as it may be amended in the future, and other healthcare
reform measures that may be adopted in the future, could have a material adverse effect on Jazz
Pharmaceuticals’ industry generally and on its ability to maintain or increase sales of our existing products or
to successfully commercialize our product candidates, if approved.
In addition to the Healthcare Reform Act, there will continue to be proposals by legislators at both the federal
and state levels, regulators and third party payors to keep healthcare costs down while expanding individual
healthcare benefits. Likewise, in the countries in the EU, legislators, policymakers and healthcare insurance
funds continue to propose and implement cost-containing measures to keep healthcare costs down, due in part
to the attention being paid to healthcare cost containment and other austerity measures in the EU. Certain of
these changes could impose limitations on the prices Jazz Pharmaceuticals will be able to charge for its
products and any approved product candidates or the amounts of reimbursement available for these products
from governmental agencies or third-party payors, may increase the tax obligations on pharmaceutical
companies such as ours, or may facilitate the introduction of generic competition with respect to Jazz
Pharmaceuticals’ products. Further, an increasing number of EU member states and other foreign countries use
prices for medicinal products established in other countries as “reference prices” to help determine the price of
the product in their own territory. Consequently, a downward trend in prices of medicinal products in some
countries could contribute to similar downward trends elsewhere. In addition, the ongoing budgetary
difficulties faced by a number of EU member states, including Greece and Spain, have led and may continue to
lead to substantial delays in payment and payment partially with government bonds rather than cash for
medicinal drug products, which could negatively impact Jazz Pharmaceuticals’ consolidated revenues and
profitability. Moreover, in order to obtain reimbursement for Jazz Pharmaceuticals’ products in some countries,
including some EU member states, Jazz Pharmaceuticals may be required to conduct clinical trials that compare
the cost-effectiveness of its products to other available therapies. There can be no assurance that Jazz
Pharmaceuticals’ products will obtain favorable reimbursement status in any country.
To help patients afford Jazz Pharmaceuticals’ products, Jazz Pharmaceuticals has various programs to assist
them, including patient assistance programs, a Xyrem free product voucher program and co-pay coupon
programs for certain products. The co-pay coupon programs of other pharmaceutical manufacturers are the
subject of ongoing class action lawsuits, first filed in 2012, challenging their legality under a variety of federal
and state laws, and Jazz Pharmaceuticals’ co-pay coupon programs could become the target of similar lawsuits.
In addition, co-pay coupon programs, including Jazz Pharmaceuticals’ program for Xyrem, have received some
negative publicity related to their use to promote branded pharmaceutical products over other less costly
alternatives. It has also come to Jazz Pharmaceuticals’ attention that at least one insurer has directed its
network pharmacies to no longer accept co-pay coupons for certain drugs the insurer identified. In addition, in
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November 2013, CMS issued guidance to the issuers of qualified health plans sold through the Healthcare
Reform Act’s marketplaces encouraging such plans to reject patient cost-sharing support from third parties and
indicating that CMS intends to monitor the provision of such support and may take regulatory action to limit it
in the future. It is possible that the outcome of the pending litigation against other manufacturers, changes in
insurer policies regarding co-pay coupons, and/or the introduction and enactment of new legislation or
regulatory action could restrict or otherwise negatively affect these programs, which could result in fewer
patients using affected products, which could include Xyrem, and therefore could have a material adverse effect
on Jazz Pharmaceuticals’ consolidated sales, business and financial condition.
Jazz Pharmaceuticals is subject to significant ongoing regulatory obligations and oversight, which may result
in significant additional expense and limit its ability to commercialize its products.
Oversight by FDA and Equivalent Non-U.S. Regulatory Authorities
Jazz Pharmaceuticals is subject to significant ongoing regulatory obligations with respect to its marketed
products, such as safety reporting requirements and additional post-marketing obligations, including
regulatory oversight of the promotion and marketing of its products. In addition, research, testing,
manufacturing, labeling, packaging, adverse event reporting, storage, advertising, promotion, sale, distribution,
recordkeeping, importing and exporting of Jazz Pharmaceuticals’ products are, and any of its product
candidates that may be approved by the FDA, the EC, the competent authorities of the EU member states and
other non-U.S. regulatory authorities will be, subject to extensive and ongoing regulatory requirements. These
requirements apply both to Jazz Pharmaceuticals and to third parties it contracts with to perform services and
supply Jazz Pharmaceuticals with products. Failure by Jazz Pharmaceuticals or any of its third party partners,
including suppliers, manufacturers, distributors and its respective central pharmacies for Xyrem and for Prialt,
to comply with applicable requirements could subject Jazz Pharmaceuticals to administrative or judicial
sanctions or other negative consequences, such as delays in approval or refusal to approve a product
candidate, withdrawal, suspension or variation of product approval, untitled letters, warning letters, fines and
other monetary penalties, unanticipated expenditures, product recall, withdrawal or seizure, total or partial
suspension of production or distribution, interruption of manufacturing or clinical trials, operating restrictions,
injunctions; suspension of licenses, civil penalties and/or criminal prosecution, any of which could have a
significant impact on Jazz Pharmaceuticals’ consolidated sales, business and financial condition.
In April 2014, Jazz Pharmaceuticals received a Form FDA 483 at the conclusion of a pharmacovigilance
inspection conducted by the FDA. The Form FDA 483 included observations relating to certain aspects of Jazz
Pharmaceuticals’ adverse drug experience reporting system for all of its products, including Xyrem. Since May
2012, all of the approximately 3,500 ADEs reported to Jazz Pharmaceuticals for all products that were
categorized as “serious and unexpected” had been reported to the FDA. However, reports related to 92 of these
ADEs had been submitted beyond the 15-day regulatory deadline. The Form FDA 483 included an observation
related to these late filings. In addition, the Form FDA 483 included observations regarding Jazz
Pharmaceuticals’ lack of written procedures for certain aspects of its evaluation of ADEs and certain
deficiencies in its investigation of ADEs. Jazz Pharmaceuticals has responded to the Form FDA 483 with a
description of the corrective actions and improvements that it had implemented before or shortly following the
inspection and additional improvements that Jazz Pharmaceuticals plans to implement to address the
observations in the Form FDA 483. In light of the fact that Jazz Pharmaceuticals has previously received
observations relating to adverse drug experience reporting, Jazz Pharmaceuticals does not know whether the
FDA will take further action, including the issuance of a warning letter as a follow-up to its inspection, or
require Jazz Pharmaceuticals to take further action, with respect to the matters covered in the Form FDA 483.
Such actions may be costly or time consuming and/or negatively affect the commercial success of Xyrem and
Jazz Pharmaceuticals’ other products. In addition, neither we nor the Parent can assure you that Jazz
Pharmaceuticals will be able to adequately address the matters raised by the FDA in the Form FDA 483 or
46
otherwise, and the failure to do so could have a material adverse effect on Jazz Pharmaceuticals’ consolidated
business, financial condition and results of operations.
If Jazz Pharmaceuticals receives regulatory approvals to sell its products, the FDA, the EC, the competent
authorities of the EU member states and other non-U.S. regulatory authorities in Europe or other countries
where Jazz Pharmaceuticals’ products are approved may impose significant restrictions on the indicated uses
or marketing of Jazz Pharmaceuticals’ products, or impose requirements for burdensome post-approval study
commitments. The terms of any product approval, including labeling, may be more restrictive than Jazz
Pharmaceuticals desires and could affect the commercial potential of the product. If Jazz Pharmaceuticals
becomes aware of problems with any of its products in the United States, Europe or elsewhere in the world or at
its contract manufacturers’ facilities, a regulatory agency may impose restrictions on Jazz Pharmaceuticals’
products, its contract manufacturers or on Jazz Pharmaceuticals. In such an instance, Jazz Pharmaceuticals
could experience a significant drop in the sales of the affected products, Jazz Pharmaceuticals’ product
revenues and reputation in the marketplace may suffer, and Jazz Pharmaceuticals could become the target of
lawsuits. In 2012, new legislation related to pharmacovigilance, or the assessment and monitoring of the safety
of drugs, became effective in the EU. This legislation enhanced the authority of European regulators to require
companies to conduct additional post-approval clinical efficacy and safety studies and increased the burden on
companies with respect to adverse event management and reporting. Under the legislation and its related
regulations and guidelines, Jazz Pharmaceuticals may be required to conduct a labor intensive collection of
data regarding the risks and benefits of marketed products and may be required to engage in ongoing
assessments of those risks and benefits, including the possible requirement to conduct additional clinical
studies, which may be time consuming and expensive and could impact Jazz Pharmaceuticals’ consolidated
profitability. Non-compliance with such obligations can lead to the variation, suspension or withdrawal of
marketing authorization or imposition of financial penalties or other enforcement measures.
The FDA approved the BLA for Erwinaze in the United States in November 2011, subject to certain postmarketing requirements, including developing and validating assays and conducting certain non-clinical
studies. In addition, the BLA approval for Erwinaze is subject to compliance with numerous post-marketing
commitments, including certain commitments which must be met by PHE with respect to product
manufacturing, which are outside of Jazz Pharmaceuticals’ control. While activities are underway to complete
the post-marketing requirements and to comply with the post-marketing commitments, if Jazz Pharmaceuticals
and/or PHE fail to do so within the timeframe established by the FDA, or if the results of the non-clinical studies
raise concerns or other issues for the FDA, Jazz Pharmaceuticals’ approval to market Erwinaze in the United
States may be withdrawn or otherwise jeopardized.
The marketing authorization in the EU for Defitelio requires Jazz Pharmaceuticals to comply with a number of
post-marketing obligations. These include obligations relating to the establishment of a patient registry. Jazz
Pharmaceuticals may be unable to comply with the post-marketing obligations imposed as part of the
marketing authorization for Defitelio. Failure to comply with these requirements may lead to the suspension,
variation or withdrawal of the marketing authorization for Defitelio in the EU.
Jazz Pharmaceuticals has not obtained marketing authorizations and/or may not currently have updated the
marketing authorization approval dossiers for Erwinaze and several other medicinal products in every
international market in which those products are being sold. For example, in some EU member states where
Jazz Pharmaceuticals does not have a marketing authorization, Erwinaze is being provided to patients on the
basis of government-approved named patient programs or temporary use authorizations. In certain of these
countries, reimbursement is provided for unauthorized products provided through national named patient or
compassionate use programs. Such reimbursement may no longer be available if authorization for named
patient or compassionate use programs expire or are terminated. While Jazz Pharmaceuticals believes that it
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has satisfied the regulations regarding its communications and medical affairs activities in those countries, if
any such country’s regulatory authorities determine that Jazz Pharmaceuticals is promoting Erwinaze without a
marketing authorization in place, Jazz Pharmaceuticals could be found to be in violation of pharmaceutical
advertising law or the regulations permitting sales under named patient programs. In that case, Jazz
Pharmaceuticals may be subject to financial or other penalties. In addition, Jazz Pharmaceuticals has provided,
and expects to continue to provide, patients access to defibrotide in countries where it is not commercially
available through continuation of an expanded access program in the United States and on a named patient
basis elsewhere. See the discussion regarding sales of defibrotide through named patient programs in the risk
factor entitled “While Jazz Pharmaceuticals has limited revenue from sales of defibrotide on a named patient
basis, neither we nor the Parent can predict whether historical revenues from named patient programs will
continue or whether Jazz Pharmaceuticals will be able to continue to distribute defibrotide on a named patient
basis.”
For a patient to be prescribed Prialt, the patient must have a surgically implanted infusion pump. One of the
two pumps the FDA has approved for use with Prialt is Medtronic Inc.’s SynchroMed® II Drug Infusion System.
Any regulatory action involving the pump or delivery of Prialt via the pump could materially adversely impact
sales of Prialt.
In addition, certain of Jazz Pharmaceuticals’ products are currently marketed as medical devices in individual
EU member states. If a competent authority in the EU were to determine that the products concerned are
incorrectly classified as a medical device, Jazz Pharmaceuticals may be required to cease marketing or
distribution of its products, or to recall or withdraw the products from the EU market. Jazz Pharmaceuticals
may also be subject to other administrative and enforcement measures, including significant fines or penalties.
The FDA requires advertising and promotional labeling to be truthful and not misleading, and products to be
marketed only for the approved indications and in accordance with the provisions of the approved label. The
FDA routinely provides its interpretations of that authority in informal communications and also in more formal
communications such as untitled letters or warning letters, and although such communications may not be
considered final agency decisions, companies may decide not to contest the agency’s interpretations so as to
avoid disputes with the FDA, even if they believe the claims to be truthful, not misleading and otherwise lawful.
For example, in September 2012, Jazz Pharmaceuticals received a warning letter from the FDA related to a
direct-to-consumer patient brochure for FazaClo. Jazz Pharmaceuticals was no longer using the allegedly
violative promotional materials at the time it received the letter, but reviewed all of its other promotional
materials for FazaClo in accordance with the letter. Jazz Pharmaceuticals agreed with the FDA on plans for
correcting the promotional materials and disseminating the corrective messages to healthcare providers,
patients and consumers and began implementation of the corrective actions in accordance with the agreedupon plans in February 2013. Jazz Pharmaceuticals believes that it has taken necessary actions required to fully
address the agency’s concerns. However, there can be no assurance that the FDA will agree with Jazz
Pharmaceuticals’ assessment. The FDA could take further action, could require Jazz Pharmaceuticals to take
further action, with respect to its FazaClo promotional materials, or could otherwise conclude Jazz
Pharmaceuticals has not taken all appropriate corrective actions with respect to the warning letter. The FDA or
other regulatory authorities may disagree with Jazz Pharmaceuticals’ response to the warning letter or
challenge other of Jazz Pharmaceuticals’ promotional materials or activities in the future, through additional
enforcement action, which may have a negative impact on Jazz Pharmaceuticals’ sales and/or may subject Jazz
Pharmaceuticals to financial or other penalties.
The FDA, the competent authorities of the EU member states and other governmental authorities also actively
enforce regulations prohibiting off-label promotion, and the government has levied large civil and criminal fines
against companies for alleged improper promotion. The U.S. government has also required companies to enter
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into complex corporate integrity agreements and/or non-prosecution agreements that impose significant
reporting and other burdens on the affected companies. For example, a predecessor company to JPI was
investigated for off-label promotion of Xyrem, and, while JPI was not prosecuted, as part of the settlement JPI
entered into a corporate integrity agreement with the Office of Inspector General, or OIG, of the U.S.
Department of Health and Human Services, or HHS, which extended through mid-2012. The investigation
resulted in significant fines and penalties, which JPI has paid, and the corporate integrity agreement required
Jazz Pharmaceuticals to maintain a comprehensive compliance program. For all of Jazz Pharmaceuticals’
products, it is important that Jazz Pharmaceuticals maintains a comprehensive compliance program. Failure to
maintain a comprehensive and effective compliance program, and to integrate the operations of acquired
businesses into a combined comprehensive and effective compliance program on a timely basis, could subject
Jazz Pharmaceuticals to a range of regulatory actions that could affect Jazz Pharmaceuticals’ ability to
commercialize its products and could harm or prevent sales of the affected products, or could substantially
increase the costs and expenses of commercializing and marketing its products.
Various U.S. state agencies traditionally oversee pharmaceutical compounding activities. Compounded drugs
are made by certain pharmacies, typically by combining, mixing or altering ingredients of a drug to make a
formulation that is not readily available to patients and/or approved by the FDA. A number of problems have
been associated with the making and use of compounded drugs, including product contamination, product
toxicity, product instability and impaired performance of medical devices used to deliver drugs. Improperly
compounded products can pose serious public health issues, as evidenced by the October 2012 fungal
meningitis outbreak in the United States which was traced to compounded drugs from the New England
Compounding Center. Pharmaceutical products administered intrathecally, such as Prialt, are frequently
compounded with other products by pharmacies, a process over which Jazz Pharmaceuticals has no control. If
any of Jazz Pharmaceuticals’ products are used in compounded drugs, Jazz Pharmaceuticals may have exposure
to claims by patients treated with compounded formulations containing Jazz Pharmaceuticals’ products and to
regulatory action by relevant government agencies. Any such claims or regulatory actions could result in harm
to Jazz Pharmaceuticals’ reputation and have a negative effect on Jazz Pharmaceuticals’ consolidated business.
In addition, since late 2012, there have been increased legislative and enforcement activities on the federal
level and new legislation was passed in November 2013 which gives the FDA increased authority over
compounding operations. Neither we nor the Parent can predict the impact of any new legislation on Jazz
Pharmaceuticals’ consolidated business.
Other Regulatory Authorities
Jazz Pharmaceuticals is also subject to regulation by other regional, national, state and local agencies, including
the DEA, the Department of Justice, the FTC, the U.S. Department of Commerce, the OIG and other regulatory
bodies, as well as governmental authorities in those non-U.S. countries in which Jazz Pharmaceuticals
commercializes its products. In addition to the FDCA, other federal, state and non-U.S. statutes and regulations
govern to varying degrees the research, development, manufacturing and commercial activities relating to
prescription pharmaceutical products, including preclinical testing, approval, production, labeling, sale,
distribution, import, export, post-market surveillance, advertising, dissemination of information, promotion,
marketing, and pricing to government purchasers and government healthcare programs. Jazz Pharmaceuticals’
partners, including its suppliers, manufacturers and distributors and the central pharmacy for Xyrem, are
subject to many of the same requirements.
These requirements include obtaining sufficient quota from the DEA each year to manufacture sodium oxybate
and Xyrem. In addition to quota requirements, the DEA imposes various registration, importing, exporting,
recordkeeping and reporting requirements, labeling and packaging requirements, security controls and a
restriction on prescription refills on certain pharmaceutical products under the Controlled Substances Act, or
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CSA. The states also impose similar requirements for handling controlled substances. The United States and the
EU member states are parties to the Convention on Psychotropic Substances (1971), or the 1971 Convention. In
October 2012, the World Health Organization sent a recommendation to the United Nations Commission on
Narcotic Drugs, or the CND, to reschedule GHB, under the 1971 Convention from its current Schedule IV status to
Schedule II status. In March 2013, the CND voted to reschedule GHB from Schedule IV to Schedule II under the
1971 Convention. While the DEA imposes its own scheduling requirements in the United States under the CSA,
the United States is obligated as a signatory to the 1971 Convention to ensure that drug scheduling in the United
States is consistent with its obligations under the international treaties. Because sodium oxybate, the active
pharmaceutical ingredient in Xyrem, is a derivative of GHB, the international rescheduling of GHB means that
Xyrem and/or sodium oxybate may be subject to more restrictive registration, recordkeeping, reporting,
importing, exporting and other requirements in the EU and certain other countries than the restrictions
currently in place. In the United States, under DEA regulations, the Xyrem finished product is currently
classified as a Schedule III controlled substance, with sodium oxybate, classified as a Schedule I controlled
substance. Although the HHS, has taken the position in the past that the United States would not be required to
alter the domestic control of GHB should it be rescheduled to Schedule II under the 1971 Convention, neither we
nor the Parent can guarantee that international rescheduling of GHB from Schedule IV to Schedule II will not
impact restrictions on Xyrem in the United States. Failure by Jazz Pharmaceuticals or any of its partners,
including suppliers, manufacturers and distributors, to comply with the requirements of the CSA and other
regulatory bodies could result in, among other things, additional operating costs to Jazz Pharmaceuticals,
delays in shipments outside or into the United States and adverse regulatory actions.
In addition, pursuant to the Export Administration Regulations, Jazz Pharmaceuticals is required to obtain a
license from the U.S. Department of Commerce prior to the exportation of certain materials and technical
information related to Prialt, a synthesized conotoxin, which is a designated controlled biological toxin.
The U.S. federal healthcare program anti-kickback statute prohibits, among other things, knowingly and
willfully offering, paying, soliciting, or receiving remuneration to induce or in return for purchasing, leasing,
ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under
Medicare, Medicaid or other federally financed healthcare programs. This statute has been interpreted to apply
to arrangements between pharmaceutical companies on one hand and prescribers, purchasers and formulary
managers on the other. Although there are a number of statutory exemptions and regulatory safe harbors
protecting certain common manufacturer business arrangements and activities from prosecution, the
exemptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce
prescribing, purchases or recommendations of Jazz Pharmaceuticals’ products may be subject to scrutiny if
they do not qualify for an exemption or safe harbor. Jazz Pharmaceuticals seeks to comply with the exemptions
and safe harbors whenever possible, but Jazz Pharmaceuticals’ practices may not in all cases meet all of the
criteria for safe harbor protection from anti-kickback liability.
The U.S. Federal False Claims Act, or the False Claims Act, prohibits any person from knowingly presenting, or
causing to be presented, a false claim for payment of federal funds, or knowingly making, or causing to be
made, a false statement to get a false claim paid. Many pharmaceutical and other healthcare companies have
been investigated and have reached substantial financial settlements with the federal government under the
False Claims Act for a variety of alleged improper marketing activities, including providing free product to
customers with the expectation that the customers would bill federal programs for the product; providing
consulting fees, grants, free travel, and other benefits to physicians to induce them to prescribe the company’s
products; and inflating prices reported to private price publication services, which are used to set drug
reimbursement rates under government healthcare programs. In addition, in recent years the government has
pursued False Claims Act cases against a number of pharmaceutical companies for causing false claims to be
submitted as a result of the marketing of their products for unapproved uses. Pharmaceutical and other
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healthcare companies also are subject to other federal false claim laws, including federal criminal healthcare
fraud and false statement statutes that extend to non-government health benefit programs.
In addition, the Physician Payment Sunshine provisions of the Healthcare Reform Act require extensive tracking
of payments and transfers of value to physicians and teaching hospitals, maintenance of a database, and public
reporting of the data. In February 2013, CMS issued a final rule implementing the Physician Payment Sunshine
provisions which provided that manufacturers begin tracking payment and transfer of value data on August 1,
2013. Reporting of the payment data occurred in two phases, with aggregated data submitted to CMS by
March 31, 2014 and transactional data submitted before June 30, 2014. This data is expected to become public
on or around October 1, 2014. It is widely anticipated that public reporting under the Physician Payment
Sunshine provisions will result in increased scrutiny of the financial relationships between industry, teaching
hospitals and physicians, and such scrutiny may negatively impact Jazz Pharmaceuticals’ ability to engage with
physicians on matters of importance to Jazz Pharmaceuticals. In addition, if the data reflected in Jazz
Pharmaceuticals’ reports are found to be in violation of any of the Physician Payment Sunshine provisions or
any other U.S. federal, state or local regulations that may apply, Jazz Pharmaceuticals may be subject to
significant civil, criminal and administrative penalties, damages or fines.
The majority of states also have statutes or regulations similar to the federal anti-kickback law and false claims
laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in several
states, apply regardless of the payor. A number of states now require pharmaceutical companies to report
expenses relating to the marketing and promotion of pharmaceutical products and to report gifts and payments
to individual physicians in the states. Other states restrict when pharmaceutical companies may provide meals
to prescribers or engage in other marketing related activities. Still other states require the posting of
information relating to clinical studies and their outcomes. In addition, California, Connecticut, Massachusetts
and Nevada require pharmaceutical companies to implement compliance programs or marketing codes of
conduct. Other states have considered similar proposals in recent years. Non-U.S. governments often have
similar regulations which Jazz Pharmaceuticals also will be subject to in those countries where it markets and
sells products.
In the EU, the advertising and promotion of Jazz Pharmaceuticals’ products are subject to EU member states’
laws governing promotion of medicinal products, interactions with physicians, misleading and comparative
advertising and unfair commercial practices. In addition, other legislation adopted by individual EU member
states may apply to the advertising and promotion of medicinal products. These laws require that promotional
materials and advertising in relation to medicinal products comply with the product’s Summary of Product
Characteristics, or SmPC, as approved by the competent authorities. The SmPC is the document that provides
information to physicians concerning the safe and effective use of the medicinal product. It forms an intrinsic
and integral part of the marketing authorization granted for the medicinal product. Promotion of a medicinal
product that does not comply with the SmPC is considered to constitute off-label promotion. The off-label
promotion of medicinal products is prohibited in the EU. The applicable laws at EU level and in the individual EU
member states also prohibit the direct-to-consumer advertising of prescription-only medicinal products.
Violations of the rules governing the promotion of medicinal products in the EU could be penalized by
administrative measures, fines and imprisonment. These laws may further limit or restrict the advertising and
promotion of Jazz Pharmaceuticals’ products to the general public and may also impose limitations on Jazz
Pharmaceuticals’ promotional activities with health care professionals.
Interactions between pharmaceutical companies and physicians are also governed by strict laws, regulations,
industry self-regulation codes of conduct and physicians’ codes of professional conduct in the individual EU
member states. The provision of benefits or advantages to physicians to induce or encourage the prescription,
recommendation, endorsement, purchase, supply, order or use of medicinal products is prohibited in the EU.
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The provision of benefits or advantages to physicians is also governed by the national anti-bribery laws of the
EU member states. One example is United Kingdom’s, or UK’s, Bribery Act of 2010, or the UK Bribery Act. As
further discussed below, the UK Bribery Act applies to any company incorporated in or “carrying on business”
in the UK, irrespective of where in the world the alleged bribery activity occurs, which could have implications
for Jazz Pharmaceuticals’ interactions with physicians both in and outside the UK. Violation of these laws could
result in substantial fines and imprisonment. Payments made to physicians in certain EU member states also
must be publicly disclosed. Moreover, agreements with physicians must often be the subject of prior
notification and approval by the physician’s employer, his/her competent professional organization, and/or the
competent authorities of the individual EU member states. Failure to comply with these requirements could
result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.
Jazz Pharmaceuticals’ business activities outside of the United States are subject to the U.S. Foreign Corrupt
Practices Act, or FCPA, and similar anti-bribery or anti-corruption laws, regulations or rules of other countries
in which Jazz Pharmaceuticals operates, including the UK Bribery Act. The FCPA and similar anti-corruption
laws generally prohibit the offering, promising, giving, or authorizing others to give anything of value, either
directly or indirectly, to non-U.S. government officials in order to improperly influence any act or decision,
secure any other improper advantage, or obtain or retain business. The FCPA also requires public companies to
make and keep books and records that accurately and fairly reflect the transactions of the company and to
devise and maintain an adequate system of internal accounting controls. The UK Bribery Act prohibits giving,
offering, or promising bribes to any person, including non-UK government officials and private persons, as well
as requesting, agreeing to receive, or accepting bribes from any person. In addition, under the UK Bribery Act,
companies which carry on a business or part of a business in the UK may be held liable for bribes given, offered
or promised to any person, including non-UK government officials and private persons, by employees and
persons associated with the company in order to obtain or retain business or a business advantage for the
company. Liability is strict, with no element of a corrupt state of mind, but a defense of having in place
adequate procedures designed to prevent bribery is available. Furthermore, under the UK Bribery Act there is
no exception for facilitation payments. As described above, Jazz Pharmaceuticals’ consolidated business is
heavily regulated and therefore involves significant interaction with public officials, including officials of nonU.S. governments. Additionally, in many other countries, the health care providers who prescribe
pharmaceuticals are employed by their government, and the purchasers of pharmaceuticals are government
entities; therefore, Jazz Pharmaceuticals’ dealings with these prescribers and purchasers may be subject to
regulation under the FCPA. Recently the SEC and the Department of Justice have increased their FCPA
enforcement activities with respect to pharmaceutical companies. In addition, under the Dodd-Frank Wall
Street Reform and Consumer Protection Act, private individuals who report to the SEC original information that
leads to successful enforcement actions may be eligible for a monetary award. Jazz Pharmaceuticals is engaged
in ongoing efforts that are designed to ensure its compliance with these laws, including due diligence, training,
policies, procedures, and internal controls. However, there is no certainty that all employees and third party
business partners (including Jazz Pharmaceuticals’ distributors, wholesalers, agents, contractors, and other
partners) will comply with anti-bribery laws. In particular, Jazz Pharmaceuticals does not control the actions of
manufacturers and other third party agents, although Jazz Pharmaceuticals may be liable for their actions.
Violation of these laws may result in civil or criminal sanctions, which could include monetary fines, criminal
penalties, and disgorgement of past profits, which could have a material adverse impact on Jazz
Pharmaceuticals’ consolidated business and financial condition.
Jazz Pharmaceuticals is also subject to laws and regulations covering data privacy and the protection of healthrelated and other personal information. The legislative and regulatory landscape for privacy and data
protection continues to evolve, and there has been an increasing focus on privacy and data protection issues
which may affect Jazz Pharmaceuticals’ consolidated business, including recently enacted laws in all
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jurisdictions where Jazz Pharmaceuticals operates. Numerous federal and state laws, including state security
breach notification laws, state health information privacy laws and federal and state consumer protection laws,
govern the collection, use and disclosure of personal information. In addition, Jazz Pharmaceuticals obtains
patient health information from most healthcare providers who prescribe Jazz Pharmaceuticals’ products and
research institutions Jazz Pharmaceuticals collaborates with, and they are subject to privacy and security
requirements under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health
Information Technology for Economic and Clinical Health Act, or HIPAA. Although Jazz Pharmaceuticals is not
directly subject to HIPAA other than with respect to providing certain employee benefits, Jazz Pharmaceuticals
could potentially be subject to criminal penalties if it knowingly obtains or discloses individually identifiable
health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by
HIPAA. Moreover, EU member states and other jurisdictions have adopted data protection laws and regulations,
which impose significant compliance obligations. For example, the EU Data Protection Directive, as
implemented into national laws by the EU member states, imposes strict obligations and restrictions on the
ability to collect, analyze and transfer personal data, including health data from clinical trials and adverse event
reporting. Data protection authorities from the different EU member states may interpret the EU Data
Protection Directive and national laws differently, which adds to the complexity of processing personal data in
the EU, and guidance on implementation and compliance practices are often updated or otherwise revised.
Failing to comply with these laws could lead to government enforcement actions and significant penalties
against Jazz Pharmaceuticals, and adversely impact Jazz Pharmaceuticals’ consolidated operating results. The
EU Data Protection Directive prohibits the transfer of personal data to countries outside of the European
Economic Area, or EEA, such as the United States, that are not considered by the EC to provide an adequate
level of data protection. There are also similar data transfer restrictions imposed on transfer of data from
Switzerland to the United States. However, there are a number of legal mechanisms to allow for the transfer of
personal data from the EEA and Switzerland to the United States, including, among others, a voluntary U.S.—EU
Safe Harbor Framework, a voluntary U.S.—Switzerland Safe Harbor Framework and the EU’s set of standard
form contractual clauses for the transfer of personal data out of the EEA to third countries where different data
protection rules apply. Jazz Pharmaceuticals’ U.S. subsidiary, JPI, has certified compliance with the U.S.—EU
Safe Harbor Framework through the U.S. Department of Commerce. A proposal for an EU Data Protection
Regulation, intended to replace the current EU Data Protection Directive, is currently under consideration. The
EU Data Protection Regulation is expected to introduce new data protection requirements and substantial fines
for breaches of the data protection rules. If the draft EU Data Protection Regulation is adopted in its current
form it may increase our company’s responsibility and liability in relation to personal data that Jazz
Pharmaceuticals processes and it may be required to put in place additional mechanisms ensuring compliance
with the new EU data protection rules.
The number and complexity of both U.S. federal and state laws continue to increase, and additional
governmental resources are being added to enforce these laws and to prosecute companies and individuals who
are believed to be violating them. In particular, the Healthcare Reform Act includes a number of provisions
aimed at strengthening the government’s ability to pursue anti-kickback and false claims cases against
pharmaceutical manufacturers and other healthcare entities, including substantially increased funding for
healthcare fraud enforcement activities, enhanced investigative powers, and amendments to the False Claims
Act that make it easier for the government and whistleblowers to pursue cases for alleged kickback and false
claim violations. While it is too early to predict what effect these changes will have on Jazz Pharmaceuticals’
consolidated business, Jazz Pharmaceuticals anticipates that government scrutiny of pharmaceutical sales and
marketing practices will continue for the foreseeable future and subject Jazz Pharmaceuticals to the risk of
government investigations and enforcement actions. Responding to a government investigation or enforcement
action would be expensive and time-consuming, and could have a material adverse effect on Jazz
Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects.
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Compliance with the U.S. federal and state, EU and national laws that apply to pharmaceutical manufacturers is
difficult and time consuming, and companies that violate them may face substantial penalties. The potential
sanctions include civil monetary penalties, exclusion of a company’s products from reimbursement under
government programs, criminal fines and imprisonment. Because of the breadth of these laws and, in some
cases, the lack of extensive legal guidance in the form of regulations or court decisions, it is possible that some
of Jazz Pharmaceuticals’ consolidated business activities could be subject to challenge under one or more of
these laws. For example, the FTC has been paying increasing attention to the use of REMS by companies selling
branded products, in particular to whether REMS may be being deliberately used to reduce the risk of
competition from generic drugs in a way that may be deemed to be anticompetitive. It is possible that the FTC
or others could claim that Jazz Pharmaceuticals’ REMS or other practices are being used in an anticompetitive
manner. The FDCA further states that a REMS shall not be used by an NDA holder to block or delay generic
drugs from entering the market. Three of the ANDA applicants have asserted that Jazz Pharmaceuticals’
patents covering the distribution system for Xyrem should not have been listed in the Orange Book, and that
the Xyrem REMS is blocking competition. Such a challenge or any other challenge that Jazz Pharmaceuticals or
its consolidated business partners have failed to comply with applicable laws and regulations could have a
material adverse effect on Jazz Pharmaceuticals’ consolidated business, financial condition, results of
operations and growth prospects. If Jazz Pharmaceuticals or the other parties with whom Jazz Pharmaceuticals
works fail to comply with applicable regulatory requirements, Jazz Pharmaceuticals or they could be subject to
a range of regulatory actions that could affect Jazz Pharmaceuticals’ ability to commercialize its products and
could harm or prevent sales of the affected products, or could substantially increase the costs and expenses of
commercializing and marketing Jazz Pharmaceuticals’ products. Any threatened or actual government
enforcement action could also generate adverse publicity and require that Jazz Pharmaceuticals devote
substantial resources that could otherwise be used in other aspects of Jazz Pharmaceuticals’ consolidated
business.
Jazz Pharmaceuticals manufactures certain active pharmaceutical ingredients, including the defibrotide drug
substance, at its manufacturing facilities in Italy. In addition, Jazz Pharmaceuticals has engaged a third party
manufacturer to process defibrotide into the finished product at its Italian manufacturing plant. Jazz
Pharmaceuticals’ manufacturing facilities and those of its third party manufacturer are subject to continuing
regulation by the Italian Health Authority and other Italian regulatory authorities with respect to the
manufacturing of active pharmaceutical ingredients, including the defibrotide drug substance or its finished
form. These facilities are also subject to inspection and regulation by the EMA with respect to the
manufacturing of the defibrotide drug substance and its finished form. Also, part of the process to obtain
approval for defibrotide is to pass a pre-approval inspection by the EMA, Italian Health Authority and the FDA
to ensure that these facilities are in compliance with cGMP. Following initial approval in a jurisdiction, the
applicable authorities will continue to inspect Jazz Pharmaceuticals’ manufacturing facilities and those of its
third party manufacturer, in some cases, unannounced, to confirm ongoing compliance with cGMP. The cGMP
requirements govern quality control of the manufacturing process and documentation policies and procedures,
and Jazz Pharmaceuticals and its third party manufacturers will need to ensure that all of its processes,
methods and equipment are compliant with cGMP. These authorities may deny approval to manufacture Jazz
Pharmaceuticals’ products, require Jazz Pharmaceuticals to stop manufacturing its products, deny approval to
the sale of Jazz Pharmaceuticals’ products or suspend the sale of Jazz Pharmaceuticals’ products, if they
determine that either Jazz Pharmaceuticals’ facilities or its third party manufacturer’s facility in Italy does not
meet the standards of compliance required under applicable regulations.
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If Jazz Pharmaceuticals fails to comply with its reporting and payment obligations under the Medicaid Drug
Rebate program or other governmental pricing programs, Jazz Pharmaceuticals could be subject to additional
reimbursement requirements, penalties, sanctions and fines which could have a material adverse effect on
Jazz Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects.
Jazz Pharmaceuticals participates in the Medicaid Drug Rebate program, established by the Omnibus Budget
Reconciliation Act of 1990 and amended by the Veterans Health Care Act of 1992 as well as subsequent
legislation. Jazz Pharmaceuticals also participates in and has certain price reporting obligations to several state
Medicaid supplemental rebate and other governmental pricing programs, and Jazz Pharmaceuticals has
obligations to report average sales price under the Medicare program. Under the Medicaid Drug Rebate
program, Jazz Pharmaceuticals is required to pay a rebate to each state Medicaid program for its covered
outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid program as a
condition of having federal funds being made available to the states for Jazz Pharmaceuticals’ drugs under
Medicaid and Medicare Part B. Those rebates are based on pricing data reported by Jazz Pharmaceuticals on a
monthly and quarterly basis to CMS, the federal agency that administers the Medicaid Drug Rebate program.
These data include the average manufacturer price and, in the case of innovator products, the best price for
each drug which, in general, represents the lowest price available from the manufacturer to any entity in the
United States in any pricing structure, calculated to include all sales and associated rebates, discounts and
other price concessions. Such data previously have not been submitted for Jazz Pharmaceuticals’ two
radiopharmaceutical products, ProstaScint (capromab pendetide) and Quadramet® (samarium sm 153
lexidronam injection). Jazz Pharmaceuticals has been engaged in interactions with CMS and a trade group, the
Council on Radionuclides and Radiopharmaceuticals, or CORAR, regarding the reporting of Medicaid pricing
data and paying Medicaid rebates for radiopharmaceutical products. For ProstaScint, Jazz Pharmaceuticals
plans to begin making any required reports when CMS provides guidance on this requirement and reporting
methodology, which is currently expected later in 2014. Jazz Pharmaceuticals sold Quadramet to a third party
in December 2013, but has retained any liabilities related to sales of the product during prior periods. In
addition to the discussions with CMS as part of CORAR, Jazz Pharmaceuticals has had separate discussions with
CMS directly regarding Quadramet. Both we and the Parent are currently unable to predict whether price
reporting and rebates will be required for ProstaScint and Quadramet and if so, for what period they will be
required. Jazz Pharmaceuticals is currently unable to reasonably estimate an amount or range of a potential
contingent loss related to the payment of rebates for Quadramet or ProstaScint. Any material liability resulting
from radiopharmaceutical price reporting and rebates would negatively impact Jazz Pharmaceuticals’
consolidated financial results.
The Healthcare Reform Act made significant changes to the Medicaid Drug Rebate program. Effective March 23,
2010, rebate liability expanded from fee-for-service Medicaid utilization to include the utilization of Medicaid
managed care organizations as well. With regard to the amount of the rebates owed, the Healthcare Reform Act
increased the minimum Medicaid rebate from 15.1% to 23.1% of the average manufacturer price for most
innovator products and from 11.0% to 13.0% for non-innovator products; changed the calculation of the rebate
for certain innovator products that qualify as line extensions of existing drugs; and capped the total rebate
amount for innovator drugs at 100% of the average manufacturer price. In addition, the Healthcare Reform Act
and subsequent legislation changed the definition of average manufacturer price. Finally, the Healthcare
Reform Act requires pharmaceutical manufacturers of branded prescription drugs to pay a branded
prescription drug fee to the federal government. Each individual pharmaceutical manufacturer pays a prorated
share of the branded prescription drug fee of $3.0 billion in 2014 (and set to increase in ensuing years), based
on the dollar value of its branded prescription drug sales to certain federal programs identified in the law. Sales
of “orphan drugs” — those designated under section 526 of the FDCA — are excluded from this fee as long as no
non-orphan indications have been approved for such orphan drugs.
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In 2012, CMS issued proposed regulations to implement the changes to the Medicaid Drug Rebate program
under the Healthcare Reform Act but has not yet issued final regulations. CMS is currently expected to release
the final regulations in 2014. Moreover, in the future, Congress could enact legislation that further increases
Medicaid drug rebates or other costs and charges associated with participating in the Medicaid Drug Rebate
program. The issuance of regulations and coverage expansion by various governmental agencies relating to the
Medicaid Drug Rebate program has and will continue to increase Jazz Pharmaceuticals’ costs and the
complexity of compliance, has been and will be time-consuming, and could have a material adverse effect on
Jazz Pharmaceuticals’ consolidated results of operations.
Federal law requires that any company that participates in the Medicaid Drug Rebate program also participate
in the Public Health Service’s 340B drug pricing discount program in order for federal funds to be available for
the manufacturer’s drugs under Medicaid and Medicare Part B. The 340B pricing program requires
participating manufacturers to agree to charge statutorily-defined covered entities no more than the 340B
“ceiling price” for the manufacturer’s covered outpatient drugs. These 340B covered entities include a variety
of community health clinics and other entities that receive health services grants from the Public Health
Service, as well as hospitals that serve a disproportionate share of low-income patients, and the Healthcare
Reform Act expanded the list of covered entities to include certain free-standing cancer hospitals, critical
access hospitals, rural referral centers and sole community hospitals. The 340B ceiling price is calculated using
a statutory formula, which is based on the average manufacturer price and rebate amount for the covered
outpatient drug as calculated under the Medicaid Drug Rebate program. Changes to the definition of average
manufacturer price and the Medicaid rebate amount under the Healthcare Reform Act and CMS’s issuance of
final regulations implementing those changes also could affect Jazz Pharmaceuticals’ 340B ceiling price
calculations and negatively impact Jazz Pharmaceuticals’ consolidated results of operations. The initiation of
any reporting of Medicaid pricing data for ProstaScint and Quadramet could result in retroactive 340B ceiling
price liability for these two products as well as prospective 340B ceiling price obligations for ProstaScint. Jazz
Pharmaceuticals is currently unable to reasonably estimate an amount or range of a contingent loss. Any
material liability resulting from radiopharmaceutical price reporting would negatively impact Jazz
Pharmaceuticals’ consolidated financial results.
The Healthcare Reform Act also exempts “orphan drugs” from the ceiling price requirements for the newlyadded covered entities. Final rules applying this statutory orphan drug exemption have not been adopted and
recent legal challenges to the validity of certain rule-making by the Health Resources and Services
Administration, or HRSA, which administers the 340B program, have made the timing of final rules uncertain. If
final rules interpret the scope of the orphan drug exemption narrowly, such as in previously proposed rules, it
could potentially negatively impact the price Jazz Pharmaceuticals is paid for certain of its products by certain
entities for some uses and increase the complexity of compliance with the 340B program.
The Healthcare Reform Act also obligates the Secretary of the HHS to create regulations and processes to
improve the integrity of the 340B program and to update the agreement that manufacturers must sign to
participate in the 340B program to obligate a manufacturer to offer the 340B price to covered entities if the
manufacturer makes the drug available to any other purchaser at any price and to report to the government
the ceiling prices for its drugs. HRSA previously was expected to issue a comprehensive proposed regulation in
2014 that would have addressed many aspects of the 340B program. However, the invalidation of the orphan
drug regulation on the ground that HRSA did not have adequate rule-making authority has raised questions
regarding whether HRSA has the authority to issue the comprehensive regulation. Any final regulation could
affect Jazz Pharmaceuticals’ obligations under the 340B program in ways neither we nor the Parent can
anticipate. In addition, legislation may be introduced that, if passed, would further expand the 340B program to
additional covered entities or would require participating manufacturers to agree to provide 340B discounted
pricing on drugs used in the inpatient setting.
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Federal law also requires that a company that participates in the Medicaid Drug Rebate program report average
sales price, or ASP, information to CMS for certain categories of drugs that are paid under Part B of the
Medicare program. Manufacturers calculate ASP based on a statutorily defined formula as well as regulations
and interpretations of the statute by CMS as to what should or should not be considered in computing ASP. An
ASP for each National Drug Code for a product that is subject to the ASP reporting requirement must be
submitted to CMS no later than 30 days after the end of each calendar quarter. CMS uses these submissions to
determine payment rates for drugs under Medicare Part B. Statutory or regulatory changes or CMS binding
guidance could affect the ASP calculations for Jazz Pharmaceuticals’ products and the resulting Medicare
payment rate, and could negatively impact Jazz Pharmaceuticals’ consolidated results of operations.
Pricing and rebate calculations vary among products and programs. The calculations are complex and are often
subject to interpretation by our company, governmental or regulatory agencies and the courts. The Medicaid
rebate amount is computed each quarter based on Jazz Pharmaceuticals’ submission to CMS of its current
average manufacturer prices and best prices for the quarter. If Jazz Pharmaceuticals becomes aware that its
reporting for a prior quarter was incorrect, or has changed as a result of recalculation of the pricing data, Jazz
Pharmaceuticals is obligated to resubmit the corrected data for a period not to exceed twelve quarters from the
quarter in which the data originally were due. Such restatements and recalculations increase Jazz
Pharmaceuticals’ costs for complying with the laws and regulations governing the Medicaid Drug Rebate
program. Any corrections to Jazz Pharmaceuticals’ rebate calculations could result in an overage or underage in
Jazz Pharmaceuticals’ rebate liability for past quarters, depending on the nature of the correction. Price
recalculations also may affect the ceiling price at which Jazz Pharmaceuticals is required to offer its products to
certain covered entities, such as safety-net providers, under the 340B drug discount program.
Jazz Pharmaceuticals is liable for errors associated with its submission of pricing data. In addition to retroactive
rebates and the potential for 340B program refunds, if Jazz Pharmaceuticals is found to have knowingly
submitted false average manufacturer price, ASP, or best price information to the government, Jazz
Pharmaceuticals may be liable for civil monetary penalties in the amount of $100,000 per item of false
information. Jazz Pharmaceuticals’ failure to submit monthly/quarterly average manufacturer price, ASP, and
best price data on a timely basis could result in a civil monetary penalty of $10,000 per day for each day the
information is late beyond the due date. Such failure also could be grounds for CMS to terminate Jazz
Pharmaceuticals’ Medicaid drug rebate agreement, pursuant to which Jazz Pharmaceuticals participates in the
Medicaid program. In the event that CMS terminates Jazz Pharmaceuticals’ rebate agreement, federal
payments may not be available under Medicaid or Medicare Part B for Jazz Pharmaceuticals’ covered outpatient
drugs.
In September 2010, CMS and the OIG indicated that they intend to pursue more aggressively those companies
who fail to report these data to the government in a timely manner. Governmental agencies may also make
changes in program interpretations, requirements or conditions of participation, some of which may have
implications for amounts previously estimated or paid. Neither we nor the Parent can assure you that Jazz
Pharmaceuticals’ submissions will not be found by CMS to be incomplete or incorrect.
Federal law requires that for a company to be eligible to have its products paid for with federal funds under the
Medicaid and Medicare Part B programs as well as to be purchased by certain federal agencies and grantees, it
also must participate in the Department of Veterans Affairs, or VA, Federal Supply Schedule, or FSS, pricing
program. To participate, Jazz Pharmaceuticals is required to enter into an FSS contract with the VA, under
which Jazz Pharmaceuticals must make its innovator “covered drugs” available to the “Big Four” federal
agencies — the VA, the Department of Defense, or DoD, the Public Health Service, and the Coast Guard — at
pricing that is capped pursuant to a statutory federal ceiling price, or FCP, formula set forth in Section 603 of
the Veterans Health Care Act of 1992, or VHCA. The FCP is based on a weighted average non-federal average
manufacturer price, or Non-FAMP, which manufacturers are required to report on a quarterly and annual basis
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to the VA. If a company misstates Non-FAMPs or FCPs it must restate these figures. Pursuant to the VHCA,
knowing provision of false information in connection with a Non-FAMP filing can subject a manufacturer to
penalties of $100,000 for each item of false information.
FSS contracts are federal procurement contracts that include standard government terms and conditions,
separate pricing for each product, and extensive disclosure and certification requirements. All items on FSS
contracts are subject to a standard FSS contract clause that requires FSS contract price reductions under
certain circumstances where pricing is reduced to an agreed “tracking customer.” Further, in addition to the
“Big Four” agencies, all other federal agencies and some non-federal entities are authorized to access FSS
contracts. FSS contractors are permitted to charge FSS purchasers other than the Big Four agencies
“negotiated pricing” for covered drugs that is not capped by the FCP; instead, such pricing is negotiated based
on a mandatory disclosure of the contractor’s commercial “most favored customer” pricing. Jazz
Pharmaceuticals offers one single FCP-based FSS contract price to all FSS purchasers for all products.
In addition, pursuant to regulations issued by the DoD TRICARE Management Activity, now the Defense Health
Agency, to implement Section 703 of the National Defense Authorization Act for Fiscal Year 2008, each of Jazz
Pharmaceuticals’ covered drugs is listed on a Section 703 Agreement under which Jazz Pharmaceuticals has
agreed to pay rebates on covered drug prescriptions dispensed to TRICARE beneficiaries by TRICARE network
retail pharmacies. Companies are required to list their innovator products on Section 703 Agreements in order
for those products to be eligible for DoD formulary inclusion. The formula for determining the rebate is
established in the regulations and Jazz Pharmaceuticals’ Section 703 Agreement and is based on the difference
between the annual Non-FAMP and the FCP (as described above, these price points are required to be
calculated by Jazz Pharmaceuticals under the VHCA).
If Jazz Pharmaceuticals overcharges the government in connection with its FSS contract or Section 703
Agreement, whether due to a misstated FCP or otherwise, Jazz Pharmaceuticals is required to refund the
difference to the government. Failure to make necessary disclosures and/or to identify contract overcharges
can result in allegations against Jazz Pharmaceuticals under the False Claims Act and other laws and
regulations. Unexpected refunds to the government, and responding to a government investigation or
enforcement action, would be expensive and time-consuming, and could have a material adverse effect on Jazz
Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects.
Price approvals and reimbursement may not be available for Jazz Pharmaceuticals’ products, which could
diminish Jazz Pharmaceuticals’ sales or affect its ability to sell its products profitably.
In both U.S. and non-U.S. markets, Jazz Pharmaceuticals’ ability to commercialize its products successfully, and
to attract commercialization partners for its products, depends in significant part on the availability of
adequate financial coverage and reimbursement from third party payors, including, in the United States,
governmental payors such as the Medicare and Medicaid programs, managed care organizations and private
health insurers. In many countries, price approvals must be obtained before products can be placed on the
market or submitted for reimbursement. Third party payors, including government payors, decide which drugs
can be reimbursed and establish reimbursement and co-pay levels. Third party payors are increasingly
challenging the prices charged for medical products and services and examining their cost effectiveness, in
addition to their safety and efficacy. In some cases, for example, third party payors try to encourage the use of
less expensive generic products through their prescription benefits coverage and reimbursement and co-pay
policies. Jazz Pharmaceuticals may need to conduct expensive pharmacoeconomic and/or clinical studies in
order to demonstrate the cost-effectiveness of its products. Even with such studies, Jazz Pharmaceuticals’
products may be considered less safe, less effective or less cost-effective than other products, and third party
payors may not provide and maintain price approvals, coverage and reimbursement for Jazz Pharmaceuticals’
products or any of its product candidates that Jazz Pharmaceuticals commercializes, in whole or in part. In
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addition, third party payors’ reimbursement practices may affect the price levels for Jazz Pharmaceuticals’
products or the availability of reimbursement for Jazz Pharmaceuticals’ products, including Xyrem and
Defitelio. Jazz Pharmaceuticals’ consolidated business could be materially harmed if the Medicaid program,
Medicare program or other third party payors in the United States or elsewhere were to deny reimbursement
for Jazz Pharmaceuticals’ products or provide reimbursement only on unfavorable terms. This risk is
particularly significant with respect to Xyrem in the United States and to Defitelio in Europe, in part due to
payor sensitivity to the price of these products. Jazz Pharmaceuticals’ consolidated business could also be
harmed if the Medicaid program, Medicare program or other reimbursing bodies or payors limit the indications
for which Jazz Pharmaceuticals’ products will be reimbursed to a smaller set of indications than Jazz
Pharmaceuticals believes is appropriate or limit the circumstances under which Jazz Pharmaceuticals’ products
will be reimbursed to a smaller set of circumstances than Jazz Pharmaceuticals believes is appropriate.
In addition, third party payors draw on diagnostic criteria to establish reimbursement guidelines. As a result,
third party payors may make changes to the coverage and reimbursement for our products, which may have a
negative impact on revenues from Jazz Pharmaceuticals’ products, including Xyrem and Defitelio. For example,
meaningful changes to the diagnostic criteria for narcolepsy are included in the fifth edition of the Diagnostic
and Statistical Manual of Mental Disorders (DSM-5) published in May 2013, and the third edition of International
Classification of Sleep Disorders (ICSD-3) published in February 2014.
In many countries, procedures to obtain price approvals, coverage and reimbursement can take considerable
time after the receipt of marketing approval. Jazz Pharmaceuticals is in the process of making pricing and
reimbursement submissions with respect to Defitelio, and discussing them with regulatory authorities, in those
European countries where pricing and reimbursement approvals are required for launch. Neither we nor the
Parent can predict the timing of Defitelio’s launch in countries where Jazz Pharmaceuticals is awaiting pricing
and reimbursement approvals. If Jazz Pharmaceuticals experiences delays and unforeseen difficulties in
obtaining favorable pricing and reimbursement approvals, planned launches in the affected countries would be
delayed and Jazz Pharmaceuticals’ anticipated revenue from Defitelio in 2014 and its growth prospects in
Europe could be negatively affected. Jazz Pharmaceuticals’ anticipated revenue and growth prospects would
also be negatively affected in the event that Jazz Pharmaceuticals is unable to ultimately obtain favorable
pricing and reimbursement approvals in countries that represent significant markets. See the discussion
regarding the launch of Defitelio in the risk factor entitled “Jazz Pharmaceuticals may not be able to
successfully commercialize Defitelio in Europe, or obtain marketing approval in other countries, including the
United States, which could have a material adverse effect on Jazz Pharmaceuticals’ consolidated business,
financial condition, results of operations and growth prospects.”
Neither we nor the Parent can predict actions third party payors may take, or whether they will limit the price
approvals, coverage and level of reimbursement for Jazz Pharmaceuticals’ products or refuse to provide and
maintain any approvals or coverage at all. For example, because some of Jazz Pharmaceuticals’ products
compete in a market with both branded and generic products, obtaining and maintaining price approvals and
reimbursement coverage by government and private payors may be more challenging than for new chemical
entities for which no therapeutic alternatives exist. Additionally, in many countries, reimbursement guidelines
and incentives provided to prescribing physicians by third party payors may have a significant impact on the
prescribing physicians’ willingness to prescribe Jazz Pharmaceuticals’ products. For example, the U.S. federal
government follows a Medicare severity diagnosis-related group, or MS-DRG, payment system for certain
institutional services provided under Medicare, which some states also use for Medicaid. The MS-DRG system
entitles a healthcare facility to a fixed reimbursement based on discharge diagnoses rather than actual costs
incurred in providing inpatient treatment, thereby increasing the incentive for the facility to limit or control
expenditures for many healthcare products. For Jazz Pharmaceuticals’ products used in the inpatient setting,
there may not be sufficient reimbursement under the MS-DRG to fully cover the cost of Jazz Pharmaceuticals’
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products. Neither we nor the Parent can be sure that reimbursement amounts, or the lack of reimbursement,
will not reduce the demand for, or the price of, Jazz Pharmaceuticals’ products. If reimbursement is not
available or is available only at limited levels, Jazz Pharmaceuticals may not be able to effectively
commercialize its products.
Third party payors frequently require that drug companies negotiate agreements with them that provide
discounts or rebates from list prices. Jazz Pharmaceuticals has agreed to provide such discounts and rebates to
some third party payors in relation to its products. Jazz Pharmaceuticals expects increasing pressure to offer
larger discounts or discounts to a greater number of third party payors to maintain acceptable reimbursement
levels and access for patients at co-pay levels that are reasonable and customary. A number of third party
payors also require prior authorization for, require reauthorization for continuation of, or even refuse to
provide, reimbursement for Jazz Pharmaceuticals’ products, and others may do so in the future. Patients who
cannot meet the conditions of prior authorizations are often prevented from obtaining the prescribed
medication, because they cannot afford to pay for the medication without reimbursement. If Jazz
Pharmaceuticals is unsuccessful in maintaining reimbursement for its products, such as Xyrem or Defitelio, at
acceptable levels, if reimbursement for its products by third party payors is subject to overly restrictive prior
authorizations, or if third party payors refuse to provide reimbursement, Jazz Pharmaceuticals’ consolidated
business will be harmed. In addition, if Jazz Pharmaceuticals’ competitors reduce the prices of their products,
or otherwise demonstrate that they are better or more cost effective than Jazz Pharmaceuticals’ products, this
may result in a greater level of reimbursement for their products relative to Jazz Pharmaceuticals’ products,
which would reduce Jazz Pharmaceuticals’ sales and harm Jazz Pharmaceuticals’ consolidated results of
operations.
In recent years, there have been a number of legislative and regulatory changes in and proposals to change the
healthcare system in ways that could impact Jazz Pharmaceuticals’ ability to sell its products profitably. These
changes and proposals include measures that would limit or prohibit payments for some medical treatments or
subject the pricing of drugs to government control and regulations changing the rebates Jazz Pharmaceuticals
is required to provide. For example, much attention has been paid to legislation proposing federal rebates on
Medicare Part D and Medicare Advantage utilization for drugs issued to certain groups of lower income
beneficiaries and the desire to change the provisions that treat these dual-eligible patients differently from
traditional Medicare patients. Any such changes could have a negative impact on revenues from sales of Jazz
Pharmaceuticals’ products.
Payors also are increasingly considering new metrics as the basis for reimbursement rates, such as average
sales price, average manufacturer price and actual acquisition cost. The existing data for reimbursement based
on these metrics is relatively limited, although certain states have begun to survey acquisition cost data for the
purpose of setting Medicaid reimbursement rates. CMS has begun posting drafts of this retail survey price
information on at least a monthly basis in the form of draft National Average Drug Acquisition Cost, or NADAC,
files, which reflect retail community pharmacy invoice costs, and National Average Retail Price, or NARP, files,
which reflect retail community pharmacy prices to consumers. In July 2013, CMS suspended the publication of
draft NARP data, pending funding decisions. In November 2013, CMS moved to publishing final rather than draft
NADAC data and has since made updated NADAC data publicly available on a weekly basis. Therefore, it may be
difficult to project the impact of these evolving reimbursement mechanics on the willingness of payors to cover
Jazz Pharmaceuticals’ products. Any failure to cover our products appropriately, in addition to legislative and
regulatory changes and others that may occur in the future, could impact Jazz Pharmaceuticals’ ability to
maximize revenues in the federal marketplace. As discussed above, recent legislative changes to the 340B drug
pricing program, the Medicaid Drug Rebate program, and the Medicare Part D prescription drug benefit also
could impact Jazz Pharmaceuticals’ consolidated revenues. A significant portion of Jazz Pharmaceuticals’
consolidated revenue from sales of Erwinaze is obtained through government payors, including Medicaid, and
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any failure to qualify for reimbursement for Erwinaze under those programs would have a material adverse
effect on revenues from sales of Erwinaze.
Jazz Pharmaceuticals expects to experience pricing pressure in the United States in connection with the sale of
its products due to managed healthcare, the increasing influence of health maintenance organizations and
additional legislative proposals. In various EU member states Jazz Pharmaceuticals expects to be subject to
continuous cost-cutting measures, such as lower maximum prices, lower or lack of reimbursement coverage
and incentives to use cheaper, usually generic, products as an alternative. If Jazz Pharmaceuticals fails to
successfully secure and maintain reimbursement coverage for its products or is significantly delayed in doing
so, Jazz Pharmaceuticals will have difficulty achieving market acceptance of its products and Jazz
Pharmaceuticals’ consolidated business will be harmed. Jazz Pharmaceuticals has periodically increased the
price of Xyrem, most recently in August 2014, and Jazz Pharmaceuticals has made and may in the future make
similar price increases on its other products. Neither we nor the Parent can assure you that such price
adjustments will not negatively affect Jazz Pharmaceuticals’ ability to secure and maintain reimbursement
coverage for Jazz Pharmaceuticals’ products, which could negatively impact Jazz Pharmaceuticals’ sales
volumes and revenue.
Health Technology Assessment, or HTA, of medicinal products is becoming an increasingly common part of the
pricing and reimbursement procedures in some EU member states. These EU member states include the United
Kingdom, France, Germany and Sweden. The HTA process, which is governed by the national laws of these
countries, is the procedure according to which the assessment of the public health impact, therapeutic impact
and the economic and societal impact of use of a given medicinal product in the national healthcare systems of
the individual country is conducted. HTA generally focuses on the clinical efficacy and effectiveness, safety,
cost, and cost-effectiveness of individual medicinal products, as well as their potential implications for the
healthcare system. Those elements of medicinal products are compared with other treatment options available
on the market. The outcome of HTA regarding specific medicinal products will often influence the pricing and
reimbursement status granted to these medicinal products by the competent authorities of individual EU
member states. The extent to which pricing and reimbursement decisions are influenced by the HTA of the
specific medicinal product vary between EU member states and cannot be determined or anticipated in relation
to Jazz Pharmaceuticals’ products at the present time.
There also continue to be legislative proposals to amend U.S. laws to allow the importation into the United
States of prescription drugs, which can be sold at prices that are regulated by the governments of various nonU.S. countries. For example, in October 2013, the State of Maine enacted a bill to allow residents of the state to
purchase prescription drugs from other countries, including Canada. The potential importation of prescription
drugs could pose significant safety concerns for patients, increase the risk of counterfeit products becoming
available in the market, and could also have a negative impact on prescription drug prices in the United States.
For example, the potential importation of Xyrem without the safeguard of Jazz Pharmaceuticals’ Xyrem REMS
program could harm patients and could also negatively impact Xyrem revenues.
Beginning April 1, 2013, Medicare payments for all items and services, including drugs and biologicals, were
reduced by 2% under the sequestration (i.e., automatic spending reductions) required by the Budget Control
Act of 2011, Pub. L. No. 112-25, as amended by the American Taxpayer Relief Act of 2012, Pub. L. 112-240. The
Bipartisan Budget Act of 2013, Pub. L. No. 113-67, extended the 2% reduction to 2023, and the Protecting Access
to Medicare Act of 2014, Pub. L. No. 113-93, extended the 2% reduction, on average, to 2024. If Congress does
not take action in the future to modify these sequestrations, Medicare Part D plans could seek to reduce their
negotiated prices for drugs. Other legislative or regulatory cost containment provisions, as described above,
could have a similar effect. These cuts reduce reimbursement payments related to Jazz Pharmaceuticals’
products, which could potentially negatively impact Jazz Pharmaceuticals’ consolidated revenues.
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Product liability and product recalls could harm Jazz Pharmaceuticals’ consolidated business.
The development, manufacture, testing, marketing and sale of pharmaceutical products are associated with
significant risks of product liability claims or recalls. Side effects or adverse events known or reported to be
associated with, or manufacturing defects in, the products sold by Jazz Pharmaceuticals could exacerbate a
patient’s condition, or could result in serious injury or impairments or even death. This could result in product
liability claims and/or recalls of one or more of Jazz Pharmaceuticals’ products. Some of Jazz Pharmaceuticals’
products, including Xyrem, have boxed warnings in their labels. In many countries, including in EU member
states, national laws provide for strict (no-fault) liability which applies even where damages are caused both by
a defect in a product and by the act or omission of a third party.
Product liability claims may be brought by individuals seeking relief for themselves, or by groups seeking to
represent a class of injured patients. Further, third party payors, either individually or as a putative class, may
bring actions seeking to recover monies spent on one of Jazz Pharmaceuticals’ products. While Jazz
Pharmaceuticals has not had to defend against any product liability claims to date, as sales of its products
increase, Jazz Pharmaceuticals believes it is likely product liability claims will be made against our company.
The risk of product liability claims may also increase if a company receives a warning letter from a regulatory
agency. Neither we nor the Parent can predict the frequency, outcome or cost to defend any such claims.
Product liability insurance coverage is expensive, can be difficult to obtain and may not be available in the
future on acceptable terms, or at all. Jazz Pharmaceuticals’ product liability insurance may not cover all of the
future liabilities it might incur in connection with the development, manufacture or sale of its products. In
addition, Jazz Pharmaceuticals may not continue to be able to obtain insurance on satisfactory terms or in
adequate amounts.
A successful claim or claims brought against Jazz Pharmaceuticals in excess of available insurance coverage
could subject Jazz Pharmaceuticals to significant liabilities and could have a material adverse effect on Jazz
Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects. Such
claims could also harm Jazz Pharmaceuticals’ reputation and the reputation of its products, adversely affecting
Jazz Pharmaceuticals’ ability to market its products successfully. In addition, defending a product liability
lawsuit is expensive and can divert the attention of key employees from operating Jazz Pharmaceuticals’
consolidated business.
Product recalls may be issued at Jazz Pharmaceuticals’ discretion or at the discretion of Jazz Pharmaceuticals’
suppliers, government agencies and other entities that have regulatory authority for pharmaceutical sales. Any
recall of Jazz Pharmaceuticals’ products could materially adversely affect Jazz Pharmaceuticals’ consolidated
business by rendering it unable to sell that product for some time and by adversely affecting its reputation.
A recall could also result in product liability claims by individuals and third party payors. In addition, product
liability claims could result in an investigation of the safety or efficacy of Jazz Pharmaceuticals’ products, its
manufacturing processes and facilities, or its marketing programs conducted by the FDA, the EMA, or the
competent authorities of the EU member states. Such investigations could also potentially lead to a recall of
Jazz Pharmaceuticals’ products or more serious enforcement actions, limitations on the indications for which
they may be used, or suspension, variation, or withdrawal of approval. Any such regulatory action by the FDA,
the EMA or the competent authorities of the EU member states could lead to product liability lawsuits as well.
Jazz Pharmaceuticals uses hazardous materials in its manufacturing facility, and any claims relating to the
improper handling, storage, release or disposal of these materials could be time-consuming and expensive.
Jazz Pharmaceuticals’ manufacturing of active pharmaceutical ingredients in Italy involves the controlled
storage, use and disposal of chemicals and solvents. Jazz Pharmaceuticals is subject to Italian laws, which
implement EU laws and regulations governing the use, transportation, treatment, storage, handling and
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disposal of solid and hazardous materials, wastewater discharges and air emissions. Jazz Pharmaceuticals has
obtained certification under the UNI EN ISO 14001 Standard for its environmental management system and
have an Eco-management and Audit Scheme (EMAS) for its plant in Italy. Jazz Pharmaceuticals’ environmental
policy is designed to comply with current EU laws and regulations on environmental protection, to provide for
continuous improvement of its manufacturing performance, to protect its employees’ health, to protect the
safety of people working at its location in Italy and to respect the safety of people living close to Jazz
Pharmaceuticals’ plant and in the surrounding community. Although Jazz Pharmaceuticals believes that its
safety procedures for handling and disposing of these hazardous materials comply with the standards
prescribed by these EU laws and regulations, Jazz Pharmaceuticals cannot eliminate the risk of contamination
or injury from hazardous materials. If an accident occurs, an injured party could seek to hold Jazz
Pharmaceuticals liable for any damages that result and any liability could exceed the limits or fall outside the
coverage of Jazz Pharmaceuticals’ insurance. Jazz Pharmaceuticals may not be able to maintain insurance on
acceptable terms, or at all. Jazz Pharmaceuticals may incur significant costs to comply with current or future EU
environmental laws and regulations.
Risks relating to Jazz Pharmaceuticals’ consolidated financial condition
Jazz Pharmaceuticals has incurred substantial debt, which could impair its flexibility and access to capital and
adversely affect Jazz Pharmaceuticals’ consolidated financial position.
As of June 30, 2014, the Parent and its subsidiaries had total consolidated indebtedness of $1.2 billion,
substantially all of which was secured indebtedness of certain of the Parent’s subsidiaries guaranteed on a
senior secured basis by us, the Parent and most of the Parent’s other subsidiaries and to which the notes would
have been effectively subordinated to the extent of the value of the assets securing the guarantees by us and
the Parent and structurally subordinated to the indebtedness of certain of the Parent’s subsidiaries and the
guarantees provided by the Parent’s other subsidiaries. After giving effect to the issuance of the notes
(assuming no exercise of the initial purchasers’ over-allotment option) and the use of proceeds therefrom to
repay outstanding borrowings under the revolving credit facility provided for under the amended credit
agreement as described in “Use of proceeds,” the total consolidated indebtedness of the Parent would have
been $1.4 billion as of June 30, 2014, of which $899.9 million would have been secured indebtedness of certain
of the Parent’s subsidiaries guaranteed on a senior secured basis by us, the Parent and most of the Parent’s
other subsidiaries, and $500.0 million would have been indebtedness of us guaranteed by the Parent. See
“Description of certain other indebtedness” and “Use of proceeds.” Our indebtedness and the indebtedness of
the Parent and its other subsidiaries may:
• limit Jazz Pharmaceuticals’ ability to borrow additional funds for working capital, capital expenditures,
acquisitions or other general business purposes;
• limit Jazz Pharmaceuticals’ ability to use its cash flow or obtain additional financing for future working
capital, capital expenditures, acquisitions or other general business purposes;
• require Jazz Pharmaceuticals to use a substantial portion of its cash flow from operations to make debt
service payments;
• limit Jazz Pharmaceuticals’ flexibility to plan for, or react to, changes in Jazz Pharmaceuticals’ consolidated
business and industry;
• place Jazz Pharmaceuticals at a competitive disadvantage compared to its less leveraged competitors; and
• increase Jazz Pharmaceuticals’ vulnerability to the impact of adverse economic and industry conditions.
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Our ability and the ability of the Parent and its other subsidiaries to make scheduled payments of the principal
of, to pay interest on or to refinance our indebtedness and the indebtedness of the Parent and its other
subsidiaries, including the notes and the guarantee, depends on the Parent’s future performance and the
results of operations of its other subsidiaries, which is subject to economic, financial, competitive, legislative,
regulatory and other factors beyond the Parent’s and its subsidiaries’ control. If Jazz Pharmaceuticals does not
have sufficient funds to meet its debt service obligations, Jazz Pharmaceuticals may be required to refinance all
or part of its existing debt, sell assets, borrow more money or sell securities, none of which either we or the
Parent can assure you that Jazz Pharmaceuticals would be able to do in a timely manner, or at all.
Covenants in the amended credit agreement restrict Jazz Pharmaceuticals’ consolidated business and
operations in many ways and if Jazz Pharmaceuticals does not effectively manage compliance with its
covenants, Jazz Pharmaceuticals’ consolidated financial condition and results of operations could be adversely
affected.
The amended credit agreement currently provides for $904.4 million of term loans due in June 2018 and a
$425.0 million revolving credit facility, with loans under such revolving credit facility due in June 2017, subject
to early mandatory repayments under certain circumstances. The amended credit agreement contains various
covenants that limit our and the Parent’s ability and/or most of its subsidiaries’ ability to, among other things:
• incur or assume liens or additional debt or provide guarantees in respect of obligations of other persons;
• issue redeemable preferred stock;
• pay dividends or distributions or redeem or repurchase capital stock;
• prepay, redeem or repurchase certain debt;
• make loans, investments, acquisitions (including acquisitions of exclusive licenses) and capital expenditures;
• enter into agreements that restrict distributions from Parent’s subsidiaries;
• sell assets and capital stock of Parent’s subsidiaries;
• enter into certain transactions with affiliates; and
• consolidate or merge with or into, or sell substantially all of Jazz Pharmaceuticals’ assets to, another person.
The amended credit agreement also includes a financial covenant that requires Jazz Pharmaceuticals to
maintain a maximum secured leverage ratio. Jazz Pharmaceuticals’ ability to comply with this financial
covenant may be affected by events beyond its control. In addition, the covenants under the amended credit
agreement could restrict Jazz Pharmaceuticals’ consolidated operations, particularly its ability to respond to
changes in its consolidated business or to take specified actions to take advantage of certain business
opportunities that may be presented to Jazz Pharmaceuticals. Jazz Pharmaceuticals’ failure to comply with any
of the covenants could result in a default under the amended credit agreement, which could permit the lenders
to declare all or part of any outstanding borrowings to be immediately due and payable, or to refuse to permit
additional borrowings under the revolving credit facility. In addition, if Jazz Pharmaceuticals is unable to repay
those amounts, the lenders under the credit agreement could proceed against the collateral granted to them to
secure that debt, which would seriously harm Jazz Pharmaceuticals’ consolidated business.
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To continue to grow Jazz Pharmaceuticals’ consolidated business, Jazz Pharmaceuticals will need to commit
substantial resources, which could result in future losses or otherwise limit its opportunities or affect its ability
to operate Jazz Pharmaceuticals’ consolidated business.
The scope of Jazz Pharmaceuticals’ consolidated business and operations has grown substantially since the
beginning of 2012 through the Azur Merger, the EUSA Acquisition and the Gentium Acquisition. To continue to
grow Jazz Pharmaceuticals’ consolidated business over the longer-term, Jazz Pharmaceuticals will need to
commit substantial additional resources to in-licensing and/or acquiring new products and product candidates,
and to costly and time-consuming product development and clinical trials of its product candidates. Jazz
Pharmaceuticals also intends to continue to invest in its commercial operations in an effort to grow sales of its
current products. Jazz Pharmaceuticals’ future capital requirements will depend on many factors, including
many of those discussed above, such as:
• the revenues from its commercial products, which may be affected by many factors, including the extent of
generic competition for Jazz Pharmaceuticals’ products;
• the costs of Jazz Pharmaceuticals’ commercial operations;
• the costs of integration activities related to any future strategic transactions Jazz Pharmaceuticals may
engage in;
• the cost of acquiring and/or licensing any new products and product candidates;
• the scope, rate of progress, results and costs of Jazz Pharmaceuticals’ development and clinical activities;
• the cost and timing of obtaining regulatory approvals and of compliance with laws and regulations;
• the cost of preparing, filing, prosecuting, defending and enforcing patent claims and other intellectual
property rights;
• the cost of investigations, litigation and/or settlements related to regulatory oversight and third party
claims; and
• changes in laws and regulations, including, for example, healthcare reform legislation.
Jazz Pharmaceuticals’ strategy includes the expansion of Jazz Pharmaceuticals’ consolidated business through
the acquisition or in-licensing and development of additional marketed or close to approval products and
specialty product candidates. Neither we nor the Parent can assure you that Jazz Pharmaceuticals will continue
to identify attractive opportunities or that Jazz Pharmaceuticals’ funds will be sufficient to fund these activities
if opportunities arise. Jazz Pharmaceuticals may be unable to expand Jazz Pharmaceuticals’ consolidated
business if it does not have sufficient capital or cannot borrow or raise additional capital on attractive terms. In
particular, the debt under the amended credit agreement may limit Jazz Pharmaceuticals’ ability to borrow
additional funds for acquisitions or to use its cash flow or obtain additional financing for future acquisitions. In
addition, if Jazz Pharmaceuticals uses a substantial amount of its funds to acquire or in-license products or
product candidates, Jazz Pharmaceuticals may not have sufficient additional funds to conduct all of its
consolidated operations in the manner Jazz Pharmaceuticals would otherwise choose.
Jazz Pharmaceuticals may not be able to access the capital and credit markets on terms that are favorable to it,
or at all.
During the past several years, domestic and international financial markets have experienced extreme
disruption from time to time, including, among other things, high volatility and significant declines in stock
prices and severely diminished liquidity and credit availability for both borrowers and investors. Jazz
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Pharmaceuticals expects to opportunistically seek access to the capital and credit markets to supplement its
existing cash balances, cash Jazz Pharmaceuticals expects to generate from operations and funds available
under its revolving credit facility to satisfy its needs for working capital, capital expenditures and debt service
requirements or to continue to grow Jazz Pharmaceuticals’ consolidated business over the longer term through
product acquisition and in-licensing, product development and clinical trials of product candidates, and
expansion of its commercial operations. In the event of adverse capital and credit market conditions, Jazz
Pharmaceuticals may not be able to obtain capital market financing or credit on favorable terms, or at all,
which could have a material adverse effect on Jazz Pharmaceuticals’ consolidated business and growth
prospects. Changes in Jazz Pharmaceuticals’ credit ratings issued by nationally recognized credit rating
agencies could adversely affect Jazz Pharmaceuticals’ cost of financing and have an adverse effect on the
market price of ordinary shares and the value of your notes.
Jazz Pharmaceuticals may not be able to successfully maintain its tax rates, which could adversely affect Jazz
Pharmaceuticals’ consolidated business and financial condition, results of operations and growth prospects.
The Parent is incorporated in Ireland and maintains subsidiaries in North America, a number of other European
jurisdictions and Bermuda. Azur Pharma was able to achieve a low average tax rate through the performance of
certain functions and ownership of certain assets in tax-efficient jurisdictions, including Ireland and Bermuda,
together with intra-group service and transfer pricing agreements, each on an arm’s length basis. The Parent is
continuing to use a substantially similar structure and arrangements. Taxing authorities, such as the U.S.
Internal Revenue Service, or the IRS, actively audit and otherwise challenge these types of arrangements, and
have done so in the pharmaceutical industry. The IRS or other taxing authority may challenge Jazz
Pharmaceuticals’ structure and transfer pricing arrangements through an audit or lawsuit. Responding to or
defending such a challenge could be expensive and consume time and other resources, and divert
management’s time and focus from operating Jazz Pharmaceuticals’ consolidated business. Neither we nor the
Parent can predict whether taxing authorities will conduct an audit or file a lawsuit challenging this structure,
the cost involved in responding to any such audit or lawsuit, or the outcome. If Parent is unsuccessful, the
Parent may be required to pay taxes for prior periods, interest, fines or penalties, and may be obligated to pay
increased taxes in the future, any of which could require Jazz Pharmaceuticals to reduce its operating expenses,
decrease efforts in support of Jazz Pharmaceuticals’ products or seek to raise additional funds, all of which
could have a material adverse effect on Jazz Pharmaceuticals’ consolidated business, financial condition,
results of operations and growth prospects.
The IRS may not agree with the conclusion that the Parent should be treated as a foreign corporation for U.S.
federal tax purposes.
Although the Parent is incorporated in Ireland, the IRS may assert that the Parent should be treated as a U.S.
corporation (and, therefore, a U.S. tax resident) for U.S. federal tax purposes pursuant to Section 7874 of the
Internal Revenue Code of 1986, as amended, or the Code. For U.S. federal tax purposes, a corporation generally
is considered a tax resident in the jurisdiction of its organization or incorporation. Because the Parent is an Irish
incorporated entity, the Parent would be classified as a foreign corporation (and, therefore, a non-U.S. tax
resident) under these rules. Section 7874 of the Code provides an exception under which a foreign incorporated
entity may, in certain circumstances, be treated as a U.S. corporation for U.S. federal tax purposes. Because the
Parent indirectly acquired all of JPI’s assets through the acquisition of the shares of JPI common stock in the
Azur Merger, the IRS could assert that the Parent should be treated as a U.S. corporation for U.S. federal tax
purposes under Section 7874. For the Parent to be treated as a foreign corporation for U.S. federal tax
purposes under Section 7874 of the Code, either (1) the former stockholders of JPI must have owned (within the
meaning of Section 7874 of the Code) less than 80% (by both vote and value) of ordinary shares by reason of
holding shares in JPI (the “ownership test”), or (2) the Parent must have substantial business activities in
Ireland after the Azur Merger (taking into account the activities of the Parent’s expanded affiliated group). The
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JPI stockholders owned less than 80% of the Parent’s share capital immediately after the Azur Merger by
reason of their ownership of shares of JPI common stock. As a result, Jazz Pharmaceuticals believes that the
Parent should be treated as a foreign corporation for U.S. federal tax purposes under current law. It is possible
that the IRS could disagree with the position that the ownership test is satisfied and assert that Section 7874 of
the Code applies to treat the Parent as a U.S. corporation following the Azur Merger. There is limited guidance
regarding the Code Section 7874 provisions, including the application of the ownership test described above.
The IRS continues to scrutinize transactions that are potentially subject to Section 7874, and issued new final
and temporary regulations under Section 7874 in June 2012 and in January 2014. Jazz Pharmaceuticals does
not expect these regulations to affect the U.S. tax consequences of the Azur Merger. Nevertheless, new
statutory and/or regulatory provisions under Section 7874 of the Code or otherwise could be enacted that
adversely affect the Parent’s status as a foreign corporation for U.S. federal tax purposes, and any such
provisions could have retroactive application to the Parent, JPI, their respective shareholders, and/or the Azur
Merger. See the risk factor entitled “Future changes to the tax laws under which we expect to be treated as a
foreign corporation for U.S. federal tax purposes or in other tax laws relating to multinational corporations
could adversely affect us.”
Section 7874 of the Code limits JPI and its U.S. affiliates’ ability to utilize their U.S. tax attributes to offset
certain U.S. taxable income, if any, generated by certain taxable transactions.
Following certain acquisitions of a U.S. corporation by a foreign corporation, Section 7874 of the Code can limit
the ability of the acquired U.S. corporation and its U.S. affiliates to utilize U.S. tax attributes such as net
operating losses, or NOLs, to offset U.S. taxable income resulting from certain transactions. Based on the
limited guidance available, this limitation applies to Jazz Pharmaceuticals. As a result, after the Azur Merger,
JPI and its U.S. affiliates have not been able and will continue to be unable, for a period of time, to utilize their
U.S. tax attributes to offset their U.S. taxable income, if any, resulting from certain taxable transactions.
Notwithstanding this limitation, Jazz Pharmaceuticals plans to fully utilize JPI’s U.S. NOLs prior to their
expiration. As a result of this limitation, however, it may take JPI longer to use its NOLs. Moreover, contrary to
these plans, it is possible that the limitation under Section 7874 of the Code on the utilization of U.S. tax
attributes could prevent JPI from fully utilizing its U.S. tax attributes prior to their expiration if JPI does not
generate sufficient taxable income.
The Parent’s U.S. affiliates’ ability to use their net operating losses to offset potential taxable income and
related income taxes that would otherwise be due could be subject to further limitations if Jazz
Pharmaceuticals does not generate taxable income in a timely manner or if the “ownership change” provisions
of Sections 382 and 383 of the Code result in further annual limitations.
The Parent’s U.S. affiliates have a significant amount of NOLs. Jazz Pharmaceuticals’ ability to use these NOLs to
offset potential future taxable income and related income taxes that would otherwise be due is dependent upon
Jazz Pharmaceuticals’ generation of future taxable income before the expiration dates of the NOLs, and neither
we nor the Parent can predict with certainty when, or whether, the Parent’s U.S. affiliates will generate
sufficient taxable income to use all of the NOLs. In addition, realization of NOLs to offset potential future
taxable income and related income taxes that would otherwise be due is subject to annual limitations under the
“ownership change” provisions of Sections 382 and 383 of the Code and similar state provisions, which may
result in the expiration of additional NOLs before future utilization. In general, an “ownership change” occurs if,
during a three-year rolling period, there is a change of 50% or more in the percentage ownership of a company
by 5% shareholders (and certain persons treated as 5% shareholders), as defined in the Code and the U.S.
Treasury Department regulations, or Treasury Regulations, promulgated thereunder. In this regard, Jazz
Pharmaceuticals currently estimates that, as a result of these ownership change provisions, Jazz
Pharmaceuticals has an annual limitation on the utilization of certain NOLs of $28.6 million for each of the
years 2014 to 2016, $11.9 million for 2017, and a combined total of $3.3 million for 2018 to 2026. However,
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Sections 382 and 383 of the Code are extremely complex provisions with respect to which there are many
uncertainties, and the Parent has not requested a ruling from the IRS to confirm its analysis of the ownership
change limitations related to the NOLs generated by the Parent’s U.S. affiliates. Therefore, the Parent has not
established whether the IRS would agree with its analysis regarding the application of Sections 382 and 383 of
the Code. If the IRS were to disagree with the Parent’s analysis, or if the Parent’s U.S. affiliates were to
experience additional ownership changes in the future, the Parent’s U.S. affiliates could be subject to further
annual limitations on the use of the NOLs to offset potential taxable income and related income taxes that
would otherwise be due.
Future changes to the tax laws under which the Parent expects to be treated as a foreign corporation for U.S.
federal tax purposes or in other tax laws relating to multinational corporations could adversely affect Jazz
Pharmaceuticals.
As described above, under current law, the Parent believes that the Parent should be treated as a foreign
corporation for U.S. federal tax purposes. However, changes to Section 7874 or the Treasury Regulations
promulgated thereunder or other IRS guidance could adversely affect the Parent’s status as a foreign
corporation for U.S. federal tax purposes, and any such changes could have prospective or retroactive
application. In addition, recent legislative proposals have aimed to expand the scope of U.S. corporate tax
residence. This legislation, if passed, could adversely affect Jazz Pharmaceuticals.
In addition, the U.S. Congress, the Organization for Economic Co-operation and Development and other
government agencies in jurisdictions where the Parent and its affiliates do business have had an extended focus
on issues related to the taxation of multinational corporations. One example is in the area of “base erosion and
profit shifting,” where payments are made between affiliates from a jurisdiction with high tax rates to a
jurisdiction with lower tax rates. As a result, the tax laws in the United States and other countries in which the
Parent and its affiliates do business could change on a prospective or retroactive basis, and any such changes
could adversely affect Jazz Pharmaceuticals.
Jazz Pharmaceuticals has significant intangible assets and goodwill. Consequently, the future impairment of
Jazz Pharmaceuticals’ intangible assets and goodwill may significantly impact its consolidated profitability.
As of June 30, 2014, Jazz Pharmaceuticals had recorded $2.4 billion of intangible assets and goodwill on a
consolidated basis related to past acquisitions. Intangible assets and goodwill are subject to an impairment
analysis whenever events or changes in circumstances indicate the carrying amount of the asset may not be
recoverable. Additionally, goodwill and indefinite-lived assets are subject to an impairment test at least
annually. In the second quarter of 2014, Jazz Pharmaceuticals recorded an intangible asset impairment charge
of $32.8 million related to certain products acquired as part of the EUSA Acquisition.
Events giving rise to impairment are an inherent risk in the pharmaceutical industry and cannot be
predicted. As a result of the significance of intangible assets and goodwill, Jazz Pharmaceuticals’ consolidated
results of operations and financial position in future periods could be negatively impacted should additional
impairments of intangible assets or goodwill occur.
Jazz Pharmaceuticals’ consolidated financial results could be adversely affected by foreign exchange
fluctuations.
Jazz Pharmaceuticals has significant operations in Europe as well as in the United States, but the Parent reports
revenues, costs and earnings in U.S. dollars. The Parent’s primary currency translation exposures relate to its
subsidiaries that have functional currencies denominated in the Euro and the British Pound. Exchange rates
between the U.S. dollar and each of the Euro and British Pound are likely to fluctuate from period to period.
Because Jazz Pharmaceuticals’ consolidated financial results are reported in U.S. dollars, Jazz Pharmaceuticals
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is exposed to foreign currency exchange risk as the functional currency financial statements of non-U.S.
subsidiaries are translated to U.S. dollars for reporting purposes. As Jazz Pharmaceuticals continues to expand
its international operations, including with the Gentium Acquisition, Jazz Pharmaceuticals will conduct more
transactions in currencies other than the U.S. dollar. To the extent that revenue and expense transactions are
not denominated in the functional currency, Jazz Pharmaceuticals is also subject to the risk of transaction
losses. Given the volatility of exchange rates, there is no assurance that the Parent will be able to effectively
manage currency transaction and/or conversion risks. Jazz Pharmaceuticals has not entered into derivative
instruments to offset the impact of foreign exchange fluctuations. Fluctuations in foreign currency exchange
rates could have a material adverse effect on Jazz Pharmaceuticals’ consolidated results of operations and
financial condition.
Risks related to the notes
The notes and the guarantee are effectively junior to any of our and the Parent’s secured indebtedness to the
extent of the value of the assets securing such debt and structurally junior to all existing and future
indebtedness and other liabilities of our and the Parent’s respective subsidiaries and if a default occurs, we
and the Parent may not have sufficient funds to fulfill our obligations under the notes and the guarantee.
The notes and the guarantee will be our and the Parent’s senior unsecured obligations and will rank senior in
right of payment to all of our and the Parent’s future indebtedness that is expressly subordinated in right of
payment to the notes, equally in right of payment with all of our or the Parent’s existing and future liabilities
that are not so subordinated (other than certain liabilities that are preferred under Bermuda or Irish law),
effectively junior in right of payment to any of our or the Parent’s secured indebtedness to the extent of the
value of the assets securing such indebtedness and to certain liabilities that are preferred under Bermuda or
Irish law; and structurally junior in right of payment to all existing and future indebtedness and other liabilities
(including trade payables) of our and the Parent’s respective subsidiaries. In the event of our or the Parent’s
bankruptcy, liquidation, reorganization or other winding up, our and the Parent’s assets that secure secured
debt will be available to pay obligations on the notes and the guarantee only after all indebtedness under such
secured debt has been repaid in full from such assets. There may not be sufficient assets remaining to pay
amounts due on any or all the notes then outstanding or under the guarantee.
As of June 30, 2014, the Parent and its subsidiaries had total consolidated indebtedness of $1.2 billion,
substantially all of which was secured indebtedness of certain of the Parent’s subsidiaries guaranteed on a
senior secured basis by us, the Parent and most of the Parent’s other subsidiaries and to which the notes would
have been effectively subordinated to the extent of the value of the assets securing the guarantees by us and
the Parent and structurally subordinated to the indebtedness of certain of the Parent’s subsidiaries and the
guarantees provided by the Parent’s other subsidiaries. After giving effect to the issuance of the notes
(assuming no exercise of the initial purchasers’ over-allotment option) and the use of a portion of the net
proceeds therefrom to repay outstanding borrowings under the revolving credit facility provided for under the
amended credit agreement as described in “Use of proceeds,” the total consolidated indebtedness of the Parent
would have been $1.4 billion as of June 30, 2014, of which $899.9 million would have been secured
indebtedness of certain of the Parent’s subsidiaries guaranteed on a senior secured basis by us, the Parent and
most of the Parent’s other subsidiaries, and $500.0 million would have been indebtedness of us guaranteed by
the Parent. See “Description of certain other indebtedness” and “Use of proceeds.”
The guarantee is the Parent’s obligation only and the Parent’s operations are conducted through, and
substantially all of the Parent’s consolidated assets are held by, its subsidiaries.
The Parent is a holding company that conducts all of its operations through its subsidiaries. Accordingly, the
Parent’s ability to pay the cash obligations, if any, that become due under the guarantee will depend on the
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results of operations of its subsidiaries and upon the ability of such subsidiaries to provide the Parent with
cash, whether in the form of dividends, loans or otherwise, to pay amounts due under the guarantee. The
Parent’s subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to
make payments in respect of the guarantee or the notes or to make any funds available for that purpose. In
addition, dividends, loans or other distributions to the Parent from such subsidiaries may be subject to
contractual and other restrictions and are subject to other business considerations. As a result, the Parent may
not be able to pay the cash obligations, if any, that become due under the guarantee.
The guarantee of the notes by the Parent may be voidable, subordinated or limited in scope under laws
governing fraudulent transfers and insolvency or under laws governing corporate authority.
Under U.S. federal and foreign bankruptcy laws and comparable provisions of state and foreign fraudulent
transfer laws, the guarantee of the notes by the Parent could be voided if, among other things, at the time the
Parent issued its guarantee, the Parent:
• intended to hinder, delay or defraud any present or future creditor by making such guarantee;
• received less than reasonably equivalent value or fair consideration for the incurrence of such indebtedness
and:
• was insolvent or rendered insolvent by reason of such incurrence; or
• was engaged in a business or transaction for which its remaining assets constituted unreasonably small
capital; or
• intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature.
The measures of insolvency for purposes of the foregoing considerations will vary depending upon the law
applied in any proceeding with respect to the foregoing. Generally, however, a guarantor in the United States
would be considered insolvent if:
• the sum of its debts, including contingent liabilities, was greater than the saleable value of all of its assets;
• the present fair saleable value of its assets was less than the amount that would be required to pay its
probable liabilities on its existing debts, including contingent liabilities, as they become absolute and mature;
or
• it was generally not paying or could not pay its debts as they become due.
We cannot be certain as to the standards a court would use to determine whether or not the Parent was solvent
at the relevant time. If the guarantee was legally challenged, the guarantee could also be subject to the claim
that, since the guarantee was incurred for our benefit, and only indirectly for the benefit of the Parent, the
obligations of the Parent were incurred for less than reasonably equivalent value or fair consideration. A court
could thus void the obligations under the guarantee, subordinate them to the Parent’s other indebtedness or
take other action detrimental to the holders of the notes.
The guarantee of the notes by the Parent may be subject to review under Irish law in the following
circumstances:
• the Parent, having become the subject of liquidation proceedings within six months (or two years if the
guarantee is given in favor of anyone who is, in relation to the Parent, a connected person) of issuing the
guarantee, is made the subject of an application by the liquidator, on behalf of the Parent, to the Irish courts
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to void the guarantee on the grounds that the issuance of the guarantee constituted a preference over other
creditors at a time when the Parent was insolvent;
• if the Parent were wound up, the Irish courts, on the application of a liquidator or creditor, may, if it can be
shown that the guarantee or any payments made thereunder constituted a fraud on the Parent, order a
return of payments made by the Parent under the guarantee;
• if the guarantee is challenged on the grounds that there was no corporate benefit to the Parent in entering
into the guarantee; or
• the Parent having become insolvent, or deemed likely to become insolvent, is made the subject of court
protection under the examinership procedure (see further below) and the court approves a scheme for the
compromise of debts of the Parent.
Under the laws of Ireland, a guarantee may only be issued where the entity issuing the guarantee receives
sufficient commercial benefit for doing so. If there is insufficient commercial benefit, the beneficiary of the
guarantee may not be able to rely on the authority of the directors of that entity to grant the guarantee and
accordingly a court may set aside the guarantee at the request of the entity’s shareholders or a liquidator. The
board of directors of the Parent has passed a resolution that the entry into the guarantee is in the Parent’s best
interests and for its corporate benefit. However, no assurance can be given that a court would agree with its
conclusion in this regard. In addition, in an insolvency of an Irish company, the claims of certain preferential
creditors (including the Irish Revenue Commissioners for certain unpaid taxes) will rank in priority to claims of
unsecured creditors. If the Parent becomes subject to an insolvency proceeding and the Parent has obligations
to creditors that are treated under Irish law as creditors that are senior relative to the holders of the notes, the
holders of the notes may suffer losses as a result of their subordinated status during such insolvency
proceeding.
If a court voided the guarantee or any payment under the guarantee of the notes as a result of a fraudulent
transfer or held it unenforceable for any other reason, the rights of holders of the notes under the guarantee
would be seriously undermined and such holders could cease to have any claim against the Parent under its
guarantee of the notes. In addition, if the guarantee is voided, we would be required to cash settle any
exchanges of the notes unless a registration statement covering the ordinary shares deliverable upon
exchange, if any, was effective. We may not have sufficient resources to settle any such exchanges in cash since
we are a finance company with very limited assets, revenue and cash flows. See “—We are a finance company
with essentially no assets, operations or cash flows other than those related to the notes, and, as a result,
investors in the notes will be relying primarily on the Parent’s guarantee for satisfaction of the obligations
under the notes.”
The Parent and its subsidiaries operate or are incorporated in jurisdictions other than Ireland and the
United States and may be subject to the insolvency, bankruptcy and corporation laws of such other
jurisdictions. The insolvency, bankruptcy and corporation laws of these jurisdictions may differ materially from
those of Ireland and those of the United States. In addition, there can be no assurance as to how the insolvency,
bankruptcy or corporation laws of the various jurisdictions in which the Parent and its subsidiaries operate will
be applied in relation to one another.
If the Parent is unable to pay its debts, an examiner may be appointed under Irish law to oversee the Parent’s
operations.
If the Parent is unable, or likely to be unable, to pay its debts, an examiner may be appointed to oversee the
Parent’s operations and to facilitate its survival and the whole or any part of its business by formulating
proposals for a compromise or scheme of arrangement. An examiner may be appointed even if the Parent is not
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insolvent. If an examiner has been appointed to the Parent or any of its subsidiaries, the examinership may be
extended to the Parent and any of its related companies, including us, even if we or the Parent are not
ourselves insolvent. There can be no assurance that we would be exempt from an extension of the
examinership.
If an examiner is appointed to the Parent, a protection period, not exceeding 100 days, will be imposed so that the
examiner can formulate and implement his proposals for a compromise or scheme of arrangement. During the
protection period, any enforcement action by a creditor is prohibited. In addition, the Parent would be prohibited
from paying any debts existing at the time of the presentation of the petition to appoint an examiner. The
appointment of an examiner may restrict the ability of the Parent to make timely payments under its guarantee
and holders may be unable to enforce their rights under the guarantee. During the course of examinership,
holders’ rights under the guarantee may be affected by the examiner’s exercise of his powers to, for example,
repudiate a restriction or prohibition on further borrowings or the creation of a security interest.
Further, a scheme of arrangement may be approved involving the writing down of the debt due by the Parent to
the holders of the notes irrespective of their views. In the event that a scheme of arrangement is not approved
and the Parent subsequently goes into liquidation, the examiner’s remuneration and expenses (including
certain borrowings incurred by the examiner on behalf of the Parent and approved by the Irish High Court) and
the claims of certain other creditors referred to above (including the Irish Revenue Commissioners for certain
unpaid taxes) will take priority over the amounts due by the Parent to the holders of the notes.
Furthermore, a court may order that an examiner shall have any of the powers a liquidator appointed by court
would have, which could include the power to apply to have transactions set aside under section 286 of the Irish
Companies Act, 1963 or section 139 of the Irish Companies Act, 1990. We cannot be certain that, in the event of
the Parent becoming insolvent, the guarantee of the notes or any payment by it pursuant to such guarantee will
not be challenged by a liquidator or examiner or that a court would uphold such guarantee or payment.
Servicing our indebtedness and the indebtedness of the Parent and its other subsidiaries requires a significant
amount of cash, and we, the Parent and the Parent’s other subsidiaries may not have sufficient cash flow from
our business to service or repay this indebtedness.
Our ability and the ability of the Parent and its other subsidiaries to make scheduled payments of the principal of,
to pay interest on or to refinance our indebtedness and the indebtedness of the Parent and its other subsidiaries,
including the notes and the guarantee, depends on the Parent’s future performance and the results of operations
of its other subsidiaries, which are subject to economic, financial, competitive, legislative, regulatory and other
factors beyond the Parent’s and its subsidiaries’ control. The Parent’s and its subsidiaries’ business may not
continue to generate cash flow from operations in the future sufficient to service our indebtedness and the
indebtedness of the Parent and its other subsidiaries and make necessary capital expenditures. If the Parent and
its subsidiaries are unable to generate such cash flow, the Parent and its subsidiaries may be required to adopt
one or more alternatives, such as selling assets, restructuring debt, reducing or delaying capital expenditures or
obtaining additional equity capital of the Parent on terms that may be onerous or highly dilutive. The ability to
refinance the indebtedness of the Parent and its subsidiaries will depend on the capital markets and the financial
condition of the Parent and its subsidiaries at such time. The Parent and its subsidiaries may not be able to engage
in any of these activities or engage in these activities on desirable terms, which could result in a default on our
debt obligations or the debt obligations of the Parent and its other subsidiaries.
We are a finance company with essentially no assets, operations, revenues or cash flows other than those
related to the notes, and, as a result, investors in the notes will be relying primarily on the Parent’s guarantee
for satisfaction of the obligations under the notes.
We are a finance subsidiary of the Parent with no assets, operations, revenues or cash flows other than those
related to the issuance, administration and repayment of the notes being offered hereby, an intercompany
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loan expected to be made by us with the net proceeds from the offering, and the guarantee on a senior secured
basis by us of the Parent’s and certain of its subsidiaries’ indebtedness under the amended credit agreement.
As a result, our ability to meet our obligations under the notes is limited and investors in the notes will be
primarily dependent on the Parent’s guarantee and repayment of the intercompany loan expected to be made
by us with the net proceeds from the offering and, thus, the Parent’s future performance and the results of
operations of its consolidated subsidiaries, for satisfaction of our obligations under the notes, including the
payment of principal and interest and upon the repurchase or exchange of the notes.
Recent and future regulatory actions and other events may adversely affect the trading price and liquidity of
the notes.
We expect that many investors in, and potential purchasers of, the notes will employ, or seek to employ, an
exchangeable arbitrage strategy with respect to the notes. Investors would typically implement such a strategy
by selling short the ordinary shares underlying the notes and dynamically adjusting their short position while
they hold the notes. Investors may also implement this type of strategy by entering into swaps on ordinary
shares in lieu of or in addition to short selling ordinary shares.
The SEC and other regulatory and self-regulatory authorities have implemented various rules and taken certain
actions, and may in the future adopt additional rules and take other actions, that may impact those engaging in
short selling activity involving equity securities (including ordinary shares). Such rules and actions include
Rule 201 of SEC Regulation SHO, the adoption by the Financial Industry Regulatory Authority, Inc. and the
national securities exchanges of a “Limit Up-Limit Down” program, the imposition of market-wide circuit
breakers that halt trading of securities for certain periods following specific market declines, and the
implementation of certain regulatory reforms required by the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010. Any governmental or regulatory action that restricts the ability of investors in, or
potential purchasers of, the notes to effect short sales of ordinary shares, borrow ordinary shares or enter into
swaps on ordinary shares could adversely affect the trading price and the liquidity of the notes.
Volatility in the market price and trading volume of ordinary shares could adversely impact the trading price of
the notes.
The stock market in recent years has experienced significant price and volume fluctuations that have often
been unrelated to the operating performance of companies. The market price of ordinary shares could fluctuate
significantly for many reasons, including in response to the risks described in this section and elsewhere in this
offering memorandum, or for reasons unrelated to Jazz Pharmaceuticals’ consolidated operations, such as
reports by industry analysts, investor perceptions or negative announcements by Jazz Pharmaceuticals’
customers, competitors or suppliers regarding their own performance, as well as industry conditions and
general financial, economic and political instability. A decrease in the market price of ordinary shares would
likely adversely impact the trading price of the notes. The market price of ordinary shares could also be
affected by possible sales of ordinary shares by investors who view the notes as a more attractive means of
equity participation in the Parent and by hedging or arbitrage trading activity that we expect to develop
involving ordinary shares. This trading activity could, in turn, affect the trading price of the notes.
Despite the current debt levels of the Parent and its subsidiaries, we, the Parent and the Parent’s other
subsidiaries may incur substantially more debt or take other actions which would intensify the risks discussed
above as well as those incorporated by reference in this offering memorandum relating to the indebtedness of
the Parent and its subsidiaries.
Despite the current consolidated debt levels of the Parent and its subsidiaries, we, the Parent and our and the
Parent’s respective subsidiaries may be able to incur substantial additional debt in the future, including secured
debt, subject to the restrictions contained in the debt instruments of the Parent and its subsidiaries. We and the
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Parent will not be restricted under the terms of the indenture governing the notes from incurring additional
debt, securing existing or future debt, recapitalizing our debt or the debt of the Parent and its other
subsidiaries or taking a number of other actions that are not limited by the terms of the indenture governing
the notes that could have the effect of diminishing our or the Parent’s ability to make payments on the notes
when due. The amended credit agreement limits the Parent’s ability and the ability of its subsidiaries (including
us) to incur additional indebtedness, including secured indebtedness, but if the loans thereunder mature or are
repaid, the Parent and its subsidiaries (including us) may not be subject to such restrictions under the terms of
any subsequent indebtedness.
We may not have the ability to raise the funds necessary to settle exchanges of the notes or to repurchase the
notes upon a fundamental change, the Parent may not have the ability to raise the funds necessary to pay
amounts due under the guarantee, and the future indebtedness of the Parent and its subsidiaries, including us,
may contain limitations on our ability to pay cash upon exchange or repurchase of the notes or the Parent’s
ability to pay amounts due under the guarantee.
Holders of the notes will have the right to require us to repurchase their notes upon the occurrence of a
fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the
notes to be repurchased, plus accrued and unpaid interest, if any, as described under “Description of notes—
Fundamental change permits holders to require us to repurchase notes.” In addition, upon exchange of the
notes, unless we elect to cause to be delivered solely ordinary shares to settle such exchange (other than paying
cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the
notes being exchanged as described under “Description of notes—Exchange rights—Settlement upon exchange.”
However, we and the Parent may not have enough available cash or be able to obtain financing at the time we
are required to make repurchases of notes surrendered therefor or notes being exchanged or at the time the
Parent is required to pay amounts due under the guarantee. In addition, our ability to repurchase the notes or
to pay cash upon exchanges of the notes, and the Parent’s ability to pay amounts due under the guarantee, may
be limited by law, by regulatory authority or by agreements governing the future indebtedness of the Parent
and its subsidiaries, including us. Our failure to repurchase notes at a time when the repurchase is required by
the indenture or to pay any cash payable on future exchanges of the notes as required by the indenture or the
Parent’s failure to pay amounts due under the guarantee would constitute a default under the indenture. A
default under the indenture could also lead to a default under agreements governing the current or future
indebtedness of the Parent and its subsidiaries, including us, whether under the amended credit agreement or
otherwise. If the repayment of the related indebtedness were to be accelerated after any applicable notice or
grace periods, we and the Parent may not have sufficient funds to repay the indebtedness and repurchase the
notes or make cash payments upon exchanges thereof or pay amounts due under the guarantee.
The Parent’s credit ratings may not reflect all risks of your investment in the notes.
The Parent’s credit ratings are an assessment by rating agencies of its ability to pay its debts when due.
Consequently, real or anticipated changes in the Parent’s credit ratings will generally affect the market value of
the notes. These credit ratings may not reflect the potential impact of risks relating to the structure or
marketing of the notes. Agency ratings are not a recommendation to buy, sell or hold any security, and may be
revised or withdrawn at any time by the issuing organization. Each agency’s rating should be evaluated
independently of any other agency’s rating.
The conditional exchange feature of the notes, if triggered, may adversely affect our or the Parent’s financial
condition and operating results.
In the event the conditional exchange feature of the notes is triggered, holders of notes will be entitled to
exchange the notes at any time during specified periods at their option. See “Description of notes—Exchange
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rights.” If one or more holders elect to exchange their notes, unless we elect to satisfy our exchange obligation
by causing to be delivered solely ordinary shares (other than paying cash in lieu of delivering any fractional
share), we would be required to settle a portion or all of our exchange obligation through the payment of cash,
which could adversely affect our and the Parent’s liquidity. In addition, even if holders do not elect to exchange
their notes, we and the Parent could be required under applicable accounting rules to reclassify all or a portion
of the outstanding principal of the notes as a current rather than long-term liability, which would result in a
material reduction of our and the Parent’s net working capital.
The accounting method for exchangeable debt securities that may be settled in cash, such as the notes, is
subject to accounting rules that could have a material effect on Jazz Pharmaceuticals’ reported consolidated
financial results.
Accounting Standards Codification Subtopic 470-20 (ASC 470-20), Debt with Conversion and Other Options,
requires an entity to separately account for the liability and equity components of convertible debt instruments
(such as the notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects
the issuer’s non-convertible debt interest rate. Accordingly, the equity component of the notes is required to be
included in the additional paid-in capital section of shareholders’ equity on Jazz Pharmaceuticals’ consolidated
balance sheet, and the value of the equity component would be treated as original issue discount for purposes
of accounting for the debt component of the notes. As a result, Jazz Pharmaceuticals will be required to
recognize a greater amount of non-cash interest expense in its consolidated income statements in the current
and future periods presented as a result of the amortization of the discounted carrying value of the notes to
their principal amount over the term of the notes. Jazz Pharmaceuticals will report lower net income in its
consolidated financial results because ASC 470-20 will require interest to include both the current period’s
amortization of the original issue discount and the instrument’s non-convertible interest rate. This could
adversely affect Jazz Pharmaceuticals’ reported or future consolidated financial results, the trading price of
ordinary shares and the trading price of the notes.
In addition, under certain circumstances, in calculating earnings per share, convertible debt instruments (such
as the notes) that may be settled entirely or partly in cash are currently accounted for utilizing the treasury
stock method, the effect of which is that the ordinary shares deliverable upon exchange of the notes, if any, are
not included in the calculation of diluted earnings per share except to the extent that the exchange value of the
notes exceeds their principal amount. Under the treasury stock method, diluted earnings per share is calculated
as if the number of ordinary shares that would be necessary to settle such excess, if we elected to settle such
excess in shares, were issued. We cannot be sure that the accounting standards in the future will continue to
permit the use of the treasury stock method. If we are unable to use the treasury stock method in accounting
for the ordinary shares deliverable upon exchange of the notes, if any, then Jazz Pharmaceuticals’ diluted
consolidated earnings per share would be adversely affected.
Holders of notes will not be entitled to any rights with respect to ordinary shares, but they will be subject to all
changes made with respect to them to the extent our exchange obligation includes ordinary shares.
Holders of notes will not be entitled to any rights with respect to ordinary shares (including, without limitation,
voting rights and rights to receive any dividends or other distributions on ordinary shares) prior to the
exchange date relating to such notes (if we have elected to settle the relevant exchange by causing to be
delivered solely ordinary shares (other than paying cash in lieu of delivering any fractional share)) or the last
trading day of the relevant observation period (if we elect to pay and cause to be delivered, as the case may be,
a combination of cash and ordinary shares in respect of the relevant exchange), but holders of notes will be
subject to all changes affecting ordinary shares. Instead, holders will be entitled to rights on such ordinary
shares only from the date on which such holders are deemed to be record holders of such ordinary shares. For
example, if an amendment is proposed to the Parent’s memorandum and articles of association requiring
75
shareholder approval and the record date for determining the shareholders of record entitled to vote on the
amendment occurs prior to the exchange date related to a holder’s exchange of its notes (if we have elected to
settle the relevant exchange by causing to be delivered solely ordinary shares (other than paying cash in lieu of
delivering any fractional share)) or the last trading day of the relevant observation period (if we elect to pay
and cause to be delivered, as the case may be, a combination of cash and ordinary shares in respect of the
relevant exchange), such holder will not be entitled to vote on the amendment, although such holder will
nevertheless be subject to any changes affecting ordinary shares.
The conditional exchange feature of the notes could result in your receiving less than the value of the ordinary
shares into which the notes may otherwise be exchangeable.
Prior to the close of business on the business day immediately preceding February 15, 2021, you may exchange
your notes only if specified conditions are met. If the specific conditions for exchange are not met, you will not
be able to exchange your notes, and you may not be able to receive the value of the cash, the ordinary shares or
a combination of cash and ordinary shares, as applicable, into which the notes would otherwise be
exchangeable.
Upon exchange of the notes, you may receive less valuable consideration than expected because the value of
ordinary shares may decline after you exercise your exchange right but before we settle our exchange
obligation.
Under the notes, an exchanging holder will be exposed to fluctuations in the value of ordinary shares during the
period from the date such holder surrenders notes for exchange until the date we or the Parent settle our
exchange obligation.
Upon exchange of the notes, we will satisfy our exchange obligation by paying or causing to be delivered, as the
case may be, cash, ordinary shares, or a combination of cash and ordinary shares, at our election. If we satisfy
our exchange obligation solely in cash or through payment and delivery, as the case may be, of a combination
of cash and ordinary shares, the amount of cash and ordinary shares, if any, due upon exchange will be
determined by reference to the volume-weighted average price per ordinary share for each trading day in a 30
trading day observation period. As described under “Description of notes—Settlement upon exchange,” this
period would be (i) if the relevant exchange date occurs on or after the date we issue a notice of redemption as
described under “Description of notes—Optional redemption”, but prior to the relevant redemption date, the 30
consecutive trading days beginning on and including the 32nd scheduled trading day (or, if such scheduled
trading day is not a trading day, the immediately following trading day) immediately preceding the redemption
date; (ii) if the relevant exchange date occurs on or after February 15, 2021, the 30 consecutive trading days
beginning on and including the 32nd scheduled trading day (or, if such scheduled trading day is not a trading
day, the immediately following trading day) immediately preceding the maturity date; and (iii) in all other
instances, if the relevant exchange date occurs prior to February 15, 2021, the 30 consecutive trading day
period beginning on and including the third trading day immediately succeeding such exchange date.
Accordingly, if the price of ordinary shares decreases during this period, the amount and/or value of
consideration you receive will be adversely affected. In addition, if the market price of ordinary shares at the
end of such period is below the average volume-weighted average prices of ordinary shares during such period,
the value of any ordinary shares that you will receive in satisfaction of our exchange obligation will be less than
the value used to determine the number of shares that you will receive.
If we elect to satisfy our exchange obligation solely in ordinary shares upon exchange of the notes, we will be
required to cause the Parent to deliver the ordinary shares, together with cash for any fractional share, on the
third business day following the relevant exchange date. Accordingly, if the price of ordinary shares decreases
during this period, the value of any shares that you receive will be adversely affected and would be less than
the exchange value of the notes on the exchange date.
76
The notes are not protected by restrictive covenants.
The indenture governing the notes does not contain any financial or operating covenants or restrictions on the
payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by us, the
Parent or our and the Parent’s respective subsidiaries. The indenture contains no covenants or other provisions
to afford protection to holders of the notes in the event of a fundamental change or other corporate transaction
involving us, the Parent or our and the Parent’s respective subsidiaries except to the extent described under
“Description of notes—Fundamental change permits holders to require us to repurchase notes,” “Description of
notes—Exchange rate adjustments—Adjustment to exchange rate upon exchange upon a make-whole
fundamental change or a redemption” and “Description of notes—Consolidation, merger and sale of assets and
tax residence.”
The increase in the exchange rate for notes exchanged in connection with a make-whole fundamental change or
during a redemption period may not adequately compensate you for any lost value of your notes as a result of
such transaction or redemption.
If a make-whole fundamental change occurs prior to the maturity date or if we call the notes for redemption,
under certain circumstances, we will increase the exchange rate by a number of additional ordinary shares for
notes exchanged in connection with such make-whole fundamental change or redemption. The increase in the
exchange rate will be determined based on the date on which the specified corporate transaction becomes
effective or the date of the redemption notice, as applicable, and the price paid (or deemed to be paid) per
ordinary share in such transaction or upon redemption as described below under “Description of notes—
Exchange rate adjustments—Adjustment to exchange rate upon exchange upon a make-whole fundamental
change or a redemption.” The increase in the exchange rate for notes exchanged in connection with a makewhole fundamental change or redemption may not adequately compensate you for any lost value of your notes
as a result of such transaction or redemption. In addition, if the price per ordinary share in the transaction or
upon redemption is greater than $775.00 or less than $135.44 (in each case, subject to adjustment), no
additional ordinary shares will be added to the exchange rate. Moreover, in no event will the exchange rate per
$1,000 principal amount of notes as a result of this adjustment exceed 7.3833 ordinary shares, subject to
adjustment in the same manner as the exchange rate as set forth under “Description of notes—Exchange
rights—Exchange rate adjustments.”
Our obligation to increase the exchange rate for notes exchanged in connection with a make-whole
fundamental change or upon redemption could be considered a penalty, in which case the enforceability
thereof would be subject to general principles of reasonableness and equitable remedies.
The exchange rate of the notes may not be adjusted for all dilutive events.
The exchange rate of the notes is subject to adjustment for certain events, including, but not limited to, the
issuance of certain share dividends on the ordinary shares, the issuance of certain rights or warrants,
subdivisions, consolidations, distributions of share capital, indebtedness, or assets, cash dividends and certain
self tender or exchange offers by the Parent as described under “Description of notes—Exchange rights—
Exchange rate adjustments.” However, the exchange rate will not be adjusted for other events, such as a thirdparty tender or exchange offer or an issuance of ordinary shares for cash, that may adversely affect the trading
price of the notes or ordinary shares. An event that adversely affects the value of the notes may occur, and that
event may not result in an adjustment to the exchange rate.
Some significant restructuring transactions and significant changes in the composition of the Parent’s board may
not constitute a fundamental change, in which case we would not be obligated to offer to repurchase the notes.
Upon the occurrence of a fundamental change relating to the Parent, you have the right to require us to
repurchase your notes. However, the fundamental change provisions will not afford protection to holders of
77
notes in the event of other transactions that could adversely affect the notes. For example, transactions such as
leveraged recapitalizations, refinancings, restructurings, or acquisitions initiated by us or the Parent may not
constitute a fundamental change requiring us to repurchase the notes. In the event of any such transaction, the
holders would not have the right to require us to repurchase the notes, even though each of these transactions
could increase the amount of indebtedness of the Parent and its subsidiaries, including us, or otherwise
adversely affect our or the Parent’s capital structure or any credit ratings, thereby adversely affecting the
holders of notes.
In addition, significant changes in the composition of the Parent’s board will not give holders the right to
require us to repurchase the notes or any entitlement to an increase in the exchange rate upon exchange unless
they constitute a fundamental change or a make-whole fundamental change as described under “Description of
notes—Fundamental change permits holders to require us to repurchase notes” and “Description of notes—
Exchange rate adjustments—Adjustment to exchange rate upon exchange upon a make-whole fundamental
change or a redemption.”
The fundamental change repurchase feature of the notes may delay or prevent an otherwise beneficial
takeover attempt of the Parent.
The indenture governing the notes will require us to repurchase the notes for cash upon the occurrence of a
fundamental change of the Parent and, in certain circumstances, to increase the exchange rate for a holder that
exchanges its notes in connection with a make-whole fundamental change. A takeover of the Parent may trigger
the requirement that we purchase the notes and/or increase the exchange rate, which could make it more
costly for a potential acquirer to engage in a combinatory transaction with us. Such additional costs may have
the effect of delaying or preventing a takeover of the Parent that would otherwise be beneficial to investors.
Neither we nor the Parent has registered the notes or the ordinary shares deliverable upon exchange of the
notes, if any, which will limit your ability to resell them.
The notes and the ordinary shares deliverable upon exchange of the notes, if any, have not been registered
under the Securities Act or any state securities laws. Unless the notes and the ordinary shares deliverable upon
exchange of the notes, if any, have been registered, the notes and such shares may not be transferred or resold
except in a transaction exempt from or not subject to the registration requirements of the Securities Act and
applicable state securities laws. Neither we nor the Parent intend to file a registration statement for the resale
of the notes and the ordinary shares, if any, into which the notes are exchangeable. See “Description of notes—
No registration rights; additional interest.”
We cannot assure you that an active trading market will develop for the notes.
Prior to this offering, there has been no trading market for the notes, and neither we nor the Parent intend to
apply to list the notes on any securities exchange or to arrange for quotation on any automated dealer
quotation system, except that application will be made to the Irish Stock Exchange for the notes to be admitted
to the Official List and to trade on the GEM and we will use our commercially reasonable efforts to procure the
listing of the notes on the GEM operated by and under the supervision of the Irish Stock Exchange prior to the
first interest payment date. We have been informed by the initial purchasers that they intend to make a market
in the notes after the offering is completed. However, the initial purchasers may cease their market-making at
any time without notice. In addition, the liquidity of the trading market in the notes, and the market price
quoted for the notes, may be adversely affected by changes in the overall market for this type of security, by
any credit ratings assigned to the notes or by any downgrade or withdrawal of such credit ratings or the credit
ratings of the Parent, by changes in Jazz Pharmaceuticals’ financial performance or prospects or in the
prospects for companies in Jazz Pharmaceuticals’ industry generally and by changes in the interest rate
environment. As a result, we cannot assure you that an active trading market will develop for the notes. If an
78
active trading market does not develop or is not maintained, the market price and liquidity of the notes may be
adversely affected. In that case you may not be able to sell your notes at a particular time or you may not be
able to sell your notes at a favorable price.
Any adverse rating of the notes may cause their trading price to fall.
Neither we nor the Parent intend to seek a rating on the notes. However, if a rating service were to rate the
notes and if such rating service were to lower its rating on the notes below the rating initially assigned to the
notes or otherwise announces its intention to put the notes on credit watch, the trading price of the notes could
decline.
You may be subject to tax if we make or fail to make certain adjustments to the exchange rate of the notes even
though you do not receive a corresponding cash distribution.
The exchange rate of the notes is subject to adjustment in certain circumstances, including the payment of cash
dividends. If the exchange rate is adjusted as a result of a distribution that is taxable to the holders of ordinary
shares, such as a cash dividend, you will be deemed to have received a dividend subject to U.S. federal income
tax without the receipt of any cash. In addition, a failure to adjust (or to adjust adequately) the exchange rate
after an event that increases your proportionate interest in the Parent could be treated as a deemed taxable
dividend to you. If a make-whole fundamental change occurs or if we elect to redeem the notes, under some
circumstances, we will increase the exchange rate for notes exchanged in connection with the make-whole
fundamental change or redemption, as the case may be. Such increase may also be treated as a distribution
subject to U.S. federal income tax as a dividend. See “Certain material U.S. federal income tax considerations.”
Risks related to ordinary shares
The market price of ordinary shares has been volatile and may continue to be volatile in the future. This
volatility may affect the price at which you could sell the ordinary shares you receive upon exchange of your
notes, if any.
The market price for ordinary shares has varied between a high of $176.60 on February 25, 2014 and a low of
$69.00 on July 2, 2013 in the twelve-month period ended June 30, 2014. This volatility may affect the price at
which you could sell ordinary shares, if any, you receive upon exchange of your notes. The market price of
ordinary shares is likely to continue to be volatile and subject to significant price and volume fluctuations in
response to market, industry and other factors, including the risk factors described above. The market price of
ordinary shares may also be dependent upon the valuations and recommendations of the analysts who cover
Jazz Pharmaceuticals’ consolidated business. If the results of Jazz Pharmaceuticals’ consolidated business do
not meet these analysts’ forecasts, the expectations of investors or the financial guidance the Parent provides
to investors in any period, the market price of ordinary shares could decline. In the past, following periods of
volatility in the market or significant price decline, securities class-action litigation has often been instituted
against companies. Such litigation, if instituted against us and/or the Parent, could result in substantial costs
and diversion of management’s attention and resources, which could materially and adversely affect Jazz
Pharmaceuticals’ consolidated business, financial condition, results of operations and growth prospects. In
addition, the market price of ordinary shares may decline if the effects of the Gentium Acquisition on the
consolidated financial results of Jazz Pharmaceuticals are not consistent with the expectations of financial
analysts or investors.
Future sales of ordinary shares in the public market could cause the share price to fall and adversely affect the
value of your notes.
Sales of a substantial number of ordinary shares in the public market, or the perception that these sales might
occur, could depress the market price of ordinary shares and could impair the Parent’s ability to raise capital
79
through the sale of additional equity or equity-related securities. As of June 30, 2014, the Parent had
59,589,459 ordinary shares in issue and outstanding, all of which shares are eligible for sale in the public
market, subject in some cases to the volume limitations and manner of sale and other requirements under
Rule 144.
In addition, the Parent has in the past and may in the future grant rights to some of its shareholders that
require the Parent to register the resale of ordinary shares on behalf of these shareholders and/or facilitate
offerings of ordinary shares held by these shareholders, including in connection with potential future
acquisitions of additional products, product candidates, or companies. For example, consistent with the
Parent’s obligations under existing registration rights agreements, the Parent entered into underwriting
agreements with certain underwriters and selling shareholders pursuant to which selling shareholders sold an
aggregate of approximately 13 million ordinary shares in two separate registered public offerings in March 2012
and in March 2013. If potential future holders of registration rights, by exercising their registration rights or
otherwise, sell a large number of shares, the sale could adversely affect the market price of ordinary shares.
The Parent has also filed registration statements to register the sale of ordinary shares reserved for issuance
under its equity incentive and employee stock purchase plans, and intends to file additional registration
statements to register any shares automatically added each year to the share reserves under these plans.
Irish law differs from the laws in effect in the United States and may afford less protection to holders of
ordinary shares.
It may not be possible to enforce court judgments obtained in the United States against the Parent in Ireland
based on the civil liability provisions of the U.S. federal or state securities laws. In addition, there is some
uncertainty as to whether the courts of Ireland would recognize or enforce judgments of U.S. courts obtained
against the Parent or its directors or officers based on the civil liabilities provisions of the U.S. federal or state
securities laws or hear actions against the Parent or those persons based on those laws. The Parent has been
advised that the United States currently does not have a treaty with Ireland providing for the reciprocal
recognition and enforcement of judgments in civil and commercial matters. Therefore, a final judgment for the
payment of money rendered by any U.S. federal or state court based on civil liability, whether or not based
solely on U.S. federal or state securities laws, would not automatically be enforceable in Ireland.
As an Irish company, the Parent is governed by the Companies Acts, which differ in some material respects
from laws generally applicable to U.S. corporations and shareholders, including, among others, differences
relating to interested director and officer transactions and shareholder lawsuits. Likewise, the duties of
directors and officers of an Irish company generally are owed to the company only. Shareholders of Irish
companies generally do not have a personal right of action against directors or officers of the company and
may exercise such rights of action on behalf of the company only in limited circumstances. Accordingly, holders
of ordinary shares may have more difficulty protecting their interests than would holders of securities of a
corporation incorporated in a jurisdiction of the United States.
Provisions of the Parent’s articles of association and Irish law could delay or prevent a takeover of the Parent
by a third party.
The Parent’s articles of association could delay, defer or prevent a third party from acquiring it, despite the
possible benefit to its shareholders, or otherwise adversely affect the price of ordinary shares. For example, the
Parent’s articles of association:
• impose advance notice requirements for shareholder proposals and nominations of directors to be
considered at shareholder meetings;
• stagger the terms of its board of directors into three classes;
80
• require the approval of a supermajority of the voting power of the shares of its share capital entitled to vote
generally at a meeting of shareholders to amend or repeal its articles of association; and
• permit its board of directors to issue one or more series of preferred shares with rights and preferences, as
the Parent’s shareholders may determine by ordinary resolution.
In addition, several mandatory provisions of Irish law could prevent or delay an acquisition of the Parent. For
example, Irish law does not permit shareholders of an Irish public limited company to take action by written
consent with less than unanimous consent. The Parent is also subject to various provisions of Irish law relating
to mandatory bids, voluntary bids, requirements to make a cash offer and minimum price requirements, as well
as substantial acquisition rules and rules requiring the disclosure of interests in its shares in certain
circumstances.
These provisions may discourage potential takeover attempts, discourage bids for ordinary shares at a
premium over the market price or adversely affect the market price of, and the voting and other rights of the
holders of, ordinary shares. These provisions could also discourage proxy contests and make it more difficult
for you and other shareholders to elect directors other than the candidates nominated by the Parent’s board.
The Parent has never declared or paid dividends on its share capital and it does not anticipate paying dividends
in the foreseeable future.
Other than funds the Parent has allocated for the purposes of supporting its share repurchase program
announced in May 2013, the Parent anticipates that it will retain all earnings, if any, to support Jazz
Pharmaceuticals’ consolidated operations and proprietary drug development programs, acquire or in-license
additional products and product candidates, and pursue other opportunities. If the Parent proposes to pay
dividends in the future, it must do so in accordance with Irish law, which provides that distributions including
dividend payments, share repurchases and redemptions be funded from “distributable reserves.” See
“Description of share capital—Dividends”. In addition, the Parent’s ability to pay cash dividends on or
repurchase ordinary shares is restricted under the terms of the amended credit agreement. Any future
determination as to the payment of dividends will, subject to Irish legal requirements, be at the sole discretion
of the Parent’s board of directors and will depend on Jazz Pharmaceuticals’ consolidated financial condition,
results of operations, capital requirements, compliance with the terms of the amended credit agreement or
other future borrowing arrangements, and other factors the Parent’s board of directors deems relevant.
Accordingly, holders of ordinary shares must rely on increases in the trading price of their shares for returns on
their investment in the foreseeable future.
A transfer of ordinary shares may be subject to Irish stamp duty.
In certain circumstances, the transfer of shares in an Irish incorporated company will be subject to Irish stamp
duty, which is a legal obligation of the buyer. This duty is currently charged at the rate of 1.0% of the price paid
or the market value of the shares acquired, if higher. Because ordinary shares are traded on a recognized stock
exchange in the United States, an exemption from this stamp duty is available to transfers by shareholders who
hold ordinary shares beneficially through brokers which in turn hold those shares through the Depository Trust
Company, or DTC, to holders who also hold through DTC. However, a transfer by or to a record holder who holds
ordinary shares directly in his, her or its own name could be subject to this stamp duty. The Parent, in its
absolute discretion and insofar as the Companies Acts or any other applicable law permit, may, or may provide
that a subsidiary of the Parent will, pay Irish stamp duty arising on a transfer of ordinary shares on behalf of
the transferee of such ordinary shares. If stamp duty resulting from the transfer of ordinary shares which would
otherwise be payable by the transferee is paid by the Parent or any of its subsidiaries on behalf of the
transferee, then in those circumstances, the Parent will, on its behalf or on behalf of its subsidiary (as the case
may be), be entitled to (i) seek reimbursement of the stamp duty from the transferee, (ii) set-off the stamp duty
81
against any dividends payable to the transferee of those ordinary shares and (iii) claim a first and permanent
lien on the ordinary shares on which stamp duty has been paid by the Parent or its subsidiary for the amount of
stamp duty paid. The Parent’s lien shall extend to all dividends paid on those ordinary shares.
Dividends paid by the Parent may be subject to Irish dividend withholding tax.
In certain circumstances, as an Irish tax resident company, the Parent will be required to deduct Irish dividend
withholding tax (currently at the rate of 20%) from dividends paid to the Parent’s shareholders. Shareholders
that are resident in the United States, EU countries (other than Ireland) or other countries with which Ireland
has signed a tax treaty (whether the treaty has been ratified or not) generally should not be subject to Irish
withholding tax so long as the shareholder has provided its broker, for onward transmission to the Parent’s
qualifying intermediary or other designated agent (in the case of shares held beneficially), or the Parent or its
transfer agent (in the case of shares held directly), with all the necessary documentation by the appropriate due
date prior to payment of the dividend. However, some shareholders may be subject to withholding tax, which
could adversely affect the price of ordinary shares and the value of the notes.
The Parent’s auditor, like other independent registered public accounting firms operating in Ireland and a
number of other European countries, is not currently permitted to be subject to inspection by the U.S. Public
Company Accounting Oversight Board, or the PCAOB, and as such, investors currently do not have the benefits
of PCAOB oversight.
As an auditor of companies that are publicly-traded in the United States and as a firm registered with the
PCAOB, the Parent’s independent registered public accounting firm is required by the laws of the United States
to undergo regular inspections by the PCAOB to assess its compliance with the laws of the United States and the
professional standards of the PCAOB. However, because the Parent’s auditor is located in Ireland, a jurisdiction
where the PCAOB is currently unable to conduct inspections, the Parent’s auditor is not currently inspected by
the PCAOB. Inspections of other auditors conducted by the PCAOB outside of Ireland have at times identified
deficiencies in those auditor’s audit procedures and quality control procedures, which may be addressed as part
of the inspection process to improve future audit quality. The lack of PCAOB inspections in Ireland prevents the
PCAOB from regularly evaluating the Parent’s auditor’s audits and its quality control procedures. In addition,
the inability of the PCAOB to conduct auditor inspections in Ireland makes it more difficult to evaluate the
effectiveness of the Parent’s auditor’s audit procedures or quality control procedures as compared to auditors
located outside of Ireland that are subject to regular PCAOB inspections. As a result, investors in the Parent are
deprived of the benefits of PCAOB inspections, and may lose confidence in Jazz Pharmaceuticals’ reported
consolidated financial information and procedures and the quality of Jazz Pharmaceuticals’ consolidated
financial statements.
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Use of proceeds
We estimate that the net proceeds we will receive from the sale of the notes offered hereby will be
approximately $485.9 million (or $559.0 million if the initial purchasers exercise their over-allotment option in
full), after deducting the initial purchasers’ discount and estimated offering expenses payable by us.
Jazz Pharmaceuticals intends to use a portion of the net proceeds from this offering to repay outstanding
borrowings under the revolving credit facility provided for under the amended credit agreement and to use the
remainder of the net proceeds for general corporate purposes, including potential business development
activities.
As of June 30, 2014, Jazz Pharmaceuticals had borrowed $300.0 million under the revolving credit facility and
the interest rate on these borrowings at that date was 2.65%. Jazz Pharmaceuticals used the proceeds from
borrowings under the revolving credit facility to partially finance the Gentium Acquisition. See “Description of
certain other indebtedness” for more information on the amended credit agreement and the revolving credit
facility provided for thereunder. Any borrowings under the revolving credit facility repaid with a portion of the
net proceeds from this offering may be reborrowed in the future. Affiliates of each of the initial purchasers are
lenders under the amended credit agreement, and therefore such affiliates will receive a portion of the
proceeds from this offering.
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Capitalization
The following table sets forth Jazz Pharmaceuticals’ cash and cash equivalents and consolidated capitalization
as of June 30, 2014:
• on an actual basis; and
• on an as adjusted basis to give effect to (i) the sale of the notes offered hereby, after deducting the initial
purchasers’ discount and estimated offering expenses payable by us, and (ii) the application of a portion of
the net proceeds therefrom to repay outstanding borrowings under the revolving credit facility provided for
under the amended credit agreement as set forth under “Use of proceeds.”
The following information should be read in conjunction with the consolidated financial statements and related
notes incorporated by reference in this offering memorandum. For more details on how you can obtain the
documents incorporated by reference in this offering memorandum, see “Where you can find more
information” and “Incorporation of certain information by reference.” The following table assumes that the
initial purchasers’ over-allotment option in this offering has not been exercised.
As of June 30, 2014
Actual
As Adjusted
(unaudited)
(In thousands, except share and per share data)
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 268,255
Long-term debt, including current portion:
1.875% exchangeable senior notes due 2021(2) . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term debt(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Total long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ equity:
Jazz Pharmaceuticals plc shareholders’ equity
Ordinary shares, nominal value $0.0001 per share, 300,000,000 shares
authorized; 59,589,459 shares issued and outstanding, actual and as
adjusted(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-voting Euro deferred shares, nominal value €0.01 per share, 4,000,000
shares authorized; 4,000,000 shares issued and outstanding, actual and
as adjusted(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital redemption reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 454,155(1)
— $ 500,000
1,196,433
896,433
1,196,433
1,396,433
6
6
55
471
1,273,159
59,946
(53,946)
55
471
1,273,159
59,946
(53,946)
Total Jazz Pharmaceuticals plc shareholders’ equity . . . . . . . . . . . . . . . . . .
Noncontrolling interests(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,279,691
396
1,279,691
396
Total equity(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,280,087
1,280,087
.........................................
$2,476,520
$2,676,520
Total
capitalization(2)
(1) Does not reflect the use of cash to fund the initial upfront payment of $75.0 million that Jazz Pharmaceuticals made to Sigma-Tau
Pharmaceuticals, Inc., or Sigma-Tau, on August 4, 2014 upon the closing of the transactions contemplated by the assignment agreement, dated
July 1, 2014, among the Parent, Jazz Pharmaceuticals International II Limited and Sigma-Tau, pursuant to which Jazz Pharmaceuticals acquired
certain rights to market defibrotide in North America, Central America and South America, and certain other assets related to defibrotide.
(2) In accordance with ASC 470-20, convertible debt instruments that may be settled entirely or partially in cash upon conversion (including the
notes offered hereby) are required to be separated into a liability and an equity component, such that interest expense reflects the issuer’s non-
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convertible debt interest rate. Upon issuance, the original issue discount will be recognized as a decrease in debt and an increase in equity. The
debt component will accrete up to the principal amount over the expected term of the debt. Such accounting guidance does not affect the actual
amount that we are required to repay. The amount shown in the table above for the notes offered hereby is the aggregate principal amount of
the notes, without reflecting the original issue discount or fees and expenses that the Parent is required to recognize or the increase in paid-in
capital on Jazz Pharmaceuticals’ consolidated balance sheet, which will increase total equity and total capitalization.
(3) Other long-term debt consists primarily of term loan obligations and revolving credit facility borrowings under the amended credit agreement.
See “Description of certain other indebtedness” and “Use of proceeds.”
(4) Ordinary shares shown as issued and outstanding in the table above is based on 59,589,459 ordinary shares issued and outstanding as of
June 30, 2014 and excludes ordinary shares reserved for delivery upon exchange of the notes offered hereby, and also excludes, as of June 30,
2014: (i) 4,240,139 ordinary shares issuable upon the exercise of outstanding options, having a weighted average exercise price of $66.57 per
share; (ii) 1,294,351 ordinary shares issuable upon the vesting of outstanding restricted stock units; (iii) 597,837 ordinary shares issuable upon
the exercise of an outstanding warrant, having an exercise price of $7.37 per share, which warrant was subsequently exercised in full;
(iv) 36,869 ordinary shares credited to individual non-employee director stock accounts under the Parent’s amended and restated Director
Deferred Compensation Plan (“DDCP”); and (v) an aggregate of up to 7,293,659 ordinary shares reserved for future issuance under the Parent’s
equity incentive and employee stock purchase plans, and reserved under the DDCP.
(5) The issued and outstanding 4,000,000 non-voting Euro deferred shares of €0.01 each are held by nominees and were issued to satisfy the
statutory minimum Euro-denominated share capital required for a public limited company incorporated in Ireland. The non-voting Euro
deferred shares have no right to receive dividends, no rights to attend and vote at the Parent’s general meetings, are redeemable only at the
Parent’s option and have no substantive right to participate in a distribution of assets upon a winding up of the Parent.
(6) Represents the interests held by the minority shareholders of Gentium.
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Price range of ordinary shares
Ordinary shares began trading on The NASDAQ Global Select Market under the trading symbol “JAZZ” on
January 18, 2012. From June 1, 2007 until January 17, 2012, the common stock of JPI was traded on The NASDAQ
Global Select Market (or The NASDAQ Global Market prior to January 3, 2012) also under the trading symbol
“JAZZ.” The following table sets forth the high and low intraday sales prices of ordinary shares (and for the
period prior to January 18, 2012, the common stock of JPI) on The NASDAQ Global Select Market (or The
NASDAQ Global Market prior to January 3, 2012) for the periods indicated.
High
Low
Fiscal Year ended December 31, 2012
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 53.10
54.50
58.94
60.00
$ 37.90
40.38
43.38
47.37
Fiscal Year ended December 31, 2013
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 60.79
72.00
93.84
128.49
$ 53.52
50.76
69.00
80.40
Fiscal Year ending December 31, 2014
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter (through August 7, 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$176.60 $123.55
156.34
120.38
166.29
133.00
The last reported sale price of ordinary shares on The NASDAQ Global Select Market on August 7, 2014 was
$135.44 per share. As of August 1, 2014, there were two holders of record of ordinary shares. Because
substantially all ordinary shares are held by brokers, nominees and other institutions on behalf of shareholders,
neither we nor the Parent is able to estimate the total number of shareholders represented by these record
holders.
Dividend policy
We, the Parent and the Parent’s other subsidiaries have never declared or paid any cash dividends and do not
presently plan to pay cash dividends in the foreseeable future. Under Irish law, dividends may only be paid, and
share repurchases and redemptions must generally be funded, only out of “distributable reserves.” In addition,
the terms of the amended credit agreement restrict the Parent’s ability to make certain restricted payments,
including dividends and other distributions by the Parent in respect of ordinary shares, subject to a general
exception for dividends and other restricted payments up to $30 million and, so long as there is no default or
event of default under the amended credit agreement, another exception that is capped at $100 million plus a
formula-based amount tied to the Parent’s consolidated net income if Parent’s total leverage ratio (as defined
in the amended credit agreement) exceeds 2:1 after giving pro forma effect to the dividend or distribution. See
“Description of certain other indebtedness” for more information on the Parent’s amended credit agreement.
Any future determination as to the payment of dividends will, subject to Irish legal requirements, be at the sole
discretion of the Parent’s board of directors and will depend on Jazz Pharmaceuticals’ consolidated financial
condition, results of operations, capital requirements, compliance with the terms of the amended credit
agreement or other future borrowing arrangements, and other factors the Parent’s board of directors deems
relevant.
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Ratio of earnings to fixed charges
The table below sets forth Jazz Pharmaceuticals’ consolidated ratio of earnings to fixed charges on a historical
basis for the periods indicated. For the purposes of calculating the ratio of earnings to fixed charges, earnings
consist of pretax income (loss) from continuing operations plus fixed charges. Fixed charges consist of interest
expense, amortization of deferred financing costs, accretion of debt discount and a portion of rental expense
deemed to be representative of interest.
2009
Ratio (deficiency) of earnings to fixed charges . . . . . . . .
(*)
Year ended December 31,
2010 2011 2012 2013
3.5
54.8
10.5
Six months ended
June 30, 2014
11.4
(*) For the fiscal year ended December 31, 2009 and the six months ended June 30, 2014, the Parent’s earnings were insufficient to cover fixed
charges by $6.8 million and $13.7 million, respectively.
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(*)
Description of notes
We will issue the notes under an indenture, which we refer to as the indenture, dated as of August 13, 2014,
among us, Jazz Pharmaceuticals plc, as guarantor, and U.S. Bank National Association, as trustee, which we
refer to as the trustee. The terms of the notes include those expressly set forth in the indenture.
You may request a copy of the indenture from us as described under “Where you can find more information.”
The following description is a summary of the material provisions of the notes and the indenture and does not
purport to be complete. This summary is subject to and is qualified by reference to all of the provisions of the
notes and the indenture, including the definitions of certain terms used in the indenture. We urge you to read
these documents because they, and not this description, define your rights as a holder of the notes.
For purposes of this description, references to “we,” “our” and “us” refer only to Jazz Investments I Limited and not
to its parent company Jazz Pharmaceuticals plc or any of Jazz Pharmaceuticals plc’s other subsidiaries, the “Parent”
or “Guarantor” refers only to Jazz Pharmaceuticals plc and not to any of its subsidiaries and, unless the context
requires otherwise, the words “ordinary share” and “ordinary shares” refer only to ordinary shares of the Parent.
General
The notes will:
• be our senior unsecured obligations;
• initially be limited to an aggregate principal amount of $500.0 million (or $575.0 million if the initial
purchasers exercise their over-allotment option in full);
• bear cash interest from August 13, 2014 at an annual rate of 1.875% payable on February 15 and August 15 of
each year, beginning on February 15, 2015;
• be subject to redemption at our option prior to August 15, 2021, in whole but not in part, in connection with
certain tax-related events as described under “—Optional Redemption—Optional redemption for changes in
the tax laws of a relevant taxing jurisdiction.”
• be subject to redemption at our option on or after August 20, 2018, in whole or in part, if the last reported
sale price of ordinary shares has been at least 130% of the exchange price then in effect for at least
20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and
including, the trading day immediately preceding the date on which we provide written notice of redemption
at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and
unpaid interest to, but excluding, the redemption date.
• be subject to repurchase by us at the option of the holders following a fundamental change (as defined below
under “—Fundamental change permits holders to require us to repurchase notes”), at a repurchase price
equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to,
but excluding, the fundamental change repurchase date;
• mature on August 15, 2021 unless earlier exchanged, repurchased or redeemed;
• be issued in denominations of $200,000 and integral multiples of $1,000 in excess thereof;
• be represented by one or more registered notes in global form, but in certain limited circumstances may be
represented by notes in definitive form. See “Book-entry, settlement and clearance”; and
• be fully and unconditionally guaranteed on a senior unsecured basis by the Parent.
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Subject to the satisfaction of certain conditions and during the periods described below, the notes may be
exchanged at an initial exchange rate of 5.0057 ordinary shares per $1,000 principal amount of notes
(equivalent to an initial exchange price of approximately $199.77 per ordinary share). The exchange rate is
subject to adjustment if certain events occur.
We will settle exchanges of notes by paying or causing the delivery of, as the case may be, cash, ordinary shares
or a combination of cash and ordinary shares, at our election, as described under “—Exchange rights—
Settlement upon exchange.” You will not receive any separate cash payment for interest, if any, accrued and
unpaid to the exchange date except under the limited circumstances described below.
The indenture does not limit the amount of debt that may be issued by us, the Parent or any of the Parent’s
other subsidiaries under the indenture or otherwise. The indenture does not contain any financial covenants
and does not restrict us or the Parent from paying dividends or issuing or repurchasing our or its other
securities. Other than the restrictions described under “—Consolidation, merger, amalgamation and sale of
assets” below and except for the provisions set forth under “—Fundamental change permits holders to require
us to repurchase notes” and “—Exchange rate adjustments—Adjustment to exchange rate upon exchange upon a
make-whole fundamental change or a redemption,” the indenture does not contain any covenants or other
provisions designed to afford holders of the notes protection in the event of a highly leveraged transaction
involving us or the Parent or in the event of a decline in our or the Parent’s credit rating as the result of a
takeover, recapitalization, highly leveraged transaction or similar restructuring involving us or the Parent that
could adversely affect such holders. See “Risk factors—Risks related to the notes—Some significant
restructuring transactions and significant changes in the composition of the Parent’s board may not constitute
a fundamental change, in which case we would not be obligated to offer to repurchase the notes.”
We may, without the consent of the holders, issue additional notes under the indenture with the same terms
and with the same CUSIP numbers as the notes offered hereby (other than differences in the issue price and the
date from which interest will accrue) in an unlimited aggregate principal amount; provided that if any such
additional notes are not fungible with the notes offered hereby for U.S. federal income tax purposes or for
securities laws purposes, the additional notes will have one or more separate CUSIP numbers. We and the
Parent may also from time to time repurchase notes in open market purchases or negotiated transactions
without giving prior notice to holders. Any notes repurchased by us or the Parent will be retired and no longer
outstanding under the indenture.
The notes will not have the benefit of a sinking fund.
We will use our commercially reasonable efforts to procure the listing of the notes on the Global Exchange
Market operated by and under the supervision of the Irish Stock Exchange (or on another recognized stock
exchange for the purposes of Section 64 of the Taxes Consolidation Act 1997 of Ireland) prior to the first
interest payment date.
Except to the extent the context otherwise requires, we use the term “notes” in this offering memorandum to
refer to each $1,000 principal amount of notes. References in this offering memorandum to a “holder” or
“holders” of notes that are held through The Depository Trust Company (“DTC”) are references to the owners of
beneficial interests in such notes, unless the context otherwise requires. However, we and the trustee will treat
the person in whose name the notes are registered (Cede & Co., in the case of notes held through DTC) as the
owner of such notes for all purposes.
Payments on the notes; paying agent and registrar; transfer and exchange
We will pay or cause to be paid through the paying agent the principal of and interest on notes in global form
registered in the name of or held by DTC or its nominee in immediately available funds to DTC or its nominee, as
the case may be, as the registered holder of such global note.
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We will pay the principal of any certificated notes at the office or agency designated by us for that purpose. We
have initially designated the office of the trustee as our paying agent and registrar as a place where notes may
be presented for payment or for registration of transfer. We may, however, change the paying agent or
registrar without prior notice to the holders of the notes, and we may act as paying agent or registrar. We will
maintain a paying agent and registrar in a jurisdiction that is not obliged to withhold or deduct tax pursuant to
the European Union Directive 2003/48/EC or any other directive implementing the conclusions of the ECOFIN
Council meeting of 26 and 27 November 2000 on the taxation of savings income, or any law implementing, or
complying with or introduced in order to conform to, such directive. Interest on certificated notes will be
payable (i) to holders holding certificated notes having an aggregate principal amount of $2,000,000 or less, by
check mailed to the holders of these notes and (ii) to holders holding certificated notes having an aggregate
principal amount of more than $2,000,000, either by check mailed to each holder or, upon written application
by a holder to the registrar not later than the relevant record date, by wire transfer in immediately available
funds to that holder’s account within the United States, which application will remain in effect until the holder
notifies, in writing, the registrar to the contrary. A holder of certificated notes may transfer or exchange such
notes at the office of the registrar in accordance with the indenture. The registrar and the trustee may require a
holder, among other things, to furnish appropriate endorsements and transfer documents. The transfer or
exchange of a beneficial interest in a note in global form may be effectuated in accordance with the indenture
and the applicable procedures of the depositary. See “—Book-entry, settlement and clearance.” No service
charge will be imposed by us, the trustee or the registrar for any registration of transfer or exchange of notes,
but we may require a holder to pay a sum sufficient to cover any transfer tax or other similar governmental
charge required by law or permitted by the indenture. We are not required to transfer or exchange any note
surrendered for exchange, redemption or required repurchase. You may not sell or otherwise transfer notes or
any of the ordinary shares deliverable upon exchange of notes except in compliance with the provisions set
forth in this offering memorandum under “Notice to investors” and “Transfer restrictions.”
The registered holder of a note will be treated as the owner of it for all purposes.
Interest
The notes will bear cash interest at a rate of 1.875% per year until maturity. Interest on the notes will accrue
from the most recent date on which interest has been paid or duly provided for or, if no interest has been paid
or duly provided for, from August 13, 2014. Interest will be payable semiannually in arrears on February 15 and
August 15 of each year, beginning February 15, 2015.
Interest will be paid to the person in whose name a note is registered at the close of business on the February 1
or August 1, as the case may be, immediately preceding the relevant interest payment date. Interest on the
notes will be computed on the basis of a 360-day year composed of twelve 30-day months. If any interest
payment date, the maturity date, any fundamental change repurchase date or redemption date falls on a day
that is not a business day, the required payment will be made on the next succeeding business day and no
interest on such payment will accrue in respect of the delay. The term “business day” means any day other than
a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law
or executive order to close or be closed.
Unless the context requires otherwise, all references to interest in this offering memorandum include additional
interest, if any, payable as described under “—No registration rights; additional interest” and/or payable at our
election as the sole remedy relating to the failure to comply with the reporting obligations as described under
“—Events of default.”
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Additional amounts
All payments and deliveries made by or on behalf of us or the Parent, or any successor to us or the Parent
under or with respect to the notes, including, but not limited to, payments of principal (including the
fundamental change repurchase price and redemption price, if applicable), premium, if any, payments of
interest and payments of cash and/or deliveries of ordinary shares (together with payments of cash for any
fractional ordinary shares) upon exchange and any payments under the guarantee described under
“—Guarantee,” will be made without withholding or deduction for, or on account of, any present or future taxes,
duties, assessments or governmental charges of whatever nature imposed or levied (including any penalties
and interest related thereto) (“applicable taxes”) by or within (1) Ireland (meaning Ireland exclusive of Northern
Ireland) or Bermuda (or any political subdivision or taxing authority thereof or therein), (2) any jurisdiction in
which we are or the Parent or any of our or its successors is, for tax purposes, incorporated, organized or
resident, or as a result of activities carried on by us, the Parent or any successor, has otherwise created a
taxable presence (or any political subdivision or taxing authority thereof or therein) or (3) any jurisdiction
through which payment is made or deemed made (or any political subdivision or taxing authority thereof or
therein) (each jurisdiction described in (1), (2) or (3), as applicable, a “relevant taxing jurisdiction”), unless such
withholding or deduction is required by law or by the interpretation or administration thereof. In the event that
any such withholding or deduction is so required, we or the Parent, as appropriate, will pay to the holder of
each note such additional amounts (the “additional amounts”) as may be necessary to ensure that the net
amount received by the beneficial owner after such withholding or deduction (and after deducting any
applicable taxes on the additional amounts) will equal the amounts that would have been received by such
beneficial owner had no such withholding or deduction been required; provided that no additional amounts will
be payable:
(1) for or on account of:
(a) any applicable taxes that would not have been imposed but for:
(i)
the existence of any present or former connection between the relevant holder or beneficial
owner of such note and the relevant taxing jurisdiction (other than merely acquiring or holding
such note or the receipt of payments or the exercise or enforcement of rights under the notes or
the guarantee) including, without limitation, such holder or beneficial owner being or having
been a national, domiciliary or resident of, or incorporated in, such relevant taxing jurisdiction or
treated as a resident thereof or being or having been physically present or engaged in a trade or
business therein or having or having had a permanent establishment therein;
(ii) the presentation of such note (in cases in which presentation is required) more than 30 days
after the later of the date on which the payment of the principal of (including the fundamental
change repurchase price and redemption price, if applicable), premium, if any, and interest on,
or payments of cash and/or deliveries of ordinary shares upon exchange of, such note became
due and payable pursuant to the terms thereof or was made or duly provided for (except to the
extent that the holder or beneficial owner would have been entitled to additional amounts had
the note been presented on the last day of such 30-day period); or
(iii) the failure of the holder or beneficial owner to provide a declaration of non-residence or other
similar claim for exemption or to present any applicable form or certificate, in each case, within
a reasonable period of time following a timely and reasonable written request from us; provided
that the holder or beneficial owner is legally entitled to provide such declaration, claim form or
certificate and that upon the making of such declaration or claim or presentation of such form or
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certificate, the holder or beneficial owner would have been able to avoid such deduction or
withholding;
(b) any estate, inheritance, gift, sale, transfer, personal property or similar applicable taxes;
(c) any applicable taxes that are payable otherwise than by withholding or deduction from payments
under or with respect to the notes;
(d) any tax imposed on a payment to an individual and required to be made pursuant to European Council
Directive 2003/48/EC on the taxation of savings income or any law implementing or complying with,
or introduced in order to conform to, such directive;
(e) any taxes payable by or on behalf of a holder who would have been able to avoid such withholding or
deduction by presenting the notes or request for payment under the guarantee to another paying
agent designated by us pursuant to the indenture; and
(f)
any combination of applicable taxes referred to in the preceding clauses (a), (b), (c), (d) and (e), and
(2) with respect to any payment of the principal of (including the fundamental change repurchase price and
redemption price, if applicable), premium, if any, and interest on, or payments of cash and/or deliveries of
ordinary shares upon exchange of, such note to a holder, if the holder is a fiduciary, partnership or person
other than the sole beneficial owner of that payment, to the extent that such payment would be required
under the laws of the relevant taxing jurisdiction to be included for tax purposes in the income of a
beneficiary or settlor with respect to the fiduciary, a member of that partnership or a beneficial owner who
would not have been entitled to such additional amounts had that beneficiary, settlor, partner or beneficial
owner been the holder thereof.
In addition to the foregoing, we will also pay and indemnify the holder for any present or future stamp, issue,
registration, value added, court or documentary taxes, or any other excise or property taxes, charges or similar
levies or taxes (including penalties, interest and any other reasonable expenses related thereto) which are
levied by any relevant taxing jurisdiction (“transfer taxes”) on the execution, delivery, registration or
enforcement of any of the notes, the indenture or any other document or instrument referred to therein or the
receipt of payments with respect thereto. For the avoidance of doubt, the indemnification provided in this
paragraph shall not include any transfer taxes arising from the transfer of notes in the ordinary course.
If we become or the Parent becomes after the date of this offering memorandum obligated to pay additional
amounts with respect to any payment under or with respect to the notes, we will deliver to the trustee on a date
that is at least 30 days prior to the date of that payment (unless the obligation to pay additional amounts arises
after the 30th day prior to that payment date, in which case we will notify the trustee promptly thereafter) an
officer’s certificate stating the fact that additional amounts will be payable and the amount estimated to be so
payable. The officer’s certificate must also set forth any other information reasonably necessary to enable the
paying agent or the exchange agent, as the case may be, to pay additional amounts to holders on the relevant
payment date. The trustee shall be entitled to rely solely on such officer’s certificate as conclusive proof that
such payments are necessary. We will provide the trustee with documentation reasonably satisfactory to the
trustee evidencing the payment of additional amounts.
We or the Parent, as appropriate, will make all withholdings and deductions required by law and will remit the
full amount deducted or withheld to the relevant tax authority in accordance with applicable law. Upon request,
we will provide to the trustee an official receipt or, if official receipts are not obtainable, other documentation
reasonably satisfactory to the trustee evidencing the payment of any applicable taxes so deducted or withheld.
We will attach to each certified copy or other document a certificate stating the amount of such applicable taxes
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paid per $1,000 principal amount of the notes then outstanding. Upon written request, copies of those receipts
or other documentation, as the case may be, will be made available by the trustee to the holders of the notes.
Whenever there is mentioned in any context the payment of cash and/or the delivery of ordinary shares
(together with payments of cash for any fractional ordinary shares) upon exchange of the notes or the payment
of principal of (including the fundamental change repurchase price and redemption price, if applicable), and
any premium or interest on, any note or any other amount payable with respect to such note, such mention
shall be deemed to include payment of additional amounts provided for in the indenture to the extent that, in
such context, additional amounts are, were or would be payable in respect thereof.
Optional redemption
No “sinking fund” is provided for the notes and, except as described below in connection with a fundamental
change, we are not required to redeem or repurchase the notes. Other than as described in this section, the
notes may not be redeemed by us at our option.
Optional redemption for changes in the tax laws of a relevant taxing jurisdiction
Prior to August 15, 2021, if we have, or on the next interest payment date would, become obligated to pay to the
holder of any note additional amounts as a result of any change or amendment on or after the date of this
offering memorandum in the laws or any rules or regulations of a relevant taxing jurisdiction or any change on
or after the date of this offering memorandum in an interpretation, administration or application of such laws,
rules or regulations by any legislative body, court, governmental agency, taxing authority or regulatory or
administrative authority of such relevant taxing jurisdiction (including the enactment of any legislation and the
formal announcement or publication of any judicial decision or regulatory or administrative interpretation or
determination) (a “change in tax law”), we may at our option redeem for cash all but not part of the notes
(except in respect of certain holders that elect otherwise as described below) at a redemption price equal to
100% of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date,
including, for the avoidance of doubt, any additional amounts with respect to such redemption price, accrued
and unpaid interest; provided that we may only redeem the notes if (x) we cannot avoid these obligations by
taking commercially reasonable measures available to us and (y) we deliver to the trustee an opinion of outside
legal counsel of recognized standing in the relevant taxing jurisdiction attesting to such change in tax law and
obligation to pay additional amounts (which opinion, for the avoidance of doubt, shall not be required to
include an opinion as to whether “commercially reasonable efforts” could be undertaken to avoid the otherwise
applicable obligations). If the redemption date occurs after a regular record date and on or prior to the
corresponding interest payment date, we will pay the full amount of accrued and unpaid interest and any
additional amounts with respect to such interest, due on such interest payment date to the record holder of the
notes on the regular record date corresponding to such interest payment date, and the redemption price
payable to the holder who presents a note for redemption will be equal to 100% of the principal amount of such
note, including, for the avoidance of doubt, any additional amounts with respect to such redemption price.
Notwithstanding anything to the contrary herein, (i) we may not redeem the notes in the case that additional
amounts are, or as a result of a change in tax law would be, payable in respect of Irish withholding tax if no
additional amounts would be payable if the notes were listed on a recognized stock exchange for Irish tax
purposes on the next interest payment date and (ii) no notice of redemption shall be given earlier than 90 days
prior to the earliest date on which we would, but for such redemption, be obligated to make payments of
additional amounts and at the time any such redemption notice is given, such obligation to pay such additional
amounts must remain in effect.
Upon receiving such notice of redemption, each holder will have the right to elect to not have its notes
redeemed, in which case we will not be obligated to pay any additional amounts on any payment with respect to
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such notes solely as a result of such change in tax law that resulted in the obligation to pay such additional
amounts (whether upon exchange, required repurchase in connection with a fundamental change, maturity or
otherwise, and whether in cash, ordinary shares, reference property or otherwise) after the redemption date
(or, if we fail to pay the redemption price on the redemption date, such later date on which we pay the
redemption price), and all future payments with respect to such notes will be subject to the deduction or
withholding of such relevant taxing jurisdiction taxes required by law to be deducted or withheld as a result of
such change in tax law; provided that, notwithstanding the foregoing, if a holder electing not to have its notes
redeemed exchanges its notes in connection with our election to redeem the notes in respect of such change in
tax law as described under “—Exchange rate adjustments—Adjustment to exchange rate upon exchange in
connection with a make-whole fundamental change or a redemption” we will be obligated to pay additional
amounts, if any, with respect to such exchange.
A holder electing to not have its notes redeemed must deliver to the paying agent a written notice of such
election so as to be received by the paying agent prior to the close of business on the second scheduled trading
day immediately preceding the redemption date; provided that, a holder that complies with the requirements
for exchange described under “—Exchange rights—Exchange procedures” will be deemed to have delivered a
notice of its election to not have its notes so redeemed. A holder may withdraw any notice of election (other
than such a deemed notice of election) by delivering to the paying agent a written notice of withdrawal prior to
the close of business on the second scheduled trading day immediately preceding the redemption date (or, if we
fail to pay the redemption price on the redemption date, such later date on which we pay the redemption price).
If no election is made or deemed to have been made, the holder will have its notes redeemed without any
further action.
Provisional redemption on or after August 20, 2018
On or after August 20, 2018, we may redeem for cash all or a portion of the notes if the last reported sale price
of ordinary shares has been at least 130% of the exchange price then in effect for at least 20 trading days
(whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading
day immediately preceding the date on which we provide written notice of redemption. The redemption price
will be equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to,
but not including, the redemption date; provided that if the redemption date occurs after a regular record date
and on or prior to the corresponding interest payment date, we will pay the full amount of accrued and unpaid
interest due on such interest payment date to the record holder of the notes on the regular record date
corresponding to such interest payment date, and the redemption price payable to the holder who presents a
note for redemption will be equal to 100% of the principal amount of such note.
Redemption procedures
We will give written notice of redemption not less than 50 nor more than 60 calendar days before the
redemption date to the trustee, the paying agent and each holder of notes. As long as the notes are held
through DTC, such notice may be made by electronic transmission to DTC, as registered holder. Simultaneously
with providing such notice, we will publish a notice containing this information on the Parent’s website or
through such other public medium as we may use at that time and will file the announcement with the Irish
Stock Exchange as long as the notes are so listed.
No notes may be redeemed if the principal amount of the notes has been accelerated, and such acceleration has
not been rescinded, on or prior to the redemption date (except in the case of an acceleration resulting from a
default by us in the payment of the redemption price with respect to such notes).
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If we decide to redeem fewer than all of the outstanding notes, the trustee will select the notes to be redeemed
(in principal amounts of $200,000 or integral multiples of $1,000 in excess thereof) by lot, or on a pro rata
basis, in all cases in accordance with DTC’s applicable procedures.
If a portion of your notes are selected for partial redemption and you exchange a portion of your notes, the
exchanged portion will be deemed to be from the portion selected for redemption. In the event of any
redemption, we will not be required to:
• issue, register the transfer of or exchange any notes during the 15 calendar day period prior to the date on
which a notice of redemption is deemed to have been given to all holders of notes to be redeemed; or
• register the transfer of or exchange any notes so selected for redemption, in whole or in part, except the
unredeemed portion of any notes being redeemed in part.
Ranking
The notes will be our senior unsecured obligations and will rank:
• senior in right of payment to all of our future indebtedness that is expressly subordinated in right of payment
to the notes;
• equally in right of payment with all of our existing and future liabilities that are not so subordinated (other
than certain liabilities that are preferred under Bermuda or Irish law);
• effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the
assets securing such indebtedness and to certain liabilities that are preferred under Bermuda or Irish law;
and
• structurally junior in right of payment to all existing and future indebtedness and other liabilities (including
trade payables) of our subsidiaries, if any.
We have guaranteed on a secured basis all of the obligations of the Parent and certain of its subsidiaries under
the amended credit agreement and the notes will rank junior to our guarantee of those obligations to the extent
of the value of the assets securing such guarantee. See “Description of certain other indebtedness.” In the event
of our bankruptcy, liquidation, reorganization or other winding up, our assets that secure secured debt will be
available to pay obligations on the notes only after all indebtedness under such secured debt has been repaid in
full from such assets. We advise you that there may not be sufficient assets remaining to pay amounts due on
any or all the notes then outstanding. After giving effect to the issuance of the notes (assuming no exercise of
the initial purchasers’ over-allotment option) and the use of a portion of the net proceeds therefrom to repay
outstanding borrowings under the revolving credit facility provided for under the amended credit agreement as
described in “Use of proceeds,” our total indebtedness (including our guarantee of obligations under the
amended credit facility) would have been $1.4 billion as of June 30, 2014, of which $899.9 million was secured
indebtedness of certain of the Parent’s subsidiaries guaranteed on a senior secured basis by us, the Parent and
most of the Parent’s other subsidiaries. See “Description of certain other indebtedness.”
We may not be able to pay the cash portions of any settlement amount upon exchange of the notes, or to pay
cash for the fundamental change repurchase price if a holder requires us to repurchase notes as described
below. See “Risk factors—Risks related to the notes—The notes and the guarantee are effectively junior to any of
our and the Parent’s secured indebtedness to the extent of the value of the assets securing such debt and
structurally junior to all existing and future indebtedness and other liabilities of our and the Parent’s respective
subsidiaries and if a default occurs, we and the Parent may not have sufficient funds to fulfill our obligations
under the notes and the guarantee.”
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We are a finance subsidiary of the Parent with no assets, operations, revenues or cash flows other than those
that will be related to the issuance, administration and repayment of the notes, the guarantee on a secured
basis by us of the Parent’s and Jazz Pharmaceuticals Inc.’s indebtedness under the amended credit agreement,
the maintenance of our existence and an intercompany loan expected to be made by us from the proceeds of
the offering. See “Risk factors—Risks related to the notes—We are a finance company with no operating history
and essentially no assets, operations, revenues or cash flows other than those related to the notes and, as a
result, investors in the notes will be relying primarily on the Parent’s guarantee for satisfaction of the
obligations under the notes.”
Guarantee
The notes and our obligations under the indenture will be fully and unconditionally guaranteed, on a senior
unsecured basis, by the Parent. The guarantee will rank:
• senior in right of payment to all of the Parent’s future indebtedness that is expressly subordinated in right of
payment to the guarantee;
• equally in right of payment with all of the Parent’s existing and future liabilities that are not so subordinated
(other than certain liabilities that are preferred under Irish law);
• effectively junior in right of payment to any of the Parent’s secured indebtedness to the extent of the value of
the assets securing such indebtedness and to certain liabilities that are preferred under Irish law; and
• structurally junior in right of payment to all existing and future indebtedness and other liabilities of the
Parent’s other subsidiaries.
As of June 30, 2014, the Parent and its subsidiaries had total consolidated indebtedness of $1.2 billion,
substantially all of which was secured indebtedness of certain of the Parent’s subsidiaries guaranteed on a
senior secured basis by us, the Parent and most of the Parent’s other subsidiaries to which the notes would
have been effectively subordinated to the extent of the value of assets securing the guarantees by us and the
Parent and structurally subordinated to the indebtedness of Jazz Pharmaceuticals Inc. and the guarantees
provided by the Parent’s other subsidiaries. After giving effect to the issuance of the notes (assuming no
exercise of the initial purchasers’ over-allotment option) and the use of a portion of the net proceeds therefrom
to repay outstanding borrowings under the revolving credit facility provided for under the amended credit
agreement as described in “Use of proceeds,” the total consolidated indebtedness of the Parent would have
been $1.4 billion as of June 30, 2014, of which $899.9 million was secured indebtedness of certain of the
Parent’s subsidiaries guaranteed on a senior secured basis by the Parent, us and most of the Parent’s other
subsidiaries. See “Description of certain other indebtedness” and “Use of Proceeds.” In the event of the
Parent’s bankruptcy, liquidation, reorganization or other winding up, the Parent’s assets that secure secured
debt will be available to pay unsecured obligations, including the obligations on the guarantee, only after all
indebtedness under such secured debt has been repaid in full from such assets. We advise you that there may
not be sufficient assets of the Parent remaining to pay amounts due under the guarantee. See “Risk factors—
Risks related to the notes—The notes and the guarantee are effectively junior to any of our and the Parent’s
secured indebtedness to the extent of the value of the assets securing such debt and structurally junior to all
existing and future indebtedness and other liabilities of our and the Parent’s respective subsidiaries and if a
default occurs, we and the Parent may not have sufficient funds to fulfill our obligations under the notes and
the guarantee.” In addition, the obligations of the Parent under its guarantee may be limited by applicable law.
See “Risk factors—Risks related to the notes—The guarantee of the notes by the Parent may be voidable,
subordinated or limited in scope under laws governing fraudulent transfers and insolvency or under laws
governing corporate authority.”
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The Parent is a holding company that conducts all of its operations through its subsidiaries. Accordingly, the
Parent’s ability to pay the cash obligations, if any, that become due under the guarantee will depend on the
results of operations of its subsidiaries and upon the ability of such subsidiaries to provide the Parent with
cash, whether in the form of dividends, loans or otherwise, to pay amounts due under the guarantee. The
Parent’s subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to
make payments in respect of the guarantee or the notes or to make any funds available for that purpose. In
addition, dividends, loans or other distributions to the Parent from such subsidiaries may be subject to
contractual and other restrictions and are subject to other business considerations. As a result, the Parent may
not be able to pay the cash obligations, if any, that become due under the guarantee. See “Risk factors—Risks
related to the notes—The guarantee is the Parent’s obligation only and the Parent’s operations are conducted
through, and substantially all of the Parent’s consolidated assets are held by, its subsidiaries.”
Exchange rights
General
Prior to the close of business on the business day immediately preceding February 15, 2021 the notes will be
exchangeable only upon satisfaction of one or more of the conditions described under the headings “—Exchange
upon satisfaction of sale price condition,” “—Exchange upon satisfaction of trading price condition,”
“—Exchange upon specified distributions and corporate events” and “—Exchange upon notice of redemption.”
On or after February 15, 2021, holders may exchange each of their notes at the applicable exchange rate at any
time prior to the close of business on the second scheduled trading day immediately preceding the maturity
date irrespective of the foregoing conditions.
The exchange rate will initially be 5.0057 ordinary shares per $1,000 principal amount of notes (equivalent to
an initial exchange price of approximately $199.77 per ordinary share). Upon exchange of a note, we will satisfy
our exchange obligation by paying or causing to be delivered, as the case may be, cash, ordinary shares or a
combination of cash and ordinary shares, at our election, all as set forth below under “—Settlement upon
exchange.” If we satisfy, or cause to be satisfied, as applicable, our exchange obligation solely in cash or
through payment and delivery, as the case may be, of a combination of cash and ordinary shares, the amount of
cash and ordinary shares, if any, due upon exchange will be based on a daily exchange value (as defined below)
for each trading day in the applicable 30 trading day observation period (as defined below under “—Settlement
upon exchange”). The trustee will initially act as the exchange agent. The exchange rate and the equivalent
exchange price in effect at any given time are referred to as the “applicable exchange rate” and the “applicable
exchange price,” respectively, and will be subject to adjustment as described below.
A holder may exchange less than the entire principal amount of its notes so long as the principal amount of
such holder’s notes not exchanged equals $200,000 or an integral multiple of $1,000 in excess thereof. If a
holder has submitted notes for repurchase upon a fundamental change, the holder may exchange those notes
only if that holder first withdraws its repurchase notice.
If we call notes for redemption, a holder of notes may exchange all or any portion of its notes only until the
close of business on the second scheduled trading day immediately preceding the redemption date unless we
fail to pay the redemption price (in which case a holder of notes may exchange such notes until the redemption
price has been paid or duly provided for).
Upon exchange, you will not receive any separate cash payment or additional ordinary shares for accrued and
unpaid interest, if any, except as described below. Neither we nor the Parent will deliver fractional ordinary
shares upon exchange of notes. Instead, we will pay cash in lieu of any fractional ordinary shares as described
under “—Settlement upon exchange.” Our payment or the delivery by the Parent, as the case may be, to you of
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the cash, ordinary shares or a combination of cash and ordinary shares, as the case may be, together with any
cash payment for any fractional ordinary shares, into which a note is exchangeable, will be deemed to satisfy in
full our obligation to make payments in respect of the note, Except in the circumstances described below,
accrued and unpaid interest, if any, on the note to, but not including, the exchange date will be deemed to be
cancelled, extinguished and forfeited.
Notwithstanding the preceding paragraph, if notes are exchanged after 5:00 p.m., New York City time, on a
record date for the payment of interest, but prior to 9:00 a.m., New York City time, on the interest payment
date corresponding to such record date, holders of such notes at 5:00 p.m., New York City time, on such record
date will receive the interest payable on such notes on the corresponding interest payment date
notwithstanding the exchange. Notes surrendered for exchange during the period from 5:00 p.m., New York
City time, on any record date to 9:00 a.m., New York City time, on the corresponding interest payment date
must be accompanied by funds equal to the amount of interest payable on the notes so exchanged; provided
that no such payment need be made:
• for exchanges following the record date immediately preceding the maturity date;
• if we have specified a redemption date that is after a record date and on or prior to the second scheduled
trading day immediately following the corresponding interest payment date;
• if we have specified a fundamental change repurchase date that is after a record date and on or prior to the
second scheduled trading day immediately following the corresponding interest payment date; or
• to the extent of any overdue interest, if any overdue interest exists at the time of exchange with respect to
such note.
Therefore, for the avoidance of doubt, all record holders on the regular record date immediately preceding the
redemption date (if notes are called for redemption) or the maturity date will receive the full interest payment
due on the redemption date or the maturity date, as applicable, regardless of whether their notes have been
exchanged following such regular record date.
If a holder exchanges notes, we will pay any documentary, stamp or similar issue or transfer tax due on the
issue of any ordinary shares upon the exchange, unless the tax is due because the holder requests any ordinary
shares to be issued in a name other than the holder’s name, in which case the holder will pay that tax.
Holders may surrender their notes for exchange under the following circumstances:
Exchange upon satisfaction of sale price condition
Prior to the close of business on the business day immediately preceding February 15, 2021, a holder may
surrender all or any portion of its notes for exchange during any calendar quarter commencing after the
calendar quarter ending on December 31, 2014 (and only during such calendar quarter), if the last reported sale
price of ordinary shares for at least 20 trading days (whether or not consecutive) during the period of
30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is
greater than or equal to 130% of the applicable exchange price on each applicable trading day.
The “last reported sale price” of ordinary shares (or any other security for which a last reported sale price must
be determined) on any trading day means the closing sale price per ordinary share (or such other security, as
the case may be) (or if no closing sale price is reported, the average of the bid and ask prices or, if more than
one in either case, the average of the average bid and the average ask prices) on that date as reported in
composite transactions for the principal U.S. securities exchange on which ordinary shares (or such other
security as the case may be) are listed. If ordinary shares (or such other security, as the case may be) are not
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listed for trading on a U.S. national or regional securities exchange on the relevant date, the “last reported sale
price” of ordinary shares (or such other security, as the case may be) will be the last quoted bid price for
ordinary shares (or such other security, as the case may be) in the over-the-counter market on the relevant
date as reported by The OTC Markets Group Inc. or a similar organization. If ordinary shares (or such other
security, as the case may be) are not so quoted, the “last reported sale price” will be the average of the midpoint of the last bid and ask prices for ordinary shares (or such other security, as the case may be) on the
relevant date from each of at least three nationally recognized independent investment banking firms selected
by us for this purpose, which may include one or more of the initial purchasers. On and after the occurrence of
a reorganization event, the last reported sale price of a unit of reference property will be determined in
accordance with the above “last reported sale price” definition or, if it cannot be so determined, then, it will be
determined by our board of directors (or a committee thereof) in a commercially reasonably manner and in
accordance with the procedures described in the indenture and/or any applicable supplemental indenture.
“Trading day” means a scheduled trading day on which (i) trading in ordinary shares (or such other security, as
the case may be) generally occurs on The NASDAQ Global Select Market or, if ordinary shares (or such other
security, as the case may be) are not then listed on The NASDAQ Global Select Market, on the principal other
U.S. national or regional securities exchange on which ordinary shares (or such other security, as the case may
be) are then listed or, if ordinary shares (or such other security, as the case may be) are not then listed on a
U.S. national or regional securities exchange, on the principal other market on which ordinary shares (or such
other security, as the case may be) are then traded, and (ii) there is no market disruption event. If ordinary
shares (or such other security, as the case may be) are not so listed or traded, “trading day” means a “business
day.”
“Market disruption event” means, if ordinary shares (or such other security, as the case may be) are listed for
trading on The NASDAQ Global Select Market or listed on another U.S. national or regional securities exchange,
the occurrence or existence during the one-half hour period ending on the scheduled close of trading on any
trading day of any material suspension or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by the securities exchange or otherwise) in ordinary shares (or such other security,
as the case may be) or in any options contracts or futures contracts relating to ordinary shares (or such other
security, as the case may be).
Exchange upon satisfaction of trading price condition
Prior to the close of business on the business day immediately preceding February 15, 2021, a holder of notes
may surrender all or any portion of its notes for exchange during the five business day period after any five
consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal
amount of notes, as determined following a request by a holder of notes in accordance with the procedures
described below, for each trading day of the measurement period was less than 98% of the product of the last
reported sale price of ordinary shares and the applicable exchange rate on such trading day.
The “trading price” of the notes on any date of determination means the average of the secondary market bid
quotations obtained by the bid solicitation agent for $5.0 million principal amount of notes at approximately
3:30 p.m., New York City time, on such determination date from three independent nationally recognized
securities dealers we select, which may include one or more of the initial purchasers; provided that if three such
bids cannot reasonably be obtained by the bid solicitation agent but two such bids are obtained, then the
average of the two bids shall be used, and if only one such bid can reasonably be obtained by the bid
solicitation agent, that one bid shall be used. If the bid solicitation agent cannot reasonably obtain at least one
bid for $5.0 million principal amount of notes from a nationally recognized securities dealer selected by us,
then the trading price per $1,000 principal amount of notes will be deemed to be less than 98% of the product
of the last reported sale price of ordinary shares and the applicable exchange rate. If (x) we are not acting as
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bid solicitation agent, and we do not, when required, instruct the bid solicitation agent to obtain bids, or if we
give such instruction to the bid solicitation agent, and the bid solicitation agent fails to solicit bids, or (y) we are
acting as bid solicitation agent and we fail to solicit bids when required, then, in either case, the trading price
per $1,000 principal amount of the notes will be deemed to be less than 98% of the product of the last reported
sale price of ordinary shares and the applicable exchange rate on each trading day of such failure.
The bid solicitation agent (if other than us) shall have no obligation to determine the trading price of the notes
unless we have requested such determination. We shall have no obligation to make such a request (or, if we are
acting as bid solicitation agent, we shall have no obligation to determine the trading price of the notes) unless a
holder (or beneficial holder) of a note of at least $2.0 million principal amount provides us with reasonable
evidence that the trading price per $1,000 principal amount of notes would be less than 98% of the product of
the last reported sale price of ordinary shares and the applicable exchange rate and requests that the bid
solicitation agent determine the trading price of the notes. At such time, we shall instruct the bid solicitation
agent (if other than us) to solicit, or if we are acting as bid solicitation agent, we shall solicit, the secondary
market bid quotations in order for us to determine the trading price per $1,000 principal amount of the notes
beginning on the next trading day and on each successive trading day until the trading price per $1,000
principal amount of notes is greater than or equal to 98% of the product of the last reported sale price of
ordinary shares and the applicable exchange rate. If the trading price condition has been met, we will so notify
the holders and the trustee in writing. At any time after the trading price condition has been met, we will notify
the holders, the exchange agent (if other than the trustee), and the trustee in writing on the first trading day on
which the trading price per $1,000 principal amount of notes is greater than or equal to 98% of the product of
the last reported sale price of ordinary shares and the exchange rate (if other than the trustee) on such trading
day. The bid solicitation agent (if other than us), the exchange agent and the trustee shall have no obligation to
determine the trading price of the notes.
The trustee will initially act as the bid solicitation agent. However, we may appoint another person (including us
or any of our affiliates) as the bid solicitation agent without prior notice to the holders.
Exchange upon specified distributions and corporate events
Certain distributions
If, prior to the close of business on the business day immediately preceding February 15, 2021, the Parent elects
to:
• issue to all or substantially all holders of ordinary shares rights, options or warrants entitling them for a
period of not more than 45 calendar days after the issue date of such issuance to subscribe for or purchase
ordinary shares, at a price per ordinary share less than the average of the last reported sale prices of
ordinary shares over the 10 consecutive trading-day period ending on the trading day immediately preceding
the declaration date for such issuance; or
• distribute to all or substantially all holders of ordinary shares the Parent’s assets, debt securities or rights to
purchase securities of the Parent, which distribution has a per ordinary share value, as reasonably
determined by the Parent’s board of directors (or a committee thereof), exceeding 10% of the last reported
sale price of ordinary shares on the trading day preceding the declaration date for such distribution,
then, in either case, we must notify in writing the holders of the notes and the exchange agent at least 35
scheduled trading days prior to the ex-dividend date for such issuance or distribution. Once we have given such
notice, holders may surrender their notes for exchange at any time until the earlier of 5:00 p.m., New York City
time, on the business day immediately preceding the ex-dividend date and the Parent’s announcement that
such issuance or distribution will not take place.
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Certain corporate events
If a transaction or event that constitutes a “fundamental change” (as defined under “—Fundamental change
permits holders to require us to repurchase notes”) or a “make-whole fundamental change” (as defined under
“—Exchange rate adjustments—Adjustment to exchange rate upon exchange upon a make-whole fundamental
change or a redemption”) occurs prior to the close of business on the business day immediately preceding
February 15, 2021, regardless of whether a holder has the right to require us to repurchase the notes as
described under “—Fundamental change permits holders to require us to repurchase notes,” all or any portion
of a holder’s notes may be surrendered for exchange at any time from or after the effective date of such
“fundamental change” or “make-whole fundamental change” until the second scheduled trading day preceding
the fundamental change repurchase date corresponding to such fundamental change, or in the case of a makewhole fundamental change that is not also a fundamental change, until the 35th trading day following the
effective date of such make-whole fundamental change.
If the Parent is a party to a consolidation, merger, binding share exchange or scheme of arrangement pursuant
to which ordinary shares would be exchanged into cash, securities or other assets or a sale, lease or other
transfer of the consolidated assets of the Parent and its subsidiaries, substantially as an entirety, to another
person (other than to one or more of its direct or indirect wholly owned subsidiaries) prior to the close of
business on the business day immediately preceding February 15, 2021, all or any portion of a holder’s notes
may be surrendered for exchange at any time from or after the effective date of such transaction and ending on
the 35th business day after the effective date of such transaction. We will notify holders, the trustee and the
exchange agent (if other than the trustee) as promptly as practicable following the date the Parent publicly
announces such transaction, but in no event later than the business day immediately following the effective
date of such transaction.
Exchange upon notice of redemption
If we provide a notice of redemption as described under “—Optional redemption,” holders may exchange all or
any portion of their notes at any time prior to the close of business on the second scheduled trading day
preceding the redemption date. After that time, a holder’s right to exchange its notes called for redemption will
expire unless we default in the payment of the redemption price, in which case a holder of notes may exchange
its notes called for redemption until the redemption price is paid or duly provided for. In addition, in the case of
a redemption, a holder may be entitled to receive an increase in the exchange rate in the form of additional
shares upon any exchange made in connection with our election to redeem the notes as described below under
“—Exchange rate adjustments—Adjustment to exchange rate upon exchange upon a make-whole fundamental
change or a redemption.”
Exchange on or after February 15, 2021
On or after February 15, 2021, a holder may exchange all or any portion of its notes at any time prior to the
close of business on the second scheduled trading day immediately preceding the maturity date regardless of
the foregoing conditions.
Exchange procedures
If you hold a beneficial interest in a global note, to exchange you must comply with DTC’s procedures for
exchanging a beneficial interest in a global note and, if required, pay funds equal to interest payable on the
next interest payment date to which you are not entitled and, if required, pay all taxes or duties, if any.
If you hold a certificated note, to exchange you must:
• complete and manually sign the exchange notice on the back of the note, or a facsimile of the exchange
notice;
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• deliver the exchange notice, which is irrevocable, and the note to the exchange agent;
• if required, furnish appropriate endorsements and transfer documents;
• if required, pay all transfer or similar taxes; and
• if required, pay funds equal to interest payable on the next interest payment date to which you are not
entitled.
We refer to the date you comply with the relevant procedures for exchange described above and any other
procedures for exchange set forth in the indenture as the “exchange date.”
If a holder has already delivered a repurchase notice as described under “—Fundamental change permits
holders to require us to repurchase notes,” the holder may not surrender that note for exchange until the
holder has withdrawn the repurchase notice in accordance with the indenture. If we have designated a
redemption date as described under “—Optional redemption,” a holder that complies with the requirements for
exchange described above will be deemed to have delivered a notice of its election to not have its notes so
redeemed.
Settlement upon exchange
Upon exchange, we may choose to pay or cause to be delivered, as the case may be, either cash (“cash
settlement”), ordinary shares (“physical settlement”) or a combination of cash and ordinary shares
(“combination settlement”), as described below. We refer to each of these settlement methods as a “settlement
method.”
We will settle all exchanges occurring on or after February 15, 2021 and all exchanges occurring after our
issuance of a notice of redemption and prior to the close of business on the second scheduled trading day
preceding the related redemption date using the same settlement method. Prior to February 15, 2021, we will
use the same settlement method for all exchanges occurring on the same exchange date. Except as described
above, however, we will not have any obligation to use the same settlement method with respect to exchanges
that occur on different business days. That is, we may choose on one business day to settle exchanges in
physical settlement, and choose on another business day cash settlement or combination settlement.
If we elect a settlement method, we will inform holders so exchanging through the trustee of such settlement
method (and, if we elect combination settlement, the specified dollar amount (as defined below) we have
selected) no later than the close of business on the second scheduled trading day immediately following the
related exchange date (or in the case of any exchanges occurring (i) on or after February 15, 2021, no later than
the close of business on the business day immediately preceding February 15, 2021, by written notice to the
trustee and through a press release containing the relevant information and by making such information
available on the Parent’s website or through such other public medium as we may use at that time and by filing
the announcement with the Irish Stock Exchange as long as the notes are so listed, or (ii) after the date of
issuance of a notice of redemption and prior to the close of business on the second scheduled trading day
preceding the related redemption date, in such notice of redemption). If we do not timely elect a settlement
method, we will not have the right to elect cash settlement or physical settlement with respect to such
exchanged notes and we will be deemed to have elected combination settlement in respect of our exchange
obligation, as described below, and the specified dollar amount will be deemed to be equal to $1,000. If we
elect combination settlement, but we do not timely notify exchanging holders of the specified dollar amount per
$1,000 principal amount of notes, such specified dollar amount will be deemed to be $1,000. It is our current
intent and policy to settle exchanges through combination settlement with a specified dollar amount of $1,000.
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Prior to February 15, 2021, we will have the right to irrevocably elect combination settlement with a specified
dollar amount equal to $1,000 by delivering written notice to all holders of the notes, the trustee and the
conversion agent and issuing a press release containing the relevant information and make such information
available on the Parent’s website or through such other public medium as we may use at that time and by filing
the announcement with the Irish Stock Exchange as long as the notes are so listed. Following such irrevocable
election, we will not have the right to change the settlement method.
Except as provided under “—Exchange rate adjustments,” settlement amounts will be computed as follows:
• if we elect physical settlement, we will cause to be delivered to the exchanging holder a number of ordinary
shares equal to the product of (1) the aggregate principal amount of notes to be exchanged, divided by
$1,000 and (2) the applicable exchange rate;
• if we elect cash settlement, we will pay to the exchanging holder in respect of each $1,000 principal amount
of notes being exchanged, cash in an amount equal to the sum of the daily exchange values for each of the
30 consecutive trading days during the applicable observation period; and
• if we elect (or are deemed to have elected) combination settlement, we will pay or cause to be delivered, as
the case may be, to the exchanging holder in respect of each $1,000 principal amount of notes being
exchanged, a “settlement amount” equal to the sum of the daily settlement amounts for each of the
30 consecutive trading days during the applicable observation period.
The “daily settlement amount,” for any of the 30 consecutive trading days during an observation period, shall
consist of:
• cash equal to the lesser of (i) the dollar amount per $1,000 principal amount of notes to be received upon
exchange as specified in the notice specifying our chosen settlement method (or deemed so specified) (the
“specified dollar amount”), if any, divided by 30 (such quotient, the “daily measurement value”) and (ii) the
daily exchange value for such trading day; and
• if the daily exchange value for such trading day exceeds the daily measurement value, a number of ordinary
shares (the “daily share amount” for such trading day) equal to (i) the difference between the daily exchange
value for such trading day and the daily measurement value, divided by (ii) the daily VWAP for such trading
day.
The “daily exchange value” means, for any of the 30 consecutive trading days during an observation period,
one-thirtieth (1/30th) of the product of (i) the applicable exchange rate and (ii) the daily VWAP on such trading
day.
The “daily VWAP” means, for any of the 30 consecutive trading days during an observation period, the per
ordinary share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on
Bloomberg page “Jazz <equity> AQR” (or its equivalent successor if such page is not available) in respect of the
period from the scheduled open of trading until the scheduled close of trading of the primary trading session on
such trading day (or if such volume-weighted average price is unavailable, the market value of one ordinary
share on such trading day determined, using a volume-weighted average method, by a nationally recognized
independent investment banking firm retained for this purpose by us). The “daily VWAP” will be determined
without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
The “observation period” with respect to any note surrendered for exchange means:
• if the relevant exchange date occurs on or after the date we issue a notice of redemption as described under
“—Optional redemption,” but prior to the relevant redemption date, the 30 consecutive trading days
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beginning on and including the 32nd scheduled trading day (or, if such scheduled trading day is not a trading
day, the immediately following trading day) immediately preceding the redemption date;
• if the relevant exchange date occurs on or after February 15, 2021, the 30 consecutive trading days beginning
on and including the 32nd scheduled trading day (or, if such scheduled trading day is not a trading day, the
immediately following trading day) immediately preceding the maturity date; and
• in all other instances, if the relevant exchange date occurs prior to February 15, 2021, the 30 consecutive
trading day period beginning on and including the third trading day immediately succeeding such exchange
date.
For the purposes of determining amounts due upon exchange only, “trading day” means a day on which
(i) there is no “market disruption event” (as defined below) and (ii) trading in ordinary shares generally occurs
on The NASDAQ Global Select Market or, if ordinary shares are not then listed on The NASDAQ Global Select
Market, on the primary other U.S. national or regional securities exchange on which ordinary shares are then
listed or, if ordinary shares are not then listed on a U.S. national or regional securities exchange, on the
principal other market on which ordinary shares are then listed or admitted for trading. If ordinary shares are
not so listed or admitted for trading, “trading day” means a “business day.”
“Scheduled trading day” means a day that is scheduled to be a trading day on the primary U.S. national or
regional securities exchange or market on which ordinary shares (or such other security, as applicable) are
listed or admitted for trading. If ordinary shares are not so listed or admitted for trading, “scheduled trading
day” means a “business day.”
For the purposes of determining amounts due upon exchange only, “market disruption event” means (i) a failure
by the primary U.S. national or regional securities exchange or market on which ordinary shares are listed or
admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence
prior to 1:00 p.m., New York City time, on any scheduled trading day for ordinary shares for more than one halfhour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by
reason of movements in price exceeding limits permitted by the relevant securities exchange or otherwise) in
ordinary shares or in any options contracts or futures contracts relating to ordinary shares.
Except as described under “—Exchange rate adjustments—Adjustment to exchange rate upon exchange upon a
make-whole fundamental change or a redemption” and “—Exchange rate adjustments—Recapitalizations,
reclassifications and changes of ordinary shares,” we will deliver, or cause to be delivered, as the case may be,
the consideration due upon exchange on the third business day immediately following the relevant exchange
date, if we elect to satisfy our exchange obligation by physical settlement, or on the third business day
immediately following the last trading day of the relevant observation period, in the case of any other
settlement method.
We will deliver cash in lieu of any fractional ordinary shares issuable upon exchange based on the daily VWAP of
the ordinary shares on the relevant exchange date, if such exchange date is not a trading day, the immediately
preceding trading day (in the case of physical settlement), or based on the daily VWAP on the last trading day of
the relevant observation period (in the case of combination settlement).
Each exchange will be deemed to have been effected as to any notes surrendered for exchange at the close of
business on the exchange date; provided, however, that, except as otherwise provided herein, the person in
whose name any ordinary shares shall be issuable upon such exchange will become the holder of record of such
ordinary shares as of the close of business on the exchange date (in the case of physical settlement) or the last
trading day of the relevant observation period (in the case of combination settlement).
To the extent any exchange of a note is to be settled by delivery of ordinary shares, we will cause the Parent to
deliver such ordinary shares. At no point will we hold ordinary shares. Any such delivery by the Parent of
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ordinary shares in settlement of such exchange will be deemed made in exchange of satisfaction of the Parent’s
guarantee obligations in respect of such note and, as a result of such delivery, we will incur a debt for an
equivalent amount owing to the Parent.
Surrender to financial institution in lieu of exchange
When a holder surrenders its notes for exchange, we may, at our election (a “financial institution surrender
election”), direct the exchange agent to surrender, on or prior to the second business day following the
exchange date, such notes to a financial institution designated by us (a “financial institution surrender”) in lieu
of exchange. In order to accept any notes surrendered for a financial institution surrender, the designated
institution must agree to timely deliver, in exchange for such notes, cash, ordinary shares or a combination of
cash and ordinary shares, at our election, that would otherwise be due upon exchange as described above
under “—Exchange rights—Settlement upon exchange” (the “exchange consideration”). If we make a financial
institution surrender election, we will, by the close of business on the second business day following the
relevant surrender date, notify the holder surrendering its notes for exchange that we have made the financial
institution surrender election and we will notify the designated financial institution of the relevant deadline for
delivery of the exchange consideration. Any notes exchanged by the designated institution will remain
outstanding. If the designated institution agrees to accept any notes for a financial institution surrender but
does not timely deliver the related exchange consideration, or if such designated financial institution does not
accept the notes for a financial institution surrender, we will deliver the relevant exchange consideration as if
we had not made a financial institution surrender election. Our designation of a financial institution to which
the notes may be submitted for a financial institution surrender does not require such institution to accept any
notes. We may, but will not be obligated to, enter into a separate agreement with any designated financial
institution that would compensate it for any such transaction.
Exchange rate adjustments
The exchange rate will be adjusted as described below, except that we will not make any adjustments to the
exchange rate for any transaction described below (other than in the case of (x) a share subdivision or share
consolidation or (y) a tender or exchange offer) if each holder of the notes participates in such transaction at
the same time and upon the same terms as holders of ordinary shares and solely as a result of holding the
notes, without having to exchange its notes and as if it held a number of ordinary shares equal to the applicable
exchange rate, multiplied by the principal amount (expressed in thousands) of notes held by such holder.
(1) If the Parent exclusively issues ordinary shares as a dividend or distribution on all or substantially all of
ordinary shares, or if the Parent effects an ordinary share subdivision or ordinary share consolidation, the
exchange rate will be adjusted based on the following formula:
ER1 = ER0 x OS1
OS0
where,
ER0 = the exchange rate in effect immediately prior to the open of business on the ex-dividend date of such
dividend or distribution, or immediately prior to the open of business on the effective date of such share
subdivision or consolidation, as applicable;
ER1 = the exchange rate in effect immediately after the open of business on such ex-dividend date or effective
date;
OS0 = the number of ordinary shares in issue immediately prior to the open of business on such ex-dividend
date or effective date; and
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OS1 = the number of ordinary shares in issue immediately after giving effect to such dividend, distribution,
share subdivision or share consolidation.
Any adjustment made under this clause (1) shall become effective immediately after the open of business on the
ex-dividend date for such dividend or distribution, or immediately after the open of business on the effective
date for such share subdivision or share consolidation. If any dividend or distribution of the type described in
this clause (1) is declared but not so paid or made, the exchange rate shall be immediately readjusted, effective
as of the date Parent’s board of directors (or a committee thereof) determines not to pay such dividend or
distribution to the exchange rate that would then be in effect if such dividend or distribution had not been
declared.
(2) If the Parent issues to all or substantially all holders of ordinary shares any rights, options or warrants
entitling them for a period of not more than 45 calendar days after the date of such issuance to subscribe
for or purchase ordinary shares, at a price per ordinary share less than the average of the last reported
sale prices of ordinary shares over the 10 consecutive trading day period ending on, and including, the
trading day immediately preceding the declaration date for such issuance, the exchange rate will be
increased based on the following formula:
ER1 = ER0 x OS0 + X
OS0 + Y
where,
ER0 = the exchange rate in effect immediately prior to the open of business on the ex-dividend date for such
issuance;
ER1 = the exchange rate in effect immediately after the open of business on such ex-dividend date;
OS0 = the number of ordinary shares in issue immediately prior to the open of business on such ex-dividend
date;
X=
the total number of ordinary shares issuable pursuant to such rights, options or warrants; and
Y=
the number of ordinary shares equal to the aggregate price payable to exercise such rights, options or
warrants, divided by the average of the last reported sale prices of ordinary shares over the
10 consecutive trading day period ending on, and including, the trading day immediately preceding the
declaration date for such issuance.
Any increase made under this clause (2) will be made successively whenever any such rights, options or
warrants are issued and shall become effective immediately after the open of business on the ex-dividend date
for such issuance. To the extent that ordinary shares are not delivered after the expiration of such rights,
options or warrants, the exchange rate shall be readjusted to the exchange rate that would then be in effect
had the increase with respect to the issuance of such rights, options or warrants been made on the basis of
delivery of only the number of ordinary shares actually delivered. If such rights, options or warrants are not so
issued, the exchange rate shall be readjusted to be the exchange rate that would then be in effect if such exdividend date for such issuance had not occurred.
For purposes of this clause (2) and for purposes of the provisions set forth above in the first bullet point under
“—Exchange upon specified distributions and corporate events—certain distributions,” in determining whether
any rights, options or warrants entitle the holders to subscribe for or purchase ordinary shares at a price per
ordinary share less than such average of the last reported sale prices for ordinary shares over the
10 consecutive trading day period ending on, and including, the trading day immediately preceding the
declaration date for such issuance, and in determining the aggregate offering price of such ordinary shares,
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there shall be taken into account any consideration received by the Parent for such rights, options or warrants
and any amount payable on exercise or exchange thereof, the value of such consideration, if other than cash, to
be determined by the Parent’s board of directors (or a committee thereof).
(3) If the Parent distributes shares of the Parent’s share capital, evidences of the Parent’s indebtedness, other
assets or property of the Parent or rights, options or warrants to acquire the Parent’s share capital or
other securities, to all or substantially all holders of ordinary shares, excluding:
• dividends, distributions, rights, options or warrants as to which an adjustment was effected pursuant to
clause (1) or (2) above;
• dividends or distributions paid exclusively in cash as to which an adjustment was effected pursuant to
clause (4) below;
• any dividends and distributions in connection with a reclassification, change, consolidation, merger,
conveyance, transfer, sale, lease or other disposition resulting in the change in the exchange
consideration as described below under “—Recapitalizations, reclassifications and changes of ordinary
shares”;
• except as otherwise described above and below under “—Exchange rate adjustments,” rights issued
pursuant to a shareholder rights plan adopted by the Parent; and
• spin-offs as to which the provisions set forth below in this clause (3) shall apply;
then the exchange rate will be increased based on the following formula:
ER1 = ER0 x
SP0
SP0 — FMV
where,
ER0 = the exchange rate in effect immediately prior to the open of business on the ex-dividend date for such
distribution;
ER1 = the exchange rate in effect immediately after the open of business on such ex-dividend date;
SP0 = the average of the last reported sale prices of ordinary shares over the 10 consecutive trading day
period ending on, and including, the trading day immediately preceding the ex-dividend date for such
distribution; and
FMV = the fair market value (as determined by the Parent’s board of directors (or a committee thereof)) of the
shares of share capital, evidences of indebtedness, other assets or property of the Parent or rights,
options or warrants to acquire the Parent’s share capital or other securities distributed with respect to
each ordinary share in issue on the ex-dividend date for such distribution.
If “FMV” (as defined above) is equal to or greater than the “SP0” (as defined above), in lieu of the foregoing
increase, each holder of a note shall receive, in respect of each $1,000 principal amount of notes it holds, at the
same time and upon the same terms as holders of ordinary shares, the amount and kind of shares of share
capital, evidences of the Parent’s indebtedness, other assets or property of the Parent or rights, options or
warrants to acquire the Parent’s share capital or other securities that such holder would have received if such
holder owned a number of ordinary shares equal to the exchange rate in effect on the ex-dividend date for the
distribution. Any increase made under the portion of this clause (3) above will become effective immediately
after the open of business on the ex-dividend date for such distribution. If such distribution is not so paid or
made, the exchange rate shall be readjusted to be the exchange rate that would then be in effect if such
dividend or distribution had not been declared.
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With respect to an adjustment pursuant to this clause (3) where there has been a payment of a dividend or
other distribution on ordinary shares of shares of share capital of any class or series, or similar equity interest,
of or relating to a subsidiary or other business unit, and such share capital or similar equity interest is listed or
quoted (or will be listed or quoted upon the consummation of such dividend or other distribution) on a U.S.
national securities exchange or a reasonably comparable non-U.S. equivalent, which we refer to as a “spin-off,”
the exchange rate will be increased based on the following formula:
ER1 = ER0 x FMV0 + MP0
MP0
where,
ER0 =
the exchange rate in effect immediately prior to the open of business on the ex-dividend date for such
spin-off;
ER1 =
the exchange rate in effect immediately after the open of business on the ex-dividend date for such
spin-off;
FMV0 = the average of the last reported sale prices of the share capital or similar equity interest distributed to
holders of ordinary shares applicable to one ordinary share (determined by reference to the definition
of last reported sale price set forth under “—Exchange upon satisfaction of sale price condition” as if
references therein to ordinary shares were to such share capital or similar equity interest) over the first
10 consecutive trading day period after, and including, the ex-dividend date of the spin-off (the
“valuation period”); and
MP0 = the average of the last reported sale prices of ordinary shares over the valuation period.
The adjustment to the exchange rate under the preceding paragraph will be determined on the last trading day
of the valuation period, but given effect as of the ex-dividend date for the spin-off; provided that in respect of
any exchange of notes during the valuation period, references in the preceding paragraph with respect to
10 trading days shall be deemed to be replaced with such lesser number of trading days as have elapsed
between the ex-dividend date of such spin-off and the exchange date in determining the exchange rate. If the
ex-dividend date of the spin-off is after the 10th trading day immediately preceding, and including, the end of
any observation period in respect of an exchange of notes, references in the preceding paragraph to 10 trading
days will be deemed to be replaced, solely in respect of that exchange, with such lesser number of trading days
as have elapsed from, and including, the ex-dividend date for the spin-off to, and including, the last trading day
of such observation period.
If any dividend or distribution that constitutes a spin-off is not so paid, the exchange rate shall be decreased,
effective as of the date the Parent’s board of directors (or a committee thereof) determines not to pay such
dividends or distributions, to the exchange rate that would then be in effect if such dividend or distribution had
not been declared.
(4) If any cash dividend or distribution is made to all or substantially all holders of ordinary shares, the
exchange rate will be adjusted based on the following formula:
ER1 = ER0 x
SP0
SP0 — C
where,
ER0 = the exchange rate in effect immediately prior to the open of business on the ex-dividend date for such
dividend or distribution;
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ER1 = the exchange rate in effect immediately after the open of business on the ex-dividend date for such
dividend or distribution;
SP0 = the last reported sale price of ordinary shares on the trading day immediately preceding the ex-dividend
date for such dividend or distribution; and
C=
the amount in cash per ordinary share that the Parent distributes to holders of ordinary shares.
If “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase,
each holder of a note shall receive, for each $1,000 principal amount of notes it holds, at the same time and
upon the same terms as holders of ordinary shares, the amount of cash that such holder would have received if
such holder owned a number of ordinary shares equal to the exchange rate on the ex-dividend date for such
cash dividend or distribution. Such increase shall become effective immediately after the open of business on
the ex-dividend date for such dividend or distribution. If such dividend or distribution is not so paid, the
exchange rate shall be decreased to be the exchange rate that would then be in effect if such dividend or
distribution had not been declared.
(5) If the Parent or any of its subsidiaries makes a payment in respect of a tender offer or exchange offer for
ordinary shares, other than odd lot tender offers, to the extent that the cash and value of any other
consideration included in the payment per ordinary share exceeds the average of the last reported sale
prices of ordinary shares over the 10 consecutive trading day period commencing on, and including, the
trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such
tender or exchange offer, the exchange rate will be increased based on the following formula:
ER1 = ER0 x AC + (SP1 x OS1)
OS0 x SP1
where,
ER0 = the exchange rate in effect immediately prior to the close of business on the 10th trading day
immediately following, and including, the trading day next succeeding the date such tender or exchange
offer expires;
ER1 = the exchange rate in effect immediately after the close of business on the 10th trading day immediately
following, and including, the trading day next succeeding the date such tender or exchange offer expires;
AC = the aggregate value, on the date such tender or exchange offer expires, of all cash and any other
consideration (as determined by the Parent’s board of directors (or a committee thereof)) paid or
payable for ordinary shares purchased in such tender or exchange offer;
OS0 = the number of ordinary shares in issue immediately prior to the close of business on the date such tender
or exchange offer expires (prior to giving effect to the purchase of all ordinary shares accepted for
purchase or exchange in such tender or exchange offer);
OS1 = the number of ordinary shares in issue immediately after the close of business on the date such tender or
exchange offer expires (after giving effect to the purchase of all ordinary shares accepted for purchase or
exchange in such tender or exchange offer); and
SP1 = the average of the last reported sale prices of ordinary shares over the 10 consecutive trading day period
commencing on, and including, the trading day next succeeding the date such tender or exchange offer
expires.
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The adjustment to the exchange rate under the preceding paragraph will occur at the close of business on the
10th trading day immediately following, and including, the trading day next succeeding the date such tender or
exchange offer expires; provided that in respect of any exchange of notes within the 10 trading days
immediately following, and including, the trading day next succeeding the expiration date of any tender or
exchange offer, references with respect to 10 trading days shall be deemed replaced with such lesser number of
trading days as have elapsed between the expiration date of such tender or exchange offer and the exchange
date in determining the exchange rate. In addition, if the trading day next succeeding the date such tender or
exchange offer expires is after the 10th trading day immediately preceding, and including, the end of any
observation period in respect of an exchange of notes, references in the preceding paragraph to 10 trading days
shall be deemed to be replaced, solely in respect of that exchange, with such lesser number of trading days as
have elapsed from, and including, the trading day next succeeding the date such tender or exchange offer
expires to, and including, the last trading day of such observation period.
If the Parent or one of its subsidiaries is obligated to purchase ordinary shares pursuant to any such tender or
exchange offer described in this clause (5) but is permanently prevented by applicable law from effecting any
such purchase or all such purchases are rescinded, the applicable exchange rate will be readjusted to be the
exchange rate that would then be in effect if such tender or exchange offer had not been made or had been
made only in respect of the purchases that have been effected.
Notwithstanding the above, certain listing standards of The NASDAQ Global Select Market may limit the amount by
which we may increase the exchange rate pursuant to the events described in clauses (2) through (5) in this section
and as described in the section captioned “—Adjustment to exchange rate upon exchange upon a make-whole
fundamental change or a redemption.” These standards generally require the Parent to obtain the approval of its
shareholders before entering into certain transactions that potentially result in the issuance of 20% or more of the
ordinary shares in issue at the time the notes are issued unless the Parent obtains shareholder approval of issuances
in excess of such limitations. In accordance with these listing standards, these restrictions will apply at any time when
the notes are outstanding, regardless of whether we then have a class of securities listed on The NASDAQ Global
Select Market. Accordingly, in the event of an increase in the exchange rate above that which would result in the
notes, in the aggregate, becoming exchangeable into ordinary shares in excess of such limitations, at our option, the
Parent will either obtain shareholder approval of such issuances or we will pay cash in lieu of delivering any ordinary
shares otherwise deliverable upon exchanges in excess of such limitations based on the daily VWAP for each trading
day of the relevant observation period in respect of which, in lieu of the Parent delivering ordinary shares, we deliver
cash pursuant to this paragraph.
Notwithstanding the foregoing, if an exchange rate adjustment becomes effective on any ex-dividend date as
described above, and a holder that has exchanged its notes on or after such ex-dividend date and on or prior to
the related record date would be treated as the record holder of ordinary shares as of the related exchange
date as described under “—Settlement upon exchange” based on an adjusted exchange rate for such exdividend date, then, notwithstanding the foregoing exchange rate adjustment provisions, the exchange rate
adjustment relating to such ex-dividend date will not be made for such exchanging holder. Instead, such holder
will be treated as if such holder were the record owner of ordinary shares on an unadjusted basis and
participate in the related dividend, distribution or other event giving rise to such adjustment.
Except as stated herein, we will not adjust the exchange rate for the issuance of ordinary shares or any
securities exchangeable into or exchangeable for ordinary shares or the right to purchase ordinary shares or
such exchangeable or exchangeable securities.
The “ex-dividend date” means the first date on which ordinary shares trade on the applicable exchange or in
the applicable market, regular way, without the right to receive the issuance, dividend or distribution in
question, from the Parent or, if applicable, from the seller of ordinary shares on such exchange or market (in
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the form of due bills or otherwise) as determined by such exchange or market. The “effective date” means the
first date on which ordinary shares trade on the applicable exchange or in the applicable market, regular way,
reflecting the relevant share subdivision or share consolidation, as applicable.
To the extent permitted by applicable law and subject to the applicable rules of The NASDAQ Global Select
Market (or any other securities exchange on which the Parent’s securities are then listed), we are permitted to
increase the exchange rate of the notes by any amount for a period of at least 20 business days if our board of
directors (or a committee thereof) determines that such increase would be in our best interest. We may also
(but are not required to) increase the exchange rate to avoid or diminish income tax to holders of ordinary
shares or rights to purchase ordinary shares in connection with a dividend or distribution of ordinary shares (or
rights to acquire ordinary shares) or similar event.
A holder may, in some circumstances, including a distribution of cash dividends to holders of ordinary shares,
be deemed to have received a distribution subject to U.S. federal income tax as a result of an adjustment or the
nonoccurrence of an adjustment to the exchange rate. For a discussion of the U.S. federal income tax treatment
of an adjustment to the exchange rate, see “Certain material U.S. federal income tax considerations.”
To the extent that the Parent has a rights plan applicable to ordinary shares in effect upon exchange of your
note, if physical settlement or combination settlement applies to your note, you will receive, in addition to any
ordinary shares received in connection with such exchange, the rights under the rights plan. However, if prior to
any exchange, the rights have separated from the ordinary shares in accordance with the provisions of the
applicable rights plan, the exchange rate will be adjusted at the time of separation as if the Parent distributed
to all or substantially all holders of ordinary shares, shares of the Parent’s share capital, evidences of
indebtedness, other assets or property of the Parent or rights, options or warrants to acquire the Parent’s
share capital or other securities as described in clause (3) above, subject to readjustment in the event of the
expiration, termination or redemption of such rights.
Notwithstanding any of the foregoing, the applicable exchange rate will not be adjusted:
• upon the issuance of any ordinary shares pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on the Parent’s securities and the investment of additional
optional amounts in ordinary shares under any plan;
• upon the issuance of any ordinary shares or options or rights to purchase those ordinary shares pursuant to
any present or future employee, director or consultant benefit plan or program of or assumed by the Parent
or any of its subsidiaries;
• upon the issuance of any ordinary shares pursuant to any option, warrant, right or exercisable or
exchangeable security not described in the preceding bullet and outstanding as of the date the notes were
first issued;
• for a change solely in the nominal value of ordinary shares; or
• for accrued and unpaid interest, if any.
Notwithstanding anything to the contrary herein, except on and after the first trading day of an observation
period with respect to a note and on or prior to the last trading day of such observation period, we will not be
required to adjust the exchange rate unless such adjustment (together with any previous adjustments not then
made) would require an increase or decrease of at least one percent in the exchange rate; provided, however,
that any such adjustments of less than one percent that are not required to be made will be carried forward and
taken into account in any subsequent adjustment, and provided, further, that any such adjustment of less than
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one percent that has not been made shall be made (i) on the effective date for any make-whole fundamental
change, and (ii), in the case of any note to which physical settlement applies, upon the exchange date, and in
the case of any note to which cash or combination settlement applies, on each trading day of the applicable
observation period.
Adjustments to the applicable exchange rate will be calculated to the nearest 1/10,000th of an ordinary share.
To the extent we adjust the exchange rate of the notes, we will provide written notice to the trustee reasonably
promptly thereafter.
Recapitalizations, reclassifications and changes of ordinary shares
In the case of:
• any recapitalization, reclassification or change of ordinary shares (other than changes resulting from a
subdivision or consolidation or change in nominal value),
• any consolidation, merger, scheme of arrangement or offer or combination involving the Parent,
• any sale, lease or other transfer to a third party of the consolidated assets of the Parent and its subsidiaries
substantially as an entirety, or
• any statutory share exchange,
in each case as a result of which ordinary shares would be converted into, or exchanged for, stock, other
securities, other property or assets (including cash or any combination thereof), then, at and after the effective
time of the transaction, the right to exchange each $1,000 principal amount of notes based on a number of
ordinary shares equal to the applicable exchange rate will be changed into a right to exchange such principal
amount of notes based on the kind and amount of shares of stock, other securities or other property or assets
(including cash or any combination thereof) that a holder of a number of ordinary shares equal to the exchange
rate immediately prior to such transaction would have owned or been entitled to receive (without giving effect
to any dissenters’ rights) (the “reference property,” and the amount and kind of reference property that a
holder of one ordinary shares would have received in such transaction, a “unit of reference property”) in such
transaction. In particular, at and after the effective time of the transaction, (i) we will continue to have the right
to determine the form of consideration to be paid or delivered, as the case may be, upon exchange of notes, as
set forth under “—Settlement upon exchange” and (ii)(x) any amount payable in cash upon exchange of the
notes as set forth under “—Settlement upon exchange” will continue to be payable in cash, (y) any ordinary
shares that we would have been required to deliver upon exchange of the notes as set forth under
“—Settlement upon exchange” will instead be deliverable in units of reference property and (z) the daily VWAP
will be calculated based on the value of a unit of reference property. If the transaction causes ordinary shares
to be exchanged into, or exchanged for, the right to receive more than a single type of consideration
(determined based in part upon any form of shareholder election), the composition of a unit of reference
property will be deemed to be (i) the weighted average per ordinary share of the types and amounts of
consideration received by the holders of ordinary shares that affirmatively make such an election or (ii) if no
shareholders affirmatively make such election, the types and amounts of consideration actually received by
shareholders. If the shareholders receive only cash in such transaction, then for all exchanges that occur after
the effective date of such transaction (i) the consideration due upon exchange of each $1,000 principal amount
of notes shall be solely cash in an amount equal to the exchange rate in effect on the exchange date (as may be
increased as described under “—Adjustment to exchange rate upon exchange upon a make-whole fundamental
change or a redemption”), multiplied by the price paid per ordinary share in such transaction and (ii) we will
satisfy our exchange obligation by paying cash to exchanging holders on the third business day immediately
following the exchange date. We will notify holders and the trustee in writing of the weighted average as soon
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as practicable after such determination is made. We and the Parent will agree in the indenture not to become a
party to any such transaction unless its terms are consistent with the foregoing.
Adjustments of prices
Whenever any provision of the indenture requires us to calculate the last reported sale prices, the daily VWAPs,
the daily exchange values, the daily settlement amounts or any functions thereof over a span of multiple days
(including during an observation period and during the 5 trading day period used to determine the “ordinary
share price” for purposes of a make-whole fundamental change), we will make appropriate adjustments (to the
extent no corresponding adjustment is otherwise made pursuant to the provisions described under “—Exchange
rate adjustments” above) to each to account for any event requiring an adjustment to the exchange rate where
the ex-dividend date, effective date or the date of the event occurs at any time during the period when the last
reported sale prices, the daily VWAPs, the daily exchange values, the daily settlement amounts or any functions
thereof are to be calculated.
Adjustment to exchange rate upon exchange upon a make-whole fundamental change or a redemption
If (i) a “fundamental change” (as defined below and determined after giving effect to any exceptions to or
exclusions from such definition, but without regard to the proviso in clause (2) of the definition of fundamental
change, a “make-whole fundamental change”) occurs on or prior to the maturity date or (ii) we call the notes
for redemption as described above under “—Optional redemption—Optional redemption for changes in the tax
laws of a relevant taxing jurisdiction” or “—Optional redemption—Provisional redemption on or after August 20,
2018”, and a holder elects to exchange its notes in connection with such make-whole fundamental change or
redemption, we will, under certain circumstances, increase the exchange rate for the notes so surrendered for
exchange by a number of additional ordinary shares (the “additional shares”), as described below. An exchange
of notes will be deemed for these purposes to be “in connection with” such make-whole fundamental change if
the notice of exchange of the notes is received by the exchange agent from, and including, the effective date of
the make-whole fundamental change up to, and including, the close of business on the second scheduled
trading day immediately prior to the related fundamental change repurchase date (or, in the case of a makewhole fundamental change that would have been a fundamental change but for the proviso in clause (2) of the
definition of fundamental change, the 35th business day immediately following the effective date of such makewhole fundamental change). An exchange of notes will be deemed for these purposes to be “in connection with”
such a redemption if the notice of exchange of the notes is received by the exchange agent from, and including,
the date of the related redemption notice up to, and including, the close of business on the second scheduled
trading day immediately prior to the related redemption date (such period, the “redemption period”).
Upon surrender of notes for exchange in connection with a make-whole fundamental change or during a
redemption period, we will, at our option, satisfy or cause to be satisfied, as applicable, our exchange obligation
by physical settlement, cash settlement or combination settlement as described under “—Exchange rights—
Settlement upon exchange” (after giving effect to any increase in the exchange rate required by this section).
However, if the consideration for ordinary shares in any make-whole fundamental change described in clause
(2) of the definition of fundamental change is composed entirely of cash, for any exchange of notes following
the effective date of such make-whole fundamental change, the exchange obligation will be calculated based
solely on the “ordinary share price” (as defined below) for the transaction and will be deemed to be an amount
of cash per $1,000 principal amount of exchanged notes equal to the applicable exchange rate (including any
adjustment as described in this section), multiplied by such ordinary share price. In such event, the exchange
obligation will be determined and paid to holders in cash on the third business day following the exchange date.
We will notify holders and the trustee in writing of the effective date of any make-whole fundamental change
and issue a press release announcing such effective date no later than five business days after such effective
date.
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The number of additional shares, if any, by which the exchange rate will be increased will be determined by
reference to the table below, based on the date on which the make-whole fundamental change occurs or
becomes effective (the “effective date”) or the date of the redemption notice, as applicable, and the price (the
“ordinary share price”) paid (or deemed paid) per ordinary share in the make-whole fundamental change or on
the date of the redemption notice, as described below. If the holders of ordinary shares receive only cash in a
make-whole fundamental change described in clause (2) of the definition of fundamental change, the ordinary
share price shall be the cash amount paid per ordinary share. Otherwise, the ordinary share price shall be the
average of the last reported sale prices of ordinary shares over the five trading day period ending on, and
including, the trading day immediately preceding the effective date of the make-whole fundamental change or
the date of the redemption notice, as applicable. In the event that an exchange during a redemption period
would also be deemed to be in connection with a make-whole fundamental change, a holder of the notes to be
exchanged will be entitled to a single increase to the exchange rate with respect to the first to occur of the
applicable date of the redemption notice or the effective date of the applicable make-whole fundamental
change, and the later event will be deemed not to have occurred for purposes of this section.
The ordinary share prices set forth in the column headings of the table below will be adjusted as of any date on
which the exchange rate of the notes is otherwise required to be adjusted. The adjusted ordinary share prices
will equal the ordinary share prices immediately prior to such adjustment, multiplied by a fraction, the
numerator of which is the exchange rate immediately prior to the adjustment giving rise to the ordinary share
price adjustment and the denominator of which is the exchange rate as so adjusted. The number of additional
shares will be adjusted in the same manner and at the same time as the exchange rate is required to be
adjusted as set forth under “—Exchange rate adjustments.”
The following table sets forth the hypothetical ordinary share price and the number of additional shares to be
received per $1,000 principal amount of notes:
Ordinary share price
Effective date/
date of redemption
notice
August 13, 2014 . . .
August 15, 2015 . . .
August 15, 2016 . . .
August 15, 2017 . . .
August 15, 2018 . . .
August 15, 2019 . . .
August 15, 2020 . . .
August 15, 2021 . . .
$135.44
2.3776
2.3776
2.3776
2.3776
2.3776
2.3776
2.3776
2.3776
$150.00 $200.00 $250.00 $300.00 $350.00 $400.00 $475.00 $550.00 $650.00
2.1555
2.1100
2.0975
2.0911
2.0639
1.9848
1.8237
1.6579
1.2168
1.2001
1.1801
1.1308
1.0539
0.9225
0.6922
0.0000
0.7862
0.7598
0.7267
0.6696
0.5880
0.4642
0.2711
0.0000
0.5380
0.5104
0.4759
0.4229
0.3510
0.2511
0.1156
0.0000
0.3831
0.3575
0.3257
0.2800
0.2210
0.1451
0.0562
0.0000
0.2807
0.2581
0.2302
0.1921
0.1450
0.0888
0.0315
0.0000
0.1826
0.1645
0.1426
0.1144
0.0816
0.0463
0.0162
0.0000
0.1221
0.1080
0.0911
0.0705
0.0478
0.0256
0.0092
0.0000
0.0727
0.0628
0.0511
0.0376
0.0238
0.0117
0.0040
0.0000
$775.00
0.0378
0.0315
0.0243
0.0164
0.0090
0.0034
0.0005
0.0000
The exact ordinary share prices and effective dates or dates of the redemption notice may not be set forth in
the table above, in which case:
• If the ordinary share price is between two ordinary share prices in the table or the effective date or date of
the redemption notice is between two dates in the table, the number of additional shares by which the
exchange rate will be increased will be determined by a straight-line interpolation between the number of
additional shares set forth for the higher and lower ordinary share prices and the earlier and later dates, as
applicable, based on a 365-day year.
• If the ordinary share price is greater than $775.00 per ordinary share (subject to adjustment in the same
manner as the ordinary share prices set forth in the column headings of the table above), no additional
shares will be added to the exchange rate.
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• If the ordinary share price is less than $135.44 per ordinary share (subject to adjustment in the same manner
as the ordinary share prices set forth in the column headings of the table above), no additional shares will be
added to the exchange rate.
Notwithstanding the foregoing, in no event will the exchange rate, as increased pursuant to this section by the
number of additional shares, exceed 7.3833 ordinary shares per $1,000 principal amount of notes, subject to
adjustment in the same manner as the exchange rate is required to be adjusted as set forth under “—Exchange
rate adjustments.”
Our obligation to satisfy the additional shares requirement could be considered a penalty, in which case the
enforceability thereof would be subject to general principles of reasonableness and equitable remedies.
Fundamental change permits holders to require us to repurchase notes
If a “fundamental change” (as defined below in this section) occurs at any time, you will have the right, at your
option, to require us to repurchase for cash any or all of your notes, or any portion such that the principal
amount of your notes not repurchased equals $200,000 or an integral multiple of $1,000 in excess thereof. The
price we are required to pay is equal to 100% of the principal amount of the notes to be repurchased, plus
accrued and unpaid interest to, but excluding, the fundamental change repurchase date (unless the
fundamental change repurchase date is after a record date but on or prior to the interest payment date to
which such record date relates, in which case we will instead pay the full amount of accrued and unpaid interest
to the holder of record on such record date and the fundamental change repurchase price will be equal to 100%
of the principal amount of the notes to be repurchased). The fundamental change repurchase date will be a
date specified by us that is not less than 20 or more than 35 business days following the date of our
fundamental change notice as described below. Any notes repurchased by us in connection with a fundamental
change will be paid for in cash.
A “fundamental change” will be deemed to have occurred at the time after the notes are originally issued if any
of the following occurs:
(1) any “person” or “group” (within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as
amended, which we refer to as the Exchange Act), other than the Parent or its subsidiaries or its or their
employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act
disclosing that such person or group has become the direct or indirect ‘‘beneficial owner,’’ as defined in
Rule 13d-3 under the Exchange Act, of ordinary share capital representing more than 50% of the voting
power of the issued ordinary share capital;
(2) the consummation of (A) any recapitalization, reclassification or change of the ordinary shares (other than
changes resulting from a subdivision or consolidation) as a result of which the ordinary shares would be
converted into, or exchanged for, shares, other securities, or other property or assets; (B) any share
exchange, consolidation or merger of, or scheme of arrangement involving, the Parent pursuant to which
the ordinary shares will be converted into, or exchanged for, cash, securities or other property or assets;
or (C) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially
all of the consolidated assets of the Parent and its subsidiaries, taken as a whole, to any person other than
one of the Parent’s direct or indirect wholly owned subsidiaries; provided, however, that a transaction
described in clause (A) or (B) in which the holders of all classes of the ordinary share capital or common
equity of the Parent immediately prior to such transaction own, directly or indirectly, more than 50% of all
classes of the issued ordinary share capital or common equity of the continuing or surviving person or
transferee or the parent thereof immediately after such transaction in substantially the same proportions
(relative to each other) as such ownership immediately prior to such transaction shall not be a
fundamental change pursuant to this clause (2);
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(3) the Parent’s shareholders approve any plan or proposal for the liquidation or dissolution of the Parent
(other than in a transaction described in clause (2) above); or
(4) ordinary shares (or other ordinary share capital or common equity interests (or depositary receipts)
underlying the notes based on which the notes are then exchangeable pursuant to the terms of the
indenture) cease to be listed on any of The New York Stock Exchange, The NASDAQ Global Market, The
NASDAQ Global Select Market or The NASDAQ Capital Market (or any of their respective successors);
provided, however, that in the case of an event, transaction or series of related transactions described in clause
(1) or (2) above, if at least 90% of the consideration received or to be received by holders of the ordinary shares
(excluding cash payments for fractional ordinary shares or dissenter’s rights) in the event, transaction or
transactions that would otherwise constitute a “fundamental change” consists of ordinary share capital or
common equity interests (or depositary receipts) that are traded on The New York Stock Exchange, The
NASDAQ Global Market, The NASDAQ Global Select Market or The NASDAQ Capital Market (or any of their
respective successors) or that will be so traded when issued or exchanged in connection with the event,
transaction or transactions or events that would otherwise constitute a fundamental change under clause (1) or
(2) of the definition thereof, which we refer to as publicly traded securities, and as a result of such event,
transaction or transactions, the notes become exchangeable based on such consideration, excluding cash
payments for fractional ordinary shares or dissenter’s rights (subject to settlement in accordance with the
provisions of “—Exchange rights—Settlement upon exchange,” “—Exchange rate adjustments” and “—Exchange
rate adjustments—Adjustment to exchange rate upon exchange upon a make-whole fundamental change or a
redemption”), such event, transaction or transactions shall not be a “fundamental change.”
On or before the 20th calendar day after the occurrence of a fundamental change, we will provide to all holders
of the notes and the trustee and paying agent (if other than the trustee) a notice of the occurrence of the
fundamental change and of the resulting repurchase right. Such notice shall state, among other things:
• the events causing a fundamental change and whether such transaction is also a make-whole fundamental
change;
• the date of the fundamental change;
• the last date on which a holder may exercise the repurchase right;
• the fundamental change repurchase price;
• the fundamental change repurchase date;
• the name and address of the paying agent and the exchange agent, if applicable;
• if applicable, the applicable exchange rate and any adjustments to the applicable exchange rate;
• if applicable, that the notes with respect to which a repurchase notice has been delivered by a holder may be
exchanged only if the holder withdraws the repurchase notice in accordance with the terms of the indenture;
and
• the procedures that holders must follow to require us to repurchase their notes.
Simultaneously with providing such notice, we will publish a notice containing this information on the Parent’s
website or through such other public medium as we may use at that time.
To exercise the fundamental change repurchase right, you must deliver, on or before the second scheduled
trading day immediately preceding the fundamental change repurchase date, the notes to be repurchased,
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which, if certificated, must be duly endorsed for transfer, together with a written repurchase notice and the
form entitled “Form of Fundamental Change Repurchase Notice” on the reverse side of the notes duly
completed, to the paying agent. Your repurchase notice must state:
• if certificated, the certificate numbers of your notes to be delivered for repurchase;
• the portion of the principal amount of notes to be repurchased, which must be a principal amount such that
the principal amount of your notes not repurchased equals $200,000 or an integral multiple of $1,000 in
excess thereof; and
• that the notes are to be repurchased by us pursuant to the applicable provisions of the notes and the
indenture.
If the notes are not in certificated form, your notice must comply with the applicable procedures of the DTC.
You may withdraw any repurchase notice (in whole or in part) by a written notice of withdrawal delivered to the
paying agent prior to the close of business on the second scheduled day immediately preceding the
fundamental change repurchase date. The notice of withdrawal shall state:
• the principal amount of notes to be withdrawn, which must be such that the principal amount not to be
repurchased equals $200,000 or an integral multiple of $1,000 in excess thereof;
• if certificated notes have been issued, the certificate numbers of the withdrawn notes; and
• the principal amount, if any, which remains subject to the repurchase notice.
If the notes are not in certificated form, your notice must comply with the applicable procedures of the DTC.
We will be required to repurchase the notes on the fundamental change repurchase date. You will receive
payment of the fundamental change repurchase price on the later of (i) the fundamental change repurchase
date and (ii) the time of book-entry transfer or the delivery of the notes. If the paying agent holds money
sufficient to pay the fundamental change repurchase price of the notes on the fundamental change repurchase
date, then, with respect to the notes that have been properly surrendered for repurchase and have not been
validly withdrawn:
• the notes will cease to be outstanding and interest will cease to accrue (whether or not book-entry transfer of
the notes is made or whether or not the notes are delivered to the paying agent); and
• all other rights of the holder will terminate (other than the right to receive the fundamental change
repurchase price and previously accrued and unpaid interest upon delivery or transfer of the notes).
In connection with any repurchase offer pursuant to a fundamental change repurchase notice, we will, if
required:
• comply with the provisions of the tender offer rules under the Exchange Act that may then be applicable;
• file a Schedule TO or any other required schedule under the Exchange Act; and
• comply with any other U.S. federal or state securities laws applicable to us in connection with such
repurchase offer.
No notes may be repurchased at the option of holders upon a fundamental change if the principal amount of
the notes has been accelerated, and such acceleration has not been rescinded, on or prior to such date (except
in the case of an acceleration resulting from a default by us in the payment of the fundamental change
repurchase price with respect to such notes).
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The repurchase rights of the holders could discourage a potential acquirer of us or the Parent. The fundamental
change repurchase feature, however, is not the result of management’s knowledge of any specific effort to
obtain control of us by any means or part of a plan by management to adopt a series of anti-takeover
provisions.
The term fundamental change is limited to specified transactions and may not include other events that might
adversely affect the Parent’s or our financial condition. In addition, the requirement that we offer to repurchase
the notes upon a fundamental change may not protect holders in the event of a highly leveraged transaction,
reorganization, merger or similar transaction involving us or the Parent.
The definition of fundamental change includes a phrase relating to the sale, lease or other transfer of “all or
substantially all” of the Parent’s consolidated assets. There is no precise, established definition of the phrase
“substantially all” under applicable law. Accordingly, the ability of a holder of the notes to require us to
repurchase its notes as a result of the sale, lease or other transfer of less than all of the Parent’s assets may be
uncertain.
If a fundamental change were to occur, we and the Parent may not have enough available cash or be able to
obtain financing at the time we are required to pay the fundamental change repurchase price or at the time the
Parent is required to pay amounts due under the guarantee. In addition, our ability to repurchase the notes or
to pay cash upon exchanges of the notes, and the Parent’s ability to pay amounts due under the guarantee, may
be limited by law, by regulatory authority or by agreements governing the future indebtedness of the Parent
and its subsidiaries, including us. See “Risk factors—Risks related to the notes—We may not have the ability to
raise the funds necessary to settle exchanges of the notes or to repurchase the notes upon a fundamental
change, the Parent may not have the ability to raise the funds necessary to pay amounts due under the
guarantee, and the future indebtedness of the Parent and its subsidiaries, including us, may contain limitations
on our ability to pay cash upon exchange or repurchase of the notes or the Parent’s ability to pay amounts due
under the guarantee.” If we fail to repurchase the notes when required following a fundamental change, we will
be in default under the indenture. In addition, we have, and may in the future incur, other indebtedness with
similar change in control provisions permitting our holders to accelerate or to require us to repurchase our
indebtedness upon the occurrence of similar events or on some specific dates.
Consolidation, merger, amalgamation and sale of assets and tax residence
The indenture provides that neither we nor the Parent shall consolidate with or merge or amalgamate into any
person or enter into a scheme of arrangement (unless we are or the Parent is, as applicable, the surviving
person) or sell, lease or otherwise transfer our respective consolidated properties and assets, substantially as
an entirety, to another person (other than for the Parent to sell, lease or otherwise transfer such assets or
properties to one or more of its direct or indirect wholly owned subsidiaries), unless:
(1) the person (if other than us or the Parent, as applicable) formed by such consolidation or into which we
are or the Parent is, as applicable, merged, amalgamated or of which we or the Parent becomes pursuant
to a scheme of arrangement or the person which acquires by sale, lease or other transfer the consolidated
properties and assets of us or the Parent, substantially as an entirety, shall (i) be a corporation, limited
liability company, partnership, trust or other business entity organized and existing under the laws of the
United States of America, any State thereof, the District of Columbia, Ireland (meaning Ireland exclusive of
Northern Ireland) or Bermuda; provided, however, that in the case of the Parent, such person is treated as
a corporation for U.S. federal income tax purposes and (ii) such person (if other than us or the Parent, as
applicable) expressly assumes, by an indenture supplemental to the indenture governing the notes,
executed and delivered to the trustee, in form satisfactory to the trustee, the obligations of us or the
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Parent, as the case may be, under the notes and the indenture (including, for the avoidance of doubt, the
obligation to pay additional amounts as described above under “—Additional amounts”); and
(2) after giving effect to such transaction, no event of default or default shall have occurred and be
continuing.
Upon any such consolidation, merger, amalgamation or transfer, the resulting, surviving, transferee or
successor person (if not us or the Parent, as the case may be) shall succeed to, and may exercise every right
and power of ours or the Parent’s under, the indenture, and we or the Parent, as the case may be, shall be
discharged from the obligations under the notes and the indenture except in the case of any such lease.
Although these types of transactions are permitted under the indenture, certain of the foregoing transactions
could constitute a fundamental change permitting each holder to require us to repurchase the notes of such
holder as described above.
The indenture also provides that none of us, the Parent or any successor shall be a tax resident of a tax
jurisdiction other than the United States, Ireland or Bermuda unless being a tax resident of such jurisdiction will
not provide us a right to redeem the notes either under the laws in force at the time such person became a tax
resident or successor or laws announced at that time; provided that the we will continue to have the benefit of
the redemption provisions described under “—Optional redemption— Optional redemption for changes in the
tax laws of a relevant taxing jurisdiction” after such change of jurisdiction in compliance with the above
provisions.
Events of default
Each of the following is an event of default with respect to the notes:
(1) we fail to pay or cause to be paid an installment of interest, if any, on any of the notes, which failure
continues for 30 days after the date when due;
(2) we fail to pay or cause to be paid the principal of any note when the same becomes due and payable at its
stated maturity, upon redemption, upon required repurchase, upon declaration of acceleration or
otherwise;
(3) we or the Parent, as applicable, fail to deliver when due the consideration deliverable upon exchange of
the notes and such failure continues for five business days;
(4) our failure to comply with our notice obligations as described under “—Fundamental change permits
holders to require us to repurchase notes,” “—Exchange rights—Exchange upon specified distributions and
corporate events,” or “—Exchange rate adjustments—Adjustment to exchange rate upon exchange upon a
make-whole fundamental change or a redemption”;
(5) failure by us or the Parent to comply with our respective obligations under “—Consolidation, merger,
amalgamation and sale of assets” above;
(6) we fail to perform or observe (or obtain a waiver with respect to) any term, covenant or agreement
contained in the notes or the indenture and not otherwise explicitly provided for in this section for a period
of 60 days after receipt by us of notice of such failure from the trustee or by us and the trustee from the
holders of at least 25% of the aggregate principal amount of then outstanding notes;
(7) default by us, the Parent or any of the Parent’s other subsidiaries with respect to any mortgage,
agreement or other instrument under which there may be outstanding, or by which there may be secured
or evidenced, any indebtedness for money borrowed in excess of $40 million (or its foreign currency
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equivalent at the time) in the aggregate of us, the Parent and/or any of the Parent’s other subsidiaries at
any one time outstanding, whether such indebtedness now exists or shall hereafter be created (i) resulting
in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the
principal or interest of any such indebtedness when due and payable at its stated maturity, upon
redemption, upon required repurchase, upon declaration of acceleration or otherwise, and such
acceleration shall not have been rescinded or annulled or such failure to pay shall have been cured within
60 days after written notice has been received by us, the Parent or such subsidiary from the trustee or
holders of at least 25% in aggregate principal amount of the outstanding notes;
(8) a final judgment for the payment of $40.0 million (or its foreign currency equivalent at the time) or more
(excluding any amounts covered by insurance or bond) rendered against us, the Parent or any of the
Parent’s other significant subsidiaries (as defined below) by a court of competent jurisdiction, which
judgment is not discharged, stayed, vacated, paid or otherwise satisfied within 60 days after (i) the date on
which the right to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which
all rights to appeal have been extinguished;
(9) certain events of bankruptcy, insolvency, examinership or reorganization of us, the Parent or any
significant subsidiary that the Parent may have; or
(10) the guarantee of the Parent ceases to be in full force and effect (except as contemplated by the terms of
the indenture) or is declared null and void in a judicial proceeding or the Parent denies or disaffirms its
obligations under the indenture or its guarantee.
A “significant subsidiary” is a subsidiary that is a “significant subsidiary” as defined under Rule 1-02(w) of
Regulation S-X under the Exchange Act; provided that, in the case of a subsidiary that meets the criteria of
clause (3) of the definition thereof but not clause (1) or (2) thereof, such subsidiary shall not be deemed to be a
significant subsidiary unless the subsidiary’s income (or loss) from continuing operations before income taxes,
extraordinary items and cumulative effect of a change in accounting principle exclusive of amounts attributable
to any non-controlling interests for the last completed fiscal year prior to the date of such determination
exceeds $25.0 million.
If an event of default occurs and is continuing (other than an event of default arising under clause (9) above
with respect to us or the Parent), the trustee by notice to us, or the holders of at least 25% in principal amount
of the outstanding notes by notice to us and the trustee, may, and the trustee at the request of such holders
shall, declare 100% of the principal of and accrued and unpaid interest, if any, on all the notes to be due and
payable.
In case of certain events of bankruptcy, insolvency, examinership or reorganization, involving us or the Parent,
100% of the principal of and accrued and unpaid interest on the notes will automatically become due and
payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be
due and payable immediately.
Notwithstanding the foregoing, the indenture will provide that, to the extent we elect, the sole remedy for an
event of default relating to (i) our failure to file with the trustee pursuant to Section 314(a)(1) of the Trust
Indenture Act any documents or reports that the Parent is required to file with the SEC pursuant to Section 13
or 15(d) of the Exchange Act (to the extent such section of the Trust Indenture Act is applicable to the indenture)
or (ii) the Parent’s failure to comply with the obligations as set forth under “—Reports and Rule 144A
information” below, will for the first 360 days after the occurrence of such an event of default, consist
exclusively of the right to receive additional interest on the notes (1) at a rate equal to 0.25% per annum of the
principal amount of the notes outstanding for each day during the first 180 days after the occurrence of such an
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event of default during which such event of default is continuing and (2) at a rate equal to 0.50% per annum of
the principal amount of the notes outstanding from the 181st day until the 360th day following the occurrence
of such event of default during which such event of default is continuing.
If we so elect, such additional interest will be payable in the same manner and on the same dates as the stated
interest payable on the notes and will be separate and distinct from, and in addition to, any additional interest
that may accrue as described under “—No registration rights; additional interest.” On the 361st day after the
occurrence of the event of default (if the event of default relating to the reporting obligations is not cured or
waived prior to such 361st day), the notes will be subject to acceleration as provided above. The provisions of
the indenture described in this paragraph will not affect the rights of holders of notes in the event of the
occurrence of any other event of default. In the event we do not elect to pay the additional interest following an
event of default in accordance with this paragraph and the immediately following paragraph (or we elect to
make such payment but do not pay the additional interest when due), the notes will be subject to acceleration
as provided above. In no event shall additional interest payable pursuant to the foregoing election accrue,
together with any additional interest payable pursuant to “—No registration rights; additional interest” below,
at a rate per year in excess of 0.50% per annum, regardless of the number of events or circumstances giving
rise to requirements to pay such additional interest pursuant to this and the immediately preceding paragraph
or pursuant to “—No registration rights; additional interest” below. With regard to any event of default relating
to our failure to comply with our obligations as set forth under “—Reports and Rule 144A information” below,
no additional interest shall accrue after such event of default has been cured.
In order to elect to pay the additional interest as the sole remedy during the first 360 days after the occurrence
of an event of default relating to the failure to comply with the reporting obligations in accordance with the
immediately preceding paragraphs, we must notify all holders of notes, the trustee and the paying agent in
writing of such election prior to the beginning of such 360-day period. Upon our failure to timely give such
notice, the notes will be immediately subject to acceleration as provided above.
If any portion of the amount payable on the notes upon acceleration is considered by a court to be unearned
interest (through the allocation of the value of the instrument to the embedded warrant or otherwise), the
court could disallow recovery of any such portion.
The holders of a majority in principal amount of the outstanding notes may waive all past defaults (except with
respect to nonpayment of principal (including the nonpayment of the fundamental change repurchase price and
redemption price) or interest or with respect to the failure to deliver the consideration due upon exchange) and
rescind any such acceleration with respect to the notes and its consequences if (i) rescission would not conflict
with any judgment or decree of a court of competent jurisdiction, (ii) all existing events of default, other than
the nonpayment of the principal of and interest on the notes that have become due solely by such declaration
of acceleration, have been cured or waived and (iii) all payments due to the trustee have been made.
Each holder shall have the right to receive payment or delivery, as the case may be, of:
• the principal (including the fundamental change repurchase price and redemption price, if applicable) of;
• accrued and unpaid interest, if any, on; and
• the consideration due upon exchange of,
its notes, on or after the respective due dates expressed or provided for in the indenture, or to institute suit for
the enforcement of any such payment or delivery, as the case may be, and such right to receive such payment
or delivery, as the case may be, on or after such respective dates shall not be impaired or affected without the
consent of such holder.
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Subject to the provisions of the indenture relating to the duties of the trustee, if an event of default occurs and
is continuing, the trustee will be under no obligation to exercise any of the rights or powers under the indenture
at the request or direction of any of the holders unless such holders have offered to the trustee indemnity or
security satisfactory to it against any loss, liability or expense. Except to enforce the right to receive payment of
principal (including the payment of the fundamental change repurchase price and redemption price, if
applicable) or interest when due, or the right to receive payment or delivery of the consideration due upon
exchange, no holder may pursue any remedy with respect to the indenture or the notes unless:
(1) such holder has previously given the trustee written notice that an event of default is continuing;
(2) holders of at least 25% in principal amount of then outstanding notes have requested the trustee to pursue
the remedy;
(3) such holders have offered the trustee security or indemnity satisfactory to it against any loss, liability or
expense;
(4) the trustee has not complied with such request within 60 days after the receipt of the request and the
offer of security or indemnity; and
(5) the holders of a majority in principal amount of the outstanding notes have not given the trustee a
direction that, in the opinion of the trustee, is inconsistent with such request within such 60-day period.
Subject to certain restrictions, the holders of a majority in principal amount of the outstanding notes are given
the right to direct the time, method and place of conducting any proceeding for any remedy available to the
trustee or of exercising any trust or power conferred on the trustee.
The indenture provides that in the event an event of default has occurred and is continuing, the trustee will be
required in the exercise of its powers to use the degree of care that a prudent person would use in the conduct
of its own affairs. The trustee, however, may refuse to follow any direction that conflicts with law or the
indenture or that the trustee determines is unduly prejudicial to the rights of any other holder or that would
involve the trustee in personal liability. Prior to taking any action under the indenture, the trustee will be
entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by
taking or not taking such action.
The indenture provides that if a default occurs and is continuing and is known to a responsible officer of the
trustee, the trustee must mail to each holder notice of the default within 90 days after it occurs. Except in the
case of a default in the payment of principal (including the payment of the fundamental change repurchase
price and redemption price) of or interest on any note or a default in the payment or delivery of the
consideration due upon exchange, the trustee may withhold notice if and so long as it in good faith determines
that withholding notice is in the interests of the holders. In addition, we are required to deliver to the trustee,
within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of
any default that occurred during the previous year. We are also required to deliver to the trustee, within
15 business days after becoming aware of the occurrence of any default or event of default, written notice of
such default or event of default, its status and what action we are taking or proposes to take in respect thereof.
Additional interest that is payable pursuant to the foregoing provisions will be payable in arrears on each
interest payment date following accrual in the same manner as regular interest on the notes. Payments of the
fundamental change repurchase price and redemption price, principal and interest that are not made when due
will accrue interest per annum at the then-applicable interest rate from the required payment date.
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Modification and amendment
Subject to certain exceptions, the indenture or the notes may be amended with the consent of the holders of at
least a majority of the principal amount of then outstanding notes (including without limitation, consents
obtained in connection with a repurchase of, or tender or exchange offer for, notes) and, subject to certain
exceptions, any past default or compliance with any provisions may be waived with the consent of the holders
of a majority of the principal amount of then outstanding notes (including, without limitation, consents
obtained in connection with a repurchase of, or tender offer or exchange offer for, notes). However, no
amendment may without the consent of each holder of an outstanding note affected:
(1) alter the manner of calculation or rate of accrual of interest on any note or change the time of payment of
any installment of interest on any note;
(2) make any of the notes payable in money or securities other than that stated in the note;
(3) change the stated maturity of any note;
(4) reduce the principal amount, fundamental change repurchase price or redemption price with respect to
any of the notes;
(5) make any change that adversely affects the rights of holders to require us to purchase the notes at the
option of holders upon a fundamental change;
(6) impair the right to institute suit for the enforcement of any payment on or with respect to any note or with
respect to the exchange of any note;
(7) adversely affect the exchange rights of the notes, including by modifying any of the notice provisions;
(8) change the percentage in aggregate principal amount of then outstanding notes necessary to modify or
amend the indenture or to waive any past default or event of default;
(9) change the ranking of the notes or guarantee;
(10) change our obligation to pay additional amounts in respect of any note;
(11) reduce the amount of notes whose holders must consent to an amendment or make any other change in
the amendment provisions which require each holder’s consent or in the waiver provisions; or
(12) release the Parent from its obligations under its guarantee or the indenture.
We, the Parent and the trustee may modify certain provisions of the indenture without the consent of any
holder of the notes, including to:
(1) evidence a successor to us or the Parent and the assumption by that successor of our or the Parent’s
respective obligations under the indenture and the notes;
(2) provide for the exchange of notes into reference property and effect any other changes to the terms of the
notes required under the indenture in connection therewith;
(3) add to our covenants for the benefit of the holders or surrender any right or power conferred upon us;
(4) secure our obligations in respect of the notes;
(5) evidence and provide for the acceptance of the appointment of a successor trustee in accordance with the
indenture;
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(6) cure any ambiguity, omission, inconsistency or correct or supplement any defective provision contained in
the indenture that does not adversely affect the holders of the notes in any material respect;
(7) to add guarantees with respect to the notes;
(8) make any other changes to the Indenture that would not reasonably be expected to adversely affect the
interests of the holders (other than those of a holder that has consented to such change); or
(9) conform the provisions of the indenture to the “Description of notes” section in the preliminary offering
memorandum, as supplemented by the related pricing term sheet, to the extent that the trustee has
received an officer’s certificate stating that any text to be so conformed constitutes an unintended conflict
with the corresponding provision in such “Description of notes” section.
Holders do not need to approve the particular form of any proposed amendment. It will be sufficient if such
holders approve the substance of the proposed amendment. After an amendment under the indenture becomes
effective, we are required to send to the holders a notice briefly describing such amendment. However, the
failure to give such notice to all the holders, or any defect in the notice, will not impair or affect the validity of
the amendment.
Discharge
We may satisfy and discharge our obligations under the indenture by delivering to the securities registrar for
cancellation all outstanding notes or by depositing with the trustee or delivering to the holders, as applicable,
after the notes have become due and payable, whether at the stated maturity, any fundamental change
repurchase date or any redemption date, upon exchange or otherwise, cash and/or ordinary shares, if any
(solely to satisfy outstanding exchanges, as applicable), sufficient to pay all of the outstanding notes and paying
all other sums payable under the indenture by us. Such discharge is subject to terms contained in the indenture.
Calculations in respect of notes
Except as otherwise provided above, we will be responsible for making all calculations called for under the
notes. These calculations include, but are not limited to, determinations of the last reported sale prices of
ordinary shares, accrued interest payable on the notes, the trading prices of the notes and the exchange rate of
the notes. We will make all these calculations in good faith and, absent manifest error, our calculations will be
final and binding on holders of notes. We will provide a schedule of our calculations to each of the trustee and
the exchange agent, and each of the trustee and exchange agent is entitled to rely conclusively upon the
accuracy of our calculations without independent verification. The trustee will forward our calculations to any
holder of notes upon the written request of that holder.
Reports and Rule 144A information
The indenture provides that any annual or quarterly reports (on Form 10-K or Form 10-Q or any successor form)
that the Parent is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act must be filed
by us with the trustee within 15 days after the same are required to be filed with the SEC (giving effect to any
grace period provided by Rule 12b-25 or any successor rule under the Exchange Act). Documents filed by the
Parent with the SEC via the EDGAR system (or any successor thereto) will be deemed to be filed with the trustee
as of the time such documents are filed via EDGAR (or any successor thereto); provided that the trustee shall
have no obligation whatsoever to determine whether or not such reports have been filed via EDGAR (or such
successor). Delivery of such reports to the trustee is for informational purposes only and the trustee’s receipt of
the same shall not constitute constructive notice of any information contained therein or determinable from
information contained therein, including our compliance with any of our covenants under the indenture (as to
which the trustee is entitled to rely exclusively on officer’s certificates).
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At any time the Parent is not subject to Section 13 or 15(d) of the Exchange Act, we will, so long as any of the
notes or ordinary shares delivered upon exchange of the notes will, at such time, constitute “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the trustee and
will, upon written request, provide to any holder, beneficial owner or prospective purchaser of such notes or
such ordinary shares, as applicable, the information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act to facilitate the resale of such notes or such ordinary shares, as applicable, pursuant to
Rule 144A under the Securities Act.
We and the Parent will take such further action as any holder or beneficial owner of such notes or such ordinary
shares, as applicable, may reasonably request from time to time to enable such holder or beneficial owner to
sell such notes or such ordinary shares, as applicable, in accordance with Rule 144A under the Securities Act, as
such rule may be amended from time to time.
Trustee
U.S. Bank National Association, is the trustee, security registrar, paying agent, bid solicitation agent and
exchange agent. U.S. Bank National Association, in each of its capacities, including without limitation as trustee,
security registrar, paying agent, exchange agent and bid solicitation agent, assumes no responsibility for the
accuracy or completeness of the information concerning us, the Parent or our affiliates or any other party
contained in this document or the related documents or for any failure by us, the Parent or any other party to
disclose events that may have occurred and may affect the significance or accuracy of such information.
We may in the future maintain banking relationships in the ordinary course of business with the trustee and its
affiliates.
Governing law
The indenture provides that it and the notes, and any claim, controversy or dispute arising under or related to
the indenture or the notes, will be governed by and construed in accordance with the laws of the State of
New York.
Restrictions on transfer
The sale of the notes and any ordinary shares deliverable upon exchange thereof has not been registered under
the Securities Act. As a result, the notes and any such ordinary shares, as applicable, deliverable upon exchange
of the notes may not be offered or sold within the United States or to, or for the account or benefit of, U.S.
persons, except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. See “Transfer restrictions.” In addition, upon any exchange of notes prior to
the notes becoming freely tradable as described under “—No registration rights; additional interest,” any
ordinary shares deliverable in exchange for such exchanged notes will be restricted ordinary shares bearing, or
subject to, a restrictive legend and assigned a restricted CUSIP number. Any transfer or sale of such restricted
ordinary shares must be effected under an effective registration statement or pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the Securities Act. See “Transfer
restrictions.”
No registration rights; additional interest
Neither we nor the Parent intend to file a shelf registration statement for the resale of the notes or any
ordinary shares deliverable upon exchange of the notes. As a result, you may resell your notes or any ordinary
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shares deliverable upon the exchange of the notes only pursuant to an exemption from the registration
requirements of the Securities Act and other applicable securities laws.
Under Rule 144 under the Securities Act (“Rule 144”) as currently in effect, a person who acquired notes from us,
the Parent or our respective affiliates and who has beneficially owned notes or ordinary shares delivered upon
exchange of the notes for at least one year is entitled to sell such notes or ordinary shares without registration,
but only if such person is not deemed to have been our or the Parent’s affiliate, as applicable, at the time of, or at
any time during the three months immediately preceding, the sale. Furthermore, under Rule 144, a person who
acquired notes from us, the Parent or our respective affiliates and who has beneficially owned notes or ordinary
shares delivered upon exchange of the notes for at least six months is entitled to sell such notes or ordinary shares
delivered upon exchange of the notes without registration, so long as (i) such person is not deemed to have been
our or the Parent’s affiliate at the time of, or at any time during the three months immediately preceding, the sale
and (ii) the Parent has filed all required reports under Section 13 or 15(d) of the Exchange Act, as applicable, on a
timely basis during the twelve months preceding such sale (other than current reports on Form 8-K). If the Parent
is not current in the Exchange Act reports, a person who acquires notes or ordinary shares delivered upon
exchange of the notes could be required to hold such ordinary shares for up to one year following such acquisition.
If the Parent is not current in the Exchange Act reports, a person who is our or Parent’s affiliate and who owns
notes could be required to hold such notes indefinitely. If the Parent is not current in filing the Exchange Act
reports, a person who is the Parent’s affiliate and who owns ordinary shares delivered upon exchange of the notes
could be required to hold such ordinary shares indefinitely.
If, at any time during the six-month period beginning on, and including, the date which is six months after the
last date of original issuance of the notes offered hereby, the Parent fails to have timely filed any document or
report that the Parent is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, as
applicable (after giving effect to all applicable grace periods thereunder and other than reports on Form 8-K),
or the notes are not otherwise freely tradable, including pursuant to Rule 144 as described above, by holders
other than our affiliates or holders that were our affiliates during the three months immediately preceding the
date of the proposed transfer (as a result of restrictions pursuant to U.S. federal securities law or the terms of
the indenture or the notes), we will pay additional interest on the notes. Additional interest will accrue at a rate
of 0.25% per annum of the principal amount of notes for the first 90 days for which the Parent’s failure to file
has occurred and is continuing and at a rate of 0.50% per annum of the principal amount of notes for the
remaining portion of such period; provided that such additional interest shall cease to accrue on the date that is
one year from the last original issuance date of the notes.
Further, if, and for so long as, the restrictive legend on the notes has not been removed, the notes are assigned
a restricted CUSIP number or the notes are not otherwise freely tradable by holders other than our affiliates or
holders that were our affiliates during the three months immediately preceding the date of the proposed
transfer (without restrictions pursuant to U.S. federal securities law or the terms of the indenture or the notes)
as of the 375th day after the last date of original issuance of the notes offered hereby, we will pay additional
interest on the notes. Additional interest will accrue on the notes from the 376th day after the last date of
original issuance of the notes offered hereby at the rate of 0.50% per annum of the principal amount of notes
outstanding until such restrictive legend is removed, the notes are assigned an unrestricted CUSIP number and
the notes are freely tradable as described above. In no event shall additional interest payable pursuant to the
foregoing provisions accrue, together with any additional interest payable as described under “—Events of
Default” above, at a rate per year in excess of 0.50% per annum, regardless of the number of events or
circumstances giving rise to requirements to pay such additional interest pursuant to these provisions or
pursuant to “—Events of default” above.
We cannot assure you when the notes or any ordinary shares deliverable upon the exchange of the notes will
become freely tradable.
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Any note that is repurchased or owned by any affiliate of us or the Parent may not be resold by such affiliate
unless registered under the Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction that results in such note no longer being a “restricted
security” (as defined in Rule 144 under the Securities Act). Until such time as we provide an instruction letter to
DTC notifying and confirming to DTC that the restricted period for the notes has elapsed and instructing DTC to
exchange all “restricted securities” represented by the restricted CUSIP for “unrestricted securities”
represented by an unrestricted CUSIP (and/or otherwise comply with DTC’s applicable procedures) and DTC
moves the notes from a restricted CUSIP number to an unrestricted CUSIP number in accordance with its
applicable procedures, the restricted CUSIP will be the CUSIP number for the notes. At such time as we provide
such instruction letter to DTC (and/or otherwise comply with DTC’s applicable procedures) and DTC has moved
all notes represented by a restricted CUSIP number to an unrestricted CUSIP number, such legend will be
deemed removed from any global note and an unrestricted CUSIP number for the notes will be deemed to be
the CUSIP number for the notes.
Additional interest that is payable pursuant to the foregoing provisions will be payable in arrears on each
interest payment date following accrual in the same manner as regular interest on the notes and will be
separate and distinct from, and in addition to, any additional interest that may accrue at our election as the
sole remedy relating to the failure to comply with our or the Parent’s respective reporting obligations as
described under “—Reports and Rule 144A information.” We shall notify the trustee and the paying agent in
writing of any additional interest that has become due and payable. Such notice shall include reference to the
event that caused the additional interest to become due, the additional interest rate, and the date that such
additional interest shall begin to accrue from. If additional interest shall cease to accrue, we shall notify the
trustee and the paying agent in writing.
Notwithstanding the foregoing, we will not be required to pay additional interest with respect to any failure to
timely file any report, if the notes are not eligible for resale under Rule 144 or if the notes are not freely
tradable, in each case as required under this “No registration rights; additional interest”: (i) on any date on
which (a) we and the Parent have filed a shelf registration statement for the resale of the notes (including the
Parent’s guarantee of the notes) and any ordinary shares issuable upon exchange of the notes, (b) such shelf
registration statement is effective and usable by holders identified therein as selling security holders for the
resale of the notes and any ordinary shares issued upon exchange of the notes, (c) the holders may register the
resale of their notes under such shelf registration statement on terms customary for the resale of exchangeable
securities offered in reliance on Rule 144A and (d) the notes and/or ordinary shares sold pursuant to such shelf
registration statement become freely tradable as a result of such sale, or (ii) once we have complied with the
requirements set forth in clause (i) above for a period of two years.
Unless the context requires otherwise, all references to interest in this offering memorandum include additional
interest, if any, payable as described under “—No registration rights; additional interest” and/or payable at our
election as the sole remedy relating to the failure to comply with the reporting obligations as described under
“—Events of default.”
Book-entry, settlement and clearance
The global notes
The notes will be initially issued in the form of one or more registered notes in global form, without interest
coupons (the “global notes”). Upon issuance, each of the global notes will be deposited with the trustee as
custodian for DTC and registered in the name of Cede & Co., as nominee of DTC.
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Ownership of beneficial interests in a global note will be limited to persons who have accounts with DTC (“DTC
participants”) or persons who hold interests through DTC participants. We expect that under procedures
established by DTC:
• upon deposit of a global note with DTC’s custodian, DTC will credit portions of the principal amount of the
global note to the accounts of the DTC participants designated by the initial purchasers; and
• ownership of beneficial interests in a global note will be shown on, and transfer of ownership of those
interests will be effected only through, records maintained by DTC (with respect to interests of DTC
participants) and the records of DTC participants (with respect to other owners of beneficial interests in the
global note).
Beneficial interests in global notes may not be exchanged for notes in physical, certificated form except in the
limited circumstances described below.
The global notes and beneficial interests in the global notes will be subject to restrictions on transfer as
described under “Transfer restrictions.”
Book-entry procedures for the global notes
All interests in the global notes will be subject to the operations and procedures of DTC. We provide the
following summary of those operations and procedures solely for the convenience of investors. The operations
and procedures of DTC are controlled by that settlement system and may be changed at any time. Neither we
nor the initial purchasers are responsible for those operations or procedures.
DTC has advised us that it is:
• a limited purpose trust company organized under the laws of the State of New York;
• a “banking organization” within the meaning of the New York State Banking Law;
• a member of the Federal Reserve System;
• a “clearing corporation” within the meaning of the Uniform Commercial Code; and
• a “clearing agency” registered under Section 17A of the Exchange Act.
DTC was created to hold securities for its participants and to facilitate the clearance and settlement of
securities transactions between its participants through electronic book-entry changes to the accounts of its
participants. DTC’s participants include securities brokers and dealers, including the initial purchasers; banks
and trust companies; clearing corporations and other organizations. Indirect access to DTC’s system is also
available to others such as banks, brokers, dealers and trust companies; these indirect participants clear
through or maintain a custodial relationship with a DTC participant, either directly or indirectly. Investors who
are not DTC participants may beneficially own securities held by or on behalf of DTC only through DTC
participants or indirect participants in DTC.
So long as DTC’s nominee is the registered owner of a global note, that nominee will be considered the sole
owner or holder of the notes represented by that global note for all purposes under the indenture.
Except as provided below, owners of beneficial interests in a global note:
• will not be entitled to have notes represented by the global note registered in their names;
• will not receive or be entitled to receive physical, certificated notes; and
• will not be considered the owners or holders of the notes under the indenture for any purpose, including with
respect to the giving of any direction, instruction or approval to the trustee under the indenture.
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As a result, each investor who owns a beneficial interest in a global note must rely on the procedures of DTC to
exercise any rights of a holder of notes under the indenture (and, if the investor is not a participant or an
indirect participant in DTC, on the procedures of the DTC participant through which the investor owns its
interest).
Payments of principal and interest with respect to the notes represented by a global note will be made by the
paying agent to DTC’s nominee as the registered holder of the global note. Neither we nor the paying agent will
have any responsibility or liability for the payment of amounts to owners of beneficial interests in a global note,
for any aspect of the records relating to or payments made on account of those interests by DTC, or for
maintaining, supervising or reviewing any records of DTC relating to those interests.
Payments by participants and indirect participants in DTC to the owners of beneficial interests in a global note
will be governed by standing instructions and customary industry practice and will be the responsibility of those
participants or indirect participants and DTC.
Transfers between participants in DTC will be effected under DTC’s procedures and will be settled in same-day
funds.
Certificated notes
Notes in physical, certificated form will be issued and delivered to each person that DTC identifies as a
beneficial owner of the related notes only if:
• DTC notifies us at any time that it is unwilling or unable to continue as depositary for the global notes and a
successor depositary is not appointed within 90 days;
• DTC ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not
appointed within 90 days; or
• an event of default with respect to the notes has occurred and is continuing and DTC requests that the notes
be issued in physical, certificated form.
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Description of share capital
The following description of the Parent’s share capital is a summary. This summary does not purport to be
complete and is qualified in its entirety by reference to the Companies Acts, and the complete text of the
Parent’s memorandum and articles of association, which memorandum and articles of association are filed as
Exhibit 3.1 to the Parent’s Current Report on Form 8-K filed with the SEC on January 18, 2012. You should read
those laws and documents carefully.
Capital structure
Authorized share capital
As of the date of this offering memorandum, the authorized share capital of the Parent is €40,000 and
$30,000, divided into 4,000,000 non-voting Euro deferred shares with nominal value of €0.01 per share and
300,000,000 ordinary shares with nominal value of $0.0001 per share.
The Parent may issue shares subject to the maximum authorized share capital contained in its memorandum
and articles of association. The authorized share capital may be increased or reduced (but not below the
number of shares then issued and outstanding) by a resolution approved by a simple majority of the votes cast
at a general meeting, in person or by proxy, of the Parent’s shareholders (referred to under Irish law as an
“ordinary resolution”). The shares comprising the Parent’s authorized share capital may be divided into shares
of such nominal value as the resolution shall prescribe. As a matter of Irish law, the directors of a company may
issue new ordinary or preferred shares for cash without shareholder approval once authorized to do so by the
memorandum and articles of association or by an ordinary resolution adopted by the shareholders at a general
meeting. The authorization may be granted for a maximum period of five years, at which point it must be
renewed by the shareholders by an ordinary resolution.
The Parent’s memorandum and articles of association authorize its board of directors to issue new ordinary or
preferred shares for cash without shareholder approval for a period of five years from the date of adoption of
such memorandum and articles of association, which adoption was effective in January 2012.
The rights and restrictions to which ordinary shares are subject are prescribed in the Parent’s memorandum
and articles of association. The Parent’s memorandum and articles of association permit it to issue preferred
shares once authorized to do so by ordinary resolution. The Parent may, by ordinary resolution and without
obtaining any vote or consent of the holders of any class or series of shares, unless expressly provided by the
terms of that class or series of shares, provide from time to time for the issuance of other classes or series of
shares and to establish the characteristics of each class or series, including the number of shares, designations,
relative voting rights, dividend rights, liquidation and other rights, redemption, repurchase or exchange rights
and any other preferences and relative, participating, optional or other rights and limitations not inconsistent
with applicable law.
Irish law does not recognize fractional shares held of record. Accordingly, the Parent’s memorandum and
articles of association do not provide for the issuance of fractional shares, and the official Irish register of the
Parent will not reflect any fractional shares. Whenever an alteration or reorganization of the Parent’s share
capital would result in any shareholder becoming entitled to fractions of a share, the Parent’s board of
directors may, on behalf of those shareholders that would become entitled to fractions of a share, sell the
shares representing the fractions for the best price reasonably obtainable, to any person and distribute the
proceeds of the sale in due proportion among those members.
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Issued share capital
As of June 30, 2014, 59,589,459 ordinary shares were issued and outstanding. In addition, as of June 30, 2014,
4,000,000 Euro deferred shares were issued and outstanding at that time, which shares are held by nominees
in order to satisfy an Irish legislative requirement to maintain a minimum level of issued share capital
denominated in Euro and to have at least seven registered shareholders. The Euro deferred shares carry no
voting rights and are not entitled to receive any dividend or distribution. On a return of assets, whether on
liquidation or otherwise, the Euro deferred shares will entitle the holder thereof only to the repayment of the
amounts paid up on such shares after repayment of the capital paid up on ordinary shares plus the payment of
$5,000,000 on each of the ordinary shares and the holders of the Euro deferred shares (as such) will not be
entitled to any further participation in the assets or profits of the Parent.
Preemption rights, share warrants and share options
Under Irish law, certain statutory preemption rights apply automatically in favor of shareholders where shares
are to be issued for cash. However, the Parent has opted out of these preemption rights in its memorandum
and articles of association as permitted under Irish law. Because Irish law provides that this opt-out expires
every five years unless renewed by a resolution approved by not less than 75% of the votes cast at a general
meeting, in person or by proxy, of the Parent’s shareholders (referred to under Irish law as a “special
resolution”), the Parent’s memorandum and articles of association provide that this opt-out must be so
renewed. If the opt-out is not renewed, shares issued for cash must be offered to existing shareholders on a pro
rata basis to their existing shareholding before the shares may be issued to any new shareholders. The
statutory preemption rights do not apply (i) where shares are issued for non-cash consideration (such as in a
stock-for-stock acquisition), (ii) to the issue of non-equity shares (that is, shares that have the right to
participate only up to a specified amount in any income or capital distribution) or (iii) where shares are issued
pursuant to an employee stock option or similar equity plan.
The Parent’s memorandum and articles of association provide that, subject to any shareholder approval
requirement under any laws, regulations or the rules of any stock exchange to which it is subject, the Parent’s
board of directors is authorized, from time to time, in its discretion, to grant such persons, for such periods and
upon such terms as it deems advisable, options to purchase such number of shares of any class or classes or of
any series of any class as the Parent’s board of directors may deem advisable, and to cause warrants or other
appropriate instruments evidencing such options to be issued. The Companies Acts provide that directors may
issue share warrants or options without shareholder approval once authorized to do so by the memorandum
and articles of association or an ordinary resolution of shareholders. The Parent is subject to the rules of The
NASDAQ Stock Market LLC and the U.S. Internal Revenue Code of 1986, or the Code, which require shareholder
approval of certain equity plan and share issuances. The Parent’s board of directors may issue shares upon
exercise of validly issued warrants or options without shareholder approval or authorization (up to the relevant
authorized share capital limit).
Dividends
Under Irish law, dividends and distributions may only be made from distributable reserves. Distributable
reserves generally means accumulated realized profits less accumulated realized losses and includes reserves
created by way of capital reduction. In addition, no distribution or dividend may be made unless the Parent’s
net assets are equal to, or in excess of, the aggregate of its called up share capital plus undistributable reserves
and the distribution does not reduce its net assets below such aggregate. Undistributable reserves include the
share premium account, the capital redemption reserve fund and net unrealized profits.
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The determination as to whether or not the Parent has sufficient distributable reserves to fund a dividend must
be made by reference to its “relevant accounts”. The “relevant accounts” are either the last set of
unconsolidated annual audited financial statements or other financial statements properly prepared in
accordance with the Companies Acts (not in accordance with U.S. GAAP), which give a “true and fair view” of
the Parent’s unconsolidated financial position and accord with accepted accounting practice. The relevant
accounts must be filed in the Companies Registration Office (the official public registry for companies in
Ireland).
The Parent’s memorandum and articles of association authorize the directors to declare dividends without
shareholder approval to the extent they appear justified by profits lawfully available for distribution. The
Parent’s board of directors may also recommend a dividend to be approved and declared by the shareholders
at a general meeting. The Parent’s board of directors may direct that the payment be made by distribution of
assets, shares or cash, and no dividend issued may exceed the amount recommended by the directors. The
dividends declared by the directors or shareholders may be paid in the form of cash or non-cash assets and may
be paid in dollars or any other currency.
The Parent’s board of directors may deduct from any dividend payable to any shareholder any amounts payable
by such shareholder to the Parent in relation to its shares.
The Parent may issue shares with preferred rights to participate in dividends declared by the Parent from time
to time, as determined by ordinary resolution. The holders of preferred shares may, depending on their terms,
rank senior to ordinary shares in terms of dividend rights and/or be entitled to claim arrears of a declared
dividend out of subsequently declared dividends in priority to ordinary shareholders.
Share repurchases, redemptions and conversions
Overview
The Parent’s memorandum and articles of association provide that any ordinary share that it has agreed to
acquire shall be deemed to be a redeemable share. Accordingly, for Irish law purposes, the repurchase of
ordinary shares by the Parent may technically be effected as a redemption of those shares as described below
under “—Repurchases and redemptions.” If the Parent’s memorandum and articles of association did not
contain such provision, repurchases by the Parent would be subject to many of the same rules that apply to
purchases of its ordinary shares by subsidiaries described below under “—Purchases by the Parent’s
subsidiaries,” including the shareholder approval requirements described below, and the requirement that any
purchases on market be effected on a “recognized stock exchange,” which, for purposes of the Companies Acts,
includes The NASDAQ Global Select Market. Neither Irish law nor any of the Parent’s constituent documents
places limitations on the right of nonresident or foreign owners to vote or hold its ordinary shares. Except
where otherwise noted, references in this offering memorandum to repurchasing or buying back ordinary
shares refer to the redemption of ordinary shares by the Parent or the purchase of the Parent’s ordinary shares
by one of its subsidiaries, in each case in accordance with the Parent’s memorandum and articles of association
and Irish law as described below.
Repurchases and redemptions
Under Irish law, a company may issue redeemable shares and redeem them out of distributable reserves or the
proceeds of a new issue of shares for that purpose. Please see also “—Dividends”. The Parent may only issue
redeemable shares if the nominal value of the issued share capital that is not redeemable is not less than 10%
of the nominal value of its total issued share capital. All redeemable shares must also be fully-paid and the
terms of redemption of the shares must provide for payment on redemption. Redeemable shares may, upon
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redemption, be cancelled or held in treasury. Based on the provisions of the Parent’s memorandum and articles
of association, shareholder approval will not be required to redeem its shares.
The Parent may also be given an additional general authority to purchase its ordinary shares on market by way
of ordinary resolution, which would take effect on the same terms and be subject to the same conditions as
applicable to purchases by the Parent’s subsidiaries as described below.
The Parent’s board of directors may also issue preferred shares, which may be redeemed at the option of either
the Parent or the shareholder, depending on the terms of such preferred shares. Please see “—Capital
structure—Authorized share capital” for additional information on preferred shares.
Repurchased and redeemed shares may be cancelled or held as treasury shares. The nominal value of treasury
shares held by the Parent at any time must not exceed 10% of the nominal value of its issued share capital. The
Parent may not exercise any voting rights in respect of any shares held as treasury shares. Treasury shares may
be canceled by the Parent or re-issued subject to certain conditions.
Purchases by the Parent’s subsidiaries
Under Irish law, an Irish or non-Irish subsidiary may purchase the Parent’s shares either on market or off
market. For a subsidiary of the Parent to make purchases on market of ordinary shares, the Parent’s
shareholders must provide general authorization for such purchase by way of ordinary resolution. However, as
long as this general authority has been granted, no specific shareholder authority for a particular on market
purchase by a subsidiary of ordinary shares is required. For a purchase of ordinary shares by a subsidiary of the
Parent off market, the proposed purchase contract must be authorized by special resolution of the Parent’s
shareholders before the contract is entered into. The person whose ordinary shares are to be bought back
cannot vote in favor of the special resolution and, for at least 21 days prior to the special resolution being
passed, the purchase contract must be on display or must be available for inspection by the Parent’s
shareholders at its registered office. The Parent’s shareholders authorized the purchase of ordinary shares, by
the Parent or by the Parent’s subsidiaries on July 31, 2014. This authorization will expire no later than
18 months after the date on which it took effect.
In order for one of the Parent’s subsidiaries to make an on market purchase of its shares, such shares must be
purchased on a “recognized stock exchange.” The NASDAQ Global Select Market, on which ordinary shares are
currently listed, is specified as a recognized stock exchange for this purpose by Irish law.
The number of shares held by the Parent’s subsidiaries at any time will count as treasury shares and will be
included in any calculation of the permitted treasury share threshold of 10% of the nominal value of its issued
share capital. While a subsidiary holds the Parent’s shares, it cannot exercise any voting rights in respect of
those shares. The acquisition of ordinary shares by a subsidiary must be funded out of distributable reserves of
the subsidiary.
Lien on shares, calls on shares and forfeiture of shares
The Parent’s memorandum and articles of association provide that it has a first and paramount lien on every
share that is not a fully paid up share for all amounts payable at a fixed time or called in respect of that share.
Subject to the terms of their allotment, directors may call for any unpaid amounts in respect of any shares to be
paid, and if payment is not made, the shares may be forfeited. These provisions are standard inclusions in the
memorandum and articles of association of an Irish public company limited by shares such as the Parent’s and
are only be applicable to ordinary shares that have not been fully paid up.
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Bonus shares
Under the Parent’s memorandum and articles of association, the Parent’s board of directors may resolve to
capitalize any amount credited to any reserve or fund available for distribution or the share premium account
or any other undistributable reserve of the Parent through the issuance of fully paid up bonus shares on the
same basis of entitlement as would apply in respect of a dividend distribution.
Consolidation and division; subdivision
Under the Parent’s memorandum and articles of association, the Parent may, by ordinary resolution,
consolidate and divide all or any of its share capital into shares of larger nominal value than its existing shares
or subdivide its shares into smaller amounts than are fixed by the Parent’s memorandum and articles of
association.
Reduction of share capital
The Parent may, by ordinary resolution, reduce its authorized share capital in any way. The Parent also may, by
special resolution and subject to confirmation by the Irish High Court, reduce or cancel its issued share capital
(which includes share premium) in any manner permitted by the Companies Acts.
Annual meetings of shareholders
The Parent is required to hold an annual general meeting at intervals of no more than 15 months from the
previous annual general meeting, provided that an annual general meeting is held in each calendar year
following the first annual general meeting and no more than nine months after the Parent’s fiscal year-end. Any
annual general meeting may be held outside Ireland if a resolution so authorizing has been passed at the
preceding annual general meeting.
Notice of an annual general meeting must be given to all of the Parent’s shareholders and to its auditors. The
Parent’s memorandum and articles of association provide for a minimum notice period of 21 clear days, which
is the minimum permitted under Irish law.
The only matters which must, as a matter of Irish law, be transacted at an annual general meeting are the
presentation of the annual accounts, balance sheet and reports of the directors and auditors, the appointment
of new auditors and the fixing of the auditor’s remuneration (or delegation of same). If no resolution is made in
respect of the reappointment of an existing auditor at an annual general meeting, the existing auditor will be
deemed to have continued in office.
Extraordinary general meetings of shareholders
Extraordinary general meetings may be convened by (i) the Parent’s board of directors, (ii) on requisition of the
Parent’s shareholders holding not less than 10% of its paid up share capital carrying voting rights, (iii) on
requisition of the Parent’s auditors or (iv) in exceptional cases, by order of the court. Extraordinary general
meetings are generally held for the purpose of approving shareholder resolutions as may be required from time
to time. At any extraordinary general meeting only such business shall be conducted as is set forth in the notice
thereof.
Notice of an extraordinary general meeting must be given to all of the Parent’s shareholders and to its auditors.
Under Irish law and the Parent’s memorandum and articles of association, the minimum notice periods are 21
clear days’ notice in writing for an extraordinary general meeting to approve a special resolution and 14 clear
days’ notice in writing for any other extraordinary general meeting.
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In the case of an extraordinary general meeting convened by the Parent’s shareholders, the proposed purpose
of the meeting must be set out in the requisition notice. Upon receipt of any such valid requisition notice, the
Parent’s board of directors has 21 days to convene a meeting of its shareholders to vote on the matters set out
in the requisition notice. This meeting must be held within two months of the receipt of the requisition notice. If
the Parent’s board of directors does not convene the meeting within such 21-day period, the requisitioning
shareholders, or any of them representing more than one half of the total voting rights of all of them, may
themselves convene a meeting, which meeting must be held within three months of the Parent’s receipt of the
requisition notice.
If the Parent’s board of directors becomes aware that its net assets are not greater than half of the amount of
the Parent’s called-up share capital, it must convene an extraordinary general meeting of its shareholders not
later than 28 days from the date that they learn of this fact to consider how to address the situation.
Quorum for general meetings
The Parent’s memorandum and articles of association provide that no business shall be transacted at any
general meeting unless a quorum is present. One or more of the Parent’s shareholders present in person or by
proxy holding not less than a majority of the Parent’s issued and outstanding shares entitled to vote at the
meeting in question constitute a quorum.
Voting
At general meetings of the Parent, a resolution put to the vote of the meeting is decided on a poll. The Parent’s
memorandum and articles of association provide that its board of directors or its chairman may determine the
manner in which the poll is to be taken and the manner in which the votes are to be counted.
Each shareholder is entitled to one vote for each ordinary share that he or she holds as of the record date for
the meeting. Voting rights may be exercised by shareholders registered in the Parent’s share register as of the
record date for the meeting or by a duly appointed proxy, which proxy need not be a shareholder. Where
interests in shares are held by a nominee trust company, such company may exercise the rights of the
beneficial holders on their behalf as their proxy. All proxies must be appointed in the manner prescribed by the
Parent’s memorandum and articles of association, which permit shareholders to notify the Parent of their proxy
appointments electronically in such manner as may be approved by the Parent’s board of directors.
In accordance with the Parent’s memorandum and articles of association, it may from time to time be
authorized by ordinary resolution to issue preferred shares. These preferred shares may have such voting
rights as may be specified in the terms of such preferred shares (e.g., they may carry more votes per share than
ordinary shares or may entitle their holders to a class vote on such matters as may be specified in the terms of
the preferred shares). Treasury shares or the Parent’s shares that are held by its subsidiaries are not entitled to
be voted at general meetings of shareholders.
Irish law requires special resolutions of the Parent’s shareholders at a general meeting to approve certain
matters. Examples of matters requiring special resolutions include:
• amending the objects or memorandum of association of the Parent;
• amending the articles of association of the Parent;
• approving a change of name of the Parent;
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• authorizing the entering into of a guarantee or provision of security in connection with a loan, quasi-loan or
credit transaction to a director or a person who is deemed to be “connected” to a director for the purposes of
the Companies Acts;
• opting out of preemption rights on the issuance of new shares;
• re-registration of the Parent from a public limited company to a private company;
• variation of class rights attaching to classes of shares (where the articles of association do not provide
otherwise);
• purchase of the Parent’s shares off market;
• reduction of issued share capital;
• sanctioning a compromise/scheme of arrangement with creditors or shareholders;
• resolving that the Parent be wound up by the Irish courts;
• resolving in favor of a shareholders’ voluntary winding-up; and
• setting the re-issue price of treasury shares.
Unanimous shareholder consent to action without meeting
The Companies Acts provide that shareholders may approve an ordinary or special resolution of shareholders
without a meeting only if (a) all shareholders sign the written resolution and (b) the company’s articles of
association permit written resolutions of shareholders (the Parent’s articles of association contain the
appropriate authorizations for this purpose).
Variation of rights attaching to a class or series of shares
Under the Parent’s memorandum and articles of association and the Companies Acts, any variation of class
rights attaching to its issued shares must be approved by a special resolution of the Parent’s shareholders of
the affected class or with the consent in writing of the holders of three-quarters of all the votes of that class of
shares.
The provisions of the Parent’s memorandum and articles of association relating to general meetings apply to
general meetings of the holders of any class of the Parent’s shares except that the necessary quorum is
determined in reference to the shares of the holders of the class. Accordingly, for general meetings of holders
of a particular class of the Parent’s shares, a quorum consists of the holders present in person or by proxy
representing at least one half of the issued shares of the class.
Inspection of books and records
Under Irish law, shareholders have the right to: (i) receive a copy of the Parent’s memorandum and articles of
association and any act of the Irish Government which alters its memorandum; (ii) inspect and obtain copies of
the minutes of general meetings and the Parent’s resolutions; (iii) inspect and receive a copy of the register of
shareholders, register of directors and secretaries, register of directors’ interests and other statutory registers
maintained in respect of the ordinary shares; (iv) receive copies of balance sheets and directors’ and auditors’
reports which have previously been sent to shareholders prior to an annual general meeting; and (v) receive
balance sheets of any of the Parent’s subsidiaries that have previously been sent to shareholders prior to an
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annual general meeting for the preceding ten years. The Parent’s auditors also have the right to inspect all of
the Parent’s books, records and vouchers. The auditors’ report must be circulated to the shareholders with the
Parent’s financial statements prepared in accordance with Irish law 21 days before the annual general meeting
and must be read to the shareholders at the Parent’s annual general meeting.
Acquisitions
An Irish public limited company may be acquired in a number of ways, including:
• a court-approved scheme of arrangement under the Companies Acts. A scheme of arrangement with
shareholders requires a court order from the Irish High Court and the approval of a majority in number
representing 75% in value of the shareholders present and voting in person or by proxy at a meeting called
to approve the scheme;
• through a tender or takeover offer by a third party for all of the Parent’s shares. Where the holders of 80%
or more of the Parent’s shares have accepted an offer for their shares, the remaining shareholders may also
be statutorily required to transfer their shares, and if the bidder does not exercise its “squeeze out” right,
then the non-accepting shareholders also have a statutory right to require the bidder to acquire their shares
on the same terms. If the Parent’s shares were to be listed on the main securities market of the Irish Stock
Exchange or another regulated stock exchange in the European Union, this threshold would be increased to
90%; and
• by way of a merger with an EU-incorporated company under the EU Cross-Border Mergers Directive
2005/56/EC. Such a merger must be approved by a special resolution.
Irish law does not generally require shareholder approval for a sale, lease or exchange of all or substantially all
of a company’s property and assets, unless the company is listed on a regulated stock exchange in the
European Union.
Appraisal rights
Generally, under Irish law, shareholders of an Irish company do not have dissenters’ or appraisal rights. Under
the European Communities (Cross-Border Mergers) Regulations 2008 governing the merger of an Irish company
limited by shares such as the Parent and a company incorporated in the European Economic Area (the
European Economic Area includes all member states of the European Union and Norway, Iceland and
Liechtenstein), a shareholder (i) who voted against the special resolution approving the merger or (ii) of a
company in which 90% of the shares are held by the other party to the merger, has the right to request that the
company acquire its shares for cash at a price determined in accordance with the share exchange ratio set out
in the merger agreement.
Disclosure of interests in shares
Under the Companies Acts, subject to certain limited exceptions, a person must notify the Parent (but not the
public) if, as a result of a transaction, including that involving the delivery of ordinary shares upon any
exchanges of the notes, such person will become interested in five percent or more of the Parent’s voting
shares, or if as a result of a transaction a shareholder who was interested in more than five percent of its voting
shares ceases to be so interested. Where any person is interested in more than five percent of the Parent’s
voting shares, such person must notify the Parent of any alteration of his or her interest that brings his or her
total holding through the nearest whole percentage number, whether an increase or a reduction. The relevant
percentage figure is calculated by reference to the aggregate nominal value of the voting shares in which the
person is interested as a proportion of the entire nominal value of the Parent’s issued share capital (or any such
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class of share capital in issue). Where the percentage level of the person’s interest does not amount to a whole
percentage, this figure may be rounded down to the next whole number. The Parent must be notified within five
business days of the transaction or alteration of the person’s interests that gave rise to the notification
requirement. If a person fails to comply with these notification requirements, such person’s rights in respect of
any of the Parent’s shares he or she holds will not be enforceable, either directly or indirectly. However, such
person may apply to the court to have the rights attaching to such shares reinstated.
In addition to these disclosure requirements, the Parent, under the Companies Acts, may, by notice in writing,
require a person whom the Parent knows or has reasonable cause to believe to be, or at any time during the
three years immediately preceding the date on which such notice is issued to have been, interested in shares
comprised in the Parent’s relevant share capital to: (i) indicate whether or not it is the case; and (ii) where such
person holds or has during that time held an interest in the Parent’s shares, to provide additional information,
including the person’s own past or present interests in the Parent’s shares. If the recipient of the notice fails to
respond within the reasonable time period specified in the notice, the Parent may apply to a court for an order
directing that the affected shares be subject to certain restrictions, as prescribed by the Companies Acts, as
follows:
• any transfer of those shares or, in the case of unissued shares, any transfer of the right to be issued with
shares and any issue of shares, shall be void;
• no voting rights shall be exercisable in respect of those shares;
• no further shares shall be issued in right of those shares or in pursuance of any offer made to the holder of
those shares; and
• no payment shall be made of any sums due from the Parent on those shares, whether in respect of capital or
otherwise.
The court may also order that shares subject to any of these restrictions be sold with the restrictions
terminating upon the completion of the sale.
In the event the Parent is in an offer period pursuant to the Irish takeover rules, as defined below, accelerated
disclosure provisions apply for persons holding an interest in the Parent’s securities of one percent or more.
Anti-takeover provisions
Irish takeover rules and substantial acquisition rules
A transaction in which a third party seeks to acquire 30% or more of the voting rights of the Parent and certain
other acquisitions of the Parent’s securities are governed by the Irish Takeover Panel Act 1997 and the Irish
Takeover Rules made thereunder, which are referred to in this offering memorandum as the “Irish takeover
rules,” and are regulated by the Irish Takeover Panel. The “General Principles” of the Irish takeover rules and
certain important aspects of the Irish takeover rules are described below.
General Principles
The Irish takeover rules are built on the following General Principles which will apply to any transaction
regulated by the Irish Takeover Panel:
• in the event of an offer, all holders of securities of the target company must be afforded equivalent
treatment and, if a person acquires control of a company, the other holders of securities must be protected;
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• the holders of securities in the target company must have sufficient time and information to enable them to
reach a properly informed decision on the offer; where it advises the holders of securities, the board of
directors of the target company must give its views on the effects of the implementation of the offer on
employment, employment conditions and the locations of the target company’s place of business;
• a target company’s board of directors must act in the interests of the company as a whole and must not deny
the holders of securities the opportunity to decide on the merits of the offer;
• false markets must not be created in the securities of the target company, the bidder or any other company
concerned by the offer in such a way that the rise or fall of the prices of the securities becomes artificial and
the normal functioning of the markets is distorted;
• a bidder can only announce an offer after ensuring that he or she can pay in full the consideration offered, if
such is offered, and after taking all reasonable measures to secure the implementation of any other type of
consideration;
• a target company may not be hindered in the conduct of its affairs longer than is reasonable by an offer for
its securities (this is a recognition that an offer will disrupt the day-to-day running of a target company,
particularly if the offer is hostile and the board of directors of the target company must direct its attention to
resisting the offer); and
• an acquisition of securities (whether such acquisition is to be effected by one transaction or a series of
transactions) shall take place only at an acceptable speed and shall be subject to adequate and timely
disclosure. Specifically, the acquisition of 10% or more of the issued voting shares within a seven day period
that would take a shareholder’s holding to or above 15% of the issued voting shares (but less than 30%) is
prohibited, subject to certain exemptions.
Mandatory bid
Under certain circumstances, a person who acquires ordinary shares, or other of the Parent’s voting securities,
may be required under the Irish takeover rules to make a mandatory cash offer for the remaining issued and
outstanding voting securities at a price not less than the highest price paid for the securities by the acquiror, or
any parties acting in concert with the acquiror, during the previous 12 months. This mandatory bid requirement
is triggered if an acquisition of securities would increase the aggregate holding of an acquiror, including the
holdings of any parties acting in concert with the acquiror, to securities representing 30% or more of the voting
rights in the Parent, unless the Irish Takeover Panel otherwise consents. An acquisition of securities by a person
holding, together with its concert parties, securities representing between 30% and 50% of the voting rights in
the Parent would also trigger the mandatory bid requirement if, after giving effect to the acquisition, the
percentage of the voting rights held by that person (together with its concert parties) would increase by 0.05%
within a 12-month period. Any person (excluding any parties acting in concert with the holder) holding
securities representing more than 50% of the voting rights of a company is not subject to these mandatory
offer requirements in purchasing additional securities.
Voluntary bid; requirements to make a cash offer and minimum price requirements
If a person makes a voluntary offer to acquire the issued and outstanding ordinary shares of the Parent and the
bidder acquired ordinary shares in the three-month period prior to the commencement of the offer period, the
offer price must not be less than the highest price paid for ordinary shares by the bidder or its concert parties
during that period. The Irish Takeover Panel has the power to extend the “look back” period to 12 months if the
Irish Takeover Panel, taking into account the General Principles, believes it is appropriate to do so.
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If the bidder or any of its concert parties has acquired more than 10% of the issued and outstanding ordinary
shares (i) during the period of 12 months prior to the commencement of the offer period or (ii) at any time after
the commencement of the offer period, the offer must be in cash (or accompanied by a full cash alternative)
and the price per ordinary share must not be less than the highest price paid by the bidder or its concert parties
during, in the case of (i), the 12-month period prior to the commencement of the offer period or, in the case of
(ii), the offer period. The Irish Takeover Panel may apply this rule to a bidder who, together with its concert
parties, has acquired less than 10% of the total ordinary shares in the 12-month period prior to the
commencement of the offer period if the Irish Takeover Panel, taking into account the General Principles,
considers it just and proper to do so.
An offer period will generally commence on the date of the first announcement of the offer or proposed offer.
Substantial acquisition rules
The Irish takeover rules also contain rules governing substantial acquisitions of shares and other voting
securities which restrict the speed at which a person may increase his or her holding of shares and rights over
shares to an aggregate of between 15% and 30% of the voting rights of the Parent. Except in certain
circumstances, an acquisition or series of acquisitions of shares or rights over shares representing 10% or more
of the voting rights of the Parent is prohibited, if such acquisition(s), when aggregated with shares or rights
already held, would result in the acquirer holding 15% or more but less than 30% of the voting rights of the
Parent and such acquisitions are made within a period of seven days. These rules also require accelerated
disclosure of acquisitions of shares or rights over shares relating to such holdings.
Frustrating action
Under the Irish takeover rules, the Parent’s board of directors is not permitted to take any action that might
frustrate an offer for the its shares once the Parent’s board of directors has received an approach that may 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 (i) the issue of shares, options or convertible securities, (ii) material
acquisitions or disposals, (iii) entering into contracts other than in the ordinary course of business or (iv) any
action, other than seeking alternative offers, which may result in frustration of an offer, are prohibited during
the course of an offer or at any earlier time during which the Parent’s board of directors has reason to believe
an offer is or may be imminent. Exceptions to this prohibition are available where:
• the action is approved by the Parent’s shareholders at a general meeting; or
• the Irish Takeover Panel has given its consent, where:
• it is satisfied the action would not constitute frustrating action;
• our shareholders holding more than 50% of the voting rights state in writing that they approve the
proposed action and would vote in favor of it at a general meeting;
• the action is taken in accordance with a contract entered into prior to the announcement of the offer (or
any earlier time at which the Parent’s board of directors considered the offer to be imminent); or
• the decision to take such action was made before the announcement of the offer and either has been at
least partially implemented or is in the ordinary course of business.
Certain other provisions of Irish law or the Parent’s memorandum and articles of association may be considered
to have anti-takeover effects, including advance notice requirements for director nominations and other
shareholder proposals, as well those described under the following captions: “—Capital structure—Authorized
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share capital” (regarding issuance of preferred shares), “—Preemption rights, share warrants and share
options,” “—Disclosure of interests in shares” and “—Corporate governance.”
Corporate governance
The Parent’s memorandum and articles of association delegate the day-to-day management of the Parent to
the board of directors. The Parent’s board of directors may then delegate the management of the Parent to
committees of the board of directors (consisting of one or more members of the board of directors) or
executives; regardless, the Parent’s board of directors remains responsible, as a matter of Irish law, for the
proper management of the affairs of the company. Committees may meet and adjourn as they determine
proper. A vote at any committee meeting will be determined by a majority of votes of the members present.
The Parent’s board of directors has a standing audit committee, a compensation committee and a nominating
and corporate governance committee, with each committee comprised solely of independent directors, as
prescribed by The NASDAQ Global Select Market listing standards and SEC rules and regulations. The Parent has
adopted corporate governance policies, including a code of conduct and an insider trading policy, as well as an
open door reporting policy and a comprehensive compliance program.
The Companies Acts require a minimum of two directors. The Parent’s memorandum and articles of association
provide that the board may determine the size of the board from time to time.
The Parent’s board of directors is divided into three classes, designated Class I, Class II and Class III. The term of
the Class I directors will expire on the date of the 2015 annual general meeting; the term of the Class II directors
will expire on the date of the 2016 annual general meeting; and the term of the Class III directors will expire on
the date of the 2017 annual general meeting. At each annual general meeting of shareholders, successors to the
class of directors whose term expires at that annual general meeting are elected for a three-year term. In no
case will any decrease in the number of directors shorten the term of any incumbent director. A director may
hold office until the annual general meeting of the year in which his or her term expires and until his or her
successor is elected and duly qualified, subject to his or her prior death, resignation, retirement,
disqualification or removal from office.
Directors are elected by ordinary resolution at a general meeting. Irish law requires majority voting for the
election of directors, which could result in the number of directors falling below the prescribed minimum
number of directors due to the failure of nominees to be elected. Accordingly, the Parent’s memorandum and
articles of association provide that if, at any general meeting of shareholders, the number of directors is
reduced below the minimum prescribed by the memorandum and articles of association due to the failure of
any person nominated to be a director to be elected, then, in such circumstances, the nominee or nominees
who receive the highest number of votes in favor of election will be elected in order to maintain such prescribed
minimum number of directors. Each director elected in this manner will remain a director (subject to the
provisions of the Companies Acts and the articles of association) only until the conclusion of the next annual
general meeting unless he or she is reelected.
Under the Companies Acts and notwithstanding anything contained in the memorandum and articles of
association or in any agreement between the Parent and a director, the Parent’s shareholders may, by an
ordinary resolution, remove a director from office before the expiration of his or her term at a meeting held on
no less than 28 days’ notice and at which the director is entitled to be heard. The power of removal is without
prejudice to any claim for damages for breach of contract (e.g. employment contract) that the director may
have against the Parent in respect of his removal.
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The Parent’s memorandum and articles of association provide that the board of directors may fill any vacancy
occurring on the board of directors. If the Parent’s board of directors fills a vacancy, the director’s term expires
at the next annual general meeting. A vacancy on the board of directors created by the removal of a director
may be filled by the shareholders at the meeting at which such director is removed and, in the absence of such
election or appointment, the remaining directors may fill the vacancy.
Legal name; formation; fiscal year; registered office
Jazz Pharmaceuticals Public Limited Company is the Parent’s current legal and commercial name. The Parent
was incorporated in Ireland on March 15, 2005 as a private limited company (registration number 399192)
under the name Azur Pharma Limited. Azur Pharma Limited was re-registered as a public limited company
named Azur Pharma Public Limited Company effective October 20, 2011, and was subsequently renamed Jazz
Pharmaceuticals Public Limited Company on January 16, 2012. The Parent’s fiscal year ends on December 31st
and its registered address is Fourth Floor, Connaught House, 1 Burlington Road, Dublin 4, Ireland.
Duration; dissolution; rights upon liquidation
The Parent’s duration is unlimited. The Parent may be dissolved and wound up at any time by way of a
shareholders’ voluntary winding up or a creditors’ winding up. In the case of a shareholders’ voluntary winding
up, a special resolution of shareholders is required. The Parent may also be dissolved by way of court order on
the application of a creditor, or by the Companies Registration Office as an enforcement measure where it has
failed to file certain returns.
The Parent’s memorandum and articles of association provide that the ordinary shareholders are entitled to
participate pro rata in a winding up, but their right to do so may be subject to the rights of any preferred
shareholders to participate under the terms of any series or class of preferred shares.
Certificated shares
Holders of ordinary shares do not have the right to require the Parent to issue certificates for their shares. The
Parent intends to only issue uncertificated ordinary shares.
No sinking fund
Ordinary shares have no sinking fund provisions.
Stock exchange listing
Ordinary shares are listed on The NASDAQ Global Select Market under the trading symbol “JAZZ.” Ordinary
shares are not currently intended to be listed on the Irish Stock Exchange.
Transfer and registration of shares
The transfer agent and registrar for ordinary shares is Computershare Trust Company, N.A. Its address is
250 Royall Street, Canton, MA 02021. An affiliate of the transfer agent maintains the share register, registration
in which is determinative of ownership of ordinary shares. A shareholder who holds shares beneficially is not
the holder of record of such shares. Instead, the depository (for example, Cede & Co., as nominee for DTC) or
other nominee is the holder of record of those shares. Accordingly, a transfer of shares from a person who
holds such shares beneficially to a person who also holds such shares beneficially through a depository or other
nominee will not be registered in the Parent’s official share register, as the depository or other nominee will
remain the record holder of any such shares.
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A written instrument of transfer is required under Irish law in order to register on the Parent’s official share
register any transfer of shares (i) from a person who holds such shares directly to any other person, (ii) from a
person who holds such shares beneficially but not directly to a person who holds such shares directly, or
(iii) from a person who holds such shares beneficially to another person who holds such shares beneficially
where the transfer involves a change in the depository or other nominee that is the record owner of the
transferred shares. An instrument of transfer is also required for a shareholder who directly holds shares to
transfer those shares into his or her own broker account (or vice versa). Such instruments of transfer may give
rise to Irish stamp duty, which must be paid prior to registration of the transfer on the Parent’s official Irish
share register. However, a shareholder who directly holds shares may transfer those shares into his or her own
broker account (or vice versa) without giving rise to Irish stamp duty provided there is no change in the
ultimate beneficial ownership of the shares as a result of the transfer and the transfer is not made in
contemplation of a sale of the shares.
Any transfer of ordinary shares that is subject to Irish stamp duty will not be registered in the name of the
buyer unless an instrument of transfer is duly stamped and provided to the transfer agent. The Parent, in its
absolute discretion and insofar as the Companies Acts or any other applicable law permit, may, or may provide
that any of its subsidiaries will, pay Irish stamp duty arising on a transfer of ordinary shares on behalf of the
transferee of such ordinary shares. If stamp duty resulting from the transfer of ordinary shares which would
otherwise be payable by the transferee is paid by the Parent or any of its subsidiaries on behalf of the
transferee, then in those circumstances, the Parent will, on its behalf or on behalf of its subsidiary (as the case
may be), be entitled to (i) seek reimbursement of the stamp duty from the transferee, (ii) set-off the stamp duty
against any dividends payable to the transferee of those ordinary shares and (iii) to claim a first and permanent
lien on ordinary shares on which stamp duty has been paid by the Parent or its subsidiary for the amount of
stamp duty paid. The Parent’s lien shall extend to all dividends paid on those ordinary shares. Parties to a share
transfer may assume that any stamp duty arising in respect of a transaction in ordinary shares has been paid
unless one or both of such parties is otherwise notified.
The Parent’s memorandum and articles of association delegate to the secretary or assistant secretary of the
Parent the authority, on behalf of the Parent, to execute an instrument of transfer on behalf of a transferring
party. Under the Parent’s memorandum and articles of association, the directors can also authorise any person
to execute an instrument of transfer on behalf of a transferring party in certain circumstances.
In order to help ensure that the official share register is regularly updated to reflect trading of ordinary shares
occurring through normal electronic systems, the Parent intends to regularly produce any required instruments
of transfer in connection with any transactions for which stamp duty is paid (subject to the reimbursement and
set-off rights described above). In the event that the Parent notifies one or both of the parties to a share
transfer that its believes stamp duty is required to be paid in connection with the transfer and that the Parent
will not pay the stamp duty, the parties may either themselves arrange for the execution of the required
instrument of transfer (and may request a form of instrument of transfer from the Parent for this purpose) or
request that the Parent execute an instrument of transfer on behalf of the transferring party. In either event, if
the parties to the share transfer have the instrument of transfer duly stamped (to the extent required) and then
provide it to the Parent’s transfer agent, the buyer will be registered as the legal owner of the relevant shares
on the Parent’s official Irish share register (subject to the suspension right described below).
The directors may suspend registration of transfers from time to time, not exceeding 30 days in aggregate each
year.
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Description of certain other indebtedness
General
On January 23, 2014, the Parent, as guarantor, and three of its wholly-owned subsidiaries, including JPI, as
borrowers, entered into a second amendment to the Parent’s and certain of its subsidiaries’ credit agreement
with Barclays Bank PLC, as administrative agent, and certain other lenders. The amended credit agreement
provides for (i) a tranche of incremental term loans in the aggregate principal amount of $350.0 million, (ii) a
tranche of term loans to refinance the $554.4 million aggregate principal amount of previously outstanding
term loans and (iii) a $425.0 million revolving credit facility. Jazz Pharmaceuticals used the proceeds from the
incremental term loans and $300.0 million of loans under the revolving credit facility together with cash on
hand to finance the Gentium Acquisition, and expects to use the proceeds from future loans under the revolving
credit facility, if any, for general corporate purposes, including business development activities. The term loans
under the amended credit agreement mature on June 12, 2018 and the revolving credit facility terminates, and
any loans outstanding thereunder become due and payable, on June 12, 2017. As of June 30, 2014,
$899.9 million principal amount was outstanding under the term loans and $300.0 million of borrowings were
outstanding under the revolving credit facility. As of June 30, 2014, Jazz Pharmaceuticals also had $2.1 million
in other borrowings outstanding under certain mortgage and equipment loans.
Interest rate, prepayments and amortization
The term loans bear interest, at JPI’s option, at a rate equal to either the LIBOR rate, plus an applicable margin
of 2.50% per annum (subject to a 0.75% LIBOR floor), or the prime lending rate, plus an applicable margin
equal to 1.50% per annum (subject to a 1.75% prime rate floor). Loans under the revolving credit facility bear
interest, at the applicable borrower’s option, at a rate equal to either the LIBOR rate, plus an applicable margin
of 2.50% per annum, or the prime lending rate, plus an applicable margin equal to 1.50% per annum, subject to
reduction by 0.25% or 0.50% based upon Jazz Pharmaceuticals’ secured leverage ratio. The revolving credit
facility has a commitment fee payable on the undrawn amount ranging from 0.25% to 0.50% per annum based
upon Jazz Pharmaceuticals’ secured leverage ratio.
The borrowers are permitted to make voluntary prepayments at any time without payment of a premium. JPI is
required to make mandatory prepayments of term loans (without payment of a premium) with (1) net cash
proceeds from certain non-ordinary course asset sales (subject to reinvestment rights and other exceptions),
(2) net cash proceeds from issuances of debt (other than certain permitted debt), (3) beginning with the fiscal
year ending December 31, 2014, 50% of Jazz Pharmaceuticals’ excess cash flow (subject to decrease to 25% or
0% if Jazz Pharmaceuticals’ secured leverage ratio is equal to or less than 2.25 to 1.00 (and greater than 1.25 to
1.00 or 1.25 to 1.00, respectively), and (4) casualty proceeds and condemnation awards (subject to
reinvestment rights and other exceptions). The term loans amortize in equal quarterly installments in an
aggregate annual amount equal to 1% of the original principal amount thereof, with any remaining balance
payable on the final maturity date of the term loans.
Guarantee
The borrowers’ obligations under the amended credit agreement and any hedging or cash management
obligations entered into with a lender or an affiliate of a lender are guaranteed on a senior basis by the Parent
and certain of its subsidiaries (including the Issuer).
Security
The Parent’s, the borrowers’ and the subsidiary guarantors’ obligations under the amended credit agreement
are secured, subject to customary permitted liens and other agreed upon exceptions, by a perfected security
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interest in (a) all tangible and intangible assets of the Parent, the borrowers and the subsidiary guarantors
(including the Issuer), except for certain customary excluded assets, and (b) all of the equity interests of the
subsidiaries of the Parent, the borrowers and the subsidiary guarantors (including the Issuer) held by such
parties (limited, in the case of the equity interests of certain foreign subsidiaries and certain domestic
subsidiaries that hold no assets other than equity interests of foreign subsidiaries, to 65% of the voting equity
interests of such subsidiaries).
Other terms
The amended credit agreement contains customary representations and warranties and customary affirmative
and negative covenants applicable to the Parent and its restricted subsidiaries, including, among other things,
restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and
dividends and other distributions. The amended credit agreement contains a financial covenant that requires
the Parent and its restricted subsidiaries to not exceed a maximum secured leverage ratio. The amended credit
agreement also includes customary events of default, including cross defaults on the Parent’s and certain of its
subsidiaries’ material indebtedness and an event of default upon a change of control.
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Certain material Bermuda tax considerations
At the present time, there is no Bermuda income or profits tax, withholding tax, capital gains tax, capital
transfer tax, estate duty or inheritance tax payable by the Issuer or by its shareholder in respect of its shares
nor are any such taxes payable in Bermuda in respect of the notes offered hereby or ordinary shares to be
issued by the Parent in the event of an exchange of the notes. The Issuer has obtained an assurance from the
Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 that, in the event
that any legislation is enacted in Bermuda imposing any tax computed on profits or income, or computed on
any capital asset, gain or appreciation or any tax in the nature of estate duty or inheritance tax, such tax shall
not, until March 31, 2035, be applicable to the Issuer or to any of its operations or to its shares, debentures or
other obligations, including the notes offered hereby or the ordinary shares to be issued by the Parent in the
event of an exchange of the notes, except insofar as such tax applies to persons ordinarily resident in Bermuda
or is payable by us in respect of real property owned or leased by us in Bermuda.
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Certain material Irish tax considerations
The following is a summary of the material Irish tax consequences for U.S. Holders of the notes and ordinary
shares based on the laws of Ireland and practice of the Irish Revenue Commissioners, in each case, currently in
force in Ireland and subject to change. The summary only applies to U.S. Holders that legally and beneficially
hold their notes or ordinary shares as an investment and does not address special classes of holders including,
but not limited to, dealers in securities, insurance companies, pension schemes, employee share ownership
trusts, collective investment undertakings, charities, tax exempt organizations, financial institutions and close
companies (as determined for Irish tax purposes), each of which may be subject to special rules not discussed
below. The summary does not constitute tax or legal advice and the comments below are of a general nature
only. Prospective investors in the notes or ordinary shares should consult their professional advisers on the tax
implications of the purchase, holding, redemption or sale of the notes or ordinary shares and the receipt of
interest or dividends thereon under the laws of their country of residence, citizenship or domicile.
Solely for the purposes of this summary of Irish tax considerations, a “U.S. Holder” means a holder of notes or
ordinary shares that (i) beneficially owns the notes or ordinary shares registered in their name; (ii) is resident in
the United States for the purposes of the Ireland-United States Double Taxation Convention (the “Treaty”) and,
where applicable, is entitled to the relevant benefits provided under the terms of the Treaty; (iii) in the case of
an individual holder, is not also resident or ordinarily resident in Ireland for Irish tax purposes; (iv) in the case
of a corporate holder, is not resident in Ireland for Irish tax purposes and is not ultimately controlled by
persons resident in Ireland; and (v) is not engaged in any trade or business and does not perform independent
personal services through a permanent establishment or fixed base in Ireland.
Notes
Interest withholding tax
In general, tax at the standard rate of income tax (currently 20%), is required to be withheld from payments of
Irish source interest. Interest paid on the notes may have an Irish source. If the interest on the notes does have
an Irish source then an exemption from withholding tax on interest payments exists under Section 64 of the
Taxes Consolidation Act, 1997 (the “1997 Act”) for certain securities (“quoted Eurobonds”) issued by a company
(such as the Issuer), which are interest bearing and are quoted on a recognized stock exchange.
Any interest paid on such quoted Eurobonds can be paid free of withholding tax provided:
(i)
the person by or through whom the payment is made is not in Ireland; or
(ii) the payment is made by or through a person in Ireland, and either:
(a) the quoted Eurobond is held in a clearing system recognized by the Irish Revenue Commissioners, or
(b) the person who is the beneficial owner of the quoted Eurobond and who is beneficially entitled to the
interest is not resident in Ireland and has made a declaration to a relevant person (such as an Irish
paying agent) in the prescribed form.
So long as, at the time interest is paid on the notes, the notes are quoted on a recognized stock exchange, such
as the GEM, and are held in a recognized clearing system, such as DTC, interest on the notes can be paid by us
and any paying agent acting on our behalf without any withholding or deduction for or on account of Irish
income tax. We have covenanted to use commercially reasonable efforts to procure the listing of the notes on
GEM prior to the first interest payment date.
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If, for any reason, the quoted Eurobond exemption referred to above does not or ceases to apply, the Issuer can
still pay interest on the notes free of withholding tax provided that it is a “qualifying company” (within the
meaning of section 110 of the 1997 Act), which we and the Parent expect it will be, and provided the interest is
paid to a person resident in a “Relevant Territory” (i.e. a member state of the European Union (other than
Ireland) or in a country with which Ireland has in force or has signed a double tax agreement). For this purpose,
residence is determined by reference to the law of the country in which the recipient claims to be resident. This
exemption from withholding tax will not apply, however, if the interest is paid to a company in connection with
a trade or business carried on by it through a branch or agency in Ireland.
If, for any reason, the quoted Eurobond exemption referred to above does not or ceases to apply, there are
provisions in Irish tax legislation and the Treaty which may allow the payment of interest without withholding
tax to U.S. Holders. Their application may require us to have knowledge of the tax residence of the U.S. Holders
and/or the U.S. Holders to provide the Irish Revenue Commissioners with appropriate documentation including,
in some instances, a certificate of residency. The administrative process for applying these exemptions where
the notes are held through DTC may require clarification with the Irish Revenue Commissioners.
Irish source income
Notwithstanding that a U.S. Holder may receive interest on the notes free of withholding tax, a U.S. Holder may
still be liable to pay Irish tax on the income. Interest paid on the notes may have an Irish source and therefore
be within the charge to Irish income tax and the Universal Social Charge (“USC”). Ireland operates a selfassessment system in respect of tax on income and any person, including a person who is neither resident nor
ordinarily resident in Ireland, with Irish source income comes within its scope.
However, interest on the notes will be exempt from Irish income tax if the recipient of the interest is resident in
a relevant territory such as the United States provided either (i) the notes are quoted Eurobonds and are
exempt from withholding tax as set out above, or (ii) in the event of the notes not being or ceasing to be quoted
Eurobonds exempt from withholding tax, if the Issuer is a qualifying company within the meaning of Section 110
of the 1997 Act, which we and the Parent expect it will be, or (iii) if the Issuer has ceased to be a qualifying
company, the recipient of the interest is a company resident in a Relevant Territory that generally taxes interest
receivable by companies from foreign sources. In these circumstances, U.S. Holders will be exempt from Irish
tax and USC on the Irish source income.
In the event of the notes not being or ceasing to be quoted Eurobonds which are exempt from withholding tax,
if the provisions in Irish tax legislation and the Treaty which may allow the payment of interest without
withholding tax to U.S. Holders referred to above apply, then U.S. Holders will not be liable for Irish income tax
on the interest.
Capital gains tax on sale, exchange, conversion, redemption or other disposition of notes
U.S. Holders will not be subject to Irish capital gains tax (“CGT”) (currently 33%) on the sale, exchange,
conversion, redemption or other disposition of notes provided that such notes are quoted on a stock exchange
at the time of disposition. A stock exchange for this purpose includes, among others, the GEM.
If, for any reason, the notes cease to be listed on the GEM, U.S. Holders will not be subject to Irish CGT on the
disposal of their notes provided that the notes do not, at the time of the disposal, derive the greater part of
their value from land, buildings, minerals, or mineral rights or exploration rights in Ireland.
Irish capital acquisitions tax
Irish capital acquisitions tax (“CAT”) is comprised principally of gift tax and inheritance tax. A gift or inheritance
of notes will come within the charge to Irish CAT (currently 33%) if either:
(i)
the disponer or the donee/successor in relation to the gift or inheritance is resident or ordinarily resident
in Ireland; or
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(ii) the notes are regarded as property situated in Ireland (i.e. if the notes are in bearer form and are
physically located in Ireland or if the register of the notes is maintained in Ireland).
Irish stamp duty on the issue, sale, exchange, conversion, redemption or other disposition of notes
No Irish stamp duty will arise on the issue, sale, exchange (including an exchange for ordinary shares pursuant
to the terms of the notes), conversion, redemption or other disposition of the notes.
Encashment tax
Irish tax will not be required to be withheld at the standard rate of income tax (currently 20%) from interest on
the notes, where such interest is collected or realised by a bank or encashment agent in Ireland on behalf of a
U.S. Holder provided such U.S. Holder has made a declaration to this effect in the prescribed form to the
encashment agent or bank.
Information exchange and the implementation of FATCA in Ireland
Due to doubts as to whether the Foreign Account Tax Compliance provisions of the U.S. Hiring Incentives to
Restore Employment Act of 2010 (“FATCA”) could have extraterritorial effect, certain countries, including
Ireland, have entered into intergovernmental agreements with the U.S. regarding the implementation of FATCA.
On December 21, 2012 Ireland signed an Intergovernmental Agreement (“IGA”) with the United States to
Improve International Tax Compliance and to Implement FATCA. Under this agreement Ireland agreed to
implement legislation to collect certain information in connection with FATCA and the Irish and U.S. tax
authorities have agreed to automatically exchange this information. The IGA provides for the annual automatic
exchange of information in relation to accounts and investments held by certain U.S. persons in a broad
category of Irish financial institutions and vice versa.
Under the IGA and the Irish Regulations implementing the information disclosure obligations Irish financial
institutions such as the Issuer are required to report certain information with respect to U.S. account holders to
the Revenue Commissioners. The Revenue Commissioners will automatically provide that information annually
to the IRS. The Issuer must obtain the necessary information from investors required to satisfy the reporting
requirements whether under the IGA, the Regulations or any other applicable legislation published in
connection with FATCA and such information may be sought from each holder and beneficial owner of the
notes. It should be noted that the Regulations require the collection of information and filing of returns with the
Irish Revenue Commissioners regardless as to whether the Issuer holds any U.S. assets or has any U.S.
investors. However to the extent that the notes are listed on a recognised stock exchange (which includes the
Irish Stock Exchange) the Issuer should have no reportable accounts in a tax year. The Irish Revenue
Commissioners in published draft guidance notes have indicated that listing of itself is sufficient in this regard.
Where the Issuer has no reportable accounts in a tax year, it is required to make a nil return for that year to the
Irish Revenue Commissioners.
The Council of the European Union has adopted a directive regarding the taxation of interest income known as
the “European Union Directive on the Taxation of Savings Income (Directive 2003/48/EC)”.
Ireland has implemented the directive into national law. Any Irish paying agent making an interest payment on
behalf of the Issuer to an individual, and certain residual entities defined in the 1997 Act, resident in another EU
Member State and certain associated and dependent territories of a Member State will have to provide details
of the payment to the Irish Revenue Commissioners who in turn will provide such information to the competent
authorities of the state or territory of residence of the individual or residual entity concerned.
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The guarantee
Payments to U.S. Holders under the guarantee can be paid by the Parent and any paying agent acting on behalf
of the Parent without any withholding or deduction for or on account of Irish income tax.
Ordinary shares of the Parent received on exchange of notes
Taxation of dividends
The Parent does not expect to pay dividends in the foreseeable future. Should the Parent begin paying
dividends, such dividends will generally be subject to dividend withholding tax (“DWT”) in Ireland at the
standard rate of income tax (currently 20%). Where DWT applies, the Parent will be responsible for withholding
such tax at source.
Dividends paid by the Parent to U.S. Holders of ordinary shares will be exempt from DWT. However, certain U.S.
Holders may need to put in place appropriate documentation in order to receive dividends free from DWT. The
form of that documentation will vary depending on the manner in which the ordinary shares are held and the
payment mechanism used to pay the dividend.
U.S. Holders who are entitled to an exemption from DWT generally have no additional liability to Irish income
tax or to the USC on a dividend paid by the Parent.
Capital gains on disposals of ordinary shares
U.S. Holders will not be subject to Irish CGT on the disposal of ordinary shares provided that such ordinary
shares are quoted on a stock exchange at the time of disposition. A stock exchange for this purpose includes,
among others, The NASDAQ Global Select Market. While it is the Parent’s intention to continue the listing of its
shares on The NASDAQ Global Select Market, no assurances can be given in this regard.
If, for any reason, ordinary shares cease to be listed on The NASDAQ Global Select Market, U.S. Holders will not
be subject to CGT on the disposal of their ordinary shares provided that the ordinary shares do not, at the time
of the disposal, derive the greater part of their value from land, buildings, minerals, or mineral rights or
exploration rights in Ireland.
Irish capital acquisitions tax
Irish CAT could apply to a gift or inheritance of the ordinary shares irrespective of the place of residence,
ordinary residence or domicile of the parties. This is because ordinary shares are regarded as property situated
in Ireland as the Parent’s share register must be held in Ireland. The person who receives the gift or inheritance
has primary liability for CAT.
Subject to available exemptions and reliefs, CAT is currently levied at a rate of 33% above certain tax-free
thresholds. The appropriate tax-free threshold is dependent upon (i) the relationship between the disponer and
the donee/successor and (ii) the aggregation of the values of previous gifts and inheritances received by the
donee/successor from persons within the same category of relationship for CAT purposes. Gifts and inheritances
passing between spouses are exempt from CAT.
Irish stamp duty
Irish stamp duty may be payable in respect of transfers of ordinary shares (currently at the rate of 1% of the
price paid or the market value of the shares acquired, if greater).
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Shares held through DTC
A transfer of ordinary shares from a seller who holds shares through DTC, to a buyer who holds the acquired
shares through DTC should not be subject to Irish stamp duty.
Shares held outside of DTC or transferred into or out of DTC
A transfer of ordinary shares (i) by a seller who holds shares outside of DTC to any buyer, or (ii) by a seller who
holds the shares through DTC to a buyer who holds the acquired shares outside of DTC, may be subject to Irish
stamp duty.
U.S. Holders wishing to transfer ordinary shares into or out of DTC may do so without giving rise to Irish stamp
duty provided that there is no change in the beneficial ownership of such shares and the transfer into or out of
DTC is not effected in contemplation of a subsequent sale of such shares to a third party. In order to benefit
from this exemption from Irish stamp duty, the seller must confirm to the Parent that there is no change in the
ultimate beneficial ownership of the shares as a result of the transfer and there is no agreement for the sale of
the shares by the beneficial owner to a third party being contemplated.
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Certain material U.S. federal income tax considerations
The following is a summary of certain material U.S. federal income tax considerations with respect to the
acquisition, ownership and disposition of notes and ordinary shares by a U.S. Holder (as defined below). It is not
a complete analysis of all potential tax considerations relating thereto. This summary applies to U.S. Holders
that hold notes and ordinary shares as capital assets for U.S. federal income tax purposes. It is based upon the
U.S. Internal Revenue Code of 1986, as amended, which is referred to herein as the Code, regulations
promulgated under the Code and administrative rulings and judicial decisions as in effect on the date of this
offering memorandum, all of which are subject to change, possibly with retroactive effect, and to differing
interpretations, which could result in U.S. federal income tax considerations different from those summarized
below.
This summary does not address any U.S. state or local taxes, estate or gift taxes or non-U.S. tax considerations.
In addition, it does not address tax considerations that may be relevant to U.S. Holders in their particular
circumstances, and those that may be relevant to U.S. Holders with a special status, such as:
• a person that owns, or is treated as owning under certain ownership attribution rules, 10% or more of the
voting power of the Parent;
• a U.S. Holder who is also resident or ordinarily resident in Ireland for Irish tax purposes or who is otherwise
subject to Irish income tax or capital gains tax with respect to the notes or the ordinary shares;
• a broker or dealer in securities;
• a bank, mutual fund, life insurance company or other financial institution;
• a tax-exempt organization;
• a qualified retirement plan or individual retirement account;
• a real estate investment trust;
• a regulated investment company;
• a person that holds notes or ordinary shares as part of a straddle, constructive sale or other integrated
transaction for tax purposes;
• a trader in securities that has elected the mark-to-market method of accounting for its securities;
• an entity classified as a partnership, S corporation or other pass-through entity for U.S. federal income tax
purposes;
• an investor in a partnership, S corporation or other pass-through entity holding notes or ordinary shares;
• a person who is liable for the alternative minimum tax or the Medicare contribution tax;
• a person whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
• a person who holds ordinary shares through a financial account at a foreign financial institution that does not
meet the requirements for avoiding withholding with respect to certain payments under Sections 1471
through 1474 of the Code; and
• a person holding notes or ordinary shares in connection with a trade or business conducted outside of the
United States.
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This summary does not address the U.S. federal income tax considerations with respect to non-U.S. Holders
arising from the acquisition, ownership and disposition of notes or ordinary shares. A “non-U.S. Holder” is a
beneficial owner of notes or ordinary shares that is not a U.S. Holder or a partnership.
If a partnership (including for this purpose any entity treated as a partnership for U.S. federal income tax
purposes) holds notes or ordinary shares, the tax treatment of a partner will generally depend upon the status
of the partner and upon the activities of the partnership. A partner of a partnership that owns or may acquire
notes or ordinary shares should consult the partner’s tax advisor regarding the specific tax consequences of the
acquisition, ownership and disposition of notes or ordinary shares.
Subject to the discussion below under “Passive foreign investment company rules,” this discussion assumes
that the Parent is not, and will not become, a passive foreign investment company, or PFIC, as described below.
INVESTORS SHOULD CONSULT THEIR OWN ADVISORS REGARDING THE TAX CONSEQUENCES OF THE
ACQUISITION, OWNERSHIP AND DISPOSITION OF NOTES OR ORDINARY SHARES IN LIGHT OF THEIR PARTICULAR
CIRCUMSTANCES.
U.S. holders
This discussion applies to an investor who is a “U.S. Holder.” A “U.S. Holder” is any beneficial owner of a note or
ordinary share that is:
• an individual citizen or resident of the United States;
• a corporation (or an entity classified as a corporation for U.S. federal tax purposes) created or organized in
or under the laws of the United States or any political subdivision thereof;
• an estate the income of which is subject to U.S. federal income taxation regardless of its source; or,
• a trust (1) that has validly elected to be treated as a U.S. person for U.S. federal income tax purposes, or
(2) over the administration of which a U.S. court can exercise primary supervision and all of the substantial
decisions of which one or more U.S. persons have the authority to control.
Entity classification election for Issuer
As described in “Description of notes,” the notes will be issued by us, a wholly owned Bermuda subsidiary of the
Parent. We have filed an election to be classified for U.S. federal tax purposes as a disregarded entity and will
remain so for so long as any of the notes is outstanding. As a result, we will not be treated for U.S. federal tax
purposes as an entity separate from the Parent. We and the Parent will treat (i) the Parent as issuer of the
notes for U.S. federal tax purposes and (ii) the notes as though they are convertible into shares of the Parent,
rather than exchangeable for shares of a corporation other than us. If the notes were exchangeable into shares
of a corporation other than us, there could be adverse tax consequences for U.S. Holders. The remainder of this
discussion assumes that we will not be treated as an entity separate from the Parent for U.S. federal tax
purposes.
Notes
Payment of interest
Interest on a note (including any additional amounts that are treated as interest) will generally be taxable to a
U.S. Holder as ordinary income at the time it is paid or accrued in accordance with such U.S. Holder’s usual
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method of accounting for U.S. federal income tax purposes. Interest income on a note generally will constitute
foreign-source income and generally will constitute “passive category income.”
It is expected, and this discussion assumes, that the notes will be issued without original issue discount for U.S.
federal income tax purposes. If, however, the notes’ principal amount exceeds the issue price by more than a de
minimis amount, as determined under applicable Treasury regulations, a U.S. Holder will be required to include
such excess in income as original issue discount, as it accrues, in accordance with a constant yield method
based on a compounding of interest before the receipt of cash payments attributable to this income.
It is anticipated that all payments under the notes to a U.S. Holder will be made without withholding or
deduction for Irish or Bermuda taxes. In the event that any such withholding or deduction is required, the
withheld tax may be claimed as a credit against the U.S. Holder’s U.S. federal income tax liability subject to
certain conditions and limitations. The rules governing the foreign tax credit are complex. Investors who are
considering the purchase of notes should consult their tax advisors regarding the availability of the foreign tax
credit in their particular circumstances.
Contingent payments
In certain circumstances, we or the Parent may be obligated to pay amounts in excess of the stated interest and
principal payable on the notes, which may implicate the provisions of Treasury Regulations relating to
“contingent payment debt instruments.” See discussions above under “Description of notes—Additional
amounts,” “Description of notes—No registration rights; additional interest,” and “Description of notes—Events
of default.” We and the Parent believe there is only a remote possibility that we or the Parent will be obligated
to make such payments of additional amounts and therefore believe that such payments should not cause the
notes to be treated as contingent payment debt instruments.
Our and the Parent’s position that the notes are not contingent payment debt instruments is binding on each
U.S. Holder unless a U.S. Holder discloses its contrary position to the Internal Revenue Service, or IRS, in the
manner required by applicable Treasury regulations. Our and the Parent’s position that the notes are not
contingent payment debt instruments is not, however, binding on the IRS. If the IRS successfully challenged this
position, and the notes were treated as contingent payment debt instruments because of the possibility of such
payments, U.S. Holders might, among other things, be required to accrue interest income at a higher rate than
the stated interest rate on the notes and to treat any gain recognized on the sale or other disposition of a note
(including any gain realized on the conversion of a note) as ordinary income rather than as capital gain.
Investors who are considering the purchase of notes are urged to consult their tax advisors regarding the
possible application of the contingent payment debt instrument rules to the notes. The remainder of this
discussion assumes that the notes are not treated as contingent payment debt instruments.
Sale, exchange, redemption or other disposition of notes
Except as provided below under “Exchange of notes for ordinary shares” and subject to the discussion under
“Passive Foreign Investment Company rules,” a U.S. Holder will generally recognize gain or loss upon the sale,
exchange, redemption or other disposition of a note equal to the difference between the amount realized
(including any amounts withheld or deducted for taxes, less any accrued but unpaid qualified stated interest not
previously included in income, which will be taxable as such) and the U.S. Holder’s adjusted tax basis in the
note. A U.S. Holder’s adjusted tax basis in a note generally will equal the cost of the notes to such holder. Any
gain or loss recognized on a taxable disposition of the note will be capital gain or loss and will be a U.S.-source
gain or loss. For a non-corporate U.S. Holder, including an individual, that has held the note for more than one
year, such capital gain will be subject to reduced rates of taxation under current law. A U.S. Holder’s ability to
deduct capital losses may be limited.
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Exchange of notes solely for ordinary shares or for a combination of cash and ordinary shares
Solely for ordinary shares
Generally, no gain or loss will be recognized by a U.S. Holder that receives solely ordinary shares in exchange
for notes except to the extent of (i) cash received in lieu of a fractional ordinary share and (ii) any amounts
withheld in respect of taxes. The amount of gain or loss recognized on the receipt of cash in lieu of a fractional
ordinary share will generally be equal to the difference between the amount of cash received in respect of the
fractional ordinary share and the portion of the U.S. Holder’s adjusted tax basis in the notes that are allocable
to the fractional ordinary share. Such gain or loss generally will be U.S.-source gain or loss for U.S. foreign tax
credit purposes. The tax basis of the ordinary shares received upon an exchange will generally equal the
adjusted tax basis of the note that was exchanged (excluding the portion of the tax basis allocable to any
fractional ordinary share). A U.S. Holder’s holding period for the ordinary shares will include the period during
which such holder held the notes.
For a combination of cash and ordinary shares
If a U.S. Holder receives a combination of cash and ordinary shares in exchange for notes, we and the Parent
intend to take the position that gain, but not loss, will be recognized equal to the excess of the fair market value
of the ordinary shares and cash received (other than cash in lieu of a fractional share) over the U.S. Holder’s
adjusted tax basis in the notes (excluding the portion of the tax basis that is allocable to any fractional share),
but in no event should the gain recognized exceed the amount of cash received. The amount of gain or loss
recognized on the receipt of cash in lieu of a fractional share will be equal to the difference between the
amount of cash received in respect of the fractional share and the portion of the U.S. Holder’s adjusted tax
basis in the note that is allocable to the fractional share.
The tax basis of the ordinary shares received in an exchange (including any fractional share deemed to be
received will generally equal the adjusted tax basis of the note that was exchanged reduced by the amount of
any cash received (other than cash received in lieu of a fractional share), and increased by the amount of gain,
if any, recognized (other than with respect to a fractional share). A U.S. Holder’s holding period for ordinary
shares will include the period during which such holder held the notes.
Alternative characterizations may be possible that could affect when income is recognized and the amount and
character of such recognized income upon the receipt of a combination of cash and ordinary shares. Such
characterization might include treatment as in part an exchange of a portion of the notes for cash and in part as
an exchange of the remainder of the notes for ordinary shares, or treatment as a fully taxable transaction.
Investors should consult their tax advisors regarding the tax treatment of the receipt of cash and ordinary
shares in exchange for notes and the ownership of the ordinary shares.
Exchange through a financial institution
If a U.S. Holder surrenders notes for exchange, we or the Parent direct the notes to be offered to a financial
institution and the designated institution accepts the notes and delivers cash or ordinary shares, or a
combination of cash and ordinary shares, in exchange for the notes, the U.S. Holder will be taxed on the
transfer as a sale or exchange of the notes, as described above under “—Sale, exchange, redemption or other
disposition of notes.” In such case, a U.S. Holder’s tax basis in the ordinary shares received will equal the fair
market value of the ordinary shares on the date of the exchange, and the U.S. Holder’s holding period in the
ordinary shares received will begin the day after receipt.
Possible effect of the change in exchange consideration
In certain situations, we or the Parent may undergo certain corporate transactions as described above under
“Description of notes—Recapitalizations, reclassifications and changes of ordinary shares.” Depending on the
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circumstances, a change in the obligor of the notes or a change in the reference property upon such a corporate
transaction could result in a deemed taxable exchange to a U.S. Holder and the modified note could be treated
as a newly issued note at that time, potentially resulting in the recognition of taxable gain or loss. In addition,
the exchange of the note into stock (other than ordinary shares), other securities, other property or assets may
also be a taxable exchange.
Constructive distributions
The exchange rate of the notes will be adjusted in certain circumstances, as described in “Description of notes—
Exchange rate adjustments,” and “Description of notes—Adjustment to exchange rate upon exchange upon a
make-whole fundamental change or certain redemptions.” Under section 305(c) of the Code, adjustments (or
failures to make adjustments) that have the effect of increasing a U.S. Holder’s proportionate interest in the
Parent’s assets or earnings may in some circumstances result in a deemed distribution to such holder.
Adjustments to the exchange rate made pursuant to a bona fide, reasonable antidilution formula that has the
effect of preventing the dilution of the interests of the beneficial owners of the notes, however, will generally
not be considered to result in a deemed distribution. Certain of the possible exchange rate adjustments
provided in the notes (including, without limitation, adjustments in respect of taxable dividends to holders of
ordinary shares) may not qualify as being pursuant to a bona fide, reasonable antidilution formula. If such
adjustments are made, a U.S. Holder will be deemed to have received a distribution even though no cash or
property has been received as a result of such adjustments. In addition, an adjustment to the exchange rate in
connection with a fundamental change may be treated as a deemed distribution. Any deemed distributions will
be treated as a taxable dividend, return of capital, or capital gain in accordance with the rules under the Code
governing corporate distributions. It is not clear whether a constructive dividend deemed paid to a noncorporate U.S. Holder would be eligible for the reduced rates of U.S. federal income tax applicable in respect of
certain dividends described below.
Ordinary shares
Distributions on ordinary shares
Although the Parent does not currently plan to pay dividends, any future distributions paid on ordinary shares
will be treated as taxable dividends to a U.S. Holder to the extent of such U.S. Holder’s pro rata share of the
Parent’s current and accumulated earnings and profits as determined under U.S. federal income tax principles.
To the extent that a distribution paid to a U.S. Holder with respect to ordinary shares exceeds such U.S. Holder’s
pro rata share of our current and/or accumulated earnings and profits, it will be treated as a non-taxable
return of capital to the extent of the U.S. Holder’s basis in the ordinary shares (determined on a share-by-share
basis), reduce (but not below zero) such basis, and thereafter be treated as a capital gain from the sale or
exchange of the U.S. holder’s ordinary shares. Please see “—Sale or other disposition of ordinary shares.” The
Parent may not maintain calculations of its earnings and profits under U.S. federal income tax principles. If this
is the case, distributions generally will be reported to U.S. Holders as dividends.
The amount of any dividend income paid in euros will be the U.S. dollar amount calculated by reference to the
exchange rate in effect on the date of receipt, regardless of whether the payment is in fact converted into U.S.
dollars. If the euros received are converted into U.S. dollars on the date of receipt, a U.S. Holder should not
recognize foreign currency gain or loss. A U.S. Holder will recognize foreign currency gain or loss if the euros
are converted into U.S. dollars at a later date and the exchange rate has changed from that in effect on the date
the euros were received. Generally, foreign currency gain or loss is treated as ordinary income or loss and is
subject to separate, complex rules regarding timing and source. Investors who are considering the purchase of
notes should consult their own tax advisors with respect to the tax treatment of foreign currency gain or loss.
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Dividends received by a non-corporate U.S. Holder will be taxed as a net capital gain at reduced rates, up to a
maximum rate of 20%, if the U.S. Holder meets certain holding period and other applicable requirements. The
reduced rate applicable to dividends will not be available for dividends received by a non-corporate U.S. Holder
if the Parent is a PFIC (as defined below) for the taxable year in which the dividend is paid or the preceding
taxable year or in certain other situations.
Dividends received by a corporate U.S. Holder will not be eligible for the dividends-received deduction generally
available to U.S. corporate shareholders under the Code for dividends received from certain corporations.
For foreign tax credit limitation purposes, distributions paid on ordinary shares that are treated as dividends
will be income from sources outside the United States and will generally constitute passive category income.
To the extent that distributions on ordinary shares are subject to Irish or Bermuda withholding taxes, U.S.
Holders generally may claim the amount of tax withheld as a deduction from gross income or as a credit against
their U.S. federal income tax liability. However, the foreign tax credit is subject to numerous complex
limitations that must be determined and applied on an individual basis. Generally, a U.S. Holder will be entitled
to claim a foreign tax credit equal to the lesser of (i) the foreign taxes paid by the U.S. Holder (which would
include any Irish or Bermuda tax withheld) and (ii) the U.S. federal income tax attributable to the U.S. Holder’s
taxable income from “foreign sources.” This limitation is calculated separately with respect to specific
categories of income. Investors who are considering the purchase of notes should consult their tax advisors
regarding the foreign tax credit rules.
Sale or other disposition of ordinary shares
Gain or loss recognized by a U.S. Holder on the sale or other disposition of ordinary shares generally will be
capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the shares for more than
one year. The gain or loss recognized will equal the difference between the U.S. Holder’s adjusted tax basis in
the ordinary shares sold and the amount realized from the sale, in each case as determined in U.S. dollars. The
gain or loss recognized will be a gain or loss from U.S. sources. Long- term capital gain recognized by noncorporate U.S. Holders is subject to reduced rates of taxation under current laws. A U.S. Holder’s ability to
deduct capital losses may be limited.
Passive Foreign Investment Company rules
In general, a corporation organized outside the United States will be a PFIC in any taxable year in which either
(i) at least 75% of its gross income is “passive income” or (ii) on average at least 50% of the value of its assets
is attributable to assets that produce passive income or are held for the production of passive income. In
determining whether a non-U.S. corporation is a PFIC, a proportionate share of the income and assets of each
corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.
Based on the Parent’s application of the test described above to the projected composition of its income and
the projected composition and estimated values of its assets, the Parent does not believe that it will be a PFIC in
2014 or subsequent years. Nevertheless, because its holds and expects to continue to hold a substantial amount
of cash or cash equivalents following this offering, and because the calculation of the value of its assets may be
based in part on the value of its ordinary shares, which may fluctuate considerably, it is difficult to predict for
any tax year whether the Parent may be a PFIC. Therefore, there can be no assurance that the Parent will not
be a PFIC in 2014 or any subsequent taxable year or that the IRS will agree with the Parent’s conclusion
regarding its PFIC status for any taxable year.
If the Parent is a PFIC in any taxable year during which a U.S. Holder owns notes or ordinary shares, the U.S.
Holder could be liable for additional taxes and interest charges upon certain distributions by the Parent and on
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any gain recognized on a sale, exchange or other disposition, including a pledge of ordinary shares, whether or
not the Parent continues to be a PFIC. In addition, certain annual tax reporting would be required. U.S. Holders
should consult their tax advisors concerning the tax consequences if the Parent is a PFIC, including certain tax
elections a U.S. Holder may wish to make to mitigate any adverse tax consequences that might arise in the
event that the Parent is a PFIC.
Reporting obligations for specified foreign financial assets
Under certain reporting obligations, U.S. Holders who are individuals are required to report on Form 8938
specified foreign financial assets that they own if the aggregate value of those assets exceeds certain threshold
amounts. Specified foreign financial assets may include notes and stock of a foreign issuer such as ordinary
shares if not held through a financial account maintained at a U.S. “financial institution,” as defined in the
applicable rules. Individual U.S. Holders should consult their own tax advisors as to the possible application of
this reporting obligation under their particular circumstances.
U.S. information reporting and backup withholding
U.S. Holders of notes or ordinary shares may be subject to information reporting and may be subject to backup
withholding on interest or distributions on notes or ordinary shares or on the proceeds from a sale or other
disposition of ordinary shares. Payments of interest or distributions on notes or ordinary shares, or the
proceeds from the sale or other disposition of ordinary shares to or through a foreign office of a broker
generally will not be subject to backup withholding, although information reporting may apply to those
payments in certain circumstances. Backup withholding will generally not apply, however, to a U.S. Holder who:
• furnishes a correct taxpayer identification number and certifies that the U.S. Holder is not subject to backup
withholding on IRS Form W-9, Request for Taxpayer Identification Number and Certification (or substitute
form); or
• is otherwise exempt from backup withholding.
Backup withholding is not an additional tax. Any amounts withheld from a payment to a U.S. Holder under the
backup withholding rules may be credited against the holder’s U.S. federal income tax liability, and a U.S.
Holder may obtain a refund of any excess amounts withheld by filing the appropriate claim for refund (typically
a tax return) with the IRS in a timely manner.
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Transfer restrictions
The notes, the guarantee and the ordinary shares, if any, deliverable upon exchange thereof have not been
registered under the Securities Act. As a result, the notes, the guarantee and the ordinary shares deliverable
upon exchange thereof may not be offered or sold within the United States or to, or for the account or benefit
of, U.S. persons, except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. Accordingly, the initial purchasers are initially offering the notes only to
“qualified institutional buyers” (as defined under Rule 144A under the Securities Act) in compliance with
Rule 144A.
As a purchaser of notes, you will be deemed to have acknowledged, represented to and agreed with us, the
Parent and the initial purchasers as follows:
• You are purchasing the notes for your own account or for an account with respect to which you exercise sole
investment discretion and you and such account are a qualified institutional buyer and are aware that the
sale to you is being made in reliance on Rule 144A.
• You acknowledge that the notes, the guarantee and the ordinary shares, if any, deliverable upon exchange
thereof have not been (and will not be) registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons except as set forth below.
• You acknowledge that neither we, the Parent, nor our and the Parent’s respective subsidiaries nor any initial
purchaser or any person representing us, the Parent, our and the Parent’s respective subsidiaries nor any
initial purchaser has made any representation to you with respect to us or the offering, sale and guarantee of
the notes and the issuance of the ordinary shares, if any, deliverable upon exchange of the notes, other than
the information contained or incorporated by reference in this offering memorandum. You also acknowledge
that you have received a copy of the offering memorandum relating to the offering of the notes and
acknowledge that you have had access to such financial and other information, including that incorporated
by reference in this offering memorandum, and have been offered the opportunity to ask us and the Parent
questions and received answers thereto, as you deemed necessary in connection with the decision to
purchase the notes.
• You will not resell or otherwise transfer any of the notes, the guarantee or the ordinary shares, if any,
deliverable upon exchange thereof prior to the date (the “resale restriction termination date”) that is the
later of (i) the date that is one year after the last date of original issuance of the notes or such shorter period
of time as permitted by Rule 144 or any successor provision thereto and (ii) such later date, if any, as may be
required by applicable law, except:
• to us, the Parent, or any of our and the Parent’s respective subsidiaries;
• under a registration statement that has been declared effective under the Securities Act;
• to a person you reasonably believe is a qualified institutional buyer that is purchasing for its own account
or for the account of another qualified institutional buyer and to whom notice is given that the transfer is
being made in reliance on Rule 144A, all in compliance with Rule 144A (if available); or
• pursuant to the exemption from registration provided by Rule 144 (if available) or any other available
exemption from the registration requirements of the Securities Act.
• You will, and each subsequent holder is required to, notify any purchaser of notes or the ordinary shares, if
any, deliverable upon exchange thereof from you or it of the above resale restrictions.
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• You understand that all of the notes and any ordinary shares deliverable upon exchange of the notes will,
prior to the resale restriction termination date, bear a legend substantially to the following effect, unless the
notes have been sold pursuant to an effective registration statement that continues to be effective at the
time of such transfer, or sold pursuant to the exemption from registration provided by Rule 144 or any
similar provision then in force under the Securities Act, or unless otherwise agreed by us with notice to the
trustee:
THIS SECURITY AND THE ORDINARY SHARES, IF ANY, DELIVERABLE UPON EXCHANGE OF THIS SECURITY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
ACQUIRER:
(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL
BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES
SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
(2) AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE
TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE
LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF
TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO
AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:
(A) TO JAZZ INVESTMENTS I LIMITED (THE “ISSUER”), JAZZ PHARMACEUTICALS PUBLIC LIMITED
COMPANY (THE “PARENT”) OR ANY OF THEIR RESPECTIVE SUBSIDIARIES, OR
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE
SECURITIES ACT, OR
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, OR
(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE ISSUER,
THE PARENT AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT
THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
• You acknowledge that we, the Parent and its subsidiaries, the initial purchasers and others will rely upon the
truth and accuracy of the above acknowledgments, representations and agreements. You agree that if any of
the acknowledgments, representations or agreements you are deemed to have made by your purchase of
notes, the guarantee and the ordinary shares, if any, deliverable upon exchange thereof is no longer
accurate, you will promptly notify us and the initial purchasers. If you are purchasing any notes as a fiduciary
or agent for one or more investor accounts, you represent that you have sole investment discretion with
respect to each of those accounts and that you have full power to make the above acknowledgments,
representations and agreements on behalf of each account.
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Plan of distribution
We and the Parent will enter into a purchase agreement with J.P. Morgan Securities LLC and Barclays Capital
Inc., as representatives of the several initial purchasers listed in the table below. Pursuant to the terms and
conditions of the purchase agreement, we will agree to sell to the initial purchasers, and each initial purchaser
will severally agree to purchase from us, the principal amount of notes set forth opposite that initial
purchaser’s name.
Principal amount
of notes
Initial purchaser
J.P. Morgan Securities LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Barclays Capital Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Citigroup Global Markets Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Morgan Stanley & Co. LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$212,500,000
112,500,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$500,000,000
75,000,000
75,000,000
25,000,000
The purchase agreement will provide that the initial purchasers are obligated to purchase all of the notes if any
are purchased. The obligations of the initial purchasers under the purchase agreement will be subject to the
satisfaction of certain conditions.
We and the Parent will agree to indemnify the initial purchasers against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments the initial purchasers may be required to make in respect
of those liabilities.
Over-allotment option
We will grant the initial purchasers an option to purchase, exercisable within a 30-day period from the date of
this offering memorandum, up to an additional $75,000,000 principal amount of notes from us, solely to cover
over-allotments, if any. If any additional notes are purchased with this option, the initial purchasers will offer
such additional notes on the same terms as those on which the notes are being offered.
New issue of notes
The sale of the notes, the guarantee and the ordinary shares deliverable upon exchange thereof, if any, have
not been registered under the Securities Act and, accordingly, the notes, the guarantee and the ordinary shares
deliverable upon exchange thereof, if any, may not be offered or sold except in transactions exempt from, or
not subject to, the registration requirements of the Securities Act. Each purchaser of the notes will be deemed
to have made the acknowledgements, representations and agreements as described under “Notice to investors”
and “Transfer restrictions.”
We have been advised that the initial purchasers propose to resell the notes to persons that they reasonably
believe to be qualified institutional buyers (as defined in Rule 144A) in reliance on Rule 144A. The price at which
the notes are offered may be changed at any time without notice.
The notes are a new issue of securities, and there is currently no established trading market for such notes. In
addition, the notes are subject to certain restrictions on resale and transfer as described under “Notice to
investors” and “Transfer restrictions.” Neither we nor the Parent intend to apply for the notes to be listed on
any securities exchange or to arrange for the notes to be quoted on any quotation system, except that
application will be made to the Irish Stock Exchange for the notes to be admitted to the Official List and to
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trading on the GEM and we will use our commercially reasonable efforts to procure the listing of the notes on
the GEM operated by and under the supervision of the Irish Stock Exchange prior to the first interest payment
date. The initial purchasers have advised us that they intend to make a market in the notes, but they are not
obligated to do so. The initial purchasers may discontinue any market-making in the notes at any time in their
sole discretion without notice. Accordingly, we cannot assure you that a liquid trading market will develop for
the notes. If an active trading market for the notes does not develop, the market price and liquidity of the notes
may be adversely affected. If the notes are traded, they may trade at a discount from their initial offering price
depending on prevailing interest rates, the market for similar securities, our performance and other factors.
No sale of similar securities
We, the Parent, and the Parent’s directors and executive officers have agreed that, for a period of 60 days, in
the case of us and the Parent, and 90 days, in the case of such executive officers and directors, from the date of
this offering memorandum, none of us, the Parent or such directors and executive officers will, without the
prior consent of J.P. Morgan Securities LLC and Barclays Capital Inc., offer, pledge, sell (or enter into any
agreement to offer or sell), directly or indirectly, any ordinary shares or any securities convertible into, or
exercisable or exchangeable for, ordinary shares, enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of the ordinary shares or such
other securities, or file or participate in the filing of a registration statement with the SEC in respect of such
ordinary shares or securities, or publicly announce an intention to effect one of these transactions.
Notwithstanding the above, the initial purchasers have agreed in the purchase agreement that the lock-up
agreement applicable to us and the Parent does not apply to: (a) our sale of the notes in this offering, or the
issuance of ordinary shares upon the exchange thereof; (b) the issuance of ordinary shares upon the
settlement, vesting or exercise of options, restricted stock units or rights (including phantom share accounts of
non-employee directors) outstanding on the date of the purchase agreement; (c) the issuance of ordinary
shares or rights to purchase ordinary shares issued pursuant to the Parent’s employee share purchase plan or
director deferred compensation plan existing on the date of the purchase agreement; (d) options to purchase
ordinary shares or any other equity-based awards issued after the date of the purchase agreement pursuant to
the Parent’s equity incentive or share option plans existing on the date of the purchase agreement, provided
that those options or other equity-based awards do not vest or otherwise become exercisable during the 60-day
lock-up period applicable to us and the Parent except that the foregoing restriction on vesting and
exercisability does not apply to (1) any options or other equity-based awards granted to the Parent’s nonemployee directors or (2) any options or other equity-based awards that vest or otherwise become exercisable
during the 60-day lock-up period applicable to us and the Parent pursuant to vesting or exercisability
acceleration provisions provided under such plans, the agreements thereunder or otherwise under the Parent’s
severance plans and arrangements existing on the date of the purchase agreement; or (e) the filing of any
registration statement on Form S-8 or any amendments thereto.
In addition, notwithstanding the lock-up agreements applicable to the Parent’s directors and executive officers,
the initial purchasers have agreed that the restrictions shall not apply to: (a) transactions relating to any
securities acquired in open market transactions after the completion of this offering; (b) transfers of any
securities as a bona fide gift; (c) in the case of a natural person, transfers of any securities by will or intestate
succession or to any trust or partnership for the direct or indirect benefit of such director or executive officer or
any member of the immediate family of the foregoing; (d) in the case of a non-natural person, distributions of
any securities to general or limited partners or stockholders or members of such person; (e) in the case of a
non-natural person, transfers of any securities (1) in connection with the sale or other bona fide transfer in a
single transaction of all or substantially all of such person’s capital stock, partnership interests, membership
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interests or other similar equity interests, as the case may be, or all or substantially all of such person’s assets,
in any such case not undertaken for the purpose of avoiding the restrictions imposed by the lock-up agreement
or (2) to another corporation, partnership, limited liability company or other business entity so long as the
transferee is an affiliate of such person and such transfer is not for value; (f) the exercise, whether on a “net” or
“cashless” exercise basis or otherwise, of outstanding options to purchase ordinary shares, and any transfer of
ordinary shares to the Parent upon any such “net” or “cashless” exercise, provided that any ordinary shares
acquired upon the exercise of such options (in the case of a “net” or “cashless” exercise, after giving effect to
the settlement of such exercise) shall be subject to the restrictions imposed by the lock-up agreement; (g) any
transfers of securities pursuant to a sale or an offer to purchase 100% of the outstanding ordinary shares,
whether pursuant to a merger, tender offer or otherwise, to a third party or group of third parties; (h) any
transfers of securities to the Parent to satisfy tax withholding obligations pursuant to the Parent’s equity
compensation plans or arrangements, (i) any sales or transfers of ordinary shares pursuant to a written trading
plan intended to meet the requirements of Rule 10b5-1 under the Exchange Act, or 10b5-1 Plan, that is in effect
as of the date of the lock-up agreement; or (j) sales or transfers of ordinary shares (including in open market
transactions through a broker) to satisfy tax withholding obligations of such director or executive officer in
connection with the vesting of equity awards pursuant to the Parent’s equity compensation plans or
arrangements, which equity awards vest during the 90-day lock-up period applicable to the Parent’s executive
officers and directors; provided that (A) in the case of any transfer or distribution pursuant to clause (b), (c), (d)
or (e), each donee, distributee or transferee is required to sign and deliver a lock-up agreement, (B) in the case
of any sale of transfer pursuant to clause (j), any public filing, report or announcement of any such sale or
transfer shall disclose that the sale or transfer was for the purpose of covering the withholding taxes payable,
and (C) in the case of an executive officer of the Parent, the foregoing restrictions will not apply if such
executive officer ceases to be an executive officer of the Parent. Moreover, the party subject to the lock-up
agreement may enter into a new 10b5-1 Plan during the 90-day lock-up period applicable to the Parent’s
executive officers and directors provided that no sales or transfers of ordinary shares are made pursuant to
that new 10b5-1 Plan before the expiration of such lock-up period, and provided further that no party is
required to, or voluntarily, files a report under the Exchange Act in connection with the entry into that new
10b5-1 Plan (or otherwise voluntarily effects any public filing, report or announcement of the entry into that
new 10b5-1 Plan), in each case during such lock-up period.
In addition, each of the Parent’s directors and executive officers has agreed that, without the prior written
consent of J.P. Morgan Securities LLC and Barclays Capital Inc., he or she will not, during the period ending
90 days after the date of this offering memorandum, make any demand for, or exercise any right with respect
to, the registration of any ordinary shares or any security convertible into or exercisable or exchangeable for
ordinary shares. J.P. Morgan Securities LLC and Barclays Capital Inc., in their sole discretion, may release any of
the securities subject to this lock-up agreement at any time without notice.
Price stabilization and short positions
In connection with the offering of the notes, the initial purchasers may engage in over-allotment, stabilizing
transactions and syndicate covering transactions in the notes and ordinary shares. Over-allotment involves
sales in excess of the offering size, which creates a short position for the initial purchasers. Stabilizing
transactions involve bids to purchase the notes or ordinary shares in the open market for the purpose of
pegging, fixing or maintaining the price of the notes. Syndicate covering transactions involve purchases of the
notes or ordinary shares in the open market after the distribution has been completed in order to cover short
positions. Stabilizing transactions and syndicate covering transactions may cause the prices of the notes or
ordinary shares to be higher than they would otherwise be in the absence of those transactions.
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Foreign jurisdictions
With respect to offers and sales of the securities that are the subject of this offering memorandum:
• offers or sales of any of such securities to persons in the United Kingdom are prohibited in circumstances
which have resulted in or will result in such securities being or becoming the subject of an offer of
transferable securities to the public as defined in Section 102B of the Financial Services and Markets Act
2000 (as amended) (the ‘‘FSMA’’);
• all applicable provisions of the FSMA must be complied with, with respect to anything done in relation to
such securities in, from or otherwise involving the United Kingdom; and
• any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA)
received in connection with the issue or sale of such securities shall only be communicated, or be caused to
be communicated, in circumstances in which Section 21(1) of the FSMA does not apply to us.
In relation to each Member State of the European Economic Area which has implemented the Prospectus
Directive (each, a “Relevant Member State”), each initial purchaser has represented and agreed that with effect
from and including the date on which the Prospectus Directive is implemented in that Relevant Member State
(the “Relevant Implementation Date”) it has not made and will not make an offer of our securities which are the
subject of this offering memorandum to the public in that Relevant Member State other than:
• to any legal entity which is a qualified investor as defined in the Prospectus Directive;
• to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD
Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus
Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of J.P. Morgan
Securities LLC and Barclays Capital Inc. for any such offer; or
• in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of notes shall require us or any initial purchaser to publish a prospectus pursuant to
Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression “an offer of securities to the public” in relation to any notes
in any Relevant Member State means the communication in any form and by any means of sufficient
information on the terms of the offer and the securities to be offered so as to enable an investor to decide to
purchase or subscribe for the securities, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means
Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent
implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant
Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.
You should be aware that the laws and practices of certain countries require investors to pay stamp taxes and
other charges in connection with purchases of securities.
Each initial purchaser of the notes has represented, warranted and agreed that:
• it will not underwrite the issue of, or place the notes, otherwise than in conformity with the provisions of the
European Communities (Markets in Financial Instruments) Regulations 2007 (Nos. 1 to 3) (as amended)
including, without limitation, Regulations 7 and 152 thereof or any codes of conduct issued in connection
therewith, and the provisions of the Investor Compensation Act 1998;
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• it will not underwrite the issue of, or place the notes, otherwise than in conformity with the provisions of the
Companies Acts, the Central Banks Acts, 1942 to 2013 (as amended) and any codes of conduct rules made
under Section 117(1) of the Central Bank Act, 1989; and
• it will not underwrite the issue of, or place, or do anything in Ireland in respect of the notes otherwise than in
conformity with the provisions of the Prospectus (Directive 2003/71/EC) Regulations 2005 (as amended) and
any rules issued under Section 51 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005
by the Central Bank.
Other relationships
Certain of the initial purchasers and their affiliates have provided in the past and may provide from time to time
in the future certain commercial banking, financial advisory, investment banking and other services for us, the
Parent and our and the Parent’s affiliates in the ordinary course of their business, for which they have received
and may continue to receive customary fees and commissions. Affiliates of each of the initial purchasers are
lenders under the amended credit agreement. Jazz Pharmaceuticals intends to use a portion of the net
proceeds of this offering in part to repay outstanding borrowings under the revolving credit facility provided for
under the amended credit agreement, and therefore such affiliates will receive a portion of the proceeds. See
“Use of proceeds.”
In addition, from time to time, certain of the initial purchasers and their affiliates may effect transactions for
their own account or the account of customers, and hold on behalf of themselves or their customers, long or
short positions in our or the Parent’s debt or equity securities or loans, and may do so in the future.
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Enforceability of civil liabilities under U.S. federal securities laws
The Issuer is organized under the laws of Bermuda and the Parent is a public limited company formed under the
laws of Ireland. In addition, certain of the directors and officers of the Issuer and the Parent are non-residents
of the United States. All or a substantial portion of the assets of such non-resident persons and of the Issuer
and the Parent are located outside of the United States. As a result, it may not be possible for investors to effect
service of process within the United States upon such persons or the Issuer or the Parent, or to enforce against
them in U.S. courts judgments obtained in such courts predicated upon the civil liability provisions of the
federal securities laws of the United States.
The Parent has been advised by counsel that the United States currently does not have a treaty with Ireland
providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters.
Therefore, a final judgment for the payment of money rendered by any U.S. federal or state court based on civil
liability, whether or not based solely on U.S. federal or state securities laws, would not automatically be
enforceable in Ireland. A judgment of the U.S. courts will be enforced by the Irish courts if the following general
requirements are met: (i) the procedural rules of the U.S. court must have been observed and the U.S. court
must have had jurisdiction in relation to the particular defendant according to Irish conflict of law rules (the
submission to jurisdiction by the defendant would satisfy this rule); and (ii) the judgment must be final and
conclusive and the decree must be final and unalterable in the court which pronounces it. A judgment can be
final and conclusive even if it is subject to appeal or even if an appeal is pending. Where however, the effect of
lodging an appeal under the applicable law is to stay execution of the judgment, it is possible that, in the
meantime, the judgment should not be actionable in Ireland. It remains to be determined whether final
judgment given in default of appearance is final and conclusive. However, the Irish courts may refuse to enforce
a judgment of the U.S. courts which meets the above requirements for one of the following reasons: (a) if the
judgment is not for a definite sum of money; (b) if the judgment was obtained by fraud; (c) if the enforcement of
the judgment in Ireland would be contrary to natural or constitutional justice; (d) if the judgment is contrary to
Irish public policy or involves certain United States laws which will not be enforced in Ireland; or (e) if
jurisdiction cannot be obtained by the Irish courts over the judgment debtors in the enforcement proceedings
by personal service in Ireland or outside Ireland under Order 11 of the Superior Courts Rules.
Likewise, the Issuer has been advised by counsel that that there is no treaty in force between the United States
and Bermuda providing for the reciprocal recognition and enforcement of judgments in civil and commercial
matters. As a result, whether a United States judgment would be enforceable in Bermuda against the Issuer or
its directors and officers depends on whether the U.S. court that entered the judgment is recognized by the
Bermuda court as having jurisdiction over the Issuer or its directors and officers, as determined by reference to
Bermuda conflict of law rules. In this regard, a judgment debt from a U.S. court that is final and for a sum
certain based on U.S. federal securities laws will not be enforceable in Bermuda unless the judgment debtor had
submitted to the jurisdiction of the U.S. court, and the issue of submission and jurisdiction is a matter of
Bermuda (not U.S.) law. In addition, and irrespective of jurisdictional issues, the Bermuda courts will not
enforce a U.S. federal securities law that is either penal or contrary to public policy. Certain remedies available
under the laws of U.S. jurisdictions, including certain remedies under U.S. federal securities laws, would not be
available under Bermuda law or enforceable in a Bermuda court, as they would be contrary to Bermuda public
policy. Further, no claim may be brought in Bermuda against the Issuer or its directors and officers in the first
instance for violation of U.S. federal securities laws because these laws have no extraterritorial jurisdiction
under Bermuda law and do not have the force of law in Bermuda.
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Legal matters
Cooley LLP, San Francisco, California, is acting as counsel to Jazz Pharmaceuticals in connection with this
offering. A&L Goodbody, Dublin, Ireland and Conyers Dill & Pearman Limited, Hamilton, Bermuda, are acting as
special counsel to Jazz Pharmaceuticals in connection with this offering, and will each issue an opinion with
respect to the validity of the issuance of the securities being offered hereby. The initial purchasers are being
represented by Davis Polk & Wardwell LLP, Menlo Park, California and Arthur Cox, Dublin, Ireland.
Independent registered public accounting firms
The consolidated financial statements and schedule of Jazz Pharmaceuticals Public Limited Company and its
subsidiaries as of December 31, 2013 and 2012, and for each of the years in the two-year period ended
December 31, 2013, and management’s assessment of the effectiveness of internal control over financial
reporting as of December 31, 2013, included in the Parent’s Annual Report on Form 10-K for the year ended
December 31, 2013, have been incorporated by reference in this offering memorandum in reliance upon the
reports of KPMG, independent registered public accounting firm, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
Ernst & Young LLP, independent registered public accounting firm, has audited the consolidated statements of
operations, comprehensive income, stockholders’ equity and cash flows, and schedule, of Jazz Pharmaceuticals,
Inc. for the year ended December 31, 2011 included in the Parent’s Annual Report on Form 10-K for the year
ended December 31, 2013, as set forth in their report, which is incorporated by reference in this offering
memorandum. Jazz Pharmaceuticals, Inc.’s financial statements and schedule are incorporated by reference in
reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.
The consolidated financial statements of Gentium S.p.A. at December 31, 2013 and 2012 and for each of the
three years ended December 31, 2013 included in Exhibit 99.1 of the Parent’s Current Report on Form 8-K/A,
filed with the SEC on April 1, 2014 and incorporated by reference in this offering memorandum, have been
audited by Reconta Ernst & Young S.p.A., an independent registered public accounting firm, as set forth in their
report thereon which is incorporated by reference in this offering memorandum, and are included herein in
reliance upon such report given on the authority of such firm as experts in accounting and auditing.
The audited historical consolidated financial statements of EUSA Pharma Inc. included in Exhibit 99.1 of the
Parent’s Current Report on Form 8-K/A, filed with the SEC on August 10, 2012, have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
The consolidated financial statements and schedule of Jazz Pharmaceuticals Public Limited Company (formerly
Azur Pharma Public Limited Company) and its subsidiaries as of December 31, 2011 and 2010, and for each of
the years in the three-year period ended December 31, 2011, included in the Annual Report on Form 10-K of
Jazz Pharmaceuticals Public Limited Company for the year ended December 31, 2011, have been incorporated
by reference herein in reliance upon the report of KPMG, independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
Where you can find more information
Whenever a reference is made in this offering memorandum to any of Jazz Pharmaceuticals’ contracts,
agreements or other documents, the reference may not be complete and you should refer to the exhibits that
167
are a part of the exhibits to the reports or other documents incorporated by reference in this offering
memorandum for a copy of such contract, agreement or other document. For additional information about
Jazz Pharmaceuticals, please refer to other documents the Parent has filed with the SEC and that are
incorporated by reference into this offering memorandum, as described under the heading “Incorporation of
certain information by reference” below. Additional information about Jazz Pharmaceuticals can be found on
the Parent’s website, at www.jazzpharmaceuticals.com, and in the Parent’s filings with the SEC. Copies of the
Parent’s filings with the SEC are available at the SEC Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549, and online at www.sec.gov and the Parent’s website at www.jazzpharmaceuticals.com. We have
included the SEC’s website address and the Parent’s website address as inactive textual references only.
Neither the contents of the SEC’s website nor the Parent’s website, nor any other website that may be accessed
from such websites, is incorporated in or otherwise considered a part of this offering memorandum. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room.
Incorporation of certain information by reference
We and the Parent ‘‘incorporate by reference’’ into this offering memorandum the information the Parent files
with the SEC. This means that we and the Parent disclose important information to you by referring you to
those filings. You should read the information incorporated by reference because it is an important part of this
offering memorandum. Information in this offering memorandum supersedes information incorporated by
reference that the Parent filed with the SEC prior to the date of this offering memorandum, while information
that the Parent files later with the SEC will automatically update and supersede the information in this offering
memorandum. We and the Parent incorporate by reference the following information or documents that the
Parent has filed with the SEC (except as noted, under Commission File No. 001-33500):
• the Parent’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on
February 25, 2014, as amended by Amendment No. 1 to Annual Report on Form 10-K/A filed with the SEC on
April 28, 2014;
• the Parent’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2014 and June 30,
2014, filed with the SEC on May 8, 2014 and August 5, 2014, respectively;
• the Current Reports on Form 8-K that the Parent filed with the SEC on January 13, 2014, January 24,
2014, February 25, 2014 (except for the information furnished under Item 2.02 thereof and the
accompanying exhibit 99.1), February 28, 2014, March 6, 2014, May 19, 2014, June 4, 2014, July 2, 2014,
July 8, 2014 and August 5, 2014 (except for the information furnished under Item 2.02 thereof and the
accompanying exhibit 99.1);
• the Parent’s Current Report on Form 8-K/A filed with the SEC on April 1, 2014;
• the unaudited consolidated financial statements of EUSA Pharma, Inc., including the unaudited consolidated
balance sheets of EUSA Pharma, Inc. as of March 31, 2012 and December 31, 2011 and the unaudited
consolidated statements of operations and cash flows for the three months ended March 31, 2012 and 2011,
and the notes related thereto, included in Exhibit 99.2 to the Parent’s Current Report on Form 8-K/A filed
with the SEC on August 10, 2012;
• the audited consolidated financial statements of EUSA Pharma, Inc., including the consolidated balance
sheets of EUSA Pharma, Inc. as of December 31, 2011 and 2010, and the related audited consolidated
statements of operations, changes in redeemable convertible preferred stock and stockholders’ equity, and
cash flows for each of the three years ended December 31, 2011, the notes related thereto and the report of
PricewaterhouseCoopers LLP, independent accountants, included in Exhibit 99.1 to the Parent’s Current
Report on Form 8-K/A filed with the SEC on August 10, 2012;
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• the audited consolidated financial statements of Azur Pharma, including the consolidated balance sheets of
Azur Pharma and subsidiaries as of December 31, 2011 and 2010, and the related audited consolidated
statements of operations, shareholders’ equity and cash flows for each of the years in the three-year period
ended December 31, 2011, the notes related thereto and the report of KPMG, independent registered public
accounting firm, included on pages F-1 to F-23 of the Annual Report on Form 10-K for Azur Pharma’s fiscal
year ended December 31, 2011 that the Parent filed with the SEC on February 28, 2012 (Commission File
No. 333-177528); and
• the Parent’s Current Report on Form 8-K that the Parent filed with the SEC on January 18, 2012 (which
evidences the registration of ordinary shares under Section 12(b) of the Exchange Act and includes therein a
description of ordinary shares).
We and the Parent also incorporate by reference any future filings (other than current reports furnished under
Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items unless such
Form 8-K expressly provides to the contrary) made by the Parent with the SEC pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act until the termination of the offering of the notes, and such filings will become a
part of this offering memorandum from the date that such documents are filed with the SEC. Information in
such future filings updates and supplements the information provided in this offering memorandum. Any
statements in any such future filings will automatically be deemed to modify and supersede any information in
any document the Parent previously filed with the SEC that is incorporated or deemed to be incorporated
herein by reference to the extent that statements in the later filed document modify or replace such earlier
statements.
Upon written or oral request, we or the Parent will provide you with a copy of any of the incorporated
documents without charge (not including exhibits to the documents unless the exhibits are specifically
incorporated by reference into the documents). Any such request may be made by writing or telephoning the
Parent at the following address or phone number:
Jazz Pharmaceuticals plc
Attn: Investor Relations
Fourth Floor, Connaught House
One Burlington Road
Dublin 4, Ireland
Telephone (U.S.): +1 650 496 2800
Telephone (Ireland): +353 1 634 7892
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$500,000,000
Jazz Investments I Limited
1.875% Exchangeable Senior Notes due 2021
Guaranteed on a senior unsecured basis by
Jazz Pharmaceuticals plc
Exchangeable for ordinary shares of
Jazz Pharmaceuticals plc
J.P. Morgan
BofA Merrill Lynch
Morgan Stanley
Barclays
Citigroup