SECOND LOAN MODIFICATION AGREEMENT

Exhibit 10.3

EXECUTION VERSION

SECOND LOAN MODIFICATION AGREEMENT

This Second Loan Modification Agreement (this “Loan Modification”) is entered into as of October 7, 2011 by and among (a) HORIZON PHARMA USA, INC., a Delaware corporation (formerly called HORIZON THERAPEUTICS, INC.) (“Horizon”), HORIZON PHARMA, INC., a Delaware corporation (“Horizon Pharma”), HORIZON PHARMA (UK) LIMITED, a company registered under the laws of England and Wales with registration number 5819120, with its registered offices in the United Kingdom at x/x Xxxxxx & Xxxxxx (XX) XXX, Xxxxx 42, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (“Horizon UK”, and together with Horizon and Horizon Pharma, each a “Borrower” and, collectively, jointly and severally, the “Borrowers”), (b) the Lenders listed on the signature pages to the Loan Agreement referenced below or otherwise party thereto from time to time (the “Lenders”) and (c) OXFORD FINANCE LLC, a Delaware limited liability company with an office located at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (“Oxford”), as administrative agent for the Lenders, or any successor administrative agent (in such capacity, the “Administrative Agent”).

1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrowers to Administrative Agent and Lenders, Borrowers are indebted to Administrative Agent and Lenders pursuant to a loan arrangement dated as of June 2, 2011, evidenced by, among other documents, a certain Loan and Security Agreement dated as of June 2, 2011, among Borrowers, Administrative Agent and Lenders, as amended by a Consent and first Loan Modification Agreement (the “First Loan Modification”) dated as of August 17, 2011 among Borrowers, Administrative Agent and Lenders (as amended, the “Loan Agreement”). Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as described in the Loan Agreement. Hereinafter, the Loan Documents, together with all other documents evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”.

3. DESCRIPTION OF CHANGE IN TERMS.

A. Modifications to Loan Agreement.

1 The Loan Agreement shall be amended by deleting the following sub-paragraph (g) in the definition of “Permitted Indebtedness” appearing in Section 15.1 of the Loan Agreement:

“(g) Indebtedness to SVB with respect to Borrowers’ credit card program and other cash management services provided that the amount of such Indebtedness shall at no time exceed $200,000;”

and inserting in lieu thereof the following:

“(g) Indebtedness to SVB with respect to Borrowers’ credit card program and other cash management services provided that the amount of such Indebtedness shall at no time exceed $500,000;”

2 The Loan Agreement shall be amended by deleting the following sub-paragraph (m) in the definition of “Permitted Liens” appearing in Section 15.1 of the Loan Agreement:

“(m) liens on (i) deposit account(s) securing Indebtedness to SVB with respect to Borrowers’ credit card program and other cash management services provided that the amount of such Indebtedness shall at no time exceed Two Hundred Thousand Dollars ($200,000), (ii) in favor of SVB in respect of Borrowers’ lock-box account maintained at SVB provided that all monies in such lock-box account are swept daily to an account at SVB subject to a Control Agreement and (iii) cash collateral in an amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000) held at SVB to secure a Letter of Credit issued by SVB in respect of Horizon’s lease of certain premises described as Suite Nos. 520 and 550, of the project now known as Corporate 500 Centre whose address is 000 Xxxx Xxxx Xxxx, Xxxxxxxxx, XX 00000; and”

and inserting in lieu thereof the following:

“(m) liens on (i) deposit account(s) securing Indebtedness to SVB with respect to Borrowers’ credit card program and other cash management services provided that the amount of such Indebtedness shall at no time exceed Five Hundred Thousand Dollars ($500,000), (ii) in favor of SVB in respect of Borrowers’ lock-box account maintained at SVB provided that all monies in such lock-box account are swept daily to an account at SVB subject to a Control Agreement and (iii) cash collateral in an amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000) held at SVB to secure a $250,000 Letter of Credit issued by SVB in respect of Horizon’s lease of certain premises described as Suite Nos. 520 and 550, of the project now known as Corporate 500 Centre whose address is 000 Xxxx Xxxx Xxxx, Xxxxxxxxx, XX 00000; and”

4. FEES. Borrower shall reimburse Administrative Agent for all legal fees and expenses incurred in connection with this Loan Modification.

5. REPRESENTATIONS AND WARRANTIES. To induce Lenders and Administrative Agent to enter into this Loan Modification, Borrowers hereby jointly and severally represent and warrant to Lenders and Administrative Agent as follows:

A. Immediately after giving effect to this Loan Modification (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

B. Borrowers have the power and due authority to execute and deliver this Loan Modification; and

C. Except as set forth in Borrowers’ 8-K filed with the SEC on August 2, 2011, the organizational documents of Borrowers delivered to Lenders and Administrative Agent on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect.

6. RATIFICATION OF PERFECTION CERTIFICATE. Other than (i) changes with respect to Borrower’s deposit accounts at SVB as provided in the modifications set forth herein and (ii) the entrance by Horizon into the Office Lease as described in the First Loan Modification, each Borrower (a) hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in those certain Perfection Certificates, each dated as of June 2, 2011, as updated by those certain Perfection Certificates, each dated as of the date hereof, by each Borrower

(collectively, the “Perfection Certificate”) and delivered to Administrative Agent and Lenders, and (b) acknowledges, confirms and agrees the disclosures and information Borrowers provided to Administrative Agent and the Lenders in the Perfection Certificate have not changed, as of the date hereof.

6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

7. RATIFICATION OF LOAN DOCUMENTS. Each Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to Administrative Agent and Lenders, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.

8. NO DEFENSES OF BORROWERS. Each Borrower hereby acknowledges and agrees that such Borrower has no offsets, defenses, claims, or counterclaims against Administrative Agent and Lenders with respect to the Obligations, or otherwise, and that if such Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Administrative Agent and Lenders, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and such Borrower hereby RELEASES Administrative Agent and Lenders from any liability thereunder, except for any obligations remaining to be performed by Administrative Agent or Lenders under the Loan Agreement or Loan Documents.

9. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Obligations, Administrative Agent and Lenders are relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan Modification, the terms of the Existing Loan Documents remain unchanged and in full force and effect. Administrative Agent’s and Lenders’ agreement to modifications to the existing Obligations pursuant to this Loan Modification in no way shall obligate Administrative Agent and Lenders to make any future modifications to the Obligations. Nothing in this Loan Modification shall constitute a satisfaction of the Obligations. It is the intention of Administrative Agent, Lenders and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Administrative Agent and Lenders in writing. No maker will be released by virtue of this Loan Modification.

10. COUNTERPARTS. This Loan Modification may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

11. GOVERNING LAW. Section 13 of the Loan Agreement is hereby incorporated by reference in its entirety.

[Remainder of Page Intentionally Left Blank – Signature Page to Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Loan Modification to be executed as of the date first above written.

HORIZON PHARMA USA, INC., as Borrower
By		/s/ Xxxxxx De Vaere
Name:		Xxxxxx De Vaere
Title:		EVP & CFO
HORIZON PHARMA, INC., as Borrower
By		/s/ Xxxxxx De Vaere
Name:		Xxxxxx De Vaere
Title:		EVP & CFO
HORIZON PHARMA (UK) LIMITED, as Borrower
By		/s/ Xxxxxx De Vaere
Name:		Xxxxxx De Vaere
Title:		Director
OXFORD FINANCE LLC, as Lender
By		/s/ Xxxx X. Xxxxxxxxx
Name:		Xxxx X. Xxxxxxxxx
Title:		Vice President & General Counsel
SILICON VALLEY BANK, as Lender
By		/s/ Xxxxxxx Xxxxxxx
Name:		Xxxxxxx Xxxxxxx
Title:		Deal Team Leader
OXFORD FINANCE LLC, as Administrative Agent
By		/s/ Xxxx X. Xxxxxxxxx
Name:		Xxxx X. Xxxxxxxxx
Title:		Vice President & General Counsel

[signature page to Second Loan Modification]