Exhibit 10.1
Execution Copy
TERMINATION AGREEMENT
ELAN CORPORATION, PLC
ELAN INTERNATIONAL SERVICES, LTD.
ELAN PHARMA INTERNATIONAL LIMITED
DOV PHARMACEUTICAL, INC.
DOV (BERMUDA), LTD.
NASCIME LIMITED
INDEX
INDEX
CLAUSE 1 DEFINITIONS
CLAUSE 2 TERMINATION OF THE DOV BERMUDA AGREEMENT
CLAUSE 3 REPRESENTATIONS, WARRANTIES, COVENANTS,
CONFIRMATIONS AND INDEMNITIES
CLAUSE 4 INTELLECTUAL PROPERTY
CLAUSE 5 SALE OF NASCIME SHARES
CLAUSE 6 RIGHTS RELATED TO SECURITIES
CLAUSE 7 COMPLETION
CLAUSE 8 CONFIDENTIALITY
CLAUSE 9 WAIVER OF ACCRUED RIGHTS/MUTUAL RELEASES
CLAUSE 10 GENERAL
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THIS TERMINATION AGREEMENT made this 21st day of October 2003 (this "Agreement")
AMONG:-
(1) ELAN CORPORATION, PLC, a public limited company incorporated under the
laws of Ireland and having its registered office at ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ("Elan Corp");
(2) ELAN INTERNATIONAL SERVICES, LTD., an exempted limited liability company
incorporated under the laws of Bermuda, and having its registered office
at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ("▇▇▇");
(3) ELAN PHARMA INTERNATIONAL LIMITED, a private limited company incorporated
under the laws of Ireland, and having its registered office at WIL House,
▇▇▇▇▇▇▇ Business ▇▇▇▇, ▇▇▇▇▇▇▇, County Clare, Ireland ("EPIL Shannon")
(4) DOV PHARMACEUTICAL INC., a Delaware corporation having its principal place
of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ of America;
(4) DOV (BERMUDA), LTD., an exempted company incorporated under the laws of
Bermuda, formerly known as DOV Newco, Ltd., and having its registered
office at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇; and
(5) NASCIME LIMITED, a private limited company incorporated under the laws of
Ireland and having its registered office at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
RECITALS
A. Certain of the Parties entered into various agreements whereby Elan Corp,
EIS, and DOV established the joint venture company, DOV Bermuda, and Elan
Corp and DOV each licensed certain intellectual property to Nascime for a
specified field of use. DOV Bermuda is the sole shareholder in Nascime.
Specifically:
(i) Elan Corp, EIS, DOV, DOV Bermuda and Nascime entered into a Joint
Development and Operating Agreement dated 21 January 1999 as amended
by the Amendment Agreement (as defined in Recital D) and as further
amended immediately prior to the Effective Date (the "JDOA");
(ii) Elan Corp and Nascime entered into a License Agreement dated 20
January 1999, agreed to by DOV (the "Elan License Agreement");
(iii) DOV and Nascime entered into a License Agreement dated 20 January
1999, agreed to by Elan Corp (the "DOV License Agreement"); and
(iv) DOV Bermuda, DOV and EIS entered into a Registration Rights
Agreement with respect to the capital stock of DOV Bermuda dated 21
January 1999 (the "DOV Bermuda Registration Rights Agreement").
B. The JDOA, DOV License Agreement and the Elan License Agreement are
together defined in this Agreement as the "DOV Bermuda Agreements".
C. Certain of the Parties also entered into agreements whereby DOV sold and
EIS purchased certain securities of DOV and such Parties agreed to certain
matters related to the ownership of such securities. Specifically:
(i) EIS and DOV entered into a Securities Purchase Agreement dated 21
January 1999 as amended by the Amendment Agreement (as defined in
Recital D) (the "Securities Purchase Agreement");
(ii) EIS and DOV entered into a Registration Rights Agreement with
respect to the capital stock of DOV dated 21 January 1999 (the "DOV
Registration Rights Agreement");
(iii) EIS and DOV entered into a $8,010,000 Convertible Exchangeable
Promissory Note dated 21 January 1999 as amended by the Amendment
Agreement (as defined in Recital D) (the "Convertible Exchangeable
Promissory Note");
(iv) EIS and DOV entered into a $7,008,750 Convertible Promissory Note
dated 21 January 1999 (the "Convertible Promissory Note"), under
which DOV has drawn down the principal amount of $2,441,600;
(v) EIS and DOV entered into a Warrant Agreement dated 21 January 1999
(the "1999 Warrant"); and
(vi) EIS and DOV entered into a Warrant Agreement dated 24 March 2003
(the "2003 Warrant").
D. Elan Corp, EIS, EPIL Shannon, DOV, DOV Bermuda and Nascime entered into an
Amendment Agreement dated 24 March 2003, a copy of which is attached
hereto as Exhibit A (the "Amendment Agreement") to, among other things (i)
amend the Convertible Exchangeable Note; (ii) eliminate in the Securities
Purchase Agreement and JDOA all references to the Exchange Right (as
defined
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below) and (iii) waive and release each other from certain obligations
under theDOV Bermuda Agreements.
E. Following the execution of this Agreement, Elan, Nascime and DOV are
entering into a license agreement providing for the grant by Elan to
Nascime of a license on the terms set forth therein (the "New Elan
License").
F. The Parties wish to (i) terminate the DOV Bermuda Agreements in accordance
with Clause 2 and (ii) set forth their agreement in relation to certain
other matters, including the transfer of the Nascime Shares by DOV Bermuda
to DOV, as set forth below.
IN CONSIDERATION OF THE MUTUAL COVENANTS CONTAINED HEREIN, AND OTHER GOOD AND
VALUABLE CONSIDERATION, THE RECEIPT AND ADEQUACY OF WHICH ARE HEREBY
ACKNOWLEDGED, IT IS HEREBY AGREED AS FOLLOWS:
1 DEFINITIONS
Capitalized terms used in this Agreement shall have the same meanings
assigned to them in the DOV Bermuda Agreements, unless such terms are
expressly defined to the contrary in this Agreement.
"Affiliate" shall mean any corporation or entity controlling, controlled
or under the common control of any other corporation or entity, excluding,
in the case of Elan Corp, an Elan JV. For the purpose of this definition,
(i) "control" shall mean direct or indirect ownership of fifty percent
(50%) or more of the stock or shares entitled to vote for the election of
directors; and (ii) DOV Bermuda shall not be an Affiliate of Elan Corp,
EPIL ▇▇▇▇▇▇▇, EPIL II or EIS.
"Agreement" shall mean this Agreement and all exhibits and schedules
hereto.
"Clinical Trials" shall mean the following:
1 in relation to Bicifadine - four phase I clinical trials (075-001
FR, 075-002 FR, 075-004 US & 075-005 US) and one phase II clinical
trial (075-003 US) and one phase III clinical trial (075-006 US);
2 in relation to Ocinaplon - three phase I clinical trials (547-006
FR, ▇▇▇-▇▇▇ ▇▇ & 547-008 GR) and two phase II clinical trials
(547-005 GR, 547-009 GR) and one phase III clinical trial (547-010
US).
"Clinical Trial Agreements" shall mean the agreements entered into by DOV,
DOV Bermuda and/or Nascime in connection with the Clinical Trials.
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"DOV" shall mean DOV Pharmaceutical, Inc.
"DOV Bermuda" shall mean DOV (Bermuda), Ltd.
"DOV Bermuda Balance Sheet" shall mean the unaudited balance sheet of DOV
Bermuda as of the Balance Sheet Date, as set forth in Schedule 1.2.
"DOV Bermuda Balance Sheet Date" shall mean July 31, 2003.
"DOV Bermuda Trademark" shall mean DOV (Bermuda), Ltd.
"DOV Improvements" shall mean improvements to the DOV compounds DOV
220,075 and DOV 273,547, developed (i) by DOV outside the Project, (ii) by
DOV, Elan or DOV Bermuda or by a third party (under contract with DOV
Bermuda, Elan or DOV) pursuant to the Project, and/or (iii) jointly by any
combination of DOV, Elan, DOV Bermuda or a third party (under contract
with DOV Bermuda, Elan or DOV) pursuant to the Project.
"DOV Know-How" shall mean DOV Know-How (as such term is defined in the DOV
License Agreement).
"DOV Patents" shall mean DOV Patent Rights (as such term is defined in the
DOV License Agreement).
"DOV Trademarks" shall mean DOV Trademarks (as such term is defined in the
DOV License Agreement).
"Effective Date" shall mean the date of this Agreement.
"Elan" shall mean Elan Corp and its Affiliates.
"Elan Improvements" shall mean improvements to the Elan Patents and/or the
Elan Know-How, developed (i) by Elan outside the Project, (ii) by Elan,
DOV or DOV Bermuda or by a third party (under contract with DOV Bermuda,
Elan or DOV) pursuant to the Project, and/or (iii) jointly by any
combination of Elan, DOV, DOV Bermuda or a third party (under contract
with DOV Bermuda, Elan or DOV) pursuant to the Project.
"Elan JV" shall mean an entity that Elan and a third party (i) establish
or have established; (ii) take shareholdings in or have a right to take
shareholdings in; and (iii) grant certain licenses in and to certain
intellectual property rights for the purpose of implementing a strategic
alliance.
"Elan Know-How" shall have the meaning set forth in the Elan License
Agreement.
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"Elan Patents" shall mean "Elan Patent Rights" as such term is defined in
the Elan License Agreement.
"Elan Trademarks" shall have the meaning set forth in the Elan License
Agreement.
"EPIL II" shall mean Elan Pharmaceuticals Investments II, Ltd. an exempted
limited liability company incorporated under the laws of Bermuda.
"EUR/(euro)" shall mean the lawful currency of Ireland.
"Exchange Right" has the meaning assigned to the term "DOV Bermuda
Exchange Right" in the Securities Purchase Agreement.
"Force Majeure" shall mean causes beyond a Party's reasonable control,
including, without limitation, acts of God, fires, strikes, acts of war,
or intervention of a governmental authority.
"Nascime" shall mean Nascime Limited.
"Nascime Balance Sheet" shall mean the unaudited balance sheet of Nascime
as of the Balance Sheet Date, as set forth in Schedule 1.1.
"Nascime Balance Sheet Date" shall mean July 31, 2003.
"Nascime Intellectual Property" shall have the meaning set forth in the
JDOA.
"Nascime Patent Rights" shall have the meaning set forth in the JDOA.
"Nascime Shares" shall have the meaning set forth in Clause 3.2.3.
"Nascime Trademark" shall mean Nascime, Limited.
"Party" shall mean Elan Corp, EIS, EPIL Shannon, DOV, DOV Bermuda or
Nascime, as the case may be, and "Parties" shall mean all such parties
together.
"Product" shall have the meaning set forth in the JDOA.
"Project" shall have the meaning set forth in the Elan License Agreement.
"Research and Development Programme" shall have the meaning set forth in
the JDOA.
"Shares" shall have the meaning set forth in the JDOA.
"Territory" shall mean all of the countries of the world.
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"United States Dollar" and "US$" and "$" shall mean the lawful currency of
the United States of America.
2. TERMINATION OF THE DOV BERMUDA AGREEMENTS
2.1. Subject to the provisions of Clause 2.2 hereof, the Parties hereby
agree to terminate the DOV Bermuda Agreements, including without
limitation, those provisions expressly stated to survive
termination, in each case with effect from the Effective Date.
All the provisions of the DOV Bermuda Agreements shall terminate
forthwith with effect from the Effective Date and be of no further
legal force or effect; provided that the defined terms included in
the DOV Bermuda Agreements that are expressly referred to in this
Agreement shall survive to the extent incorporated by reference
herein.
2.2 For the avoidance of doubt and without prejudice to the generality
of the foregoing Clause 2.1, the Parties hereby acknowledge and
agree as follows in the case of Clauses 2.2.1-2.2.4 with effect
immediately prior to, and in all other cases under Clause 2.2 as of
the Effective Date:
2.2.1 DOV Bermuda Director
The DOV Bermuda Director nominated by EIS, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
holding office with DOV Bermuda immediately prior to the
Effective Date shall resign;
EIS hereby assigns to DOV all of EIS' rights and powers ,
and DOV agrees to such assignment of rights and powers,
under Clause 7 of the JDOA and authorizes DOV to take such
actions as DOV sees fit in exercising such rights.
DOV hereby designates ▇▇▇▇▇▇▇ ▇▇▇▇ as the DOV Bermuda
Director originally permitted to be nominated by EIS and
such person hereby accepts such nomination.
2.2.2 Nascime Director
The Nascime Director nominated by EIS (the "EIS Nascime
Director"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and his alternate director,
▇▇▇▇▇▇▇ ▇▇▇▇▇, holding office with Nascime immediately prior
to the Effective Date shall resign;
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2.2.3 the nominees on the Management Committee of the EIS Nascime
Director shall be deemed to have been removed from the
Management Committee by the EIS Nascime Director;
2.2.4 the nominees on the R&D Committee of the EIS Nascime
Director, shall be deemed to have been removed from the R&D
Committee by the EIS Nascime Director;
2.2.5 all rights granted to Nascime pursuant to the Elan License
Agreement to use the Elan Patents, the Elan Know-How and the
Elan Trademarks shall terminate forthwith;
2.2.6 neither DOV nor Nascime shall have any rights in or to the
Elan Patents, the Elan Know-How, the Elan Improvements
and/or the Elan Trademarks and/or any other patents,
know-how or any other intellectual property rights
whatsoever of Elan, except to the extent granted pursuant to
the New Elan License;
2.2.7 with effect from the Effective Date, Elan shall not have any
rights in or to the DOV Patents, the DOV Know-How, the DOV
Improvements and/or the DOV Trademarks and/or any other
patents, know-how or any other intellectual property rights
whatsoever of DOV;
2.2.8 with effect from the Effective Date, Elan shall not have any
rights in or to the Nascime Intellectual Property, including
the Nascime Patent Rights, and/or any other patents,
know-how or any other intellectual property rights
whatsoever of Nascime;
2.2.9 Elan shall terminate or shall cause to be terminated any and
all research and development work being conducted by it in
connection with or pursuant to any Research and Development
Programme or the DOV Bermuda Agreements on behalf of DOV
Bermuda or Nascime;
2.2.10 Elan shall terminate or cause to be terminated any and all
technical services and assistance being conducted by it in
connection with the DOV Bermuda Agreements ;
2.2.11 for the avoidance of doubt, Elan shall not have any
obligation to provide working capital, research or
development funding, or other funding or financing of any
nature to DOV Bermuda or Nascime, whether under the DOV
Bermuda Agreements or otherwise;
2.2.12 Elan shall not have any obligation to pay any milestone
payment or make any milestone investment to or in Nascime,
DOV Bermuda
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or DOV whether relating to the Project, the achievement of
any objectives set forth therein or otherwise.
2.3 Each of the Parties acknowledges and agrees with the other Parties
that, as of the Effective Date, no monies are owed or are refundable
by any of the Parties to the others pursuant to the DOV Bermuda
Agreements, other than such sums owed to DOV and Elan by DOV Bermuda
pursuant to the JDOA as are set forth on Schedule 2.3, to be paid
prior to the Effective Date.
For the avoidance of doubt, the Parties acknowledge that DOV agrees
to pay on behalf of DOV Bermuda and Nascime the amounts owing by DOV
Bermuda in respect of Directors' Fees, Audit Accrual and other
general R&D Accrual as set out on Schedule 2.3.
For the avoidance of doubt, the Parties acknowledge that DOV Bermuda
is liable to pay any fees due and owing to Codan Corporate
Administrative Services upon the Effective Date, and thereafter.
2.4 The Parties agree that, notwithstanding anything contained herein to
the contrary, Clause 18.1 of the JDOA shall continue in full force
and effect.
3 REPRESENTATIONS, WARRANTIES, CONFIRMATIONS AND INDEMNITIES
3.1 Sub-licenses:
DOV represents and warrants to the other Parties that Nascime has
not granted any sub-licenses or any other rights of any nature to
any third parties pursuant to the Elan License Agreement or the DOV
License Agreement.
3.2 Shareholdings
For the avoidance of doubt, the Parties confirm that, as of the
Effective Date:
3.2.1 DOV holds19,432 class A shares, par value $1.00 per share,
of DOV Bermuda;
3.2.2 EPIL II holds 3,980 class B non-voting shares, par value
$1.00 per share, in DOV Bermuda;
3.2.3 DOV Bermuda holds 4,000 ordinary shares, par value
(euro)1.269738 per share, in Nascime (which represents the
entire issued and
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outstanding share capital of Nascime) (the "Nascime
Shares").
3.3 Balance Sheet:
3.3.1 DOV Bermuda Balance Sheet:
DOV represents and warrants to the other Parties that, to
its knowledge, the DOV Bermuda Balance Sheet is accurate in
all material respects and that, since the DOV Bermuda
Balance Sheet Date, there has been no material adverse
change in the financial position or prospects of DOV
Bermuda.
DOV represents and warrants to the other Parties that, to
its knowledge, there are no other creditors of DOV Bermuda
other than as described in the DOV Bermuda Balance Sheet.
DOV represents and warrants to the other Parties that the
DOV Bermuda Balance Sheet consolidates the Nascime Balance
Sheet and that, to its knowledge, the liabilities as set out
in the DOV Bermuda Balance Sheet reflect in all material
respects all outstanding liabilities of Nascime, adjusted
where appropriate to eliminate inter-company accounts
between DOV Bermuda and Nascime.
3.3.2 Nascime Balance Sheet:
DOV represents and warrants to the other Parties that, to
its knowledge, the Nascime Balance Sheet is accurate in all
material respects and that, since the Balance Sheet Date,
there has been no material adverse change in the financial
position or prospects of Nascime.
DOV represents and warrants to the other Parties that, to
its knowledge, there are no other creditors of Nascime other
than as described in the Nascime Balance Sheet or the DOV
Bermuda Balance Sheet.
3.4 Third party agreements / Orders / Claims:
3.4.1 Each of the Parties confirms to the other Parties hereto
that, as of the Effective Date, to its knowledge, neither
DOV Bermuda nor Nascime is a party to, or bound by, any
judgment, order, decree or other directive of or stipulation
with any court or any governmental or regulatory authority.
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3.4.2 Each of DOV and Elan Corp represents and warrants to the
other Parties that, to its knowledge, neither DOV Bermuda
nor Nascime is a party to, or bound by, or is a third party
beneficiary of any agreement with any third party, except
for the DOV Bermuda Agreements and the Elan License
Agreement, and the Clinical Trial Agreements, and other than
as set out in Schedule 3.4.2 (collectively the "Third Party
Agreement(s)").
For the avoidance of doubt and with reference to the
indemnity in Clause 3.7.1, the Parties agree that the
indemnity in Clause 3.7.1 shall extend to any claims,
losses, liabilities and/or damages arising from such Third
Party Agreements.
3.4.3 Each of the Parties confirms to the other Parties hereto
that, as of the Effective Date, to its actual knowledge,
there are no claims, suits or proceedings pending or
threatened against DOV Bermuda and/or Nascime.
3.5 Regulatory Applications:
Each of the Parties confirms to the other Parties that, prior to and
as of the Effective Date, no regulatory applications, other than
those in respect of the Clinical Trials, have been filed by DOV
Bermuda and/or Nascime or by any Party with any government authority
in any part of the world for any product in relation to the Project.
3.6 Exclusion of warranties / liability:
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL OTHER
WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED,
STATUTORY OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED BY THE
PARTIES.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NO PARTY
SHALL BE LIABLE TO ANY OTHER PARTY BY REASON OF ANY REPRESENTATION
OR WARRANTY, CONDITION OR OTHER TERM OR ANY DUTY OF COMMON LAW, OR
UNDER THE EXPRESS TERMS OF THIS AGREEMENT, FOR ANY CONSEQUENTIAL
SPECIAL OR INCIDENTAL OR PUNITIVE LOSS OR DAMAGE (WHETHER FOR LOSS
OF CURRENT OR FUTURE PROFITS, LOSS OF ENTERPRISE VALUE OR OTHERWISE)
AND WHETHER
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OCCASIONED BY THE NEGLIGENCE OF THE RESPECTIVE PARTIES, THEIR
EMPLOYEES OR AGENTS OR OTHERWISE.
3.7 Indemnity by DOV:
3.7.1 DOV hereby agrees to indemnify and hold harmless Elan Corp,
EIS, EPIL ▇▇▇▇▇▇▇, their respective Affiliates, officers,
directors, agents, representatives, employees and
shareholders, and any person holding office on or prior to
the Effective Date as an EIS Director (as defined in the
JDOA) (or any alternate director of the EIS Director) or as
a Nascime Director nominated by EIS (or any alternate
director of such Nascime Director) or as a member of the
Management Committee or the R&D Committee (each such person
or entity referred to as an "Elan Indemnified Party")
against any claims, losses, liabilities or damages and
expenses (including reasonable attorneys' fees and expenses)
incurred or sustained by such Elan Indemnified Party arising
out of or in relation to any claim or proceedings made
against DOV Bermuda and/or Nascime or an Elan Indemnified
Party which relate in any way to the activities of DOV
Bermuda and/or Nascime, past present or future, including
without limitation, claims arising with respect to the
conduct of clinical trials (if any) by DOV Bermuda and/or
Nascime, or by DOV or any other person or entity on behalf
of DOV Bermuda and/or Nacsime whether in connection with the
Project or otherwise.
3.7.2 For the avoidance of doubt and without prejudice to the
generality of Clause 3.7.1, DOV, DOV Bermuda and Nascime,
jointly and severally, shall indemnify and hold harmless
Elan against any claims, losses, liabilities or damages and
expenses (including reasonable attorneys' fees and expenses)
which may arise in relation to any claim or proceedings made
against Elan Corp or any of its Affiliates alleging
infringement or other unauthorized use of the proprietary
rights of a third party arising from the manufacture,
importation, use, offer for sale, sale or other
commercialization of any Products, the Nascime Intellectual
Property, the Nascime Patent Rights and/or any technology
related thereto.
3.7.3 For the avoidance of doubt and with reference to the
indemnity in Clause 3.7.1, the Parties acknowledge that the
Clinical Trials were carried out by the DOV on behalf of
Nascime and agree that the indemnity in Clause 3.7.1 shall
extend to any claims, losses, liabilities or damages arising
from such Clinical Trials.
3.7.4 Notwithstanding anything to the contrary set forth in
Clauses 3.7.1, 3.7.2 or 3.7.3, none of DOV, DOV Bermuda or
Nascime shall be
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required to provide such indemnification as set out in
Clauses 3.7.1, 3.7.2 or 3.7.3 to the extent that any claim
or proceeding arises out of or relates to:
(i) gross negligence, willful misconduct or violation of
law by any Elan Indemnified Party; or
(ii) any agreement in writing entered into by Elan Corp or
any of its Affiliates with any Third Party binding
upon Nascime or DOV Bermuda prior to the Effective
Date that was not authorized by or known to Nascime or
DOV Bermuda (and for purposes of this Clause 3.7.4,
the knowledge of Nascime or DOV Bermuda shall be
construed as meaning the actual knowledge of any of
the directors of Nascime or DOV Bermuda nominated by
DOV or any of DOV's nominees to the Management
Committee).
3.7.5 Elan Corp shall indemnify and hold harmless DOV, DOV
Bermuda, Nascime and their respective successors, assigns,
officers, directors, agents, representatives, employees and
shareholders (each such person or entity referred to as a
"DOV Indemnified Party"), against any claims, losses,
liabilities or damages and expenses (including reasonable
attorneys' fees and expenses) incurred or sustained by such
DOV Indemnified Party arising out of or in relation to a
breach by Elan of the representation and warranty set forth
in Clause 3.11.
3.7.6 Prior to the Effective Date, DOV shall furnish Elan Corp
with copies of all policies of comprehensive general
liability insurance and/or other insurance coverage (the
"Policies") which it holds in respect of the Clinical
Trials.
DOV shall be obliged to maintain the Policies for a period
of 5 years from the Effective Date, maintaining at all times
at a minimum, the levels of cover evidenced in the Policies,
noting Elan Corp as an additional insured, and shall, at the
reasonable request of Elan Corp from time to time, furnish
to Elan Corp evidence that all premiums or other payments on
the Policies are fully paid up and the Policies are
subsisting.
3.8 Organization and authority:
Each of the Parties represents and warrants to the other Parties
that it is a corporation duly organized and validly existing under
the laws of its jurisdiction of organization.
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3.9 Approvals:
Each of the Parties represents and warrants to the other Parties
that no permit, authorization, consent or approval of or by
("Approval"), or any notification of or filing with ("Filing"), any
person or entity (governmental or otherwise) is required in
connection with the execution, delivery or performance of this
Agreement by such Party, or if any such Approval or Filing is so
required, that same has been obtained or filed prior to the
Effective Date.
3.10 Authorization
Each Party represents and warrants to the other Parties that (i) it
has the requisite authority and possesses the legal right to enter
into this Agreement and effect the transactions contemplated hereby;
and (ii) the execution, delivery and performance by each Party of
this Agreement has been duly authorized by all requisite corporate
action by such Party.
3.11 No Violations:
Each Party represents and warrants to the other Parties that the
execution, delivery and performance by such Party of this Agreement
and the compliance with the provisions hereby by such Party do not
and will not violate, conflict with or constitute or result in a
breach of or default under (or an event that with notice or passage
of time or both would constitute a default) or give rise to any
right of termination, cancellation or acceleration under (i) the
articles of incorporation or bylaws or equivalent instruments of
incorporation or formation of such Party; or (ii) any contract,
indenture, mortgage, deed of trust, lease, loan, agreement or other
instrument, to which such Party or any of its assets or property is
bound, except, in each case, where such violation, conflict, breach,
default, termination, cancellation, acceleration would not,
individually or in the aggregate, have a material adverse effect on
the business, assets, liabilities, operations, conditions or
prospects of such Party.
3.12 Legal Proceedings
Each of the Parties represents and warrants to the other Parties
that, to such Party's knowledge, there is no legal, administrative,
arbitration or other action or proceeding or governmental or
investigation pending against such Party or its Affiliates that
materially challenges, or would have a material adverse effect on,
the validity or performance of this Agreement
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3.13 Trademark Applications:
DOV represents and warrants to the other Parties that DOV Bermuda,
DOV and Nascime have not filed for any trademark protection or has
not adopted any new trademark, apart from the DOV Bermuda Trademark
or the Nascime Trademark, in connection with DOV Bermuda's business
or Nascime's business or any product or service provided thereunder.
3.14 Elan Improvements
Elan represents and warrants to DOV that no Elan Improvements were
developed by Elan or by any other Party pursuant to the Project, the
DOV Bermuda Agreements or otherwise.
3.15 DOV Improvements
DOV represents and warrants to Elan that no DOV Improvements were
developed by DOV or by any other Party pursuant to the Project, the
DOV Bermuda Agreements or otherwise.
3.16 Representation and Warranties as of the Effective Date
Except where expressly stated otherwise, each of the representations
and warranties in this Agreement are made as of the Effective Date.
4 INTELLECTUAL PROPERTY
4.1 Ownership:
On and following the Effective Date:
4.1.1 For the avoidance of doubt, the Elan Patents, the Elan
Know-How, the Elan Improvements and/or the Elan Trademarks
shall remain the sole and exclusive property of Elan.
4.1.2 For the avoidance of doubt, the DOV Patents, the DOV
Know-How, the DOV Improvements and/or the DOV Trademarks
shall remain the sole and exclusive property of DOV.
4.1.3 All Nascime Intellectual Property and Nascime Patent Rights
shall remain the sole and exclusive property of Nascime.
A full list of the Nascime Intellectual Property and Nascime
Patent Rights developed pursuant to the Project, or
otherwise pursuant to the DOV Bermuda Agreements is set
forth in Schedule 4.1.3.
14
5 SALE OF NASCIME SHARES
5.1 On the Effective Date, DOV agrees to purchase from DOV Bermuda, and
DOV Bermuda agrees to sell, transfer and deliver to or cause to be
sold, transferred and delivered to DOV, all its right, title and
interest in and to the Nascime Shares for the Purchase Price.
5.2 On the Effective Date, DOV shall pay to DOV Bermuda the aggregate
sum of $29,411,765 (the "Purchase Price"), which reflects the agreed
upon present value of the total assets and business of DOV Bermuda,
as follows:
5.2.1 DOV shall transfer to DOV Bermuda immediately available
funds in an amount equal to $5,000,000 (the "Cash Payment");
and
5.2.2 DOV shall issue a promissory note for $24,411,765to DOV
Bermuda, in the form attached in Schedule 5.2.2 (the "DOV
Bermuda Note").
5.3 DOV Bermuda shall:
5.3.1 prior to receipt of the Purchase Price and transfer of the
Nascime Shares, contribute to the capital of Nascime,
without issuance therefor of any securities of Nascime to
DOV Bermuda, any intercompany indebtedness owed by Nascime
to DOV Bermuda;
5.3.2 following receipt of the Purchase Price, deliver, or cause
to be delivered to DOV, stock certificates representing the
Nascime Shares;
5.3.3 following receipt of the Purchase Price, promptly distribute
to EPIL II the Cash Payment, representing EPIL II's pro rata
distributive portion of the Purchase Price based upon EPIL
II's 17% equity interest in DOV Bermuda as of June 30, 2003;
and
5.3.4 following receipt of the Purchase Price, distribute to DOV
the DOV Bermuda Note, representing DOV's pro rata
distributive portion of the Purchase Price based upon DOV's
83% equity interest in DOV Bermuda as of June 30, 2003,
following which the DOV Bermuda Note may be cancelled and
forgiven.
6 RIGHTS RELATED TO DOV SECURITIES
6.1 Nothing contained herein shall constitute a waiver of any right of
EPIL II or EIS or any of their respective successors and assigns
with respect to
15
their respective ownership of securities in DOV under any agreements
of any kind in existence with DOV with respect thereto, which
agreements shall remain unmodified and in full force and effect,
except as set forth in Schedule 6.1 hereof.
7 COMPLETION
7.1 Matters relating to DOV Bermuda:
On the Effective Date, Elan and DOV shall take or (to the extent
that the same is within its powers) cause to be taken the following
steps prior to or at directors meetings of DOV Bermuda, or such
other meetings, as appropriate:
7.1.1 the change of the registered office of DOV Bermuda from
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
7.1.2 the modification, as appropriate, by board resolutions of
DOV Bermuda of matters such as the removal of EIS as book
keeper for DOV Bermuda, the removal of EIS representatives
as authorized signatories of DOV Bermuda's bank account, the
resignation of any officers appointed by EIS and any other
related matters whatsoever;
7.1.3 the execution and delivery of a letter from the directors of
DOV Bermuda nominated by DOV to Elan in the form of Exhibit
B attached hereto; and
7.1.4 any other steps required by this Agreement, including,
without limitation, effecting those items set forth under
Clause 5 pursuant to appropriate board and shareholder
resolutions and otherwise.
7.2 Matters relating to Nascime:
On the Effective Date, Elan and DOV shall take or (to the extent
that the same is within its powers) cause to be taken the following
steps prior to or at directors meetings of Nascime, or such other
meetings, as appropriate:
7.2.1 the modification, as appropriate, by board resolutions of
Nascime of matters such as the removal of EIS as book keeper
for Nascime, the removal of EIS representatives as
authorized signatories of Nascime's bank account, the
resignation of any officers appointed by EIS and any other
related matters whatsoever;
7.2.2 the adoption of new Bye-Laws of Nascime; and
16
7.2.3 any other steps required by this Agreement, including,
without limitation, effecting those items set forth under
Clause 5 pursuant to appropriate board and shareholder
resolutions and otherwise.
8 CONFIDENTIALITY
8.1 Confidentiality:
8.1.1 The Parties agree that it may be necessary pursuant to this
Agreement, from time to time, to disclose to each other
confidential and proprietary information, including without
limitation, inventions, trade secrets, specifications,
designs, data, know-how and other proprietary information,
processes, services and business of the disclosing Party.
The foregoing together with the terms of this Agreement
shall be referred to collectively as "Additional
Confidential Information".
The Parties also agree that it may have been necessary to
disclose to each other Confidential Information (as defined
in the JDOA) pursuant to the DOV Bermuda Agreements.
Together Additional Confidential Information and
Confidential Information shall be referred to collectively
as "Proprietary Information".
8.1.2 Save as otherwise specifically provided herein, and subject
to Clause 8.2 and 8.3, each Party shall disclose Proprietary
Information of another Party only to those employees,
representatives and agents requiring knowledge thereof in
connection with fulfilling the Party's obligations under
this Agreement, and not to any other third party.
Each Party further agrees to inform all such employees,
representatives and agents of the terms and provisions of
this Agreement relating to Proprietary Information and their
duties hereunder and to obtain their agreement hereto as a
condition of receiving Proprietary Information.
Each Party shall exercise the same standard of care as it
would itself exercise in relation to its own confidential
information (but in no event less than a reasonable standard
of care) to protect and
17
preserve the proprietary and confidential nature of the
Proprietary Information disclosed to it by another Party.
Each Party shall promptly, upon request of another Party,
return all documents and any copies thereof containing
Proprietary Information belonging to, or disclosed by, such
Party, save that it may retain one copy of the same solely
for the purposes of ensuring compliance with this Clause 8.
8.1.3 Any breach of this Clause 8 by any person informed by one of
the Parties is considered a breach by the Party itself.
8.1.4 Proprietary Information shall be deemed not to include:
(1) information which is in the public domain;
(2) information which is made public through no breach of
this Agreement;
(3) information which is independently developed by a
Party, as evidenced by such Party's records;
(4) information that becomes available to a receiving
Party on a non-confidential basis, whether directly or
indirectly, from a source other than another Party,
which source did not acquire this information on a
confidential basis.
8.1.5 The provisions relating to confidentiality in this Clause 8
shall remain in effect during the term of this Agreement,
and for a period of 10 years following the Effective Date of
this Agreement.
8.1.6 The Parties agree that the obligations of this Clause 8 are
necessary and reasonable in order to protect the Parties'
respective businesses, and each Party agrees that monetary
damages may be inadequate to compensate a Party for any
breach by another Party of its covenants and agreements set
forth herein.
The Parties agree that any such violation or threatened
violation may cause irreparable injury to a Party and that,
in addition to any other remedies that may be available, in
law and equity or otherwise, each Party shall be entitled to
seek injunctive relief against the threatened breach of the
provisions of this Clause 8, or a continuation of any such
breach by another Party, specific performance and other
equitable relief to redress such breach together with
damages and reasonable counsel fees and expenses to enforce
its rights hereunder.
18
8.2 Announcements:
Subject to Clause 8.3, no announcement or public statement
concerning the existence, subject matter or any term of this
Agreement shall be made by or on behalf of any Party without the
prior written approval of the other Parties.
The terms of any such announcement shall be agreed in good faith by
the Parties.
8.3 Required Disclosures:
8.3.1 A Party (the "Disclosing Party") will be entitled to make an
announcement or public statement concerning the existence,
subject matter or any term of this Agreement, or to disclose
Proprietary Information that the Disclosing Party is
required to make or disclose pursuant to:
(1) a valid order of a court or governmental authority; or
(2) any other requirement of law or any securities or
stock exchange;
provided that if the Disclosing Party becomes legally
required to make such announcement, public statement or
disclosure hereunder, the Disclosing Party shall give the
other Parties prompt notice of such fact to enable the other
Parties to seek a protective order or other appropriate
remedy concerning any such announcement, public statement or
disclosure.
The Disclosing Party shall fully co-operate with the other
Parties in connection with that other Party's or Parties'
efforts to obtain any such order or other remedy, provided
that, other than as agreed above, the Disclosing Party shall
not have any obligation to co-operate in connection with
that other Party's or Parties efforts to obtain any such
order or other remedy in relation to required SEC filings.
If any such order or other remedy does not fully preclude
announcement, public statement or disclosure, the Disclosing
Party shall make such announcement, public statement or
disclosure only to the extent that the same is legally
required.
8.3.2 Each of the Parties shall be entitled to provide a copy of
this Agreement (and any subsequent amendments hereto) and
the DOV
19
Bermuda Agreements to a potential third party purchaser in
connection with Clause 10.2.1(2); provided that the relevant
third party purchaser or assignee has entered into a
confidentiality agreement on terms no less protective than
the terms of this Clause 8.
9 WAIVER OF ACCRUED RIGHTS/MUTUAL RELEASES
9.1 With effect from the Effective Date, each Party and each of its
Affiliates ("Releasor"):
9.1.1 waives any accrued rights that Releasor may have accrued
against the other Parties and each of its Affiliates,
officers, directors, representatives, agents and employees
and the assigns and successors in interest of any of the
foregoing entities ("Releasees"), whether known or unknown,
foreseen or unforeseen, fixed or contingent, of any nature
whatsoever from the beginning of time to the Effective Date
under the DOV Bermuda Agreements; and
9.1.2 fully and finally releases and discharges the Releasees from
any and all manner of actions, claims, promises, debts, sums
of money, demands, obligations, in law or in equity,
directly or indirectly, whether known or unknown, foreseen
or unforeseen, fixed or contingent, of any nature whatsoever
that Releasor may have by reason of any act, omission,
matter, provision, cause or thing whatsoever from the
beginning of time to the Effective Date under the DOV
Bermuda Agreements.
9.2 For the avoidance of doubt the provisions of this Clause 9 shall not
in any way act as a waiver by any of the Parties in respect of any
of the provisions set forth in this Agreement (including, for the
avoidance of doubt, Clause 3.7.1).
9.3 For the further avoidance of doubt, the Parties acknowledge and
agree that the waiver set forth in Clause 9.1 shall supercede the
waiver and release set forth in Clause 6 of the Amendment Agreement.
10 GENERAL
10.1 Governing law and jurisdiction:
10.1.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without
regard to conflicts of law principles under the laws of the
State of New York.
20
10.1.2 For the purposes of this Agreement, the Parties submit to
the nonexclusive jurisdiction of the State and Federal
Courts of New York.
10.2 Assignment:
10.2.1 Subject to Clause 10.2.2, this Agreement shall not be
assigned by any Party without the prior written consent of
the others, save that any Party:
(1) may assign this Agreement in whole or in part and delegate
its duties hereunder to its Affiliate or Affiliates without
such consent; and
(2) may assign its rights and obligations to a successor
(whether by merger, consolidation, reorganization or other
similar event) or purchaser of all or substantially all of
its assets relating to such Party's technology related to
this Agreement, provided that such successor or purchaser
has agreed in writing to assume all of such Party's rights
and obligations hereunder and a copy of such assumption is
provided to the other Parties.
10.2.2 For the avoidance of doubt, nothing in this Clause 10.2
shall affect the provisions governing assignment of
securities in Schedule 6.1 hereof.
10.3 Notices:
10.3.1 Any notice to be given under this Agreement shall be sent in
writing in English by registered airmail, internationally
recognized courier or telefaxed to the following addresses:
If to DOV Bermuda at:
DOV Bermuda, Ltd
▇▇▇▇▇▇ House
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telephone: + ▇▇▇ ▇▇▇ ▇▇▇▇
Fax: + ▇▇▇ ▇▇▇ ▇▇▇▇▇
21
with a copy to DOV pursuant to the contact information set
forth below.
If to Nascime at:
Nascime Limited
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: + ▇▇▇ ▇ ▇▇▇ ▇▇▇▇
Fax: + ▇▇▇ ▇ ▇▇▇ ▇▇▇▇
If to DOV at:
DOV Pharmaceutical, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ Procter LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq
Telephone: (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
If to Elan, EPIL ▇▇▇▇▇▇▇, and/or EIS at:
Elan Corporation, plc
Elan International Services, Ltd.
C/o Elan International Services, Ltd.
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇
Bermuda
Attention: Secretary
Telephone: ▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇▇ ▇▇▇▇
22
or to such other address (es) and telefax numbers as may
from time to time be notified by any Party to the others
hereunder.
10.3.2 Any notice sent by mail shall be deemed to have been
delivered within seven (7) working days after dispatch or
delivery to the relevant courier and notice sent by fax
shall be deemed to have been delivered upon confirmation
receipt. Notice of change of address shall be effective upon
receipt.
10.4 Waiver:
No waiver of any right under this Agreement shall be deemed
effective unless contained in a written document signed by the Party
charged with such waiver, and no waiver of any breach or failure to
perform shall be deemed to be a waiver of any future breach or
failure to perform or of any other right arising under this
Agreement.
10.5 Severability:
If any provision in this Agreement is agreed by the Parties to be,
or is deemed to be, or becomes invalid, illegal, void or
unenforceable under any law that is applicable hereto:
10.5.1 such provision will be deemed amended to conform to
applicable laws so as to be valid and enforceable; or
10.5.2 if it cannot be so amended without materially altering the
intention of the Parties, it will be deleted, with effect
from the date of this Agreement or such earlier date as the
Parties may agree, and the validity, legality and
enforceability of the remaining provisions of this Agreement
shall not be impaired or affected in any way.
10.6 Further Assurances:
At the request of any of the Parties, the other Party or Parties
shall (and shall use reasonable efforts to procure that any other
necessary parties shall) execute and perform all such documents,
acts and things as may reasonably be required subsequent to the
signing of this Agreement for assuring to or vesting in the
requesting Party the full benefit of the terms hereof.
23
10.7 Successors:
This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and permitted
assigns.
10.8 Amendments:
No amendment, modification or addition hereto shall be effective or
binding on any Party unless set forth in writing and executed by a
duly authorized representative of each Party.
10.9 Counterparts:
This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and all
of which when taken together shall constitute this Agreement.
10.10 Costs:
Each Party shall bear its own costs and expenses in connection with
the transactions contemplated by this Agreement.
10.11 Force Majeure:
No Party to this Agreement shall be liable for failure or delay in
the performance of any of its obligations hereunder if such failure
or delay results from Force Majeure, but any such failure or delay
shall be remedied by such Party as soon as practicable.
10.12 Relationship of the Parties:
The Parties are independent contractors under this Agreement.
Nothing herein contained shall be deemed to create or establish an
employment, agency, joint venture, or partnership relationship
between the Parties or any of their agents or employees, or any
other legal arrangement that would impose liability upon one Party
for the act or failure to act of another Party. No Party shall have
any express or implied power to enter into any contracts,
commitments or negotiations or to incur any liabilities in the name
of, or on behalf of, another Party, or to bind another Party in any
respect whatsoever.
10.13 Entire agreement:
10.13.1 This Agreement sets forth all of the agreements and
understandings between the Parties with respect to the
subject matter hereof. There are no agreements or
understandings with respect to the subject matter hereof,
either oral or written, between the Parties other than as
set forth in this Agreement.
24
10.13.2 No provision of this Agreement shall be construed so as to
negate, modify or affect in any way the provisions of any
other agreement between the Parties unless specifically
provided herein and only to the extent so specified.
THE REMAINDER OF THIS PAGE
HAS BEEN INTENTIONALLY LEFT BLANK.
25
IN WITNESS WHEREOF the Parties have executed this Agreement.
SIGNED
BY: ____________________
for and on behalf of
Elan Corporation, plc
SIGNED
BY: ____________________
for and on behalf of
Elan International Services, Ltd.
SIGNED
BY: ____________________
for and on behalf of
Elan Pharma International Limited
SIGNED
BY: _____________________
for and on behalf of
DOV (Bermuda), Ltd.
SIGNED
BY: ____________________
for and on behalf of
Nascime Limited
SIGNED
BY_______________________
for and on behalf of
DOV Pharmaceutical, Inc.
EXHIBIT A
AMENDMENT AGREEMENT
EXHIBIT B
FORM OF LETTER
DOV (Bermuda), Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇
Fax ▇▇▇-▇▇▇-▇▇▇▇
Elan Corporation, plc
Elan International Services, Ltd.
C/o Elan International Services, Ltd.
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇
Bermuda
Gentlemen:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ Beer and ▇▇▇▇▇▇▇ ▇▇▇▇, the new DOV Bermuda Director
nominated by DOV Pharmaceuticals, Inc., hereby acknowledge, pursuant to the
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and applicable common law, that, in the exercise of
their powers and in the discharge of their duties, they are obligated to, inter
alia, (i) act honestly and in good faith with a view to the best interests of
DOV (Bermuda), Ltd., and (ii) exercise the care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances.
Very truly yours,
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Director
---------------------------------
▇▇▇▇▇▇▇ Beer
Director
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇
Director
SCHEDULE 1.1
NASCIME BALANCE SHEET
NASCIME LTD
UNAUDITED BALANCE SHEET
(expressed in United States dollars)
July 31, 2003
US$
-------------
ASSETS: (Unaudited)
Cash 5,637
-----------
Total assets 5,637
===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Due to Elan 286,079
Due to Dov 4,106,828
Accounts Payable & Accrued Expenses 41,682
-----------
Total current liabilities 4,434,589
Long Term Liabilities:
Non-Interest bearing loan facility --
Total liabilities 4,434,589
Stockholders' (Deficit)/Equity:
Common Stock 5,091
Additional paid in capital 33,199,077
Accumulated deficit (37,633,120)
-----------
Total Stockholders' (Deficit)/Equity (4,428,952)
-----------
Total liabilities and stockholders' equity 5,637
===========
SCHEDULE 1.2
DOV BERMUDA BALANCE SHEET
DOV (BERMUDA), LTD
UNAUDITED CONSOLIDATED BALANCE SHEET
(expressed in United States dollars)
July 31st, 2003
US$
---------------
ASSETS: (Unaudited)
Cash 8,728
-----------
Total assets 8,728
===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Due to Elan 287,283
Due to Dov 4,106,828
Accounts Payable & Accrued Expenses 41,214
-----------
Total current liabilities 4,435,325
Long Term Liabilities:
Non-Interest bearing loan facility --
Total liabilities 4,435,325
Stockholders' (Deficit)/Equity:
Common Stock 20,000
Additional paid in capital 33,232,696
Accumulated deficit (37,679,293)
-----------
Total Stockholders' (Deficit)/Equity (4,426,597)
-----------
Total liabilities and stockholders' equity 8,728
===========
SCHEDULE 2.3
PAYMENTS
AMOUNTS OWED BY DOV BERMUDA TO DOV, ELAN AND OTHER PARTIES AS OF THE DOV BERMUDA
BALANCE SHEET DATE
1. Elan $287,283
2. Dov Pharmaceuticals, Inc $4,106,828
3. Directors Fees $14,807
4. Audit Accrual $21,875
5. Other general R & D Accrual $4,532
Total $4,435,325
AMOUNTS OWED BY NASCIME LIMITED TO DOV PHARMACEUTICALS, INC., ELAN AND OTHER
PARTIES AS OF THE BALANCE SHEET DATE
1. Elan $286,079
2. Dov Pharmaceuticals, Inc $4,106,828
3. Directors Fees $14,807
4. Audit Accrual $21,875
5. Other general R & D Accrual $5,000
Total $4,434,589
SCHEDULE 3.4.2
THIRD PARTY AGREEMENTS
Agreements to which DOV Bermuda is a party
Engagement letter between DOV Bermuda and Standard & Poor's dated 2 June 2003
Codan Corporate Administrative Services
Agreements to which Elan is a party
Confidentiality Agreement between The Centre of Crystallography, National
University of Ireland in Galway and Elan dated 24.01.02
Agreements to which DOV is a party
Breacon Pharmaceuticals Ltd, UK
Parexel, France
Advanced Biomedical Research, New Jersey
▇▇▇▇ ▇▇▇▇▇ Associates, Utah
Parexel, Germany
SCHEDULE 4.1.3
NASCIME INTELLECTUAL PROPERTY
AND
Nascime PATENT RIGHTS
1 Controlled release formulations of ocinaplon, their method of manufacture
and use
2 Data and results developed by or for Nascime based on such controlled
release formulation of ocinaplon
3 Controlled release formulations of bicifadine, their method of manufacture
and use
4 Data and results developed by or for Nascime based on such controlled
release formulation of bicifadine
5 U.S. Patent Application 60/399,852 and any patents or applications
claiming priority to such patent application
6 U.S. Patent Application 60/430,740 and any patents or applications
claiming priority to such patent application
SCHEDULE 5.2.2
FORM OF PROMISSORY NOTE
$24,411,765 October __, 2003
FOR VALUE RECEIVED, the undersigned, DOV PHARMACEUTICAL, INC., a Delaware
corporation (the "Maker"), HEREBY PROMISES TO PAY to the order of DOV (BERMUDA),
LTD., a Bermuda exempted company (the "Holder"), the principal sum of
TWENTY-FOUR MILLION FOUR HUNDRED ELEVEN THOUSAND SEVEN HUNDRED AND SIXTY-FIVE
DOLLARS ($24,411,765) on October __, 2003, without interest.
Payment of principal shall be made in lawful money of the United States of
America by bank check or wire transfer of immediately available funds to such
address or bank account as the Holder shall designate to the Maker in writing.
The Maker shall have the right, at any time, to prepay all or any part of
the outstanding principal amount without premium or penalty.
The Maker hereby waives presentment, demand, notice, protest and other
demands and notices in connection with the delivery, acceptance or enforcement
of this Note.
No delay or omission on the part of the Holder in exercising any right
hereunder shall operate as a waiver of such right or of any other right under
this Note, and a waiver, delay or omission on any one occasion shall not be
construed as a bar to or waiver of any such right on any future occasion.
The Maker hereby agrees to pay on demand all reasonable costs and
expenses, including, without limitation, attorneys' fees and legal expenses,
incurred or paid by the Holder in enforcing this Note.
Any provision hereof found to be illegal, invalid or unenforceable for any
reason shall not affect the validity, legality or enforceability of the
remainder hereof.
This Note shall be deemed to be under seal, and all rights and obligations
hereunder shall be governed by the laws of the State of New York.
EXECUTED as of the date set forth above.
DOV PHARMACEUTICAL, INC.
By:
Name:
Title:
SCHEDULE 6.1
RIGHTS RELATED TO THE SECURITIES
AMENDMENTS TO THE FINANCE DOCUMENTS
1. Development Funding; Amendment of Notes
The Convertible Promissory Note is hereby amended by deleting Section 1(b) and
1(c) ("Disbursements") and Section 4 ("Conditions of Funding") in their
entirety, which Sections shall be of no further force or effect whatsoever as of
the Effective Date.
The Convertible Exchangeable Promissory Note and the Convertible Promissory Note
(collectively, the "Notes") are hereby further amended to provide that,
notwithstanding anything in the Notes to the contrary, no further drawdowns may
be made under the Notes on or after the Effective Date.
The second sentence of Section 3 of the Amendment Agreement ("Status of Joint
Venture; Funding") is hereby deleted in its entirety as of the Effective Date
and is of no further force and effect.
2. Transfer Restrictions
The following provisions are hereby amended as follows, effective as of the
Effective Date:
Section 17 ("Assignments and Transfers") of the Securities Purchase Agreement is
hereby amended by deleting such section in its entirety and inserting the
following in lieu thereof:
"SECTION 17. Assignments and Transfers. Subject to Sections 6(a)(i) and
6(a)(ii), this Agreement may be transferred or assigned, in whole or in
part, by (a) EIS or (b) the Company to its affiliates or to a surviving
corporation in connection with the merger or consolidation, or to a
purchaser in connection with the sale of all or substantially all the
assets or business, of the Company; provided that any such transferee or
purchaser assumes all of the Company's obligations under this Agreement
and provided further in the case of a proposed transfer to an affiliate,
the Company shall remain directly obligated to EIS for all obligations
therein. This Agreement and all the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Other than as set forth above, this Agreement may
not be transferred by the Company without the prior written consent of
EIS."
Section 9 ("Transfer of Registration Rights") of the DOV Registration Rights
Agreement is hereby amended by deleting such section in its entirety and
inserting the following in lieu thereof:
"9. Transfer of Registration Rights. The rights granted to any Person
under this Agreement are freely transferable in connection with any
assignment of Registrable Securities by a
Holder; provided that: (a) such transfer may otherwise be effected in
accordance with applicable securities laws, (b) if not already a party
hereto, the assignee or transferee agrees in writing prior to such
transfer to be bound by the provisions of this Agreement applicable to the
transferor, and (c) such transferee shall acquire and own Registrable
Securities representing shares of Common Stock with a value of at least
$1,000,000 at the time of such transfer."
Section 13(d) ("Successors and Assigns") of the DOV Registration Rights
Agreement is hereby amended by deleting the word "permitted" in the first and
third sentences thereof.
Section 5(b)(i) of the 1999 Warrant is hereby deleted in its entirety and
replaced by the following:
"This Warrant may be transferred or assigned by the Holder, in whole or in
part. This Warrant and all of the provisions hereof shall be binding upon
and inure to the benefit of the Holders and their respective successors
and assigns. The Company shall transfer this Warrant, in whole, but not in
part, to the surviving corporation in connection with a merger or
consolidation, or to a purchaser in connection with the sale of all or
substantially all the assets or business, of the Company; such surviving
corporation or purchaser shall assume all of the Company's obligations
under this Warrant."
Section 9(a) of the Convertible Exchangeable Promissory Note is hereby amended
by deleting such section in its entirety and inserting the following in lieu
thereof:
"This Note may be transferred or assigned by the Holder, in whole or in
part; provided that if this Note is transferred in part to a transferee
that is not an affiliate of Elan then such holder shall acquire no less
than one-third of the interest of this Note. This Note and all the
provisions hereof shall be binding upon and inure to the benefit of the
Holders and their respective successors and assigns. DOV shall not assign
any of its rights or obligations hereunder; provided that DOV shall
transfer this Note, in whole, but not in part, to a surviving corporation
in connection with the merger or consolidation of DOV, or to a purchaser
in connection with the sale of all or substantially all the assets or
business, of DOV; such surviving corporation or purchaser shall assume all
of DOV's obligations under this Note."
Section 8(a) of the Convertible Promissory Note is hereby amended by deleting
such section in its entirety and inserting the following in lieu thereof:
"This Note may be transferred or assigned by the Holder, in whole or in
part; provided that if this Note is transferred in part to a transferee
that is not an affiliate of Elan then such holder shall acquire no less
than the whole interest of this Note. This Note and all of the provisions
hereof shall be binding upon and inure to the benefit of the Holders and
their respective successors and assigns. DOV shall not assign any of its
rights or obligations hereunder; provided that DOV shall transfer this
Note, in whole, but not in part, to a surviving corporation in connection
with the merger or consolidation of DOV, or to a purchaser in connection
with the sale of all or substantially all the assets or business, of DOV;
such surviving corporation or purchaser shall assume all of DOV's
obligations under this Note."
In addition to the foregoing, and other than with respect to the limitations
imposed under the (i) Securities Purchase Agreement as to the limitations on
transfer of the right to nominate and elect a member, and to appoint an
observer, to DOV's board of directors, (ii) DOV Registrations Rights Agreement
as to holdback rights and volume limitations with regard to transfers, and (iii)
Convertible Exchangeable Promissory Note and the Convertible Promissory Note as
to limitations on transfer of such notes in whole, but in certain circumstances
not in part, any and all other provisions, legends or requirements for legends
in any way, directly or indirectly, limiting or conditioning the free transfer,
alienation or assignment of the securities of DOV and associated rights
originally issued by DOV to any of EIS or EPIL ▇▇▇▇▇▇▇ or their respective
subsidiaries or Affiliates (including, without limitation, those securities
currently held by Elan Pharmaceutical Investments Ltd. and Elan Pharmaceutical
Investments II, Ltd.) are hereby deleted in their entirety and are of no further
force and effect. The Parties hereby agree that other than as mentioned above
the transfer of such securities of DOV are thus no longer subject to contractual
restrictions on transfer of any kind. The Parties recognize that such securities
remain subject to restrictions imposed under applicable securities laws. DOV
will use commercially reasonable efforts to inform its transfer agent, and
cooperate with the holder of such securities to confirm with prospective third
party transferees from time to time, of the elimination of such restrictions
and, if the certificate representing such securities is legended to reflect a
contractual restriction that is no longer in effect, DOV shall, if requested by
the holder of such securities, shall reissue such securities without such
restrictive legend.
3. Registration Rights Agreement
Section 2(a) of the DOV Registration Rights Agreement is hereby amended by
deleting the words "at least 25%" in the second line of such section and
inserting "at least 10%" in lieu thereof and by further inserting the following
sentence at the end of such section:
"Notwithstanding the foregoing, so long as the Company is entitled to use Form
S-3 under the Securities Act, any Holder or Holders who collectively hold
Registrable Securities representing at least 10% of the Registered Securities
then outstanding, shall be permitted unlimited Demand Registrations hereunder on
Form S-3, or any similar short-form registration (a "Short-Form Registration"),
if available; provided that such Holder or Holders, as applicable, will be
entitled to request only one Short-Form Registration in any 12-month period."
4. Securities Purchase Agreement
Recital A of the Securities Purchase Agreement is hereby amended by deleting
subsection (ii) in its entirety and inserting the following in lieu thereof:
"certain shares of the Company's non-voting series B preferred stock, par
value U.S. $1.00 per share (the "Special Stock"; the shares of Common
Stock and the shares of Special Stock, the "Shares"), convertible into the
Common Stock on a share for share basis,"
Sections 4(a) and 5 of the Securities Purchase Agreement are hereby deleted in
their entirety and shall be of no further force or effect.
Section 4(b) of the Securities Purchase Agreement is hereby amended by deleting
the language immediately following the clause "to exchange such number of
securities, as are necessary to bring its holdings to below the excess of 19.9%
of the voting securities of the Company," and inserting the following in lieu
thereof:
"for Special Stock."
Section 6 ("Certain Rights of EIS") of the Securities Purchase Agreement is
hereby amended by deleting such section in its entirety and inserting the
following in lieu thereof:
"Section 6. Certain Rights.
(a)(i) Company Board of Directors. EIS shall have the right to
nominate and elect one member to the Company's board of directors in
accordance with the terms of the Special Stock as set forth in the
Company's Certificate of Incorporation, as the same may be amended from
time to time provided that (1) such right shall not be exercised prior to
January 22, 2005, (2) notice of such exercise with identification of EIS's
nominee shall be given no earlier than July 22, 2004, (3) if exercised
such election shall at DOV's request be deferred up to six months if
composition of the DOV board of directors is then such that a board member
additional to the EIS nominee would be required for the board to be
comprised of a majority of independent directors and (4) EIS's right to
nominate and elect a board member shall not be transferred to other than
an affiliate of EIS. For avoidance of doubt, no prohibition on transfer of
the right to nominate and elect one member to the Company's board of
directors shall prohibit or in any way restrict the transfer of securities
of the Company.
(a)(ii) Observer Rights. At any time EIS or an affiliate does not
have a designee sitting on the Company's board of directors pursuant to
the rights granted under the Company's Certificate of Incorporation (as
qualified by Section 6(a)(i) above), EIS or an affiliate, if it then holds
a majority of the issued and outstanding shares of Special Stock and at
least ten percent (10%) of the capital stock of the Company, shall be
entitled to appoint an observer to the Company's board of directors (such
observer, the "Special Stock Representative"). The Special Stock
Representative shall be entitled to receive the same notice of any
meetings of the Company's board of directors as each member of the
Company's board of directors shall receive, attend meetings of the
Company's board of directors as an observer and shall be provided all
information otherwise made available to the members of the Company's board
of directors; provided that, with regard to the Special Stock
Representative's status as an observer, (1) the Company may exclude the
Special Stock Representative from access to any material or board meeting
or any portion thereof, if the Company believes upon the advice of counsel
that such exclusion is reasonably necessary to preserve the attorney
client privilege; (2) the Special Stock Representative shall not be
permitted to vote at any Company board meetings or be counted for purposes
of determining whether there is a sufficient quorum for the board to
conduct its business; and (3) the Special Stock Representative shall agree
to hold in confidence and trust and shall execute the Company's standard
form nondisclosure and confidentiality agreement so agreeing not to trade
on the basis of material non-public
information acquired from the Company or to disclose to third parties or
use for purposes inimical to the Company's best interests any information
provided to or learned by it in connection with the rights provided under
this Section 6(a)(ii). The rights granted under this Section 6(a)(ii)
shall terminate and be of no further force or effect upon such time as EIS
or an affiliate is no longer entitled to nominate and elect one member to
the Company's board of directors pursuant to the rights granted to such
holder."
5. Voting Matters/Shareholder Distributions for Taxes
The Letter Agreement, dated January 21, 1999, among JVP, Newco, Nascime, Elan
Corp and EIS (the "Letter Agreement") is hereby amended as of the Effective Date
as follows:
(a) Paragraph 1 is hereby amended in its entirety to read as
follows:
"1. At no time prior to June 30, 2004 shall the voting interest of Elan
Corporation, plc (including its subsidiaries) (collectively, "Elan") in
DOV be 10% or greater of the voting power of all shares of stock of DOV.
The foregoing restriction shall automatically terminate and shall be of no
further force or effect with respect to any shares of stock of DOV
transferred or assigned to persons or entities other than Elan."
(b) Paragraph 2 of the Letter Agreement is hereby deleted in its
entirety and shall be of no further force or effect.
6. Third Party Beneficiary
Each Party acknowledges and agrees that EPIL II shall be deemed in all respects
to be a third party beneficiary of the agreements contained in this Schedule 6.1
with the same force and effect as if EPIL II were a party thereto with regard to
any securities of DOV or its Affiliates to which EPIL II is the holder of
record.