Exhibit 1.4
FUNDING AGREEMENT made this 21/st/ day of January, 2000.
among:
(1) ELAN CORPORATION, PLC, a public limited company incorporated under the laws
of Ireland, and having its registered office at Xxxxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxx 0, Xxxxxxx ("Elan");
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(2) ELAN PHARMA INTERNATIONAL LIMITED, a company incorporated under the laws of
Ireland, and having its registered office at Wil House, Xxxxxxx Business
Xxxx, Xxxxxxx,, County Clare, Ireland ("EPIL");
(3) ELAN INTERNATIONAL SERVICES, LTD., an exempted limited liability company
incorporated under the laws of Bermuda, and having its registered office at
Xxxxxxxxx Xxxxx, 0 Xxxxxx Xx., Xxxxxxxx, Xxxxxxx ("XXX"); and
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(4) DEPOMED, INC. a corporation incorporated under the laws of California and
having its principal place of business at 000 Xxxxxxxx Xxxxx, Xxxxxx Xxxx,
Xxxxxxxxxx 00000-0000, Xxxxxx Xxxxxx of America ("DMI").
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RECITALS:
A. EIS and DMI have formed a Bermuda exempted limited liability company to be
known as DepoMed Development Ltd.("Newco").
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B. Elan and EPIL are beneficially entitled to the use of certain patents which
have been granted or are pending in relation to the Elan Intellectual
Property.
C. DMI is beneficially entitled to the use of certain patents that have been
granted or are pending in relation to the Depomed Intellectual Property.
D. As of the date hereof, Elan and EPIL have entered into license agreements
with Newco, and DMI has entered into a license agreement with Newco, in
connection with the license to Newco of the Elan Intellectual Property and
the DMI Intellectual Property, respectively.
E. Elan and DMI have agreed to co-operate in the research, development and
commercialization of the Products based on their respective technologies.
F. As of the date hereof, Elan, EPIL, EIS, DMI and Newco have entered into a
Subscription, Joint Development and Operating Agreement, dated as of the
date hereof (the "JDOA") for the purpose of recording the terms and
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conditions of the research, development and commercialization of the
Products and governing certain aspects of the affairs of and their
dealings with Newco. The parties have agreed that capitalized terms when
used in the Recitals hereto and in this Agreement shall bear the same
meanings as ascribed to such terms in the JDOA.
CLAUSE 1
SUBSEQUENT FUNDING
1.1 It is estimated that Newco will require an additional U.S.$10,000,000 to
commence development of the Products based upon the DMI Intellectual
Property, the Elan Intellectual Property and/or the Newco Technology (the
"Subsequent Funding"). Within 24 months of the Closing Date, EIS and DMI
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may provide to Newco, by way of contributed surplus or loan, as may be
agreed to by EIS and DMI, up to an aggregate maximum amount of
U.S.$10,000,000, such funding to be provided by EIS and DMI to Newco on a
pro rata basis based on their respective equity interests, on a fully-
diluted basis.
1.2 The Subsequent Funding shall be provided by EIS and DMI, each in its sole
discretion, at such times as shall be necessary for the development of the
Products as provided in the Business Plan or as otherwise approved by the
Newco Directors, including at least one EIS Director and one DMI Director.
The Subsequent Funding shall be funded on the following terms:
1.2.1 The minimum amount of each disbursement of the Subsequent Funding
shall be U.S.$250,000 (except in the event that an amount less than
U.S.$250,000 remains available for funding, in which case such
lesser amount may be funded) allocated between EIS and DMI as
provided in Section 1.1 above;
1.2.2 There shall be no Event of Default (as defined in the Note) under
the Note on the date of Subsequent Funding (except to the extent
that any Event of Default has been waived by EIS);
1.2.3 Such funding shall be provided in accordance with the Business Plan
or as otherwise approved by the Newco Board of Directors (including
at least one Newco Director designated by EIS and a majority of the
Newco Directors designated by DMI); and
1.2.4 Such funding shall be subject to the receipt by Elan or EIS of any
required approvals under the Merger and Takeover (Control) Act 1978-
1996 (the "Irish Mergers Act").
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1.3 In the event that Elan or EIS is unable to obtain approval under the Irish
Mergers Act within three months after a determination of the necessity of
such funding by the Newco Directors, the parties hereto shall work together
in good faith, each in its sole discretion, to agree on an alternative
funding mechanism.
1.4 Each request for Subsequent Funding shall be delivered from the Management
Committee to each of the Stockholders upon 15 business days' prior written
notice, which notice shall set forth:
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(i) the amount of the Subsequent Funding requested;
(ii) the date requested to fund such amount (which with respect to DMI,
shall not be a date earlier than DMI receives a disbursement under
the Note to permit funding of its share of the Subsequent Funding, if
applicable); and
(iii) a reasonably detailed narrative and summary of the uses and
application thereof.
CLAUSE 2
TERMINATION
2.1 This Agreement shall govern the funding methodology of EIS and DMI with
respect to Newco until terminated by written agreement of EIS and DMI.
CLAUSE 3
GENERAL
3.1 Good Faith:
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Each of the Parties hereto undertakes with the others to do all things
reasonably within its power that are necessary or desirable to give effect
to the spirit and intent of this Agreement.
3.2 Further Assurance:
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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.
3.3 Reliance on Representations and Warranties:
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Each of the Parties hereto hereby acknowledges that in entering into this
Agreement it has not relied on any representation or warranty except as
expressly set forth herein or in any document referred to herein.
3.4 Force Majeure:
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Neither Party to this Agreement shall be liable for delay in the
performance of any of its obligations hereunder if such delay is caused by
or results from causes beyond its reasonable
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control, including without limitation, acts of God, fires, strikes, acts of
war (whether war be declared or not), insurrections, riots, civil
commotions, strikes, lockouts or other labor disturbances or intervention
of any relevant government authority, but any such delay or failure shall
be remedied by such Party as soon as practicable.
3.5 Relationship of the Parties:
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Nothing contained in this Agreement is intended or is to be construed to
constitute Elan, EPIL or EIS, on one hand, and DMI, on the other hand, as
partners, or Elan, EPIL or EIS as an employee or agent of DMI, or DMI as an
employee or agent of Elan, EPIL or EIS.
No Party hereto shall have any express or implied right or authority to
assume or create any obligations on behalf of or in the name of another
Party or to bind another Party to any contract, agreement or undertaking
with any third Party.
3.6 Counterparts:
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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.
3.7 Notices:
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Any notice to be given under this Agreement shall be sent in writing by
registered or recorded delivery post or reputable overnight courier such as
Federal Express or telecopied to:
Elan at:
Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxx 0
Xxxxxxx
Attention: Vice President & General Counsel
Elan Pharmaceutical Technologies,
a division of Elan Corporation, plc
Telephone: 000-0-000-0000
Fax: 000-0-000-0000
with a copy to:
Xxxxx Xxxxxxxxxxx LLC
000 Xxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone: 000-000-0000
Fax: 000-000-0000
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EPIL at:
Xxx Xxxxx
Xxxxxxx Xxxxxxxx Xxxx
Xxxxxxx, Xx. Xxxxx
Xxxxxxx
with a copy to:
Xxxxx Xxxxxxxxxxx LLC
000 Xxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone: 000-000-0000
Fax: 000-000-0000
EIS at:
Elan International Services, Ltd.
000 Xx. Xxxxx Xxxxx
Xxxxxx, Xxxxxx XX00
Bermuda
Attention: President
Telephone: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxx Xxxxxxxxxxx LLC
000 Xxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone: 000-000-0000
Fax: 000-000-0000
DMI at:
000 Xxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Chief Executive Officer
Telephone 000-000-0000
Fax 000-000-0000
with a copy to:
Xxxxxx Xxxxxx White & XxXxxxxxx
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000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx, Esq.
Telephone: 000-000-0000
Fax: 000-000-0000
or to such other address(es) as may from time to time be notified by any
Party to the others hereunder.
Any notice sent by mail shall be deemed to have been delivered within three
working days after dispatch or delivery to the relevant courier and any
notice sent by telecopy shall be deemed to have been delivered upon
confirmation of receipt by telephone. Notices of change of address shall be
effective upon receipt.
3.8 Governing Law:
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This Agreement shall be governed by and construed in accordance with the
substantive (as opposed to procedural) laws of the State of New York,
without giving effect to principles thereof relating to conflicts of laws.
Any dispute hereunder shall be adjudicated in a forum set forth in the
Securities Purchase Agreement.
3.9 Severability:
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If any provision in this Agreement is agreed by the Parties to be, deemed
to be or is or becomes invalid, illegal, void or unenforceable under any
law that is applicable hereto, such provision will be deemed amended to
conform to applicable laws so as to be valid and enforceable or, if it
cannot be so amended without materially altering the intention of the
Parties, it will be deleted, with effect from the date of such 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.
3.10 Amendments:
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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 all Parties.
3.11 Waiver:
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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.
3.12 Assignment:
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None of the Parties shall be permitted to assign its rights or obligations
hereunder without the prior written consent of the other Parties except as
follows:
3.12.1 Elan, EPIL, EIS and/or DMI shall have the right to assign their
rights and to delegate their obligations hereunder to their
Affiliates; provided, however, that such assignment does not
result in material adverse tax consequences for any other
Parties; provided, that Elan, EPIL, EIS and/or DMI (if
applicable) shall remain obligated after such delegation.
3.12.2 Elan, EPIL and EIS shall have the right to assign their rights
and to delegate their obligations hereunder to a special purpose
financing or similar vehicle established by Elan, EPIL and/or
EIS; provided, that Elan, EPIL, EIS and/or DMI (if applicable)
shall remain obligated after such delegation provided, further,
that such assignment does not cause material adverse tax,
accounting or financial consequences to Elan, EPIL, EIS and/or
DMI.
3.12.3 Elan, EPIL, EIS and/or DMI shall have the right to assign or
otherwise transfer their rights and obligations hereunder in
connection with a sale of all or substantially all of the
business of such Party to which the Transaction Documents relate,
whether by merger, sale of stock, sale of assets or otherwise.
3.13 Whole Agreement/No Effect on Other Agreements:
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This Agreement and the other Transaction Documents set forth all of the
agreements and understandings between the Parties with respect to the
subject matter hereof, and supersedes and terminates all prior 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 and the other Transaction Documents.
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 any of
the Parties unless specifically referred to, and solely to the extent
provided herein. In the event of a conflict between the provisions of this
Agreement and the provisions of the License Agreements, the terms of this
Agreement shall prevail unless this Agreement specifically provides
otherwise.
3.14 Successors:
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This Agreement shall be binding upon and inure to the benefit of the
Parties hereto, their successors and permitted assigns.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties hereto have executed this Funding
Agreement on the day first set forth above.
SIGNED
BY: /s/ Xxxxx Xxxxxx
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for and on behalf of
ELAN CORPORATION, PLC
in the presence of: /s/ Xxxxxx Xxxxx
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SIGNED
BY: /s/ Xxxxx Xxxxxx
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for and on behalf of
ELAN PHARMA INTERNATIONAL LIMITED
in the presence of: /s/ Xxxxxx Xxxxx
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SIGNED
BY: /s/ Xxxxx Xxxxxx
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for and on behalf of
ELAN INTERNATIONAL SERVICES, LTD.
in the presence of: /s/ Xxxxxx Xxxxx
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SIGNED
BY: /s/ Xxxx X. Xxxx
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for and on behalf of
DEPOMED, INC.
in the presence of: /s/ Xxxx Xxxxxxxx
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[Funding Agreement]
