As executed
- -----------
Dated 2 July, 1999
ELAN CORPORATION, PLC.
AND
EMISPHERE TECHNOLOGIES, INC.
AND
EBBISHAM LIMITED
TERMINATION AGREEMENT
(terminating the
i. the Joint Venture Agreement dated 26 September 1996 between Ebbisham
Limited and Elan Corporation, plc. and Emisphere Technologies, Inc.;
and
ii. the License Agreement dated 26 September 1996 between Ebbisham Limited
and Elan Corporation, plc.)
[* * *] = This provision is subject to a request for confidential treatment.
Table of Contents
-----------------
Page #
1. Interpretation........................................................3
2. Termination of the JV Agreement and the Elan License Agreement........5
3. Payment of monies:....................................................8
4. Property Ownership Rights.............................................8
5. Non-competition and agreement not to sue.............................11
6. Sale of Shares and Completion........................................12
7. Warranties and Indemnities...........................................13
8. Secrecy/No announcements.............................................16
9. Waiver of accrued rights/covenant not to sue.........................18
10. Governing law and jurisdiction.......................................20
11. General..............................................................21
i
THIS TERMINATION AGREEMENT is made on 2 July, 1999.
AMONG:
(1) ELAN CORPORATION, PLC, a company incorporated in Ireland of Lincoln
House, Lincoln Place, Dublin 2, Ireland (including its Affiliates and
successors) ("Elan"); and
(2) EMISPHERE TECHNOLOGIES, INC., a corporation incorporated under the laws
of the State of Delaware, USA, having its executive offices at 765 Old
Saw Mill River Road, Tarrytown, NY 10591, USA (including its Affiliates
and successors) ("Emisphere"); and
(3) EBBISHAM LIMITED, a company incorporated in Ireland of Monksland,
Athlone, Co. Westmeath, Ireland (including its Affiliates and
successors) ("Ebbisham").
RECITALS:
A. Elan, Emisphere and Ebbisham entered into various agreements on 26
September 1996 whereby, inter alia, Elan and Emisphere established the
joint venture company, Ebbisham, and Elan and Emisphere each licensed
certain patents and know-how to Ebbisham for a specified field of use.
Specifically:
(i) Elan, Emisphere and Ebbisham entered into a Joint Venture
Agreement dated 26 September 1996 (the "JV Agreement");
(ii) Elan and Ebbisham entered into a (non-exclusive) License
Agreement dated 26 September 1996 (the "Elan License
Agreement");
(iii) Emisphere and Ebbisham entered into an (exclusive) License
Agreement dated 26 September 1996 (the "Emisphere License
Agreement");
(iv) Elan, Emisphere and Ebbisham entered into various other
transaction documents dated 26 September 1996 (the
"Transaction Documents").
B. Elan, Emisphere and Ebbisham wish to terminate in full the JV Agreement
and the Elan License Agreement pursuant to this Termination Agreement
and to set forth their agreement in relation to other matters
including, inter alia, the transfer by Elan to Emisphere of the A
Shares.
C. As of the Effective Date, Elan (or certain Affiliates of Elan, as the
case may be) and Emisphere and/or Ebbisham, as the case may be, are
entering into various financing documents including, inter alia, the
Note Purchase Agreement, the Subscription
2
Agreement, the Registration Rights Agreement and the Ebbisham Loan
Agreement ("the Current Transaction Financing Documents") pursuant to
which Emisphere, among other things, will issue a zero coupon note in
the initial principal amount of $20,000,000.
D. As of the Effective Date, Elan and Emisphere have entered into a
license agreement ("the New License Agreement") whereby Elan has
licensed to Emisphere certain rights relating to [* * *] filed by Elan
on [* * *] and [* * *] filed by Elan on [* * *].
E. As of the Effective Date, Elan has caused the [* * *] Patent
Application to be assigned to Ebbisham pursuant to a written assignment
agreement ("the Assignment Agreement").
NOW IT IS HEREBY AGREED AS FOLLOWS IN CONSIDERATION OF THE PAYMENT OF
$10 AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND ADEQUACY
OF WHICH IS HEREBY ACKNOWLEDGED:
1. Interpretation:
"Affiliate" means any corporation or other entity other than Ebbisham
controlling, controlled or under the common control of Emisphere or
Elan, as the case may be. For the purpose of this definition, "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
or if not meeting the preceding criteria, the power to direct or cause
the direction of management and strategic decisions of that corporation
or other entity.
"Agreements" mean collectively the Elan License Agreement, the
Emisphere License Agreement, the JV Agreement and the Transaction
Documents.
"A Shares" means the [* * *] Shares in the capital of Ebbisham which
were allotted to Elan under the JV Agreement.
"Balance Sheet Date" means 30 April 1999.
"Completion" means the completion of the transactions that occur on the
Effective Date.
"Compounds" (as previously defined in the Agreements) means Heparin
and/or Heparinoids.
"Current Transaction Documents" means the Current Transaction Financing
Documents, this Termination Agreement, the New License Agreement and
the Assignment Agreement.
"Effective Date" means the date of signing of this Termination
Agreement by the parties.
3
"Ebbisham Loan Agreement" means the Loan Agreement of even date
herewith between Elan and Ebbisham in the amount of [* * *].
"Ebbisham's 30 April Balance Sheet" means the balance sheet contained
in Ebbisham's 30 April Management Accounts.
"Ebbisham's 30 April Management Accounts" means the management accounts
of Ebbisham for the period ended 30 April 1999, a copy of which is
attached at Schedule 1.
"Heparin" (as previously defined in the Agreements) means naturally
occurring forms of Heparin, including Heparin USP, BP and EP as well as
smaller molecular fractions thereof.
"Heparinoids" (as previously defined in the Agreements) means various
sulphated polysaccharides that have anti-coagulant activity resembling
that of Heparin.
"[* * *] Patent Application" means [* * *] Patent Application [* * *],
filed on [* * *].
"Note Purchase Agreement" means the Note Purchase Agreement of even
date herewith between Emisphere and Elan International Services, Ltd.,
a Bermudian company.
"Registration Rights Agreement" means the Registration Rights Agreement
of even date herewith between Emisphere and Elan International
Management, Ltd., a Bermudian company.
"Scheduled Company Programme Technology" means only the patents,
know-how and other intellectual property, as the case may be, which is
described in Schedule 2.
"Scheduled Elan Programme Technology" means only the Elan Programme
Technology which is described in Schedule 3.
"Scheduled Emisphere Programme Technology" means only the Emisphere
Programme Technology which is described in Schedule 4.
"Scheduled Serendipity Inventions" means only the patents, know-how and
other intellectual property, as the case may be, which is described in
Schedule 5.
"SNAC" means Sodium N-[8-(2-hydroxybenzoyl)amino]caprylate, its free
acid, esters thereof and other pharmaceutically accepted salt forms
thereof.
4
"SNAD" means Sodium N-[10-(2-hydroxybenzoyl)amino] decanoate, its free
acid, esters thereof and other pharmaceutically accepted salt forms
thereof.
"Subscription Agreement" means the Subscription Agreement of even date
herewith between Emisphere and Elan International Management, Ltd., a
Bermudian company.
"1090 Patent Application" means the [* * *] patent application which
was filed by Elan [* * *], a copy of which is attached at Schedule
[* * *], entitled [* * *]; any equivalent [* * *]-provisionals,
continuations, continuations-in-part, divisionals, and re-issues
thereof and any foreign counterpart applications, and any patents
granted on such applications.
[* * *]
Capitalised terms used in this Termination Agreement shall have the
same meanings assigned to them in the Agreements, unless such terms are
expressly defined to the contrary in this Termination Agreement.
2. Termination of the JV Agreement and the Elan License Agreement:
2.1 Subject to the provisions of Clause 2.2, Elan and Ebbisham
hereby agree to terminate the JV Agreement and the Elan
License Agreement, in each case with effect from the Effective
Date.
All the provisions of the JV Agreement and the Elan License Agreement
shall terminate forthwith with effect from the Effective Date and be of
no further legal force or effect.
2.2 For the avoidance of doubt and without prejudice to the
generality of the foregoing Clause 2.1, Elan, Emisphere and
Ebbisham hereby acknowledge and agree as follows as of the
Effective Date:-
2.2.1 the Management Committee and the Research Committee
(as such terms were defined in the JV Agreement)
shall each be dissolved forthwith with effect from
the Effective Date and thereby cease to have any
function in relation to Ebbisham;
5
2.2.2 the nominees on the Management Committee of the "A"
Directors and the "B" Directors respectively shall
be deemed to have been removed from the Management
Committee by the "A" Directors and the "B" Directors
respectively immediately prior to the dissolution of
the Management Committee;
2.2.3 the nominees on the Research Committee of the
nominees on the Management Committee of the "A"
Directors and the "B" Directors respectively, shall
be deemed to have been removed from the Research
Committee by the nominees on the Management
Committee of the "A" Directors and the "B" Directors
respectively, immediately prior to the dissolution
of the Management Committee pursuant to Clause
2.2.1;
2.2.4 the rights granted to Ebbisham pursuant to the Elan
License Agreement to use the Elan Patents, the Elan
Know-How, Improvements and the Elan Trademarks (as
such terms were defined in the Elan License
Agreement) shall terminate forthwith with effect
from the Effective Date;
2.2.5 the rights granted to Elan pursuant to the Elan
License Agreement to use the Elan Programme
Technology, the Emisphere Programme Technology, the
Company Programme Technology and the Emisphere
Technology shall terminate forthwith with effect
from the Effective Date;
2.2.6 any sub-license of the Elan Technology (as such term
was defined in the Elan License Agreement) which may
have been granted by Ebbisham to Emisphere pursuant
to Clause 2.5 of the Elan License Agreement shall
terminate forthwith with effect from the Effective
Date;
2.2.7 any sub-license of the Emisphere Technology (as such
term was defined in the Emisphere License Agreement)
which may have been granted by Ebbisham to Elan
pursuant to Clause 2.5 of the Emisphere License
Agreement shall terminate forthwith with effect from
the Effective Date;
2.2.8 subject only to the provisions of the New License
Agreement, with effect from the Effective Date,
neither of Emisphere nor Ebbisham shall have any
right of any nature to use, disclose, license or
otherwise transfer the Elan Patents, the Elan
Know-How, Improvements and/or the Elan Trademarks
(as such terms were defined in the Elan License
Agreement) and/or any other patents, know-how or any
other intellectual property rights whatsoever of
Elan;
2.2.9 with effect from the Effective Date, Elan shall not
have any right of any nature to use, disclose,
license or otherwise transfer the Emisphere
6
Patents, the Emisphere Know-How, Improvements and/or
the Emisphere Trademarks (as such terms were defined
in the Emisphere License Agreement) and/or any other
patents, know-how or any other intellectual property
rights whatsoever of Emisphere;
2.2.10 with effect from the Effective Date, Elan shall not
have any right of any nature to use, disclose,
license or otherwise transfer the Scheduled Company
Programme Technology, the Scheduled Elan Programme
Technology, the Scheduled Emisphere Programme
Technology or the Scheduled Serendipity Inventions;
2.2.11 subject only to the provisions of this Termination
Agreement, as and from the Effective Date, Elan
shall be free to license, sublicense, commercialize
in any way and otherwise use the Elan Patents, the
Elan Know-How, Improvements and the Elan Trademarks
(as such terms were defined in the Elan License
Agreement)) in relation to or in connection with all
and any applications and uses, including for the
avoidance of doubt, in relation to the Compounds, or
otherwise, whether alone or in conjunction with any
third party;
2.2.12 subject only to the provisions of this Termination
Agreement and any restrictions which may apply as
between Emisphere and Ebbisham, as and from the
Effective Date, Emisphere and Ebbisham shall be free
to license, sublicense, commercialize in any way and
otherwise use the Emisphere Patents, the Emisphere
Know-How, Improvements and the Emisphere Trademarks
(as such terms were defined in the Emisphere License
Agreement), the Scheduled Company Programme
Technology, the Scheduled Elan Programme Technology,
the Scheduled Emisphere Programme Technology and the
Scheduled Serendipity Inventions) in relation to or
in connection with all and any applications and
uses, including for the avoidance of doubt, in
relation to the Compounds, or otherwise, whether
alone or in conjunction with any third party;
2.2.13 all research and development work (if any) being
conducted by Elan under Clause 6 of the Elan License
Agreement and all research and development services
(if any) being conducted by Elan and/or Emisphere
under Clause 7.6 of the JV Agreement shall terminate
forthwith with effect from the Effective Date;
2.2.14 with effect from the Effective Date, Elan shall have
no obligation to provide working capital or other
funding or financing of any nature to Ebbisham;
7
2.2.15 all equipment or other tangible assets (if any)
purchased by Emisphere and/or Elan which were funded
by Ebbisham pursuant to Clause 10.1 of the JV
Agreement shall be delivered to and become the
absolute property of Ebbisham within 10 days of the
Effective Date;
2.2.16 all technical services and assistance (if any) being
conducted by Elan and/or Emisphere under Clause 13
of the JV Agreement (Technical Services and
Assistance) shall terminate forthwith with effect
from the Effective Date.
2.3 Ebbisham hereby warrants to Elan that it has not granted any
sub-licences or any other rights of any nature to any third
parties pursuant to the Elan License Agreement, save any
sub-license of the Elan Technology (as such term was defined
in the Elan License Agreement) which may have been granted by
Ebbisham to Emisphere pursuant to Clause 2.5 of the Elan
License Agreement.
3. Payment of monies:
3.1 Subject to Clause 3.3 and 3.4, none of the parties shall be liable
to repay to any other party any amount of money which may have been
paid by any party to another party under the JV Agreement.
3.2 Subject to Clause 3.3 and 3.4, each of the parties acknowledges and
agrees with the other parties that no monies are owed by any of the
parties to the others pursuant to the JV Agreement on the Effective
Date.
3.3 The parties acknowledge that certain loans were made by Elan to
Ebbisham as described in the Recitals to the Note Purchase Agreement
which are being repaid by Ebbisham/Emisphere on the Effective Date in
the manner set forth in the Recitals to the Note Purchase Agreement.
3.3.1 The parties acknowledge that there are certain
monies owed to Emisphere by Ebbisham that will
remain outstanding following the Effective Date.
4. Property Ownership Rights:
4.1 Ownership:
4.1.1 On and following the Effective Date:
(1) for the avoidance of doubt, the Elan
Patents, the Elan Know-How, Improvements
and/or the Elan Trademarks (as such terms
were
8
defined in the Elan License Agreement) shall
remain the sole and exclusive property of
Elan;
(2) for the avoidance of doubt, the Emisphere
Patents, the Emisphere Know-How,
Improvements and/or the Emisphere Trademarks
(as such terms were defined in the Emisphere
License Agreement) shall remain the sole and
exclusive property of Emisphere;
(3) all Scheduled Company Programme Technology
shall remain the sole and exclusive property
of Ebbisham.
(4) all Scheduled Elan Programme Technology
shall remain the sole and exclusive property
of Ebbisham;
(5) all Scheduled Emisphere Programme Technology
shall remain the sole and exclusive property
of Ebbisham;
(6) all Scheduled Serendipity Inventions shall
remain the sole and exclusive property of
Ebbisham.
4.1.2 Except as described in Item 4 of Schedule 3, Elan
hereby warrants to Ebbisham and Emisphere that it
has not granted any license or sublicense or any
other rights to any third party in respect of the
Scheduled Elan Programme Technology, the Scheduled
Emisphere Programme Technology or the Scheduled
Company Programme Technology.
4.1.3 Each of Ebbisham and Emisphere hereby warrants to
Elan that it has not granted any license or
sublicense to any third party in respect of the
Scheduled Elan Programme Technology, the Scheduled
Emisphere Programme Technology or the Scheduled
Company Programme
Technology.
4.1.4 Elan hereby warrants that it has used all reasonable
efforts in carrying out the work required in listing
the Scheduled Elan Programme Technology.
4.1.5 Emisphere hereby warrants that it has used all
reasonable efforts in carrying out the work required
in listing the Scheduled Emisphere Programme
Technology.
4.1.6 Each of Emisphere and Elan hereby warrants that it
has used all reasonable efforts in carrying out the
work required in listing the Scheduled Company
Programme Technology and the Scheduled
Serendipity Inventions.
9
4.2 Acknowledgements and confirmations:
For the avoidance of doubt, each of the parties irrevocably
acknowledges and confirms to the other parties as follows:
4.2.1 no Company Programme Technology (as such term was
defined in Clause 8.5 of the JV Agreement) has
arisen or been created at any time pursuant to the
Agreements, save the Scheduled Company Programme
Technology;
4.2.2 [* * *], no Emisphere Programme Technology (as such
term was defined in the Emisphere License Agreement)
has arisen or been created at any time pursuant to
the Agreements, save the Scheduled Emisphere
Programme Technology;
4.2.3 [* * *], no Elan Programme Technology (as such term
was defined in the Elan License Agreement) has
arisen or been created at any time pursuant to the
Agreements, save the Scheduled Elan Programme
Technology;
4.2.4 no "serendipity invention" (as such term was defined
in Clause 8.6 of the JV Agreement) has arisen or
been created at any time by any of the parties
pursuant to the Agreements, save the Scheduled
Serendipity Inventions.
4.3 [* * *] Patent Application:
On the Effective Date, Elan shall cause the [* * *] Patent
Application to be assigned to Ebbisham pursuant to the
Assignment Agreement.
4.4 Prosecution and maintenance of the [* * *] Patent Application:
4.4.1 Ebbisham, at Ebbisham's expense, shall have the
right to file and prosecute a regular US application
and foreign applications corresponding to the
[* * *] Patent Application and claiming priority to
the [* * *] Patent Application; defend all such
applications against third party oppositions; and to
maintain in force any issued letters patent.
Ebbisham shall have the right in its reasonable
business discretion to control such filing,
prosecution, defence and mainenance, provided
however, that Elan, shall be provided with copies of
all documents relating to such filing, prosecution,
defence, and maintenance in sufficient time to
review such documents to comment and approve in
writing prior
10
to filing, said approval not to be unreasonably
withheld by Elan and required prior to Ebbisham
filing any document.
At any time, Ebbisham has the right to abandon the
[* * *] Patent Application or any corresponding
application or patent claiming priority from the
[* * *] Patent Application.
4.4.2 Elan, Emisphere and Ebbisham agree that at no time
will any independent claim of any application filed
according to Clause 4.4.1 [* * *]:
[* * *]
4.4.3 Elan, Emisphere and Ebbisham agree that at no time
will Emisphere and Ebbisham [* * *] without the
prior consent in writing of Elan.
4.4.4 Elan, Emisphere and Ebbisham agree that at no time
[* * *] (as specifically defined in [* * *] Patent
Application).
4.4.5 Elan, Emisphere and Ebbisham agree that at no time
will [* * *] is in the form of [* * *].
[* * *]
11
[* * *]
6. Sale of Shares and Completion:
6.1 Subject to the terms of this Termination Agreement:
6.1.1 Elan shall sell as beneficial owner and Emisphere
shall purchase, free from all liens, charges and
encumbrances and together with all rights now or
hereafter attaching to them, the A Shares;
12
6.1.2 the A Shares will be sold by Elan to Emisphere at a
price of $1 each, making an aggregate of $10,000 in
respect of the transfer of the A Shares by Elan to
Emisphere under Clause 5.1.1.
6.2 Completion shall take place at Elan's offices at Lincoln
House, Lincoln Place, Dublin 1 on 25 June 1999 at 2pm (or such
later date as may be agreed by the parties) and such other
places, if any, as the parties may agree.
On Completion, Elan and Emisphere shall take or (to the extent
that the same is within its powers) cause to be taken the
following steps at directors and shareholders meetings of
Ebbisham, or such other meetings, as appropriate:
6.2.1 the resignation of all the A Directors and the
Secretary of Ebbisham holding office prior to the
execution of this Termination Agreement;
6.2.2 the delivery by Elan to Emisphere of a transfer in
respect of the A Shares duly executed by Elan in
favour of Emisphere or as it may direct together
with the relative share certificates;
6.2.3 the payment by Emisphere to Elan of the
consideration for the A Shares as provided by Clause
6.1.2;
6.2.4 the transfer to Emisphere (or as it may direct) of
the share register, and all books and records of
Ebbisham in the possession of Elan (including minute
books and the company seal(s));
6.2.5 the change of the registered office of Ebbisham to
26 Lower Hatch Street, Dublin 2;
6.2.6 subject to the satisfaction of any pre-conditions to
the Ebbisham Loan Agreement, the funding by Elan of
[* * *] pursuant to the Ebbisham Loan Agreement; and
6.2.7 any other steps required by the Current Transaction
Documents.
6.3 Emisphere shall, following Completion, promptly deliver to the
Irish Revenue Commissioners the stock transfer form referred
to in Clause 6.2.2 for assessment of stamp duty, and shall
promptly pay the duty thus assessed.
7. Warranties and Indemnities:
7.1 WITH REFERENCE TO THE TRANSFER BY ELAN TO EMISPHERE OF
THE A SHARES AS PROVIDED BY CLAUSE 6 AT COMPLETION (BUT
13
WITHOUT PREJUDICE TO ELAN'S OBLIGATION UNDER CLAUSE 6.1.1
HEREOF TO TRANSFER THE A SHARES TO EMISPHERE FREE FROM ALL
LIENS, CHARGES AND ENCUMBRANCES), AND SAVE AS PROVIDED IN
CLAUSE 7.4.2, THE PARTIES ACKNOWLEDGE AND AGREE THAT ELAN
MAKES NO REPRESENTATION OR WARRANTY OF ANY NATURE TO EMISPHERE
OR ANY OTHER PERSON IN RELATION TO EBBISHAM OR ANY OF ITS
AFFAIRS PAST, PRESENT OR FUTURE.
Emisphere acknowledges that it is entering into this
Termination Agreement in reliance exclusively on its own
business judgement, the information which has been available
to it as a shareholder of Ebbisham and otherwise and on the
due diligence it has carried out in relation to Ebbisham.
7.2 EXCEPT AS EXPRESSLY PROVIDED IN THIS TERMINATION AGREEMENT,
ALL OTHER WARRANTIES, CONDITIONS AND REPRESENTATIONS, EXPRESS
OR IMPLIED, STATUTORY OR OTHERWISE HEREUNDER ARE HEREBY
EXPRESSLY EXCLUDED BY THE PARTIES.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS TERMINATION
AGREEMENT, NONE OF THE PARTIES SHALL BE LIABLE TO ANY OF THE
OTHER PARTIES BY REASON OF ANY REPRESENTATION OR WARRANTY,
CONDITION OR OTHER TERM OR ANY DUTY OF COMMON LAW, OR UNDER
THE EXPRESS TERMS OF THIS TERMINATION AGREEMENT, FOR ANY
CONSEQUENTIAL OR INCIDENTAL OR PUNITIVE LOSS OR DAMAGE
(WHETHER FOR LOSS OF PROFITS OR OTHERWISE) AND WHETHER
OCCASIONED BY THE NEGLIGENCE OF THE RESPECTIVE PARTIES, THEIR
EMPLOYEES OR AGENTS OR OTHERWISE.
7.3 Without prejudice to the generality of Clauses 7.1 and 7.2,
for the avoidance of doubt, each of Elan and Emisphere hereby
acknowledges as follows:
7.3.1 with reference to Ebbisham's 30 April Balance Sheet
and save in respect of Ebbisham's taxation
liabilities for which provision has been made in
Ebbisham's 30 April Management Accounts, the only
creditors of Ebbisham on 30 April 1999 were Elan and
Emisphere;
7.3.2 save in respect of Ebbisham's taxation liabilities
for which provision has been made in Ebbisham's 30
April Management Accounts, the only creditors of
Ebbisham immediately prior to Completion were Elan
and Emisphere;
14
7.3.3 to the knowledge of Emisphere and Elan, the
financial position of Ebbisham as stated in
Ebbisham's 30 April Management Accounts is accurate
and since the Balance Sheet Date, there has been no
material adverse change in the financial position or
prospects of Ebisham provided that neither Emisphere
nor Elan will be liable to compensate the other in
the event that the acknowledgement in this Clause
7.3.3 is incorrect in any way.
7.4 For the avoidance of doubt:
7.4.1 Subject only to the provisions of Clause 7.4.2,
Emisphere hereby indemnifies Elan, the A Directors
and the Secretary of Ebbisham holding office prior
to the execution of this Termination Agreement,
against any claims, costs liabilities or expenses of
any nature arising in relation to any claim or
proceedings which may be initiated against Ebbisham,
Elan, the A Directors or the Secretary of Ebbisham
holding office prior to the execution of this
Termination Agreement, following the Effective Date
which relate in any way to the activities of
Ebbisham, past, present or future, provided that the
indemnified party under this Clause 7.4.1 shall have
no right to indemnification hereunder to the extent
arising out of its own gross negligence or fraud.
7.4.2 To their respective knowledge, each of Emisphere and
Elan acknowledge and confirm that full provision or
reserve was made in Ebbisham's 30 April Balance
Sheet for all taxation that is or may be payable by,
or assessed against, Ebbisham for any taxable period
ending on or prior to 30 April 1999.
If following the Effective Date, Ebbisham's taxation
for any taxable period ending on or prior to 30
April 1999 is finally determined to be in excess of
the afore-mentioned provision or reserve for
taxation in Ebbisham's 30 April Balance Sheet, Elan
and Emisphere shall each contribute to Ebbisham 50%
of the amount of the excess.
Emisphere and Ebbisham agree to provide to Elan
copies of all correspondence and notices from the
relevant taxation authorities relating to the
taxation matters described in this Clause 7.4.2
together with all such additional materials and
assistance as may reasonably be requested by Elan,
and the parties agree to use all reasonable
commercial efforts to minimise any taxation
liability of Ebbisham described in this Clause 7.4.2
prior to discharge of same by Ebbisham.
15
8. Secrecy/No announcements:
8.1 On or within 10 working days of the Effective Date:
8.1.1 Elan shall return to Ebbisham and Emisphere all
confidential information of Ebbisham and Emisphere
in its possession on the Effective Date, including,
without limitation, the information, product and
materials listed in Schedule 6; and
8.1.2 Ebbisham and Emisphere shall return to Elan all
confidential information of Elan in its possession
on the Effective Date.
8.2 Emisphere and Ebbisham agree to maintain in confidence and,
save as otherwise provided in this Clause 8, shall not
disclose this Termination Agreement or any information of Elan
in the form of documentation or oral presentations of a
proprietary or confidential nature ("Confidential
Information") which may be disclosed by Elan to Emisphere or
Ebbisham pursuant to this Termination Agreement.
8.3 Elan agrees to maintain in confidence and, save as otherwise
provided in this Clause 8, shall not disclose this Termination
Agreement or any information of Emisphere or Ebbisham in the
form of documentation or oral presentations of a proprietary
or confidential nature ("Confidential Information") which may
be disclosed by Emisphere or Ebbisham to Elan pursuant to this
Termination Agreement.
8.4 Each party agrees to treat Confidential Information disclosed
to it by the other hereunder with the same degree of care as
it does in protecting its own confidential information,
provided that:
8.4.1 Confidential Information may be disclosed to each
party's Representatives on a needtoknow basis;
8.4.2 Confidential Information shall be disclosed within
the recipient company only on a needtoknow basis;
and
[* * *]
For this purpose, each party shall ensure that any such
officers, directors, financial advisors, independent auditors,
legal counsel or employees (its "Representatives")
16
and potential strategic partners are bound by confidentiality
undertakings no less strict than those set out herein.
8.5 The restrictions and obligations of nondisclosure and nonuse
shall not apply to information which:
8.5.1 is in the public domain;
8.5.2 is in the possession of the recipient at the time of
disclosure;
8.5.3 becomes available to the recipient on a
non-confidential basis, from a third party who is
under no confidentiality obligations to the party
disclosing Confidential Information; or
8.5.4 is independently developed by the recipient.
8.6 If any party or any of its Representatives or Affiliates
becomes legally compelled (by deposition, interrogatory,
request for documents, subpoena, civil investigative demand or
similar process) to disclose any of the other party's
Confidential Information, such party shall provide the other
party with prompt prior written notice and may disclose that
portion of the other party's Confidential Information that is
legally required and shall [* * *] to obtain (and shall
cooperate with the other party's efforts to obtain) assurance
that confidential treatment will be accorded the other party's
Confidential Information.
If any party is required by law to make any public disclosure,
including any public filings required to be made under the
rules or regulations of the U.S. Securities and Exchange
Commission, the Nasdaq Stock Market or other national
securities exchange, otherwise prohibited by this Termination
Agreement, such party shall provide the other party with
prompt prior written notice and may disclose that portion of
the other party's Confidential Information that is legally
required and shall [* * *] to obtain (and shall cooperate with
the other party's efforts to obtain) assurance that
confidential treatment will be accorded the other party's
Confidential Information.
8.7 Each of the parties agree that money damages may not be a
sufficient remedy for any breach of this Section 8 and that
Elan or Emisphere or Ebbisham, as the case may be, shall be
entitled to seek injunctive or other equitable relief as a
remedy for any such breach.
8.8 For the avoidance of doubt, in the event of any conflict
between the provisions of this Clause 8 and any of the
provisions of Clauses 2.2.4, 2.2.5, 2.2.6, 2.2.7, 2.2.8,
17
2.2.9, 2,2.10, 2.2.11, 2.2.12 and 4 of this Termination
Agreement ("the Prevailing Provisions"), the Prevailing
Provisions shall prevail.
8.9 Subject only to the specific exceptions set forth in this
Clause 8, none of the parties shall disclose the existence of
this Termination Agreement or the other agreements entered
into by the parties on the Effective Date, the subject matter
hereof nor originate any publicity, new release or other
public announcement, written or oral without the prior written
consent of the other parties.
9. Waiver of accrued rights/covenant not to sue:
9.1 With reference to Clause 22.1 of the Elan License Agreement
and Clause 30.12 of the JV Agreement respectively and [* * *],
with effect from the Effective Date, each of the parties
waives any accrued rights which it may have under the Elan
License Agreement and the JV Agreement respectively.
9.2 Without prejudice to the waiver of accrued rights set forth in
Clause 9.1 and [* * *].
9.2.1 Elan covenants to Emisphere and Ebbisham not to take
any legal proceedings or pursue any remedy in any
court or other forum against Emisphere or Ebbisham
or licensee or sub-licensee of Emisphere or Ebbisham
in respect of any accrued rights which Elan may have
under the Elan License Agreement or JV Agreement on
the Effective Date;
9.2.2 Each of Emisphere and Ebbisham covenant to Elan not
to take any legal proceedings or pursue any remedy
in any court or other forum against Elan or any
licensee or sub-licensee of Elan in respect of any
accrued rights which either of such parties may have
under Elan License Agreement or the JV Agreement on
the Effective Date.
9.3 For the avoidance of doubt:
9.3.1 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 Termination
Agreement or in respect of any claim of fraud;
9.3.2 the provisions of this Clause 9 shall not in any way
restrict any of the parties' respective rights to
take any legal proceedings or pursue any remedy in a
court in respect of any of the provisions set forth
in this Termination Agreement pursuant to Clause
10.2 of this Termination Agreement.
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9.4 For the avoidance of doubt, each of the parties acknowledges
to the other parties that Elan was not a party to the
Emisphere License Agreement and accordingly, was not at any
time subject to any obligations to any party thereunder.
[* * *]
19
[* * *]
10. Governing law and jurisdiction:
10.1 This Termination Agreement shall be governed by and construed
in accordance with the laws of Ireland.
20
10.2 The parties hereby submit to the jurisdiction of the state and
Federal courts located in the State of New York, USA and the
courts of Ireland and the parties hereby waive any and all
defences of improper venue or that the Forum is inconvenient.
11. General:
11.1 Good Faith
Each of the parties hereto undertakes with the others to do
all things reasonably within its power which are necessary or
desirable to give effect to the spirit and intent of this
Termination Agreement.
11.2 Further Assurance
Each of the parties hereto shall, and shall use their
respective commercially reasonable endeavours to procure that
any necessary third party shall, do execute and perform all
such further deeds, documents, assurances, acts and things as
any of the parties hereto may reasonably require by notice in
writing to the others to carry the provisions of this
Termination Agreement into full force and effect.
11.3 No Representation
Each of the parties hereby acknowledges that in entering into
this Termination Agreement it has not relied on any
representation or warranty save as expressly set out in this
Termination Agreement or in any other Current Transaction
Document.
11.4 Counterparts
This Termination 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 Termination Agreement.
11.5 Notices
Any notice to be given under this Termination Agreement shall
be sent in writing by registered or recorded delivery post or
telecopied to:
21
- Elan at
Elan Corporation PLC
Lincoln House, Lincoln Place, Dublin 2, Ireland
Attention: Vice President & General Counsel, Elan
Pharmaceutical Technologies
Telephone: 353 1 7094301
Telefax: 353 1 7094124
- Emisphere at
Emisphere Technologies, Inc.
765 Old Saw Mill River Road, Tarrytown, NY 10591, USA
Attention: Chief Financial Officer
Telephone: 001 914 785 4763
Telefax: 001 914 593 8292
- Ebbisham at
Ebbisham Limited
26 Lower Hatch Street, Dublin 2, Ireland
Attention: James Cawley
Telephone: 353 1 6762599
Telefax: 353 1 6762688
or to that 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
seven (7) working days after dispatch and any notice sent by telecopy
shall be deemed to have been delivered within twenty-four (24) hours of
the time of the dispatch. Notices of change of address shall be
effective upon receipt.
11.6 Severability
If any provision in this Termination Agreement is agreed by
the parties to be, deemed to be or becomes invalid, illegal,
void or unenforceable under any applicable law, (i) the
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
22
the date of such agreement or such earlier date as the parties
may agree, and (ii) the validity, legality and enforceability
of the remaining provisions of this Termination Agreement
shall not be impaired or affected in any way.
11.7 Amendments
No amendment, modification or addition to this Termination
Agreement shall be effective or binding on any party unless
set forth in writing and executed by a duly authorised
representative of all parties.
11.8 Waiver
No waiver of any right under this Termination 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 Termination Agreement.
11.9 Successors
This Termination Agreement shall be binding upon and enure to
the benefit of the parties hereto and their successors.
23
IN WITNESS of which the parties have executed this Termination
Agreement.
24
SCHEDULE 1
Management Accounts of Ebbisham for the year ended 30 April 1999
(Attached)
25
SCHEDULE 2
[* * *]
26
SCHEDULE 3
[* * *]
35
SCHEDULE 4
[* * *]
36
SCHEDULE 5
[* * *]
37
SCHEDULE 6
[* * *]
38
SCHEDULE 7
[* * *]
39
Executed by ELAN CORPORATION, PLC
/s/ Seamus Mulligan
- -------------------
Name: Seamus Mulligan
Title: Exec. V.P. - Corporate Development
Executed by EMISPHERE TECHNOLOGIES, INC.
/s/ Charles Abdalian
- --------------------
Name: Charles Abdalian
Title: Chief Financial Officer
40