Exhibit
10.25


 


 


SECURITIES AMENDMENT AGREEMENT


 


 


AMONG


 


 


ELAN CORPORATION, PLC,


 


 


ELAN INTERNATIONAL SERVICES, LTD.


 


and


 


 


ACORDA THERAPEUTICS, Inc.


 

















 


THIS
SECURITIES AMENDMENT AGREEMENT made this 26th day of September, 2003 (this “Agreement”)


 


AMONG:-


 


(1)                                 ELAN CORPORATION, PLC, a public limited company incorporated under
the laws of Ireland and having its registered office at Lincoln House, Lincoln
Place, Dublin 2, Ireland (“Elan Corp”);


 


(2)                                 ELAN INTERNATIONAL SERVICES,
LTD., an exempted limited
liability company incorporated under the laws of Bermuda, and having its
registered office at Clarendon House, 2 Church St., Hamilton, Bermuda, a
wholly-owned subsidiary of Elan Corp (“EIS”);
and


 


(3)                                 ACORDA
THERAPEUTICS, Inc., a
Delaware corporation having its principal place of business at 15 Skyline
Drive, Hawthorne, NY 10532, United States of America (“Acorda”).


 


RECITALS


 


A.                                   Acorda and EIS have entered into agreements
whereby Acorda sold and EIS purchased certain securities of Acorda and such
parties agreed to certain matters related to the ownership of such
securities.  Specifically:


 


(i)                                     EIS and Acorda entered into a Preferred
Stock, Convertible Note and Warrant Purchase Agreement dated as of January 22,
1997 (the “1997 Securities Purchase Agreement”);


 


(ii)                                  EIS and Acorda entered into a Securities
Purchase Agreement dated April 21, 1998 (the “1998
Securities Purchase Agreement”);


 


(iii)                               EIS and Acorda entered into a Subscription
Agreement dated as of August 6, 1999 (the “1999
Securities Purchase Agreement”);


 


(iv)                              Acorda and certain stockholders of Acorda
including EIS entered into an Amended and Restated Registration Rights
Agreement with respect to the capital stock of Acorda dated January 22, 1997,
as amended and restated July 7, 1998, August 6, 1999, December 20, 2000 and May
8, 2003, as a result of which, inter alia,
additional purchasers were added as parties to such agreement (as amended and
restated, the “Acorda Registration Rights
Agreement”); and


 


(v)                                 Elan Corp, Acorda and certain other
stockholders entered into an Amended and Restated Stockholders Agreement dated
December 20,


 

















 


2000,
as amended and restated as of May 8, 2003 (the “Stockholders Agreement”).


 


B.                                     The Parties have entered into a Termination
Agreement of even date herewith (the “Termination
Agreement”).


 


C.                                     Simultaneously with the execution of the
Termination Agreement, Elan Corp and Acorda are entering into a Amended and
Restated License and Supply Agreement, pursuant to which, among other things,
certain of the parties thereto are amending and restating that certain License
Agreement (the “Restated Elan License
Agreement”) by and among Acorda, Elan Corp and MS Research and
Development Corporation (“MS R&D”).


 


D.                                    The Parties desire to enter into this
Agreement to set forth their agreements relating to certain matters relating
to: (i) the securities of Acorda held by Elan, (ii) amendments to the 1997
Securities Purchase Agreement, the Limited Recourse Note (as defined below),
the Full Recourse Note (as defined below), the Acorda Registration Rights
Agreement, the Second Closing Warrant and the SSDA (collectively, the “Amended Finance Documents”); and (iii)
Board observation rights in favor of EIS.


 


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 Termination Agreement, 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.  For the purpose
of this definition, (i) “control” shall mean direct or indirect ownership of
fifty  (50%) percent or more of the
stock or shares entitled to vote for the election of directors and (ii) MS
R&D shall not be an Affiliate of Elan Corp, EPIL II or EIS.


 


“Effective Date” shall mean the date of this
Agreement.


 


“Elan”  shall
mean Elan Corp and its Affiliates.


 


“EPIL II” shall mean Elan Pharmaceuticals Investment II, Ltd.
an exempted limited liability company incorporated under the laws of Bermuda.


 


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“Force Majeure” shall mean causes beyond a Party’s reasonable
control, including, without limitation, acts of God, fires, strikes, acts or
war or terrorism, or intervention of a governmental authority.


 


“Full Recourse Note” shall mean the Full Recourse Convertible
Promissory Note dated January 22, 1997 in the principal amount of $2,500,000
issued by Acorda to EIS.


 


“Limited Recourse Note” shall mean the Limited Recourse
Convertible Promissory Note dated January 22, 1997 in the principal amount of
$5,000,000 issued by Acorda to EIS.


 


“Party” shall mean Elan Corp, EIS, Acorda or MS R&D, as the
case may be, and “Parties” shall
mean all such parties together.


 


 “Second
Closing Warrant” shall mean the Second Closing Warrant to up to
100,000 Shares of the Series B Preferred Stock of Acorda
dated February 4, 2007 having an exercise price of $2.00 per share issued to
EIS.


 


2.                                       Milestone Purchases.  The Parties
hereto acknowledge and agree that none of Elan Corp, EIS, EPIL II or their
respective affiliates, subsidiaries, successors or assigns are obligated to
purchase additional securities of or from Acorda, or their respective
affiliates or subsidiaries, successors or assigns.


 


3.                                       Transfer Restrictions.  The Parties
hereby agreed to amend the Amended Finance Agreements as set forth hereinbelow:


 


3.1                                 1997 Securities Purchase
Agreement


 


(a)                                  Section 8.1 of the 1997 Securities Purchase
Agreement is hereby amended by changing all references to “50,000 of the
Shares” to “2,200,000 of the Shares.” 
The references to 2,200,000 shares shall be subject to adjustment for
stock splits, combinations, reclassifications, and other similar events.


 


(b)                                 Section 8.2 of the 1997 Securities Purchase
Agreement is hereby deleted and replaced with the following:


 


“Assignment of Rights to
Financial Information.  The rights
granted pursuant to Section 8.1 may not be assigned or conveyed by the
Purchaser or by any subsequent transferee of such rights without the prior
written consent of the Company; provided, however, that the
Purchaser and any transferee, after giving notice to the Company, may assign
such rights to any transferee that acquires no fewer than 2,200,000 shares of
Common Stock (subject to adjustment for stock splits, combinations,
reclassifications, and other similar events) (including for purposes of
determining the number of shares of Common Stock, any shares of


 


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Common Stock issued or
issuable upon conversion or exercise of other securities), other than a
transferee that is a Competitor. For purposes of this Agreement, “Competitor”
shall mean any party engaged, directly or indirectly, in drug development for
therapies for spinal cord injuries or multiple sclerosis.”


 


(c)                                  Section 10 of the 1997 Securities Purchase
Agreement is hereby deleted in its entirety and replaced with the following:


 


“The Purchaser shall not
sell, assign or otherwise transfer any of the Securities to a Competitor
without the prior written consent of the Company.  In addition and in any event, the Purchaser shall be obligated to
comply with all applicable restrictions on transfer under applicable federal
and state securities laws.”


 


3.2                                 Limited Recourse Note


 


(a)                                  The first proviso of Section 1 of the Limited
Recourse Note shall be amended and restated in its entirety to read as follows:


 


“; provided, however, that
if the Board of Directors of the Company reasonably determines that such
Regulatory Approval is unlikely to be obtained or shall not be obtained in a
timely manner and provides written notice (the “Notice”) thereof to the Holder
(a “Board Termination”), then, on the thirtieth day following receipt of the
Notice by the Holder (the “Board Termination Date”), the outstanding principal
sum remaining on this Promissory Note, together with all accrued and unpaid interest
thereon, shall be automatically converted into shares of the Series D Preferred
Stock of the Company (the “Series D Preferred”) in accordance with Section 3.2
below effective as of the Board Termination Date, unless the Holder shall have
delivered a written notice to the Company prior to the Board Termination Date
of its desire to have such amount canceled (the “Cancellation Right”), in which
event, such amount shall be canceled as of the Board Termination Date;”


 


(b)                                 Section 3.1 of the Limited Recourse Note
shall be amended to:


 


(i)                                     replace the reference to “the Series D
Preferred Stock of the Company (the “Series D Preferred”)” with “Series D
Preferred”;


(ii)                                  insert the following parenthetical after
reference to $12.50: “(subject to adjustment for stock splits, combinations,
reclassifications, and other similar events)”; and


(iii)                               amend and restate the first line of the
second paragraph of Section 3.1 of the Limited Recourse Note to read in its
entirety as follows: “The right and option of the Holder to convert the unpaid
principal amount of this Promissory Note into Series D Preferred shall
terminate upon the first to occur of: (i) the automatic conversion thereof on
the Board Termination Date; and (ii) the payment (or repayment) by the Company
of all amounts owing under this


 


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Promissory Note (subject to
the notice requirements of Section 2 hereof).”


 


(c)                                  Section 3.2 shall be renumbered Section 3.3,
and all references in the Limited Recourse Note to Section 3.2 (other than as
set forth in this Agreement) shall become references to Section 3.3.


 


(d)                                 A new Section 3.2 shall be inserted into the
Limited Recourse Note to read in its entirety as follows:


 


“Automatic Conversion
into Series D Preferred Sock. 
Subject to the Holder exercising the Cancellation Right in accordance
with Section 1 above, immediately prior to the Board Termination Date, the full
unpaid principal balance and accrued interest outstanding under this Promissory
Note at such time shall be automatically converted into fully paid and
nonassessable shares of Series D Preferred at a rate which shall be equal to
the quotient obtained by dividing:


 


(x)
the principal amount of this Promissory Note plus all accrued and unpaid
interest thereon, by


 


(y)
$12.50 (subject to adjustment for stock splits, combinations,
reclassifications, and other similar events).”


 


(e)                                  Section 5.7 of the Limited Recourse Note is
hereby deleted and replaced in its entirety to read as follows:


 


“Transfer Restrictions.
The Holder shall not sell, assign or otherwise transfer all or any portion of
this Promissory Note to a Competitor (as defined below) without the prior
written consent of the Company.  In
addition and in any event, the Holder shall be obligated to comply with all
applicable restrictions on transfer under applicable federal and state
securities laws. For purposes of this Note, “Competitor” shall mean any party
engaged, directly or indirectly, in drug development for therapies for spinal
cord injuries or multiple sclerosis.


 


(f)                                    All references to “Committee Termination” and
“Committee Termination Date” shall become references to “Board Termination” and
“Board Termination Date.”


 


3.3                                 Full Recourse Note


 


(a)                                  The first clause of Section 1 of the Full
Recourse Note shall be amended and restated in its entirety to read as follows:


 


“If the Holder has not
converted the outstanding principal hereunder into Preferred Stock in
accordance with Section 3 hereof by the date which is the earlier of (i) the
first anniversary after the first Regulatory Approval (as defined below) and
(ii) September 30, 2008 (the “Maturity Date”),”


 


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(b)                                 The first proviso of Section 1 of the Full
Recourse Note shall be amended to replace the reference to “the Committee (as
defined in the License Agreement)” with “the Board of Directors of the
Company”.


 


(c)                                  The following proviso shall be inserted at
the end of the first sentence of Section 1 of the Full Promissory Note,
immediately prior to the definition of “Regulatory Approval”:


 


“; provided further,
however, if no Regulatory Approval has been received on or prior to the
Maturity Date, the Company shall have the right to extend the Maturity Date by
six month periods (each, an “Extension Period”) by delivery of a written notice
to the Holder certifying that it is the reasonable, good faith belief, after
due diligence and inquiry by the Company’s Board of Directors, of the Company
that such Regulatory Approval is likely to be obtained in a timely manner
(each, an “Extension Notice”), at least 30 days prior to the Maturity Date or
the then current Extension Period, as the case may be.”


 


(d)                                 Section 5.6 of the Full Recourse Note is
hereby deleted and replaced in its entirety to read as follows:


 


“Transfer Restrictions.
The Holder shall not sell, assign or otherwise transfer all or any portion of
this Promissory Note to a Competitor (as defined below) without the prior
written consent of the Company.  In
addition and in any event, the Holder shall be obligated to comply with all
applicable restrictions on transfer under applicable federal and state
securities laws. For purposes of this Note, “Competitor” shall mean any party
engaged, directly or indirectly, in drug development for therapies for spinal cord
injuries or multiple sclerosis.”


 


(e)                                  All references to “Committee Termination”
shall become references to “Board Termination” and all references to
“Committee” shall become references to the “Board of Directors of the
Company”).


 


3.4                                 Acorda Registration Rights
Agreement


 


(a)                                  Acorda hereby agrees that the amendments to
the Acorda Registration Rights Agreement set forth in this Clause 3.4
constitute a superseding agreement between Acorda and Elan that does not
require the consent of the other parties to the Acorda Registration Rights
Agreement.


 


(b)                                 Acorda agrees that the legend set forth in
Section 2(b) of the Acorda Registration Rights Agreement shall be amended and
restated to read in its entirety as follows:


 


“THESE SECURITIES ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN AN AGREEMENT
BETWEEN THE


 


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COMPANY AND THE STOCKHOLDER,
A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.”


 


(c)                                  Acorda agrees that the restrictions set forth
in Section 3 of the Acorda Registration Rights Agreement shall not apply to
Elan or its transferees of any Restricted Securities (as defined in the Acorda
Registration Rights Agreement); provided, however, Elan agrees to provide
written notice to Acorda of any transfer of Restricted Securities to a third
party which notice shall set forth the name of the relevant transferee, the
date of such transfer and the Restricted Securities transferred and which such
notice shall also be accompanied by, if requested by Acorda, at Elan’s expense,
an unqualified written opinion of legal counsel who shall and whose legal
opinion shall be satisfactory to Acorda, which opinion shall be addressed to
Acorda to the effect that the proposed transfer of the Restricted Securities
may be effected without registration under the Securities Act of 1933, as
amended.


 


(d)                                 Acorda agrees that the reference to 100,000
shares in Section 13 of the Acorda Registration Rights Agreement shall be
subject to adjustment for stock splits, combinations, reclassifications and
other similar events.


 


3.5                                 Second Closing Warrant.  The
first two sentences of Section 10 (Transfers) of the Second Closing Warrant are
hereby deleted and replaced in their entirety with the following:


 


“This Warrant may be transferred
or assigned by the Warrantholder, in whole or in part, subject to compliance by
the Warrantholder with all applicable federal and state securities laws,
without the prior written consent of the Company; provided, however, any
assignee or transferee of this Warrant (“permitted assignee”) shall be required
to accept this Warrant subject to all rights and obligations of the
Warrantholder as set forth herein.”


 


4.                                       Board Observation Right.  Subject to
earlier termination as provided herein, as long as Elan holds not less than
2,200,000 shares of Acorda’s outstanding common stock on a fully-diluted basis
(subject to stock splits, combinations, reclassifications and other similar
events), Elan shall have the right to have an observer (the “Elan Observer”)
present at two meetings each year of Acorda’s board of directors, the
determination of which meetings to be at Acorda’s sole discretion. The Elan
Observer may be excused from any meeting or discussion by the Board of
Directors to the extent that the Board may deem it to be inappropriate, in the
judgment of the Board, for the Elan Observer to be present during any such
meeting or discussion.  The
out-of-pocket expenses of the Elan Observer with respect to attending such
meetings will be reimbursed by Acorda to the same extent that Acorda reimburses
such expenses of its Directors. Elan may transfer its right to the Elan
Observer to any third party to which it sells, transfers or assigns not less
than 2,200,000 shares of Acorda’s outstanding common stock on a fully-diluted
basis (subject to stock splits, combinations, reclassifications and other
similar events). The observer right provided for herein shall terminate upon
the earlier to occur of (i) the closing of an initial public offering of
Acorda’s securities or (ii) the date upon which Elan


 


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or its transferee ceases to
own five percent (5%) or more of Acorda’s outstanding common stock on a
fully-diluted basis.


 


5.                                       General


 


5.1                                 Governing law and
jurisdiction:


 


(a)                                  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.


 


(b)                                 For the purposes of this Agreement, the
Parties submit to the nonexclusive jurisdiction of the State and Federal Courts
of New York.


 


5.2                                 Assignment:


 


(a)                                  Subject to Clause 5.2(b), this Agreement
shall not be assigned by any Party without the prior written consent of the
others, save that any Party:


 


(i)             may assign this Agreement in whole or in part
and delegate its duties hereunder to its Affiliate or Affiliates without such
consent; and


(ii)          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.


 


(b)                                 For the avoidance of doubt, nothing in this
Clause 5.2 shall affect the provisions governing assignment of securities set
forth elsewhere in this Agreement.


 


5.3                                 Notices:


 


(a)                                  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 Acorda at:

  
	
   

  
	
  Acorda Therapeutics, Inc.

  
	
  15 Skyline Drive

  
	
  Hawthorne, NY  10532

  



 


8

















 


	
  Facsimile:

  
	
  Attention: 

  	
  President

  
	
   

  
	
  If to MS R&D or Acorda,

  with a copy to:

  
	
   

  
	
  Wilson, Sonsini, Goodrich & Rosati

  
	
  650 Page Mill Road

  
	
  Palo Alto, CA  94304

  
	
  Facsimile: 650-493-6811

  
	
  Attention: 

  	
  Douglas Collom

  
	
   

  
	
  If to Elan and/or EIS at:

  
	
   

  
	
  Elan Corporation, plc

  
	
  Elan International Services, Ltd.

  
	
  C/o Elan International Services, Ltd.

  
	
  102 St. James Court

  
	
  Flatts,

  
	
  Smiths FL04

  
	
  Bermuda

  
	
  Attention: 

  	
  Secretary

  
	
  Telephone: 

  	
  441 292 9169

  
	
  Fax: 

  	
  441 292 2224

  



 


or to such other address(es)
and telefax numbers as may from time to time be notified by any Party to the
others hereunder.


 


(c)                                  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.


 


5.4                                 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.


 


5.5                                 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:


 


(a)                                  such provision will be deemed amended to
conform to applicable laws so as to be valid and enforceable; or


 


9

















 


(b)                                 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.


 


5.6                                 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.


 


5.7                                 Successors.  This
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their respective successors and permitted assigns.


 


5.8                                 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.


 


5.8                                 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.


 


5.9                                 Costs.  Each
Party shall bear its own costs and expenses in connection with the transactions
contemplated by this Agreement.


 


5.10                           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.


 


5.11                           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.


 


5.11                           Entire Agreement.


 


(a)                                  This Agreement, the Amended Finance Documents,
the 1998 Securities Purchase Agreement, the Termination Agreement and the
Restated Elan License set forth all of the agreements and understandings
between the


 


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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 such agreements
and documents.


 


(b)                                 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.


 


(c)                                  Other than as expressly set forth herein, the
Amended Finance Documents remain in full force and effect and all future
references to them shall be deemed to give effect to the amendments set forth
herein.


 


THE REMAINDER OF THIS PAGE

HAS BEEN INTENTIONALLY LEFT BLANK.


 


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IN WITNESS
WHEREOF the Parties
have executed this Agreement.


 


	
  SIGNED

  
	
   

  
	
   

  
	
  Elan Corporation, plc

  
	
   

  
	
   

  
	
  BY:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
   

  
	
  SIGNED

  
	
   

  
	
  Elan International Services, Ltd

  
	
   

  
	
   

  
	
  BY:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
   

  
	
  SIGNED

  
	
   

  
	
  Acorda Therapeutics, Inc.

  
	
   

  
	
   

  
	
  BY:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


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