Exhibit 10.41


 




REVENUE INTERESTS ASSIGNMENT AGREEMENT


Dated as of December 23, 2005


between


ACORDA THERAPEUTICS, INC.


and


KING GEORGE HOLDINGS LUXEMBOURG IIA S.À R.L.


 


 


 





















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  PURCHASE AND SALE OF ASSIGNED INTERESTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Purchase and Sale

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.02

  	
  Payments in Respect of the Assigned
  Interests

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.03

  	
  Purchase Price

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.04

  	
  No Assumed Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.05

  	
  Excluded Assets

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REPRESENTATIONS AND WARRANTIES OF ACORDA

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Organization

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.02

  	
  Corporate Authorization

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.03

  	
  Governmental Authorization

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.04

  	
  Ownership

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.05

  	
  Intentionally Omitted

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.06

  	
  Financial Statements

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.07

  	
  No Undisclosed Liabilities

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.08

  	
  Solvency

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.09

  	
  Litigation

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.10

  	
  Compliance with Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.11

  	
  Conflicts

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.12

  	
  Intellectual Property

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.13

  	
  Regulatory Approval

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.14

  	
  Material Contracts

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.15

  	
  Subordination

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.16

  	
  Place of
  Business

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.17

  	
  Broker’s Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.18

  	
  Other
  Information

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.19

  	
  Elan
  Agreements and Novartis Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.20

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS
  AND WARRANTIES OF PRF

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Organization

  	
   

  



 


 


 


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  Section 4.02

  	
  Authorization

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.03

  	
  Broker’s Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.04

  	
  Conflicts

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.05

  	
  Consents

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.06

  	
  Funds
  Available

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Consents and
  Waivers

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.02

  	
  Access;
  Information

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.03

  	
  Material
  Contracts

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.04

  	
  Confidentiality;
  Public Announcement

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.05

  	
  Security
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.06

  	
  Commercially
  Reasonable Efforts; Further Assurance

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.07

  	
  Call Option;
  Put Option

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.08

  	
  Remittance to
  Lockbox Account; Quarterly True-Up

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.09

  	
  License
  Agreements; Elan Agreements and Novartis Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.10

  	
  Intellectual
  Property

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.11

  	
  Negative
  Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.12

  	
  Future
  Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.13

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.14

  	
  Notice

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.15

  	
  Use of
  Proceeds.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.16

  	
  Legal Opinion

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  THE CLOSING;
  CONDITIONS TO CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.02

  	
  Conditions
  Applicable to PRF

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.03

  	
  Conditions
  Applicable to Acorda

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Termination
  Date

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.02

  	
  Effect of
  Termination

  	
   

  



 


 


 


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  ARTICLE VIII

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.02

  	
  Specific
  Performance

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.03

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.04

  	
  Successors and
  Assigns

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.05

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.06

  	
  Independent
  Nature of Relationship

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.07

  	
  Federal Tax

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.08

  	
  Entire
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.09

  	
  Amendments; No
  Waivers

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.10

  	
  Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.11

  	
  Headings and
  Captions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.12

  	
  Counterparts;
  Effectiveness

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.13

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.14

  	
  Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.15

  	
  Governing Law;
  Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.16

  	
  Force Majeure

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.17

  	
  Waiver of Jury
  Trial

  	
   

  



 


 


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EXHIBITS AND SCHEDULES


EXHIBITS


	
  Exhibit A

  	
  —

  	
  Form of Bill
  of Sale

  	
   

  
	
  Exhibit B

  	
  —

  	
  Form of
  Board Observer Rights Agreement

  	
   

  
	
  Exhibit C

  	
  —

  	
  Form of
  Lockbox Agreement

  	
   

  
	
  Exhibit D

  	
  —

  	
  Form of
  Security Agreement

  	
   

  
	
  Exhibit E

  	
  —

  	
  Elan
  Agreements

  	
   

  
	
  Exhibit F

  	
  —

  	
  Novartis
  Agreement

  	
   

  
	
  Exhibit G

  	
  —

  	
  Legal
  Opinion of Dreier LLP (transaction opinion)

  	
   

  
	
  Exhibit H

  	
  —

  	
  Letter from
  Finnegan, Henderson, Farabow, Garrett & Dunner LLP

  	
   

  
	
   

  	
   

  	
  (IP letter)

  	
   

  
	
  Exhibit I

  	
  —

  	
  Form of
  Guaranty

  	
   

  



 


SCHEDULES


 


	
  Schedule 1.01

  	
  —

  	
  Knowledge Persons

  	
   

  
	
  Schedule 3.03

  	
  —

  	
  Governmental
  Authorizations

  	
   

  
	
  Schedule 3.04(a)

  	
  —

  	
  Ownership

  	
   

  
	
  Schedule 3.04(b)

  	
  —

  	
  Permitted Liens

  	
   

  
	
  Schedule 3.06

  	
  —

  	
  Financial Statements

  	
   

  
	
  Schedule 3.09

  	
  —

  	
  Litigation

  	
   

  
	
  Schedule 3.11

  	
  —

  	
  Conflicts

  	
   

  
	
  Schedule 3.12(a)

  	
  —

  	
  Intellectual Property

  	
   

  
	
  Schedule 3.12(b)

  	
  —

  	
  Intellectual Property
  Agreements

  	
   

  
	
  Schedule 3.12(c)

  	
  —

  	
  Breach of Intellectual
  Property Agreements

  	
   

  
	
  Schedule 3.12(e)

  	
  —

  	
  Liens on Intellectual
  Property

  	
   

  
	
  Schedule 3.12(f)

  	
  —

  	
  Fees and Applications
  Related to Intellectual Property

  	
   

  
	
  Schedule 3.12(h)

  	
  —

  	
  Enforceability of
  Intellectual Property

  	
   

  
	
  Schedule 3.13

  	
  —

  	
  Regulatory Approval

  	
   

  
	
  Schedule 3.14

  	
  —

  	
  Material Contracts

  	
   

  
	
  Schedule 3.16

  	
  —

  	
  Place of Business

  	
   

  
	
  Schedule 3.19

  	
  —

  	
  Elan Agreements and
  Novartis Agreement

  	
   

  
	
  Schedule 3.20

  	
  —

  	
  Insurance

  	
   

  
	
  Schedule 6.02(g)

  	
  —

  	
  Filing Jurisdictions

  	
   

  



 


iv





















 


REVENUE INTERESTS ASSIGNMENT AGREEMENT


This REVENUE INTERESTS ASSIGNMENT AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this “Agreement”)
is made and entered into as of December 23, 2005 by and between Acorda
Therapeutics, Inc., a Delaware corporation (“Acorda”), and King George
Holdings Luxembourg IIA S.à r.l., a Luxembourg private limited company (together
with its permitted successors and assigns, “PRF”) and an Affiliate of
Paul Royalty Fund II, L.P.


WHEREAS, Acorda
wishes to sell, assign, convey and transfer to PRF, and PRF wishes to purchase
from Acorda, the Assigned Interests (as hereinafter defined), upon and subject
to the terms and conditions hereinafter set forth.


NOW,
THEREFORE, in consideration of the mutual covenants,
agreements representations and warranties set forth herein, the parties hereto
agree as follows:


ARTICLE
I


DEFINITIONS


Section 1.01         Definitions.


 


The following
terms, as used herein, shall have the following meanings:


“Acorda”
shall have the meaning set forth in the first paragraph hereof.


“Acorda
Concentration Account” shall mean a segregated account established and
maintained at the Lockbox Bank pursuant to the terms of the Lockbox Agreement
and this Agreement.  The Acorda
Concentration Account shall be the account into which the funds remaining in
the Joint Concentration Account after payment therefrom of the amounts payable
to PRF pursuant to Section 2.02(b) of this Agreement are swept in
accordance with the terms of this Agreement and the Lockbox Agreement.


“Acorda
Indemnified Party” shall have the meaning set forth in Section 8.05(b).


“Acorda
Parties” shall have the meaning set forth in Section 3.12(a).


“Affiliate”
shall mean any Person that controls, is controlled by, or is under common
control with another Person.  For
purposes of this definition, “control” shall mean (i) in the case of
corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the stock or shares having the right to vote for the election of
directors, and (ii) in the case of non-corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the equity interest with the power
to direct the management and policies of such non-corporate entities.


“Agreement”
shall have the meaning set forth in the first paragraph hereof.


 


1





















 


“Applicable
Percentage” shall mean, as of any date of determination, on a Fiscal
Year-by-Fiscal Year basis (or applicable portion thereof in the first and last
Fiscal Years under this Agreement), during the period from October 1, 2005
through and including December 31, 2015:


(a)                                  prior to the date
that the payments received and retained (i.e., not refunded by PRF) by PRF
under Sections 2.02(b) and 5.08 are less than twice the aggregate
amount paid by PRF under Section 2.03, the following:


(i)                                     with respect to
Net Revenues of up to and including $30,000,000, fifteen percent (15%),


(ii)                                  with respect to Net
Revenues in excess of $30,000,000 but less than and including $60,000,000, six
percent (6%), and


(iii)                               with respect to Net
Revenues in excess of $60,000,000, one percent (1%), and


(b)                               from and after the date
that the payments received and retained (i.e., not refunded by PRF) by PRF
under Sections 2.02(b) and 5.08 are at least twice the aggregate
amount paid by PRF under Section 2.03, one percent (1.0%).


“Assigned
Interests” shall mean PRF’s right to receive amounts equal to the
Applicable Percentage of the Net Revenues pursuant to the terms and conditions
of this Agreement.


“Audit
Costs” shall mean, with respect to any audit of the books and records of
Acorda with respect to amounts payable or paid under this Agreement, the cost
of such audit, including all reasonable fees, costs and expenses incurred in
connection therewith.


“Bankruptcy
Event” shall mean the occurrence of any of the following:


(i)            Acorda shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, relief of debtors or the like, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its respective debts, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any portion
of its assets, or Acorda shall make a general assignment for the benefit of its
respective creditors;


(ii)           there shall be
commenced against Acorda any case, proceeding or other action of a nature
referred to in clause (i) above which remains undismissed, undischarged or
unbonded for a period of sixty (60) calendar days;


(iii)          there shall be
commenced against Acorda any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process against the
Product or any substantial portion of the Intellectual Property related to the
Product, which results in the entry of an order for any such relief which shall
not have been vacated, discharged, stayed, satisfied or bonded pending appeal
within sixty (60) calendar days from the entry thereof;


 


 


2





















 


(iv)          Acorda shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above;


(v)           at any time after
December 31, 2006, Acorda shall admit in writing its inability to pay its
respective debts as they become due; or


(vi)          at any time after
December 31, 2006, Acorda shall be in a financial condition such that the sum
of its debts, as they become due and mature, is greater than the fair value of
its property, when taken together on a consolidated basis with its
Subsidiaries.


“Bill of
Sale” shall mean the Bill of Sale substantially in the form of Exhibit A.


“Board
Observer Rights Agreement” shall mean the Board Observer Rights Agreement
between Acorda and PRF, which Board Observer Rights Agreement shall be
substantially in the form of Exhibit B.


“Business
Day” shall mean any day other than a Saturday, a Sunday, any day which is a
legal holiday under the laws of the State of New York, or any day on which
banking institutions located in the State of New York are required by law or
other governmental action to close.


“Call
Option” shall have the meaning set forth in Section 5.07(a).


“Call
Option Event” shall mean any one of the following events:


(i)            the completion of
an initial underwritten public offering of shares of common stock of Acorda
pursuant to an effective registration statement filed with the SEC resulting in
a total market capitalization in excess of $150,000,000 (with total market
capitalization equaling the offering price of such common stock to the public
multiplied by the total number of issued and outstanding shares of common stock
after giving effect to the offering); or


(ii)           any Change of
Control.


“Change of Control”
shall mean:


(i)            the acquisition by
any Person or group (within the meaning of Sections 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934) of beneficial ownership of any capital stock
of Acorda, if after such acquisition, such Person or group would be the “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934),
directly or indirectly, of securities of Acorda representing more than fifty
percent (50%) of the combined voting power of Acorda’s then outstanding
securities entitled to vote generally in the election of directors; or


(ii)           the consummation
after approval by Acorda’s stockholders of a merger or consolidation of Acorda,
with any other Person, other than a merger or consolidation which would result
in Acorda’s voting securities outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%) of the
combined voting power of Acorda’s voting


 


 


3





















 


securities or
such surviving entity’s voting securities outstanding immediately after such
merger or consolidation.


“Closing”
shall have the meaning set forth in Section 6.01.


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


“Collateral”
shall mean the property included in the definition of “Collateral” in the
Security Agreement.


“Confidential
Information” shall mean, as it relates to Acorda and its Affiliates and the
Product, the Intellectual Property, confidential business information,
financial data and other like information (including ideas, research and
development, know-how, formulas, schematics, compositions, technical data,
specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals), inventory, ideas, algorithms,
processes, computer software programs or applications (in both source code and
object code form), client lists and tangible or intangible proprietary
information or material, or such other information that either party identifies
to the other as confidential or the nature of which or the circumstances of the
disclosure of which would reasonably indicate that such information is
confidential.


“Daily
Amount” shall have the meaning set forth in Section 2.02(b).


“Deposit
Accounts” shall mean, collectively, the Lockbox Account, the Joint
Concentration Account, the Acorda Concentration Account and the PRF
Concentration Account, each established and maintained pursuant to the Lockbox
Agreement.


“Disputes”
shall have the meaning set forth in Section 3.12(i).


“Drug
Approval Application” shall mean an application for Regulatory Approval
required before commercial sale or use of the Product as a drug in a regulatory
jurisdiction, including with respect to the United States a new drug
application (“NDA”) or supplemental new drug application, or a prior
approval supplement to an NDA or any amendments thereto submitted to the FDA.


“Elan”
shall mean Elan Pharmaceuticals, Inc. or Elan Pharma International Limited, as
applicable.


“Elan
Agreements” shall mean that certain Asset Purchase Agreement, dated as of
July 21, 2004, by and between Acorda and Elan Pharmaceuticals, Inc. and that
certain Zanaflex Supply Agreement, dated as of July 21, 2004, by and between
Acorda and Elan Pharma International Limited.


“Excluded
Assets” shall have the meaning set forth in Section 2.05.


“Excluded
Liabilities and Obligations” shall have the meaning set forth in Section 2.04.


 


 


4





















 


“FDA”
shall mean the United States Food and Drug Administration or any successor
federal agency thereto.


“Financial
Statements” shall mean the consolidated balance sheets of Acorda and its
Subsidiaries at December 31, 2003, December 31, 2004, and September 30, 2005
and the related consolidated statements of operations and cash flows and the consolidated
statements of changes in stockholders’ equity of Acorda and its Subsidiaries
audited for the Fiscal Years ended June 30, 2002, June 30, 2003, the six month
period ended December 31, 2003 and the year ended December 31, 2004, and
unaudited for the nine month period ended September 30, 2005 and the
accompanying footnotes thereto, as filed with Amendment No. 1 to Acorda’s
Registration Statement on Form S-1 filed with the SEC on November 29, 2005.


“Fiscal
Quarter” shall mean each calendar quarter.


“Fiscal
Year” shall mean the calendar year.


“GAAP”
shall mean generally accepted accounting principles in the United States in
effect from time to time.


“GE Capital”
shall mean General Electric Capital Corporation.


“Governmental
Authority” shall mean any government, court, regulatory or administrative
agency or commission, or other governmental authority, agency or
instrumentality, whether foreign, federal, state or local (domestic or
foreign), including the United States Patent and Trademark Office, the FDA, the
United States National Institute of Health, or any other government authority
in any country.


“Gross
Product Revenues” means, for any period of determination, the sum of the
following for such period: (i) the 
amounts invoiced by Acorda or any of its Affiliates to a Third Party
with respect to the sale of Product in the United States by Acorda or any of
its Affiliates, (ii) the amounts receivable by Acorda or any of its Affiliates
from a Third Party with respect to the sale, distribution or other use of the
Product in the United States by such Third Party (including any amounts
receivable by Acorda or its Affiliates under License Agreements), and (iii)
collections in respect of write-offs or allowances for bad debts in respect of
items described in the preceding clauses (i) and (ii).


“Guarantor”
means Paul Royalty Fund II, L.P.


“Guaranty”
means the guaranty executed by the Guarantor in favor of Acorda, which shall be
substantially in the form attached hereto as Exhibit I.


“Initial
Contingent Payment” shall have the meaning set forth in Section 2.03.


“Intellectual
Property” shall mean all proprietary information; trade secrets; know-how;
confidential information; inventions (whether patentable or unpatentable and
whether or not reduced to practice or claimed in a pending patent application)
and improvements thereto; Patents; registered or unregistered trademarks, trade
names, service marks, including all goodwill associated therewith; registered
and unregistered copyrights and all applications thereof; in each


 


 


5





















 


case that are owned, controlled by, issued to, licensed to, licensed by
or hereafter acquired by or licensed by Acorda, in each case solely relating
to, embodied by, covering or involving the Product.


“Joint
Concentration Account” shall mean a segregated account, subject to a
control agreement in favor of PRF, established for the benefit of Acorda and
PRF and maintained at the Lockbox Bank pursuant to the terms of the Lockbox
Agreement and this Agreement.  The Joint
Concentration Account shall be the account into which the Lockbox Bank sweeps
the funds held in the Lockbox Account.


“Knowledge”
shall mean the actual knowledge of any of the persons listed on Schedule
1.01 hereto (each a “Knowledge Person”) relating to a particular
matter.  Notwithstanding the foregoing,
the Knowledge Persons shall be deemed to have knowledge of a particular matter
if, in the prudent exercise of his or her duties and responsibilities in the
ordinary course of business, such Knowledge Person should have known of such
matter.


“License
Agreement” shall mean any existing or future license, development,
commercialization, co-promotion, collaboration, manufacturing, distribution,
marketing or partnering agreement entered into before or during the Revenue
Interest Period by Acorda or any of its Affiliates relating to the Product
and/or under the Intellectual Property.


“Licensees”
shall mean, collectively, the licensees, sublicensees or distributors under the
License Agreements; each a “Licensee”.


“Liens”
shall mean all liens, encumbrances, security interests, mortgages, rights to
preferential payments or charges of any kind.


“Lockbox
Account” shall mean collectively, any lockbox and segregated lockbox
account established and maintained at the Lockbox Bank pursuant to a Lockbox
Agreement and this Agreement.  The
Lockbox Account shall be the account into which all payments made to Acorda in
respect of the sale of the Product are to be remitted.


“Lockbox
Agreement” shall mean any agreement entered into by a Lockbox Bank, Acorda
and PRF, substantially in the form of Exhibit C attached hereto,
pursuant to which, among other things, the Lockbox Account, the Joint
Concentration Account, the PRF Concentration Account and the Acorda Concentration
Account shall be established and maintained.


“Lockbox
Bank” shall mean Citibank, N.A. or such other bank or financial institution
approved by each of PRF and Acorda and a party to any Lockbox Agreement.


“Losses”
shall mean collectively, any and all claims, damages, losses, judgments,
liabilities, costs and expenses (including reasonable expenses of investigation
and reasonable attorneys’ fees and expenses in connection with any action, suit
or proceeding), giving effect to any tax benefit realized by the indemnified
party which is attributable to the Losses to which an indemnity claim relates.


 


 


6





















 


“Material
Adverse Change” shall mean, with respect to Acorda, a material adverse
change in the business, operations, assets or financial condition of Acorda and
its Subsidiaries, taken as a whole.


“Material
Adverse Effect” shall mean (i) the effect of a Material Adverse
Change, (ii) a material adverse effect on the validity or enforceability
of any of the Transaction Documents, (iii) a material adverse effect on the
ability of Acorda to perform any of its material obligations under any of the
Transaction Documents, (iv) a material adverse effect on the rights or
remedies of PRF under any of the Transaction Documents, (v) a material
adverse effect on the right of PRF to receive the Assigned Interests or any
payment due to PRF hereunder, (vi) a material adverse effect on the Assigned
Interests, including any material adverse effect on the Product or the ability
of Acorda to distribute, market and/or sell the Product, or (vii) a right to
terminate or receive material damages inuring to the benefit of a Third Party
arising with respect to any Material Contract.


“Material
Contract” shall mean any contract, agreement or other arrangement to which
either Acorda or any of its Subsidiaries is a party or any of Acorda’s or its
Subsidiaries’ respective assets or properties are bound or committed (other
than the Transaction Documents) related to the Product or the Intellectual Property
(including, in all circumstances, the Elan Agreements, the Novartis Agreement
and each License Agreement) for which breach, nonperformance or failure to
renew could reasonably be expected to have a Material Adverse Effect (without regard for clause (vii) of the
definition thereof).


“NDA”
shall mean a new drug application and all amendments and supplements thereto,
submitted to the FDA with respect to the Product.


“Net
Revenues” shall mean, for any period of determination, the difference of


(A)                              Gross Product Revenues
for such period, less


(B)                              the sum, with respect to
the items described in clauses (i) and (ii) of the definition of Gross Product
Revenues, of


(i)                                     cash, trade
discounts and rebates actually granted or paid but only if and to the extent, on
an annual basis, the same are in accordance with sound business practices or
not in excess of customary industry standards with respect to products
comparable to or at a similar stage in product life as the Product,


(ii)                                  allowances and
adjustments actually credited to customers for Product that is spoiled,
damaged, outdated, obsolete, returned or otherwise recalled, but only if and to
the extent, on an annual basis,  the same
are in accordance with sound business practices or not in excess of customary
industry standards with respect to products comparable to or at a similar stage
in product life as the Product,


(iii)                               charges for freight,
postage, shipping, delivery, service and insurance charges, to the extent
invoiced,


 


 


7





















 


(iv)                              taxes, duties or other
governmental charges to the extent invoiced, and


(v)                                 write-offs or
allowances for bad debts.


In calculating Net Revenues, any transfer from Acorda to an Affiliate
shall be disregarded and the calculation shall instead be based on the first
transfer to a Third Party.


“Novartis”
shall mean Novartis Pharma AG.


“Novartis
Agreement” shall mean that certain License Agreement, dated as of April 17,
1991, by and between Sandoz Pharma, predecessor to Novartis Pharma AG, and
Athena Neurosciences, Inc., predecessor to Elan Pharmaceuticals, Inc., as
assumed by Acorda pursuant to that certain Assignment and Assumption Agreement,
dated as of July 21, 2004, by and among Acorda, Elan Pharmaceuticals, Inc. and
Novartis Pharma AG.


“Obligations”
shall mean any and all obligations of Acorda under the Transaction Documents.


“Patents”
shall mean all patents, patent rights, patent applications, patent disclosures
and invention disclosures issued or filed, together with all reissues, divisions,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof relating to the Product, composition of matter, formulation, or methods
of manufacture or use thereof that are issued or filed as of the date hereof or
during the Revenue Interest Period, including, without limitation, those
identified in Schedule 3.12(a) in each case, which are owned,
controlled by, issued to, licensed to or licensed by Acorda or any of its
Affiliates.


“Patent
Office” shall mean the respective patent office, including the United
States Patent and Trademark Office and any comparable foreign patent office,
for any Patents.


“Permitted
Liens” shall mean (i) Liens created in favor of PRF pursuant to the
Security Agreement and any other Transaction Document; (ii) liens for taxes or
other governmental charges arising by operation of law in the ordinary course
of business for sums which are not yet due and payable, and (iii) any Liens set
forth on Schedule 3.04(b).


“Person”
shall mean an individual, corporation, partnership, limited liability company,
association, trust or other entity or organization, but not including a
government or political subdivision or any agency or instrumentality of such
government or political subdivision.


“PRF”
shall have the meaning set forth in the first paragraph hereof.


“PRF
Concentration Account” shall mean a segregated account established for the
benefit of PRF and maintained at the Lockbox Bank pursuant to the terms of the
Lockbox Agreement and this Agreement. 
The PRF Concentration Account shall be the account into which the funds
held in the Joint Concentration Account which are payable to PRF pursuant to Section
2.02(b) of this Agreement are swept by the Lockbox Bank in accordance with
the terms of this Agreement and the Lockbox Agreement.


“PRF
Indemnified Party” shall have the meaning set forth in Section 8.05(a).


 


 


8





















 


“Product”
shall mean (i) the products currently known and marketed in the United States
under the trademark Zanaflex® as capsule and tablet formulations of tizanidine
hydrochloride, also known as
5-chloro-4-(2-imidazolin-2-ylamino)-2,1,3-benzothiodiazole hydrochloride
(Chemical Abstracts Registry No. 64461-82-1); and (ii) any formulation,
reformulation or line extension containing tizanidine hydrochloride, or any
derivative or closely related analogs thereof (including but not limited to any
stereoisomers, either separated or combined, any hydrates, any polymorphs, any
salts, any solvates and any crystal forms) as monotherapy or in combination
with any other substance that is made, used, sold, offered for sale, imported,
distributed, marketed or promoted in the United States by Acorda, its
Affiliates or Licensees.


“Put/Call
Price” shall mean the greater of (i) an amount equal to one hundred fifty
percent (150%) of all payments made by PRF pursuant to Section 2.03 as
of the date of exercise of the Call Option or Put Option, as the case may be,
less an amount equal to the aggregate of (i) all amounts received by PRF
pursuant to the Security Agreement and (ii) all payments made by Acorda to PRF
(and retained by PRF) pursuant to Sections 2.02(b), 2.03(b), 2.03(c),
5.08 and 8.05, prior to and as of the date of payment of the
Put/Call Price, or (ii) an amount that would generate an internal rate of
return (utilizing the same methodology utilized by the IRR function in
Microsoft Excel) to PRF of twenty-five percent (25%) on all payments made by
PRF pursuant to Section 2.03 as of the date of exercise of the Call
Option or Put Option, as the case may be, taking into account the amount and
timing of all amounts received by PRF pursuant to the Security Agreement and
all payments made by Acorda to PRF (and retained by PRF) pursuant to Sections
2.02(b), 2.03(b), 2.03(c),  5.08 and 8.05, prior
to and as of the date of payment of the Put/Call Price.


“Put Option”
shall have the meaning set forth in Section 5.07(b).


“Put Option
Event” shall mean any one of the following events:


(i)            any Change of
Control;


(ii)           any Bankruptcy
Event;


(iii)          any Transfer by
Acorda of all or substantially all of its assets;


(iv)          any Transfer by
Acorda of any of its interests in the Product (other than pursuant to a License
Agreement);


(v)           any breach by Acorda
in any material respect of any of its covenants in Section 2.02(b)
(unless such breach results from any action or omission by any Person other
than Acorda), Section 2.03(b) or (c), or Section 5.08(c)
(unless such breach results from any action or omission by any Person other
than Acorda) or Section 5.08(f), which breach is not cured within sixty
(60) days following delivery by PRF to Acorda of written notice of such breach;
or


(vi)          any (A) breach by
Acorda in any material respect of any of its covenants in Section 5.05, Section
5.08(d), Section 5.09(b), Section 5.10 and Section 5.15,
or (B) representation made by Acorda in any of Sections 3.04, 3.12,
3.13(b) or (c) or 3.19 proves after the Closing Date,
based on facts or circumstances which PRF was not aware of on or prior to the
Closing Date, to have been false or incorrect in any material respect when
made; in each case if


 


 


9





















 


and only if
such breach or falseness or incorrectness (x) is not cured (if such breach or
falseness or incorrectness is capable of being cured) within seventy (70) days
following delivery by PRF to Acorda of written notice thereof, and (y) results
in a Put Option Material Adverse Effect.


“Put Option
Material Adverse Effect” shall mean (i)  a material adverse effect on
the validity or enforceability of any of the Transaction Documents, (ii) a
material adverse effect on the ability of Acorda to perform any of its material
obligations under any of the Transaction Documents, (iii) a material
adverse effect on the rights or remedies of PRF under any of the Transaction
Documents, (iv) a material adverse effect on the right of PRF to receive
the Assigned Interests or any payment due to PRF hereunder, and (v) a material
adverse effect on the Assigned Interests, including any material adverse effect
on the Product or the ability of Acorda to distribute, market and/or sell the
Product.


“Quarterly
Report” shall mean, with respect to the relevant Fiscal Quarter of Acorda,
(i) a report showing all payments made by Acorda to PRF under this
Agreement during such quarter and showing in detail the basis for the
calculation of such payments, (ii) a reconciliation of such report
referred to in clause (i) above to all information and data deliverable to
Acorda, PRF or their Affiliates by the parties to any License Agreement,
together with relevant supporting documentation, (iii) a description of Acorda’s
use of the proceeds received from PRF and retained by Acorda pursuant to Section
2.03 hereof during such quarter and (iv) such additional information as PRF
may reasonably request.


“Regulatory
Agency” shall mean a Governmental Authority with responsibility for the
approval of the marketing and sale of pharmaceuticals in the United States or
other regulation of pharmaceuticals.


“Regulatory
Approval” shall mean all approvals (including, without limitation, where
applicable, pricing and reimbursement approval and schedule classifications),
product and/or establishment licenses, registrations or authorizations of any
Governmental Authority of a Drug Approval Application necessary for the
manufacture, use, storage, import, export, transport, offer for sale, or sale
of the Product in the United States.


“Revenue
Interest Period” shall mean the period from and including October 1, 2005
through and including December 31, 2015, unless earlier terminated upon a
repurchase of the Assigned Interests by Acorda pursuant to Section 5.07
or otherwise in accordance with the terms of this Agreement.


“Revenue
Interests” shall mean (A) with respect to any License Agreement, all of Acorda’s
rights under such License Agreement, including, without limitation, rights to
receive payments in respect of sale of the Product and (B) otherwise, all of
Acorda’s rights, however derived, to receive payments in respect of sales of
the Product.


“SEC”
shall mean the Securities and Exchange Commission.


“Secondary
Contingent Payment” shall have the meaning set forth in Section 2.03.


“Security
Agreement” shall mean the Security Agreement between Acorda and PRF
providing for, among other things, the grant by Acorda in favor of PRF of a
valid continuing,


 


 


10





















 


perfected lien on and security interest in, the Assigned Interests and
the other Collateral described therein, which Security Agreement shall be
substantially in the form of Exhibit D.


“Subsidiary”
or “Subsidiaries” shall mean with respect to any Person (i) any
corporation of which the outstanding capital stock having at least a majority
of votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time owned, directly or indirectly, by such Person
or (ii) any other Person of which at least a majority voting interest under
ordinary circumstances is at the time, directly or indirectly, owned by such
Person.


“Term”
shall mean the term of this Agreement, as provided in Section 7.01
hereof.


“Term Sheet”
shall mean the Term Sheet for Purchase of Revenue Interest from Acorda
Therapeutics, Inc. dated October 27, 2005 between Paul Capital Advisors, LLC
and Acorda as the same may be amended to the date hereof.


“Third
Party” shall mean any Person other than Acorda or PRF or their respective
Affiliates.


“Transaction
Documents” shall mean, collectively, this Agreement, the Bill of Sale, the
Security Agreement, the Lockbox Agreement and the Board Observer Rights
Agreement.


“Transfer”
or “Transferred” shall mean any sale, conveyance, assignment,
disposition or transfer.


“True-Up
Statement” shall have the meaning set forth in Section 5.08(f).


“UCC”
shall mean the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.


“United States”
shall mean the United States of America.


“Year-to-Date Net
Revenues” shall have the meaning set forth in Section 5.08(f).


ARTICLE
II


PURCHASE AND SALE OF
ASSIGNED INTERESTS


Section 2.01         Purchase and Sale.


 


Upon the terms
and subject to the conditions set forth in this Agreement, Acorda agrees to
sell, assign, transfer and convey to PRF, and PRF agrees to purchase from
Acorda, free and clear of all Liens (except for Permitted Liens) and subject to
the conditions set forth in Article VI, all of Acorda’s rights and
interests in and to the Assigned Interests on the Closing Date.  PRF’s ownership interest in each of the
Assigned Interests so acquired shall vest immediately upon Acorda’s receipt of
payment for such Assigned Interests pursuant to Section 2.03.


 


 


11





















 


Section 2.02         Payments in Respect of the
Assigned Interests.


 


(a)           PRF shall be
entitled to receive the Applicable Percentage in respect of Net Revenues made
during the Revenue Interest Period.


(b)           Commencing on the
effective date of the Lockbox Agreement and continuing as long as the
Applicable Percentage is fifteen percent (15%) in the applicable Fiscal Year,
eight percent (8%) of the first $30,000,000 of Gross Product Revenues in each
Fiscal Year shall be swept from the Joint Concentration Account into the PRF
Concentration Account on a daily basis (the “Daily Amount”) pursuant to Section
5.08.


(c)           Any additional
payments to be made by Acorda to PRF hereunder or under any other Transaction
Document shall be made by wire transfer of immediately available funds.


Section 2.03         Purchase Price.


 


(a)           In full
consideration for the assignment by Acorda of the Assigned Interests, and
subject to the terms and conditions set forth herein, PRF shall pay to Acorda
or its designees the following amounts:


(i)            At the Closing,
$15,000,000 (including (A) amounts which shall be paid by PRF on behalf of
Acorda at the time of Closing to GE Capital as partial payment of the amounts
owed by Acorda to GE Capital pursuant to that certain Promissory Note, dated as
of January 28, 2004, issued by Acorda to GE Capital (not to exceed $3,500,000);
and (B) $500,000 of which shall be retained by PRF for reimbursement of its
expenses (with PRF to account for its expenses within ninety (90) days of the
date of this Agreement and to refund any excess of the $500,000 over its actual
expenses to Acorda);


(ii)           an additional
$5,000,000 (the “Initial Contingent Payment”) within fifteen (15)
Business Days of receipt by PRF of a notice properly given by Acorda under
clause (ii)(C) below, payable at Acorda’s option in its sole and absolute
discretion if and only if (A) Acorda’s net sales of Product during the period
from January 1, 2005 through and including December 31, 2005 equal or exceed
$11,000,000; (B) Net Revenues during the period from January 1, 2006 through
and including June 30, 2006 equal or exceed $16,000,000; and (C) PRF receives a
written request from Acorda for the Initial Contingent Payment within five (5)
days of Acorda’s determination that the targets in clauses (A) and (B) have
been met and in any event no later than September 30, 2006;


(iii)          an additional
$5,000,000 (the “Secondary Contingent Payment”) within fifteen (15)
Business Days of receipt by PRF of a notice properly given by Acorda under
clause (iii)(B) below, payable at Acorda’s option in its sole and absolute
discretion if and only if (A) Net Revenues during the period from January 1,
2006 through and including December 31, 2006 equal or exceed $33,500,000; and
(B) PRF receives a written request from Acorda for the Secondary Contingent
Payment within five (5) days of Acorda’s determination that the Net Revenue
target in clause (A) has been met and in any event no later than March 31,
2007; and


(iv)          The payments to be
made by PRF hereunder shall be paid by wire transfer of immediately available
funds to the account designated by Acorda.


 


 


12





















 


(b)           If  PRF makes the Initial Contingent Payment,
Acorda shall pay to PRF, in addition to and not in reduction of amounts payable
by Acorda to PRF under Sections 2.02 and 5.08 and clause (c) of
this Section 2.03, the sum of $5,000,000 on December 1, 2009.


(c)           If  PRF makes the Secondary Contingent Payment,
Acorda shall pay to PRF, in addition to and not in reduction of amounts payable
by Acorda to PRF under Sections 2.02 and 5.08 and clause (b) of
this Section 2.03, the sum of $5,000,000 on December 1, 2010.


(d)           The payments, if
any, to be made by Acorda hereunder shall be paid by wire transfer of
immediately available funds to the account designated by PRF.


Section 2.04         No Assumed Obligations.


 


Notwithstanding any provision in this Agreement or any other writing to
the contrary, PRF is acquiring only the Assigned Interests and is not assuming
any liability or obligation of Acorda or any of its Affiliates of whatever
nature, whether presently in existence or arising or asserted hereafter,
whether under any Transaction Document or otherwise.  All such liabilities and obligations shall be
retained by and remain obligations and liabilities of Acorda or its Affiliates
(the “Excluded Liabilities and Obligations”).


Section 2.05         Excluded Assets.


 


Notwithstanding
any provision in this Agreement or any other writing to the contrary, Acorda is
not selling, conveying, assigning, or transferring to PRF any assets,
properties or rights of Acorda, including any ownership interest in any Patents
or other Intellectual Property, other than (i) Acorda’s rights and interests in
and to the Assigned Interests subject to and in accordance with the terms of
this Agreement and (ii) the assignments for security purposes being made under
the Security Agreement and the Lockbox Agreement.  All other assets, properties and rights of
Acorda are not being sold, conveyed, assigned or transferred to PRF hereunder
(the (“Excluded Assets”), whether or not they are related to the
Product.


ARTICLE
III


REPRESENTATIONS AND
WARRANTIES OF ACORDA


Acorda hereby
represents and warrants to PRF as of the date hereof, the following:


Section 3.01         Organization.


 


Acorda is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers and all licenses,
authorizations, consents and approvals required to carry on its business as now
conducted and as proposed to be conducted in connection with the transactions
contemplated by the Transaction Documents. 
Acorda is duly qualified to do business as a foreign corporation and is
in good standing in every jurisdiction in which the failure to do so would have
a Material Adverse Effect.


 


 


13





















 


Section 3.02         Corporate Authorization.


 


Acorda has all
necessary power and authority to enter into, execute and deliver the
Transaction Documents and to perform all of the obligations to be performed by
it hereunder and thereunder and to consummate the transactions contemplated
hereunder and thereunder.  The
Transaction Documents have been duly authorized, executed and delivered by
Acorda and each Transaction Document constitutes the valid and binding
obligation of Acorda, enforceable against Acorda in accordance with their
respective terms, subject, as to enforcement of remedies, to bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally or general equitable principles.


Section 3.03         Governmental Authorization.


 


The execution
and delivery by Acorda of the Transaction Documents, and the performance by
Acorda of its obligations hereunder and thereunder, does not require any notice
to, action or consent by, or in respect of, or filing with, any Governmental
Authority, except for the filing of financing statements under the UCC and
except as set forth on Schedule 3.03.


Section 3.04         Ownership.


 


(a)           Acorda owns, or
holds a valid license under, all of the Intellectual Property and the
Regulatory Approvals with respect to the Product free and clear of all Liens
other than Permitted Liens, and no license or covenant not to sue under any
Intellectual Property or Regulatory Approvals has been granted by Acorda to any
Third Party, except as set forth on Schedule 3.04(a).


(b)           Acorda, immediately
prior to the assignment of the Assigned Interests, owns, and is the sole holder
of, all the Revenue Interests; and Acorda owns, and is the sole holder of,
and/or has and holds a valid, enforceable and subsisting license to, all of
those other assets that are required to produce or receive any payments from
any Licensee or payor under and pursuant to, and subject to the terms of any
License Agreement, in each case free and clear of any and all Liens other than
Permitted Liens.  Except as set forth on Schedule
3.04(b), Acorda has not transferred, sold, or otherwise disposed of, or
agreed to transfer, sell, or otherwise dispose of any portion of the Revenue
Interests other than as contemplated by this Agreement.  Except as set forth on Schedule 3.04(b),
no Person other than Acorda has any right to receive the payments payable under
any License Agreement, other than PRF’s rights with respect to the Assigned
Interests, from and after the Closing Date. 
Acorda has the full right to sell, transfer, convey and assign to PRF
all of Acorda’s rights and interests in and to the Assigned Interests being
sold, transferred, conveyed and assigned to PRF pursuant to this Agreement
without any requirement to obtain the consent of any Person, except such
consents as are obtained at or prior to the Closing.  At the Closing, PRF shall have acquired good
and valid rights and interests of Acorda in and to the Assigned Interests being
sold, transferred, conveyed and assigned to PRF pursuant to this Agreement,
free and clear of any and all Liens, except for Permitted Liens, subject to the
terms and conditions of this Agreement.


 


 


14





















 


Section 3.05         Intentionally Omitted.


 


Section 3.06         Financial Statements.


 


Except as set forth on Schedule
3.06, the Financial Statements are complete and accurate in all material
respects, were prepared in conformity with GAAP and present fairly in all
material respects the financial position and the results of operations of
Acorda and its Subsidiaries as of the dates and for the periods covered
thereby, subject in the case of the unaudited financial statements to the
absences of footnotes, year-end adjustments and other supplementary information
required by GAAP.


Section 3.07         No Undisclosed Liabilities.


 


Except for
those liabilities (i) specifically identified on the face of or described in
the Notes to the Financial Statements, (ii) incurred by Acorda or its
Subsidiaries in the ordinary course of business since December 31, 2004,
or (iii) in connection with the Obligations under the Transaction Documents,
there are no material liabilities of Acorda relating to the Product, of any
kind whatsoever, whether accrued, contingent, absolute, determined or
determinable.


Section 3.08         Solvency.


 


Acorda is not
insolvent as defined in any statute of the United States Bankruptcy Code or in
the fraudulent conveyance or fraudulent transfer statutes of the States of
Delaware or New York.  Assuming
consummation of the transactions contemplated by the Transaction Documents, (i)
the present fair saleable value of Acorda’s assets is greater than the amount
required to pay its debts as they become due, (ii) Acorda does not have
unreasonably small capital with which to engage in its business, and (iii)
Acorda has not incurred, nor does it have present plans to or intend to incur,
debts or liabilities beyond its ability to pay such debts or liabilities as
they become absolute and matured.


Section 3.09         Litigation.


 


There is no
(i) action, suit, arbitration proceeding, claim, investigation or other
proceeding pending or, to the Knowledge of Acorda, threatened against Acorda or
(ii) any governmental inquiry pending or, to the Knowledge of Acorda,
threatened against Acorda, in each case with respect to clauses (i) and (ii)
above, which, if adversely determined, would question the validity of, or could
adversely affect the transactions contemplated by any of the Transaction
Documents or could reasonably be expected to have a Material Adverse
Effect.  Except as set forth on Schedule
3.09, there is no action, suit, claim, proceeding or investigation pending
or, to the Knowledge of Acorda, threatened against Acorda or any other Person
relating to the Product, the Intellectual Property, the Regulatory Approvals,
the Revenue Interests or the Assigned Interests.


Section 3.10         Compliance with Laws.


 


Acorda (a) is
not in violation of, has not violated, or to the Knowledge of Acorda, is not
under investigation with respect to, and, (b) has not been threatened to
be charged with or been given notice of any violation of any law, rule, ordinance
or regulation of, or any judgment, order,


 


 


15





















 


writ, decree, permit or license entered by any Governmental Authority
applicable to Acorda, the Assigned Interests or the Revenue Interests which
could reasonably be expected to have a Material Adverse Effect.


Section 3.11         Conflicts.


 


                (a)           Except as set forth on Schedule 3.11,
neither the execution and delivery of any of the Transaction Documents nor the
performance or consummation of the transactions contemplated hereby and thereby
will:  (i) contravene, conflict with,
result in a breach or violation of, constitute a default under, or accelerate
the performance provided by, in any material respects any provisions of: (A)
any law, rule, ordinance or regulation of any Governmental Authority, or any
judgment, order, writ, decree, permit or license of any Governmental Authority,
to which Acorda or any of its Subsidiaries or any of their respective assets or
properties may be subject or bound, the breach or violation of which could
reasonably be expected to result in a Material Adverse Effect; or (B) any
Material Contract or any other contract, agreement, commitment or instrument to
which Acorda or any of its Subsidiaries is a party or by which Acorda or any of
its Subsidiaries or any of their respective assets or properties is bound or
committed for which breach, nonperformance or failure to renew could reasonably
be expected to have a Material Adverse Effect; (ii) contravene, conflict with,
result in a breach or violation of, constitute a default under, or accelerate
the performance provided by, any provisions of the certificate of incorporation
or by-laws (or other organizational or constitutional documents) of Acorda or
any of its Subsidiaries; (iii) except for the filing of the UCC-1 financing
statements required hereunder and filings with the United States Patent and
Trademark Office, require any notification to, filing with, or consent of, any
Person or Governmental Authority, except such consents that are obtained at or
prior to the Closing; (iv) give rise to any right of termination, cancellation
or acceleration of any right or obligation of Acorda or any of its Subsidiaries
or any other Person or to a loss of any benefit relating to the Revenue
Interests or the Assigned Interests; or (v) result in the creation or
imposition of any Lien on (A) the assets or properties of Acorda or any of its
Subsidiaries or (B) the Assigned Interests, the Revenue Interests, or any other
Collateral, other than, with respect to clause (v) above, any Permitted Lien.


                (b)           Other than as set forth on Schedule
3.04(b), Acorda has not granted, nor does there exist, any Lien on the Revenue
Interests, the Assigned Interests or any other Collateral other than pursuant
to the Security Agreement.


Section 3.12         Intellectual Property.


 


For purposes
of this Section 3.12, the terms “Product” or “Products” shall mean the products
currently known and marketed in the United States under the trademark Zanaflex®
as capsule and tablet formulations of tizanidine hydrochloride, also known as
5-chloro-4-(2-imidazolin-2-ylamino)-2,1,3-benzothiodiazole hydrochloride
(Chemical Abstracts Registry No. 64461-82-1).


(a)           Schedule 3.12(a) sets forth an
accurate, true and complete list (by category and family) of all (1) Patents
and utility models, (2) trade names, common law trademarks, common law service
marks, registered trademarks, registered service marks, and applications for


 


 


16





















 


trademark registration or service mark registration,
(3) registered and unregistered copyrights and (4) domain name registrations
and websites, in each case with respect to clauses (1), (2), (3) and (4) above
in this subsection (a) that are owned, licensed, or used to make, have made, use,
sell, have sold, offer for sale, import, develop, promote, market, distribute,
manufacture, commercialize or otherwise exploit the Product in the United
States by Acorda, its Affiliates, manufacturers, distributors or Licensees, as
applicable (for purposes of this Section 3.12, the foregoing are
collectively referred to as the “Acorda Parties”), it being understood
that Acorda has not conducted any independent investigation with respect to any
of the Acorda Parties other than Acorda and its Affiliates.  For each item of Intellectual Property listed
on Schedule 3.12(a), Acorda has identified (i) the owner, (ii) the
application number, (iii) the patent or registration number, (iv) the
expiration date, as applicable, including any applicable term extensions or
supplemental protection certificates, if applicable, (v) the earliest relied
upon priority filing date used to calculate the expiration date, and (vi) the
due date(s) for any applicable maintenance, annuity or renewal fee.  Except as disclosed therein, each item of
Intellectual Property listed on Schedule 3.12(a) that is issued, granted
or registered is valid, enforceable and subsisting and no listed Intellectual
Property has lapsed, expired, been cancelled or become abandoned.  The Patent applications listed in Schedule
3.12(a) have been prosecuted by competent patent counsel in a diligent
manner since July 21, 2004 and continue to be prosecuted by competent patent
counsel in a diligent manner, and, to Acorda’s Knowledge, the Patent
applications listed in Schedule 3.12(a) were prosecuted by competent
patent counsel in a diligent manner prior to July 21, 2004.


(b)           Schedule 3.12(b) sets forth an
accurate, true and complete list of all agreements, whether oral or written,
express or implied, including, without limitation, assignments, licenses,
options, franchise, distribution, marketing and manufacturing agreements,
sponsorships, project agreements, collaboration agreements, joint development
agreements, agreements not to enforce, consents, settlements, assignments,
security interests, liens and other encumbrances or mortgages, and any
amendments(s) renewal(s), novation(s) and termination(s) pertaining thereto,
pursuant to which Acorda has the legal right to exploit Intellectual Property
that is owned by another Person or a Third Party.  There are no unpaid fees or royalties under
any agreement listed on Schedule 3.12(b) that have become due, or are
expected to become overdue, as of the Closing Date, except as disclosed on Schedule
3.12(b).


(c)           Each agreement listed in Schedule
3.12(b) is legal, valid, binding, enforceable, and in full force and effect
(it being understood that Acorda has not conducted any independent
investigation with respect to any such agreement entered into prior to July 21,
2004).  Acorda is not in breach in any
material respect of such listed agreements and, to Acorda’s Knowledge, no
circumstances or grounds exist that would give rise to a claim of breach or
right of rescission, termination, revision, or amendment of any of the agreements
specified in Schedule 3.12(b), including, without limitation, the
execution, delivery and performance of this Agreement and the other Transaction
Documents, except as disclosed on Schedule 3.12(c).


(d)           The Acorda Parties have full, legal
right to make, have made, use, sell, have sold, offer for sale, import,
develop, distribute, manufacture, commercialize, market or otherwise exploit
the Product, in the countries in which they are conducting such activities,
without infringing any intellectual property right that is owned by another
Person or a Third Party in such countries, it being understood that Acorda has
not conducted any independent investigation with respect to any of the Acorda
Parties other than Acorda and its Affiliates.


 


 


17





















 


(e)           Acorda possesses sole, exclusive,
valid, marketable and unencumbered title to the Intellectual Property for which
it is listed as the owner on Schedule 3.12(a), and there are no liens,
mortgages or encumbrances on or to any Intellectual Property listed on Schedule
3.12(a) that it owns or agreement listed on Schedule 3.12(b), except
as disclosed on Schedule 3.12(e).


(f)            There are no unpaid maintenance,
annuity or renewal fees currently overdue for any of the Intellectual Property
listed on Schedule 3.12(a), nor have any applications or registrations
therefor lapsed or become abandoned, been cancelled or expired, except as
disclosed on Schedule 3.12(a) or Schedule 3.12(f).


(g)           Acorda (to the extent that Acorda is
an applicant or is otherwise involved in the patent prosecution of any Patent)
and, to Acorda’s Knowledge, each owner and inventor of each Patent have
complied in all material respects with all applicable duties of candor and good
faith in dealing with any Patent Office, including the duty to disclose to any
applicable Patent Office all information known to be material to patentability
(it being understood that with respect to the period prior to July 21, 2004
Acorda has not conducted an independent investigation as to compliance with
such duties of candor and good faith).


(h)           Neither Acorda nor, to Acorda’s
Knowledge, any other Person has undertaken or omitted to undertake any acts,
and, to Acorda’s Knowledge, no circumstance or grounds exist, that would
invalidate, reduce or eliminate, in whole or in part, the enforceability or
scope of (i) any Intellectual Property or, in the case of Intellectual Property
owned or exclusively licensed by Acorda, Acorda’s entitlement to exclusively
exploit such Intellectual Property, or (ii) Acorda’s right to enjoy payments
made in respect of sales of the Product or other revenues from any Intellectual
Property, except as disclosed on Schedule 3.12(h) (it being understood
that with respect to the period prior to July 21, 2004 Acorda has not conducted
an independent investigation as to whether such acts were undertaken or whether
there was a failure to undertake any such acts).


(i)            There is, and has been, no pending,
decided or settled opposition, interference proceeding, reexamination proceeding,
cancellation proceeding, injunction, claim, lawsuit, proceeding, hearing,
investigation, complaint, arbitration, mediation, demand, International Trade
Commission investigation, decree, or any other dispute, disagreement, or claim
(collectively referred to hereinafter as “Disputes”), nor, to Acorda’s
Knowledge, has any such Dispute been threatened challenging the legality,
validity, enforceability or ownership of any Intellectual Property or which
would give rise to a credit against the revenues  of Acorda as a result of the manufacture,
sale offer for sale, use, importation or exportation of the Product or the
exploitation of the licensed Intellectual Property and, to Acorda’s Knowledge,
no circumstances or grounds exist that would give rise to such a Dispute.  There are no Disputes by any Person or Third
Party against Acorda or, to Acorda’s Knowledge, the other Acorda Parties, and
Acorda has not received any written notice or claim of any such Dispute, and,
to Acorda’s Knowledge, there exists no circumstances or grounds upon which any
such claim could be asserted, as pertaining to the Product.  Neither Acorda nor, to its Knowledge, its
licensor has sent any notice of any such Dispute to a Third Party, and there
exists no circumstance or grounds upon which Acorda or, to its Knowledge, its
licensor could assert any such claim, as pertaining to the Product.  No Intellectual Property or the Product is
subject to any outstanding injunction, judgment, order,


 


 


18





















 


decree, ruling charge, settlement or other disposition
of Dispute, and Acorda has fully complied with, paid and otherwise satisfied
all obligations relating to any such disposition.


(j)            There is no pending or, to Acorda’s
Knowledge, threatened action, suit, or proceeding, or any investigation or
claim by any Governmental Authority to which Acorda is a party (1) that would
be the subject of a claim for indemnification by any Person or Third Party
under any Material Contract, or (2) that the marketing, sale or distribution of
the Product in the United States by the Acorda Parties does or will infringe on
any patent or other intellectual property rights of any other Person.  To Acorda’s Knowledge, there are no pending
published or unpublished United States, international or foreign patent
applications owned by any other Person, which, if issued, would limit or
prohibit, in any material respect, the use of the Product or the licensed
Intellectual Property relating to the Product.


(k)           Acorda has taken, and will continue
to take, all commercially reasonable measures and precautions necessary to
protect and maintain (1) the confidentiality of all Intellectual Property
(except such Intellectual Property whose value would be unimpaired by public
disclosure) that it owns and (2) the value of all Intellectual Property and
assets related to the Product.


(l)            No material trade secret of Acorda
has been published or disclosed to any Person except pursuant to a written
agreement requiring such Person to keep such trade secret confidential (it
being understood that with respect to any publication or disclosure of material
trade secrets of Acorda occurring prior to July 21, 2004 Acorda has not
conducted an independent investigation).


Section 3.13         Regulatory Approval. Except
as set forth on Schedule 3.13:


 


(a)           Acorda has made
available to PRF all of the following documents that Acorda has received in any
form from any contract party to any License Agreement:


(i)            all regulatory
correspondence, written notes in respect of telephone communications,
electronic communications, copies of all submissions to any active regulatory
files regarding preclinical, clinical, manufacturing, adverse events, any
notices and forms received by a contract party from appropriate Regulatory
Agencies relating to compliance, developmental (including safety, efficacy and
potency), marketing, promotion or manufacturing activities concerning the
Intellectual Property or the Products;


(ii)           correspondence or
reports from both internal corporate employees and non-governmental consultants
relating to any of the regulatory and/or product liability exposures, marketing
and reimbursement strategies, manufacturing (i.e., annual audit reports),
preclinical and clinical data issues concerning the Products; and


(iii)          any information or
communication that would indicate that any Regulatory Agency (A) is not
likely to approve any application with respect to the Products, (B) is
likely to revise or revoke any current approval granted by any Regulatory
Agency with respect to the Products, or (C) is likely to pursue compliance
actions against Acorda or any contract party relating to a License Agreement.


 


 


19





















 


(b)           Either Acorda or, to
Acorda’s Knowledge, either Novartis or Elan, possesses all Regulatory Approvals
issued or required by the appropriate Regulatory Agencies necessary to conduct
its current business relating to the Products, and neither Acorda nor, to
Acorda’s Knowledge, Novartis or Elan, has received any notice of proceedings
relating to, and there are no facts or circumstances to Acorda’s Knowledge that
would reasonably be expected to lead to, the revocation, suspension,
termination or modification of any such Regulatory Approvals.


(c)           Acorda is in
material compliance with, and has materially complied with, all applicable
federal, state, local and foreign laws, rules, regulations, standards, orders
and decrees governing its business, including all regulations promulgated by
each Regulatory Agency, the failure of compliance with which could reasonably
be expected to result in a Material Adverse Effect; Acorda has not received any
notice citing action or inaction by it that would constitute any material
non-compliance with any applicable federal, state, local and foreign laws,
rules, regulations, or standards, which could reasonably be expected to result
in a Material Adverse Effect; and to Acorda’s Knowledge, no prospective change
in any applicable federal, state, local or foreign laws, rules, regulations or
standards has been adopted which, when made effective, could reasonably be
expected to result in a Material Adverse Effect.


(d)           The studies, tests
and preclinical and clinical trials conducted relating to the Products by or on
behalf of Acorda or, to Acorda’s Knowledge, Novartis or Elan, were and, if
still pending, are being conducted in all material respects in accordance with
experimental protocols, procedures and controls pursuant to, where applicable,
accepted professional and scientific standards; the descriptions of the results
of such studies, tests and trials provided to PRF are accurate in all material
respects; and neither Acorda nor, to Acorda’s Knowledge, Novartis nor Elan, has
received any notices or correspondence from any Regulatory Agency or any Institutional
Review Board or comparable authority requiring the termination, suspension, or
material modification or clinical hold of any such studies, tests or
preclinical or clinical trials conducted by or on behalf of Acorda or Novartis
or Elan, which termination, suspension, material modification or clinical hold
could reasonably be expected to result in a Material Adverse Effect.


Section 3.14         Material Contracts.


 


Schedule 3.14 sets forth all of
the Material Contracts. Neither Acorda nor any of its Subsidiaries is in breach
of or in default under any Material Contract which default, individually or in
the aggregate, would result in a Material Adverse Effect.  To the Knowledge of Acorda, nothing has
occurred and no condition exists that would permit any other party thereto to
terminate any Material Contract prior to its expiration.  Neither Acorda nor any of its Subsidiaries
has received any notice or, to the Knowledge of Acorda, any threat of early
termination of any such Material Contract. 
To the Knowledge of Acorda, no other party to a Material Contract is in
breach of or in default under such Material Contract.  All Material Contracts are valid and binding
on Acorda and its Subsidiaries and, to the Knowledge of Acorda, on each other
party thereto.


 


20


















Section 3.15         Subordination.


The claims and
rights of PRF created by any Transaction Document in and to the Assigned
Interests, the Revenue Interests and any other Collateral are not and shall not
be subordinated to any creditor of Acorda or any other Person.


Section 3.16         Place of Business.


Acorda’s
principal place of business and chief executive office are set forth on Schedule 3.16.


Section 3.17         Broker’s Fees.


Acorda has not
taken any action that would entitle any Person to any commission or broker’s
fee in connection with the transactions contemplated by the Transaction
Documents.


Section 3.18         Other Information.


No
representation, warranty or statement made by Acorda in (a) Section 3.12,
to Acorda’s Knowledge, or (b) in any Transaction Document (except for Section
3.12), and no Schedule or Exhibit hereto, in each case taken in the
aggregate, contains any untrue statement of a material fact or omits any
statement of material fact necessary in order to make the statements made
therein in light of the circumstances under which they were made not
misleading.


Section 3.19         Elan Agreements and
Novartis Agreement.


True, correct and
complete copies of the Elan Agreements and the Novartis Agreement, including
any amendments thereto, together with all agreements executed in connection
with the transactions contemplated thereby, are attached hereto, respectively,
as Exhibit E and Exhibit F. 
In addition:


(a)           Acorda and, to Acorda’s Knowledge, Elan and Novartis, are
in compliance in all material respects with the terms and conditions of the
Elan Agreements and the Novartis Agreement, as applicable;


(b)           in respect of Acorda, and to Acorda’s Knowledge, in
respect of Elan and Novartis, as applicable, the Elan Agreements and the
Novartis Agreement were duly executed and delivered at the time of their
signing;


(c)           neither Acorda nor, to Acorda’s Knowledge, Elan or
Novartis, is in default in any  material
respect of any of its respective obligations under the Elan Agreements or the
Novartis Agreement, as applicable;


(d)           except as set forth on Schedule 3.19, neither Elan
nor Novartis has any right of set-off, rescission, counterclaim, reduction,
deduction or defense in any way related to the Product;


 


21





















 


(e)           Acorda has not waived any rights or defaults under the
Elan Agreements or the Novartis Agreement and to Acorda’s Knowledge no event
has occurred which, after the giving of notice or the lapse of time or both,
would constitute a default or breach by Acorda under the Elan Agreements or the
Novartis Agreement or, to Acorda’s Knowledge, would constitute a default or
breach by Elan or Novartis, as applicable;


(f)            the Elan Agreements and the Novartis Agreement are in
full force and effect and, following the date of their signings, respectively,
there has been no correspondence or other written communication to the contrary
sent by or on behalf of Acorda to, or received by or on behalf of Acorda from,
Elan or Novartis, as applicable;


(g)           Acorda has not received any notice, whether written or
oral, pursuant to the Elan Agreements or the Novartis Agreement that such
agreement or agreements has been or will be terminated prior to any applicable
expiration or that Acorda is in default of its obligations under such agreement
or agreements.  Acorda has no intention
of terminating the Elan Agreements or the Novartis Agreement prior to any
applicable expiration and has no Knowledge of any event, circumstances or
grounds, including any breach of any payment obligations thereunder, which pursuant
to the terms of the Elan Agreements or the Novartis Agreement, as applicable, give
the other party thereto the right to terminate such respective agreement prior
to any applicable expiration; and


(h)           All payments that were due and payable and required to be
made prior to the date hereof under the terms of the Elan Agreements and the
Novartis Agreement have been made.


Section 3.20         Insurance.


Acorda has
named PRF as an additional insured party with respect to its general liability
and product liability insurance policies. 
A schedule of Acorda’s insurance policy or insurance policies is
attached hereto as Schedule 3.20.


ARTICLE
IV



REPRESENTATIONS AND WARRANTIES OF PRF


PRF represents
and warrants to Acorda the following:


Section 4.01         Organization.


PRF is a private
limited company duly formed and validly existing under the laws of Luxembourg.


Section 4.02         Authorization.


PRF has all
necessary power and authority to enter into, execute and deliver the
Transaction Documents and to perform all of the obligations to be performed by
it hereunder and thereunder and to consummate the transactions contemplated
hereunder and thereunder.  The
Transaction Documents have been duly authorized, executed and delivered by PRF
and each Transaction Document constitutes the valid and binding obligation of
PRF, enforceable against 


 


22





















 


PRF in accordance with their respective terms, subject, as to
enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors’ rights generally or general equitable
principles.


Section 4.03         Broker’s Fees.


PRF has not
taken any action that would entitle any Person to any commission or broker’s
fee in connection with the transactions contemplated by the Transaction
Documents.


Section 4.04         Conflicts.


Neither the
execution and delivery of this Agreement or any other Transaction Document nor
the performance or consummation of the transactions contemplated hereby or
thereby will:  (i) contravene, conflict
with, result in a breach or violation of, constitute a default under, or
accelerate the performance provided by, in any material respects any provisions
of: (A) any law, rule or regulation of any Governmental Authority, or any
judgment, order, writ, decree, permit or license of any Governmental Authority,
to which PRF or any of its assets or properties may be subject or bound; or (B)
any contract, agreement, commitment or instrument to which PRF is a party or by
which PRF or any of its assets or properties is bound or committed; (ii)
contravene, conflict with, result in a breach or violation of, constitute a
default under, or accelerate the performance provided by, any provisions of the
organizational or constitutional documents of PRF; or (iii) require any notification
to, filing with, or consent of, any Person or Governmental Authority.


Section 4.05         Consents.


The execution and
delivery by PRF of this Agreement and the other Transaction Documents to which
it is a party, and the performance by PRF of its obligations hereunder and
thereunder, do not require any notice to, action or consent by, or in respect
of, or filing with, any Governmental Authority or Person.


Section 4.06         Funds Available.


Each of PRF and Guarantor
will at all times maintain sufficient funds to satisfy its obligations under Section
2.03 and Section 8.05 as they become due.


ARTICLE
V



COVENANTS


During the
Term, the following covenants shall apply:


Section 5.01         Consents and Waivers.


Acorda shall
use its commercially reasonable efforts to obtain and maintain any required
consents, acknowledgements, certificates or waivers so that the transactions
contemplated by this Agreement or any other Transaction Document may be
consummated and shall not result in any 


 


23





















 


default or breach or termination prior to their respective expirations
of any of the Material Contracts.


Section 5.02         Access; Information.


(a)           Promptly
after receipt by Acorda of notice of any action, claim, investigation,
proceeding (commenced or threatened), offer, proposal, correspondence or other
material written communication relating to the transactions contemplated by
this Agreement, any other Transaction Document, the Revenue Interests, or any
License Agreement or use of the
Intellectual Property, then, Acorda shall inform PRF of the receipt of such
notice and the substance of such action, claim, investigation, proceeding,
offer, proposal, correspondence or other written communication and, if in
writing shall furnish PRF with a copy of such notice and any related materials
with respect to such action, claim, investigation, proceeding, offer, proposal,
correspondence or other written communication.


(b)           Acorda shall keep and maintain, or cause to be kept and
maintained, at all times accurate and complete books and records adequate to
correctly reflect all payments paid and/or payable with respect to Revenue
Interests and Assigned Interests and all deposits made into the applicable
Deposit Accounts.


(c)           PRF and any of PRF’s representatives shall have the right,
from time to time, to visit Acorda’s offices and properties where Acorda keeps
and maintains its books and records relating or pertaining to the Revenue
Interests, the Assigned Interests and the other Collateral to inspect and copy
such books and records, during normal business hours, and, upon ten (10)
Business Days’ written notice given by PRF to Acorda, Acorda will provide PRF
and any of PRF’s representatives reasonable access to such books and records, in order to verify the accuracy of the Quarterly
Reports, True-Up Statements (as defined in Section 5.08(f) and payments of
the Applicable Percentage for any Fiscal Year; provided that such inspection shall not take place more often than
once a Fiscal Year, and that unless PRF identifies a reasonable basis to
extend any inquiry to a period prior to the beginning of the two Fiscal Year
period most recently ended as of the date of its inquiry (e.g., if the date of
the inquiry is March 31, 2010, the relevant period would have commenced on
January 1, 2007), PRF shall restrict its inquiry to the period commencing as of
the beginning of the two Fiscal Year period most recently ended as of the date
of its inquiry and ending as of the date of its inquiry.


(d)           In the event any audit of the books and records of Acorda
relating to the Revenue Interests, Assigned Interests, and the other Collateral
by PRF and/or any of PRF’s representatives reveals that the amounts paid to PRF
hereunder for the period of such audit have been understated by more than the
greater of (i) $75,000 or (ii) five percent (5%) of the amounts determined to
be due for the period subject to such review, then the Audit Costs in respect
of such audit shall be borne by Acorda; and in all other cases, such Audit
Costs shall be borne by PRF.  PRF shall
treat all information subject to review under this Section 5.02 in
accordance with the confidentiality provisions of this Agreement.


(e)           Acorda shall, promptly after the end of each Fiscal Quarter
of Acorda (but in no event later than forty-five (45) days following the end of
such quarter), produce and deliver to PRF a Quarterly Report for such quarter,
together with a certificate of an executive officer of 


 


24





















 


Acorda, certifying that to the knowledge of
such officer (i) such Quarterly Report is a true and complete copy and
(ii) any statements and any data and information therein prepared by
Acorda are true, correct and accurate in all material respects.


(f)            Unless Acorda is timely filing its quarterly reports on
Form 10-Q and annual reports on Form 10-K in accordance with the requirements
of the Securities Exchange Act of 1934, as amended, Acorda shall deliver to PRF
the following financial statements:


(i)            within forty-five (45) calendar days after the end of
each Fiscal Quarter, copies of the unaudited consolidated financial statements
of Acorda and its Subsidiaries for such Fiscal Quarter; and


(ii)           within ninety (90) calendar days after the end of each
Fiscal Year, copies of the audited consolidated financial statements of Acorda
and its Subsidiaries for such Fiscal Year.


Section 5.03         Material Contracts.


Acorda shall
comply with all terms and conditions of and fulfill all of its obligations under
all the Material Contracts, except for such noncompliance which could not
reasonably be expected to give rise to a Material Adverse Effect.  Acorda shall not amend any Material Contract in
any material respect or issue any consents or other approvals under any
Material Contract without the prior written consent of PRF (not to be unreasonably
withheld or delayed).


Section 5.04         Confidentiality; Public
Announcement.


(a)           All information furnished by PRF to Acorda or by Acorda to
PRF, including the Confidential Information, in connection with this Agreement
and any other Transaction Document and the transactions contemplated hereby and
thereby, as well as the terms, conditions and provisions of this Agreement and
any other Transaction Document, shall be kept confidential by Acorda and PRF,
and shall be used by Acorda and PRF and their respective Affiliates only in
connection with this Agreement and any other Transaction Document and the
transactions contemplated hereby and thereby. 
Notwithstanding the foregoing, (i) Acorda and PRF may disclose such
information to their partners, directors, employees, managers, officers and
Affiliates, and to their actual or potential auditors, assignees, investors,
bankers, advisors, trustees and other financing parties and participants and
their respective representatives and counsel, provided that such Persons
shall be informed of the confidential nature of such information and shall be
obligated to keep such information confidential pursuant to the terms of this Section
5.04(a) and that each party shall take, and shall require such Persons to
take, reasonable steps to prevent any unauthorized use or disclosure of any
Confidential Information of the other Party and (ii) the foregoing restrictions
shall not apply to information that (A) is already in the public domain at the
time the information is disclosed (other than as a result of its improper
disclosure by PRF, its Affiliates or representatives), (B) thereafter becomes
lawfully obtainable from other sources who are not under an obligation of
confidentiality and are not otherwise prohibited from disclosing such
information by a contractual, legal or fiduciary obligation, (C) is required to
be disclosed in any document filed with any Governmental Authority, or (D) is
disclosed under securities laws, rules and regulations applicable to Acorda or 


 


25





















 


pursuant to the rules and regulations of any
securities exchange or trading system on which securities of Acorda may be
listed for trading.


(b)           Except as required by law or the rules and regulations of
any securities exchange or trading system or the FDA or any Governmental
Authority with similar regulatory authority, or except with the prior written
consent of the other party (which consent shall not be unreasonably withheld or
delayed), no party shall issue any press release or make any other public
disclosure with respect to the transactions contemplated by this Agreement or
any other Transaction Document; provided, however, that Acorda
and PRF may jointly prepare a press release for dissemination promptly
following the Closing Date.


(c)           The rights to review, consult with or consent, as
applicable and as set forth in this Section 5.04, with respect to any
disclosures shall only apply for the first time that specific information is to
be disclosed, and shall not apply to the subsequent disclosure of substantially
similar information that has previously been disclosed unless there have been
material changes in the disclosure since the date of the previous disclosure.


Section 5.05         Security Agreement.


Subject to the terms and
conditions of the Security Agreement, Acorda shall, at all times until the
Obligations are paid and performed in full, grant in favor of PRF a valid,
continuing, first perfected lien on and security interest in the Revenue
Interests, the Assigned Interests and the other Collateral described in the
Security Agreement.


Section 5.06         Commercially Reasonable
Efforts; Further Assurance.


(a)           Subject to the terms and conditions of this Agreement,
each of PRF and Acorda will use its commercially reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
reasonably necessary under applicable laws and regulations to consummate the
transactions contemplated by this Agreement and any other Transaction
Document.  PRF and Acorda agree to
execute and deliver such other documents, certificates, agreements and other
writings (including any financing statement filings requested by PRF) and to
take such other actions as may be reasonably necessary in order to consummate
or implement expeditiously the transactions contemplated by this Agreement and
any other Transaction Document and to vest in PRF good, valid and marketable
rights and interests in and to the Assigned Interests free and clear of all Liens,
except for Permitted Liens (which Permitted Liens shall, in any event and
notwithstanding anything else contained in this Agreement or the other
Transaction Documents to the contrary, be junior and subordinate to the Liens
in favor of PRF with respect to the Collateral).


(b)           PRF and Acorda shall execute and deliver such additional
documents, certificates and instruments, and to perform such additional acts,
as may be reasonably requested and necessary or appropriate to carry out and
effectuate all of the provisions of this Agreement and any other Transaction
Document and to consummate all of the transactions contemplated by this
Agreement and any other Transaction Document.


(c)           PRF and Acorda shall cooperate and provide assistance as
reasonably requested by the other party in connection with any litigation,
arbitration or other proceeding (whether 


 


26





















 


threatened, existing, initiated, or
contemplated prior to, on or after the date hereof) to which any party hereto
or any of its officers, directors, shareholders, agents or employees is or may
become a party or is or may become otherwise directly or indirectly affected or
as to which any such Persons have a direct or indirect interests, in each case
relating to this Agreement, any other Transaction Document, the Assigned
Interests or any other Collateral, or the transactions described herein or
therein.


Section 5.07         Call Option; Put Option.


(a)           In the event that a Call Option Event shall occur during
the Term, Acorda shall have the right, but not the obligation (the “Call
Option”), exercisable within one hundred eighty (180) days following the
occurrence of the Call Option Event, to repurchase the Assigned Interests from
PRF for a repurchase price equal to the Put/Call Price.  In order to exercise the Call Option, Acorda
shall deliver written notice to PRF of its election to so repurchase the
Assigned Interests within one hundred and eighty (180) days following the
occurrence of the Call Option Event. 
Acorda shall, within ten (10) Business Days following PRF’s receipt of
such written notice of the Call Option, repurchase from PRF the Assigned
Interests at the Put/Call Price, the payment of which shall be made by wire
transfer of immediately available funds to the account designated by PRF.


(b)           In the event that a Put Option Event shall occur during
the Term, PRF shall have the right, but not the obligation (the “Put Option”),
exercisable within one hundred eighty (180) days of its receipt of written
notice from Acorda of the Put Option Event, to require Acorda to repurchase
from PRF the Assigned Interests at the Put/Call Price.  In the event PRF elects to exercise its Put
Option, PRF shall so notify Acorda in writing and Acorda shall, within ten (10)
Business Days following Acorda’s receipt of such notice, repurchase from PRF
the Assigned Interests at the Put/Call Price, the payment of which shall be
made by wire transfer of immediately available funds to the account designated
by PRF in its election notice.  Notwithstanding
anything to the contrary contained herein, immediately upon the occurrence of a
Bankruptcy Event, PRF shall be deemed to have automatically and simultaneously
elected to have Acorda repurchase from PRF the Assigned Interests for the
Put/Call Price and the Put/Call Price shall be immediately due and payable
without any further action or notice by any party.


(c)           In connection with the consummation of a repurchase of the
Assigned Interests pursuant to the Call Option or the Put Option, PRF agrees that
it will (i) promptly execute and deliver to Acorda such UCC termination
statements and other documents as may be necessary to release PRF’s Lien on the
Collateral and otherwise give effect to such repurchase and (ii) take such
other actions or provide such other assistance as may be necessary to give
effect to such repurchase.


Section 5.08         Remittance to Lockbox
Account; Quarterly True-Up.


(a)           Within thirty (30) days after the date of this Agreement,
the parties hereto shall enter into a Lockbox Agreement in form and substance
reasonably satisfactory to the parties hereto and the Lockbox Bank, which
Lockbox Agreement will provide for, among other things, the establishment and
maintenance of a Lockbox Account, a Joint Concentration Account, an Acorda Concentration
Account and a PRF Concentration Account in accordance with the terms 


 


27





















 


herein and therein.  Any PRF Concentration Account shall be held
solely for the benefit of PRF, but shall be subject to the terms and conditions
of this Agreement, the Security Agreement and the other Transaction
Documents.  Funds deposited into the
Lockbox Account shall be swept by the Lockbox Bank on a daily basis into the
Joint Concentration Account and subsequent thereto, the Daily Amount shall be
swept into the PRF Concentration Account. 
PRF shall have immediate and full access to any funds held in the PRF
Concentration Account and such funds shall not be subject to any conditions or restrictions
whatsoever, subject to PRF’s obligations under Section 5.08(f)(ii).  After the Daily Amount is swept into the PRF
Concentration Account, the amounts remaining in the Joint Concentration Account
shall then be swept, at the direction of Acorda, into the Acorda Concentration
Account.  Acorda shall have immediate and
full access to any funds held in the Acorda Concentration Account and such
funds shall not be subject to any conditions or restrictions whatsoever other
than those of the Lockbox Bank; provided, however, that nothing herein shall (i) affect or
reduce Acorda’s obligations to pay in full all amounts due to PRF under this
Agreement, or (ii) in any manner limit the recourse of PRF to the Collateral to
satisfy Acorda’s Obligations.


(b)           Acorda shall pay for all fees, expenses and charges of the
Lockbox Bank.


(c)           Commencing on the
effective date of the Lockbox Agreement and thereafter, any and all sales and
licensing revenue in respect of the Product received by Acorda shall be
deposited into the Lockbox Account.


(d)           With respect to any License Agreement entered into by
Acorda from and after the date hereof, Acorda shall (i) at the time of the
execution and delivery of such agreement, instruct any party thereto under such
agreement to remit to the Lockbox Account when due all applicable payments in
respect of sales and licensing revenue in respect of the Product and in respect
of royalties received from Licensees that are due and payable to Acorda in
respect of or derived from such agreement during the Term; and (ii) deliver to
PRF evidence of such instruction and of such applicable party’s agreement
thereto.


(e)           Acorda shall not have any right to terminate the Lockbox
Bank without PRF’s prior written consent. 
Any such consent, which PRF may grant or withhold in its sole and
absolute discretion, shall be subject to the satisfaction of each of the
following conditions to the satisfaction of PRF:


(i)                                     the
successor Lockbox Bank shall be acceptable to PRF;


(ii)                                  PRF,
Acorda and the successor Lockbox Bank shall have entered into a lockbox agreement
substantially in the form of the Lockbox Agreement initially entered into;


(iii)                               all
funds and items in the accounts subject to the Lockbox Agreement to be
terminated shall be transferred to the new accounts held at the successor
Lockbox Bank prior to the termination of the then existing Lockbox Bank; and


(iv)                              PRF
shall have received evidence that all of the applicable parties making payments
in respect of sales of the Product have been instructed to remit 


 


28





















 


all future payments in respect
of sales of the Product to the new accounts held at the successor Lockbox Bank.


(f)            True-Up.


(i)                                     Following
the end of each Fiscal Quarter, as soon as Acorda shall have determined the Net
Revenues for such Fiscal Quarter and for each other Fiscal Quarter in the
Fiscal Year in which the then most recently ended Fiscal Quarter occurred (the “Year-to-Date
Net Revenues”) and in any event no later than forty-five (45) days after
the end of such Fiscal Quarter (unless such Fiscal Quarter is the last Fiscal
Quarter of a Fiscal Year in which case no later than ninety (90) days after the
end of such Fiscal Quarter), Acorda shall present PRF a certificate, in
reasonable detail with supporting calculations and information, detailing the
Year-to-Date Net Revenues (the “True-Up Statement”). For purposes of
this Section 5.08, the first Fiscal Quarter shall comprise the period
from October 1, 2005 through March 31, 2006.


(ii)                                  If
PRF has received on or prior to the last day of the most recently ended Fiscal
Quarter payments from Acorda under Section 2.02 or this Section 5.08
(disregarding, for the avoidance of doubt, any payments made by Acorda under Section
2.03) in respect of the Fiscal Year for which Year-to-Date Net Revenues is
calculated under clause (i) above which are in excess of the Applicable
Percentage of Year-to-Date Net Revenues, PRF shall pay such excess to Acorda
within fifteen (15) Business Days of receipt by PRF of the True-Up Statement.


(iii)                               If the
Applicable Percentage of Year-to-Date Net Revenues is in excess of the amounts
PRF has received on or prior to the last day of the most recently ended Fiscal
Quarter in respect of the Fiscal Year for which Year-to-Date Net Revenues is
calculated under clause (i) above under Section 2.02 or this Section
5.08 (disregarding, for the avoidance of doubt, any payments made by Acorda
under Section 2.03), Acorda shall pay such excess to PRF within fifteen
(15) Business Days of the receipt by PRF of the True-Up Statement.


Section 5.09         License Agreements; Elan
Agreements and Novartis Agreement.


(a)           Acorda shall use its commercially reasonable efforts to
duly perform and observe all of its covenants and obligations under each
License Agreement in all material respects. 
Upon the occurrence of a material breach of any of the License
Agreements by any other party thereto, which is not cured as provided therein,
Acorda thereto shall use its commercially reasonable efforts to seek to enforce
all of its rights and remedies thereunder.


(b)           Acorda shall use its commercially reasonable efforts to
duly perform and observe all of its covenants and obligations under the Elan
Agreements and the Novartis Agreement in all material respects, including
making any and all payments due thereunder on a timely basis.  


 


29





















 


Acorda shall not permit any amendment or
modification to, set-off, or waiver or consent under the Elan Agreements or the
Novartis Agreement that would materially adversely affect the Product, the
Intellectual Property, the Revenue Interests, or the Assigned Interests without
PRF’s prior written consent.  Acorda
shall notify PRF of any such amendment or modification to, set-off, or waiver
or consent under, the Elan Agreements or the Novartis Agreement.  Acorda shall not assign or otherwise transfer
any of the Intellectual Property if such assignment or transfer would
materially adversely affect PRF with respect to the Revenue Interests or the
Assigned Interests under this Agreement, without PRF’s prior written
consent.  Upon an occurrence of any
breach or default that would, either directly or with the giving of notice, lapse
of time or both, give either party to such agreement the right to terminate
such agreement, termination (other than upon expiration), litigation or threat
thereof relating to the Elan Agreements or the Novartis Agreement or any
related agreement, Acorda shall promptly consult with PRF regarding an
appropriate course of action.  If the
parties agree to take action to enforce any or all of Acorda’s rights and
remedies thereunder, action shall be commenced at Acorda’s expense and under
Acorda’s control.  If the parties do not
agree, upon written request by PRF, Acorda shall institute legal action or take
any other reasonable action at PRF’s expense. 
In such instance, PRF shall be entitled to approve counsel, fully
participate in any legal proceedings and consent to any settlement, and no
counsel shall be selected and no settlement shall be entered into without the
consent of PRF, which consent shall not be unreasonably withheld, conditioned
or delayed.  Any recovery from such
action shall first go to reimburse legal expenses, pro rata, and the remainder
shall constitute a part of the Revenue Interest and be transferred to the Lockbox Account.


Section 5.10         Intellectual Property.


(a)           Acorda shall, at its sole expense, either directly or by using
commercially reasonable efforts to cause any Licensee to do so, take any and
all actions (including taking legal action to
specifically enforce the applicable terms of any License Agreement), and
prepare, execute, deliver and file any and all agreements, documents or
instruments which are necessary or, in the commercially reasonable opinion of
Acorda (taking into account the interests and rights of PRF under any of the
Transaction Documents and the PRF’s ability to realize the benefits of the
transactions contemplated by each of the Transaction Documents), desirable to
(A) diligently maintain the applicable Intellectual Property and the
Patents and (B) diligently defend such Intellectual Property and such
Patents against infringement or interference by any other Persons, and against
any claims of invalidity or unenforceability, in the United States (including,
without limitation, by bringing any legal action for infringement or defending
any counterclaim of invalidity or action of a Third Party for declaratory
judgment of non-infringement or non-interference).  Acorda shall not, and shall use its commercially
reasonable efforts to cause any Licensee not to, disclaim or abandon, or fail
to take any action necessary or desirable to prevent the disclaimer or
abandonment of, the applicable Patents or other Intellectual Property, except
where the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.


(b)           In the event that Acorda becomes aware that the Product or
a Licensee under any License Agreement infringes, misappropriates or violates
any Third Party intellectual property, Acorda shall promptly use commercially
reasonable efforts to attempt to obtain the legal right to use any Third Party
intellectual property on behalf of itself and the affected Licensee, as
applicable, except where the failure to do so could not reasonably be expected
to result in a 


 


30





















 


Material Adverse Effect and shall pay all
costs and amounts associated with obtaining any such legal right to use Third
Party intellectual property without any reduction in or offset to the Assigned
Interests.


(c)           Acorda shall directly, or through a Licensee, take any and
all actions and prepare, execute, deliver and file any and all agreements,
documents or instruments that are necessary or 
commercially reasonable or desirable to secure and maintain, all
Regulatory Approvals.  Acorda shall not
withdraw or abandon, or fail to take any action necessary to prevent the
withdrawal or abandonment of, any Regulatory Approval once obtained.


Section 5.11         Negative Covenants.


Acorda shall not, without
the prior written consent of PRF:


(a)           Forgive, release or compromise any amount owed to Acorda
and relating to the Assigned Interests in a manner which could reasonably be
expected to materially adversely affect the Assigned Interests;


(b)           Waive, amend, cancel or terminate, exercise or fail to
exercise, any of its material rights constituting or relating to the Revenue
Interests;


(c)           Amend, modify, restate, cancel, supplement, terminate or
waive any provision of any License Agreement in any material respect, or grant
any consent thereunder, or agree to do any of the foregoing; or


(d)           Create, incur, assume or suffer to exist any Lien, or
exercise any right of rescission, offset, counterclaim or defense, upon or with
respect to the Assigned Interests, the Revenue Interests or the other Collateral,
or agree to do or suffer to exist any of the foregoing, except for any Lien or
agreements in favor of PRF granted under or pursuant to this Agreement and the
other Transaction Documents and except for Permitted Liens.


Section 5.12         Future Agreements.


Acorda shall not enter
into any agreement that would materially adversely affect the Product, the
Intellectual Property, the Revenue Interests, or the Assigned Interests without
PRF’s prior written consent, which consent shall be granted or withheld in PRF’s
sole and absolute discretion.


Section 5.13         Insurance.


Acorda shall (i) maintain
insurance policies comparable to the policies listed on Schedule 3.20
and (ii) maintain PRF as an additional insured party with respect to its
general liability and product liability insurance policies.


Section 5.14         Notice.


Acorda shall provide PRF
with written notice as promptly as practicable (and in any event within ten
(10) Business Days) after becoming aware of any of the following:


 


31





















 


(a)           the occurrence of a Bankruptcy Event;


(b)           any material breach or default by Acorda of any covenant,
agreement or other provision of this Agreement, any other Transaction Document,
the Elan Agreements or the Novartis Agreement (which breach, with respect to
the Elan Agreements or the Novartis Agreement, could reasonably be expected to
give rise to a right of the other party thereto to terminate such agreement
prior to its expiration);


(c)           any representation or warranty made or deemed made by
Acorda in any of the Transaction Documents or in any certificate delivered to
PRF pursuant hereto shall prove to be untrue, inaccurate or incomplete in any
material respect on the date as of which made or deemed made;


(d)           the occurrence of a Call Option Event;


(e)           the occurrence of a Put Option Event; or


(f)            any sublicense by a Licensee of any rights licensed
pursuant to any License Agreement.


Section 5.15         Use of Proceeds.


Acorda shall
use all proceeds received from PRF (and retained by Acorda) pursuant to Section
2.03 in support of the business plan and commercialization of the Product,
including sales operation and expansion, additional clinical studies and
purchase, royalty and/or other payments related to the acquisition and supply of
the Product.  All of such proceeds shall
be used exclusively to support sales and marketing, clinical and regulatory
activities, and financial obligations related specifically and solely to the
Product.  Acorda shall not use any such
proceeds for any other current or future product of Acorda except if such use is
ancillary and relates to the use of proceeds to support, or would in Acorda’s
reasonable business judgment, support the commercialization of the Product.  Acorda shall use commercially reasonable efforts
to fully support the sales of the Product, which shall mean those efforts that
a similarly situated company in the pharmaceutical industry, including with
similar financial and other resources, would use in connection with the
commercialization of a pharmaceutical product of similar market and profit
potential at a similar stage in product life as the Product.


Section 5.16         Legal Opinion.


Acorda shall,
within thirty (30) days of the date hereof and at its sole cost and expense
(notwithstanding any other expense provisions hereof or otherwise agreed by PRF
and its Affiliates and Acorda), cause to be delivered to PRF an opinion of
outside counsel with respect to the creation, attachment and perfection of the
security interests in favor of PRF under the Security Agreement and the Lockbox
Agreement (such opinion to be reasonably acceptable to PRF).


 


32





















 


ARTICLE
VI



THE CLOSING; CONDITIONS TO CLOSING


Section 6.01         Closing.


Subject to the
closing conditions set forth in Sections 6.02 and 6.03, the
closing of the purchase and sale of the Assigned Interests (the “Closing”)
shall take place at the offices of McDermott Will & Emery LLP, 50
Rockefeller Plaza, New York, New York 10020, on the Closing Date.


Section 6.02         Conditions Applicable to
PRF.


The obligation
of PRF to effect the Closing shall be subject to the satisfaction of each of
the following conditions, any of which may be waived by PRF in its sole
discretion:


(a)           Accuracy of Representations and
Warranties.  The representations
and warranties of Acorda set forth in the Transaction Documents shall be true,
correct and complete in all material respects as of the Closing Date.


(b)           No Adverse Circumstances.  There shall not have occurred or be
continuing any event or circumstance (including any development with respect to
the efficacy of the Product or the Intellectual Property or the use or expected
future use of the same as opposed to competing products) that could reasonably
be expected to have a Material Adverse Effect.


(c)           Litigation.  No action, suit, litigation, proceeding or
investigation shall have been instituted, be pending or threatened
(i) challenging or seeking to make illegal, to delay or otherwise directly
or indirectly to restrain or prohibit the consummation of the transactions
contemplated by this Agreement, or seeking to obtain damages in connection with
the transactions contemplated by this Agreement, or (ii) seeking to
restrain or prohibit PRF’s acquisition or future receipt of the Assigned
Interests.


(d)           Consents; Releases.  All notices to, consents, approvals,
authorizations and waivers from Third Parties and Government Authorities that
are required for the consummation of the transactions contemplated by this
Agreement or any of the Transaction Documents shall have been obtained or
provided for and shall remain in effect, including (i) the Note Modification
and Amendment between Acorda and Elan International Services, Ltd. with respect
to the Full Recourse Convertible Promissory Note, dated as of January 22, 1997,
issued by Acorda in the principal amount of $2,500,000 and the Limited Recourse
Convertible Promissory Note, dated as of January 22, 1997, issued by Acorda in
the principal amount of $5,000,000 and (ii) a payoff letter and lien release
from GE Capital, in form and substance satisfactory to PRF.


(e)           Officer’s Certificate.  PRF shall have received a certificate of an
executive officer of Acorda pursuant to which such officer certifies that the
conditions set forth in Sections  6.02(a), (b), (c),
and (k) have been satisfied in all respects.


(f)            Bill of Sale.  The Bill of Sale shall have been executed and
delivered by Acorda to PRF, and PRF shall have received the same.


 


33





















 


(g)           Security Agreement.  The Security Agreement shall have been duly
executed and delivered by all the parties thereto, together with proper
financing statements (including Form UCC-1s) for filing under the UCC and/or
any other applicable law, rule, statute or regulation relating to the perfection
of a security interest in filing offices in the jurisdictions listed on Schedule 6.02(g),
and such agreement shall be in full force and effect.


(h)           Legal Opinion; Intellectual
Property Letter.


(i)                                     PRF
shall have received an opinion of Dreier LLP, transaction counsel to Acorda, in
form and substance satisfactory to PRF and its counsel, to the effect set forth
in Exhibit G.


(ii)                                  PRF
shall have received a letter from Finnegan, Henderson, Farabow, Garrett &
Dunner LLP, intellectual property counsel to Acorda, in form and substance
satisfactory to PRF and its counsel, to the effect set forth in Exhibit H.


(i)            Board Observer Rights Agreement.  The Board Observer Rights Agreement shall
have been duly executed and delivered by Acorda and PRF, and PRF shall have
received the same.


(j)            Corporate Documents of Acorda.  PRF shall have received on the Closing Date,
certificates, dated as of the Closing Date, of an executive officer of Acorda
(the statements made in which shall be true and correct on and as of the
Closing Date):  (i) attaching
copies, certified by such officer as true and complete, of Acorda’s certificate
of incorporation or other organizational documents (together with any and all
amendments thereto) certified by the appropriate Governmental Authority as
being true, correct and complete copies; (ii) attaching copies, certified
by such officer as true and complete, of resolutions of the board of directors
of Acorda authorizing and approving the execution, delivery and performance by
Acorda of the Transaction Documents and the transactions contemplated herein
and therein; (iii) setting forth the incumbency of the officer or officers
of Acorda who have executed and delivered the Transaction Documents including
therein a signature specimen of each such officer or officers; and
(iv) attaching copies, certified by such officer as true and complete, of
a certificate of the appropriate Governmental Authority of Acorda’s
jurisdiction of incorporation, stating that Acorda is in good standing under
the laws of the State of Delaware.


(k)           Covenants.  Acorda shall have complied in all material
respects with its covenants set forth in the Transaction Documents required to
be performed prior to the Closing Date.


Section 6.03         Conditions Applicable to
Acorda.


The obligation
of Acorda to effect the Closing shall be subject to the satisfaction of each of
the following conditions, any of which may be waived by Acorda in its sole
discretion:


(a)           Accuracy of Representations and
Warranties.  The
representations and warranties of PRF set forth in this Agreement shall be
true, correct and complete in all material respects as of the Closing Date.


 


34





















 


(b)           Litigation.  No action, suit, litigation, proceeding or
investigation shall have been instituted, be pending or threatened
(i) challenging or seeking to make illegal, to delay or otherwise directly
or indirectly to restrain or prohibit the consummation of the transactions
contemplated by this Agreement, or seeking to obtain damages in connection with
the transactions contemplated by this Agreement, or (ii) seeking to
restrain or prohibit PRF’s acquisition or future receipt of the Assigned
Interests.


(c)           Closing Certificate.  Acorda shall have received at the Closing a
certificate of an authorized representative of PRF certifying that the
conditions set forth in Sections 6.03(a) and (b) have been
satisfied in all material respects as of the Closing Date.


(d)           Full Payment. 
The amounts to be paid by PRF directly to Acorda and/or its designees
pursuant to clause (i) of Section 2.03(a) shall have been tendered by
wire transfer of immediately available funds to the accounts designated by
Acorda to PRF on or prior to the Closing.


(e)           Guaranty. 
The Guaranty shall have been executed and delivered by the Guarantor.


ARTICLE
VII



TERMINATION


Section 7.01         Termination Date.


Except as
otherwise provided in this Section 7.01 and in Sections 7.02 and 8.01,
this Agreement shall terminate upon expiration of the Revenue Interest
Period.  If any payments are required to
be made by one of the parties hereunder after that date, this Agreement shall
remain in full force and effect until any and all such payments have been made
in full, and (except as provided in Section 7.02) solely for that
purpose.  In addition, this Agreement
shall sooner terminate if Acorda or PRF shall have exercised its Call Option or
Put Option, respectively, under Section 5.07, with the termination date
in that event being the date on which both Acorda completes the repurchase of
the Assigned Interests with payment in full to PRF and PRF complies with its
related obligations under Section 5.07(c).


Section 7.02         Effect of Termination.


In the event
of the termination of this Agreement pursuant to Section 7.01, this
Agreement and the other Transaction Documents shall terminate and shall
forthwith become void and have no effect without any liability on the part of
any party hereto or its Affiliates, directors, officers, stockholders,
partners, managers or members other than the provisions of this Section 7.02
and Sections 5.04, 5.05 (provided
the Security Agreement and the Lockbox Agreement shall each terminate as
provided in those respective agreements),  8.01, 8.02, 8.04 and
8.05 hereof, which shall survive any termination as set forth in Section
8.01.  Nothing contained in this Section
7.02 shall relieve any party from liability for any breach of this
Agreement.


 


35





















 


ARTICLE
VIII



MISCELLANEOUS


Section 8.01         Survival.


(a)           All representations and warranties made herein and in any
other Transaction Document, any certificates or in any other writing delivered
pursuant hereto or in connection herewith shall survive the execution and
delivery of this Agreement and the Closing and shall continue to survive until
termination of this Agreement in accordance with Article VII.  Notwithstanding anything in this Agreement or
implied by law to the contrary, all the agreements contained in Sections
5.04, 5.05 (provided the Security Agreement and the
Lockbox Agreement shall each terminate as provided in those respective
agreements), 8.01, and 8.05 shall survive the execution
and delivery of this Agreement and the Closing until the date which is five (5)
years following the termination of this Agreement in accordance with Article
VII (it being understood that any pending claims made under Section 8.05
shall continue, and the obligations in Section 8.05 shall continue in
respect of such claims, until disposition of such claims by a court of
competent jurisdiction in a final non-appealable disposition or by agreed
settlement by the parties, whether or not such five (5) year period following
termination shall elapse).


(b)           Any investigation or other examination that may have been
made or may be made at any time by or on behalf of the party to whom
representations and warranties are made shall not limit, diminish or in any way
affect the representations and warranties in the Transaction Documents, and the
parties may rely on the representations and warranties in the Transaction
Documents irrespective of any information obtained by them by any
investigation, examination or otherwise.


Section 8.02         Specific Performance.


Each of the
parties hereto acknowledges that the other party will have no adequate remedy
at law if it fails to perform any of its obligations under any of the
Transaction Documents.  In such event,
each of the parties agrees that the other party shall have the right, in
addition to any other rights it may have (whether at law or in equity), to
specific performance of this Agreement.


Section 8.03         Notices.


All notices,
consents, waivers and communications hereunder given by any party to the other
shall be in writing (including facsimile transmission) and delivered
personally, by telegraph, telecopy, telex or facsimile, by a recognized
overnight courier, or by dispatching the same by certified or registered mail,
return receipt requested, with postage prepaid, in each case addressed:


 


36





















 


	
  If
  to PRF to:

  
	
   

  
	
   

  	
  King
  George Holdings Luxembourg IIA S.à r.l.

  
	
   

  	
  c/o Paul Capital
  Partners

  
	
   

  	
  140 East 45th Street,
  44th Floor

  
	
   

  	
  New York, NY 10017

  
	
   

  	
  Attention: Clarke B.
  Futch, Partner

  
	
   

  	
  Facsimile No.: (646)
  264-1101

  
	
   

  	
   

  
	
  If to Guarantor to:

  
	
   

  
	
   

  	
  Paul
  Royalty Fund II, L.P., c/o Paul Capital Partners

  
	
   

  	
  140 East 45th Street,
  44th Floor

  
	
   

  	
  New York, NY 10017

  
	
   

  	
  Attention: Clarke B.
  Futch, Partner

  
	
   

  	
  Facsimile No.: (646)
  264-1101

  
	
  with a copy to:

  
	
   

  
	
   

  	
  McDermott Will &
  Emery LLP

  
	
   

  	
  227 West Monroe Street

  
	
   

  	
  Chicago, IL 60606-5096

  
	
   

  	
  Attention: Timothy R.M.
  Bryant

  
	
   

  	
  Facsimile No.: (312)
  984-7700

  
	
   

  	
   

  
	
  If to Acorda to:

  
	
   

  
	
   

  	
  Acorda Therapeutics,
  Inc.

  
	
   

  	
  15 Skyline Drive

  
	
   

  	
  Hawthorne, NY 10532

  
	
   

  	
  Attention: Gerard
  Cignarella

  
	
   

  	
  Facsimile No.: (914)
  347-4560

  
	
   

  	
   

  
	
  with a copy to:

  
	
   

  
	
   

  	
  Dreier LLP

  
	
   

  	
  499 Park Avenue

  
	
   

  	
  New York, NY 10022

  
	
   

  	
  Attention: Jill M.
  Cohen

  
	
   

  	
  Facsimile No.: (212)
  328-6101

  



or to such other address
or addresses as PRF or Acorda may from time to time designate by notice as
provided herein, except that notices of changes of address shall be effective
only upon receipt.  All such notices,
consents, waivers and communications shall: 
(a) when posted by certified or registered mail, postage prepaid,
return receipt requested, be effective three (3) Business Days after dispatch,
unless such communication is sent trans-Atlantic, in which case they shall be
deemed effective five (5) Business Days after dispatch, (b) when telegraphed,
telecopied, telexed or facsimiled, be effective upon receipt by the
transmitting party of 


 


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confirmation of complete
transmission, or (c) when delivered by a recognized overnight courier or in
person, be effective upon receipt when hand delivered.


Section 8.04         Successors and Assigns.


The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. 
Acorda shall not be entitled to assign any of its obligations and rights
under the Transaction Documents without the prior written consent of PRF, which
consent shall not be unreasonably withheld or delayed, except that Acorda may
assign any of the Transaction Documents or its obligations and rights
thereunder, without such consent, to an Affiliate or to any entity that
acquires all or substantially all of its business or assets whether by merger,
reorganization, acquisition, sale, or otherwise.  PRF may assign any of its rights under the
Transaction Documents without restriction to any Affiliate or partner of PRF.  PRF may also assign the Transaction Documents,
in whole or in part, to any Person in connection with any financing (including
any capital markets or securitization transaction), without the consent of
Acorda, provided that the Guarantor also guarantees the obligations of
PRF under the Transaction Documents that are being assumed by such
assignee.  Any successor or assignee of
PRF shall assume all obligations of PRF under this Agreement and the other
Transaction Documents which are not expressly retained by PRF.


Section 8.05         Indemnification.


(a)           Acorda hereby indemnifies and holds PRF and its Affiliates
and any of their respective partners, directors, managers, members, officers,
employees and agents (each a “PRF Indemnified Party”)
harmless from and against any and all Losses (including all Losses in
connection with any product liability claims or claims of infringement or
misappropriation of any intellectual property rights of any Third Parties)
incurred or suffered by any PRF Indemnified Party arising out of any breach of
any representation or warranty made by Acorda in any of the Transaction
Documents or any breach of or default under any covenant or agreement by Acorda
pursuant to any Transaction Document, including any failure by Acorda to
satisfy any of the Excluded Liabilities and Obligations.


(b)           PRF hereby indemnifies and holds Acorda, its Affiliates
and any of their respective partners, directors, managers, officers, employees
and agents (each an “Acorda Indemnified Party”)
harmless from and against any and all Losses incurred or suffered by an Acorda
Indemnified Party arising out of any breach of any representation or warranty
or made by PRF in any of the Transaction Documents or any breach of or default
under any covenant or agreement by PRF pursuant to any Transaction Document.


(c)           If any claim, demand, action or proceeding (including any
investigation by any Governmental Authority) shall be brought or alleged
against an indemnified party in respect of which indemnity is to be sought
against an indemnifying party pursuant to the preceding paragraphs, the
indemnified party shall, promptly after receipt of notice of the commencement
of any such claim, demand, action or proceeding, notify the indemnifying party
in writing of the commencement of such claim, demand, action or proceeding,
enclosing a copy of all papers served, if any; provided,
that
the omission to so notify such indemnifying party will not relieve the
indemnifying party from any liability that it may have to any indemnified party
under the 


 


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foregoing provisions of this Section 8.05
unless, and only to the extent that, such omission results in the forfeiture
of, or has a material adverse effect on the exercise or prosecution of,
substantive rights or defenses by the indemnifying party.  In case any such action is brought against an
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 8.05 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.  In any such proceeding, an indemnified party
shall have the right to retain its own counsel, but the reasonable fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel, (ii) the indemnifying
party has assumed the defense of such proceeding and has failed within a
reasonable time to retain counsel reasonably satisfactory to such indemnified
party or (iii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential conflicts of interests between them
based on the advice of such counsel.  It
is agreed that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate law firm (in addition to
local counsel where necessary) for all such indemnified parties.  The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.  No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such proceeding.


(d)           Notwithstanding anything to the contrary contained in this
Agreement, the following limitations shall apply to indemnification claims
under this Agreement:


(i)            no individual Loss (or series of related Losses) under Section
8.05(a) or (b) shall be valid and assertable unless it is (or they
are) for an amount in excess of $5,000; and


(ii)           Acorda shall be liable with respect to claims under Section
8.05(a) only if the aggregate Losses related to such Losses when considered
together, exceed $50,000 in which case Acorda shall be liable for all such
Losses, and not only those Losses in excess of such amount.


(e)           In no event shall any indemnifying party be responsible or
liable for any Losses under this Section 8.05 that are consequential, in
the nature of lost profits, special or punitive or otherwise not actual damages
(except to the extent same are owing pursuant to a third party 


 


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claim). 
The amount of Losses recoverable by an indemnified party
under this Section 8.05 with respect to an indemnity claim shall be
reduced by (i) the amount of any payment received by such indemnified party
(or any Affiliate thereof), with respect to the Losses to which such indemnity
claim relates, from an insurance carrier, and (ii) if the indemnified party is PRF
and PRF exercised the Put Option, the Put/Call Price (except with respect to
Losses incurred by PRF constituting out-of-pocket expenses in connection with a
Third Party claim).


Section 8.06         Independent Nature of
Relationship.


(a)           The relationship between Acorda and PRF is solely that of
seller and purchaser, and neither PRF nor Acorda has any fiduciary or other
special relationship with the other or any of their respective Affiliates.  Nothing contained herein or in any other Transaction
Document shall be deemed to constitute Acorda and PRF as a partnership, an
association, a joint venture or other kind of entity or legal form.


(b)           No officer or employee of PRF will be located at the
premises of Acorda or any of its Affiliates, except in connection with an audit
performed pursuant to Section 5.02. 
No officer, manager or employee of PRF shall engage in any commercial
activity with Acorda or any of its Affiliates other than as contemplated herein
and in the other Transaction Documents.


(c)           Acorda and/or any of its Affiliates shall not at any time
obligate PRF, or impose on PRF any obligation, in any manner or respect to any
Person not a party hereto.


Section 8.07         Federal Tax.


Notwithstanding
the accounting treatment thereof, for United States federal, state and local
tax purposes, Acorda and PRF shall treat the transactions contemplated by the
Transaction Documents as debt for United States tax purposes.  The parties hereto agree not to take any
position that is inconsistent with the provisions of this Section 8.07
on any tax return or in any audit or other administrative or judicial
proceeding unless (i) the other party to this Agreement has consented to such
actions, which consent shall not be unreasonably withheld, or (ii) the party
that contemplates taking such an inconsistent position has been advised by
counsel in writing that it is more likely than not (x) that there is no “reasonable
basis” (within the meaning of Treasury Regulation Section 1.6662-3(b)(3)) for
the position specified in this Section 8.07 or (y) that taking such
a position would otherwise subject the party to penalties under the Internal
Revenue Code of 1986, as amended.


Section 8.08         Entire Agreement.


This
Agreement, together with the Exhibits and Schedules hereto (which are incorporated
herein by reference) and the other Transaction Documents, constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements (including the Term Sheet and the Expense Reimbursement
Letter dated October 27, 2005), understandings and negotiations, both written
and oral, between the parties with respect to the subject matter of this
Agreement.  No representation,
inducement, promise, understanding, condition or warranty not set forth herein
(or in the Exhibits, Schedules or other Transaction Documents) has been made or
relied upon by either party hereto.  None
of this Agreement, nor 


 


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any provision hereof, is intended to confer upon any Person other than
the parties hereto any rights or remedies hereunder.


Section 8.09         Amendments; No Waivers.


(a)           This Agreement or any term or provision hereof may not be
amended, changed or modified except with the written consent of the parties
hereto.  No waiver of any right hereunder
shall be effective unless such waiver is signed in writing by the party against
whom such waiver is sought to be enforced.


(b)           No failure or delay by either party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.


Section 8.10         Interpretation.


When a
reference is made in this Agreement to Articles, Sections, Schedules or
Exhibits, such reference shall be to an Article, Section, Schedule or Exhibit
to this Agreement unless otherwise indicated. 
The words “include”, “includes” and “including” when used herein shall
be deemed in each case to be followed by the words “without limitation”.  Neither party hereto shall be or be deemed to
be the drafter of this Agreement for the purposes of construing this Agreement
against one party or the other.


Section 8.11         Headings and Captions.


The headings
and captions in this Agreement are for convenience and reference purposes only
and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.


Section 8.12         Counterparts;
Effectiveness.


This Agreement
may be executed in two or more counterparts, each of which shall be an
original, but all of which together shall constitute one and the same
instrument.  This Agreement shall become
effective when each party hereto shall have received a counterpart hereof
signed by the other parties hereto.  Any
counterpart may be executed by facsimile or pdf signature and such facsimile or
pdf signature shall be deemed an original.


Section 8.13         Severability.


If any
provision of this Agreement is held to be invalid or unenforceable, the
remaining provisions shall nevertheless be given full force and effect unless
the invalid provisions are of such essential importance to this Agreement that
it is to be reasonably assumed that the parties would not have entered into
this Agreement without the invalid provisions. In such event, the parties shall
substitute such invalid provisions with valid ones, which in their economic
effect come so close to the invalid provisions that it can be reasonably
assumed that the parties would have entered into this Agreement also with those
substituted provisions.


 


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Section 8.14         Expenses.


Each party hereto will
pay all of its own fees and expenses in connection with entering into and
consummating the transactions contemplated by this Agreement; provided,
that Acorda agrees, on the Closing Date, to reimburse PRF for up to $500,000 of
its actual, reasonable, and documented due diligence and other, including
legal, expenses associated with the transaction contemplated hereby (payable as
provided in Section 2.03); and provided, further, that
Acorda agrees to reimburse and indemnify PRF for any expenses (including
reasonable fees and expenses of legal counsel) incurred by PRF in connection
with asserting or enforcing of PRF’s rights hereunder, including, without
limitation, in connection with any insolvency, bankruptcy or similar proceeding
involving Acorda.


Section 8.15         Governing Law;
Jurisdiction.


(a)           This Agreement shall be governed by, and construed,
interpreted and enforced in accordance with, the laws of the state of New York,
without giving effect to the principles of conflicts of law thereof.


(b)           Any legal action or proceeding with respect to this
Agreement or any other Transaction Document may be brought in any state or
federal court of competent jurisdiction in the state, county and city of New
York.  By execution and delivery of this
Agreement, each party hereto hereby irrevocably consents to and accepts, for
itself and in respect of its property, generally and unconditionally the
non-exclusive jurisdiction of such courts. 
Each party hereto hereby further irrevocably waives any objection,
including any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or
hereafter have to the bringing of any action or proceeding in such jurisdiction
in respect of any Transaction Document.


(c)           Each party hereto hereby irrevocably consents to the
service of process out of any of the courts referred to in subsection (b) above
of this Section 8.15 in any such suit, action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
it at its address set forth in this Agreement. 
Each party hereto hereby irrevocably waives any objection to such
service of process and further irrevocably waives and agrees not to plead or claim
in any suit, action or proceeding commenced hereunder or under any other
Transaction Document that service of process was in any way invalid or
ineffective.  Nothing herein shall affect
the right of a party to serve process on the other party in any other manner
permitted by law.


Section 8.16         Force Majeure.


Neither party shall lose
any rights hereunder or be liable to the other party for Losses on account of
failure of performance by the defaulting party if the failure is occasioned by
war, Act of God, terrorism, or embargo, and the non-performing party has
exerted commercially reasonable efforts to overcome such force majeure.


 


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Section 8.17         Waiver of Jury Trial.


Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any action,
proceeding, claim or counterclaim arising out of or relating to any Transaction
Document or the transactions contemplated under any Transaction Document.  This waiver shall apply to any subsequent
amendments, renewals, supplements or modifications to any Transaction Document.


[SIGNATURE PAGE FOLLOWS]


 


 


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IN WITNESS
WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the date
first above written.


 


	
  ACORDA:

  	
  ACORDA
  THERAPEUTICS, INC. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Ron Cohen

  	
   

  
	
   

  	
   

  	
  Name: Ron Cohen

  
	
   

  	
   

  	
  Title: President
  & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PRF:

  	
  KING GEORGE HOLDINGS LUXEMBOURG IIA S.À R.L.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Clarke B. Futch

  	
   

  
	
   

  	
   

  	
  Name:Clarke B.
  Futch

  
	
   

  	
   

  	
  Title: Manager