AS SUCH PERSONS CONTINUE TO QUALIFY UNDER THE
STANDARDS SET FORTH IN THE DEFINITION OF "INDEPENDENT DIRECTOR" SPECIFIED ABOVE.
(F)
BOARD SIZE.
THE COMPANY AGREES THAT THE MAXIMUM SIZE OF THE
COMPANY'S BOARD OF DIRECTORS SHALL BE SEVEN MEMBERS FROM AND
AFTER THE CLOSING,
EXCLUDING:
(I) ANY DIRECTORS NOMINATED BY BIOVAIL LABORATORIES INCORPORATED
("BIOVAIL") PURSUANT TO SECTION 3.02 OF THE STOCK PURCHASE AGREEMENT BETWEEN
BIOVAIL AND THE COMPANY DATED AS OF MAY 28, 2002; (II) ANY DIRECTOR NOMINATED BY
ELAN CORPORATION, PLC ("ELAN") PURSUANT TO CLAUSE 5.1.1. OF THE SUBSCRIPTION,
JOINT DEVELOPMENT AND OPERATING AGREEMENT BY AND AMONG ELAN, ELAN PHARMA
INTERNATIONAL LIMITED, ELAN INTERNATIONAL SERVICES, LTD. AND THE COMPANY AND
DEPOMED DEVELOPMENT, LTD.; (III) ANY DIRECTORS IN EXCESS OF SEVEN MEMBERS TO THE
EXTENT NECESSARY TO COMPLY WITH SEC REGULATIONS OR OTHER REGULATORY REQUIREMENTS
OR STOCK EXCHANGE LISTING STANDARDS APPLICABLE TO THE COMPANY; AND (IV) ANY
DIRECTORS IN EXCESS OF SEVEN MEMBERS APPROVED BY A MAJORITY OF THE COMPANY'S
INDEPENDENT DIRECTORS (AS DEFINED IN SECTION 4.11(B) ABOVE) OR BY AT LEAST
TWO-THIRDS OF THE COMPANY'S ENTIRE BOARD OF DIRECTORS.
4.13
INVESTMENT COMPANY.
THE COMPANY IS NOT AN "INVESTMENT COMPANY"
WITHIN THE MEANING OF SUCH TERM UNDER THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
4.14
INDEBTEDNESS.
THE SEC REPORTS FILED ON OR PRIOR TO THE DATE HEREOF
(AND PRIOR TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY THE PARTIES
HERETO) SET FORTH ALL OUTSTANDING SECURED AND UNSECURED INDEBTEDNESS OF THE
COMPANY, OR FOR WHICH THE COMPANY HAS ANY
12
COMMITMENTS OR PAYMENT OBLIGATIONS.
FOR THE PURPOSES OF THIS AGREEMENT,
"INDEBTEDNESS" MEANS:
(A)
ANY LIABILITIES FOR BORROWED MONEY OR AMOUNTS OWED IN EXCESS OF
$25,000 (OTHER THAN TRADE ACCOUNTS PAYABLE INCURRED IN THE ORDINARY COURSE OF
BUSINESS);
(B)
ALL GUARANTIES, ENDORSEMENTS AND OTHER CONTINGENT OBLIGATIONS IN
RESPECT OF INDEBTEDNESS OR PAYMENT OBLIGATIONS OF OTHERS, WHETHER OR NOT THE
SAME ARE OR SHOULD BE REFLECTED IN THE COMPANY'S BALANCE SHEET (OR THE NOTES
THERETO), EXCEPT GUARANTIES BY ENDORSEMENT OF NEGOTIABLE INSTRUMENTS FOR DEPOSIT
OR COLLECTION OR SIMILAR TRANSACTIONS IN THE ORDINARY COURSE OF BUSINESS; AND
(C)
THE PRESENT VALUE OF ANY LEASE PAYMENTS IN EXCESS OF $25,000 DUE
UNDER LEASES REQUIRED TO BE CAPITALIZED IN ACCORDANCE WITH GAAP.
The Company is not in default with respect to any Indebtedness.
4.15
CERTAIN FEES.
OTHER THAN THE FEES SPECIFIED IN SECTION 4.16 OF
EXHIBIT D PAYABLE BY THE COMPANY TO THOMAS WEISEL PARTNERS LLC (THE "PLACEMENT
AGENT"), NO BROKERS', FINDERS' OR FINANCIAL ADVISORY FEES OR COMMISSIONS ARE
PAYABLE BY THE COMPANY WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.
4.16
MATERIAL AGREEMENTS.
EXCEPT AS SET FORTH IN THE SEC REPORTS FILED
ON OR PRIOR TO THE DATE HEREOF (AND PRIOR TO THE EXECUTION AND DELIVERY OF THIS
AGREEMENT BY THE PARTIES HERETO), THE COMPANY IS NOT A PARTY TO ANY WRITTEN OR
ORAL CONTRACT, INSTRUMENT, AGREEMENT, COMMITMENT, OBLIGATION, PLAN OR
ARRANGEMENT, A COPY OF WHICH WOULD BE REQUIRED TO BE FILED WITH THE