To: Icebrg who wrote (2829 ) 7/22/2002 5:18:54 AM From: Icebrg Read Replies (1) | Respond to Elan, Xcel, Zanaflex and Mysoline.sec.gov In June 2001, the Company and Elan entered into an agreement whereby Elan agreed to make payments to the Company through December 31, 2010 based on the net sales of Elan’s product Zanaflex. In exchange, the Company and Elan amended the original product acquisition agreements to provide for payments from the Company to Elan through December 31, 2015 based on the net sales of Mysoline. The payments from Elan to the Company are based on 5% to 10% of Zanaflex net sales subject to contractually agreed upon maximum annual payments ranging from $1.5 million to $4.5 million. The payments from the Company to Elan equal 20% of the first $8 million of Mysoline annual net sales and 5% of Mysoline annual net sales between $8 million and $25 million and therefore will not exceed $2.5 million annually. This product financing has an imputed interest rate of approximately 7% based on the Company’s current estimates of the total net payments over the term of the financing.
