EXHIBIT 10.16(B)
WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED
BY AN ASTERISK *), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
AMENDMENT
TO THE
LICENSE AND COLLABORATION AGREEMENT
This Amendment (the "Amendment") entered into effective as of December
21, 2006 (the "Amendment Effective Date") to the License and Collaboration
Agreement, effective as of June 23, 2005 (the "License and Collaboration
Agreement"), by and between Alkermes, Inc. ("Alkermes") and Cephalon, Inc.
("Cephalon"), witnesseth that (capitalized terms used but not defined herein
shall have the meaning set forth in the License and Collaboration Agreement):
RECITALS:
WHEREAS, pursuant to the License and Collaboration Agreement, the
Parties agreed, among other things, that, until December 31, 2007, Alkermes was
responsible for cumulative Distributable Losses up to One Hundred Twenty Million
Dollars ($120,000,000) and Cephalon was responsible for cumulative Distributable
Losses in excess of One Hundred Twenty Million Dollars ($120,000,000); and
WHEREAS, Alkermes and Cephalon have now agreed to amend the terms and
conditions governing responsibilities for Distributable Losses for the period
from August 1, 2006 through December 31, 2006.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
1. Section 9.3 shall be amended and restated to read as follows:
"9.3 PROFIT SHARING. Subject to Sections 9.3.1, 9.3.2 and 9.3.3
below, Cephalon shall receive or pay, as applicable, [**] percent
([**]%) of the Distributable Profit (Loss) for the Products with
respect to sales in the Territory, and Alkermes shall receive or
pay, as applicable, [**] percent ([**]%) of the Distributable
Profit (Loss) for the Products with respect to sales in the
Territory, to be calculated and paid in accordance with the
reconciliation and payment provisions of Section 9.5.
9.3.1 ALKERMES OBLIGATIONS. Notwithstanding the foregoing,
but subject to Section 9.3.3, for the period from the Effective
Date until the later of (a) December 31, 2007 or (b) the date
eighteen (18) months after the first Regulatory Approval of a
Product
* Confidential Treatment Requested
in the Territory, Alkermes shall be responsible for the payment
of monthly Distributable Losses up to an aggregate amount equal
to the Distributable Loss Cap. The "Distributable Loss Cap" shall
mean the sum of (i) cumulative Distributable Losses up to One
Hundred Twenty Million Dollars ($120,000,000) paid by Alkermes
(and not reimbursed by Cephalon pursuant to Section 9.3.3) and
(ii) Four Million Six Hundred Four Thousand One Hundred
Ninety-Eight Dollars ($4,604,198).
9.3.2 CEPHALON OBLIGATIONS. Notwithstanding the foregoing,
but subject to Section 9.3.3, for the period from the Effective
Date until the later of (a) December 31, 2007 or (b) the date
eighteen (18) months after the first Regulatory Approval of a
Product in the Territory, Cephalon shall be responsible for the
payment of monthly Distributable Losses exceeding, in the
aggregate, the Distributable Loss Cap.
9.3.3 DISTRIBUTABLE LOSSES FROM AUGUST 1, 2006 TO DECEMBER
31, 2006. Notwithstanding Sections 9.3.1 and 9.3.2, Cephalon
Incurred Shared Expenses for the period from August 1, 2006 to
December 31, 2006 shall be borne solely by Cephalon, shall be
excluded from cumulative Distributable Losses paid by Alkermes
pursuant to Section 9.3.1 and shall not count against the
Distributable Loss Cap. If, prior to the Amendment Effective
Date, any Cephalon Incurred Shared Expenses for the period from
August 1, 2006 to December 31, 2006 were included in any
calculation of monthly Distributable Losses for such period and
paid by Alkermes to Cephalon in accordance with Section
9.5(iii)(B), then promptly after the Amendment Effective Date
Cephalon shall reimburse such amounts to Alkermes and such
amounts shall be excluded from cumulative Distributable Losses
paid by Alkermes pursuant to Section 9.3.1 and shall not count
against the Distributable Loss Cap. For the avoidance of doubt,
Alkermes Incurred Shared Expenses for the period from August 1,
2006 to December 31, 2006 shall continue to be included in the
calculation of monthly Distributable Losses for the period from
August 1, 2006 to December 31, 2006."
2. A new Section 9.5(iv) shall be added to the License and Collaboration
Agreement and shall read as follows:
"Notwithstanding anything to the contrary herein, for the period
August 1, 2006 through December 31, 2006, Cephalon shall pay the
Cephalon Incurred Shared Expenses and shall reimburse Alkermes
for the Cephalon Incurred Shared Expenses paid to Cephalon by
Alkermes as set forth in Section 9.3.3, and any such costs paid
or reimbursed by Cephalon shall
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be excluded from cumulative Distributable Losses paid by Alkermes
pursuant to Section 9.3.1 and shall not count against the
Distributable Loss Cap. For the avoidance of doubt, Alkermes
Incurred Shared Expenses for this period shall continue to be
included in the calculation of monthly Distributable Losses."
3. Section 9.5(iii)(B) shall be amended and restated to read as follows:
"Except as set forth in Section 9.5(iv) and subject to adjustment
as set forth in 9.5(iii)(C) below, if there is a Distributable
Loss during any month in the period from the Effective Date until
the later of (a) December 31, 2007 or (b) the date eighteen (18)
months after the first Regulatory Approval of a Product in the
Territory, then neither Party individually shall have a profit
during such month and Alkermes shall bear the Distributable Loss
as follows:"
4. Section 9.5(iii)(C) shall be amended and restated to read as follows:
"If the cumulative Distributable Loss paid by Alkermes (and not
reimbursed by Cephalon pursuant to Section 9.3.3) from all months
in which there is a Distributable Loss, during the period from
the Effective Date until the later of (a) December 31, 2007 or
(b) the date eighteen (18) months after the first Regulatory
Approval of a Product in the Territory, exceeds the Distributable
Loss Cap, then the amounts payable to Cephalon under Section
9.5(iii)(B) above shall be reduced and/or the amounts payable by
Cephalon under Section 9.5(iii)(B) above shall be increased, as
applicable, so that Cephalon bears the amount of such cumulative
Distributable Loss in excess of the Distributable Loss Cap."
5. Except as specifically amended herein, all provisions of the License
and Collaboration Agreement shall remain in full force and effect in
accordance with their terms. In the event of a conflict between the
provisions of the License and Collaboration Agreement and those of
this Amendment, this Amendment shall control. This Amendment, together
with the License and Collaboration Agreement, represents the entire
agreement between the Parties regarding the subject matter hereof, and
there are no prior or contemporaneous written or oral promises or
representation relating to this subject not incorporated herein,
including the Binding Term Sheet between the Parties dated October 17,
2006. No amendment or modification of the terms and conditions of this
Amendment shall be binding on either Party unless reduced to a writing
referencing this Amendment and signed by an authorized officer of the
Party to be bound.
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6. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original for all purposes, but all of which
together shall constitute one and the same instrument. This Amendment
may be executed and delivered by facsimile and upon such delivery the
facsimile signature will be deemed to have the same effect as if the
original signature had been delivered to the other Party.
7. This Amendment shall be governed by and construed in accordance with
the Laws of the State of Delaware (other than its choice of law
principles).
[SIGNATURE PAGE FOLLOWS]
* Confidential Treatment Requested
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IN WITNESS WHEREOF, each of the Parties has caused this Amendment to
be executed and delivered by its duly authorized representatives to be effective
as of the date set forth above.
ALKERMES, INC. CEPHALON, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------- ------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: J. ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President Title: Executive Vice President + CFO
* Confidential Treatment Requested
