Exhibit 10.13(c)
AMENDMENT
TO THE
SUPPLY
AGREEMENT
This Amendment (the “
Amendment ”) entered into effective as of December 21,
2006 (the “ Amendment Effective Date ”) to the
Supply Agreement, effective as of June 23, 2005 (the “
Supply 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
Supply Agreement):
RECITALS:
WHEREAS, pursuant to the Supply
Agreement, the Parties agreed, among other things, that Alkermes
was responsible for providing the capital necessary to permit the
Manufacture of the Product Requirements pursuant to such Supply
Agreement; and
WHEREAS, Alkermes and Cephalon have
now agreed to amend the terms and conditions governing
responsibilities for providing the capital necessary to meet the
Product Requirements for the Product.
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.
A new Section 5.5 shall be added to
the Supply Agreement and shall read as follows:
“5.5
Line 5 and Line 6.
(a)
Product Manufacturing Equipment Purchase . Notwithstanding anything to the contrary
herein, effective the Amendment Effective Date, Alkermes will sell
and Cephalon will purchase for the Purchase Price described below
all equipment that on September 30, 2006 (the “ Agreement
Date ”) constituted the second wet process line for the
Manufacture of the Product at the Alkermes Manufacturing Facility
in Wilmington, Ohio (“ Line 5 ”) and the third
wet process line for the Manufacture of the Product at the Alkermes
Manufacturing Facility in Wilmington, Ohio (“ Line 6
”) (such equipment along with all other equipment thereafter
added to Line 5 and Line 6, the “ Product Manufacturing
Equipment ”) as well as reimburse Alkermes for all
related Capital Improvements (as defined below) made prior to the
Agreement Date. Within ten (10) days of the Amendment
Effective Date, Cephalon will pay Alkermes the purchase price of
Nineteen Million Three Hundred Fifty-Six Thousand Seven Hundred
Fifty-Six Dollars ($19,356,756) (the “ Purchase Price
”). Upon receipt of the Purchase Price Alkermes will
transfer to Cephalon the title to and risk of loss of all Product
Manufacturing Equipment in existence on the Agreement Date and all
Capital Improvements made prior to the Agreement Date.
Thereafter, Alkermes will supply to Cephalon at the end of
each
calendar quarter a detailed listing
of all Capital Improvements made to Line 5 and Line 6 during such
calendar quarter and will supply supporting documentation for all
Fully Capitalized Costs (as defined below) incurred by Alkermes as
requested by Cephalon from time to time.
Notwithstanding anything to the
contrary herein, whether or not Alkermes has supplied to Cephalon
any listing thereof in accordance with the preceding paragraph,
Cephalon will own any Product Manufacturing Equipment and other
Capital Improvements made to Line 5 or Line 6 for which Cephalon
has made the related payment to Alkermes of Fully Capitalized Costs
pursuant to Section 5.5(b). To evidence and perfect
Cephalon’s ownership interest in the Product Manufacturing
Equipment and other Capital Improvements, Alkermes agrees to
execute and deliver all deeds, assignments, bills of sale and other
documents reasonably requested by Cephalon, including appropriate
Uniform Commercial Code financing statements with respect to the
Product Manufacturing Equipment and other Capital
Improvements. Alkermes will keep the Product Manufacturing
Equipment and other Capital Improvements free and clear of all
liens and encumbrances, other than those which may result from any
act of Cephalon. All costs incurred by Cephalon for insuring
the Product Manufacturing Equipment and other Capital Improvements,
and for paying any taxes, including personal property and sales
taxes that may accrue with respect to the Product Manufacturing
Equipment and other Capital Improvements, shall be deemed to be
Cephalon Incurred Shared Expenses.
(b)
Capital Improvements . Following the Agreement Date, Alkermes
has continued and will continue to design, engineer, procure
additional equipment for, develop, construct and validate Line 5
and Line 6 (all such activities the “ Capital
Improvements ”). Within ten (10) days of the
Amendment Effective Date, Cephalon will reimburse Alkermes for the
Fully Capitalized Costs of Capital Improvements incurred by
Alkermes during October 2006 and any other Fully Capitalized Costs
associated with Line 5 and Line 6 incurred by Alkermes during this
period. Within the period ending thirty (30) days after the
later of (i) the Amendment Effective Date or (ii) Cephalon’s
receipt of Alkermes’ invoice therefor, Cephalon will
reimburse Alkermes for the Fully Capitalized Costs of Capital
Improvements incurred by Alkermes during November 2006 and any
other Fully Capitalized Costs associated with Line 5 and Line 6
incurred by Alkermes during this period. Within fifteen (15)
days of the end of each month after the Amendment Effective Date,
Alkermes will invoice Cephalon for the Fully Capitalized Costs of
Capital Improvements incurred by Alkermes during the prior month
and any other Fully Capitalized Costs associated with Line 5 and
Line 6 incurred by Alkermes during such period. Cephalon will
pay each such invoice within thirty (30) days of receipt;
provided , however , that Cephalon shall not be
obligated to pay pursuant to this Section 5.5(b) for any Fully
Capitalized Costs exceeding in the aggregate Fifty-One Million Six
Hundred Forty-Three Thousand Two Hundred Forty-Four Dollars
($51,643,244). All costs incurred by Alkermes with respect to
Line 5 and Line 6 that are not
2
reimbursed by Cephalon pursuant to
this Section 5.5(b) or included in the Purchase Price will, to the
extent covered by Development Plan budgets approved by the JSC, be
deemed to be Alkermes Incurred Shared Expenses or, to the extent
appropriate, be included in Fully Burdened Manufacturing
Costs. “ Fully Capitalized Costs ” shall
mean costs that normally would be capitalized in accordance with
Cephalon’s accounting policies (whether incurred by Cephalon
or Alkermes), including direct labor costs of both Cephalon and
Al
