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                                                                    EXHIBIT 10.3

                               FINANCIAL COVENANTS

                                ADDENDUM NO. 001

                          TO MASTER SECURITY AGREEMENT

                          DATED AS OF DECEMBER 22, 2004

THIS ADDENDUM NO. 001 (this "ADDENDUM NO. 001") is made as of the 22 day of
December 2004, amends and supplements the above referenced agreement (the
"AGREEMENT"), between GENERAL ELECTRIC CAPITAL CORPORATION (together with its
successors and assigns, if any, "SECURED PARTY") and ALKERMES, INC. ("DEBTOR")
and is hereby incorporated into the Agreement as though fully set forth therein.
Capitalized terms not otherwise defined herein shall have the meanings set forth
in the Lease.

The Agreement is hereby amended by adding the following:

      FINANCIAL COVENANTS.

      "(a) Debtor shall, at all times during the term of the Agreement, comply
with the following:

      Maintain minimum Unrestricted Cash (as defined below) equal to the greater
of (i) $50,000,000 or (ii) 6 months of Monthly Cash Burn (as defined below).
Unrestricted Cash is defined as cash, cash equivalents and investments in
marketable securities with maturities of less than 12 months, less any such
cash, cash equivalents and investments in marketable securities pledged to other
parties. Monthly Cash Burn is defined as the sum of net income (or loss) plus
non-cash charges for the most recent 3 months ended divided by 3, minus current
portions of long-term debt divided by 12. Long-term debt shall include all
indebtedness for borrowed money, other than indebtedness of limited-purpose or
special-purpose subsidiaries of Debtor which indebtedness is non-recourse to
Debtor so long as the terms and conditions of the governing documents of each
such subsidiary and the purchase and sale agreement between Debtor and each such
subsidiary are satisfactory to Secured Party.

      All financial items in the preceding paragraph shall be derived in
accordance with generally accepted accounting principles in the United States of
America ("GAAP").

      If this covenant is violated, Debtor will (i) provide Secured Party within
ten (10) business days of such occurrence a security deposit in an amount equal
to 75% of Debtor's then obligations to Secured Party under the Agreement and
(ii) execute any documentation requested by Secured Party related to the
security deposit."

       (b) COMPLIANCE REPORTS. Debtor's Authorized Representative shall certify
periodically that Debtor is in compliance with the requirements of subsection
(a) above. Such notification and certification shall be provided within thirty
(30) days after the end of each fiscal

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month (the "COMPLIANCE DATE"), reflecting such information as of the end of such
fiscal month. If Debtor fails timely to provide such notification and compliance
certificates, within fifteen (15) days after the Compliance Date, such failure
shall be deemed a default under the Agreement if not cured within two (2)
business days after notice from Secured Party. The reports required under this
section are in addition to and not a substitute for the reports required under
the REPORTS Section of the Agreement.

Except as expressly modified hereby, all terms and provisions of the Agreement
shall remain in full force and effect. This Addendum No.00l is not binding or
effective with respect to the Agreement until executed on behalf of Secured
Party and Debtor by authorized representatives of Secured Party and Debtor.

 IN WITNESS WHEREOF, Debtor and Secured Party have caused this Addendum No.
 001 to be executed by their duly authorized representatives as of the date
 first above written.

 SECURED PARTY:                                 DEBTOR:

 GENERAL ELECTRIC CAPITAL CORPORATION           ALKERMES, INC.

 By: /s/ John Edel                              By: /s/ James Frates
     -------------                                  ----------------
 Name: John Edel                                Name: James Frates

 Title: SVP                                     Title: VP

 ATTEST

 By:_______________________________________

 Name:_____________________________________<PAGE>

                                                                    EXHIBIT 10.4

WHEREVER 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.

                    FOURTH AMENDMENT TO DEVELOPMENT AGREEMENT
              FIRST AMENDMENT TO MANUFACTURING AND SUPPLY AGREEMENT

This Agreement shall be the Fourth Amendment to the Development Agreement by and
between Janssen Pharmaceutica International, a division of Cilag International
AG, having its place of business in CH-6300 Zug, Switzerland ("JANSSEN") and
Medisorb Technologies International, A Delaware limited partnership
("Medisorb"), which agreement has in the meantime been duly assigned from
Medisorb to Alkermes Controlled Therapeutics Inc. II, a company organized and
existing under the laws of the Commonwealth of Pennsylvania, 64 Sidney Street,
Cambridge, MA 02139-4136, U.S.A. ("ACT II") by a deed of assignment dated. March
1, 1996.

This Agreement shall also be the First Amendment to the Manufacturing and Supply
Agreement by and between JPI PHARMACEUTICA INTERNATIONAL, a division of Cilag AG
International Zug, a company duly organized and existing under the laws of
Switzerland, having its principal office in CH-6300 Zug, Kollerstrasse 38,
Switzerland (hereinafter referred to as "JPI"), and JANSSEN PHARMACEUTICA Inc.,
1125 Trenton-Harbourton Road, Titusville, NJ 08560, USA (hereinafter referred to
as "JANSSEN US") and ACT II, which agreement has since been duly transferred
from JANSSEN PHARMACEUTICA INC. TO JANSSEN PHARMACEUTICA PRODUCTS, L.P. (JPI and
JANSSEN US collectively referred to herein as "JANSSEN").

WHEREAS JANSSEN and ACT II desire to amend certain terms of the Development
Agreement and the Manufacturing and Supply Agreement with respect to the
ownership of certain capital equipment.

NOW THEREFORE, the parties agree to amend the Development Agreement and the
Manufacturing and Supply Agreement as follows:

1.    Notwithstanding the provisions of Section 4 of the SECOND AMENDMENT to the
      Development Agreement and Section 2.2 of the Manufacturing and Supply
      Agreement, JANSSEN agrees to sell to ACT II and ACT II agrees to purchase
      from JANSSEN the equipment described on Exhibit A, attached hereto and
      made a part hereof (the "Equipment") for good and valuable consideration
      of $1.00 (one U.S. dollar).

2.    THE EQUIPMENT IS SOLD "WHERE IS; AS IS" WITHOUT ANY REPRESENTATION OR
      WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
      LIMITATION, ANY REPRESENTATION OR WARRANTY AS TO THE DESIGN, QUALITY OR
      CONDITION OF THE EQUIPMENT, ANY WARRANTY OF MERCHANTABILITY OR FITNESS OF
      THE

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      EQUIPMENT FOR ANY PARTICULAR PURPOSE OR AS TO THE OTHER MATTER RELATING TO
      THE EQUIPMENT OR ANY PART THEREOF. ACT II CONFIRMS THAT IT HAS SELECTED
      THE EQUIPMENT ON THE BASIS OF ITS OWN JUDGMENT AND EXPRESSLY DISCLAIMS
      RELIANCE UPON ANY STATEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY
      JANSSEN.

3.    ACT II HEREBY ASSUMES AND RELEASES JANSSEN FROM ANY AND ALL CLAIMS ARISING
      FROM THE USE OR OPERATION OF THE EQUIPMENT (OR THE FAILURE TO OPERATE OR
      OTHER IMPROPER FUNCTIONING OF THE EQUIPMENT), OR ANY PART THEREOF, FROM
      AND AFTER THE DATE HEREOF AND HEREBY INDEMNIFIES AND HOLDS HARMLESS
      JANSSEN FOR ANY AND ALL DAMAGES RESULTING FROM THE USE OR OPERATION OF THE
      EQUIPMENT (OR THE FAILURE TO OPERATE OR OTHER IMPROPER FUNCTIONING OF THE
      EQUIPMENT), OR ANY PART THEREOF, FROM AND AFTER THE DATE HEREOF,
      INCLUDING, WITHOUT LIMITATION, ALL INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR
      LOSS OF REVENUE OR PROFIT, LOSS OF USE OF THE EQUIPMENT, DOWNTIME COSTS OR
      COST OF ANY SUBSTITUTE EQUIPMENT.

4.    THIS AMENDMENT SHALL BE EFFECTIVE AS OF DECEMBER 20, 2000.

WITNESS, the signature of all parties hereto by their duly authorized officers.

                                           JANSSEN PHARMACEUTICA INTERNATIONAL
                                           Represented by CILAG AG INTERNATIONAL

                             CILAG AG INTERNATIONAL
                             Landis + Gyr-Strasse 1
                             CH-6300 Zug

/s/ E. Rombouts                                          /s/ H. Schmid
----------------------                                   -----------------------
(title) EXECUTIVE DIRECTOR OPERATIONS                    (title) GENERAL MANAGER
E. ROMBOUTS                                              H. SCHMID

                                        ALKERMES CONTROLLED THERAPEUTICS INC. II

/s/ James Frates                                          /s/ Michael Landine
----------------------                                   ----------------------
(title) VICE PRESIDENT                                   (title) VICE PRESIDENT

                                            JANSSEN PHARMACEUTICA PRODUCTS, L.P.

                                                         /s/ Michael Chester
----------------------                                   -----------------------
(title)                                                  (title) SECRETARY

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                                   EXHIBIT A

                                     [***]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.<PAGE>

                                                                    EXHIBIT 10.5

WHEREVER 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.

                    THIRD AMENDMENT TO DEVELOPMENT AGREEMENT

             SECOND AMENDMENT TO MANUFACTURING AND SUPPLY AGREEMENT
                      FIRST AMENDMENT TO LICENSE AGREEMENTS

            This Third Amendment amends the Development Agreement (the
"Development Agreement"), dated December 23, 1993, by and between Janssen
Pharmaceutica International, a division of Cilag International AG, having its
place of business in CH-6300 Zug, Switzerland ("JANSSEN") and Medisorb
Technologies International, a Delaware limited partnership ("Medisorb"), which
agreement has in the meantime been duly assigned from Medisorb to Alkermes
Controlled Therapeutics Inc. II, a Pennsylvania corporation, 64 Sidney Street,
Cambridge, MA 02139-4136, U.S.A. ("ACT II") by a deed of assignment dated March
1, 1996.

            This Second Amendment amends the Manufacturing and Supply Agreement
(the "Manufacturing Agreement"), dated August 6, 1997, by and between JANSSEN
and Janssen Pharmaceutica Inc., a New Jersey corporation ("Janssen US") on the
one hand, and ACT II on the other hand.

            This First Amendment amends both the License Agreement (the "US
License"), dated February 13, 1996, by and between Janssen US and Medisorb,
which agreement has in the meantime been duly assigned from Medisorb to ACT II
and the License Agreement (the "EX-US License"), dated February 21, 1996, by and
between JANSSEN and Medisorb, which agreement has in the meantime been duly
assigned from Medisorb to ACT II (both licenses together referred to as the
"License Agreements").

            WHEREAS, JANSSEN desires to evaluate the possibility of developing a
* formulation of the Product and ACT II is prepared to undertake such
feasibility study under the terms set forth hereinafter.

            NOW, THEREFORE, the parties, intending to be legally bound hereby,
agree as follows:

            All capitalised terms used herein shall have the meaning set forth
in the Development Agreement, Manufacturing Agreement or License Agreements, as
applicable, unless clearly indicated otherwise. This agreement will be referred
to herein as this "Amendment".

            1. ACT II and JANSSEN will undertake the activities set forth in the
protocol for a * Product feasibility attached to this Amendment as
Exhibit I (hereinafter "Protocol"). Such activities will be undertaken in
accordance with the time and event schedule specified in the Protocol with a
view to allow JANSSEN to evaluate candidate formulations against the target
profile specified in the Protocol within a 12 month period following the
effective date of this Amendment.

            2. JANSSEN will reimburse ACT II for the activities to be undertaken
by it in accordance with the budget provided for in the Protocol. ACT II will
invoice JANSSEN and JANSSEN will pay ACT II within * following receipt of the
invoice.

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            3. Following the internal analysis by JANSSEN of the various
formulations prepared by ACT II, JANSSEN will promptly inform ACT II of its
decision whether or not it wants to proceed with the development of a * Product.
In the event JANSSEN elects to proceed with the further development, the parties
will immediately meet to discuss a full development plan, including a time and
event schedule and related budget. Such development plan shall be governed by
the terms of the Development Agreement, as amended, unless specifically agreed
otherwise.

            4. Section 4.A of the Development Agreement shall be amended to add
the following sentence; "The term of this Agreement, as the terms of this
Agreement shall relate to performance of the Protocol, as defined in the Fourth
Amendment to this Agreement, shall continue until completion of all activities
in the Protocol are performed, and if Janssen elects to proceed with a *
Product, until completion of the activities in the development plan to be agreed
upon according to Section 3 of the Fourth Amendment to this Agreement."

            5. In the event JANSSEN elects to proceed with a * Product
development as aforementioned, JANSSEN's rights in connection with the * Product
shall be governed by the terms of the License Agreements. In such an event, the
parties hereby amend the License Agreements as follows:

                  (a) Section 1(i) of both the US License and the EX-US License
(the definition of "Product") shall be amended to add the following sentence at
the end of such section: "Any formulation of a Product which is designed to
provide release of Risperdone over a * shall be referred to as a
"*".

                  (b) Section 3(a) of the US License shall be amended to add the
following sentences, to be inserted as the second and third sentences of such
section: "Notwithstanding the foregoing, Janssen US shall pay or cause to be
paid to Act II a running royalty at the rate of * of the Net Sales of each unit
of * sold to customers in the Territory by Janssen US, its Affiliates and
Sublicensees, if such unit of * was manufactured by Act II, or (ii) *, if such
unit of * was manufactured by Janssen. Such royalties shall be payable quarter-
annually in arrears within * days following the end of Janssen US's regular
fiscal quarters in any year during the term hereof."

                  (c) Section 3(a) of the EX-US License shall be amended to add
the following sentences, to be inserted as the second and third sentences of
such section: "Notwithstanding the foregoing, Janssen. shall pay or cause to be
paid to Act II a running royalty at the rate of (i) * of the Net Sales of each
unit of * sold to customers in the Territory by Janssen, its Affiliates and
Sublicensees, if such unit of * was manufactured by Act II, or (ii) *, if such
unit of * was manufactured by Janssen. Such royalties shall be payable quarter-
annually in arrears within * days following the end of each three (3) month
period ending on March 31, June 30, September 30 or December 31 in any year
during the term hereof."

            6.    (a) Section 1.10 of both the Manufacturing Agreement (the
definition of "Product") shall be amended to add the following sentence at the
end of such section: "Any formulation of a Product which is designed to provide
release of Risperdone over a four-week period shall be referred to as a "*".

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                  (b)   Section 6.1 of the Manufacturing Agreement shall be
amended to add the following sentences as the 4th, 5th and 6th sentences of such
section: "For purposes of calculating the Manufacturing Fee due by
JANSSEN/Janssen US for Manufacture the *, the volume breaks with the number of
vials to determine the percentage (Exhibit D of the Manufacturing Agreement)
will be adjusted to reflect the difference of mg per vial, the number of vials
and the difference in manufacture cost. The final Fee will be agreed when all
the manufacturing parameters are known to both parties." The attached model
using * of the * versus the non-* (based on the manufacturing assumptions on the
date of signature of this Amendment) shall be used as basis for said
discussions.

                  (c)   At the time that JANSSEN decides to proceed with the
development of the * Product, the parties will then evaluate the total capacity
required for both the * and the * formulations of the Product.

            7.    In the event that any findings generated as a result of the
feasibility program are deemed patentable, the provisions of Article 5 of the
License Agreements will apply to any such invention and JANSSEN and Janssen US'
rights in relation thereto shall be governed by the provisions of Article 2 of
said License Agreements.

            8.    ACT II recognises and acknowledges that JANSSEN is under no
obligation to proceed with the further development of a * Product and that the
decision to do so is at its sole discretion, irrespective of the outcome of the
feasibility study,

            9.    This Amendment is deemed to be effective as of April 1, 2000.

            WITNESS, the signature of all parties hereto by their duly
authorized officers.

                                            JANSSEN Pharmaceutica International,
                                            a division of Cilag International AG

                                            /s/ Erik Rombouts
                                            ---------------------------------
                                            Name:
                                            Title:

                                            ALKERMES CONTROLLED
                                            THERAPEUTICS NC. II

                                            /s/ Michael Landine
                                            ---------------------------------
                                            Name: Michael Landine
                                            Title: Vice President

                                            JANSSEN PHARMACEUTICA INC.

                                            /s/ Michael Chester
                                            ---------------------------------
                                            Name: Michael Chester
                                            Title: CORPORATE SECRETARY

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                                       *
                                    SUMMARY

                                     [***]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

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