Document:

Exhibit 10.1

 

FIRST
AMENDMENT TO LEASE

 

This First Amendment to
Lease (“First Amendment”) is entered into as of May 11, 2006, by and
between the NewTower Trust Company  Multi-Employer Property Trust (fka the Multi-Employer
Property Trust), a trust organized under 12 C.F.R. Section 9.18 (“Landlord”)
and Cephalon, Inc., a
Delaware corporation (“Tenant”), in consideration of the mutual
covenants contained herein and the benefits to be derived herefrom.

 

WITNESSETH:

 

WHEREAS, Landlord and
Tenant entered into a certain Office Lease dated as of January 14, 2004 (the “Lease”)
pursuant to which Landlord leased to Tenant approximately one hundred thirteen
thousand seven hundred forty-nine (113,749) rentable square feet (the “Initial
Premises”) of space on the first, second and third floors of the building (referred
to herein and in the Lease as the “Building”) located at 41 Moores Road,
Frazer, Pennsylvania, commonly known as Westbrook Corporate Center; and

 

WHEREAS, by letter dated
February 28, 2006 from Tenant to Landlord, Tenant has exercised its right under
Paragraph 2.12 of the Lease to extend the term of the Lease from February 28,
2007 through February 29, 2008 (the “Prior Exercised Renewal Option”) at
the rental rate set forth in the Lease; and

 

WHEREAS, Tenant also
subleases an additional seventy-three thousand nine hundred four (73,904)
rentable square feet (as further described in Section 3 hereof and defined
therein as the Expansion Premises) in the Building from Systems & Computer
Technology Corporation (“SCT”) pursuant to a certain Sublease dated as
of March 1, 2004 between SCT and the Tenant, the term of which expires on
February 28, 2009; and

 

WHEREAS, Landlord and
Tenant are desirous of amending the Lease to, among other things (a) further
extend the term thereof, and (b) provide that Tenant shall lease the Expansion
Premises directly from the Landlord upon the expiration of the Sublease, all on
the terms and conditions set forth herein;

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which is
acknowledged by both Landlord and Tenant, the parties agree that the Lease is
hereby amended as follows:

 

1.                                       Capitalized Terms. Capitalized terms that are used but not defined in this First Amendment
shall have the meanings given them in the Lease.

 

2.                                       Extension of Lease Term. The Lease is hereby amended to extend the Lease Term from its present
expiration date of February 29, 2008 to February 28, 2015, and the definition
of the “Lease Term” set forth in Section 1 of the Lease is amended by
deleting the words “and end thirty-six months following the Rent Commencement
Date” from the first sentence thereof and substituting in their stead the words
“and end on February 28, 2015”.

 

3.                                       Expansion Premises.

 

(a)                                  Effective on
March 1, 2009 (the “Expansion Premises Commencement Date”), Landlord
hereby leases to Tenant, and Tenant hereby rents from Landlord upon the terms
and conditions of this First Amendment, the portion of the Building depicted on
the plan attached hereto as First Amendment Exhibit A
and agreed by Landlord and Tenant for all purposes under the Lease to consist
of an aggregate of approximately seventy-three thousand nine hundred four
(73,904) rentable square feet (the “Expansion Premises”), of which
approximately nineteen thousand one hundred seventy-five (19,175) rentable
square feet are located on the first floor of the Building, approximately
twenty-one thousand nine hundred sixty-six (21,966) rentable square feet are
located on the second floor of the Building, and approximately thirty-two
thousand seven hundred sixty-three (32,763) rentable square feet are located on

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

1

 

the third floor of the
Building. On the Expansion Premises Commencement Date, the Expansion Premises
shall become part of the Premises and, except as otherwise provided herein,
shall be subject to all of the terms and conditions of the Lease for the
remainder of the Lease Term.

 

(b)                                 Tenant
acknowledges and agrees that it is and shall remain in possession of the
Expansion Premises through the Expansion Premises Commencement Date, subject to
and in accordance with the terms of the Sublease and that certain Consent to
Sublease dated March      , 2004 by and among
Landlord, Tenant and SCT.

 

4.                                       Modification of Base Rent. Base Rent for the period through and including February 28, 2007 shall
continue to be due and payable at the rate set forth in the Lease as in effect
prior to this First Amendment. Any other provision of the Lease to the contrary
notwithstanding, Section 1 of the Lease is hereby amended to provide that Base
Rent for the period beginning on March 1, 2007 shall be as follows:

 

	
   

  	
   

  	
  Applicable

  	
   

  	
  Rate

  	
   

  	
   

  	
   

  	
  Monthly Base

  
	
  Applicable Portion of Lease Term

  	
   

  	
  Portion of

  	
   

  	
  Per/Rentable

  	
   

  	
  Annual Base

  	
   

  	
  Rent Installment

  
	
  Beginning

  	
   

  	
  Ending

  	
   

  	
  Premises

  	
   

  	
  Sq. Ft./ Annum

  	
   

  	
  Rent

  	
   

  	
  (Annual ÷ 12)

  
	
  March
  1, 2007

  	
   

  	
  February
  29, 2008*

  	
   

  	
  Initial Premises Only

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  March
  1, 2008

  	
   

  	
  February
  28, 2009

  	
   

  	
  Initial Premises Only

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  March
  1, 2009

  	
   

  	
  February
  28, 2010

  	
   

  	
  Initial Premises and Expansion Premises

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  March
  1, 2010

  	
   

  	
  February
  28, 2011

  	
   

  	
  Initial Premises and Expansion Premises

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  March
  1, 2011

  	
   

  	
  February
  29, 2012

  	
   

  	
  Initial Premises and Expansion Premises

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  March
  1, 2012

  	
   

  	
  February
  28, 2013

  	
   

  	
  Initial Premises and Expansion Premises

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  March
  1, 2013

  	
   

  	
  February
  28, 2014

  	
   

  	
  Initial Premises and Expansion Premises

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  March
  1, 2014

  	
   

  	
  February
  28, 2015

  	
   

  	
  Initial Premises and Expansion Premises

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  

 

*Base Rent for the period
from March 1, 2007 through February 29, 2008 representing the period covered by
the Prior Exercised Renewal Option has not been amended but is restated in the
above table in order to confirm same.

 

5.                                       Definitions. The Lease is hereby amended by deleting from Section 1 thereof the
definitions of Base Year, Premises, Prime Rate, and Tenant’s Pro Rata Share, and
substituting in their stead the following:

 

(a)                                  Base Year:  For that portion of the Lease Term (i) prior
to March 1, 2008, the “Base Year” is calendar year 2004, and (ii) from
and after March 1, 2008, the “Base Year” is calendar year 2008.

 

(b)                                 Premises:  For that portion of the Lease Term prior to
the Expansion Premises Commencement Date, “Premises” means and refers to
the Initial Premises consisting of an aggregate of approximately one hundred
thirteen thousand seven hundred forty-nine

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

2

 

(113,749) rentable square
feet, of which approximately thirty-eight thousand nine hundred thirty-three
(38,933) rentable square feet are located on the first floor of the Building,
approximately forty-two thousand five hundred ninety (42,590) rentable square
feet are located on the second floor of the Building, and approximately thirty-two
thousand two hundred twenty-six (32,226) rentable square feet are located on
the third floor of the Building. For that portion of the Lease Term from and
after the Expansion Premises Commencement Date, “Premises” means and
refers to the Initial Premises and the Expansion Premises consisting of the
entire Building and containing approximately one hundred eighty-seven thousand
six hundred fifty-three (187,653) rentable square feet. The number of rentable
square feet of the Initial Premises and the Expansion Premises as set forth in
this paragraph shall be final, binding and conclusive for all purposes of this
Lease.

 

(c)                                  Tenant’s Pro Rata Share:  A fraction, the numerator of which is the
number of rentable square feet of floor area in the Premises, and the
denominator of which is the number of rentable square feet of floor area in the
Building. Except as provided below, for all periods during the Lease Term prior
to the Expansion Premises Commencement Date, “Tenant’s Pro Rata Share”
is 113,749/187,653 = sixty and sixty-two one-hundredths percent (60.62%), which
shall be final, conclusive and controlling during such portion of the Lease
Term for all purposes. For all periods during the Lease Term from and after the
Expansion Premises Commencement Date, “Tenant’s Pro Rata Share of Operating
Costs” is 187,653/187,653 = one hundred percent (100.00%), which shall be
final, conclusive and controlling during such portion of the Lease Term for all
purposes. Notwithstanding the foregoing, for purposes of determining the Excess
Operating Costs Allocable to the Premises, Tenant’s Pro Rata Share for the
first Lease Year (i.e. March 1, 2004 through February 28, 2005) is deemed to be
thirty-nine and ninety-seven one-hundredths percent (39.97%) and Tenant’s Pro
Rata Share for the second Lease Year (i.e. March 1, 2005 through February 28,
2006) is deemed to be forty-nine and three one-hundredths percent (49.03%).

 

6.                                       Condition of Premises. Tenant accepts the Initial Premises, and shall accept the Expansion
Premises, for the remainder of the Lease Term (as extended herein) in their AS IS condition. Tenant acknowledges that no representations
as to the condition of the Initial Premises or the Expansion Premises have been
made by Landlord. Notwithstanding anything to the contrary contained herein or
in the Lease, except as expressly provided in Section 7 of this First Amendment
Landlord shall have no obligation to provide any improvement allowance as a
condition to, or in connection with, the extension of the Lease Term or the
expansion of the Premises as provided in this First Amendment.

 

7.                                        Refurbishment Improvements/Allowance.
In the event that Tenant desires to refurbish the Premises after March 1, 2010,
subject to the terms and conditions hereof Landlord shall provide Tenant with
an allowance (the “Refurbishment Allowance”) toward the cost of such
refurbishment (including labor and materials, architectural, engineering,
permitting and space planning fees, and construction management fee) of up to a
maximum of [**] of the Premises (i.e. [**]). Except as provided in the penultimate
sentence of this Section 7, any such refurbishment work (collectively, “Refurbishment
Improvements”) shall be subject to all of the terms and conditions of
Exhibit C to the Lease, provided that any reference in Exhibit C to (a) “Tenant
Improvements” shall be deemed to refer to the Refurbishment Improvements, (b)
the “Tenant Improvement Allowance” shall be deemed to refer to the
Refurbishment Allowance, (c) the Tenant Improvement Contractor shall be deemed
to refer to the contractors approved by Landlord for the Refurbishment Work in
accordance with Paragraph 2(c) of said Exhibit C, (d) the Plans and
Specifications shall be deemed to refer to the plans and specifications
approved by Landlord for the Refurbishment Work in accordance with Paragraph 1
of said Exhibit C, and (e) Tenant Improvement Costs shall be deemed to refer to
the costs of the Refurbishment Improvements (which costs shall include all of
the same types of costs applicable to the Tenant Improvements as are included
in Tenant Improvement Costs under Paragraph 3(a) of said Exhibit C).
Notwithstanding anything to the contrary contained in the Lease (including but
not limited to the last paragraph of Exhibit C to the Lease), (x) in the event
that Tenant

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

3

 

has not completed the
Refurbishment Improvements and/or satisfied all of the terms and conditions for
disbursement of the Refurbishment Allowance on or before March 1, 2013,
Landlord shall have no further obligation to pay or disburse any remaining
portion of the Refurbishment Allowance, and (y) 
Tenant shall not be entitled to receive any credit or payment on account
of any unexpended portion of the Refurbishment Allowance. Further, (1) in
addition to the matters provided for in Paragraph 4.19 of the Lease, to the
extent accurate any estoppel certificate requested by Landlord shall certify
that all required contributions by Landlord to Tenant on account of the
Refurbishment Improvements have been delivered or received, as the case may be,
and (2) for all purposes under the Lease, the Refurbishment Improvements shall
constitute Tenant Alterations and shall be subject to all terms and conditions
applicable thereto, provided that in the event of any inconsistency between the
terms of this First Amendment and the terms of the Lease, the terms of this
First Amendment shall control.

 

8.                                       Option to Renew.

 

(a)                                  Paragraph
2.12 of the Lease is hereby amended by deleting the first two (2) lines thereof
and subparagraphs (a) through (f) (but retaining the balance of said paragraph
2.12 from and after the definition of “Fair Market Rent”):

 

“Option to Renew. Landlord hereby
grants Tenant one (1) option to renew the Lease Term for a period of five (5)
years (the “Renewal Term”) beginning on March 1, 2015 and ending on
February 29, 2020, upon the following terms and conditions:

 

(a)                                  Tenant
must exercise such renewal option, if at all, by giving written notice (the “Exercise
Notice”)  to Landlord on or before
August 31, 2013;

 

(b)                                 At
the time Tenant delivers the Exercise Notice, this Lease must be in full force
and effect, Tenant must not have assigned this Lease or sublet more than
fifteen percent (15%) of the Premises, and no Event of Default shall have occurred
and be continuing hereunder; and

 

(c)                                  The
Renewal Term shall be upon the same term, covenants and conditions contained in
this Lease, except that (1) the annual Base Rent for the renewal Term shall be
the then-current Fair Market Rent of the Premises as of the first day of the
Renewal Term, but in no event less than the annual Base Rent in effect
immediately prior to the commencement of the Renewal Term, and (2) Tenant shall
have no further option to extend the Lease Term.

 

(b)                                 Paragraph 2.12
of the Lease is hereby further amended by deleting the words “adjusted to
reflect a 2004 Base Year” from the fourth line of the text immediately
following former subparagraph (f) (which has been deleted pursuant to Section
10(a) of this First Amendment) and substituting in their stead “adjusted to
reflect a 2008 Base Year”.

 

11.                                 Right of First Offer No Longer Applicable.
The Lease is hereby amended by deleting Paragraph 2.13 thereof in its entirety.

 

12.                                 Default Rate. Section 3.8 of the
Lease is hereby amended by deleting clause (a) thereof and substituting in its
stead the following:

 

“(a)  the published prime or reference rate at a
national banking institution designated by Landlord (the “Prime Rate”) then in
effect, plus three (3) percentage points, or”.

 

13.                                 Modification of Tenant’s Insurance Requirements.
(a)  Subparagraph 4.14.1(a) of the Lease
is hereby amended by deleting the following text from the last three (3) lines thereof:

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

4

 

“and which policy names
Landlord and Manager and, at Landlord’s request Landlord’s mortgage lender(s)
or investment advisors, as additional insureds;”

 

and substituting in its
stead the following:

 

“and
which policy names Landlord, Kennedy Associates Real Estate Counsel, Inc., the Manager
and, at Landlord’s request, Landlord’s trustee(s), mortgage lender(s) and/or
investment advisors, as additional insureds;”.

 

(b)  Subparagraph 4.14.2 of the Lease is hereby
amended by deleting the last sentence thereof and substituting the following in
its stead:

 

“Upon
any request from time to time made by Landlord, Tenant shall deliver to
Landlord, Kennedy Associates Real Estate Counsel, Inc., the Manager, and any
other parties hereunder required to be named as additional insureds,
certificates evidencing the existence and amounts of all such policies.”

 

14.                                 Modification of Landlord’s Insurance Requirements.
Subparagraph 4.15.1 of the Lease is hereby superseded and replaced in its
entirety by the following:

 

“4.15.1   A policy of commercial general liability
insurance, insuring against claims of bodily injury and death or property
damage or loss with a combined single limit at the Commencement Date of not
less than One Million Dollars ($1,000,000.00) per occurrence and Two Million
Dollars ($2,000,000.00) in the aggregate, which policy shall be payable on an “occurrence”
rather than a “claims made” basis; and an excess liability policy in umbrella
form with a minimum limit of liability of Four Million Dollars ($4,000,000.00);”.

 

15.                                 Modification of Landlord’s Authorized Agents.
Paragraph 6.17 of the Lease is hereby superseded and replaced in its entirety
by the following:

 

“6.17                     Landlord’s Authorized Agents. Notwithstanding
anything contained in the Lease to the contrary, including without limitation, the
definition of Landlord’s Agents, only officers of Landlord’s authorized
representative, Kennedy Associates Real Estate Counsel, Inc., and officers of NewTower
Trust Company, the trustee of Landlord, are authorized to amend, renew or
terminate this Lease, or to compromise any of Landlord’s claims under this
Lease or to bind Landlord in any manner. Without limiting the effect of the
previous sentence, no property manager or broker shall be considered an
authorized agent of Landlord to amend, renew or terminate this Lease, to
compromise any of Landlord’s claims under this Lease or to bind Landlord in any
manner.”

 

16.                                 Change of Designated Addresses.
Landlord’s Designated Address set forth in the Lease opposite Landlord’s
signature is hereby superseded and replaced in its entirety by the following:

 

Designated Address
for Landlord:

 

NewTower Trust Company
Multi-Employer Property Trust

c/o Kennedy Associates
Real Estate Counsel, Inc.

Attention: Executive Vice President - Asset Management

1215 Fourth Ave., Suite 2400

Seattle, WA 98161 

Facsimile:  (206) 682-4769

 

with a copy to:

 

NewTower Trust Company
Multi-Employer Property Trust

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

5

 

c/o Kennedy Associates
Real Estate Counsel, Inc.

Attn: Vice President -
Asset Management

7315 Wisconsin Avenue,
Suite 350 West

Bethesda, MD 20814

Facsimile:  (301) 656-9339

 

and with a copy to:

 

NewTower Trust Company
Multi-Employer Property Trust

c/o NewTower Trust
Company

Attn: President/MEPT

or Patrick O. Mayberry

Three Bethesda Metro
Center, Suite 1600

Bethesda, MD 20814

Facsimile:  (240) 235-9961

 

and with a copy to
Manager at:

 

Trammell Crow Company

101 West Elm Street,
Suite 400

Conshohocken, PA 19428

Facsimile:   484-530-4601

 

Tenant’s Designated
Address set forth in the Lease opposite Tenant’s signature is hereby superseded
and replaced in its entirety by the following:

 

Designated Address
for Tenant:

 

Cephalon, Inc.

41 Moores Road

Frazer, PA 19355

Attn: Legal Department

Facsimile: (610) 738-6590

 

with a copy to:

 

Morgan, Lewis &
Bockius LLP

1701 Market Street

Philadelphia, PA 19103

Attn:  J.J. Broderick, Esq.

Facsimile:  (215) 963-5001

 

17.                                 Offer. The submission of this First
Amendment to Tenant or its broker or other agent does not constitute an offer
to amend the Lease. This First Amendment shall have no force or effect until:
(a) it is executed and delivered by Tenant to Landlord; and (b) it is executed
and delivered by Landlord to Tenant.

 

18.                                 Brokers. Tenant was represented in
the transaction evidenced by this First Amendment by Studley, Inc. (“Tenant’s
Broker”), a licensed real estate broker. Landlord was represented in the
transaction evidenced by this First Amendment by Trammell Crow Company (“Landlord’s
Broker”), a licensed real estate broker. Each party to this First Amendment
shall indemnify, defend and hold harmless the other party from and against any
and all claims asserted against such other party by any real estate broker,
finder or intermediary relating to any act of the indemnifying party in
connection with this First Amendment.

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

6

 

19.                                 Severability; Captions. If any
clause or provision of this First Amendment is determined to be illegal,
invalid, or unenforceable under present or future laws, the remainder of this First
Amendment shall not be affected by such determination, and in lieu of each
clause or provision that is determined to be illegal, invalid or unenforceable,
there be added as a part of this First Amendment a clause or provision as
similar in terms to such illegal, invalid or unenforceable clause or provision
as may be possible and be legal, valid and enforceable. Headings or captions in
this First Amendment are added as a matter of convenience only and in no way
define, limit or otherwise affect the construction or interpretation of this First
Amendment.

 

20.                                 Incorporation of Prior Agreement; Amendments.
The Lease, together with this First Amendment contains all of the agreements of
the parties hereto with respect to any matter covered or mentioned therein or
herein, and no prior agreement or understanding pertaining to any such matter
shall be effective for any purpose. No provision of the Lease as amended by
this First Amendment may be amended or added to except by an agreement in
writing signed by the parties to the Lease or their respective successors in interest.

 

21.                                 Authority. Each individual
executing this First Amendment on behalf of their respective party represents
and warrants to the other party that he or she is duly authorized to so execute
and deliver this First Amendment and that all corporate actions and consents
required for execution of this First Amendment have been given, granted or
obtained. If Tenant is a partnership, company, corporation or other business
organization, it shall, within ten (10) Business Days after demand by Landlord,
deliver to Landlord satisfactory evidence of the due authorization of this
Lease and the authority of the person executing this First Amendment on its
behalf.

 

22.                                 Ratification of Lease. The Lease,
as herein amended, remains in full force and effect and is hereby ratified and
reaffirmed in all respects.

 

<THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK>

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

7

 

WHEREFORE, the parties
set their hands and seals as of the date first written above.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
  NewTower
  Trust Company Multi-Employer 

  Property Trust, a trust organized under 

  12 C.F.R. Section 9.18

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Kennedy
  Associates Real Estate Counsel, Inc., 

  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James R.
  Landau

  	
   

  
	
   

  	
   

  	
  Name: James R.
  Landau

  
	
   

  	
   

  	
  Its: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
  Cephalon, Inc.,a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert J. Urban

  	
   

  
	
   

  	
  Print Name: Robert J.
  Urban

  
	
   

  	
  Title: Vice President,
  Worldwide Facilities and 

  Corporate Engineering

  
							

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

8

 

LANDLORD ACKNOWLEDGEMENT

 

	
  Maryland

  	
  )

  
	
  Montgomery

  	
  ) ss.

  
	
   

  	
  )

  

 

On
this 11th day of May, 2006, before me personally appeared James R.
Landau, to me known to be a Vice President of Kennedy Associates Real Estate
Counsel, Inc., the corporation that executed the within and foregoing
instrument as authorized signatory of the NewTower Trust Company Multi-Employer
Property Trust, and acknowledged said instrument to be the free and voluntary
act and deed of such corporation as such authorized signatory, for the uses and
purposes therein mentioned, and on oath stated that he (he or she) was
authorized to execute said instrument.

 

IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year first above written.

 

	
   

  	
  Name: /s/

  	
  Melissa A. McLean

  	
   

  
	
   

  	
  NOTARY PUBLIC in and
  for the Maryland,

  
	
   

  	
  residing at Washington
  DC.

  
	
   

  	
  My appointment expires:
  August 29, 2009.

  

 

[NOTARIAL SEAL]

 

TENANT
ACKNOWLEDGEMENT

 

	
   

  	
  )

  
	
   

  	
  ) ss.

  
	
   

  	
  )

  

 

On this 21st day of April,
2006, before me, a Notary Public in and for the Commonwealth of Pennsylvania
personally appeared Robert J. Urban, the Vice President, Worldwide Facilities
and Corporate Engineering of Cephalon, Inc., the Delaware corporation that executed the within and foregoing instrument, and
acknowledged said instrument to be the free and voluntary act and deed of said corporation
for the uses and purposes therein mentioned, and on oath stated that s/he/they
was/were authorized to execute said instrument..

 

IN WITNESS WHEREOF, I
have hereunto set my hand and affixed my official seal the day and year first
above written.

 

 

	
   

  	
  Name:

  	
  /s/ Carolyn S. Iosca

  	
   

  
	
   

  	
  NOTARY PUBLIC in and
  for the

  
	
   

  	
   

  	
  , residing at 

  
	
   

  	
   

  	
  .

  
	
   

  	
  My appointment expires:
  March 3, 2007.

  
						

 

[NOTARIAL SEAL]

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

9

 

First Amendment Exhibit A

 

Drawing Showing the Expansion Premises

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

10Exhibit
10.2

 

CO-PROMOTION
AGREEMENT

 

This
Co-Promotion Agreement (hereafter, this “AGREEMENT”) is entered into as of June
12, 2006, by and between Cephalon, Inc., a Delaware corporation (“CEPHALON”),
and Takeda Pharmaceuticals North America, Inc., a Delaware corporation (“TPNA”).

 

RECITALS

 

A.                                   Cephalon
is the owner of all right, title and interest in and to Cephalon’s product
marketed under the brand name “PROVIGIL®” (“PROVIGIL”, as more fully defined
below).

 

B.                                     Cephalon
believes additional resources are necessary to adequately meet the demands for
information about and access to Provigil in the Territory and, therefore,
desires to Co-Promote Provigil with TPNA in the Territory.

 

C.                                     TPNA
desires to Co-Promote Provigil with Cephalon in the Territory, and Cephalon is
willing to grant TPNA the right to Co-Promote Provigil in the Territory, all on
the terms and subject to the conditions set forth in this Agreement.

 

D.                                    Cephalon
is awaiting Marketing Authorization to market and sell Nuvigil in the
Territory.

 

E.                                      Cephalon
believes, following receipt of Marketing Authorization for Nuvigil, additional
resources may be necessary to adequately meet the demands for information about
and access to Nuvigil in the Territory and, therefore, desires to provide for
the opportunity to Co-Promote Nuvigil with TPNA in the Territory.

 

F.                                      TPNA
desires to have the opportunity to Co-Promote Nuvigil with Cephalon in the
Territory, and Cephalon is willing to grant TPNA the opportunity to Co-Promote
Nuvigil in the Territory, all on the terms and subject to the conditions set
forth in this Agreement.

 

1.                                       DEFINITIONS

 

1.1.                              ACTUAL
BASELINE NET SALES shall mean for the first Agreement Year the Baseline Net
Sales multiplied by the sum of (a) one (1) plus (b) [**].
Actual Baseline Net Sales for all subsequent Agreement Years shall mean the
Actual Baseline Net Sales for the immediately preceding Agreement Year
multiplied by the sum of (i) one (1) plus (ii) [**].
By way of example, [**].

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

 

1.2.                              ACTUAL
ANNUAL EFFECTIVE PRICE INCREASE shall mean, for an Agreement Year, the sum of
the Actual Annual Effective Price Increase for Provigil and the Actual Annual
Effective Price Increase for Nuvigil.

 

The Actual Annual
Effective Price Increase for Provigil shall mean, for an Agreement Year:  [**].

 

The Actual Annual
Effective Price Increase for Nuvigil shall mean, for an Agreement Year:  [**].

 

By way of example, [**]. All calculations of Actual Annual Effective Price
Increase shall be carried out to two (2) decimal places.

 

1.3.                              ADVERSE
EVENT(S) shall mean those events defined as adverse drug experiences in Title
21 of the U.S. Code of Federal Regulations, §§ 314.80, as amended from time to
time and published in the Federal Register.

 

1.4.                              AFFILIATE
shall mean any corporation, firm, partnership or other entity that directly or
indirectly owns, is owned by or is under common ownership with a Party to the
extent of at least fifty percent (50%) of the equity or other ownership
interest having the power to vote on or direct the affairs of the entity and any
person, firm, partnership, corporation or other entity actually controlled by,
controlling or under common control with a Party.

 

1.5.                              AGREEMENT
YEAR shall mean the period beginning on July 1, 2006 and ending twelve (12)
consecutive calendar months later, and each successive twelve (12) consecutive
calendar months period during the Term.

 

1.6.                              BASELINE
NET SALES shall mean [**].

 

1.7.                              BUSINESS
DAY shall mean a day on which commercial banks are open for business in New
York City. References in this Agreement to “DAYS” other than Business Days
shall mean calendar days.

 

1.8.                              CALL
shall mean (i) with respect to the CNS 500 Sales Force Representatives, a
personal visit by a CNS 500 Sales Force Representative to a Rozerem Target
Physician during which such CNS 500 Sales Force Representative Details the
Products, (ii) with respect to the Excel 250 Sales Force Representatives, a
personal visit by an Excel 250 Sales Force Representative to a TPNA Provigil
Target Physician during which such Excel 250 Sales Force Representative Details
the Products, and (iii) with respect to the Cephalon Provigil Sales Force
Representatives, a personal visit by a Cephalon Provigil Sales Force
Representative to a Cephalon Provigil Target Physician during which such
Cephalon Provigil Sales Force Representative Details the Products.

 

1.9.                              CEPHALON
DETAIL REQUIREMENTS shall have the meaning set forth in Section 2.2(b).

 

1.10.                        CEPHALON
PROVIGIL SALES FORCE REPRESENTATIVE shall mean the four hundred (400) or more
field-based sales representatives employed by Cephalon who as of 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

2

 

the
Effective Date promote Provigil. Cephalon Provigil Sales Force Representatives
shall mean all such field-based representatives.

 

1.11.                        CEPHALON
PROVIGIL TARGET PHYSICIANS shall mean those physicians in the existing call
plan of the Cephalon Provigil Sales Force Representatives, which consists
primarily of primary care physicians, psychiatrists and neurologists. It is
understood that Cephalon may amend such call plan from time to time based on
Cephalon’s then current assessment of the optimal list of central nervous
system market targets in primary care, psychiatry and neurology.

 

1.12.                        CHANGE OF
CONTROL of Cephalon shall occur if (i) any person or entity not an Affiliate of
Cephalon acquires directly or indirectly the beneficial ownership of any voting
security of Cephalon, or if the percentage ownership of such person or entity
in the voting securities of Cephalon is increased through stock redemption, cancellation
or other recapitalization, and immediately after such acquisition or increase
such person or entity is, directly or indirectly, the beneficial owner of
voting securities representing fifty percent (50%) or more of the total voting
power of all of the then-outstanding voting securities of Cephalon, (ii) the
consummation of a merger, consolidation, recapitalization, or reorganization of
Cephalon, other than any such transaction which would result in stockholders or
equity holders of Cephalon or an Affiliate of Cephalon immediately prior to
such transaction owning at least fifty percent (50%) of the outstanding
securities of the surviving entity in such transaction immediately following
such transaction, or (iii) the stockholders or equity holders of Cephalon shall
approve a plan of complete liquidation of Cephalon or an agreement for the sale
or disposition by Cephalon of all or a substantial portion of Cephalon’s
assets, other than pursuant to the transaction as described above or to an
Affiliate.

 

1.13.                        CNS 500
SALES FORCE REPRESENTATIVE shall mean the five hundred (500) or more
field-based sales representatives employed by TPNA or TPA who as of the
Effective Date promote TPNA’s insomnia product ROZEREM® and who are not Excel
250 Sales Representatives. CNS 500 Sales Force Representatives shall mean all
such field-based sales representatives.

 

1.14.                        CNS 500
INCENTIVE PLAN PRODUCT WEIGHTING shall have the meaning set forth in Section
5.5(c)(i).

 

1.15.                        CODE OR
CODES shall mean the Code on Interactions with Healthcare Professionals
promulgated by the Pharmaceutical Research and Manufacturers of America (PhRMA)
and the American Medical Association Guidelines on Gifts to Physicians, as
either of the foregoing may be amended.

 

1.16.                        CO-PROMOTION
shall mean those promotional activities undertaken by a pharmaceutical company’s
sales force in concert with at least one other pharmaceutical company’s sales
force to implement the marketing and sales plans with respect to a particular
prescription pharmaceutical product under a single trademark. When used as a
verb, Co-Promote shall mean to engage in such activities.

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

3

 

1.17.                        COST OF
MANUFACTURE shall mean, with respect to a product, Cephalon’s fully allocated
manufacturing and packaging (including overhead costs) cost directly applied by
Cephalon to such product calculated on a consistent basis in accordance with
GAAP, and shall also include all production costs. Cost of Manufacture shall
not include any manufacturing variances due to idle (other than planned
maintenance shutdowns) plant capacity or allocable to other products or any
profit related to intercompany transfer pricing.

 

1.18.                        DETAIL or
DETAILING shall mean a face-to-face meeting, between (i) a Sales Representative
of the applicable Party, meeting minimum professional standards of a four-year
college degree (B.A., B.S. or equivalent), and (ii) a health care professional
with prescribing authority, during which a presentation of the Product’s
attributes is orally presented in a manner consistent with the quality of such
presentations made by a Party’s professional representatives for such Party’s
other products. A FIRST POSITION DETAIL shall mean a Detail where the
presentation of such Product during the Detail is the first presentation made
and is the presentation on which the most time is spent during such meeting. A
SECOND POSITION DETAIL shall mean a Detail where the presentation of a Product
during the Detail is the presentation on which the second most amount of time
is spent during such meeting. When used as a verb, Detail shall mean to engage
in a Detail.

 

1.19.                        EFFECTIVE
DATE shall mean the date upon which this Agreement becomes effective and shall
be the date first written above.

 

1.20.                        ESTIMATED
BASELINE NET SALES shall mean (i) for the first Agreement Year [**], (ii) for all subsequent Agreement Years [**], and (iii) for each twelve (12) month period during the
Sunset Royalty Period [**].

 

1.21.                        EXCEL 250
SALES FORCE REPRESENTATIVE shall mean the two hundred fifty (250) or more
field-based sales representatives employed by TPNA or TPA who as of the
Effective Date are not CNS 500 Sales Force Representatives. Excel 250 Sales
Force Representatives shall mean all such field-based sales representatives.

 

1.22.                        EXCEL 250
INCENTIVE PLAN PRODUCT WEIGHTING shall have the meaning set forth in Section
5.5(c)(ii).

 

1.23.                        FDA shall
mean the United States Food and Drug Administration and any successor agency
thereto.

 

1.24.                        FIRST
COMMERCIAL SALE OF NUVIGIL shall mean the first shipment of commercial
quantities of Nuvigil sold to a Third Party by Cephalon or its sublicensees in
the Territory after receipt of Marketing Authorization for Nuvigil in the
Territory. Sales for test marketing, sampling and promotional uses, clinical
trial purposes or compassionate or similar uses shall not be considered to
constitute a First Commercial Sale of Nuvigil.

 

1.25.                        GAAP shall
mean Generally Accepted Accounting Principles in the United States.

 

1.26.                        GROSS
SALES shall mean gross shipments of the Products in the Territory as invoiced
by Cephalon, excluding any deductions including, without limitation, deductions
for 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

4

 

prompt
payment discounts, wholesaler discounts, returns, coupons (including those
provided in connection with patient assistance programs) whether reserved,
actually presented or otherwise, Medicaid discounts, Medicare Part D discounts,
and managed care and governmental contracts.

 

1.27.                        GROSS TO
NET FACTOR shall mean [**] unless
adjusted by the Steering Committee due to legislative, governmental,
administrative or other regulatory changes to formulas for mandated discounts
to governmental customers. For the avoidance of doubt, an adjustment shall not
be made in the case of changes in discount exposure (a) that are unrelated to
new legislation or governmental, administrative or other regulatory actions or
(b) that are discretionary.

 

1.28.                        INCREMENTAL
NET SALES shall mean Net Sales for the applicable Agreement Year minus the
Estimated Baseline Net Sales for such applicable Agreement Year.

 

1.29.                        INITIAL
TERM shall have the meaning set forth in Section 3.1.

 

1.30.                        INVENTORY
CHANGE for a particular Agreement Year and each year during the Sunset Royalty
Period shall mean [**]. Attached
as Schedule 1.30(A) is a template for the calculation of Inventory Change. Also
attached as Schedule 1.30(B) is a template showing the supporting data for
Schedule 1.30(A).

 

1.31.                        INVENTORY
CHANGE TRUE-UP shall have the meaning set forth in Section 4.6(b).

 

1.32.                        JOINT
CO-PROMOTION ACTIVITIES shall have the meaning set forth in Section 5.4.

 

1.33.                        MARKETING
ADVISORY COMMITTEE shall mean the committee established and conducted in
accordance with the procedures set forth in Article 5.

 

1.34.                        MARKETING
AUTHORIZATION shall mean, with respect to the Territory, the regulatory
authorization required to market and sell a Product in the Territory as granted
by FDA.

 

1.35.                        NDA shall
mean a New Drug Application for a Product in accordance with the requirements
of the FDA.

 

1.36.                        NET SALES
shall mean Gross Sales multiplied by the Gross to Net Factor.

 

1.37.                        NUVIGIL
shall mean Cephalon’s Nuvigil® (armodafinil) single-isomer formulation of
modafinil product in all dosages and for all indications approved by FDA at any
time during the Term.

 

1.38.                        PARTY(IES)
shall mean each of Cephalon and TPNA.

 

1.39.                        PRIMARY
DETAIL EQUIVALENT (“PDE”) shall mean a numerical amount that scores the value
of Details performed by Sales Representatives as follows:  [**] for each
First Position Detail and [**] for each
Second Position Detail.

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

5

 

1.40.                        PRODUCT
shall mean Provigil or Nuvigil. PRODUCTS shall mean Provigil and Nuvigil. For
purposes of clarification, Nuvigil shall not be deemed a Product for purposes
of this Agreement until immediately following the First Commercial Sale of
Nuvigil.

 

1.41.                        PROMOTION
means those promotional activities undertaken by a pharmaceutical company’s
sales force to implement the marketing and sales plans with respect to a
particular prescription product under a single trademark. When used as a verb, “Promote”
shall mean to engage in such activities.

 

1.42.                        PROMOTIONAL
MATERIALS shall mean all written, printed, video or graphic advertising,
promotional, training and communication materials (other than labeling for the
Products) for marketing, advertising, promotion and sale of the Products for
use in the Territory by (i) Sales Representatives or (ii) advertisements or
direct mail pieces.

 

1.43.                        PROVIGIL
shall mean Cephalon’s Provigil® (modafinil) product for the improvement of
wakefulness in patients with excessive sleepiness associated with narcolepsy,
obstructive sleep apnea/hypopnea syndrome, and shift work sleep disorder in all
dosages and for all indications approved by FDA at any time during the Term.

 

1.44.                        OIG
GUIDANCE shall have the meaning set forth in Section 2.3.

 

1.45.                        QUARTERLY
ESTIMATED BASELINE NET SALES AMOUNT shall mean the amount equal to [**].

 

1.46.                        ROYALTY
PAYMENT shall have the meaning set forth in Section 4.1.

 

1.47.                        ROZEREM
TARGET PHYSICIANS shall mean those physicians in the existing call plan of the
CNS 500 Sales Force Representatives, which consists primarily of primary care
physicians, psychiatrists and neurologists. It is understood that TPNA may
amend such call plan from time to time based on TPNA’s then current assessment
of the optimal list of central nervous system market targets in primary care,
psychiatry and neurology.

 

1.48.                        SALES
REPRESENTATIVE shall mean a CNS Sales Force Representative, an Excel 250 Sales
Force Representative or a Cephalon Provigil Sales Force Representative. Sales
Representatives shall mean the CNS Sales Force Representatives, the Excel 250
Sales Force Representatives and the Cephalon Provigil Sales Force
Representatives.

 

1.49.                        STEERING
COMMITTEE shall have the meaning set forth in Section 5.6.

 

1.50.                        SUNSET
ROYALTY PAYMENT shall have the meaning set forth in Section 4.2.

 

1.51.                        SUNSET
ROYALTY PERIOD shall mean the three (3) year period of time following the
Initial Term.

 

1.52.                        TARGET
AUDIENCE shall mean the Rozerem Target Physicians, the TPNA Provigil Target
Physicians and the Cephalon Provigil Target Physicians, as the case may be.

 

1.53.                        TERM shall
have the meaning set forth in Section 3.1.

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

6

 

1.54.                        TERRITORY
shall mean the United States of America, its territories and possessions,
including Puerto Rico.

 

1.55.                        THIRD
PARTY(IES) shall mean any person or entity other than Cephalon and TPNA or their
Affiliates.

 

1.56.                        TOTAL
SUNSET ROYALTY BASE shall mean the sum of Royalty Payments paid to TPNA
hereunder for the [**] prior to
the expiration of the Initial Term or termination of this Agreement, as
applicable.

 

1.57.                        TPA shall
mean Takeda Pharmaceuticals America, Inc., a wholly-owned subsidiary of TPNA.

 

1.58.                        TPNA
DETAIL REQUIREMENTS shall have the meaning set forth in Section 2.2(b).

 

1.59.                        TPNA
PROVIGIL TARGET PHYSICIANS shall mean those physicians determined by the
Marketing Advisory Committee to which the Excel 250 Sales Force Representatives
will promote the Products. The Marketing Advisory Committee shall target such
physicians in a commercially reasonable manner to maximize sales of the
Products during the Term.

 

2.                                       CO-PROMOTION

 

2.1.                              GRANT
OF RIGHTS.

 

(a)                                  Cephalon
grants to TPNA the exclusive non-sublicensable (except as to TPA) right to
Co-Promote the sale of Provigil in the Territory to the Rozerem Target
Physicians utilizing the CNS 500 Sales Force Representatives and to the TPNA
Provigil Target Physicians utilizing the Excel 250 Sales Force Representatives,
subject to (i) Cephalon’s right to Co-Promote Provigil in the Territory to the
Cephalon Provigil Target Physicians utilizing the Cephalon Provigil Sales Force
Representatives and (ii) all the other terms and conditions of this Agreement.
Cephalon shall retain exclusively all of its rights with respect to Provigil
outside the Territory and TPNA shall have no rights with respect to Provigil
outside the Territory as a result of the execution or performance of this
Agreement.

 

(b)                                 Cephalon
shall not grant any rights that permit or authorize any Third Party during the
Term to Promote, sell or Detail Provigil in the Territory without TPNA’s prior
written consent. TPNA shall have no other rights relating to Provigil except as
specified in this Agreement. Cephalon grants to TPNA a fully paid license to
use the Cephalon trademarks relating to the Products in the Territory during
the Term in connection only with the marketing and promotion of the Products as
contemplated in this Agreement, subject to Cephalon retaining full rights to
use the Cephalon trademarks relating to the Products in the Territory, and
without limiting in any way Cephalon’s rights with respect to the Cephalon
trademarks outside the Territory. Cephalon shall not use the Takeda logo or any
trademark registered for use in connection with TPNA’s business without TPNA’s
prior written consent.

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

7

 

2.2.                              EFFORTS.

 

(a)                                  TPNA
shall deploy the CNS 500 Sales Force Representatives and the Excel 250 Sales
Force Representatives, and Cephalon shall deploy the Cephalon Provigil Sales
Force Representatives, in an effort to promote effectively and conduct Details
of Provigil in accordance with the terms of this Agreement and the instructions
of the Marketing Advisory Committee. Both Cephalon and TPNA shall use
reasonable commercial efforts consistent with accepted pharmaceutical industry
business practices to maximize sales of the Products during the Term and in
conducting their respective promotional and Detailing activities hereunder.

 

(b)                                 (i)
TPNA shall cause the CNS 500 Sales Force Representatives and the Excel 250
Sales Force Representatives to conduct the total Details required (“TPNA DETAIL
REQUIREMENTS”) to be performed by such Sales Representatives during the Term as
set forth on Schedule 2.2(b) and (ii) Cephalon shall cause the Cephalon
Provigil Sales Force Representatives to conduct the total Details required (“CEPHALON
DETAIL REQUIREMENTS”) to be performed by such Sales Representatives during the
Term as set forth on Schedule 2.2(b).

 

(c)                                  During
the Term and subject to Section 10.1, each CNS 500 Sales Force Representative
shall promote [**], provided that [**] are targeted at the Rozerem Target Physicians.

 

(d)                                 During
the Term and subject to Section 10.1, each Excel 250 Sales Force Representative
shall promote [**], provided that [**] are targeted at the TPNA Provigil Target Physicians.

 

(e)                                  During
the Term and subject to Section 10.1, each Cephalon Provigil Sales Force
Representative shall promote [**], provided
that [**] are targeted at the Cephalon
Provigil Target Physicians.

 

(f)                                    The
Parties acknowledge and agree that (i) some or all of TPNA’s obligations
hereunder may be performed by TPA, and (ii) in no event will TPNA perform or
permit any of its Affiliates to perform Details outside the fifty (50) states
of the United States of America and the District of Columbia. To the extent
that TPNA causes or permits TPA to perform any of TPNA’s obligations under this
Agreement, (I) TPNA hereby unconditionally guarantees the performance of all
such obligations in accordance with the terms of this Agreement, subject only
to TPNA’s rights and remedies hereunder, and (II) TPNA shall cause TPA to
comply with all of the terms, provisions and conditions contained in this
Agreement that would be applicable to TPNA in the performance of such
obligations.

 

(g)                                 TPNA
agrees that in its Promotion of the Products it will not negatively position
the Products in any oral presentation or Promotional Materials. Likewise,
Cephalon agrees that in its promotional practices it will not negatively
position Rozerem in any oral presentation or Promotional Materials. Notwithstanding
the previous two sentences, nothing contained herein shall prevent either party
from complying with applicable laws and regulations, including regulatory
requirements relating to fair balance.

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

8

 

2.3.                              COMPLIANCE
WITH LAW. Each of Cephalon and TPNA agree that in promoting the Products and
performing Details, such Party shall comply with applicable laws and
regulations applicable to the marketing, sale and promotion of pharmaceutical
products (including without limitation the Prescription Drug Marketing Act (“PDMA”),
Federal Health Care Program Anti-Kickback Law (42 U.S.C. ss.1320a-7b), the
Health Insurance Portability and Accountability Act of 1996), FDA laws and
regulations, the Codes, and the terms of this Agreement. No Party shall be
required to undertake any obligation, or incur any cost or reimbursement
obligation, in connection with any activity under this Agreement that such
Party believes, in good faith, may violate any applicable law, regulation or
Code. Consistent with the “Compliance Program Guidance for Pharmaceutical
Manufacturers,” published by the Office of Inspector General, U.S. Department
of Health and Human Services (the “OIG Guidance”), each Party agrees to
maintain a compliance program with respect to its promotional and sales activities
pursuant to this Agreement containing all of the elements described in such
guidance document.

 

3.                                       TERM,
TERMINATION AND RENEGOTIATION

 

3.1.                              TERM.
This Agreement shall commence on the Effective Date (it being understood and
agreed that TPNA shall not be obligated to cause the CNS 500 Sales Force
Representatives to perform Details prior to July 5, 2006 and to cause the Excel
250 Sales Force Representatives to perform Details prior to January 1, 2007)
and shall terminate at 11:59 p.m. Eastern Standard Time on June 30, 2009,
unless earlier terminated pursuant to Section 3.2 (the “INITIAL TERM”). After
the Initial Term, this Agreement may only be renewed by agreement of the
Parties in writing (the “INITIAL TERM” and any renewal terms are collectively
referred to as the “TERM”).

 

3.2.                              EARLY
TERMINATION.

 

(a)                                  Each
Party shall have the right to terminate this Agreement before the end of the
Term, so long as any notice or cure period required under this Section 3.2(a)
expires prior to the end of the Term, (i) subject to Section 5.6, upon a
material breach of this Agreement by the other Party where such breach is not
cured within ninety (90) days following the other Party’s receipt of written
notice of such breach, (ii) upon the withdrawal of Marketing Authorization for
a Product or upon the withdrawal of the Product by Cephalon due to a serious
life-threatening health and/or safety concern, but, in each case, only if the
Net Sales of such Product represented [**] for the
Products during the [**] immediately
preceding such withdrawal, (iii) upon the bankruptcy or insolvency, or the
making or seeking to make or arrange an assignment for the benefit of creditors
of the other Party, or the initiation of proceedings in voluntary or
involuntary bankruptcy, or the appointment of a receiver or trustee of such
Party’s property that is not discharged within ninety (90) days, (iv) upon
sixty (60) days written notice delivered to the other Party if Net Sales for
the first Agreement Year are [**] or for the
second Agreement Year [**], (v) upon
thirty (30) days prior written notice delivered to the other Party within sixty
(60) days after a Change of Control of Cephalon occurs; provided however, TPNA
may only exercise such termination right if such Change of Control places TPNA
at a competitive disadvantage with respect to a Third Party product that
directly competes [**] immediately
preceding such Change of Control; or (vi) upon thirty (30) days written notice
delivered to the other Party within thirty (30) days after (1) the launch in
the Territory of a FDA-

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934, as amended.

 

9

 

approved
generic version of either of the Products and (2) a decline in the Net Sales of
the Products over [**]
immediately preceding such launch; or (vii) upon the occurrence of serious
Adverse Events related to the use of a Product that cause a Party to reasonably
conclude that the continued use of such Product by patients will result in
serious life-threatening health and/or safety concerns, but only if the Net
Sales of such Product represented [**]immediately
preceding such conclusion; provided, however, if the Product that has the
occurrence of serious Adverse Events has Net Sales that [**]
immediately preceding such conclusion, then TPNA may cease promotion of only such
Product having the occurrence of serious Adverse Events.

 

(b)                                 Effect
of Early Termination.

 

(i)                                     In
the event this Agreement is terminated by Cephalon pursuant to clause (iv) of
Section 3.2(a), then TPNA shall be entitled to receive from Cephalon [**]. Payments under this Section 3.2(b)(i) shall be made in
accordance with Sections 4.2(b)(i) and (d).

 

(ii)                                  In
the event this Agreement is terminated by TPNA pursuant to clause (v) of
Section 3.2 (a), then TPNA shall be entitled to receive from Cephalon the Sunset
Royalty Payments. Payments under this Section 3.2(b)(ii) shall be made in
accordance with Sections 4.2(a), (b)(i), (c) and (d).

 

(iii)                               For
the avoidance of doubt, in the event this Agreement is terminated pursuant to
Section 3.2(a) during the first Agreement Year, for the purpose of payments
required under Section 3.2(b)(i) and (ii) [**].

 

(iv)                              In
the event this Agreement is terminated by Cephalon pursuant to clause (v) of
Section 3.2(a) during [**]. Payment
due to TPNA under this Section 3.2(b)(iv) shall be paid by Cephalon within
thirty (30) days following the effective date of termination of this Agreement.

 

4.                                       FEES
AND PAYMENTS

 

4.1.                              ROYALTY
ON INCREMENTAL NET SALES. TPNA, in consideration for the performance of its
obligations hereunder, shall be entitled to receive from Cephalon one of the
following royalty payments (the “ROYALTY PAYMENT”):  (i) during the Term when only Provigil is
being sold, a royalty payment equal to [**], or (ii)
during the Term when the Products are being sold, a royalty payment equal to [**]. The amount of such Royalty Payment shall be determined
and paid on a quarterly basis and shall be calculated following each calendar
quarter of an Agreement Year by [**]. No
Royalty Payment for a calendar quarter shall be made if [**].
Cephalon shall provide TPNA with written statements as provided in Section 4.5.
All Royalty Payments required to be paid by Cephalon shall be paid by Cephalon
within ten (10) Business Days following Cephalon’s delivery of the written
statement of the Net Sales of the Products and Royalty Payment amount for a
calendar quarter or such shorter period. In the event this Agreement is
terminated pursuant to Section 3.2(a), a pro-rated quarterly Royalty Payment
will be due to TPNA at the close of the quarter in which such termination
becomes effective if the amount calculated in the immediately following
sentence is positive. The amount of such Royalty Payment, if any, will be
calculated by [**].

 

**Portions of the Exhibit have been omitted and have been filed separately
pursuant to an application for confidential treatment filed with the Securities
and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934, as amended.

 

10

 

4.2.                              SUNSET
ROYALTY PAYMENTS.

 

(a)                                  Except
as otherwise provided in this Section 4.2 and as contemplated in Section 3.2,
in the event that this Agreement is not renewed by the Parties beyond June 30,
2009, TPNA shall be entitled to receive from Cephalon the following additional
payments (each a “SUNSET ROYALTY PAYMENT,” and together the “SUNSET ROYALTY
PAYMENTS”): [**]. The amount of such Sunset
Royalty Payment shall be determined and paid on a quarterly basis and shall be
calculated following each three (3) month period during the Sunset Royalty
Period by [**]. No Sunset Royalty Payment for any
three (3) month period shall be made if [**].

 

(b)                                 Cephalon’s
obligation to make Sunset Royalty Payments is subject to the following: (i) the
Sunset Royalty Payments will be made every three (3) months during the Sunset
Royalty Period, and (ii) except as provided in Section 3.2(b), TPNA shall not
be entitled to receive, and Cephalon shall not be obligated to make, any Sunset
Royalty Payments if this Agreement is terminated prior to July 1, 2009.

 

(c)                                  The
total Sunset Royalty Payments shall not exceed the following amounts:  [**].

 

(d)                                 Cephalon
shall provide TPNA with written statements as provided in Section 4.5. All
Sunset Royalty Payments required to be paid by Cephalon shall be paid by
Cephalon within ten (10) Business Days following Cephalon’s delivery of the
written statements.

 

4.3.                              PAYMENTS.
All payments under this Agreement shall be in U.S. dollars in immediately
available funds, and, unless instructed otherwise by the receiving Party, shall
be made via wire transfer to the account designated from time to time by the
receiving Party.

 

4.4.                              TAXES.
Unless otherwise required by law, each Party shall be responsible for paying
and reporting all of its own taxes and fees, including without limitation
income taxes, withholding taxes, payroll taxes, franchise taxes and all taxes
and fees in connection with the Party conducting business in any jurisdiction.

 

4.5.                              REPORTS.
Within thirty (30) days following the end of each calendar quarter of each
Agreement Year and each three (3) month period during the Sunset Royalty
Period, Cephalon shall provide TPNA with written statements containing a
calculation of the Net Sales for such quarter or three (3) month period, a
calculation of the Royalty Payment for such quarter or Sunset Royalty Payment
for such three (3) month period, and the date and amount of any price increases
in the Products, if any, during such quarter or three (3) month period. Examples
of the required written statements are attached as Schedules 1.30(A) and
1.30(B), and each Party shall provide the information identified in the
Schedules.

 

4.6.                              ROYALTY
PAYMENT AND INVENTORY CHANGE TRUE-UPS.

 

(a)                                  Within
sixty (60) days following the end of each Agreement Year during the Term and the
end of each twelve (12) month period during the Sunset Royalty Period, if any,
Cephalon shall determine the actual Royalty Payments or Sunset Royalty Payments
earned during such Agreement Year or twelve (12) month period. The actual
Royalty Payments earned or Sunset Royalty Payments earned will be calculated as
[**] 
In the event that the actual 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

11

 

Royalty
Payments or Sunset Royalty Payments earned for the applicable period are more
than the sum of the quarterly Royalty Payments or the sum of the quarterly
Sunset Royalty Payments paid for such period, then Cephalon shall pay to TPNA
an amount equal to the actual earned amount minus the paid amount as provided
in subsection (c) below. In the event that the actual Royalty Payments earned
or Sunset Royalty Payments earned for the applicable period are less than the
sum of the quarterly Royalty Payments or the sum of the quarterly Sunset
Royalty Payments paid for such period, then TPNA shall pay to Cephalon an
amount equal to the paid amount minus the actual earned amount as provided in
subsection (c) below.

 

(b)                                 Within
sixty (60) days following the end of each Agreement Year during the Term and
the end of each twelve (12) month period during the Sunset Royalty Period, if
any, the Parties shall determine the Inventory Change True-Up. The INVENTORY
CHANGE TRUE-UP shall be calculated as follows: 
the Inventory Change for the applicable Agreement Year or twelve (12)
month period during the Sunset Royalty Period, multiplied by the applicable
royalty rate. In the event that the Inventory Change True-Up is positive, then
Cephalon shall pay to TPNA an amount equal to the actual earned amount minus
the paid amount as provided in subsection (c) below. In the event that the
Inventory Change True-Up is negative, then TPNA shall pay to Cephalon an amount
equal to the paid amount minus the actual earned amount as provided in
subsection (c) below. TPNA will restate historical figures to the beginning of
the Term or Sunset Royalty Period for any IMS methodology change that occurs
during the Term or Sunset Royalty Period respectively, or IMS corrections
applicable to such periods. Cephalon will prepare a calculation of the
Inventory Change using units of the Products held by wholesale customers as
reported to Cephalon by its wholesale customers. To the extent the two methods
differ such that the payment to either Party would vary by more than [**] over a twelve (12) month period, Cephalon shall propose
a settlement to the Marketing Advisory Committee.

 

(c)                                  Cephalon
shall deliver to TPNA its calculations of the actual Royalty Payments and
Sunset Royalty Payments earned and the Inventory Change True-Up pursuant to
Sections 4.6(a) and 4.6(b) in writing using the formats shown in Schedules
1.30(A) and 1.30(B) and shall include the net amount due by either TPNA or
Cephalon to the other Party in such writing. The Party owing shall make the
payment due within ten (10) Business Days of TPNA’s receipt of Cephalon’s
written calculations.

 

5.                                       CO-PROMOTION
MANAGEMENT AND NUVIGIL RIGHTS

 

5.1.                              (a)                                  MARKETING
ADVISORY COMMITTEE. Within thirty (30) days after the Effective Date, Cephalon
and TPNA shall assemble a team of appropriate personnel from both Cephalon and
TPNA (the “MARKETING ADVISORY COMMITTEE”) to plan the ongoing sales and
promotional strategies and to review and direct such activities for the
Products in the Territory. The Marketing Advisory Committee shall consist of an
equal number of representatives from each of Cephalon and TPNA, not to exceed a
total of [**] representatives. Cephalon shall
designate one of its representatives on the Marketing Advisory Committee to
serve as its chairperson and TPNA shall designate one of its representatives on
the Marketing Advisory Committee to serve as its vice-chairperson. The
Marketing Advisory Committee may from time to time include additional
non-voting ad-hoc representatives from either Party on specific issues as the
need arises. As appropriate, the Marketing Advisory Committee may establish one
or more sub-committees to act on matters that may arise between meetings of the

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

12

 

Marketing
Advisory Committee or to consider matters that would be more effectively
considered by a smaller committee.

 

(b)                                 The
representatives of each Party serving on the Marketing Advisory Committee shall
collectively have one vote on all matters considered by the Marketing Advisory
Committee. In the event that the members of the Marketing Advisory Committee
are unable to agree on any matter, such matter shall be submitted to the senior
marketing officer of each Party, who shall meet in person or by telephone
within seven (7) Business Days to review and resolve such matter. If the senior
marketing officers of the Parties are not able to resolve such matter, the
chairperson of the Marketing Advisory Committee shall make a final decision
with respect to such matter that shall be binding on the Parties, subject to:
(i) the exceptions provided in Section 5.8, and (ii) the right of either Party
to require a disputed matter that is likely, in such Party’s reasonable
judgment, to have a material adverse impact on a Party or its Sales
Representatives to be submitted to the Steering Committee for resolution.

 

5.2.                              RESPONSIBILITIES
OF MARKETING ADVISORY COMMITTEE.

 

(a)                                  Except
as provided in Section 5.8, the Parties agree that Cephalon will have final
planning, oversight, performance evaluation and decision-making authority and
responsibility for all sales, marketing and promotional activities related to
the Products. TPNA will have the opportunity, through the Marketing Advisory
Committee, to confer with and advise Cephalon on such sales, marketing and
promotional matters, provided, however, that TPNA will not, without the prior
written consent of Cephalon (which consent shall not be unreasonably withheld),
initiate any advisory boards, speaker training programs, provide any grants,
conduct any primary market research or any other programs with respect to the
Products. Subject to the foregoing, the following marketing and promotional
matters, inter  alia, will be considered by the Marketing Advisory
Committee: (i) the fundamental marketing and promotional strategies; (ii) the
development of a comprehensive annual marketing plan; (iii) the establishment
and implementation of appropriate sales and marketing policies, programs, and
procedures; (iv) the development of strategies, policies, and objectives for
managed care and professional services representatives; (v) the development and
monitoring of individual and area performance measures for all field sales
activities; (vi) establishment and monitoring of the Products sampling
practices; (vii) establishment of requirements for and regularly review
prescription tracking, call reporting, and other secondary market data; (viii)
development of marketing and Promotional Materials such as product detail aids,
advertising, promotional give-aways, speaker kits, and direct mail; (ix)
establishment as appropriate of supplementary non-personal promotional programs
such as compliance, telemarketing and internet activities; (x) development of
professional/medical education programs including seminars, symposia,
participation at professional and medical conferences, and conventions,
physician advocacy programs, and event marketing programs; and (xi) the
determination of the TPNA Provigil Target Physicians; and (xii) planning and
coordinating public relations activities for the Products.

 

(b)                                 Notwithstanding
anything set forth above in Section 5.2(a), Cephalon shall bear final
responsibility for (i) determining pricing for the Products, and (ii) ensuring
that the Promotional Materials and labeling comply with the Federal Food, Drug
and Cosmetic Act and all other applicable laws and regulations; provided,
however, pursuant to Section 5.8, TPNA shall have the right to decline to use
any Promotional Material or item. For the avoidance of 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

13

 

doubt,
Cephalon solely shall make all decisions regarding the pricing of the Products
to all channels of trade (including, without limitation, chargebacks, rebates,
discounts, credits, free goods or any other matter affecting the ultimate
prices to Third Parties) and under no circumstances shall any such pricing matter
be discussed by the Parties.

 

5.3.                              MEETINGS
OF MARKETING ADVISORY COMMITTEE. Meetings of the Marketing Advisory Committee
shall be held [**] commencing with the first
meeting to occur within thirty (30) days following the Effective Date or more
often as determined by the Marketing Advisory Committee. The location of
Marketing Advisory Committee meetings and whether to hold them via
teleconference and/or videoconference shall be determined by the Marketing
Advisory Committee, provided one Party does not bear an undue travel burden.
Minutes of each Marketing Advisory Committee meeting shall be transcribed and
issued by a designee of the Committee within ten (10) Business Days after each
meeting and shall be approved by the chairperson and vice-chairperson not later
than the first order of business at the immediately succeeding Marketing
Advisory Committee meeting. Each Party shall bear its own expenses in
connection with attending meetings of the Marketing Advisory Committee. The
Marketing Advisory Committee shall also establish a procedure for either (i)
calling special interim meetings of the Marketing Advisory Committee in the
event a need for Marketing Advisory Committee decisions arises between
regularly scheduled meetings or (ii) establishing a process for making such
interim decisions.

 

5.4.                              JOINT
CO-PROMOTION ACTIVITIES. Subject to the overall marketing and promotional plan
for the Products established by Cephalon and considered by the Marketing
Advisory Committee, each of Cephalon and TPNA shall be responsible for
performing the Co-Promotion activities described below (the “JOINT CO-PROMOTION
ACTIVITIES”), in each case in accordance with the requirements established in
this Agreement. Accordingly, except as otherwise provided in this Agreement,
each Party shall fully bear all of the costs incurred by such Party in
connection with such Party’s performance of the Joint Co-Promotion Activities.

 

(a)                                  FIELD
SALES. The Marketing Advisory Committee shall determine and adjust as necessary
the physician targets and call activities of the Excel 250 Sales Force
Representatives. Each Party shall maintain records of each Product Detail by
its Sales Representatives using a call document which records the name and
address of the member of the Target Audience, the date and position of the
Product Detail and shall supply a monthly record of the number of total Product
Details to the other Party within sixty (60) days of the end of each month in a
form to be established by the Marketing Advisory Committee.

 

(b)                                 SAMPLING
AND PROMOTIONAL MATERIALS.

 

(i)                                     The
Marketing Advisory Committee shall determine the appropriate level of sampling
and Promotional Materials per member of the Target Audience, consistent with
Cephalon’s sampling practices on the Effective Date and subject to Section 5.8.
All sample distribution and storage shall be conducted by Cephalon in
accordance with the PDMA. Any record-keeping and/or reporting obligations of
either Party shall be conducted by such Party in accordance with PDMA, if
applicable. Cephalon shall supply a monthly record to TPNA of the number of
sample units requested by each Party and fulfilled on behalf of each 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

14

 

Party
per member of the Target Audience within sixty (60) days of the end of each
month in a form to be established by the Marketing Advisory Committee.

 

(ii)                                  TPNA
shall not be required to commence sampling activities to physicians until it
has (1) completed validation of Cephalon’s internal sampling procedures and/or
an audit of the Third Party vendor who will be providing sampling distribution
services, and (2) established its own internal procedures relating to sampling
the Products. TPNA shall complete such validation activities and establish such
procedures prior to July 17, 2006. TPNA shall perform sampling activities to
mid-level health care practitioners only after establishing its own internal
procedures supporting such sampling activities, provided that TPNA shall
establish such procedures prior to July 31, 2006. Notwithstanding anything to
contrary contained in this Section 5.4(b)(ii), if TPNA identifies a material
issue while conducting such validation activities, TPNA shall provide Cephalon
with prompt written notice of such material issue(s) and the Parties shall mutually
agree upon an extension of the applicable deadline(s). Not later than ten (10)
Business Days after the Effective Date, the Parties shall agree on any
procedures to fulfill sampling reporting obligations to the FDA or the Drug
Enforcement Agency.

 

(c)                                  SALES
FORCE TRAINING. Cephalon’s training managers will provide initial training to [**] TPNA sales force trainers. Cephalon and TPNA will each
pay their own expenses associated with such initial training. Thereafter,
Cephalon and TPNA will each be responsible for conducting training of their own
sales forces, at their own expense, subject to Section 5.4(d) with respect to
training materials.

 

(d)                                 REIMBURSEMENT
OF COSTS. TPNA agrees that certain of the Joint Co-Promotion Activities will be
primarily undertaken by Cephalon on behalf of both Parties, and TPNA shall
reimburse Cephalon for the following incremental out-of-pocket costs actually
incurred by Cephalon on TPNA’s behalf:

 

(i)                                     materials
shipped to TPNA’s warehouse:  marketing
and promotion materials (sales aids, premiums, speaker kits, reprints, etc.);
and training materials; and

 

(ii)                                  samples
(and related shipping costs) requested by TPNA’s Sales Representatives at
Cephalon’s Cost of Manufacture;

 

(iii)                               program
costs due to increased physician reach including but not limited to:  direct mail; medical education; dinner
speaker programs; medical symposia; medical meetings and similar activities
approved by the Marketing Advisory Committee; and Phase IV clinical trials.

 

The Parties acknowledge that TPNA’s reimbursement
obligations are intended to correspond to those costs which are incremental
based on TPNA’s Co-Promotion obligations hereunder and not to those costs which
Cephalon would have incurred regardless of such Co-Promotion obligations. In
each Agreement Year an initial budget for the reimbursable items listed above
will be set by the Marketing Advisory Committee and will be approved by the
Steering Committee. TPNA’s obligation to reimburse Cephalon under, or make
direct payments in connection with, this Article 5 shall not exceed [**] for each Agreement Year during the Term 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

15

 

without the prior written agreement of TPNA. For the avoidance of
doubt, in addition to reimbursement for the items noted above, TPNA’s cap on
expenses noted in the previous sentence shall include amounts paid directly by
TPNA for dinner speaker programs or such other promotional materials or
programs that the Parties agree TPNA will handle directly.

 

Cephalon shall submit a detailed invoice to TPNA
within thirty (30) days following the end of each calendar quarter for all
reimbursable items hereunder delivered to TPNA during such quarter. TPNA will
pay such invoice within thirty (30) days following receipt thereof.

 

5.5.                              OTHER
CO-PROMOTION MATTERS.

 

(a)                                  BOOKING
OF SALES REVENUE. Cephalon shall record on its books all revenue from Gross
Sales and Net Sales of the Products.

 

(b)                                 PACKAGING.
Cephalon shall have the responsibility for selecting and approving all
packaging materials.

 

(c)                                  SALES
INCENTIVE PLAN.

 

(i)                                     TPNA
will structure the incentive compensation plan of the CNS 500 Sales Force so
that the Products will provide [**] of the
total target incentive earnings potential for each CNS 500 Sales Force
Representative (the “CNS 500 Incentive Plan Product Weighting”). TPNA will
monitor the actual aggregate incentive payout percentage to the CNS 500 Sales
Force Representatives for the Products. If in the six (6) month period ending
December 31, 2006 or in any six (6) month period ending March 31 or September
30 during the Term, the actual aggregate incentive payout percentage to the CNS
500 Sales Force for the Products is [**] (the “CNS
Incentive Payout Variance”), then an adjustment will be made to the CNS
Incentive Plan Product Weighting for the subsequent six (6) month period. If
the CNS Incentive Payout Variance is [**], then such
adjustment shall be [**]. If the
CNS Incentive Payout Variance is [**], then such
adjustment shall be [**]. If the
actual aggregate incentive payout to the CNS 500 Sales Force Representatives
for the Products is [**], TPNA may,
at its sole option, adjust the CNS 500 Incentive Plan Product Weighting for the
subsequent six (6) month period in the same manner as described above;
provided, however, in no case shall the CNS Incentive Plan Product Weighting be
[**]. For the avoidance of doubt, the
CNS Incentive Payout Variance shall be calculated [**].
By way of example, [**].

 

(ii)                                  TPNA
will structure the incentive compensation plan of the Excel 250 Sales Force so
that the Products will provide [**] of the
total target incentive earnings potential for each Excel 250 Sales Force
Representative (the “Excel 250 Incentive Plan Product Weighting”). TPNA will
monitor the actual aggregate incentive payout percentage to the Excel 250 Sales
Force Representatives for the Products. If in the six (6) month period ending
June 30, 2007 or in any six (6) month period ending March 31 or September 30
during the Term where the Excel 250 Sales Force is deployed, the actual aggregate
incentive payout percentage to the Excel 250 Sales Force for the Products is [**] (the “Excel Incentive Payout Variance”), then an
adjustment will be made to the CNS Incentive Plan Product Weighting for the
subsequent six (6) month period. If the Excel Incentive Payout Variance is [**], then such adjustment shall be [**].

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

16

 

If the
Excel 250 Incentive Payout Variance is [**], then such
adjustment shall be [**]. If the
actual aggregate incentive payout to the Excel 250 Sales Force Representatives
for the Products is [**]TPNA may,
at its sole option, adjust the Excel 250 Incentive Plan Product Weighting for
the subsequent six (6) month period in the same manner as described above;
provided, however, in no case shall the Excel 250 Incentive Plan Product
Weighting be [**]. For the avoidance of doubt
the Excel 250 Incentive Payout Variance shall be calculated as [**]. By way of example, [**].

 

(iii)                               For the avoidance of
doubt, in any Agreement Year the weighted average of the CNS Incentive Payout
Variance and the Excel Incentive Payout Variance will [**].
By way of example, [**].

 

(iv)                              For
the avoidance of doubt, in the event the weighted average of the CNS Incentive
Payout Variance and the Excel Incentive Payout Variance is [**],
such event shall be deemed a material breach of this Agreement subject to the
cure period noted in Section 3.2(a)(i) but not subject to the provisions of
Article 16.

 

5.6.                              STEERING
COMMITTEE.

 

(a)                                  RESPONSIBILITY.
Within thirty (30) days following the Effective Date, the Parties shall form a
Steering Committee (the “STEERING COMMITTEE”) whose responsibility shall be to
(i) discuss any proposed amendments to and renewals of this Agreement, (ii)
make any adjustments to the Gross to Net Factor in accordance with Section
1.27, and (iii) consider any Disputes in accordance with Article 16. Except for
the exceptions set forth in Section 5.8, the Parties agree that Cephalon will
have final authority to decide all matters, other than renewals of this
Agreement. In connection with Section 5.6(a)(ii), Cephalon will notify TPNA in
writing of any government mandate that may require an adjustment to the Gross
to Net Factor as provided under this Agreement.

 

(b)                                 COMPOSITION
AND PROCEDURES. The Steering Committee shall have [**]
representatives from each of Cephalon and TPNA. [**] the
representatives from each Party shall be the senior marketing executive for
such Party. The Steering Committee may from time to time include additional
non-voting ad-hoc representatives from either Party on specific issues as the
need arises. Each Party shall have one vote on all matters.

 

5.7.                              MEETINGS
OF STEERING COMMITTEE. The Steering Committee shall meet [**].
The location of such meetings shall be agreed upon between the Parties, and may
be via teleconference and/or videoconference. Minutes of each Steering
Committee meeting shall be transcribed and issued by a designee of the
Committee within ten (10) Business Days after each meeting and shall be
approved by a representative from each Party no later than the first order of
business at the immediately succeeding Steering Committee meeting. Each Party
shall bear its own expenses in connection with attending meetings of the
Steering Committee.

 

5.8.                              TPNA
EXCEPTIONS. Notwithstanding anything to the contrary contained in this
Agreement, no decision by the Marketing Advisory Committee or the Steering
Committee shall require TPNA, without TPNA’s prior written consent, to: (i)
perform more PDEs than as provided in Section 2.2(b); (ii) pay more costs and
promotional expenses than as provided in 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

17

 

Section
5.4(d); (iii) use any Promotional Materials, carry any promotional items, make
any promotional statement or undertake a promotional practice that TPNA
believes in good faith does not meet TPNA’s internal pharmaceutical promotional
guidelines; (iv) revise its existing sales representative compensation policies
inconsistent with the terms of this Agreement, or (v) alter its sales
representatives’ call targets reach and/or frequency within the CNS 500 Sales
Force Representatives. TPNA shall promptly inform Cephalon in writing of TPNA’s
rationale for its good faith belief that using any Promotional Materials,
carrying any promotional items, making any promotional statements or
undertaking a promotional practice does not meet TPNA’s internal pharmaceutical
promotional guidelines. If Cephalon disagrees with TPNA’s conclusion regarding
the matters in clause (iii) above, then the disagreement shall be submitted
promptly to the Marketing Advisory Committee for resolution. Until a resolution
is reached, TPNA shall have the right to decline to perform such practice or
message.

 

5.9.                              FINANCIAL
MATTERS. Within thirty (30) days following the Effective Date, each of Cephalon
and TPNA shall designate a single finance representative, who may be changed
from time to time on written notice, to be responsible for correspondence
relating to financial reporting, audit activities and any other financial
matters relating to this Agreement. Each Party shall cooperate with the other
Party with respect to any such financial matters and respond to the requests of
the other Party within a reasonable period of time.

 

5.10.                        NUVIGIL
RIGHTS. Except for its obligations to make Royalty Payments and Sunset Royalty
Payments, Cephalon shall retain exclusively all of its rights with respect to
Nuvigil inside and outside the Territory and TPNA shall have no rights with
respect to Nuvigil whatsoever. Notwithstanding the immediately prior sentence,
if, during the Term, Cephalon receives Marketing Authorization for Nuvigil and
commences Promotion of Nuvigil, then Cephalon may, at its sole option, add
Nuvigil as a Product for the CNS 500 Sales Force Representatives and/or the
Excel 250 Sales Force Representatives to Detail under the terms of this
Agreement, provided that, if Cephalon elects to so add Nuvigil, TPNA’s Detail
Requirements shall not increase. In the event Cephalon elects to so add
Nuvigil, TPNA shall be deemed to be granted rights with respect to Nuvigil
equivalent to those granted under Section 2.1. For the avoidance of doubt,
Cephalon shall not Co-Promote Nuvigil in the Territory with any Third Party
during the Term.

 

5.11.                        NOTIFICATION
OF INTELLECTUAL PROPERTY LITIGATION. In the event of the institution of any
suit by a Third Party against Cephalon or TPNA for patent or trademark
infringement involving the Cephalon Patents or Cephalon Trademarks in the
Territory during the Term, the Party sued shall promptly notify the other Party
in writing. Cephalon shall keep TPNA informed of the status of any patent or
trademark infringement litigation or settlement thereof concerning the
Products, Cephalon Patents or the Cephalon Trademarks, provided, however, that
no settlement or consent judgment or other voluntary final disposition of any
suit defended or action brought relating thereto shall be entered into without
the consent of TPNA if such settlement shall require TPNA to make a monetary
payment or undertake any other obligations. The Parties acknowledge that TPNA
has not evaluated the merits of any claims made in any litigation existing as
of the Effective Date brought by or against Cephalon relating to the Cephalon
Patents.

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

18

 

6.                                       MANUFACTURING
AND SUPPLY

 

6.1.                              CEPHALON
RESPONSIBILITIES.

 

(a)                                  Cephalon
shall manufacture, package, store and ship the Products and samples of the
Products in accordance with (i) “CURRENT GOOD MANUFACTURING PRACTICES” as set
forth by the FDA, (ii) each Product’s approved NDA, and (iii) all applicable
local, state, and Federal laws and regulations.

 

(b)                                 Cephalon
shall manufacture sufficient quantities of (i) the Products to meet its sales
forecasts for the Term, and (ii) samples of Products to adequately support the
Detail obligations of the Parties hereunder.

 

(c)                                  Cephalon
shall supply samples of the Products in response to sample order requests for
both Parties on substantially the same response time and schedule as provided
to Cephalon Sales Representatives. All sample order requests that fall within
the amounts budgeted pursuant to Section 5.4(d) shall be filled by Cephalon as
provided in the prior sentence. The Parties will maintain those records
required by PDMA and, subject to receipt of necessary information from TPNA,
Cephalon shall be solely responsible for the filing of any necessary reports to
the FDA in connection with the PDMA.

 

7.                                       REGULATORY,
SAFETY AND SURVEILLANCE

 

7.1.                              REGULATORY
MATTERS.

 

(a)                                  RESPONSIBILITY.
All regulatory matters in the Territory regarding the Products shall remain
under the exclusive control of Cephalon.

 

(b)                                 PERMITS.
Cephalon shall be responsible for and maintain all regulatory and governmental
permits, licenses and approvals that may be necessary to manufacture, ship,
sell and market the Products in the Territory.

 

(c)                                  REPORTING.
Cephalon shall be responsible for any reporting of matters, or other
communications with FDA, regarding the manufacture, sale or promotion of the
Products, including Adverse Events, to FDA and other relevant regulatory
authorities, in accordance with applicable laws and regulations. Cephalon shall
provide TPNA with copies of:  (i) reports
of Adverse Events submitted to FDA or any governmental authority in the
Territory regarding the Products, within ten (10) days of submission of any
such reports; and (ii) all annual reports submitted by Cephalon to FDA or other
governmental authorities redacted to include information only regarding the
Products. In the event Cephalon or TPNA should become aware of information that
may require a recall, field alert, Product withdrawal or field correction
arising from any defect in the Products, it shall immediately notify the other
Party in writing.

 

(d)                                 TPNA
INVOLVEMENT. TPNA shall not, without the consent of Cephalon, unless so
required by applicable law, correspond or communicate with the FDA or with any
other governmental authority, concerning the Products, or otherwise take any
action concerning any authorization or permission under which any of the
Products are sold. TPNA shall provide to Cephalon, upon receipt, copies of any
communication from the FDA or other 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

19

 

governmental
authority related to the Products. If TPNA is advised in writing by its outside
counsel that it must communicate with the FDA or other governmental authority,
then TPNA shall so advise Cephalon and TPNA shall, if the law permits, comply
with any and all reasonable direction of Cephalon concerning any meeting or
communication with the FDA or other governmental authority.

 

7.2.                              ADVERSE
EVENTS. Promptly after the Effective Date, in recognition of Cephalon’s primary
responsibility for reporting Adverse Events associated with the Products, the
Parties shall agree upon standard operating procedures, consistent with this
Agreement, for the investigation and reporting of Adverse Events regarding the
Products. The Parties shall immediately implement such agreed procedures and
shall provide each other on a regular basis with any appropriate information
that enables the other Party to meet its regulatory obligations in the
Territory with respect to the Products or that is relevant to the safe use of
the Products. The agreed procedures will be reviewed jointly on a regular basis
or when there is a change in regulations governing Adverse Event reporting.
Cephalon shall provide TPNA with a copy of its standard operating procedures
for reporting Adverse Events in effect as of the Effective Date and any future
revisions thereto. The Parties or their respective designees shall enter into a
mutually agreed upon safety data exchange agreement.

 

7.3.                              MEDICAL
INQUIRIES. Promptly after the Effective Date, the Parties shall establish
procedures to enable the prompt response to any medical inquiries relating to
the Products received by TPNA.

 

8.                                       AUDIT
RIGHTS

 

Each
of Cephalon and TPNA shall keep complete and accurate records of its respective
Details and incentive compensation payments for the Products to Sales
Representatives. Cephalon shall keep complete and accurate records of the Gross
Sales of the Products, Cost of Manufacture of samples of the Products, and any
other reimbursable expenses. Each Party shall have the right, at such Party’s
expense, through an independent certified public accountant or like person
reasonably acceptable to the other Party, upon execution of a confidentiality
agreement, to examine such records during regular business hours upon
reasonable written notice during the Term and thereafter [**] after
the later of the termination of this Agreement or the final scheduled Sunset
Royalty Payment; provided, however, that (i) such examination shall not take
place more often than [**] and shall
not cover such records for [**] (other
than the period prior to July 1, 2006), (ii) such accountant or like person
shall report to such Party only as to the accuracy of the reports or payments
provided or made by the other Party under this Agreement and (iii) such
accountant or like person shall not report any individual compensation information.
Any adjustments required as a result of overpayments or underpayments
identified through a Party’s exercise of audit rights shall be made by
subtracting or adding, as appropriate, amounts from or to the next Royalty
Payment or Sunset Royalty Payment in accordance with Section 4.3 or, if no
further Royalty Payments or Sunset Royalty Payments are due, by payment to the
Party owed such adjustment within thirty (30) days after identification of such
adjustment. The Party requesting the audit shall bear the full cost of the
audit unless such audit correctly discloses that the discrepancy for the audit
period differs by more than [**] from the
amount the accountant determines is correct, in such case the owing Party shall
pay the reasonable fees and expenses charged by the accountant. In addition,
the owing Party shall pay interest from the original date 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

20

 

due and
until payment on the amount of the underpayment or overpayment at a rate equal
to the average one (1) month London Inter-Bank Offering Rate (LIBOR) for the
U.S. dollar as reported from time to time in The Wall Street Journal, effective
for the first date on which payment was delinquent and calculated on the number
of days such payment is overdue or, if such rate is not regularly published, as
published in such source as the Steering Committee agrees. In the event that a
Party disputes an invoice or other payment obligation under this Agreement,
such Party shall timely pay the amount of the invoice or other payment
obligation that is not in dispute, and the Parties shall resolve such dispute
in accordance with Article 17.

 

9.                                       CONFIDENTIALITY

 

9.1.                              DISCLOSURE
OF KNOW-HOW. To the extent that Cephalon has disclosed or in the future
discloses to TPNA any know-how, TPNA shall not acquire any ownership rights in
such know-how by virtue of this Agreement or otherwise.

 

9.2.                              CONFIDENTIAL
INFORMATION. During the Term and for a period of [**],
Cephalon and TPNA shall not use or disclose to Third Parties any information
received from the other Party or otherwise developed or attained (including
prior to the Term, during the Term, during the Sunset Royalty Period or during
any period in which the Parties have audit rights pursuant to Article 8
following the Sunset Royalty Period) by either Party in the performance of
activities in furtherance of this Agreement without first obtaining the written
consent of the disclosing Party, except as may be otherwise provided in, or
required in order for a Party to fulfill its obligations under, this Agreement.
During and following the Term of this Agreement, this confidentiality
obligation shall not apply to such information that (i) is or becomes a matter
of public knowledge (other than by breach of this Agreement by the receiving
Party), (ii) is required by law to be disclosed (in such event, the disclosing
Party shall provide the other Party with prior written notice of its intent to
disclose such other Party’s confidential information pursuant to this Section
9.2(ii), with an opportunity, if possible, to appeal such disclosure and with
copies of any such confidential information so disclosed), (iii) the receiving
Party can establish was already known to it or was in its possession at the
time of disclosure, (iv) the receiving Party can establish was independently
developed by persons in its employ who had no contact with and were not aware
of the content of the confidential information, or (v) is disclosed to the
receiving Party by a Third Party having the right to do so. The Parties shall
take reasonable measures to assure that no unauthorized use or disclosure is
made by others to whom access to such information is granted.

 

Nothing in this Agreement shall be construed as
preventing either Party from disclosing any information received from the other
to an Affiliate of the receiving Party who is necessary for the purposes of
enabling the receiving Party to fulfill its obligations under this Agreement,
provided, the receiving Party shall be responsible for breaches of the confidentiality
obligations by such Affiliate.

 

9.3.                              PUBLIC
ANNOUNCEMENTS. No public announcement or other disclosure to Third Parties
concerning the existence of or terms of this Agreement shall be made, either
directly or indirectly, by either Party, without first obtaining the written
approval of the other Party and agreement upon the nature, text and timing of
such announcement or disclosure; provided, however, either Party shall have the
right to make any such public announcement or 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

21

 

other
disclosure required by law after such Party has provided to the other Party a
copy of such announcement or disclosure and an opportunity to comment thereon.
Each Party agrees that it shall cooperate fully with the other with respect to
all disclosures regarding this Agreement to the Securities Exchange Commission
and any other governmental or regulatory agencies, including requests for
confidential treatment of proprietary information of either Party included in
any such disclosure. Neither Party shall be required to provide the other Party
with any advance notice of any public announcements or other disclosures
related to periodic, routine financial reporting unless such announcement or
other disclosure will include non-routine information relating to the Products
or this Agreement. Each Party shall provide the other with an advance copy of
any scripts or questions and answers related to this Agreement, which may be
prepared in connection with the initial announcement of this Agreement. All
subsequent public statements by either Party related to this Agreement shall be
substantially consistent with such initial announcement, unless otherwise
reviewed in advance by the other Party. TPNA acknowledges its responsibilities
under the federal and state securities laws in the United States with respect
to trading in the securities of Cephalon while in possession of material
non-public information relating to Cephalon, and agrees to maintain and enforce
appropriate policies to prevent the violations of such laws by its employees
and representatives.

 

10.                                 RESTRICTIVE
COVENANTS

 

10.1.                        NON-COMPETITION.

 

(a)                                  For
purposes of this Section 10.1, “TPNA COMPETING PRODUCT” shall mean any product,
other than the Products, [**] and “CEPHALON
COMPETING PRODUCT” shall mean any product, other than the Products and
SparlonTM, [**], except in the case such product
is promoted by a sales force other than the Cephalon Provigil Sales Force that
is not also promoting either of the Products.

 

(b)                                 During
the Term and the Sunset Royalty Period, TPNA (including TPA) shall not Promote,
market or sell in the Territory any TPNA Competing Product and Cephalon shall
not Promote, market or sell in the Territory any Cephalon Competing Product.

 

(i)                                     If
during the Sunset Royalty Period, TPNA Promotes, markets or sells a TPNA
Competing Product, [**]. During
the Sunset Royalty Period, the definition of a TPNA Competing Product shall be [**].

 

(ii)                                  Except
as provided in Section 3.2(b)(i), if during the Sunset Royalty Period, Cephalon
Promotes, markets or sells a Cephalon Competing Product, then the Sunset
Royalty Payment as of the date that Cephalon first promotes, markets or sells
such Cephalon Competing Product shall [**]. During
the Sunset Royalty Period, the definition of a Cephalon Competing Product shall
be [**]. For the avoidance of doubt, Cephalon may [**].

 

10.2.                        NON-SOLICITATION.
During the Term and for a period of [**] thereafter,
neither Party shall recruit or solicit, directly or through a Third Party, for
employment or otherwise, any employee of the other Party without the written
consent of the other Party. The 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

22

 

Parties
agree that general solicitation, such as through advertisements or recruiting
services, not targeted at the other Party’s employees shall not be a violation
of the foregoing sentence.

 

11.                                 RIGHTS
AND DUTIES UPON TERMINATION

 

11.1.                        CONTINUING
OBLIGATIONS. The following provisions shall survive the termination of this
Agreement for any reason:  Sections
5.4(d), 5.5(a), 11.1, and 15.4, and Articles 3, 4, 8, 9, 10, 12, 14 and 16. In
addition, any other provision required to interpret and enforce the Parties’
rights and obligations under this Agreement shall also survive, but only to the
extent required for the full observation and performance of this Agreement.

 

11.2.                        REMEDIES.
Termination of this Agreement in accordance with its provisions shall not limit
the remedies that may be otherwise available to either Party in law or equity;
provided that neither Cephalon nor TPNA shall be liable under this Agreement
for any indirect, incidental, punitive, exemplary, special or consequential
damages of any kind whatsoever sustained as a result of a breach of this
Agreement. Any payments due hereunder by a Party to the other Party shall not
be deemed to be indirect, incidental, punitive, exemplary, special or
consequential damages.

 

11.3.                        RETURNS.
Upon termination of this Agreement, TPNA shall immediately return to Cephalon
all sales and Promotional Materials and communication materials, marketing
plans and reports and other tangible items provided by Cephalon to TPNA or
otherwise developed or attained jointly or by TPNA pursuant to the terms and
intent of this Agreement. Notwithstanding the foregoing, (i) TPNA shall have
the right to keep one (1) copy of any items reasonably necessary to confirm its
surviving obligations hereunder, and (ii) if any such returned items are
reusable by Cephalon, Cephalon shall reimburse TPNA within thirty (30) days
after receipt thereof for TPNA’s costs to obtain such items pursuant to Section
5.4.

 

12.                                 REPRESENTATIONS,
WARRANTIES, COVENANTS AND INDEMNIFICATION

 

12.1.                        REPRESENTATIONS,
WARRANTIES AND COVENANTS OF CEPHALON. Except as disclosed on Schedule 12.1,
Cephalon represents, warrants and covenants that:

 

(a)                                  Cephalon
has the corporate power and authority to execute and deliver this Agreement and
to perform its obligations hereunder, and the execution, delivery and
performance of this Agreement has been duly and validly authorized and approved
by proper corporate action on the part of Cephalon. Assuming due authorization,
execution and delivery on the part of TPNA, this Agreement constitutes a legal,
valid and binding obligation of Cephalon, enforceable against Cephalon, in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditor rights generally and by the effects of general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).

 

(b)                                 The
execution and delivery of this Agreement by Cephalon and the performance by
Cephalon contemplated hereunder will not violate any applicable laws.

 

(c)                                  Neither
the execution and delivery of this Agreement nor the performance hereof by
Cephalon requires Cephalon or any of its Affiliates to obtain any permits, 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

23

 

authorizations
or consents from any governmental authority or from any other person, not
previously obtained.

 

(d)                                 Cephalon
solely owns all right, title and interest in the Products, the Cephalon Patents
and the Cephalon Trademarks with respect to the Products, the Cephalon Patents
and Cephalon Trademarks are all the patents and trademarks reasonably believed
by Cephalon as necessary to manufacture and package the Products for sale in
the Territory, and to distribute, use, promote and sell the Products in the
Territory for their FDA-approved indications, all free of any material lien,
encumbrance, liability and other restriction and Cephalon has not granted any
right to a Third Party that is in conflict with the rights granted hereunder. For
purposes of this Section 12.1, “CEPHALON PATENTS” shall mean [**] and “CEPHALON TRADEMARKS” shall mean those trademarks
and logos owned by Cephalon and used or intended to be used in connection with
the promotion of the Products.

 

(e)                                  Except
as otherwise disclosed in Cephalon’s Quarterly Report on Form 10-Q for the
period ended March 31, 2006 filed with the Securities and Exchange Commission
(the “Form 10-Q”), to the knowledge of Cephalon, and except for such other
matters that, if adversely adjudicated, would not have a material adverse
effect on Cephalon, there are no actions, suits, proceedings or claims, pending
against Cephalon or any of its Affiliates, or, to the knowledge of Cephalon,
threatened against Cephalon or any of its Affiliates, at law or in equity, or
before or by any governmental authority relating to (x) the Products, or (y)
the manufacture, marketing, distribution, use, promotion, offer for sale or
sale of the Products contemplated under this Agreement. Except as disclosed in
the Form 10-Q and such matters disclosed on Schedule 12.1(g), there are no
investigations of public record pending or, to Cephalon’s knowledge, any
investigations ongoing or threatened against Cephalon or any of its Affiliates,
at law or in equity, or before or by any governmental authority relating to the
Product or the manufacture, marketing, distribution, use, promotion, offer for
sale or sale thereof contemplated under this Agreement or which could otherwise
adversely affect Cephalon’s ability to perform its obligations hereunder. Cephalon
shall promptly notify TPNA in writing if any state or federal investigation
relating to the Products shall be initiated from and after the Effective Date.

 

(f)                                    As
of the Effective Date, Cephalon has not received notice of infringement or
misappropriation of any alleged rights asserted by any Third Party in relation
to any technology used by Cephalon in connection with the manufacture,
marketing, distribution, use, promotion, offer for sale or sale of the Products
and, except as otherwise disclosed in the Form 10-Q, Cephalon has no knowledge
of any Third Party U.S. patent or trademark which can be asserted as infringed
by the manufacture, marketing, distribution, use, promotion, offer for sale or
sale of the Products.

 

(g)                                 (i)
To the best of Cephalon’s knowledge and except as disclosed on Schedule 12.1(g),
it is in compliance in all material respects with all material laws and
regulations applicable to the subject matter of this Agreement, including,
without limitation, the PDMA, Federal Health Care Program Anti-Kickback Law (42
U.S.C. ss.1320a-7b), the Health Insurance Portability and Accountability Act of
1996, FDA laws and regulations and the Codes, (ii) Cephalon has established an
ethics and compliance program with respect to its promotional and sales
activities in accordance with the OIG Guidance, and has organized its program
to include the seven elements identified by the OIG Guidance, and (iii)
Cephalon sales and 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

24

 

marketing
personnel have received training pursuant to such ethics and compliance
program, including training on proper sales and marketing techniques.

 

(h)                                 The
NDAs relating to the Products and filed with the FDA, and any amendments and
supplements thereto (i) have been prepared in all material respects in
accordance with all applicable requirements of the Food, Drug and Cosmetic Act,
and (ii) with respect to Provigil, the NDA has been approved by FDA. None of
Cephalon or any of its Affiliates has received any notice which has, or
reasonably should have, led Cephalon or any of its Affiliates to believe that
FDA has commenced, or threatened to initiate, any action to withdraw any
Marketing Authorization for Provigil or to limit the ability of Cephalon or any
of its Affiliates to manufacture (or to have manufactured for it by a Third
Party) Provigil or to request the recall of Provigil or commenced, or
threatened to Cephalon’s knowledge, to initiate any action to enjoin production
of Provigil at any facility.

 

(i)                                     Cephalon
shall promptly notify TPNA in writing of a Change of Control of Cephalon.

 

(j)                                     All
manufacturing operations conducted by Cephalon and its Affiliates (or by Third
Parties on their behalf) relating to the manufacturing of the Products is being
conducted in material compliance with current good manufacturing practices and
other applicable legal and/or regulatory requirements.

 

12.2.                        REPRESENTATIONS,
WARRANTIES AND COVENANTS OF TPNA. TPNA represents, warrants and covenants that:

 

(a)                                  TPNA
has the corporate power and authority to execute and deliver this Agreement and
to perform its obligations hereunder, and the execution, delivery and
performance of this Agreement has been duly and validly authorized and approved
by proper corporate action on the part of TPNA. Assuming due authorization,
execution and delivery on the part of Cephalon, this Agreement constitutes a
legal, valid and binding obligation of TPNA, enforceable against TPNA, in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditor rights generally and by the effects of
general principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law).

 

(b)                                 The
execution and delivery of this Agreement by TPNA and the performance by TPNA
contemplated hereunder will not violate any applicable laws.

 

(c)                                  Neither
the execution and delivery of this Agreement nor the performance hereof by TPNA
requires TPNA or any of its Affiliates to obtain any permits, authorizations or
consents from any governmental authority or from any other person.

 

(d)                                 TPNA
has not granted any right to a Third Party that is in conflict with the rights
granted hereunder.

 

(e)                                  (i)
Each of TPNA and TPA is in material compliance with all material laws and
regulations applicable to the subject matter of this Agreement, including,
without limitation, the PDMA, Federal Health Care Program Anti-Kickback Law (42
U.S.C. ss.1320a-7b), 

 

**Portions of the Exhibit have been omitted and have been filed separately
pursuant to an application for confidential treatment filed with the Securities
and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934, as amended.

 

25

 

the
Health Insurance Portability and Accountability Act of 1996, FDA laws and
regulations and the Codes, (ii) TPNA and TPA have established a compliance
program with respect to its promotional and sales activities in accordance with
the OIG Guidance, and has organized its program to include the seven elements
identified in the OIG Guidance, and (iii) TPNA and TPA sales and marketing
personnel have received training pursuant to such ethics and compliance
program, including training on proper sales and marketing techniques.

 

12.3.                        INDEMNIFICATION
BY CEPHALON. Except as otherwise expressly provided in Section 12.4, Cephalon
shall defend, indemnify and hold harmless TPNA and its Affiliates and their
officers, directors, shareholders, employees, agents, representatives, successors
and assigns from and against all losses, costs, expenses, liabilities, fines,
penalties, damages, claims, complaints, actions, investigations, lawsuits or
other proceedings (including court costs and reasonable attorneys’, economists’,
accountants’, and other experts’ fees and expenses, and all other reasonable
costs and expenses of investigation, defense or settlement of claims and
amounts paid in settlement thereof) (collectively referred to as “CLAIMS”) of
Third Parties arising out of (i) any negligent act or omission, or willful
wrongdoing by Cephalon or any of its Affiliates in the performance of this
Agreement, (ii) the failure by Cephalon or any of its Affiliates to comply with
any law or regulation or any FDA or other governmental requirement in the
performance of this Agreement, (iii) any assertion of the infringement or
misappropriation of any Third Party patent, copyright, trademark, service mark,
trade secret, or other intellectual property as a result of the development,
registration, marketing, promotion, labeling, use, sale or distribution of the
Products in the performance of this Agreement, (iv) any breach of any covenant,
representation or warranty of Cephalon or any of its Affiliates under this
Agreement, (v) the development, registration, manufacture, promotion, labeling,
use, sale or distribution of the Products; and (vi) any civil or criminal
proceedings or investigation brought by any plaintiff or governmental authority
arising out of or relating to (1) any existing or future settlement agreement
between Cephalon and one or more generic pharmaceutical companies relating to
the Cephalon Patents, (2) Cephalon’s sales, marketing and promotional
practices, including dissemination of any information, relating to Provigil
prior to the Effective Date, and/or (3) Cephalon’s sales, marketing and
promotional practices, including dissemination of any information, relating to
the Products from and after the Effective Date. Cephalon shall not be obligated
under this Section to the extent that the Claim was the result of the
nonperformance, negligence or willful misconduct of any employee or agent of
TPNA or anyone acting on behalf of TPNA, including its Affiliates and their
officers, directors, shareholders, employees, agents, representatives, successors
and assigns.

 

12.4.                        INDEMNIFICATION
BY TPNA. Except as otherwise expressly provided in Section 12.3, TPNA shall
defend, indemnify and hold harmless Cephalon and its Affiliates and their
officers, directors, shareholders, employees, agents, representatives,
successors and assigns from and against all Claims of Third Parties arising out
of (i) any negligent act or omission, or willful wrongdoing by TPNA or any of
its Affiliates in the performance of this Agreement, (ii) the infringement or
misappropriation by TPNA or any of its Affiliates of any Third Party patent,
copyright, trademark, service mark, trade secret or other intellectual
property, as a result of TPNA’s or such Affiliate’s marketing or promotion of
the Product which is not pursuant to the terms of this Agreement or in
conformity with the direction of the Marketing Advisory Committee, and (iii)
any breach of any covenant representation or warranty of TPNA under this
Agreement. TPNA shall not be obligated under this Section to the extent that
the Claim was the 

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

26

 

result
of the nonperformance, negligence or willful misconduct of any employee or
agent of Cephalon or anyone acting on behalf of Cephalon, including its
Affiliates and their officers, directors, shareholders, employees, agents,
representatives, successors and assigns. For the avoidance of doubt, if TPNA
acts in compliance with the directives of the Marketing Advisory Committee or
as required pursuant to provisions giving Cephalon the right of determination,
such acts shall not constitute a basis for indemnification by TPNA of Cephalon
under this Agreement.

 

12.5.                        LIMITATIONS
ON INDEMNIFICATION. The obligations to indemnify, defend, and hold harmless set
forth in Sections 12.3 and 12.4 shall be contingent upon the Party seeking
indemnification (the “INDEMNITEE”): (i) notifying the indemnifying Party of a
claim, demand or suit within fifteen (15) Business Days of receipt of same;
provided, however, that Indemnitee’s failure or delay in providing such notice
shall not relieve the indemnifying Party of its indemnification obligation
except to the extent the indemnifying Party is prejudiced thereby; (ii)
allowing the indemnifying Party and/or its insurers the right to assume
direction and control of the defense of any such claim, demand or suit; (iii)
using its best efforts to cooperate with the indemnifying Party and/or its
insurers in the defense of such claim, demand or suit at the indemnifying Party’s
expense; and (iv) agreeing not to settle or compromise any claim, demand or
suit without prior written authorization of the indemnifying Party. The
Indemnitee shall have the right to participate in the defense of any such
claim, demand or suit referred to in this Section utilizing attorneys of its
choice, at its own expense, provided, however, that the indemnifying Party
shall have full authority and control to handle any such claim, demand or suit.

 

12.6.                        INSURANCE.

 

(a)                                  During
the Term and for a period of [**] after the
termination or expiration of this Agreement, Cephalon shall obtain and/or
maintain at its sole cost and expense, liability insurance (including product
liability insurance, workers compensation, general liability, automobile
liability, and advertising liability insurance), which may be through
self-insured arrangements, in amounts which are reasonable and customary in the
U.S. pharmaceutical industry for companies of comparable size, products and
activities at the respective place of business of Cephalon. Such liability insurance
or self-insured arrangements shall insure against bodily injury, physical
injury or property damage arising out of the manufacture, sale, storage,
promotion, distribution, or marketing of the Products.

 

(b)                                 During
the Term, TPNA shall obtain and maintain workers compensation, general
liability, automobile liability, and advertising liability insurance (including
any self-insured arrangements) in amounts which are reasonable and customary in
the U.S. pharmaceutical industry for companies of comparable size, products and
activities at the respective place of business of TPNA.

 

(c)                                  The
indemnity obligations of the Parties under this Article 12 shall not be deemed
to be limited by the amounts of the insurance coverage required by the Parties
under this Section 12.6.

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

27

 

13.                                 ASSIGNMENT

 

Neither
Party shall assign or transfer its rights or obligations under this Agreement
without the prior written consent of the other Party; provided however, that
either Party may make such an assignment or transfer without such consent (i)
to an Affiliate of such Party, or (ii) in connection with a merger, or
consolidation with, or the sale to a Third Party of, the entire pharmaceutical
business of such Party. In the event of any such permitted assignment or
transfer without such consent, as a condition to such assignment or transfer,
the assigning or transferring Party must confirm to the other Party in writing
that it will remain fully liable for all obligations under this Agreement as if
such assignment or transfer had not occurred.

 

14.                                 NOTICES

 

Any
notice, request, approval or other document required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been given
when delivered in person, or sent by overnight courier service, postage
prepaid, or sent by certified or registered mail, return receipt requested, or
by facsimile transmission, to the following addresses of the Parties and to the
attention of the persons identified below (or to such other address, addresses
or persons as may be specified from time to time in a written notice). Any
notices given pursuant to this Agreement shall be deemed to have been given and
delivered upon the earlier of (i) if sent by overnight courier service, on the
date when received at the address set forth below as proven by a written
receipt from the delivery service verifying delivery, or (ii) if sent by
certified or registered mail, three (3) Business Days after mailed by certified
or registered mail postage prepaid and properly addressed, with return receipt
requested, or (iii) if sent by facsimile transmission, on the day when sent by
facsimile as confirmed by automatic transmission report coupled with certified
or registered mail or overnight courier service receipt proving delivery, or
(iv) if delivered in person, on the date of delivery to the address set forth
below as proven by written signature of the recipient.

 

	
  Cephalon, Inc:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  41 Moores Road

  	
   

  
	
   

  	
  Frazer, Pennsylvania 19355

  	
   

  
	
   

  	
  Facsimile: (610) 738-6258

  
	
   

  	
  Attention:

  	
  John E. Osborn

  
	
   

  	
   

  	
  Company Secretary

  
	
   

  	
   

  
	
  Copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Dechert LLP

  	
   

  
	
   

  	
  2929 Arch Street

  	
   

  
	
   

  	
  Cira Centre

  	
   

  
	
   

  	
  Philadelphia, Pennsylvania 19104

  	
   

  
	
   

  	
  Facsimile: (215) 655-2510

  
	
   

  	
  Attention:

  	
  James A. Lebovitz

  
						

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

28

 

	
  Takeda Pharmaceuticals North America, Inc.:

  	
   

  	
   

  
	
   

  
	
   

  	
  475 Half Day Road

  	
   

  
	
   

  	
  Lincolnshire, Illinois 60069

  
	
   

  	
  Facsimile:

  	
  (847) 383-3762

  
	
   

  	
  Attention: Dan Orlando

  
	
   

  	
  Vice President, Sales

  	
   

  
	
   

  	
   

  	
   

  
	
  Copy to:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Facsimile:

  	
  (847) 383-3481

  
	
   

  	
  Attention:

  	
  General Counsel

  
						

 

Notwithstanding
the foregoing, notice of any breach of this Agreement delivered by a Party
under Section 3.2 shall be provided in accordance with the foregoing provisions
to the chief executive officer of the other Party in addition to the persons
identified above.

 

15.                                 MISCELLANEOUS

 

15.1.                        FORCE
MAJEURE. If the performance of any part of this Agreement by either Party, or
of any obligation under this Agreement, is prevented, restricted, interfered
with or delayed by reason of any cause beyond the reasonable control of the
Party liable to perform, unless conclusive evidence to the contrary is
provided, the Party so affected shall, upon giving written notice to the other
Party, be excused from such performance to the extent of such prevention,
restriction, interference or delay, provided that the affected Party shall use
its reasonable best efforts to avoid or remove such causes of nonperformance
and shall continue performance with the utmost dispatch whenever such causes are
removed. When such circumstances arise, the Parties shall discuss what, if any,
modification of the terms of this Agreement may be required in order to arrive
at an equitable solution.

 

15.2.                        NO
PARTNERSHIP OR JOINT VENTURE. It is expressly agreed that Cephalon and TPNA
shall be independent contractors and that the relationship between the two
Parties shall not constitute a partnership, joint venture or agency. Neither
Cephalon nor TPNA shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other, without the prior written consent of the other Party
to do so.

 

15.3.                        EXECUTION
IN COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

 

15.4.                        GOVERNING
LAW. This Agreement shall be deemed to have been made in the State of Delaware,
without giving effect to its conflicts of laws principles, and its form,
execution, validity, construction and effect shall be determined in accordance
with the laws of the State of New York.

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

29

 

15.5.                        WAIVER OF
BREACH. The failure of either Party at any time or times to require performance
of any provision hereof shall in no manner affect its rights at a later time to
enforce the same. No waiver by either Party of any condition or term in any one
or more instances shall be construed as a further or continuing waiver of such
condition or term or of another condition or term.

 

15.6.                        SEVERABILITY.
In the event any portion of this Agreement were to be held illegal, void or
ineffective, the remaining portions of this Agreement shall remain in full
force and effect. If any of the terms or provisions of this Agreement are in
conflict with any applicable statute or rule of law, then such terms or
provisions shall be deemed inoperative to the extent that they may conflict
therewith and shall be deemed to be modified to conform with such statute or
rule of law. In the event that the terms and conditions of this Agreement are
materially altered as a result of this Section 15.6, the Parties shall
renegotiate the terms and conditions of this Agreement to resolve any
inequities.

 

15.7.                        ENTIRE
AGREEMENT. This Agreement shall constitute the entire agreement between the
Parties relating to the subject matter thereof and shall supersede all previous
writings and understandings. No terms or provisions of this Agreement shall be
varied or modified by any prior or subsequent statement, conduct or act of
either of the Parties, except that the Parties may amend this Agreement by
written instruments specifically referring to and executed in the same manner
as this Agreement.

 

16.                                 DISPUTE
RESOLUTION

 

16.1.                        INTERNAL
RESOLUTION. Any dispute, controversy or claim arising out of or relating to
this Agreement, including a disagreement on whether a material breach has
occurred, (collectively referred to as “DISPUTE”) shall be attempted to be
settled by the Parties, in good faith, by submitting each such Dispute to the
Steering Committee, which shall meet in person or by telephone within seven (7)
Business Days to review any Dispute. If the Dispute is not resolved by the
Steering Committee within fourteen (14) Business Days after a meeting to
discuss the Dispute, either Party may at any time thereafter provide the other
written notice specifying the terms of such Dispute in reasonable detail.
Within seven (7) Business Days of receipt of such notice, the Chief Executive
Officers of each Party, or a member of management designated by the respective
Chief Executive Officer, shall meet in person (at a mutually agreed upon time
and location) or by telephone for the purpose of resolving such Dispute. They will
discuss the problems and/or negotiate for a period of up to ten (10) Business
Days in an effort to resolve the Dispute or negotiate an acceptable
interpretation or revision of the applicable portion of this Agreement mutually
agreeable to both Parties, without the necessity of formal procedures relating
thereto. In the event such Chief Executive Officers are unable to resolve the
Dispute or negotiate an acceptable interpretation or revision of the applicable
portion of this Agreement mutually agreeable to both Parties, without the
necessity of formal procedures relating thereto, within such ten (10) Business
Day period, the Parties may pursue any available legal or equitable rights or
remedies.

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

30

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

31

 

NOW
THEREFORE, the Parties, through their authorized officers, have executed this
Agreement as of the date first written above.

 

	
  CEPHALON, INC.

  	
  TAKEDA PHARMACEUTICALS NORTH 

  AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ J. Kevin Buchi

  	
   

  	
  By:

  	
  /s/ Mark Booth

  	
   

  
	
  Name:

  	
  J. Kevin Buchi

  	
  Name:

  	
  Mark
  Booth

  
	
  Title:

  	
  Executive Vice President and CFO

  	
  Title:

  	
  President

  
						

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

32

 

SCHEDULE
1.30(A)

 

Quarterly
Sales Report

 

The
following schedule will be prepared by Cephalon and delivered to TPNA within
thirty (30) days following the end of each calendar quarter of the Term and
three (3) month period of the Sunset Royalty Period. The following schedule, including
Royalty Payment true-up calculations, will be prepared by Cephalon and
delivered to TPNA within sixty (60) days following the end of each Agreement
year and each twelve (12) month period of the Sunset Royalty Period. The
following schedule, including Inventory Change True-Up calculations, will be
prepared by TPNA and delivered to Cephalon within sixty (60) days following the
end of each Agreement year and each twelve (12) month period of the Sunset
Royalty Period. Data in columns identified by * will be provided by Cephalon. Data
in columns not identified by * will be left blank by Cephalon and will be
provided by TPNA. The numbers below are for illustrative purposes only.

 

[**]

 

**Portions of the Exhibit have been omitted and have been filed separately
pursuant to an application for confidential treatment filed with the Securities
and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934, as amended.

 

33

 

SCHEDULE
1.30(B)

 

Quarterly
Sales Supporting Data

 

The following schedule
will be prepared by Cephalon and delivered to TPNA within thirty (30) days
following the end of each calendar quarter of the Term and three (3) month
period of the Sunset Royalty Period. Data in columns identified by * will be
provided by Cephalon. Data in columns not identified by * will be left blank by
Cephalon and will be provided by TPNA. The numbers below are for illustrative
purposes only.

 

[**]

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

34

 

SCHEDULE
2.2(b)

 

PDE
Requirements for the Products

 

TPNA Detail
Requirements:  Number of Total PDEs by
the CNS 500 Sales Force Representatives for the Products:

 

	
  Agreement Year

  	
   

  	
  Total PDEs(1)(2)(4)

  
	
  First

  	
   

  	
  [**]

  
	
  Second

  	
   

  	
  [**]

  
	
  Third

  	
   

  	
  [**]

  

 

TPNA Detail
Requirements:  Number of Total PDEs by
the Excel 250 Sales Force Representatives for the Products:

 

	
  Agreement Year

  	
   

  	
  Total PDEs(1)(2)(3)(4)

  
	
  First

  	
   

  	
  [**]

  
	
  Second

  	
   

  	
  [**]

  
	
  Third

  	
   

  	
  [**]

  

 

Cephalon Detail
Requirements:  Number of Total PDEs by
the Cephalon Provigil Sales Force Representatives for the Products:

 

	
  Agreement Year

  	
   

  	
  Total PDEs(1)(2)

  
	
  First

  	
   

  	
  [**]

  
	
  Second

  	
   

  	
  [**]

  
	
  Third

  	
   

  	
  [**]

  

 

(1)  At least [**] of the
Total PDEs for any Agreement Year shall be completed during each calendar
quarter of such Agreement Year, provided that this quarterly requirement shall
not apply to the Excel 250 Sales Force Representatives for the quarters ending
March 31, 2007 and June 30, 2007.

 

(2)  All Details shall be either First Position
Details or Second Position Details.

 

(3)  During the first Agreement Year, at least [**] of these Details shall be First Position Details and
the balance, if any, shall be Second Position Details. Thereafter, during the
balance of the Term, at least [**] of the
Details delivered shall be First Position Details and the balance, if any,
shall be Second Position Details.

 

(4)  During the first Agreement Year, the Total
PDEs for each of the CNS 500 Sales Force Representatives and the Excel 250
Sales Force Representatives set forth above shall be performed by the CNS 500
Sales Force Representatives and the Excel 250 Sales Force Representatives
respectively. During the second and third Agreement Years, the Total PDEs for
the CNS 500 Sales Force Representatives and the Excel 250 Sales Force
Representatives shall be performed in the aggregate by members of either the
CNS 500 Sales Force Representatives or the Excel 250 Sales Force
Representatives subject to the provisions of footnotes (2) and (3) to this
Schedule.

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

35

 

SCHEDULE
12.1(g)

 

Cephalon
has received subpoenas from the U.S. Attorney’s Office in Philadelphia with
respect to PROVIGIL and certain of Cephalon’s other products. This
investigation is ongoing and appears to be focused on Cephalon’s sales and
promotional practices related to these products. Cephalon is cooperating with
this investigation, is providing documents to the Government and has been
engaged in ongoing discussions with the U.S. Attorney’s Office regarding this
matter. Cephalon also has received a voluntary request for information from the
Office of the Connecticut Attorney General asking us to provide information
generally related to Cephalon’s sales and promotional practices for Cephalon’s
three largest U.S. products, including PROVIGIL. Cephalon is complying with
this voluntary request.

 

While
Cephalon has policies and procedures in place designed to ensure compliance
with all applicable FDA requirements related to, among other things, sales and
promotional practices, the U.S. Attorney’s Office in Philadelphia, the Office
of Connecticut Attorney General or any other federal, state or other regulatory
authority could take enforcement action against Cephalon if they believe that
Cephalon’s current or historical sales and promotional practices related to
PROVIGIL are not in compliance with applicable laws and regulations. Cephalon
cannot predict or provide TPNA with any assurances concerning the ultimate
outcome of these matters.

 

**Portions of the Exhibit have been omitted and have been filed
separately pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.

 

36

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}]]