UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q

 
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the quarterly period ended June 30, 2015	
OR	
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the transition period from              to	
Commission File Number 000-50513	

ACORDA THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
(State or other jurisdiction of incorporation
or organization)	13-3831168
(I.R.S. Employer
Identification No.)	

420 Saw Mill River Road, Ardsley, New York
(Address of principal executive offices)	10502
(Zip Code)	
(914) 347-4300
(Registrant’s telephone number,
including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x   No  o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x   No  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer  x	Accelerated filer  o	Non-accelerated filer  o
(Do not check if a
smaller reporting company)	Smaller Reporting Company  o	
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
Class	 	Outstanding at July 31, 2015	
Common Stock, $0.001 par value
per share	 	42,846,274 shares	

 

 

ACORDA THERAPEUTICS, INC.
TABLE OF CONTENTS
 
 	Page	
PART I—FINANCIAL INFORMATION	 	
Item 1.	Financial Statements 	1	
 	Consolidated Balance Sheets as of June 30, 2015 (unaudited) and December 31, 2014	1	
 	Consolidated Statements of Operations (unaudited) for the Three and Six-month Periods Ended June 30, 2015 and 2014	2	
 	Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the Three and Six-month Periods Ended June 30, 2015 and 2014	3	
 	Consolidated Statements of Cash Flows (unaudited) for the Six-month Periods Ended June 30, 2015 and 2014	4	
 	Notes to Consolidated Financial Statements (unaudited) 	5	
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19	
Item 3.	Quantitative and Qualitative Disclosures About Market Risk 	36	
Item 4.	Controls and Procedures 	36	
PART II—OTHER INFORMATION	 	
Item 1.	Legal Proceedings 	38	
Item 1A.	Risk Factors 	39	
Item 6.	Exhibits 	40	

 

 

This Quarterly Report on Form 10-Q contains forward-looking statements relating to future events and our future performance within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Stockholders are cautioned that such statements involve risks and uncertainties, including:  The ability to realize the benefits anticipated from the Civitas Therapeutics, Inc. transaction and to successfully integrate Civitas's operations into our operations; our ability to successfully market and sell Ampyra in the U.S.; third party payers (including governmental agencies) may not reimburse for the use of Ampyra or our other products at acceptable rates or at all and may impose restrictive prior authorization requirements that limit or block prescriptions; the risk of unfavorable results from future studies of Ampyra or from our other research and development programs, including CVT-301, Plumiaz, or any other acquired or in-licensed programs; we may not be able to complete development of, obtain regulatory approval for, or successfully market CVT-301, Plumiaz, or any other products under development; we may need to raise additional funds to finance our expanded operations and may not be able to do so on acceptable terms; the occurrence of adverse safety events with our products; delays in obtaining or failure to obtain regulatory approval of or to successfully market Fampyra outside of the U.S. and our dependence on our collaboration partner Biogen in connection therewith; competition; failure to protect our intellectual property, to defend against the intellectual property claims of others or to obtain third party intellectual property licenses needed for the commercialization of our products; and failure to comply with regulatory requirements could result in adverse action by regulatory agencies. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which we operate and management’s beliefs and assumptions. All statements, other than statements of historical facts, included in this report regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make, and investors should not place undue reliance on these statements. In addition to the risks and uncertainties described above, we have included important factors in the cautionary statements in this report and in our Annual Report on Form 10-K for the year ended December 31, 2014, particularly in the “Risk Factors” section (as updated by the disclosures in our subsequent quarterly reports), that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make. Forward-looking statements in this report are made only as of the date hereof, and we do not assume any obligation to publicly update any forward-looking statements as a result of developments occurring after the date of this report.
 
We and our subsidiaries own several registered trademarks in the U.S. and in other countries.  These registered trademarks include, in the U.S., the marks “Acorda Therapeutics,” our stylized Acorda Therapeutics logo, “Ampyra,” “Zanaflex,” “Zanaflex Capsules,” “Qutenza” and “ARCUS.”  Also, our mark “Fampyra” is a registered mark in the European Community Trademark Office and we have registrations or pending applications for this mark in other jurisdictions.  Our trademark portfolio also includes several registered trademarks and pending trademark applications (e.g., “Plumiaz”) in the U.S. and worldwide for potential product names or for disease awareness activities.  Third party trademarks, trade names, and service marks used in this report are the property of their respective owners.

 

 
PART I
 
Item 1.  Financial Statements
 
ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES
 
Consolidated Balance Sheets
 
(In thousands, except share data)
 	 	June 30,
 2015	 	 	December 31,
2014	 	
 	 	(unaudited)	 	 	 	 	
Assets	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	
Cash and cash equivalents 	 	$	76,197	 	 	$	182,170	 	
Restricted cash 	 	 	900	 	 	 	1,205	 	
Short-term investments 	 	 	225,523	 	 	 	125,448	 	
Trade accounts receivable, net of allowances of $732 and $771, as of June 30, 2015 and December 31, 2014, respectively	 	 	29,797	 	 	 	32,211	 	
Prepaid expenses 	 	 	18,526	 	 	 	15,523	 	
Finished goods inventory held by the Company 	 	 	48,649	 	 	 	26,256	 	
Finished goods inventory held by others 	 	 	553	 	 	 	581	 	
Deferred tax asset 	 	 	19,321	 	 	 	18,420	 	
Other current assets 
 	 	 	8,167	 	 	 	7,324	 	
Total current assets 	 	 	427,633	 	 	 	409,138	 	
Property and equipment, net of accumulated depreciation 	 	 	44,453	 	 	 	46,090	 	
Goodwill 	 	 	182,952	 	 	 	182,952	 	
Intangible assets, net of accumulated amortization 	 	 	431,759	 	 	 	432,822	 	
Non-current portion of deferred cost of license revenue 	 	 	3,223	 	 	 	3,540	 	
Restricted cash 	 	 	4,809	 	 	 	—	 	
Other assets 
 	 	 	5,721	 	 	 	6,137	 	
Total assets 
 	 	$	1,100,550	 	 	$	1,080,679	 	
Liabilities and Stockholders’ Equity	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Accounts payable 	 	$	16,947	 	 	$	17,751	 	
Accrued expenses and other current liabilities 	 	 	55,535	 	 	 	56,118	 	
Deferred product revenue—Zanaflex 	 	 	28,403	 	 	 	29,420	 	
Current portion of deferred license revenue 	 	 	9,057	 	 	 	9,057	 	
Current portion of revenue interest liability 	 	 	585	 	 	 	893	 	
Current portion of convertible notes payable 
 	 	 	1,144	 	 	 	1,144	 	
Total current liabilities 	 	 	111,671	 	 	 	114,383	 	
Convertible senior notes (due 2021) 	 	 	291,538	 	 	 	287,699	 	
Acquired contingent consideration 	 	 	56,800	 	 	 	52,600	 	
Non-current portion of deferred license revenue 	 	 	46,042	 	 	 	50,570	 	
Non-current portion of convertible notes payable 	 	 	1,074	 	 	 	2,184	 	
Deferred tax liability 	 	 	23,885	 	 	 	23,885	 	
Other non-current liabilities 	 	 	9,256	 	 	 	9,103	 	
Commitments and contingencies	 	 	 	 	 	 	 	 	
Stockholders’ equity:	 	 	 	 	 	 	 	 	
Common stock, $0.001 par value. Authorized 80,000,000 shares at June 30, 2015 and December 31, 2014; issued and outstanding 42,829,813 and 41,883,843 shares, including those held in treasury, as of June 30, 2015 and December 31, 2014, respectively	 	 	43	 	 	 	42	 	
Treasury stock at cost (12,420 shares at June 30, 2015 and December 31, 2014)	 	 	(329	)	 	 	(329	)	
Additional paid-in capital 	 	 	783,128	 	 	 	761,026	 	
Accumulated deficit 	 	 	(222,498	)	 	 	(220,410	)	
Accumulated other comprehensive loss 
 	 	 	(60	)	 	 	(74	)	
Total stockholders’ equity 
 	 	 	560,284	 	 	 	540,255	 	
Total liabilities and stockholders’ equity 
 	 	$	1,100,550	 	 	$	1,080,679	 	
See accompanying Unaudited Notes to Consolidated Financial Statements

 
1

 

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES
 
Consolidated Statements of Operations
 
(unaudited)
 
(In thousands, except per share data)
 	 	Three-month
period ended
June 30, 2015	 	 	Three-month
period ended
June 30, 2014	 	 	Six-month
period ended
June 30, 2015	 	 	Six-month
period ended
June 30, 2014	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	
Net product revenues 	 	$	107,565	 	 	$	89,719	 	 	$	201,064	 	 	$	164,182	 	
Royalty revenues 
 	 	 	3,878	 	 	 	5,146	 	 	 	7,966	 	 	 	8,937	 	
License revenue 
 	 	 	2,264	 	 	 	2,264	 	 	 	4,529	 	 	 	4,529	 	
Total net revenues 	 	 	113,707	 	 	 	97,129	 	 	 	213,559	 	 	 	177,648	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Costs and expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of sales 	 	 	22,708	 	 	 	18,899	 	 	 	41,155	 	 	 	34,428	 	
Cost of license revenue 	 	 	159	 	 	 	159	 	 	 	317	 	 	 	317	 	
Research and development 	 	 	31,229	 	 	 	16,448	 	 	 	61,865	 	 	 	30,970	 	
Selling, general and administrative 	 	 	52,819	 	 	 	50,644	 	 	 	101,589	 	 	 	97,537	 	
Changes in fair value of acquired contingent consideration
 	 	 	1,100	 	 	 	—	 	 	 	4,200	 	 	 	—	 	
Total operating expenses 
 	 	 	108,015	 	 	 	86,150	 	 	 	209,126	 	 	 	163,252	 	
Operating income 	 	 	5,692	 	 	 	10,979	 	 	 	4,433	 	 	 	14,396	 	
Other expense (net):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest and amortization of debt discount expense	 	 	(4,010	)	 	 	(426	)	 	 	(8,061	)	 	 	(518	)	
Interest income 	 	 	94	 	 	 	165	 	 	 	160	 	 	 	337	 	
Other income 	 	 	351	 	 	 	—	 	 	 	471	 	 	 	—	 	
Total other expense (net) 	 	 	(3,565	)	 	 	(261	)	 	 	(7,430	)	 	 	(181	)	
Income (loss) before taxes
 	 	 	2,127	 	 	 	10,718	 	 	 	(2,997	)	 	 	14,215	 	
(Provision for) benefit from income taxes 
 	 	 	(1,130	)	 	 	(6,033	)	 	 	909	 	 	 	(8,825	)	
Net income (loss) 
 	 	$	997	 	 	$	4,685	 	 	$	(2,088	)	 	$	5,390	 	

Net income (loss) per share—basic 	 	$	0.02	 	 	$	0.11	 	 	$	(0.05	)	 	$	0.13	 	
Net income (loss) per share—diluted 	 	$	0.02	 	 	$	0.11	 	 	$	(0.05	)	 	$	0.13	 	
Weighted average common shares outstanding used in computing net income (loss) per share—basic	 	 	42,085	 	 	 	41,032	 	 	 	42,058	 	 	 	40,985	 	
Weighted average common shares outstanding used in computing net income (loss) per share—diluted	 	 	43,282	 	 	 	42,432	 	 	 	42,058	 	 	 	42,336	 	
 
See accompanying Unaudited Notes to Consolidated Financial Statements

 
2

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES
 
Consolidated Statements of Comprehensive Income (Loss)
 
(unaudited)
 
(In thousands)
 	 	Three-month
period ended
June 30, 2015	 	 	Three-month
period ended
June 30, 2014	 	 	Six-month
period ended
June 30, 2015	 	 	Six-month
period ended
June 30, 2014	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) 
 	 	$	997	 	 	$	4,685	 	 	$	(2,088	)	 	$	5,390	 	
Other comprehensive income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized gains on available for sale securities, net of tax
 	 	 	31	 	 	 	14	 	 	 	14	 	 	 	59	 	
Other comprehensive income, net of tax 	 	 	31	 	 	 	14	 	 	 	14	 	 	 	59	 	
Comprehensive income (loss) 
 	 	$	1,028	 	 	$	4,699	 	 	$	(2,074	)	 	$	5,449	 	
 
See accompanying Unaudited Notes to Consolidated Financial Statements

 
3

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES
 
Consolidated Statements of Cash Flows
 
(unaudited)
 
(In thousands)
 	 	Six-month
period ended
June 30, 2015	 	 	Six-month
period ended
June 30, 2014	 	
Cash flows from operating activities:	 	 	 	 	 	 	
Net (loss) income 	 	$	(2,088	)	 	$	5,390	 	
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:	 	 	 	 	 	 	 	 	
Share-based compensation expense 	 	 	15,834	 	 	 	13,373	 	
Amortization of net premiums and discounts on investments	 	 	1,434	 	 	 	1,487	 	
Amortization of debt discount and debt issuance costs 	 	 	4,230	 	 	 	157	 	
Amortization of revenue interest issuance cost 	 	 	7	 	 	 	12	 	
Depreciation and amortization expense 	 	 	7,491	 	 	 	3,624	 	
Change in acquired contingent consideration obligation 	 	 	4,200	 	 	 	—	 	
Loss on put/call liability 	 	 	—	 	 	 	20	 	
Deferred tax (benefit) provision 	 	 	(909	)	 	 	8,863	 	
Changes in assets and liabilities:	 	 	 	 	 	 	 	 	
Decrease in accounts receivable 	 	 	2,413	 	 	 	3,757	 	
Increase in prepaid expenses and other current assets 	 	 	(3,845	)	 	 	(1,538	)	
Increase in inventory held by the Company 	 	 	(22,393	)	 	 	(5,287	)	
Decrease in inventory held by others 	 	 	27	 	 	 	57	 	
Decrease in non-current portion of deferred cost of license revenue	 	 	317	 	 	 	317	 	
Decrease in other assets 	 	 	17	 	 	 	17	 	
(Decrease) increase in accounts payable, accrued expenses, other current liabilities	 	 	(2,496	)	 	 	134	 	
Decrease in revenue interest liability interest payable 	 	 	(190	)	 	 	(510	)	
Decrease in non-current portion of deferred license revenue	 	 	(4,528	)	 	 	(4,528	)	
Increase in other non-current liabilities 	 	 	—	 	 	 	18	 	
Decrease in deferred product revenue—Zanaflex 	 	 	(1,017	)	 	 	(2,628	)	
(Increase) decrease in restricted cash 	 	 	(4,504	)	 	 	277	 	
Net cash (used in) provided by operating activities 	 	 	(6,000	)	 	 	23,012	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	
Purchases of property and equipment 	 	 	(4,057	)	 	 	(1,390	)	
Purchases of intangible assets 	 	 	(572	)	 	 	(1,286	)	
Purchases of investments 	 	 	(275,987	)	 	 	(263,848	)	
Proceeds from maturities of investments 
 	 	 	174,500	 	 	 	128,500	 	
Net cash used in investing activities 	 	 	(106,116	)	 	 	(138,024	)	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	
Proceeds from issuance of convertible senior notes 	 	 	—	 	 	 	345,000	 	
Debt issuance costs 	 	 	—	 	 	 	(7,441	)	
Proceeds from issuance of common stock and option exercises	 	 	6,268	 	 	 	4,375	 	
Repayments of revenue interest liability 
 	 	 	(125	)	 	 	(360	)	
Net cash provided by financing activities 
 	 	 	6,143	 	 	 	341,574	 	
Net (decrease) increase in cash and cash equivalents 	 	 	(105,973	)	 	 	226,562	 	
Cash and cash equivalents at beginning of period 
 	 	 	182,170	 	 	 	48,037	 	
Cash and cash equivalents at end of period 
 	 	$	76,197	 	 	$	274,599	 	
Supplemental disclosure:	 	 	 	 	 	 	 	 	
Cash paid for interest 	 	 	3,986	 	 	 	706	 	
Cash paid for taxes 	 	 	1,323	 	 	 	1,214	 	
 
See accompanying Unaudited Notes to Consolidated Financial Statements

 

4

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES
 
Notes to Consolidated Financial Statements
 
(unaudited)
 
(1) Organization and Business Activities
 
Acorda Therapeutics, Inc. (“Acorda” or the “Company”) is a biopharmaceutical company dedicated to the identification, development and commercialization of novel therapies that restore function and improve the lives of people with neurological disorders.
 
Management is responsible for the accompanying unaudited interim consolidated financial statements and the related information included in the notes to the consolidated financial statements. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments, including normal recurring adjustments necessary for the fair presentation of the Company’s financial position and results of operations and cash flows for the periods presented. Results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year.
 
These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K for such year, as filed with the Securities and Exchange Commission (the SEC).
 
(2) Summary of Significant Accounting Policies
 
Principles of Consolidation
 
The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and include the results of operations of the Company and its majority owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
 
Use of Estimates
 
The consolidated financial statements include certain amounts that are based on management’s best estimates and judgments.  Estimates are used in determining such items as provisions for rebates and incentives, chargebacks, and other sales allowances, depreciable/amortizable lives, asset impairments, excess inventory, valuation allowance on deferred taxes, purchase price allocations and amounts recorded for contingencies and accruals.  Because of the uncertainties inherent in such estimates, actual results may differ from these estimates.  Management periodically evaluates estimates used in the preparation of the consolidated financial statements for reasonableness. 

The use of forecasted financial information is inherent in many of our accounting estimates, including but not limited to, determining the estimated fair value of goodwill, intangible assets and contingent consideration, matching intangible amortization to underlying benefits (e.g. sales and cash inflows), establishing and evaluating inventory reserves, and evaluating the need for valuation allowances for deferred tax assets.  Such forecasted financial information is comprised of numerous assumptions regarding our future revenues, cash flows, and operational results.  Management believes that its financial forecasts are reasonable and appropriate based upon current facts and circumstances.  Because of the inherent nature of forecasts, however, actual results may differ from these forecasts.  Management regularly reviews the information related to these forecasts and adjusts the carrying amounts of the applicable assets and liabilities prospectively when actual results differ from previous estimates.
 
Investments
 
Both short-term and long-term investments consist of US Treasury bonds. The Company classifies marketable securities available to fund current operations as short-term investments in current assets on its consolidated balance sheets. Marketable securities are classified as long-term investments in long-term assets on the consolidated balance sheets if the Company has the ability and intent to hold them and such holding period is longer than one year. The Company classifies its short-term and long-term investments as available-for-sale. Available-for-sale securities are recorded at the fair value of the investments based on quoted market prices.

5

 
Unrealized holding gains and losses on available-for-sale securities, which are determined to be temporary, are excluded from earnings and are reported as a separate component of accumulated other comprehensive loss.
 
Premiums and discounts on investments are amortized over the life of the related available-for-sale security as an adjustment to yield using the effective-interest method. Dividend and interest income are recognized when earned. Amortized premiums and discounts, dividend and interest income and realized gains and losses are included in interest income.
 
Accumulated Other Comprehensive Loss
 
 The Company’s accumulated other comprehensive loss is comprised of unrealized gains and losses on available for sale securities and is recorded and presented net of income tax.
 
Revenue Recognition
 
Ampyra

Ampyra is available only through a network of specialty pharmacy providers that provide the medication to patients by mail; Kaiser Permanente, which distributes Ampyra to patients through a closed network of on-site pharmacies; and ASD Specialty Healthcare, Inc. (an AmerisourceBergen affiliate), which distributes Ampyra to the U.S. Bureau of Prisons, the U.S. Department of Defense, the U.S. Department of Veterans Affairs, or VA, and other federal agencies. Ampyra is not available in retail pharmacies. The Company does not recognize revenue from product sales until there is persuasive evidence of an arrangement, delivery has occurred, the price is fixed and determinable, the buyer is obligated to pay the Company, the obligation to pay is not contingent on resale of the product, the buyer has economic substance apart from the Company, the Company has no obligation to bring about the sale of the product, and the amount of returns can be reasonably estimated and collectability is reasonably assured. The Company recognizes product sales of Ampyra following receipt of product by a network of specialty pharmacy providers, Kaiser Permanente, and ASD Specialty Healthcare, Inc. The specialty pharmacy providers, Kaiser Permanente, and ASD Specialty Healthcare, Inc. are contractually obligated to hold no more than an agreed number of days of inventory, ranging from 10 to 30 days.
 
The Company’s net revenues represent total revenues less allowances for customer credits, including estimated discounts, rebates, and chargebacks. These allowances are recorded for cash consideration given by a vendor to a customer that is presumed to be a reduction of the selling prices of the vendor’s products or services and, therefore, are characterized as a reduction of revenue. At the time product is shipped to specialty pharmacies, Kaiser Permanente and ASD Specialty Healthcare, Inc., an adjustment is recorded for estimated discounts, rebates and chargebacks. These allowances are established by management as its best estimate based on available information and will be adjusted to reflect known changes in the factors that impact such allowances. Allowances for discounts, rebates and chargebacks are established based on the contractual terms with customers, historical trends, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for the product and anticipated introduction of competitive products.  Product shipping and handling costs are included in cost of sales.  The Company does not accept returns of Ampyra with the exception of product damages that occur during shipping.
 
Zanaflex
 
The Company applies the revenue recognition guidance in Accounting Standards Codification (ASC) 605-15-25, which among other criteria requires that future returns can be reasonably estimated in order to recognize revenue. The amount of future tablet returns is uncertain due to generic competition and customer conversion to Zanaflex Capsules. The Company has accumulated sales history with Zanaflex Capsules; however, due to existing and potential generic competition and customer conversion from Zanaflex tablets to Zanaflex Capsules, management is unable to determine a return rate at this time. As a result, the Company accounts for these product shipments using a deferred revenue recognition model. Under the deferred revenue model, the Company does not recognize revenue upon product shipment. For these product shipments, the Company invoices the wholesaler, records deferred revenue at gross invoice sales price, and classifies the cost basis of the product held by the wholesaler as a separate component of inventory. The Company recognizes revenue when prescribed to the end-user, on a first-in first-out (FIFO) basis. The Company’s revenue to be recognized is based on (1) the estimated prescription demand, based on pharmacy sales for its products; and (2) the Company’s analysis of third-party information, including third-party market research data. The Company’s estimates are subject to the inherent limitations of estimates that rely on third-party data, as certain third-party information is itself in the form of estimates, and reflect other limitations. The Company’s sales and revenue recognition reflects the Company’s estimates of actual product prescribed to the end-user. The Company expects to be able to apply a more traditional revenue recognition policy such that revenue is recognized following

6

 
shipment to the customer when it believes it has sufficient data to develop reasonable estimates of expected returns based upon historical returns and greater certainty regarding generic competition.
 
The Company’s net revenues represent total revenues less allowances for customer credits, including estimated discounts, rebates, and chargebacks. These allowances are recorded for cash consideration given by a vendor to a customer that is presumed to be a reduction of the selling prices of the vendor’s products or services and, therefore, should be characterized as a reduction of revenue when recognized in the vendor’s statement of operations. Adjustments are recorded for estimated discounts, rebates and chargebacks. These allowances are established by management as its best estimate based on available information and are adjusted to reflect known changes in the factors that impact such allowances. Allowances for discounts, rebates and chargebacks are established based on the contractual terms with customers, analysis of historical levels of discounts, rebates and chargebacks, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for each product and anticipated introduction of competitive products. In addition, the Company records a charge to cost of goods sold for the cost basis of the estimated product returns the Company believes may ultimately be realized at the time of product shipment to wholesalers. The Company has recognized this charge at the date of shipment since it is probable that it will receive a level of returned products; upon the return of such product it will be unable to resell the product considering its expiration dating; and it can reasonably estimate a range of returns. This charge represents the cost basis for the low end of the range of the Company’s estimated returns. Product shipping and handling costs are included in cost of sales.
 
Qutenza

Qutenza is distributed in the United States by Besse Medical, Inc., a specialty distributor that furnishes the medication to physician offices; and by ASD Specialty Healthcare, Inc., a specialty distributor that furnishes the medication to hospitals and clinics. The Company does not recognize revenue from product sales until there is persuasive evidence of an arrangement, delivery has occurred, the price is fixed and determinable, the buyer is obligated to pay the Company, the obligation to pay is not contingent on resale of the product, the buyer has economic substance apart from the Company, the Company has no obligation to bring about the sale of the product, and the amount of returns can be reasonably estimated and collectability is reasonably assured. This means that, for Qutenza, the Company recognizes product sales following receipt of product by its specialty distributors.
 
The Company’s net revenues represent total revenues less allowances for customer credits, including estimated rebates, chargebacks, and returns. These allowances are recorded for cash consideration given by a vendor to a customer that is presumed to be a reduction of the selling prices of the vendor’s products or services and, therefore, are characterized as a reduction of revenue. At the time product is shipped, an adjustment is recorded for estimated rebates, chargebacks, and returns. These allowances are established by management as its best estimate based on available information and will be adjusted to reflect known changes in the factors that impact such allowances. Allowances for rebates, chargebacks, and returns are established based on the contractual terms with customers, historical trends, as well as expectations about the market for the product and anticipated introduction of competitive products.  Product shipping and handling costs are included in cost of sales.
 
Milestones and royalties

In order to determine the revenue recognition for contingent milestones, the Company evaluates the contingent milestones using the criteria as provided by the Financial Accounting Standards Boards (FASB) guidance on the milestone method of revenue recognition. At the inception of a collaboration agreement, the Company evaluates if payments are substantive.  The criteria requires that (i) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from the Company’s activities to achieve the milestone, (ii) the milestone be related to past performance, and (iii) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement.  If these criteria are met then the contingent milestones can be considered as substantive milestones and will be recognized as revenue in the period that the milestone is achieved. Royalties are recognized as earned in accordance with the terms of various research and collaboration agreements.
 
In-Process Research and Development
 
The cost of in-process research and development (IPR&D) acquired directly in a transaction other than a business combination is capitalized if the projects have an alternative future use; otherwise they are expensed. The fair values of IPR&D projects acquired in business combinations are capitalized. Several methods may be used to determine the estimated fair value of the IPR&D acquired in a business combination. The Company utilizes the "income method”, and uses estimated future net cash flows that are derived from projected sales revenues and estimated costs. These projections are based on

7

 
factors such as relevant market size, patent protection, historical pricing and expected industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. These assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or written off, as appropriate. IPR&D intangible assets which are determined to have had a drop in their fair value are adjusted downward and an expense recognized in the statement of operations. These assets are tested at least annually or sooner when a triggering event occurs that could indicate a potential impairment.
 
Contingent Consideration
 
The Company records contingent consideration as part of its business acquisitions.  Contingent consideration is recognized at fair value as of the date of acquisition and recorded as a liability on the consolidated balance sheet.  The contingent consideration is re-valued on a quarterly basis using a probability weighted discounted cash-flow approach until fulfillment or expiration of the contingency.  Changes in the fair value of the contingent consideration are recognized in the statement of operations.
 
Goodwill
 
Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired as a result of the Company’s business acquisitions accounted for using the acquisition method of accounting.  Goodwill is not amortized and is subject to impairment testing on an annual basis or when a triggering event occurs that may indicate the carrying value of the goodwill is impaired.
 
Collaborations
 
The Company recognizes collaboration revenues and expenses by analyzing each element of the agreement to determine if it shall be accounted for as a separate element or single unit of accounting. If an element shall be treated separately for revenue recognition purposes, the revenue recognition principles most appropriate for that element are applied to determine when revenue shall be recognized. If an element shall not be treated separately for revenue recognition purposes, the revenue recognition principles most appropriate for the bundled group of elements are applied to determine when revenue shall be recognized. Payments received in excess of revenues recognized are recorded as deferred revenue until such time as the revenue recognition criteria have been met.
 
Concentration of Credit Risk
 
The Company’s principal direct customers as of June 30, 2015 were a network of specialty pharmacies, Kaiser Permanente, and ASD Specialty Healthcare, Inc. for Ampyra, wholesale pharmaceutical distributors for Zanaflex Capsules and Zanaflex tablets, and two specialty distributors for Qutenza. The Company periodically assesses the financial strength of these customers and establishes allowances for anticipated losses, if necessary. Four customers individually accounted for more than 10% of the Company’s product revenue in 2015 and 2014. Four customers individually accounted for more than 10% of the Company’s accounts receivable as of June 30, 2015 and December 31, 2014, respectively. The Company’s net product revenues are generated in the United States.
 
Segment and Geographic Information
 
The Company is managed and operated as one business which is focused on the identification, development and commercialization of novel therapies to improve the lives of people with neurological disorders. The entire business is managed by a single management team that reports to the Chief Executive Officer. The Company does not operate separate lines of business with respect to any of its products or product candidates and the Company does not prepare discrete financial information with respect to separate products or product candidates or by location.  Accordingly, the Company views its business as one reportable operating segment. Net product revenues reported to date are derived from sales of Ampyra, Zanaflex and Qutenza in the United States.
 
Subsequent Events
 
Subsequent events are defined as those events or transactions that occur after the balance sheet date, but before the financial statements are filed with the Securities and Exchange Commission. The Company completed an evaluation of the impact of any subsequent events through the date these financial statements were issued, and determined there were no

8

 
subsequent events requiring disclosure in or requiring adjustment to these financial statements other than the subsequent event disclosed in Note 11 below.
 
Recent Accounting Pronouncements
 
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU No. 2014-09).  This new standard will replace all current U.S. GAAP guidance on this topic and eliminate all industry-specific guidance.  In July 2015, the FASB decided to defer the effective date of the new revenue standard for interim and annual periods beginning after December 15, 2017 (previously December 15, 2016).  The change will allow public entities to adopt the new standard as early as the original public entity effective date (i.e. annual reporting periods beginning after December 15, 2016 and interim periods therein).  Early adoption prior to that date will not be permitted.  ASU 2014-09 allows for either full retrospective or modified retrospective adoption.  The Company is evaluating the transition method that will be elected and the potential effects of adopting the provisions of ASU No. 2014-09.
 
In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15), which defines management’s responsibility to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures if there is substantial doubt about its ability to continue as a going concern.  ASU 2014-05 is effective for annual reporting periods ending after December 15, 2016 with early adoption permitted.  The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

In April 2015, the FASB issued Accounting Standards Update 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset.  ASU-2014-15 is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2015, with early adoption permitted.  The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements or results of operations.

On June 12, 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements . With regard to fair value measurement disclosures, ASU 2015-10 clarified that, for nonrecurring measurements estimated at a date during the reporting period other than the end of the reporting period, an entity should clearly indicate that the fair value information presented is not as of the period’s end as well as the date or period that the measurement was taken. This change was effective immediately upon issuance of ASU 2015-10.  The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements or disclosures.

(3) Acquisitions
 
Civitas Therapeutics, Inc. Acquisition
 
On October 22, 2014, the Company completed the acquisition of Civitas Therapeutics, Inc., a Delaware corporation (Civitas).  As a result of the acquisition, the Company acquired global rights to CVT-301, a Phase 3 treatment candidate for OFF episodes of Parkinson’s disease.  The acquisition of Civitas also included rights to Civitas’s proprietary ARCUS pulmonary delivery technology, which management believes has potential applications in multiple disease areas, and a subleased manufacturing facility in Chelsea, Massachusetts with commercial-scale capabilities.  The approximately 90,000 square foot facility also includes office and laboratory space.  Approximately 45 Civitas employees based at the Chelsea facility joined the Acorda workforce in connection with the acquisition.

The Civitas acquisition was completed under an Agreement and Plan of Merger, dated as of September 24, 2014 (the Merger Agreement), by and among Acorda, Five A Acquisition Corporation, a Delaware corporation and its wholly-owned subsidiary (Merger Sub), Civitas and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity as the security holders’ representative (SRS).  Pursuant to the terms of the Merger Agreement, Merger Sub has merged with and into Civitas, which is the surviving corporation in the Merger and which is continuing as a wholly-owned subsidiary of Acorda under the Civitas name.

Pursuant to the terms of the Merger Agreement, aggregate merger consideration was $525 million plus $4.5 million in Civitas transaction costs paid by the Company.  Additionally and pursuant to the Merger Agreement, upon consummation of the merger, $39.375 million of the aggregate merger consideration was deposited into escrow to secure representation and warranty indemnification obligations of Civitas and Civitas’ security holders.  The transaction was financed with cash on

9

hand.  The Company incurred approximately $7.2 million of its own transactions costs related to legal, valuation and other professional and consulting fees associated with the acquisition.  These transaction costs have been expensed as selling, general and administrative expenses in the year ended December 31, 2014.

The fair value of consideration transferred as of the acquisition date of October 22, 2014 totaled approximately $529.5 million summarized as follows:

(In thousands)
Cash paid 	 	$	524,201	 	
Extinguishment of long-term debt 	 	 	5,325	 	
Fair value of consideration transferred 	 	$	529,526	 	

In accordance with the acquisition method of accounting, the Company allocated the preliminary purchase price to the estimated fair values of the identifiable assets acquired and liabilities assumed, with any excess allocated to goodwill.  The fair value of acquired IPR&D will be classified as an indefinite lived intangible asset until the successful completion or abandonment of the associated research and development efforts.  The Company accounted for the transaction as a business combination.  The results of Civitas’ operations have been included in the consolidated statements of operations from the date of acquisition.

Acquired contingent consideration represents the estimated fair value of certain royalty payments due under a prior acquisition agreement between Alkermes and Civitas pertaining to sales of licensed products using the ARCUS technology.  The estimated fair value of the acquired contingent consideration was determined by applying a probability adjusted, discounted cash flow approach based on estimated future sales expected from CVT-301, a phase 3 candidate for the treatment of OFF episodes of Parkinson’s Disease and CVT-427, a pre-clinical development stage product.  CVT-427 is an inhaled triptan intended to provide relief from acute migraine episodes by taking advantage of the ARCUS delivery system.

Goodwill represents the amount of the purchase price paid in excess of the estimated fair value of the assets acquired and liabilities assumed.  The goodwill recorded as part of the acquisition is primarily related to establishing a deferred tax liability for the IPR&D intangible assets which have no tax basis and, therefore, will not result in a future tax deduction.

The following table presents the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date of October 22, 2014:

(In thousands)
Current assets 	 	$	54,911	 	
Property and equipment 	 	 	27,913	 	
Identifiable intangible assets:	 	 	 	 	
   In-process research and development 	 	 	423,000	 	
Other non-current assets 	 	 	1,002	 	
Current liabilities 	 	 	(6,154	)	
Contingent consideration 	 	 	(50,400	)	
Deferred taxes 	 	 	(102,633	)	
Other non-current liabilities 	 	 	(1,065	)	
  Fair value of acquired assets and liabilities 	 	 	346,574	 	
Goodwill 	 	 	182,952	 	
  Aggregate purchase price 	 	 	529,526	 	
Amount paid to extinguish long-term debt 	 	 	(5,325	)	
  Cash Paid 	 	$	524,201	 	

10

 
The Company may update its preliminary acquisition accounting for provisional amounts for which the accounting is incomplete during the reporting period in which the acquisition occurred, and may continue to update the provisional amounts until the amounts are no longer provisional, but for no longer than one year from the date of the acquisition.  Any updates to the fair value of consideration given or fair value assigned to assets acquired and liabilities assumed during the measurement period would be adjusted through goodwill.
 
Pro-Forma Financial Information Associated with the Civitas Acquisition (Unaudited)
 
The following table summarizes certain supplemental pro forma financial information for the three and six-month periods ended June 30, 2015 and 2014 as if the acquisition of Civitas had occurred as of January 1, 2013.  The unaudited pro forma financial information for the three and six-month periods ended June 30, 2014 reflects (i) the impact to depreciation expense based on fair value adjustments to the property, plant and equipment acquired from Civitas; (ii) the effect to interest expense on a loan Civitas entered into at March 31, 2014; and (iii) the income tax benefit from Civitas net loss at the Company’s effective income tax rate at June 30, 2014.  The unaudited pro forma financial information was prepared for comparative purposes only and is not necessarily indicative of what would have occurred had the acquisition been made at that time or of results which may occur in the future.

 	For the Three Month Period ended	 	For the Three Month Period ended	 	
 	June 30, 2015	 	June 30, 2014	 	
(In thousands)	Reported	 	Pro Forma	 	Reported	 	Pro Forma	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net revenues	 	$	113,707	 	 	$	113,707	 	 	$	97,129	 	 	$	97,129	 	
Net income	 	 	997	 	 	 	997	 	 	 	4,685	 	 	 	504	 	

 	For the Six Month Period ended	 	For the Six Month Period ended	 	
 	June 30, 2015	 	June 30, 2014	 	
(In thousands)	Reported	 	Pro Forma	 	Reported	 	Pro Forma	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net revenues	 	$	213,559	 	 	$	213,559	 	 	$	177,648	 	 	$	177,648	 	
Net (loss) income	 	 	(2,088	)	 	 	(2,088	)	 	 	5,390	 	 	 	(3,838	)	

(4) Share-based Compensation
 
During the three-month periods ended June 30, 2015 and 2014, the Company recognized share-based compensation expense of $8.7 million and $7.6 million, respectively. During the six-month periods ended June 30, 2015 and 2014, the Company recognized share-based compensation expense of $15.8 million and $13.4 million, respectively.  Activity in options and restricted stock during the six-month period ended June 30, 2015 and related balances outstanding as of that date are reflected below. The weighted average fair value per share of options granted to employees for the three-month periods ended June 30, 2015 and 2014 were approximately $13.83 and $15.37, respectively.  The weighted average fair value per share of options granted to employees for the six-month periods ended June 30, 2015 and 2014 were approximately $15.97 and $18.18, respectively.
 
The following table summarizes share-based compensation expense included within the consolidated statements of operations:
 
 	For the three-month	 	For the six-month	 	
 	period ended June 30,	 	period ended June 30,	 	
(In millions)	2015	 	2014	 	2015	 	2014	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development	 	$	2.2	 	 	$	1.6	 	 	$	4.0	 	 	$	2.7	 	
Selling, general and administrative	 	 	6.5	 	 	 	6.0	 	 	 	11.8	 	 	 	10.7	 	
Total	 	$	8.7	 	 	$	7.6	 	 	$	15.8	 	 	$	13.4	 	

11

 
A summary of share-based compensation activity for the six-month period ended June 30, 2015 is presented below:
 
Stock Option Activity
 
 	 	Number of Shares
(In thousands)	 	 	Weighted Average
Exercise Price	 	 	Weighted Average
Remaining
Contractual
Term	 	 	Intrinsic Value
(In thousands)	 	
Balance at January 1, 2015	 	 	7,786	 	 	$	29.05	 	 	 	 	 	 	 	
Granted 	 	 	1,451	 	 	 	35.58	 	 	 	 	 	 	 	
Cancelled 	 	 	(122	)	 	 	35.24	 	 	 	 	 	 	 	
Exercised 
 	 	 	(251	)	 	 	24.98	 	 	 	 	 	 	 	
Balance at June 30, 2015
 	 	 	8,864	 	 	$	30.15	 	 	 	7.0	 	 	$	40,919	 	
Vested and expected to vest at June 30, 2015
 	 	 	8,735	 	 	$	30.07	 	 	 	6.9	 	 	$	40,848	 	
Vested and exercisable at June 30, 2015
 	 	 	4,924	 	 	$	26.60	 	 	 	5.4	 	 	$	36,290	 	

Restricted Stock Activity
 
(In thousands)
Restricted Stock	 	Number of Shares	
Nonvested at January 1, 2015	 	502	
Granted	 	219	
Vested	 	(15)	
Forfeited
 	 	(14)	
Nonvested at June 30, 2015
 	 	692	

Unrecognized compensation cost for unvested stock options and restricted stock awards as of June 30, 2015 totaled $75.2 million and is expected to be recognized over a weighted average period of approximately 2.6 years.
 
  (5) Earnings Per Share
 
The following table sets forth the computation of basic and diluted earnings per share for the three and six-month periods ended June 30, 2015 and 2014:
 
(In thousands, except per share data)
 	 	Three-month
period ended
June 30, 2015	 	 	Three-month
period ended
June 30, 2014	 	 	Six-month
period ended
June 30, 2015	 	 	Six-month
period ended
June 30, 2014	 	
Basic and diluted	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) 	 	$	997	 	 	$	4,685	 	 	$	(2,088	)	 	$	5,390	 	
Weighted average common shares outstanding used in computing net income (loss) per share—basic	 	 	42,085	 	 	 	41,032	 	 	 	42,058	 	 	 	40,985	 	
Plus: net effect of dilutive stock options and restricted common shares	 	 	1,197	 	 	 	1,400	 	 	 	—	 	 	 	1,351	 	
Weighted average common shares outstanding used in computing net income (loss) per share—diluted
 	 	 	43,282	 	 	 	42,432	 	 	 	42,058	 	 	 	42,336	 	
Net income (loss) per share—basic
 	 	$	0.02	 	 	$	0.11	 	 	$	(0.05	)	 	$	0.13	 	
Net income (loss) per share—diluted
 	 	$	0.02	 	 	$	0.11	 	 	$	(0.05	)	 	$	0.13	 	

The difference between basic and diluted shares is that diluted shares include the dilutive effect of the assumed exercise of outstanding securities. The Company’s stock options and unvested shares of restricted common stock could have the most significant impact on diluted shares.

12

 
Securities that could potentially be dilutive are excluded from the computation of diluted earnings per share when a loss from continuing operations exists or when the exercise price exceeds the average closing price of the Company’s common stock during the period, because their inclusion would result in an anti-dilutive effect on per share amounts.
 
The following amounts were not included in the calculation of net income (loss) per diluted share because their effects were anti-dilutive:
 
(In thousands)
 	Three-month
period ended
June 30, 2015	Three-month
period ended
June 30, 2014	Six-month
period ended
June 30, 2015	Six-month
period ended
June 30, 2014	
Denominator	 	 	 	 	
Stock options and restricted common shares	5,406	3,739	3,974	3,859	
Convertible note – Saints Capital 	19	29	19	29	
 
Additionally, the impact of the convertible debt was determined to be anti-dilutive and excluded from the calculation of net income per diluted share.
 
  (6) Income Taxes
 
For the three-month periods ended June 30, 2015 and 2014, the Company recorded a $1.1 million and $6.0 million provision for income taxes, respectively based upon its estimated tax liability for the year.  For the six-month periods ended June 30, 2015 and 2014, the Company recorded a $0.9 million benefit from and $8.8 million provision for income taxes based upon its estimated tax liability for the year. The provision for/benefit from income taxes is based on federal, state and Puerto Rico income taxes. The effective income tax rates for the Company for the three-month periods ended June 30, 2015 and 2014 were 53% and 56%, respectively.  The effective income tax rates for the Company for the six-month periods ended June 30, 2015 and 2014 were 30% and 62%, respectively.  As a result of the Federal research and development tax credit not being extended during the first and second quarter of 2015, the Company was not able to receive a benefit in the effective tax rate for this in 2015. The Company, however, was able to receive a benefit in the effective tax rate for 2015 for the Massachusetts state research and development tax credit in addition to the Federal orphan drug credit.
 
The Company continues to evaluate the realizability of its deferred tax assets and liabilities on a periodic basis and will adjust such amounts in light of changing facts and circumstances including, but not limited to, future projections of taxable income, tax legislation, rulings by relevant tax authorities, the progress of ongoing tax audits and the regulatory approval of products currently under development. Any changes to the valuation allowance or deferred tax assets and liabilities in the future would impact the Company's income taxes.
 
(7) Fair Value Measurements
 
The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2015 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs utilize unobservable data points for the asset or liability. The Company’s Level 1 assets consist of time deposits and investments in a Treasury money market fund and the Company’s Level 2 assets consist of high-quality government bonds and are valued using observable market prices.  Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets and Level 2 assets are valued using quoted prices for similar assets and liabilities in active markets or other market observable inputs such as interest rates and yield curves. The Company’s Level 3 liabilities represent acquired contingent consideration related to the acquisition of Civitas and are valued using a probability weighted discounted cash flow valuation approach.  No changes in valuation techniques occurred during the three or six months ended June 30, 2015.  The estimated fair values of all of our financial instruments approximate their carrying values at June 30, 2015.

13

 
(In thousands)
 	 	Level 1	 	 	Level 2	 	 	Level 3	 	
June 30, 2015	 	 	 	 	 	 	 	 	 	
Assets Carried at Fair Value:	 	 	 	 	 	 	 	 	 	
Cash equivalents 	 	$	38,253	 	 	$	—	 	 	$	—	 	
Short-term investments 	 	 	—	 	 	 	225,523	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities Carried at Fair Value:	 	 	 	 	 	 	 	 	 	 	 	 	
Acquired contingent consideration 	 	 	—	 	 	 	—	 	 	 	56,800	 	
Put/call liability 	 	 	—	 	 	 	—	 	 	 	—	 	

December 31, 2014	 	 	 	 	 	 	 	 	 	 	 	 	
Assets Carried at Fair Value:	 	 	 	 	 	 	 	 	 	 	 	 	
Cash equivalents 	 	$	149,754	 	 	$	—	 	 	$	—	 	
Short-term investments 	 	 	—	 	 	 	125,448	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities Carried at Fair Value:	 	 	 	 	 	 	 	 	 	 	 	 	
Acquired contingent consideration 	 	 	—	 	 	 	—	 	 	 	52,600	 	
Put/call liability 	 	 	—	 	 	 	—	 	 	 	—	 	

The fair value of the Company's convertible senior notes was approximately $349.1 million as of June 30, 2015. The Company estimates the fair value of its Notes utilizing market quotations for the debt (Level 2).
The following table presents additional information about liabilities measured at fair value on a recurring basis and for which the Company utilizes Level 3 inputs to determine fair value.
 
Acquired contingent consideration
 
(In thousands)
 	 	Three-month
period ended
June 30, 2015	 	 	Three-month
period ended
June 30, 2014	 	 	Six-month
period ended
June 30, 2015	 	 	Six-month
period ended
June 30, 2014	 	
Acquired contingent consideration:	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, beginning of period 	 	$	55,700	 	 	$	—	 	 	$	52,600	 	 	$	—	 	
Fair value change to contingent consideration (unrealized) included in the statement of operations	 	 	1,100	 	 	 	—	 	 	 	4,200	 	 	 	—	 	
Balance, end of period 	 	$	56,800	 	 	$	—	 	 	$	56,800	 	 	$	—	 	

The Company estimates the fair value of its acquired contingent consideration using a probability weighted discounted cash flow valuation approach based on estimated future sales expected from CVT-301, a phase 3 candidate for the treatment of OFF episodes of Parkinson’s Disease and CVT-427, a pre-clinical development stage product.  CVT-427 is an inhaled triptan intended to provide relief from acute migraine episodes taking advantage of the ARCUS delivery system. Using this approach, expected future cash flows are calculated over the expected life of the agreement, are discounted, and then exercise scenario probabilities are applied. Some of the more significant assumptions made in the valuation include (i) the estimated CVT-301 and CVT 427 revenue forecasts, (ii) probabilities of success, and (iii) discount periods and rate. The probability of achievement of revenue milestones ranged from 28.5% to 70% with milestone payment outcomes ranging from $0 to $60 million in the aggregate for CVT-301 and CVT-427.  The valuation is performed quarterly.  Gains and losses are included in the statement of operations.  For the three months ended June 30, 2015, changes in the fair value of the acquired contingent consideration were due to the re-calculation of cash flows for the passage of time and updates to certain of the other assumptions noted above.
 
The acquired contingent consideration is classified as a Level 3 liability as its valuation requires substantial judgment and estimation of factors that are not currently observable in the market.  If different assumptions were used for the various inputs to the valuation approach, including but not limited to, assumptions involving probability adjusted sales estimates for CVT-301 and CVT-427 and estimated discount rates, the estimated fair value could be significantly higher or lower than the fair value we determined.

14

 
(8) Investments

The Company has determined that all of its investments are classified as available-for-sale. Available-for-sale securities are carried at fair value with interest on these securities included in interest income and are recorded based primarily on quoted market prices.  Available-for-sale securities consisted of the following:
 
(In thousands)
 	 	Amortized
Cost	 	 	Gross
unrealized
gains	 	 	Gross
unrealized
losses	 	 	Estimated
fair
value	 	
June 30, 2015	 	 	 	 	 	 	 	 	 	 	 	 	
US Treasury bonds 	 	$	225,496	 	 	$	33	 	 	$	(6)	 	 	$	225,523	 	
December 31, 2014	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
US Treasury bonds 	 	 	125,443	 	 	 	14	 	 	 	(9)	 	 	 	125,448	 	
 
The contractual maturities of short-term available-for-sale debt securities at June 30, 2015 and December 31, 2014 are greater than 3 months but less than 1 year.  The Company has determined that there were no other-than-temporary declines in the fair values of its investments as of June 30, 2015.
 
Short-term investments with maturities of three months or less from date of purchase have been classified as cash equivalents, and amounted to $38.3 million and $149.8 million   as of June 30, 2015 and December 31, 2014, respectively.
 
Unrealized holding gains and losses are reported within accumulated other comprehensive income (AOCI) in the statements of comprehensive income (loss).  The changes in AOCI associated with the unrealized holding loss on available-for-sale investments during the six months ended June 30, 2015, were as follows (in thousands):
 
(In thousands)
 	 	Net Unrealized Gains on Marketable Securities	 	
Balance at December 31, 2014 	 	$	(74	)	
   Other comprehensive income before reclassifications:	 	 	14	 	
   Amounts reclassified from accumulated other
       comprehensive income 	 	 	—	 	
   Net current period other comprehensive income	 	 	14	 	
Balance at June 30, 2015 	 	$	(60	)	

(9) Collaborations, Alliances, and Other Agreements
 
Biogen
 
On June 30, 2009, the Company entered into an exclusive collaboration and license agreement with Biogen International GmbH (formerly Biogen Idec International GmbH), or Biogen to develop and commercialize Ampyra (known as Fampyra outside the U.S.) in markets outside the United States (the “Collaboration Agreement”). Under the Collaboration Agreement, Biogen was granted the exclusive right to commercialize Ampyra and other products containing aminopyridines developed under that agreement in all countries outside of the United States, which grant includes a sublicense of the Company’s rights under an existing license agreement between the Company and Alkermes plc (Alkermes), formerly Elan Corporation, plc (Elan). Biogen has responsibility for regulatory activities and future clinical development of Fampyra in ex-U.S. markets worldwide. The Company also entered into a related supply agreement with Biogen (the “Supply Agreement”), pursuant to which the Company will supply Biogen with its requirements for the licensed products through the Company’s existing supply agreement with Alkermes.
 
Under the Collaboration Agreement, the Company was entitled to an upfront payment of $110.0 million as of June 30, 2009, which was received in July 2009, and a $25.0 million milestone payment upon approval of the product in the European Union, which was received in August 2011. The Company is also entitled to receive additional payments of up to $10.0 million based on the successful achievement of future regulatory milestones and up to $365.0 million based on the successful achievement of future sales milestones. Due to the uncertainty surrounding the achievement of the future regulatory and sales milestones, these payments will not be recognized as revenue unless and until they are earned. The Company is not able to reasonably predict if and when the milestones will be achieved. Under the Collaboration Agreement,

15

 
Biogen will be required to make double-digit tiered royalty payments to the Company on ex-U.S. sales. In addition, the consideration that Biogen will pay for licensed products under the Supply Agreement will reflect the price owed to the Company’s suppliers under its supply arrangements with Alkermes or other suppliers for ex-U.S. sales. The Company and Biogen may also carry out future joint development activities regarding licensed product under a cost-sharing arrangement. Under the terms of the Collaboration Agreement, the Company, in part through its participation in joint committees with Biogen, will participate in overseeing the development and commercialization of Ampyra and other licensed products in markets outside the United States pursuant to that agreement. Acorda will continue to develop and commercialize Ampyra independently in the United States.
 
As of June 30, 2009, the Company recorded deferred revenue of $110.0 million for the upfront payment from Biogen under the Collaboration Agreement. Also, as a result of such payment to Acorda, a payment of $7.7 million was made to Alkermes and recorded as a deferred expense.
 
The Company considered the following deliverables with respect to the revenue recognition of the $110.0 million upfront payment:  (1) the license to use the Company’s technology, (2) the Collaboration Agreement to develop and commercialize licensed product in all countries outside the U.S., and (3) the Supply Agreement. Due to the inherent uncertainty in obtaining regulatory approval, the applicability of the Supply Agreement is outside the control of the Company and Biogen. Accordingly, the Company has determined the Supply Agreement is a contingent deliverable at the onset of the agreement.  As a result, the Company has determined the Supply Agreement does not meet the definition of a deliverable that needs to be accounted for at the inception of the arrangement. The Company has also determined that there is no significant and incremental discount related to the supply agreement since Biogen will pay the same amount for inventory that the Company would pay and the Company effectively acts as a middle man in the arrangement for which it adds no significant value due to various factors such as the Company does not have any manufacturing capabilities or other know-how with respect to the manufacturing process.
 
The Company has determined that the identified non-contingent deliverables (deliverables 1 and 2 immediately preceding) would have no value on a standalone basis if they were sold separately by a vendor and the customer could not resell the delivered items on a standalone basis, nor does the Company have objective and reliable evidence of fair value for the deliverables. Accordingly, the non-contingent deliverables are treated as one unit of accounting.  As a result, the Company will recognize the non-refundable upfront payment from Biogen as revenue and the associated payment to Alkermes as expense ratably over the estimated term of regulatory exclusivity for the licensed products under the Collaboration Agreement as the Company had determined this was the most probable expected benefit period. The Company recognized $2.3 million and $4.5 million in license revenue, a portion of the $110.0 million received from Biogen, and $159,000 and $317,000 in cost of license revenue, a portion of the $7.7 million paid to Alkermes, during the three and six-month periods ended June 30, 2015 and 2014, respectively.  The Company currently estimates the recognition period to be approximately 12 years from the date of the Collaboration Agreement.
 
As part of its ex-U.S. license agreement, Biogen owes Acorda royalties based on ex-U.S. net sales, and milestones based on ex-U.S. regulatory approval and new indications.  These milestones included a $25.0 million payment for approval of the product in the European Union which was recorded and paid in the three month period ended September 30, 2011. Based on Acorda’s worldwide license and supply agreement with Alkermes, Alkermes received 7% of this milestone payment from Acorda during the same period.  For revenue recognition purposes, the Company has determined this milestone to be substantive in accordance with applicable accounting guidance related to milestone revenue.  Substantive uncertainty existed at the inception of the arrangement as to whether the milestone would be achieved because of the numerous variables, such as the high rate of failure inherent in the research and development of new products and the uncertainty involved with obtaining regulatory approval. Biogen leveraged Acorda’s U.S. Ampyra study results that contributed to the regulatory approval process. Therefore, the milestone was achieved based in part on Acorda’s past performance.  The milestone was also reasonable relative to all deliverable and payment terms of the collaboration arrangement. Therefore, the payment was recognized in its entirety as revenue and the cost of the milestone revenue was recognized in its entirety as an expense during the three-month period ended September 30, 2011. The Company recognized $2.5 million and $2.8 million in royalty revenue for the three-month periods ended June 30, 2015 and 2014 and $4.8 million and $5.2 million for the 6 month periods ended June 30, 2015 and 2014, respectively, related to ex-U.S. sales of Fampyra by Biogen.
 
Actavis/Watson
 
The Company has an agreement with Watson Pharma, Inc., a subsidiary of Actavis, Inc. (formerly Watson Pharmaceuticals, Inc.), to market tizanidine hydrochloride capsules, an authorized generic version of Zanaflex Capsules

16

 
which was launched in February 2012.  In accordance with the agreement, the Company receives a royalty based on Watson’s gross margin, as defined by the agreement, of the authorized generic product. During the three-month periods ended June 30, 2015 and 2014, the Company recognized royalty revenue of $1.4 million and $2.4 million, respectively, related to the gross margin of the Zanaflex Capsule authorized generic.  During the three-month periods ended June 30, 2015 and 2014, the Company also recognized revenue and a corresponding cost of sales of $1.3 million, respectively, related to the purchase and sale of the related Zanaflex Capsule authorized generic product to Actavis, which is recorded in net product revenues and cost of sales.
 
During the six-month periods ended June 30, 2015 and 2014, the Company recognized royalty revenue of $3.1 million and $3.8 million, respectively, related to the gross margin of the Zanaflex Capsule authorized generic.  During the six-month periods ended June 30, 2015 and 2014, the Company also recognized revenue and a corresponding cost of sales of $1.4 million and $2.2 million, respectively, related to the purchase and sale of the related Zanaflex Capsule authorized generic product to Actavis, which is recorded in net product revenues and cost of sales.
 
Neuronex
 
In December 2012, the Company acquired Neuronex, Inc., a privately-held development stage pharmaceutical company (Neuronex) developing Plumiaz (our trade name for Diazepam Nasal Spray).  Plumiaz is a proprietary nasal spray formulation of diazepam that we are developing under Section 505(b)(2) of the Food, Drug and Cosmetic Act as an acute treatment for selected, refractory patients with epilepsy, on stable regimens of antiepileptic drugs, or AEDs, who experience intermittent bouts of increased seizure activity also known as seizure clusters or acute repetitive seizures, or ARS.
 
The Company completed the acquisition pursuant to a merger agreement with Neuronex and Moise A. Khayrallah, acting as the Stockholders’ Representative on behalf of the former Neuronex equity holders.  In July 2015, the Company entered into an amendment to the merger agreement with Mr. Khayrallah, as Stockholders’ Representative.  Pursuant to the amendment, the Stockholders’ Representative, acting on behalf of the former Neuronex equity holders, agreed to certain modifications to the Company’s future contingent payment obligations regarding the development and potential commercialization of Plumiaz, described below.  In consideration of those modifications, pursuant to the amendment the Company agreed to pay the former Neuronex equity holders $8.75 million.
 
Under the terms of the Neuronex merger agreement, the Company made an upfront payment of $2.0 million in February 2012.  The Company also paid $1.5 million during the twelve month period ended December 31, 2012 pursuant to a commitment under the agreement to fund research to prepare for the Plumiaz pre-NDA meeting with the FDA.  In December 2012, the Company completed the acquisition by paying $6.8 million to former Neuronex equity holders less a $300,000 holdback provision.  After adjustment for Neuronex’s working capital upon closing of the acquisition, approximately $120,000 of the holdback amount was remaining as of December 31, 2013.  This balance was paid to the former equity holders of Neuronex pursuant to the merger agreement in February 2014.
 
Under the merger agreement, the former equity holders of Neuronex will be entitled to receive payments from the Company, in addition to payments the Company has already made under the merger agreement, upon the achievement of specified regulatory, manufacturing-related, and sales milestones with respect to Diazepam Nasal Spray products (Plumiaz).  Pursuant to the merger agreement as amended by the amendment, the Company is obligated to pay (i) up to $3 million in specified regulatory and manufacturing-related milestone payments, a reduction from up to $18 million in such payments that were originally specified in the merger agreement, and (ii) up to $100 million upon the achievement of specified sales milestones, a reduction from up to $105 million in such payments that were originally specified in the merger agreement. Under the merger agreement, the former equity holders of Neuronex will also be entitled to receive tiered royalty-like earnout payments on worldwide net sales of Diazepam Nasal Spray products (Plumiaz), if any.  The rates for these payments pursuant to the merger agreement originally ranged from the upper single digits to lower double digits, but were modified pursuant to the amendment and now range from the mid single digits to mid double digits.  These payments are payable on a country-by-country basis until the earlier to occur of ten years after the first commercial sale of a product in such country and the entry of generic competition in such country as defined in the Agreement.
 
The patent and other intellectual property and other rights relating to Diazepam Nasal Spray products are licensed from SK Biopharmaceuticals Co., Ltd. (SK).  Pursuant to the SK license, which granted worldwide rights to Neuronex, except certain specified Asian countries, the Company’s subsidiary Neuronex is obligated to pay SK up to $8 million upon the achievement of specified development milestones with respect to the Diazepam Nasal Spray product (including a $1 million payment that was triggered during the three-month period ending September 30, 2013 upon the FDA’s acceptance for

17

 
review of the first NDA for Plumiaz and paid during the three-month period ending December 31, 2013), and up to $3 million upon the achievement of specified sales milestones with respect to the Diazepam Nasal Spray product.  Also, Neuronex is obligated to pay SK a tiered, mid-single digit royalty on net sales of Diazepam Nasal Spray products.
 
The Company evaluated the initial acquisition transaction based upon the guidance of ASC 805, Business Combinations, and concluded that it only acquired inputs and did not acquire any processes.  The Company needed to develop its own processes in order to produce an output. Therefore the Company accounted for the transaction as an asset acquisition and accordingly the $2.0 million upfront payment, $1.5 million in research funding and $6.8 million of closing consideration net of tangible net assets acquired of $3.7 million which were primarily the taxable amount of net operating loss carryforwards, were expensed as research and development expense during the twelve-month period ended December 31, 2012.

(10) Commitments and Contingencies
 
A summary of the Company’s commitments and contingencies was included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The Company’s long-term contractual obligations include commitments and estimated purchase obligations entered into in the normal course of business.

In March 2015, Civitas exercised its right to extend the term of a sublease for five additional years, until December 31, 2020, and Civitas retains the right to further extend the sublease beyond that date for another five year period.  The base rent is currently $722,000 per year.  For each extension period, the economic terms of the sublease will be determined by a process set forth in the sublease, and Civitas will be required to provide a letter of credit in an amount equal to the full five-year lease obligation for each lease extension period and additional security.  Alkermes leases the building pursuant to an overlease with H&N Associates, LLC, and has extension rights pursuant to the overlease that correspond to Civitas’ extension rights under the sublease. Alkermes has exercised a five-year extension option under the overlease that corresponds with Civitas’ exercise of its five year extension option under the sublease.  Pursuant to the sublease, Civitas has agreed to comply with all of Alkermes’s obligations under the overlease .

The Company is currently party to the other legal proceedings described in Part II, Item 1 of this quarterly report on Form 10-Q, which are principally patent litigation matters. The Company has assessed such legal proceedings and does not believe that it is probable that a liability has been incurred or that the amount of any potential liability or range of losses can be reasonably estimated. As a result, the Company did not record any loss contingencies for any of these matters. While it is not possible to determine the outcome of the matters described in Part II, Item 1, Legal Proceedings, of this quarterly report on Form 10-Q, the Company believes that, the resolution of all such matters will not have a material adverse effect on its consolidated financial position or liquidity, but could possibly be material to the Company's consolidated results of operations in any one accounting period. Litigation expenses are expensed as incurred.

(11) Subsequent Event
 
In July 2015, the Company entered into an amendment to the merger agreement pursuant to which it acquired Neuronex, Inc. in December 2012.  Pursuant to the amendment, the former Neuronex equity holders agreed to certain modifications to the Company’s future contingent payment obligations regarding the development and potential commercialization of Plumiaz, described below.  In consideration of those modifications, pursuant to the amendment the Company agreed to pay the former Neuronex equity holders $8.75 million.
 
Under the merger agreement, the former equity holders of Neuronex will be entitled to receive payments from the Company, in addition to payments the Company has already made under the merger agreement, upon the achievement of specified regulatory, manufacturing-related, and sales milestones with respect to Diazepam Nasal Spray products (Plumiaz).  Pursuant to the merger agreement as amended by the amendment, the Company is obligated to pay (i) up to $3 million in specified regulatory and manufacturing-related milestone payments, a reduction from up to $18 million in such payments that were originally specified in the merger agreement, and (ii) up to $100 million upon the achievement of specified sales milestones, a reduction from up to $105 million in such payments that were originally specified in the merger agreement. Under the merger agreement, the former equity holders of Neuronex will also be entitled to receive tiered royalty-like earnout payments on worldwide net sales of Diazepam Nasal Spray products (Plumiaz), if any.  The rates for these payments pursuant to the merger agreement originally ranged from the upper single digits to lower double digits, but were modified pursuant to the amendment and now range from the mid single digits to mid double digits.  These payments are payable on a country-by-country basis until the earlier to occur of ten years after the first commercial sale of a product in such country and the entry of generic competition in such country as defined in the Agreement.

18

 Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q.
 
Background

We are a biopharmaceutical company dedicated to the identification, development and commercialization of novel therapies that restore function and improve the lives of people with neurological disorders.  We market three FDA-approved therapies, including Ampyra (dalfampridine) Extended Release Tablets, 10 mg, a treatment to improve walking in patients with multiple sclerosis, or MS, as demonstrated by an increase in walking speed. We have one of the leading pipelines in the industry of novel neurological therapies.  We are currently developing a number of clinical and preclinical stage therapies.  This pipeline addresses a range of disorders, including chronic post-stroke walking deficits (PSWD), Parkinson’s disease, epilepsy, heart failure, MS, and spinal cord injury.
 
Ampyra
 
General
 
Ampyra was approved by the FDA in January 2010 for the improvement of walking in people with MS. To our knowledge, Ampyra is the first and only drug approved for this indication. Efficacy was shown in people with all four major types of MS (relapsing remitting, secondary progressive, progressive relapsing and primary progressive).  Ampyra was made commercially available in the United States in March 2010.  Net revenue for Ampyra was $105.5 million for the three months ended June 30, 2015 and $87.4 million for the three months ended June 30, 2014.
 
Since the March 2010 launch of Ampyra, more than 100,000 people with MS in the U.S. have tried Ampyra.  We believe that Ampyra is increasingly considered by many physicians a standard of care to improve walking in people with MS.  As of June 30, 2015, approximately 70% of all people with MS who were prescribed Ampyra received a first refill, and approximately 40% of all people with MS who were prescribed Ampyra have been dispensed at least six months of the medicine through refills, consistent with previously reported trends.  These refill rates exclude patients who started Ampyra through our First Step trial program.  Our First Step program provides eligible patients with two months of Ampyra at no cost.  More than 65% of new Ampyra patients currently enroll in First Step.  The program is in its fourth year, and data show that First step participants have higher compliance and persistency rates over time compared to non-First Step pati ents.  Approximately 50% of patients who initiate Ampyra therapy with the First Step free trial program convert to paid prescriptions.
 
Ampyra is marketed in the U.S. through our own specialty sales force and commercial infrastructure. We currently have approximately 90 sales representatives in the field calling on a priority target list of approximately 7,000 physicians.  We also have established teams of Medical Science Liaisons, Regional Reimbursement Directors, Managed Markets Account Directors who provide information and assistance to payers and physicians on Ampyra, National Trade Account Managers who work with wholesalers and our limited network of specialty pharmacies, and Market Development Managers who work collaboratively with field teams and corporate personnel to assist in the execution of the Company’s strategic initiatives.
 
Ampyra is distributed in the U.S. exclusively through a limited network of specialty pharmacy providers that deliver the medication to patients by mail; Kaiser Permanente, which distributes Ampyra to patients through a closed network of on-site pharmacies; and ASD Specialty Healthcare, Inc. (an AmerisourceBergen affiliate), which distributes Ampyra to the U.S. Bureau of Prisons, the U.S. Department of Defense, the U.S. Department of Veterans Affairs, or VA, and other federal agencies.  All of these customers are contractually obligated to hold no more than an agreed number of days of inventory, ranging from between 10 to 30 days.
 
We have contracted with a third party organization with extensive experience in coordinating patient benefits to run Ampyra Patient Support Services, or APSS, a dedicated resource that coordinates the prescription process among healthcare providers, people with MS, and insurance carriers.  Processing of most incoming requests for prescriptions by APSS begins within 24 hours of receipt. Patients will experience a range of times to receive their first shipment based on the processing time for insurance requirements. As with any prescription product, patients who are members of benefit plans that have restrictive prior authorizations may experience delays in receiving their prescription.

19

 
Two of the largest national health plans in the U.S. – United Healthcare and Cigna – have listed Ampyra in the lowest competitive reimbursement tier, which means that it is listed in either the lowest branded copay tier or the lowest branded specialty tier (if more than one specialty tier exists) of their commercial preferred drug list or formulary.  Approximately 75% of insured individuals in the U.S. continue to have no or limited prior authorizations, or PA’s, for Ampyra.  We define limited PAs as those that require only an MS diagnosis, documentation of no contraindications, and/or simple documentation that the patient has a walking impairment; such documentation may include a Timed 25-Foot Walk (T25W) test.  The access figure is calculated based on the number of pharmacy lives reported by health plans.
 
License and Collaboration Agreement with Biogen
 
Ampyra is marketed as Fampyra outside the U.S. by Biogen International GmbH (formerly Biogen Idec International GmbH), or Biogen, under a license and collaboration agreement that we entered into in June 2009.  Fampyra has been approved in a number of countries across Europe, Asia and the Americas.   Biogen anticipates making Fampyra commercially available in additional markets in 2015.  Under our agreement with Biogen, we are entitled to receive double-digit tiered royalties on sales of Fampyra and we are also entitled to receive additional payments based on achievement of certain regulatory and sales milestones.  We received a $25 million milestone payment from Biogen in 2011, which was triggered by Biogen’s receipt of conditional approval from the European Commission for Fampyra.  The next expected milestone payment would be $15 million, due when ex-U.S. net sales exceed $100 million over four consecutive quarters.
 
Ampyra Patent Update
 
We have five issued patents listed in the Orange Book for Ampyra, one of which issued in 2014, as follows:
 
·  	The first is U.S. Patent No. 8,007,826, with claims relating to methods to improve walking in patients with MS by administering 10 mg of sustained release 4-aminopyridine (dalfampridine) twice daily. Based on the final patent term adjustment calculation of the United States Patent and Trademark Office, or USPTO, this patent will extend into 2027.	

·  	The second is U.S. Patent No. 5,540,938, the claims of which relate to methods for treating a neurological disease, such as MS, and cover the use of a sustained release dalfampridine formulation, such as AMPYRA (dalfampridine) Extended Release Tablets, 10 mg for improving walking in people with MS.  In April 2013, this patent received a five year patent term extension under the patent restoration provisions of the Hatch Waxman Act.  With a five year patent term extension, this patent will expire in 2018.   We have an exclusive license to this patent from Alkermes (originally with Elan, but transferred to Alkermes as part of its acquisition of Elan’s Drug Technologies business).	

·  	The third is U.S. Patent No. 8,354,437, which includes claims relating to methods to improve walking, increase walking speed, and treat walking disability in patients with MS by administering 10 mg of sustained release 4-aminopyridine (dalfampridine) twice daily.  This patent is set to expire in 2026.	

·  	The fourth is U.S. Patent No. 8,440,703, which includes claims directed to methods of improving lower extremity function and walking and increasing walking speed in patients with MS by administering less than 15 mg of sustained release 4-aminopyridine (dalfampridine) twice daily.  This patent is set to expire in 2025.	

·  	The fifth is U.S. Patent No. 8,663,685 with claims relating to methods to improve walking in patients with MS by administering 10 mg of sustained release 4-aminopyridine (dalfampridine) twice daily.  Absent patent term adjustment, the patent is set to expire in 2025.	

Ampyra also has Orphan Drug designation, which gives it marketing exclusivity in the U.S. until January 2017.

In June and July of 2014, we received eight separate Paragraph IV Certification Notices from Accord Healthcare, Inc., Actavis FL, Inc., Alkem Laboratories Ltd., Apotex, Inc., Aurobindo Pharma Ltd., Mylan Pharmaceuticals, Inc., Roxane Laboratories, Inc., and Teva Pharmaceuticals USA, Inc., advising that each of these companies had submitted an ANDA to the FDA seeking marketing approval for generic versions of Ampyra (dalfampridine) Extended Release Tablets, 10 mg.  The ANDA filers have challenged the validity of our Orange Book-listed patents for Ampyra, and they have also asserted that generic versions of their products do not infringe certain claims of these patents.  In response to these filings, we filed lawsuits in the U.S. District Court for the District of Delaware against all of these companies alleging multiple counts of patent infringement.  These lawsuits have been consolidated into a single case.  The court has scheduled a Markman hearing

20

on March 7, 2016, and has set a five day bench trial starting on September 19, 2016.  This litigation is further described below in Part II, Item 1 of this report.  We filed these lawsuits within 45 days from the date of receipt of each of the Paragraph IV Certification Notices.  As a result, a 30 month statutory stay of approval period applies to each of the ANDAs under the Hatch-Waxman Act.  The 30 month stay starts from January 22, 2015, which is the end of the new chemical entity (NCE) exclusivity period for Ampyra.  This restricts the FDA from approving the ANDAs until July 2017 at the earliest, unless a Federal district court issues a decision adverse to all of our asserted Orange Book-listed patents prior to that date.

On May 6, 2015, we received a Paragraph IV Certification Notice from Sun Pharmaceutical Industries Limited, or Sun Pharmaceuticals, advising that it had submitted an ANDA to the FDA seeking marketing approval for a generic version of Ampyra (dalfampridine) Extended Release Tablets, 10 mg.  Sun Pharmaceuticals has challenged the validity of four of our five Orange Book-listed patents for Ampyra, and did not file against our U.S. Patent No. 5,540,938, and they have also asserted that generic versions of their products may not infringe certain claims of these patents.  In response to the filing, we filed a lawsuit against Sun Pharmaceuticals in the U.S. District Court for the District of Delaware alleging multiple counts of patent infringement.  This litigation is further described in Part II, Item 1 of this report.  We filed this lawsuit within 45 days from the date of receipt of this Paragraph IV Certification Notice, which instituted a 30 month statutory stay of approval period to the Sun Pharmaceuticals ANDA under the Hatch-Waxman Act.  Since the Sun Pharmaceuticals ANDA was filed after January 22, 2015, which is the end of the new chemical entity (NCE) exclusivity period for Ampyra, the 30 month statutory stay of approval will start from the receipt of the Paragraph IV Certification Notice.  This restricts the FDA from approving the ANDA until November 2017 at the earliest, unless a Federal district court issues a decision adverse to all of our asserted Orange Book-listed patents prior to that date.

On February 10 and 27, 2015, a hedge fund (acting with affiliated entities and individuals and proceeding under the name of the Coalition for Affordable Drugs) filed two separate inter partes review (IPR) petitions with the U.S. Patent and Trademark Office, challenging U.S. Patent Nos. 8,663,685, and 8,007,826, which are two of the five Ampyra Orange Book-listed patents. In May and June of 2015, we filed our preliminary responses, opposing the requests to institute these two IPRs.  The deadlines for the rulings on the institution of the IPRs are August and September, respectively.  If they are allowed to proceed, we will oppose the full proceedings and defend our patents. The 30-month statutory stay period based on patent infringement suits filed by Acorda against ANDA filers is not impacted by these filings, and remains in effect.

In 2011, the European Patent Office, or EPO, granted EP 1732548, the counterpart European patent to U.S. Patent No. 8,354,437 with claims relating to, among other things, use of a sustained release aminopyridine composition, such as dalfampridine, to increase walking speed.  In March 2012, Synthon B.V. and neuraxpharm Arzneimittel GmBH filed oppositions with the EPO challenging the EP 1732548 patent.  We defended the patent, and in December 2013, we announced that the EPO Opposition Division upheld amended claims in this patent covering a sustained release formulation of dalfampridine for increasing walking in patients with MS through twice daily dosing at 10 mg.  Both Synthon B.V. and neuraxpharm Arzneimittel GmBH have appealed the decision.  In December 2013, Synthon B.V., neuraxpharm Arzneimittel GmBH and Actavis Group PTC ehf filed oppositions with the EPO challenging our EP 2377536 patent, which is a divisional of the EP 1732548 patent.  Both European patents are set to expire in 2025, absent any additional exclusivity granted based on regulatory review timelines.
 
We will vigorously defend our intellectual property rights.
 
Zanaflex
 
Zanaflex Capsules and Zanaflex tablets are FDA-approved as short-acting drugs for the management of spasticity, a symptom of many central nervous system disorders, including MS and spinal cord injury. These products contain tizanidine hydrochloride, one of the two leading drugs used to treat spasticity.  We launched Zanaflex Capsules in April 2005 as part of our strategy to build a commercial platform for the potential market launch of Ampyra.  Combined net revenue of Zanaflex Capsules and Zanaflex tablets was $524,000 for the three months ended June 30, 2015 and $721,000 for the three months ended June 30, 2014.  In 2012, Apotex commercially launched a generic version of tizanidine hydrochloride capsules, and we also launched our own authorized generic version, which is being marketed by Watson Pharma (a subsidiary of Actavis).  In March 2013, Mylan Pharmaceuticals commercially launched their own generic version of Zanaflex Capsules.  The commercial launch of generic tizanidine hydrochloride capsules has caused a significant decline in net revenue from the sale of Zanaflex Capsules, and the launch of these generic versions and the potential launch of other generic versions is expected to cause the Company’s net revenue from Zanaflex Capsules to decline further in 2015 and beyond.

21

 
Qutenza
Qutenza is a dermal patch containing 8% prescription strength capsaicin the effects of which can last up to three months and is approved by the FDA for the management of neuropathic pain associated with post-herpetic neuralgia, also known as post-shingles pain.  We acquired commercialization rights to Qutenza in July 2013 from NeurogesX, Inc.  These rights include the U.S., Canada, Latin America and certain other territories.  Qutenza was approved by the FDA in 2010 and launched in April 2010 but NeurogesX discontinued active promotion of the product in March 2012.  In January 2014, we re-launched Qutenza in the U.S. using our existing commercial organization, including our specialty neurology sales force as well as our medical and safety reporting infrastructure.  Net revenue for Qutenza was $251,000 for the three months ended June 30, 2015 and $276,000 for the three months ended June 30, 2014.
 
Astellas Pharma Europe Ltd. has exclusive commercialization rights for Qutenza in the European Economic Area (EEA) including the 28 countries of the European Union, Iceland, Norway, and Liechtenstein as well as Switzerland, certain countries in Eastern Europe, the Middle East and Africa.
 
Research & Development Programs
 
We have one of the leading pipelines in the industry of novel neurological therapies.  We are currently developing a number of clinical and preclinical stage therapies.  This pipeline addresses a range of disorders, including chronic post-stroke walking deficits (PSWD), Parkinson’s disease, epilepsy, heart failure, MS, and spinal cord injury.  Our pipeline includes the programs described below.
 
CVT-301 and ARCUS Technology
 
On October 22, 2014, we completed the acquisition of Civitas Therapeutics, Inc., a Delaware corporation.  As a result of the acquisition, we acquired global rights to CVT-301, a Phase 3 treatment candidate for OFF episodes of Parkinson’s disease.  Our acquisition of Civitas also included rights to Civitas’s proprietary ARCUS pulmonary delivery technology, which we believe has potential applications in multiple disease areas, and a subleased manufacturing facility in Chelsea, Massachusetts with commercial-scale capabilities.  The approximately 90,000 square foot facility also includes office and laboratory space.
 
CVT-301 is an inhaled formulation of levodopa, or L-dopa, for the treatment of OFF episodes in Parkinson’s disease.  Parkinson’s disease is a progressive neurodegenerative disorder resulting from the gradual loss of certain neurons in the brain responsible for producing dopamine.  The disease is characterized by symptoms such as impaired ability to move, muscle stiffness and tremor.  The standard of care is oral L-dopa, but there are significant challenges in creating a dosing regimen that consistently maintains therapeutic effects as Parkinson’s disease progresses.  The unpredictable re-emergence of symptoms is referred to as an OFF episode, and current strategies for treating these OFF episodes are widely regarded as inadequate.
 
CVT-301 is based on the proprietary ARCUS technology platform that we acquired with Civitas.  The ARCUS technology is a dry-powder pulmonary delivery system that we believe has potential applications in multiple disease areas.  This platform allows delivery of significantly larger doses of medication than are possible with conventional dry powder formulations.  This in turn provides the potential for pulmonary delivery of a much wider variety of pharmaceutical agents.
 
In December 2014, we announced that the first patient has been enrolled in a Phase 3 study of CVT-301 for the treatment of OFF episodes in Parkinson’s disease.  We expect results from the efficacy trial in 2016, and pending timely recruitment for clinical trials, our goal is to file a new drug application, or NDA, in the U.S. by the end of 2016.  We expect that the NDA will be filed under section 505(b)(2) of the Food Drug and Cosmetic Act, referencing data from the branded L-dopa product Sinemet®.  Based on Civitas’s interactions with the FDA, we believe a single Phase 3 efficacy study will be needed for filing an NDA.  A separate long term safety study will also be required.  We are projecting that, if approved, annual peak sales of CVT-301 in the U.S. alone could exceed $500 million.
 
In June 2015, we presented data from a Phase 2b clinical trial of CVT-301 at the 19th International Congress of Parkinson's Disease and Movement Disorders (MDS).  The data showed that patients experiencing an OFF episode, treated with CVT-301, experienced significantly greater improvements in motor function than patients treated with inhaled placebo; the difference in improvement was already apparent 10 minutes after dosing and was durable for at least an hour, the longest time point at which patients were measured.

22

 
In addition to CVT-301, we are exploring opportunities for other proprietary products in which inhaled delivery using our ARCUS technology can provide a significant therapeutic benefit to patients.  For example, we are currently developing CVT-427, an inhaled triptan intended to provide relief from acute migraine episodes by taking advantage of the ARCUS delivery system.  Triptans are the class of drug most commonly prescribed to treat acute migraine. Oral triptans, which account for approximately 98% of all triptan doses, can be associated with slow onset of action and gastrointestinal challenges. The slow onset of action, usually 30 minutes or longer, can result in poor response rates. Patients cite the need for rapid relief from migraine symptoms as their most desired medication attribute. Additionally, individuals with migraine may suffer from nausea and delayed gastric emptying which further impact the consistency and efficacy of the oral route of administration.  CVT-427 is currently in pre-clinical development and we are preparing to file an IND and initiate the first Phase 1 clinical trial for this program by the end of 2015.

Also, in July 2015 we announced that the Bill & Melinda Gates Foundation has awarded us a $1.4 million grant to support the development of a formulation and delivery system for a dry powder version of lung surfactant, a treatment for neonatal respiratory distress syndrome (RDS). The formulation will be based on our proprietary ARCUS technology, and will be produced in collaboration with the Massachusetts Institute of Technology (MIT).  RDS is a condition affecting newborns in which fluid collects in the lungs' air sacs; it most commonly affects infants born prematurely. It can be fatal, or lead to severe, chronic health issues caused by a lack of oxygen getting to the baby’s brain and other organs. The syndrome is caused by the infants’ inability to produce enough surfactant, a liquid lining the inside of the lungs. Delivering liquid surfactant to the lungs via intubation is the standard of care. Intubation poses problems in the developing world due to resource and infrastructure limitations, including the need to refrigerate surfactant, access to sterile medical supplies, access to potable water and a lack of healthcare professionals trained in intubation. This grant will support the development of a portable and easily administered inhaled form of surfactant, which may present a more practical alternative for use in developing areas of the world.  This program is not aimed at developing a commercial product.  However, our work on this program could potentially generate information that is useful for adapting the ARCUS technology to commercial pediatric uses.

Ampyra/Dalfampridine Development Programs
 
We believe there may be potential for dalfampridine to be applied to neurological conditions in addition to MS.  In December 2014, we announced that the first patient has been enrolled in a Phase 3 clinical trial evaluating the use of dalfampridine administered twice daily (BID) to improve walking in people who are suffering from chronic post-stroke walking deficits (PSWD) after experiencing an ischemic stroke.  As part of the trial design, we are planning to conduct an interim analysis of the trial data in 2016, and depending on the outcome of that analysis we may initiate a second pivotal trial prior to the conclusion of the first Phase 3   trial.  We have been exploring a once-daily (QD) formulation of dalfampridine for use in the chronic post-stroke clinical program.  Based on the results of an in-vitro alcohol dose dumping study and a subsequent fed-fasted study, we determined that the initial QD formulation that we had been developing with an external partner was not practical for further testing.  We are working with different external partners to develop a new QD formulation that could be included in future post-stroke studies.  We currently have three prototypes from three different partners, and expect to move all three into Phase 1 clinical testing before the end of 2015.
 
Plumiaz
 
We are developing Plumiaz, a proprietary nasal spray formulation of diazepam, for the treatment of people with epilepsy currently on stable regimens of antiepileptic drugs (AEDs) who experience bouts of increased seizure activity, also known as seizure clusters or acute repetitive seizures.  In 2013, we submitted a New Drug Application (NDA) filing for Plumiaz to the FDA.  In May 2014, the FDA issued a Complete Response Letter, or CRL, for the Plumiaz NDA.  In May 2015, we announced that we completed discussions with the FDA, and are advancing the development of Plumiaz.  Based on interactions with the FDA, we plan to conduct three clinical trials prior to resubmitting the NDA for Plumiaz.
 
·  	The first trial, a long-term open-label study assessing safety and tolerability of Plumiaz over 52 weeks, was initiated in December 2014. This study will enroll approximately 100 participants ages 12-65 and we expect it will be completed in the second half of 2016. Details of this study are available at www.clinicaltrials.gov .	

·  	We will also conduct a pharmacokinetic dose proportionality study in healthy adults; we expect this study will be initiated in the first quarter of 2016 and will be completed in second half of 2016.	

·  	The third study will assess the bioavailability, safety and tolerability of Plumiaz compared to diazepam rectal gel (Diastat®). This open-label, randomized, crossover study will enroll approximately 120 people	

23

with refractory epilepsy ages 12-65 who experience seizure clusters. We have initiated this study and we expect that it will be completed in the fourth quarter of 2016.

Pending the successful completion of these studies, we are planning to resubmit the NDA for Plumiaz in the first quarter of 2017.  Based on FDA guidelines, the expected review period of the resubmitted NDA would be six months.
 
We have obtained orphan drug designation, which would confer seven years of market exclusivity from the date of approval for diazepam containing drug products for the same indication.  We licensed two patent families relating to the clinical formulation for Diazepam Nasal Spray, including a granted U.S. patent that is set to expire in 2029.   We anticipate that our current infrastructure can support sales and marketing of this product if it receives FDA approval.  If approved, we project peak U.S. net sales revenue of more than $200 million.
 
We acquired the Plumiaz program in December 2012 in connection with our acquisition of Neuronex, Inc., a privately-held development stage pharmaceutical company.  We completed the acquisition pursuant to a merger agreement with Neuronex and Moise A. Khayrallah, acting as the Stockholders’ Representative on behalf of the former Neuronex equity holders.  In July 2015, we entered into an amendment to the merger agreement with Mr. Khayrallah, as Stockholders’ Representative.  Pursuant to the amendment, the Stockholders’ Representative, acting on behalf of the former Neuronex equity holders, agreed to certain modifications to our future contingent payment obligations regarding the development and potential commercialization of Plumiaz, described below.  In consideration of those modifications, pursuant to the amendment we agreed to pay the former Neuronex equity holders $8,750,000.
 
Under the Merger Agreement, the former equity holders of Neuronex will be entitled to receive payments from us, in addition to payments we have already made under the merger agreement, upon the achievement of specified regulatory, manufacturing-related, and sales milestones with respect to Plumiaz.  Pursuant to the merger agreement as amended by the amendment, we are obligated to pay (i) up to $3 million in specified regulatory and manufacturing-related milestone payments, a reduction from up to $18 million in such payments that were originally specified in the merger agreement, and (ii) up to $100 million upon the achievement of specified sales milestones, a reduction from up to $105 million in such payments that were originally specified in the merger agreement. Under the merger agreement, the former equity holders of Neuronex will also be entitled to receive tiered royalty-like earnout payments on worldwide net sales of Plumiaz, if any.  The rates for these payments pursuant to the merger agreement originally ranged from the upper single digits to lower double digits, but were modified pursuant to the amendment and now range from the mid single digits to mid double digits.  These payments are payable on a country-by-country basis until the earlier to occur of ten years after the first commercial sale of a product in such country and the entry of generic competition in such country as defined in the Agreement.
 
The patent and other intellectual property and other rights relating to Plumiaz are licensed from SK Biopharmaceuticals Co., Ltd. (SK).  Pursuant to the SK license, which granted worldwide rights to Neuronex, except certain specified Asian countries, the Company’s subsidiary Neuronex is obligated to pay SK up to $8 million upon the achievement of specified development milestones with respect to Plumiaz (including a $1 million payment that was triggered in 2013 upon the FDA’s acceptance for review of the first NDA for Plumiaz), and up to $3 million upon the achievement of specified sales milestones with respect to the Diazepam Nasal Spray product.  Also, Neuronex is obligated to pay SK a tiered, mid-single digit royalty on net sales of Plumiaz.
 
Cimaglermin alfa (also known as GGF2) /Neuregulins
 
Cimaglermin alfa, which we previously referred to as GGF2, is our lead product candidate for our neuregulin program.  We have completed a cimaglermin Phase 1 clinical trial in heart failure patients.  This was a dose-escalating trial designed to test the maximum tolerated single dose, with follow-up assessments at one, three, and six months.  Data from this trial showed a dose-related improvement in ejection fraction in addition to safety findings.  A dose-limiting toxicity was also identified in the highest planned dose cohort, specifically acute liver injury meeting Hy’s Law for drug induced hepatotoxicity, which resolved within several days.  In March 2015, we presented new analyses of data from this trial at the American College of Cardiology (ACC) 64 th Annual Scientific Session and Expo.  These analyses found that cimaglermin produced a dose-dependent benefit at multiple time points for up to three months following a single infusion.
 
In October 2013, we announced that the first patient had been enrolled in a second clinical trial of cimaglermin .  This Phase 1b single-infusion trial in people with heart failure is assessing tolerability of three dose levels of cimaglermin , which were tested in the first trial, and also includes assessment of drug-drug interactions and several exploratory measures of efficacy.  In June 2015 we announced that we had stopped enrollment in this trial based on the occurrence of a case of hepatotoxicity (liver injury) meeting Hy’s Law criteria (elevated ALT, AST and bilirubin), based on blood test results.  We

24

 
also received a notification of clinical hold from the FDA following submission of this information.  The abnormal blood tests resolved within several days, as was the case with the one Hy’s Law case reported in the previous Phase 1 study noted above.  The 22 patients who were dosed in the trial will complete the pre-planned one year of follow up.  We expect to complete an analysis of data from the three-month follow up by the end of 2015.  We have ongoing analyses and non-clinical studies to investigate the biological basis for liver interactions of cimaglermin, and we plan to review these and other data from the cimaglermin studies with the FDA.
 
Remyelinating Antibodies
 
rHIgM22 is the lead antibody in our remyelinating antibody program, and we are developing it as a potential therapeutic for MS. We believe a therapy that could repair myelin sheaths has the potential to restore neurological function to those affected by demyelinating conditions.  In April 2013, we initiated a Phase 1 clinical trial of rHIgM22 to assess the safety and tolerability of rHIgM22 in patients with MS.  The study also included several exploratory clinical, imaging and biomarker measures.   We announced top-line safety and tolerability results in February 2015. The trial, which followed participants for up to six months after receiving a single dose of rHIgM22, found no dose-limiting toxicities at any of the five dose levels studied.  In April 2015, we presented additional safety data from this trial at the 67th American Academy of Neurology Annual Meeting.  The additional data showed that rHIgM22 was well-tolerated in each of the five doses, supporting additional clinical development.  In addition, testing detected rHIgM22 in cerebrospinal fluid (CSF), indicating the drug’s access to the central nervous system.   Additional data from this trial will be presented at future medical meetings. Based on these data, we intend to advance clinical development of rHIgM22 for MS.  Our second Phase 1 trial in relapsing MS patients is open for enrollment , and we expect trial results in 2016.
 
Chondroitinase Program
 
We are continuing research on the potential use of chondroitinases for the treatment of injuries to the brain and spinal cord, as well as other neurotraumatic indications.  The chondroitinase program is in the research and translational development phase and has not yet entered formal preclinical development.
 
NP-1998
 
NP-1998 is a Phase 3 ready, 20% prescription strength capsaicin topical solution that we have been assessing for the treatment of neuropathic pain.  We acquired rights to NP-1998 from NeurogesX, Inc. in 2013 in connection with our purchase of Qutenza, an FDA-approved dermal patch containing 8% prescription strength capsaicin.  We acquired development and commercialization rights in the U.S., Canada, Latin America and certain other territories.  Astellas Pharma Europe Ltd. has an option to develop NP-1998 in the European Economic Area (EEA) including the 28 countries of the European Union, Iceland, Norway, and Liechtenstein as well as Switzerland, certain countries in Eastern Europe, the Middle East and Africa. We believe this liquid formulation of the capsaicin-based therapy has key advantages over the Qutenza patch, and we believe NP-1998 has the potential to treat multiple neuropathies.  However, we have evaluated and reprioritized our research and development pipeline based on our 2014 acquisition of Civitas, and as a result we have no current plans to invest in further development of NP-1998 for neuropathic pain.
 
Outlook for 2015

Financial Guidance for 2015
 
We are providing the following guidance with respect to our 2015 financial performance:
 
·  	We expect 2015 net revenue from the sale of Ampyra to range from $410 million to $420 million.  This guidance is narrowed from our prior guidance of $405 million to $420 million.	

·  	We expect Zanaflex (tizanidine hydrochloride) and ex-U.S. Fampyra (prolonged-release fampridine tablets) 2015 revenue to be approximately $25 million, which includes net sales of branded Zanaflex products and royalties from ex-U.S. Fampyra and authorized generic tizanidine hydrochloride capsule sales.	

·  	Research and development (R&D) expenses in 2015 are expected to range from $140 million to $150 million, excluding share-based compensation charges and expenditures related to the potential acquisition of new products or other business development activities.  This is a revision from our prior guidance of $150 to $160 million.  The	

25

increase in research and development expenses in 2015 compared to 2014 is primarily related to Phase 3 studies of dalfampridine and CVT-301.  Additional expenses include continued development of Plumiaz, clinical trials for cimaglermin alfa (previously GGF2) and rHIgM22 and CVT-427, as well ongoing preclinical studies.

·   	Selling, general and administrative expenses (SG&A) in 2015 are expected to range from $180 million to $190 million, excluding share-based compensation charges.   We have set a high priority on managing selling, general and administrative expenses in 2015.	

The range of SG&A and R&D expenditures for 2015 are non-GAAP financial measures because they exclude share-based compensation charges and certain non-cash expenses related to the Civitas acquisition.  Non-GAAP financial measures are not an alternative for financial measures prepared in accordance with GAAP.  However, we believe the presentation of these non-GAAP financial measures, when viewed in conjunction with actual GAAP results, provides investors with a more meaningful understanding of our projected operating performance because they exclude non-cash charges that are substantially dependent on changes in the market price of our common stock.  We believe that non-GAAP financial measures that exclude share-based compensation charges and certain non-cash expenses related to the Civitas acquisition   help indicate underlying trends in our business, and are important in comparing current results with prior period results and understanding expected operating performance.  Also, our management uses non-GAAP financial measures that exclude share-based compensation charges and certain non-cash expenses related to the Civitas acquisition   to establish budgets and operational goals, and to manage our business and to evaluate its performance.

Development Pipeline Goals
 
Our planned goals and key initiatives with respect to our pipeline during 2015 and beyond are as follows:

·  	Continue progressing our Phase 3 efficacy and safety studies of CVT-301 for the treatment of OFF episodes in Parkinson’s disease.  We expect results from the efficacy trial in 2016, and pending timely recruitment for clinical trials, our goal is to file a new drug application, or NDA, in the U.S. by the end of 2016.	

·  	Continue progressing our Phase 3 clinical trial assessing the use of a once-daily (BID) formulation of dalfampridine as a treatment for chronic post-stroke walking deficits (PSWD) after experiencing an ischemic stroke.   A s part of the trial design, we are planning to conduct an interim analysis of the trial data in 2016, and depending on the outcome of that analysis we may initiate a second pivotal trial prior to the conclusion of the first Phase 3   trial. We are working with different external partners to develop a once-daily (QD) formulation that could be included in future post-stroke studies.  We currently have three prototypes from three different partners, and expect to move all three into Phase 1 clinical testing before the end of 2015.	

·  	We are developing Plumiaz, a proprietary nasal spray formulation of diazepam, for the treatment of people with epilepsy who experience seizure clusters, also known as acute repetitive seizures.  In 2013, we submitted a New Drug Application (NDA) filing for Plumiaz to the FDA.  In May 2014, the FDA issued a Complete Response Letter, or CRL, for the Plumiaz NDA.  In May 2015, we announced that we completed discussions with the FDA, and are advancing the development of Plumiaz.  Based on interactions with the FDA, we plan to conduct three clinical trials prior to resubmitting the NDA for Plumiaz, described above in this report.  Pending the successful completion of these studies, we are planning to resubmit the NDA for Plumiaz in the first quarter of 2017.  Based on FDA guidelines, the expected review period of the resubmitted NDA would be six months. 	

·  	In June 2015 we announced that we had stopped enrollment in this trial based on the occurrence of a case of hepatotoxicity (liver injury) meeting Hy’s Law criteria (elevated ALT, AST and bilirubin), based on blood test results.  We also received a notification of clinical hold from the FDA following submission of this information.  The 22 patients who were dosed in the trial will complete the pre-planned one year of follow up.  We expect to complete an analysis of data from the three-month follow up by the end of 2015.  We have ongoing analyses and non-clinical studies to investigate the biological basis for liver interactions of cimaglermin, and we plan to review these and other data from the cimaglermin studies with the FDA.	

·  	Our Phase 1 clinical trial of rHIgM22 found no dose-limiting toxicities at any of, and was well tolerated in each of, the five dose levels studied.  In addition, testing detected rHIgM22 in cerebrospinal fluid (CSF), indicating the drug’s access to the central nervous system.  Based on these data, we intend to advance clinical development of rHIgM22 for MS.  Our second Phase 1 trial in relapsing MS patients is open for enrollment , and we expect trial	

26

results in 2016.

·  	We are preparing an IND for and plan to initiate the first Phase 1 clinical trial of CVT-427, an inhaled triptan intended to provide relief from acute migraine episodes, by the end of 2015.	

Results of Operations
 
Three-Month Period Ended June 30, 2015 Compared to June 30, 2014
 
Net Product Revenues

Ampyra
 
We recognize product sales of Ampyra following receipt of product by our network of specialty pharmacy providers, Kaiser Permanente and ASD Specialty Healthcare, Inc.  We recognized net revenue from the sale of Ampyra to these customers of $105.5 million as compared to $87.4 million for the three-month periods ended June 30, 2015 and 2014, respectively, an increase of $18.1 million, or 21%.  The net revenue increase was comprised of net volume increases of $8.9 million due to greater demand we believe due to, in part, the success of certain marketing programs such as our First Step and Step Together programs and price increases net of discount and allowance adjustments of $9.2 million.  Effective January 1, 2015, we increased our sale price to our customers by 10.95%.

Discounts and allowances which are included as an offset in net revenue consist of allowances for customer credits, including estimated chargebacks, rebates, discounts and returns. Discounts and allowances are recorded following shipment of Ampyra tablets to our network of specialty pharmacy providers, Kaiser Permanente and ASD Specialty Healthcare, Inc. Adjustments are recorded for estimated chargebacks, rebates, and discounts.  Discounts and allowances also consist of discounts provided to Medicare beneficiaries whose prescription drug costs cause them to be subject to the Medicare Part D coverage gap (i.e., the “donut hole”).  Payment of coverage gap discounts is required under the Affordable Care Act, the health care reform legislation enacted in 2010.  Discounts and allowances may increase as a percentage of sales as we enter into managed care contracts in the future.

Zanaflex

We recognize product sales of Zanaflex Capsules and Zanaflex tablets using a deferred revenue recognition model where shipments to wholesalers are recorded as deferred revenue and only recognized as revenue when end-user prescriptions of the product are reported. We also recognize product sales on the transfer price of product sold for an authorized generic of Zanaflex Capsules.  We recognized net revenue from the sale of Zanaflex Capsules and Zanaflex tablets of $524,000 for the three-month period ended June 30, 2015, as compared to $721,000 for the three-month period ended June 30, 2014.  Net product revenues also include $1.3 million which represents the sale of our Zanaflex Capsules authorized generic product to Actavis for the three-month periods ended June 30, 2015 and 2014, respectively.  Generic competition has caused a significant decline in sales of Zanaflex Capsules and is expected to cause the Company’s net revenue from Zanaflex Capsules to decline further in 2015 and beyond.  The decrease in net revenues was also the result of a disproportionate increase in discounts and allowances due to the mix of customers continuing to purchase our product. These customers receive higher levels of rebates and allowances.
 
Discounts and allowances, which are included as an offset in net revenue, consist of allowances for customer credits, including estimated chargebacks, rebates, and discounts.

Qutenza

We recognize product sales of Qutenza following receipt of product by our specialty distributors. We recognized net revenue from the sale of Qutenza of $251,000 and $276,000 for the three-month periods ended June 30, 2015 and 2014, respectively.  For the foreseeable future we do not expect that sales of this product will materially contribute to our revenues.

License Revenue

We recognized $2.3 million in license revenue for the three-month periods ended June 30, 2015 and 2014, related to the $110.0 million received from Biogen in 2009 as part of our collaboration agreement. We currently estimate the recognition period to be approximately 12 years from the date of the Collaboration Agreement.

27

Royalty Revenue

We recognized $2.5 million and $2.8 million in royalty revenue for the three-month periods ended June 30, 2015 and 2014, respectively, related to ex-U.S. sales of Fampyra by Biogen.

We recognized $1.4 million and $2.4 million in royalty revenue for the three-month periods ended June 30, 2015 and 2014, respectively, related to the authorized generic sale of Zanaflex Capsules.

Cost of Sales

We recorded cost of sales of $22.7 million for the three-month period ended June 30, 2015 as compared to $18.9 million for the three-month period ended June 30, 2014.  Cost of sales for the three-month period ended June 30, 2015 consisted primarily of $18.8 million in inventory costs related to recognized revenues.  Cost of sales for the three-month period ended June 30, 2015 also consisted of $2.4 million in royalty fees based on net product shipments, $147,000 in amortization of intangible assets, and $80,000 in period costs related to freight, stability testing, and packaging.  Cost of sales also included $1.3 million, which represents the cost of Zanaflex Capsules authorized generic product sold for the three-month period ended June 30, 2015.

Cost of sales for the three-month period ended June 30, 2014 consisted primarily of $15.1 million in inventory costs related to recognized revenues.  Cost of sales for the three-month period ended June 30, 2014 also consisted of $2.1 million in royalty fees based on net product shipments, $179,000 in amortization of intangible assets, and $165,000 in period costs related to freight, stability testing, and packaging. Cost of sales also included $1.3 million, which represents the cost of Zanaflex Capsules authorized generic product sold for the three-month period ended June 30, 2014.

Cost of License Revenue
 
 We recorded cost of license revenue of $159,000 for the three-month periods ended June 30, 2015 and 2014, respectively.  Cost of license revenue represents the recognition of a portion of the deferred $7.7 million paid to Alkermes in 2009 in connection with the $110.0 million received from Biogen as a result of our collaboration agreement.
 
Research and Development
 
Research and development expenses for the three-month period ended June 30, 2015 were $31.2 million as compared to $16.4 million for the three-month period ended June 30, 2014, an increase of approximately $14.8 million, or 90%.  The increase was primarily due to $12.8 million in CVT-301 and CVT-427 expenses incurred in 2015 after the acquisition of Civitas in October 2014.  The increase was also due to an increase in overall research and development staff, compensation and related expenses of $3.6 million to support the research and development initiatives related to our product pipeline, as well as increases in expenses for certain research and development programs, including $690,000 related to our cimaglermin program and $640,000 related to our Plumiaz program.  The increases in research and development expenses for the three-month period ended June 30, 2015 were partially offset by decreases in expenses in certain other research and development programs, including decreases of $1.7 million related to our life cycle management program for Ampyra, $680,000 related to the RHIgM22 program, $341,000 in other R&D support costs and $140,000 related to the NP-1998 program.
 
Selling, General and Administrative
 
Sales and marketing expenses for the three-month period ended June 30, 2015 were $26.1 million compared to $29.0 million for the three-month period ended June 30, 2014, a decrease of approximately $2.9 million, or 10%.  The decrease was attributable to a decrease of $2.1 million for pre-launch activities associated with the possible commercialization of Plumiaz and a decrease in overall marketing, selling, distribution, and market research expenses for Ampyra of $590,000 and Zanaflex of $234,000.
 
General and administrative expenses for the three-month period ended June 30, 2015 were $26.7 million compared to $21.7 million for the three-month period ended June 30, 2014, an increase of approximately $5.0 million, or 23%. This increase was primarily the result of an increase of $1.7 million for staff and compensation expenses and other expenses related to supporting the growth of the organization, including the acquisition of Civitas in October 2014, and an increase of $2.0 million in legal fees and business development expenses of $1.3 million.

28

 
Changes in Fair Value of Acquired Contingent Consideration
 
 As a result of the original Civitas spin out of Alkermes, part of the consideration to Alkermes was a future royalty to be paid to Alkermes on Civitas products.  Acorda acquired this contingent consideration as part of the Civitas acquisition.  The fair value of that future royalty is assessed quarterly.  We recorded a $1.1 million expense pertaining to changes in the fair-value of our acquired contingent consideration for the three-month period ended June 30, 2015.  The changes in the fair-value of the acquired contingent consideration were due to the re-calculation of discounted cash flows for the passage of time and updates to certain other estimated assumptions.  There were no changes to the valuation techniques.

Other Income / Expense
 
 Other expense was $3.6 million for the three-month period ended June 30, 2015 compared to other expense of $261,000 for the three-month period ended June 30, 2014, an increase of $3.3 million. The increase was due to an increase in interest expense of $3.6 million, principally related to the cash and non-cash portions of interest expense for the convertible senior notes issued in June 2014 (the Notes). Interest expense related to the Notes was $3.6 million for the three-month period ended June 30, 2015, of which the non-cash portion was $2.1 million.
 
Benefit from / Provision for Income Taxes
 
For the three-month periods ended June 30, 2015 and 2014, the Company recorded a $1.1 million and $6.0 million provision for income taxes based upon its estimated tax liability for the year.  The provision for income taxes is based on federal, state and Puerto Rico income taxes. The effective income tax rates for the Company for the three-month periods ended June 30, 2015 and 2014 were 53% and 56%, respectively. As a result of the Federal research and development tax credit not being extended during the second quarter of 2015, the Company was not able to receive a benefit in the effective tax rate for this in 2015. The Company, however, was able to receive a benefit in the effective tax rate for 2015 for the Massachusetts state research and development tax credit in addition to the Federal orphan drug credit.
 
 We continue to evaluate the realizability of the Company’s deferred tax assets and consider all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance will be required to reduce the deferred tax assets to the amount that is more likely than not to be realized in future periods.
 
Six-Month Period Ended June 30, 2015 Compared to June 30, 2014
 
Net Product Revenues

Ampyra
 
We recognize product sales of Ampyra following receipt of product by our network of specialty pharmacy providers, Kaiser Permanente and ASD Specialty Healthcare, Inc.  We recognized net revenue from the sale of Ampyra to these customers of $197.9 million as compared to $159.9 million for the six-month periods ended June 30, 2015 and 2014, respectively, an increase of $38 million, or 24%.  The net revenue increase was comprised of net volume increases of $20.0 million, due to, in part, the success of certain marketing programs such as our First Step and Step Together programs and price increases net of discount and allowance adjustments of $18.0 million. Effective January 1, 2015, we increased our sale price to our customers by 10.95%.

Discounts and allowances which are included as an offset in net revenue consist of allowances for customer credits, including estimated chargebacks, rebates, discounts and returns. Discounts and allowances are recorded following shipment of Ampyra tablets to our network of specialty pharmacy providers, Kaiser and ASD Specialty Healthcare, Inc.. Adjustments are recorded for estimated chargebacks, rebates, and discounts.  Discounts and allowances also consist of discounts provided to Medicare beneficiaries whose prescription drug costs cause them to be subject to the Medicare Part D coverage gap (i.e., the “donut hole”).  Payment of coverage gap discounts is required under the Affordable Care Act, the health care reform legislation enacted in 2010.  Discounts and allowances may increase as a percentage of sales as we enter into managed care contracts in the future.

Zanaflex

We recognize product sales of Zanaflex Capsules and Zanaflex tablets using a deferred revenue recognition model where shipments to wholesalers are recorded as deferred revenue and only recognized as revenue when end-user prescriptions of the product are reported. We also recognize product sales on the transfer price of product sold for an

29

 
authorized generic of Zanaflex Capsules. We recognized net revenue from the sale of Zanaflex Capsules and Zanaflex tablets of $1.2 million for the six-month period ended June 30, 2015, as compared to $1.6 million for the six-month period ended June 30, 2014. Net product revenues also include $1.4 million which represents the sale of our Zanaflex Capsules authorized generic product to Actavis for the six-month period ended June 30, 2015, as compared to $2.2 million for the six-month period ended June 30, 2014.  Generic competition has caused a significant decline in sales of Zanaflex Capsules and is expected to cause the Company’s net revenue from Zanaflex Capsules to decline further in 2015 and beyond.  The decrease in net revenues was also the result of a disproportionate increase in discounts and allowances due to the mix of customers continuing to purchase our product. These customers receive higher levels of rebates and allowances.
 
Discounts and allowances, which are included as an offset in net revenue, consist of allowances for customer credits, including estimated chargebacks, rebates, and discounts.

Qutenza
 We recognize product sales of Qutenza following receipt of product by our specialty distributors. We recognized net revenue from the sale of Qutenza of approximately $473,000 and $485,000 for the six-month periods ended June 30, 2015 and 2014, respectively.  For the foreseeable future we do not expect that sales of this product will materially contribute to our revenues

License Revenue

We recognized $4.5 million in license revenue for the six-month periods ended June 30, 2015 and 2014, related to the $110.0 million received from Biogen in 2009 as part of our collaboration agreement. We currently estimate the recognition period to be approximately 12 years from the date of the Collaboration Agreement.

Royalty Revenues

We recognized $4.8 million and $5.2 million in royalty revenue for the six-month periods ended June 30, 2015 and 2014, respectively related to ex-U.S. sales of Fampyra by Biogen.

We recognized $3.1 million and $3.8 million in royalty revenue for the six-month periods ended June 30, 2015 and 2014, respectively, related to the authorized generic sale of Zanaflex Capsules.

Cost of Sales

We recorded cost of sales of $41.2 million for the six-month period ended June 30, 2015 as compared to $34.4 million for the six-month period ended June 30, 2014. Cost of sales for the six-month period ended June 30, 2015 consisted primarily of $34.7 million in inventory costs related to recognized revenues.  Cost of sales for the six-month period ended June 30, 2015 also consisted of $4.5 million in royalty fees based on net product shipments, $294,000 in amortization of intangible assets, and $165,000 in period costs related to freight, stability testing, and packaging. Cost of sales also included $1.4 million, which represents the cost of Zanaflex Capsules authorized generic product sold for the six-month period ended June 30, 2015.

Cost of sales for the six-month period ended June 30, 2014 consisted primarily of $27.8 million in inventory costs related to recognized revenues.  Cost of sales for the six-month period ended June 30, 2014 also consisted of $3.8 million in royalty fees based on net product shipments, $358,000 in amortization of intangible assets, and $252,000 in period costs related to freight, stability testing, and packaging. Cost of sales also included $2.2 million, which represents the cost of Zanaflex Capsules authorized generic product sold for the six-month period ended June 30, 2014.

Cost of License Revenue
 
 We recorded cost of license revenue of $317,000 for the six-month periods ended June 30, 2015 and 2014, respectively.  Cost of license revenue represents the recognition of a portion of the deferred $7.7 million paid to Alkermes in 2009 in connection with the $110.0 million received from Biogen as a result of our collaboration agreement.
 
Research and Development
 
Research and development expenses for the six-month period ended June 30, 2015 were $61.9 million as compared to $31.0 million for the six-month period ended June 30, 2014, an increase of approximately $30.9 million, or 100%. The increase was primarily due to $24.1 million in CVT-301 and CVT-427 expenses incurred in 2015 after the acquisition of

30

 
 
Civitas in October 2014 and an increase in overall research and development staff, compensation and related expenses of $4.2 million to support the research and development initiatives related to our product pipeline.  The increase was also due to increases in expenses for various other research and development programs, including $1.4 million related to our life cycle management program for Ampyra, $752,000 relating to our cimaglermin program, $375,000 related to our chondroitinase program, $353,000 related to our NP-1998 program, and $282,000 related to our Plumiaz program.  The increase in expenses related to our NP-1998 program is primarily attributable to drug supply purchase commitments made earlier in 2014 prior to the program re-prioritization.  The increases in research and development expenses for the six-month period ended June 30, 2015 were partially offset by a decrease of $578,000 related to the rHIgM22 program.
 
Selling, General and Administrative
 
Sales and marketing expenses for the six-month period ended June 30, 2015 were $51.1 million compared to $55.6 million for the six-month period ended June 30, 2014, a decrease of approximately $4.5 million, or 8%.  The decrease was attributable to a decrease of $3.8 million for pre-launch activities associated with the possible commercialization of Plumiaz, a decrease in overall marketing, selling, distribution, and market research expenses for Ampyra of $1.7 million and a decrease in Zanaflex marketing of $234,000. The decrease in sales and marketing expenses was partially offset by an increase in overall compensation, benefits, and other selling expenses of $1.2 million, including sales force incentive compensation.
 
General and administrative expenses for the six-month period ended June 30, 2015 were $50.5 million compared to $41.9 million for the six-month period ended June 30, 2014, an increase of approximately $8.6 million, or 21%. This increase was primarily the result of an increase of $4.8 million for staff and compensation expenses and other expenses related to supporting the growth of the organization, including the acquisition of Civitas in October 2014, an increase of $2.5 million in legal fees, $2.3 million in general and administrative expenses incurred in 2015 after the acquisition of Civitas in October 2014 and $1.3 million in business development expenses.  The increases in general and administrative expenses for the six-month period ended June 30, 2015 were partially offset by a decrease of $1.6 million for work on FDA post-approval requirements for the Zanaflex franchise, and $800,000 in drug safety and surveillance expenses.
 
Changes in Fair Value of Acquired Contingent Consideration
 
 As a result of the original Civitas spin out of Alkermes, part of the consideration to Alkermes was a future royalty to be paid to Alkermes on Civitas products.  Acorda acquired this contingent consideration as part of the Civitas acquisition.  The fair value of that future royalty is assessed quarterly.  We recorded a $4.2 million expense pertaining to changes in the fair-value of our acquired contingent consideration for the six-month period ended June 30, 2015.  The changes in the fair-value of the acquired contingent consideration were due to the re-calculation of discounted cash flows for the passage of time and updates to certain other estimated assumptions.  There were no changes to the valuation techniques.
 
Other Income / Expense
 
 Other expense was $7.4 million for the six-month period ended June 30, 2015 compared to $181,000 for the six-month period ended June 30, 2014, an increase of approximately $7.2 million. The increase was due to an increase in interest expense of $7.5 million, principally related to the cash and non-cash portions of interest expense for the convertible senior notes issued in June 2014 (the Notes). Interest expense related to the Notes was $7.2 million for the six-month period ended June 30, 2015, of which the non-cash portion was $4.2 million.
 
Benefit From / Provision for Income Taxes
 
 For the six-month periods ended June 30, 2015 and 2014, the Company recorded a $0.9 million benefit from and $8.8 million provision for income taxes based upon its estimated tax liability for the year.  The provision for income taxes is based on federal, state and Puerto Rico income taxes. The effective income tax rates for the six-month periods ended June 30, 2015 and 2014 were 30% and 62%, respectively. As a result of the Federal research and development tax credit not being extended during the first two quarters of 2015, the Company was not able to receive a benefit in the effective tax rate for this in 2015.  The Company, however, was able to receive a benefit in the effective tax rate for 2015 for the Massachusetts state research and development tax credit in addition to the Federal orphan drug credit.
 
 We continue to evaluate the realizability of the Company’s deferred tax assets and consider all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance will be required to reduce the deferred tax assets to the amount that is more likely than not to be realized in future periods.

31

 
  Liquidity and Capital Resources
 
Since our inception, we have financed our operations primarily through private placements and public offerings of our common stock and preferred stock, a convertible debt offering, payments received under our collaboration and licensing agreements, sales of Ampyra and Zanaflex Capsules, and, to a lesser extent, from loans, government grants and our financing arrangement with Paul Royalty Fund (PRF) (see below).
 
We were cash flow positive in 2014 and, at June 30, 2015, we had $301.7 million of cash, cash equivalents and short-term investments, compared to $307.6 million at December 31, 2014.  We expect to remain cash flow positive in 2015.  We believe that we have sufficient cash, cash equivalents and short-term investments on hand, in addition to cash expected to be generated from operations, to fund our operations, including our currently anticipated development pipeline activities as currently planned.
 
Our future capital requirements will depend on a number of factors, including the amount of revenue generated from sales of Ampyra, the continued progress of our research and development activities, the amount and timing of milestone or other payments payable under collaboration, license and acquisition agreements, the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims and other intellectual property rights, and capital required or used for future acquisitions or to in-license new products and compounds including the development costs relating to those products or compounds.  To the extent our capital resources are insufficient to meet future operating requirements we will need to raise additional capital, reduce planned expenditures, or incur indebtedness to fund our operations. If we require additional financing in the future, we cannot assure you that it will be available to us on favorable terms, or at all.
 
Financing Arrangements
 
Saints Capital Notes
 
In January 1997, Elan International Services, Ltd. (EIS) loaned us an aggregate of $7.5 million pursuant to two convertible promissory notes to partly fund our research and development activities. On December 23, 2005, Elan transferred these promissory notes to funds affiliated with Saints Capital.  As of June 30, 2015, $2.2 million of these promissory notes was outstanding, which amount includes accrued interest. The fifth of seven annual payments on this note was due and paid on the five year anniversary of Ampyra approval on January 22, 2015 and will continue to be paid annually until paid in full.
 
Zanaflex Revenue Interests Assignment
 
On December 23, 2005, we entered into a revenue interest assignment agreement with PRF, a dedicated healthcare investment fund, pursuant to which we assigned to PRF the right to a portion of our net revenues (as defined in the agreement) from Zanaflex Capsules, Zanaflex tablets and any future Zanaflex products.  To secure our obligations to PRF, we also granted PRF a security interest in substantially all of our assets related to Zanaflex. Our agreement with PRF covers all Zanaflex net revenues generated from October 1, 2005 through and including December 31, 2015, unless the agreement terminates earlier. In November 2006, we entered into an amendment to the revenue interest assignment agreement with PRF. Under the terms of the amendment, PRF paid us $5.0 million in November 2006. An additional $5.0 million was due to us if net revenues during the fiscal year 2006 equaled or exceeded $25.0 million. This milestone was met and the receivable was reflected in our December 31, 2006 financial statements. Under the terms of the amendment, we repaid PRF $5.0 million on December 1, 2009 and an additional $5.0 million on December 1, 2010 since the net revenues milestone was met. In November 2014, PRF sold its Zanaflex revenue interest to Valeant Pharmaceuticals International, Inc.
 
Under the revenue interests assignment agreement and the amendment, PRF was entitled to, and now as PRF’s successor, Valeant is entitled to the following portion of Zanaflex net revenues:
 
 	•	with respect to Zanaflex net revenues up to and including $30.0 million for each fiscal year during the term of the agreement, 15% of such net revenues;	
 
 	•	with respect to Zanaflex net revenues in excess of $30.0 million but less than and including $60.0 million for each fiscal year during the term of the agreement, 6% of such net revenues; and	
 
 	•	with respect to Zanaflex net revenues in excess of $60.0 million for each fiscal year during the term of the agreement, 1% of such net revenues.	

32

 
Notwithstanding the foregoing, once PRF and Valeant, as PRF’s successor, have received and retained payments under the agreement that are at least 2.1 times the aggregate amount PRF paid us under the agreement, Valeant will only be entitled to 1% of Zanaflex net revenues. In connection with the transaction, we recorded a liability as of June 30, 2015, referred to as the revenue interest liability, of approximately $585,000. We impute interest expense associated with this liability using the effective interest rate method and record a corresponding accrued interest liability. The effective interest rate is calculated based on the rate that would enable the debt to be repaid in full over the life of the arrangement. The interest rate on this liability may vary during the term of the agreement depending on a number of factors, including the level of Zanaflex sales. We currently estimate that the imputed interest rate associated with this liability will be approximately 5.8%. Payments made to Valeant as a result of Zanaflex sales levels will reduce the accrued interest liability and the principal amount of the revenue interest liability.
 
Upon the occurrence of certain events, including if we experience a change of control, undergo certain bankruptcy events, transfer any of our interests in Zanaflex (other than pursuant to a license agreement, development, commercialization, co-promotion, collaboration, partnering or similar agreement), transfer all or substantially all of our assets, or breach certain of the covenants, representations or warranties we make under the agreement, Valeant may (i) require us to repurchase the rights we sold them at the “put/call price” in effect on the date such right is exercised or (ii) foreclose on the Zanaflex assets that secure our obligations to Valeant.  Except in the case of certain bankruptcy events, if Valeant exercises its right, which we refer to as Valeant’s put option, to cause us to repurchase the rights we assigned to it, Valeant may not foreclose unless we fail to pay the put/call price as required.  If we experience a change of control we have the right, which we refer to as our call option, to repurchase the rights we sold under the revenue interests assignment agreement at the “put/call price” in effect on the date such right is exercised.  The put/call price on a given date is the greater of (i) all payments made by PRF/Valeant to us as of such date, less all payments received by PRF/Valeant from us as of such date, and (ii) an amount that would generate an internal rate of return to PRF/Valeant of 25% on all payments made by PRF/Valeant to us as of such date, taking into account the amount and timing of all payments received by PRF/Valeant from us as of such date.  We have determined that Valeant’s put option and our call option meet the criteria to be considered an embedded derivative and should be accounted for as such.  As of June 30, 2015, we have no liability recorded related to the put/call option to reflect its current estimated fair value. This liability is revalued on an as needed basis to reflect any changes in the fair value and any gain or loss resulting from the revaluation is recorded in earnings.
 
Convertible Senior Notes
 
In June 2014, the Company entered into an underwriting agreement (the Underwriting Agreement) with J.P. Morgan Securities LLC (the Underwriter) relating to the issuance by the Company of $345 million aggregate principal amount of 1.75% Convertible Senior Notes due 2021 (the Notes) in an underwritten public offering pursuant to the Company’s Registration Statement on Form S-3 (the Registration Statement) and a related preliminary and final prospectus supplement, filed with the Securities and Exchange Commission (the Offering).  The principal amount of Notes included $45 million aggregate principal amount of Notes that was purchased by the Underwriter pursuant to an option granted to the Underwriter in the Underwriting Agreement, which option was exercised in full.  The net proceeds from the offering, after deducting the Underwriter’s discount and the offering expenses paid by the Company, were approximately $337.5 million.
 
The Notes are governed by the terms of an indenture, dated as of June 23, 2014 (the Base Indenture) and the first supplemental indenture, dated as of June 23, 2014 (the Supplemental Indenture, and together with the Base Indenture, the Indenture), each between the Company and Wilmington Trust, National Association, as trustee (the Trustee).  The Notes will be convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, based on an initial conversion rate, subject to adjustment, of 23.4968 shares per $1,000 principal amount of Notes (which represents an initial conversion price of approximately $42.56 per share), only in the following circumstances and to the following extent: (1) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (2) during any calendar quarter commencing after the calendar quarter ending on September 30, 2014 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (3) if the Company calls any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; (4) upon the occurrence of specified events described in the Indenture; and (5) at any time on or after December 15, 2020 through the second scheduled trading day immediately preceding the maturity date.

33

 
The Company may not redeem the Notes prior to June 20, 2017.  The Company may redeem for cash all or part of the Notes, at the Company’s option, on or after June 20, 2017 if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending within five trading days prior to the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
 
The Company will pay 1.75% interest per annum on the principal amount of the Notes, payable semiannually in arrears in cash on June 15 and December 15 of each year.  The Company paid $3.0 million on June 15, 2015 for interest due on the Notes.  The Notes will mature on June 15, 2021.
 
If the Company undergoes a “fundamental change” (as defined in the Indenture), subject to certain conditions, holders may require the Company to repurchase for cash all or part of their Notes in principal amounts of $1,000 or an integral multiple thereof.  The fundamental change repurchase price will be equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.  If a make-whole fundamental change, as described in the Indenture, occurs and a holder elects to convert its Notes in connection with such make-whole fundamental change, such holder may be entitled to an increase in the conversion rate as described in the Indenture.
 
The Indenture contains customary terms and covenants and events of default. If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company) occurs and is continuing, the Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding Notes by notice to the Company and the Trustee, may declare 100% of the principal of and accrued and unpaid interest, if any, on all the Notes to be due and payable.  Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately.  Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving the Company, 100% of the principal and accrued and unpaid interest, if any, on all of the Notes will become due and payable automatically.  Notwithstanding the foregoing, the Indenture provides that, to the extent the Company elects and for up to 270 days, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right to receive additional interest on the Notes.
 
The Notes will be senior unsecured obligations and will rank equally with all of the Company’s existing and future senior debt and senior to any of the Company’s subordinated debt.  The Notes will be structurally subordinated to all existing or future indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries and will be effectively subordinated to the Company’s existing or future secured indebtedness to the extent of the value of the collateral.  The Indenture does not limit the amount of debt that the Company or its subsidiaries may incur.
 
In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Notes as a whole.  The excess of the principal amount of the liability component over its carrying amount, referred to as the debt discount, is amortized to interest expense over the seven-year term of the Notes using the effective interest method. The equity component is not re-measured as long as it continues to meet the conditions for equity classification.
 
 Our outstanding note balances as of June 30, 2015 consisted of the following:
 
  (In thousands)	 	June 30, 2015	 	
Liability component:	 	 	 	
Principal	 	$	345,000	 	
Less: debt discount, net	 	(53,462)	 	
Net carrying amount	 	$	291,538	 	
Equity component	 	$	61,195	 	

Investment Activities
 
At June 30, 2015, cash, cash equivalents and short-term investments were approximately $301.7 million, as compared to $307.6 million at December 31, 2014.  Our cash and cash equivalents consist of highly liquid investments with

34

 
original maturities of three months or less at date of purchase and consist of time deposits and investments in a Treasury money market fund and US Treasury bonds.  Also, we maintain cash balances with financial institutions in excess of insured limits.  We do not anticipate any losses with respect to such cash balances.  As of June 30, 2015, our cash and cash equivalents were $76.1 million, as compared to $182.2 million as of December 31, 2014.  Our short-term investments consist of US Treasury bonds with original maturities greater than three months and less than one year.  The balance of these investments was $225.5 million as of June 30, 2015, as compared to $125.4 million as of December 31, 2014.
 
Net Cash (Used in) / Provided by Operations
 
Net cash used in operations was $6.0 million for the six-month period ending June 30, 2015 while $23.0 million was provided by operations for the six-month period ended June 30, 2014.  Cash used in operations for the six-month period ended June 30, 2015 was primarily due to a net increase in working capital items of $27.2 million primarily attributable to an increase in inventory held by the company, a net loss of $2.1 million principally resulting from an overall increase in operating expenses, a decrease in deferred license revenue of $4.5 million due to the amortization of the upfront collaboration payment received during the three-month period ended September 30, 2009, and a deferred tax benefit of $0.9 million. Cash used in operations was partially offset by a non-cash share-based compensation expense of $15.8 million, depreciation and amortization of $7.5 million, a non-cash charge for the change in the contingent consideration obligation of $4.2 million, and amortization of the debt discount and debt issuance costs of $4.2 million.
 
Cash provided by operations for the six-month period ended June 30, 2014 was primarily due to a non-cash share-based compensation expense of $13.4 million, a deferred tax provision of $8.9 million, net income of $5.4 million principally resulting from an increase in net product revenues, depreciation and amortization of $3.6 million, and amortization of net premiums and discounts on investments of $1.5 million.  Cash provided by operations was partially offset by a net decrease in working capital items of $5.7 million attributable to an increase in inventory held by the company and a decrease in Zanaflex deferred product revenue due to product returns, as well as a decrease of $4.5 million in the non-current portion of deferred license revenue.
 
Net Cash Used in Investing
 
Net cash used in investing activities for the six-month period ended June 30, 2015 was $106.1 million, primarily due to $276.0 million in purchases of investments, purchases of property and equipment of $4.1 million, and purchases of intangible assets of $0.6 million, partially offset by $174.5 million in proceeds from maturities and sales of investments.
 
Net Cash Provided by Financing
 
Net cash provided by financing activities for the six-month period ended June 30, 2015 was $6.1 million, primarily due to $6.2 million in net proceeds from the issuance of common stock and exercise of stock options partially offset by $0.1 million in repayments to PRF.
 
Contractual Obligations and Commitments
 
 A summary of our minimum contractual obligations related to our major outstanding contractual commitments is included in our Annual Report on Form 10-K for the year ended December 31, 2014. Our long-term contractual obligations include commitments and estimated purchase obligations entered into in the normal course of business. Under certain supply agreements and other agreements with manufacturers and suppliers, we are required to make payments for the manufacture and supply of our clinical and approved products.  During the six-month period ended June 30, 2015, commitments related to the purchase of inventory decreased as compared to December 31, 2014.  As of June 30, 2015, we have inventory-related purchase commitments totaling approximately $36.5 million.
 
Under certain agreements, we are required to pay royalties for the use of technologies and products in our R&D activities and in the commercialization of products.  The amount and timing of any of the foregoing payments are not known due to the uncertainty surrounding the successful research, development and commercialization of the products.
 
Under certain agreements, we are also required to pay license fees and milestones for the use of technologies and products in our R&D activities and in the commercialization of products.  As of June 30, 2015, we have committed to make potential future milestone payments to third parties of up to approximately $169 million as part of our various collaborations, including licensing and development programs.  This represents a decrease of approximately $35 million as compared to December 31, 2014, due to the termination of certain license agreements. Payments under these agreements generally become

35

 
due and payable only upon achievement of certain developmental, regulatory or commercial milestones.  Because the achievement of these milestones had not occurred as of June 30, 2015, such contingencies have not been recorded in our financial statements.  Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory and commercial milestones.  There is uncertainty regarding the various activities and outcomes needed to reach these milestones, and they may not be achieved.
 
Our 2014 acquisition of Civitas included a subleased manufacturing facility in Chelsea, Massachusetts with commercial-scale capabilities.  The approximately 90,000 square foot facility also includes office and laboratory space.  Civitas subleases the Chelsea, Massachusetts facility from Alkermes, Inc.  The sublease is an operating lease that was scheduled to expire on December 31, 2015.  In March 2015, Civitas exercised its right to extend the term of the sublease for five additional years, until December 31, 2020, and Civitas retains the right to further extend the sublease beyond that date for another five year period.  The base rent is currently $722,000 per year.  For each extension period, the economic terms of the sublease will be determined by a process set forth in the sublease, and Civitas will be required to provide a letter of credit in an amount equal to the full five-year lease obligation for each lease extension period and additional security.  Alkermes leases the building pursuant to an overlease with H&N Associates, LLC, and has extension rights pursuant to the overlease that correspond to Civitas’ extension rights under the sublease.  Alkermes has exercised a five-year extension option under the overlease that corresponds with Civitas’ exercise of its five year extension option under the sublease.  Pursuant to the sublease, Civitas has agreed to comply with all of Alkermes’s obligations under the overlease .
 
Critical Accounting Policies and Estimates
 
 Our critical accounting policies are detailed in our Annual Report on Form 10-K for the year ended December 31, 2014. As of June 30, 2015, our critical accounting policies have not changed materially from December 31, 2014.
 
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
 
Our financial instruments consist of cash equivalents, short-term investments, grants receivable, convertible notes payable and accounts payable. The estimated fair values of all of our financial instruments approximate their carrying values at June 30, 2015.
 
We have cash equivalents and short-term investments at June 30, 2015, which are exposed to the impact of interest rate changes and our interest income fluctuates as our interest rates change. Due to the nature of our investments in money market funds and US Treasury bonds, the carrying value of our cash equivalents and short-term investments approximate their fair value at June 30, 2015.  At June 30, 2015, we held $301.7 million in cash, cash equivalents and short-term investments which had an average interest rate of approximately 0.1%.
 
We maintain an investment portfolio in accordance with our investment policy.  The primary objective of our investment policy is to preserve principal, maintain proper liquidity and to meet operating needs.  Although our investments are subject to credit risk, our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure from any single issue, issuer or type of investment.  Our investments are also subject to interest rate risk and will decrease in value if market interest rates increase.  However, interest rate risk is mitigated due to the conservative nature and relatively short duration of our investments.  We do not own derivative financial instruments.  Accordingly, we do not believe that there is any material market risk exposure with respect to derivative or other financial instruments.
 
Item 4.  Controls and Procedures
 
Evaluation of disclosure controls and procedures
 
As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”) we carried out an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the second quarter of 2015, the period covered by this report.  This evaluation was carried out under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer.  Based on that evaluation, these officers have concluded that, as of June 30, 2015, our disclosure controls and procedures were effective to achieve their stated purpose.
 
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations, and forms.  Disclosure controls and procedures

36

 
include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding disclosure.
 
Change in internal control over financial reporting
 
In connection with the evaluation required by Exchange Act Rule 13a-15(d), our management, including our chief executive officer and chief financial officer, concluded that there were no changes in our internal control over financial reporting during the quarter ended June 30, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
Limitations on the effectiveness of controls
 
Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met.  Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

37

PART II—OTHER INFORMATION
 
Item 1.  Legal Proceedings
 
Apotex

In August 2007, we received a Paragraph IV Certification Notice from Apotex Inc., advising that it had submitted an Abbreviated New Drug Application, or ANDA, to the FDA seeking marketing approval for generic versions of Zanaflex Capsules.  In response to the filing of the ANDA, in October 2007, we filed a lawsuit against Apotex in the U.S. District Court for the District of New Jersey asserting infringement of our U.S. Patent No. 6,455,557.  In September 2011, the Court ruled against us and, following our appeal, in June 2012 the U.S. Court of Appeals for the Federal Circuit affirmed the decision.  We did not seek any further appeal of the decision.  On September 6, 2011, we filed a citizen petition with the FDA requesting that the FDA not approve Apotex’s ANDA because of public-safety concerns about Apotex’s proposed drug.  On December 2, 2011, Apotex filed suit against us in the U.S. District Court for the Southern District of New York.  In that suit, Apotex alleged, among other claims, that we engaged in anticompetitive behavior and false advertising in connection with the development and marketing of Zanaflex Capsules, including that the citizen petition we filed with the FDA delayed FDA approval of Apotex’s generic tizanidine capsules.  On January 26, 2012, we moved to dismiss or stay Apotex’s suit.  On February 3, 2012, the FDA denied the citizen petition that we filed and approved Apotex’s ANDA for a generic version of Zanaflex Capsules.  On February 21, 2012, Apotex filed an amended complaint that incorporated the FDA action, but otherwise made allegations similar to the original complaint.  Requested judicial remedies include monetary damages, disgorgement of profits, recovery of litigation costs, and injunctive relief.  Following our filing of a motion to dismiss the amended complaint, in 2013 the Court dismissed five of the six counts in the amended complaint, including all of the antitrust claims, leaving only a claim under the Lanham Act relating to alleged product promotional activities.  In October 2014, the Court granted our motion for summary judgment against Apotex’s remaining claim.  Apotex has appealed both the motion to dismiss and summary judgment decisions to the Second Circuit Court of Appeals.  The Company will defend itself vigorously throughout the appeal process.

Ampyra Patents

In June and July of 2014, we received eight separate Paragraph IV Certification Notices from Accord Healthcare, Inc., Actavis FL, Inc., Alkem Laboratories Ltd., Apotex, Inc., Aurobindo Pharma Ltd., Mylan Pharmaceuticals, Inc., Roxane Laboratories, Inc., and Teva Pharmaceuticals USA, Inc., advising that each of these companies had submitted an ANDA to the FDA seeking marketing approval for generic versions of Ampyra (dalfampridine) Extended Release Tablets, 10 mg.  The ANDA filers have challenged the validity of our Orange Book-listed patents for Ampyra, and they have also asserted that generic versions of their products do not infringe certain claims of these patents.  In response to the filing of these ANDAs, in July 2014, we filed lawsuits against these generic pharmaceutical manufacturing companies in the U.S. District Court for the District of Delaware asserting infringement of our U.S. Patent Nos. 5,540,938, 8,007,826, 8,354,437, 8,440,703, and 8,663,685.  Requested judicial remedies include recovery of litigation costs and injunctive relief, including a request that the effective date of any FDA approval for these generic companies to make, use, offer for sale, sell, market, distribute, or import the proposed generic products be no earlier than the dates on which the Ampyra Orange-book listed patents expire, or any later expiration of exclusivity to which we are or become entitled.   These lawsuits with the eight ANDA filers have been consolidated into a single case.  The U.S. District Court for the District of Delaware has scheduled a Markman hearing on March 7, 2016, and has set a five day bench trial starting on September 19, 2016.  The Markman hearing will be conducted to determine the scope and limitations of certain patent claims that are asserted in the litigation.  We filed these lawsuits within 45 days from the date of receipt of each of the Paragraph IV Certification Notices.  As a result, a 30 month statutory stay of approval period applies to each of the ANDAs under the Hatch-Waxman Act.  The 30 month stay starts from January 22, 2015, which is the end of the new chemical entity (NCE) exclusivity period for Ampyra.  This restricts the FDA from approving the ANDAs until July 2017 at the earliest, unless a Federal district court issues a decision adverse to all of our asserted Orange Book-listed patents prior to that date.

In August 2014, Mylan Pharmaceuticals, Inc. and its parent, Mylan, Inc. (collectively, “Mylan”), filed a motion challenging the jurisdiction of the U.S. District Court for the District of Delaware.  On January 14, 2015, the Court denied Mylan’s motion to dismiss with respect to the ANDA filer, Mylan Pharmaceuticals, Inc.  On January 30, 2015, the Court granted Mylan’s request for an interlocutory appeal of its jurisdictional decision to the Federal Circuit Court of Appeals.  The Company will defend itself vigorously throughout the appeal process.  Due to Mylan’s motion to dismiss, we also filed another patent infringement suit against Mylan in the U.S. District Court for the Northern District of West Virginia asserting the same U.S. Patents and requesting the same judicial relief as in the Delaware action. On December 17, 2014, we filed a motion in the Northern District of West Virginia to stay that action in deference to the Delaware proceeding and until the issue of jurisdiction has been decided.  On February 11, 2014, the District Court for the Northern District of West Virginia

38

granted Acorda’s motion to stay the proceeding in that district until the Federal Circuit Court of Appeals decides Mylan’s appeal of Delaware’s jurisdictional decision.  The patent infringement case against Mylan, however, is still proceeding in Delaware along with the cases against the other eight ANDA filers (see below) at the present time.

On May 6, 2015, we received a Paragraph IV Certification Notice from Sun Pharmaceutical Industries Limited, or Sun Pharmaceuticals, advising that it had submitted an ANDA to the FDA seeking marketing approval for a generic version of Ampyra (dalfampridine) Extended Release Tablets, 10 mg.  Sun Pharmaceuticals has challenged the validity of four of our five Orange Book-listed patents for Ampyra, and did not file against our U.S. Patent No. 5,540,938, and they have also asserted that generic versions of their products may not infringe certain claims of these patents.  In response to the filing of the ANDA, in May 2015 we filed a lawsuit against Sun Pharmaceuticals in the U. S. District Court for the District of Delaware asserting infringement of our U.S. Patent Nos. 8,007,826, 8,354,437, 8,440,703, and 8,663,685, which was within the 45 days from the date of receipt of  Sun’s Paragraph IV Certification Notice which instituted the30 month statutory stay of approval period to the Sun Pharmaceuticals ANDA under the Hatch-Waxman Act.  Requested judicial remedies include recovery of litigation costs and injunctive relief, including a request that the effective date of any FDA approval for these generic companies to make, use, offer for sale, sell, market, distribute, or import the proposed generic products be no earlier than the dates on which the Ampyra Orange-book listed patents expire, or any later expiration of exclusivity to which we are or become entitled.  We filed this lawsuit within 45 days from the date of receipt of the Paragraph IV Certification Notice, which instituted the 30 month statutory stay of approval period to the Sun Pharmaceuticals ANDA under the Hatch-Watchman Act.  Since the Sun Pharmaceuticals ANDA was filed after January 22, 2015, which is the end of the new chemical entity (NCE) exclusivity period for Ampyra, the 30 month statutory stay of approval will start from the receipt of the Paragraph IV Certification Notice.  This restricts the FDA from approving the ANDA until November 2017 at the earliest, unless a Federal district court issues a decision adverse to all of our asserted Orange Book-listed patents prior to that date.
 
On February 10 and 27, 2015, a hedge fund (acting with affiliated entities and individuals and proceeding under the name of the Coalition for Affordable Drugs) filed two separate inter partes review (IPR) petitions with the U.S. Patent and Trademark Office, challenging U.S. Patent Nos. 8,663,685, and 8,007,826, which are two of the five Ampyra Orange Book-listed patents. In May and June of 2015, we filed our preliminary responses, opposing the requests to institute these two IPRs.   The deadlines for the rulings on the institution of the IPRs are August and September, respectively.  If they are allowed to proceed, we will oppose the full proceedings and defend our patents. The 30-month statutory stay period based on patent infringement suits filed by Acorda against ANDA filers is not impacted by these filings, and remains in effect.
 
We will vigorously defend our intellectual property rights.
 
Item 1 of Part II of our Quarterly Reports on Form 10-Q for the fiscal quarter ended March 31, 2015, includes prior updates to the legal proceedings described above .
 
Item 1A.  Risk Factors
 
In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2014, as updated in our Quarterly Reports subsequently filed during the current fiscal year, all of which could materially affect our business, financial condition or future results. These risks are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

39

Item 6.  Exhibits
 
Exhibit No .	 	Description	
2.1*	 	Amendment No. 1 to Agreement and Plan of Merger, effective as of July 27, 2015, by and among the Registrant, Neuronex, Inc., and Moise A. Khayrallah, solely in his capacity as the Stockholders’ Representative.	
10.1	 	First Amendment to Lease, dated as of May 21, 2015, by and between BMR-Ardsley Park LLC and the Registrant.	
10.2**	 	Employment Agreement, dated as of June 8, 2015, by and between the Registrant and Enrique Carrazana.	
10.3**	 	Letter agreement dated June 15, 2015, by and between the Registrant and Enrique Carrazana.	
10.4**	 	Employment Agreement, dated as of June 8, 2015, by and between the Registrant and Lauren Sabella.	
10.5**	 	Executive Employment Agreement, dated as of December 27, 2010, between Civitas Therapeutics, Inc. (formerly Corregidor Therapeutics, Inc.) and Rick Batycky.	
10.6**	 	First Amendment to Executive Employment Agreement, dated as of June 27, 2013, between Civitas Therapeutics, Inc. and Rick Batycky.	
10.7**	 	Second Amendment to Executive Employment Agreement, dated as of June 30, 2014, between Civitas Therapeutics, Inc. and Rick Batycky.	
10.8**	 	Employment offer letter, dated December 5, 2014, by and between the Registrant and Rick Batycky.	
10.9**	 	Acorda Therapeutics, Inc. 2015 Omnibus Incentive Compensation Plan.  Incorporated herein by reference to Appendix A to the Registrant’s 2015 Proxy Statement filed as Schedule 14A on April 30, 2015.	
10.10**	 	Forms of equity award documents for awards under the Acorda Therapeutics, Inc. 2015 Omnibus Incentive Compensation Plan.	
31.1	 	Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.	
31.2	 	Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.	
32.1	 	Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
32.2	 	Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
101.INS***	 	XBRL Instance Document.	
101.SCH***	 	XBRL Taxonomy Extension Schema Document.	
101.CAL***	 	XBRL Taxonomy Extension Calculation Linkbase Document.	
101.DEF***	 	XBRL Taxonomy Extension Definition Linkbase Document.	
101.LAB***	 	XBRL Taxonomy Extension Label Linkbase Document.	
101.PRE***	 	XBRL Taxonomy Extension Presentation Linkbase Document.	
 
*	Portions of this exhibit were redacted pursuant to a confidential treatment request filed with the Secretary of the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.	
 
**	Indicates management contract or compensatory plan or arrangement.	
 
***	In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.”	

 
40

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Acorda Therapeutics, Inc.

 	By:	/s/ Ron Cohen	

Date:  August 7, 2015	 	Ron Cohen, M.D.
President, Chief Executive Officer and Director
(Principal Executive Officer)	

 	 	
 	By:	/s/ Michael Rogers	

Date:  August 7, 2015	 	Michael Rogers
Chief Financial Officer
(Principal Financial and Accounting Officer)	

 
41

Exhibit Index
 
Exhibit No.	 	Description	
2.1*	 	Amendment No. 1 to Agreement and Plan of Merger, effective as of July 27, 2015, by and among the Registrant, Neuronex, Inc., and Moise A. Khayrallah, solely in his capacity as the Stockholders’ Representative.	
10.1	 	First Amendment to Lease, dated as of May 21, 2015, by and between BMR-Ardsley Park LLC and the Registrant.	
10.2**	 	Employment Agreement, dated as of June 8, 2015, by and between the Registrant and Enrique Carrazana.	
10.3**	 	Letter agreement dated June 15, 2015, by and between the Registrant and Enrique Carrazana.	
10.4**	 	Employment Agreement, dated as of June 8, 2015, by and between the Registrant and Lauren Sabella.	
10.5**	 	Executive Employment Agreement, dated as of December 27, 2010, between Civitas Therapeutics, Inc. (formerly Corregidor Therapeutics, Inc.) and Rick Batycky.	
10.6**	 	First Amendment to Executive Employment Agreement, dated as of June 27, 2013, between Civitas Therapeutics, Inc. and Rick Batycky.	
10.7**	 	Second Amendment to Executive Employment Agreement, dated as of June 30, 2014, between Civitas Therapeutics, Inc. and Rick Batycky.	
10.8**	 	Employment offer letter, dated December 5, 2014, by and between the Registrant and Richard Batycky.	
10.10**	 	Forms of equity award documents for awards under the Acorda Therapeutics, Inc. 2015 Omnibus Incentive Compensation Plan.	
31.1	 	Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.	
31.2	 	Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.	
32.1	 	Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
32.2	 	Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
101.INS***	 	XBRL Instance Document.	
101.SCH***	 	XBRL Taxonomy Extension Schema Document.	
101.CAL***	 	XBRL Taxonomy Extension Calculation Linkbase Document.	
101.DEF***	 	XBRL Taxonomy Extension Definition Linkbase Document.	
101.LAB***	 	XBRL Taxonomy Extension Label Linkbase Document.	
101.PRE***	 	XBRL Taxonomy Extension Presentation Linkbase Document.	
 
*	Portions of this exhibit were redacted pursuant to a confidential treatment request filed with the Secretary of the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.	
 
**	Indicates management contract or compensatory plan or arrangement.	
 
***	In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.”	

 

EXHIBIT 2.1

CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.  SUCH OMITTED PORTIONS, WHICH ARE MARKED WITH BRACKETS [       ] AND AN ASTERISK*, HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF MERGER
 
This Amendment No. 1 (the " Amendment ") to that certain Agreement and Plan of Merger (the " Merger Agreement "), dated as of February 15, 2012, by and among Acorda Therapeutics, Inc., a Delaware corporation ("  Parent "), ATI Development Corp., a Delaware corporation and wholly owned subsidiary of Parent ("  Merger Sub "), Neuronex, Inc., a Delaware corporation (the "  Company "), and Moise A. Khayrallah, as the Stockholders’ Representative is entered into effective as of July 27, 2015 (the “ Amendment Date ”).  Capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings given to such terms in the Merger Agreement.

RECITALS
 
WHEREAS , Parent, the Company and the Stockholders’ Representative desire to amend the Merger Agreement pursuant to Section 8.3(a) of the Merger Agreement as set forth herein, which amendment will be effected by the execution of this Amendment by Parent, the Company and the Stockholders’ Representative.

AGREEMENT
 
NOW, THEREFORE, in consideration of the foregoing and the mutual obligations in this Amendment and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
 
1.   The chart setting forth the Milestone Events and Milestone Payments contained in Section 1.7(b)(1) of the Merger Agreement is hereby amended and restated in its entirety to read as follows:

Milestone Event	Milestone Payment	
Execution of an agreement with a commercial device manufacturer; provided such agreement [***] (an “[***] Manufacturing Agreement ”)	$ [***]	
Approval of the DZNS Product by the European Medicines Agency (or any successor agency thereto).	$ [***]	

 

CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.  SUCH OMITTED PORTIONS, WHICH ARE MARKED WITH BRACKETS [       ] AND AN ASTERISK*, HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
2.   Section 1.7(b)(2) of the Merger Agreement is hereby amended and restated in its entirety to read as follows:
 
(2)           Upon the first occurrence of each of the Sales Milestone Events set forth in the chart below under the heading “ Sales Milestone Event ,” the Sales Milestone Payment set forth opposite such Sales Milestone Event in the chart below shall become due and payable in accordance with and subject to Section 1.7(d) and shall be treated by all of the parties to this Agreement as an additional purchase price paid for the Company Capital Stock, Company Warrants and Company Options for all income Tax purposes (except to the extent required by applicable Law).  Annual Net Sales reflected below in the following table shall be determined with reference to any period of four consecutive calendar quarters.  For the avoidance of doubt, the Sales Milestone Payments shall be due only once upon the achievement of a Sales Milestone Event.  Net Sales in any calendar quarter may count towards at most one Sales Milestone Event (so that Net Sales that count towards one Sales Milestone Event cannot be counted towards another Sales Milestone Event), and, following achievement of a Sales Milestone Event, Net Sales start accruing toward the next Sales Milestone Event no earlier than after the end of the last calendar quarter included in the Annual Net Sales period which achieved such prior Sales Milestone Event.  By way of example and not limitation, if the first time that the Sales Milestone Event of “Annual Net Sales of at least $ [***] ” is achieved with respect to sales made in the four (4) consecutive calendar quarter period ending in the third calendar quarter of 2015, then the Sales Milestone Event of “Annual Net Sales of at least $ [***] ” cannot be deemed achieved until at least the end of the third calendar quarter of 2016 (i.e., the end of the next succeeding four calendar quarter period).
 
Sales Milestone Event	Sales Milestone Payment	
Annual Net Sales of at least $ [***]	$ [***]	
Annual Net Sales of at least $ [***]	$ [***]	
Annual Net Sales of at least $ [***]	$ [***]	
Annual Net Sales of at least $ [***]	$ [***]	

 
2

CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.  SUCH OMITTED PORTIONS, WHICH ARE MARKED WITH BRACKETS [       ] AND AN ASTERISK*, HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
3.   The chart setting forth the Earn-out Rates based on calendar year Net Sales contained in Section 1.7(c)(1) of the Merger Agreement is hereby amended and restated in its entirety to read as follows:

Calendar Year Net Sales	Earn-out Rate	
Portion of calendar year Net Sales from $0 up to and including $ [***]	[***]%	
Portion of calendar year Net Sales above $ [***] up to and including $ [***]	[***]%	
Portion of calendar year Net Sales above $ [***]	[***]%	
 
4.   Additional Contingent Payment .  In consideration for the Stockholders’ Representative agreeing to this Amendment, Parent shall make or cause to be made an additional payment in the amount of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000)  in accordance with the Contingent Allocation Certificate delivered by the Stockholder’s Representative to Parent on the date hereof concurrently with the execution of this Amendment, which amount shall be funded into the Neuronex Payroll account and JP Morgan Paying Agent account as specified in such certificate within five (5) days after the Amendment Date for further distribution to the Former Holders in accordance with payroll account procedures and the JP Morgan paying agency agreement, respectively.  Section 1.7(a)(1) of the Merger Agreement shall be deemed amended to include this additional payment as an additional “Contingent Payment” as defined in such section of the Merger Agreement.
 
5.   Stockholders’ Representative .  The Stockholders’ Representative represents and warrants that (i) he is executing this Amendment as Stockholders’ Representative on behalf of himself and all other Former Holders pursuant to Section 8.1 of the Merger Agreement, the written agreement between him and the other Former Holders contemplated by Section 8.1(e) of the Merger Agreement, as heretofore amended or supplemented, as well as any other written agreement that the Stockholders’ Representative may have with any or all of the other Former Holders (collectively, the “ Former Holder Agreements ”), and (ii) the Stockholders’ Representative has taken any and all actions and receive any and all approvals needed from the Former Holders, pursuant to the Former Holder Agreements or otherwise, which required actions and approvals are described in Exhibit A to this  Amendment, such that the Stockholders’ Representative is fully authorized to execute this Amendment on behalf of the Former Holders and it is valid, binding and enforceable against the Former Holders in accordance with its terms.

3

CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.  SUCH OMITTED PORTIONS, WHICH ARE MARKED WITH BRACKETS [       ] AND AN ASTERISK*, HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
6.   Counterparts .  This Amendment may be executed and delivered in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same agreement.
 
7.   Entire Agreement; Remainder of the Merger Agreement Unchanged .  This Amendment constitutes the entire agreement of the parties and supersede all other agreements and understandings, both written and oral, among or between any of the parties with respect to the subject matter hereof.  Except as otherwise expressly set forth in this Amendment, the Merger Agreement shall remain in full force and effect without any amendment or modification to the terms and provisions thereof.  For avoidance of doubt, this Amendment does not have the effect of curing any breach or inaccuracy of any representation, warranty, covenant or agreement set forth in the Merger Agreement that existed prior to this Amendment, if any.
 
8.   Governing Law .  This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of Delaware applicable to parties residing in the State of Delaware, without regard to applicable principles of conflicts of law.
 
[Signature Page Follows]

4

CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.  SUCH OMITTED PORTIONS, WHICH ARE MARKED WITH BRACKETS [       ] AND AN ASTERISK*, HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.
 	 	ACORDA THERAPEUTICS, INC.
 
By: /s/ Ron Cohen
 
Name: Ron Cohen
 
Its: President and CEO

 	 	NEURONEX, INC.
 
By: /s/ Jane Wasman
 
Name: Jane Wasman
 
Its: President

 	 	 
/s/ Moise A. Khayrallah
Moise A. Khayrallah, solely in his capacity as the Stockholders’ Representative acting on his behalf and behalf of all of the Former Holders	

SIGNATURE PAGE TO AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER

 
CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.  SUCH OMITTED PORTIONS, WHICH ARE MARKED WITH BRACKETS [       ] AND AN ASTERISK*, HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT A
The Stockholders’ Representative obtained written consents to the Amendment from each of the other Former Holders, true and correct copies of which have been provided to Parent.

 

 

EXHIBIT 10.1

FIRST AMENDMENT TO LEASE
 
THIS FIRST   AMENDMENT TO LEASE (this “ First Amendment ”) is entered into as of this 21 st day of May, 2015 (the “ First Amendment Date ”), by and between BMR-ARDSLEY PARK LLC, a Delaware limited liability company (“ Landlord ”), and ACORDA THERAPEUTICS, INC., a Delaware corporation (“ Tenant ”).
 
RECITALS
 
A.   WHEREAS, Landlord and Tenant entered into that certain Lease dated as of June 23, 2011, as supplemented by that certain letter dated May 15, 2014 and amended by that certain letter dated September 11, 2014 (the “ September Letter ” and collectively, and as the same may have been heretofore further amended, amended and restated, supplemented or modified from time to time, the “ Existing Lease ”), whereby Tenant leases certain premises from Landlord at 410, 420 and the Connector Building on Saw Mill River Road, Ardsley, New York and as of the Term Commencement Date for Initial 440 Expansion Premises (as defined in the September Letter), at 440 Saw Mill River Road, Ardsley, New York;
 
B.   WHEREAS, Tenant desires to lease from Landlord and Landlord desires to lease to Tenant certain additional premises, consisting of approximately seven hundred fourteen (714) square feet of Rentable Area, as shown in Exhibit A attached hereto (the “ Existing Bridge Premises ”) located in the existing pedestrian bridge that connects the second (2 nd ) floor of the 440 Building and the second (2 nd ) floor of the 410 Building (the “ Existing Bridge ”), pursuant to the terms and conditions of this First Amendment;
 
C.   WHEREAS, Tenant desires to lease from Landlord and Landlord desires to lease to Tenant certain additional premises, consisting of approximately four hundred fifty-two (452) square feet of Rentable Area, as shown in Exhibit B attached hereto (the “ Corridor Premises ”) located on the first (1 st ) floor of the 440 Building, pursuant to the terms and conditions of this First Amendment;
 
D.   WHEREAS, Tenant desires to construct a new pedestrian bridge (the “ New Bridge ”) connecting the second (2 nd ) floor of the 420 Building and the Initial 440 Expansion Premises, consisting of approximately seven hundred fourteen (714) square feet of Rentable Area (the “ New Bridge Premises ”) and upon Substantial Completion (as defined below) of the New Bridge, Tenant desires to lease from Landlord and Landlord desires to lease to Tenant the New Bridge Premises, pursuant to the terms and conditions of this First Amendment;
 
E.   WHEREAS, Landlord and Tenant desire to nullify Landlord’s obligation to construct that certain canopy at the shared entrance between the 430 Building and the 440 Building;
 
F.   WHEREAS, Landlord and Tenant desire to correct erroneous Rentable Area references in the Existing Lease;

 

 
 
G.   WHEREAS, Tenant desires to pay certain Real Estate Taxes which become due directly to the taxing authority, pursuant to the terms and conditions of this First Amendment;
 
H.   WHEREAS, Tenant desires to modify Exhibit M of the Existing Lease; and
 
I.   WHEREAS, Landlord and Tenant desire to modify and amend the Existing Lease only in the respects and on the conditions hereinafter stated.
 
AGREEMENT
 
NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, agree as follows:
 
1.   Definitions .
 
1.1.   For purposes of this First Amendment, capitalized terms shall have the meanings ascribed to them in the Existing Lease unless otherwise defined herein.  The Existing Lease, as amended by this First Amendment, is referred to collectively herein as the “ Lease .”
 
1.2.   Notwithstanding anything to the contrary in the Lease, the “ Existing Bridge Commencement Date ,” the “ Corridor Commencement Date ” and the Term Commencement Date for the Initial 440 Expansion Premises shall each be January 9, 2015.
 
1.3.   Notwithstanding anything to the contrary in the Lease, the “ Corridor Basic Annual Rent Commencement Date ” and the Expansion Rent Commencement Date for the Initial 440 Expansion Premises shall each be April 12, 2015, subject to deferral (if any) as set forth in the September Letter.
 
2.   Additional Premises .
 
2.1.   Existing Bridge Premises .
 
(a)   Effective as of the Existing Bridge Commencement Date, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Existing Bridge Premises for use by Tenant in accordance with the Permitted Use and no other uses.  From and after the Existing Bridge Commencement Date, the term “Premises,” as used in the Lease, shall include the Existing Bridge Premises.
 
(b)   The Term with respect to the Existing Bridge Premises shall commence as of the Existing Bridge Commencement Date and end on the Term Expiration Date, subject to earlier termination of the Lease as provided therein.
 
(c)   Tenant first occupied the Existing Bridge Premises for the Permitted Use on the Existing Bridge Commencement Date.

 
2

 
(d)   Landlord has completed the work described in Exhibit C attached hereto (the “ Existing Bridge Landlord Work ”).
 
(e)   As of the Existing Bridge Commencement Date, all references in the Lease to the 410 Building shall mean the 410 Building together with the Existing Bridge.
 
2.2.   Corridor Premises .
 
(a)   Effective as of the Corridor Commencement Date, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Corridor Premises for use by Tenant in accordance with the Permitted Use and no other uses.  From and after the Corridor Commencement Date, the term “Premises,” as used in the Lease, shall include the Corridor Premises.
 
(b)   The Term with respect to the Corridor Premises shall commence as of the Corridor Commencement Date and end on the Term Expiration Date, subject to earlier termination of the Lease as provided therein.
 
(c)   Tenant first occupied the Corridor Premises for the Permitted Use on the Corridor Commencement Date.
 
(d)   Landlord has completed the work (the “ Corridor Landlord Work ”) required of Landlord described in Exhibit D attached hereto .
 
2.3.   New Bridge Premises .
 
(a)   Effective on the New Bridge Commencement Date (as defined below), Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the New Bridge Premises for use by Tenant in accordance with the Permitted Use and no other uses.  From and after the New Bridge Commencement Date, the term “Premises,” as used in the Lease, shall include the New Bridge Premises.
 
(b)   The Term with respect to the New Bridge Premises shall commence on the day (the “ New Bridge Commencement Date ”) that the work (the “ New Bridge Improvements ”) described in the New Bridge Work Letter attached hereto as Exhibit F is Substantially Complete (as defined in Section 4.1(b) ) and end on the Term Expiration Date, subject to earlier termination of the Lease as provided in the Lease.   Tenant shall execute and deliver to Landlord written acknowledgment of the actual New Bridge Commencement Date within ten (10) days after Tenant takes occupancy of the New Bridge Premises for the Permitted Use, in the form attached as Exhibit E hereto.  Failure to execute and deliver such acknowledgment, however, shall not affect the New Bridge Commencement Date or Landlord’s or Tenant’s liability hereunder.  Failure by Tenant to obtain validation by any medical review board or other similar governmental licensing agency, if applicable, of the New Bridge Premises required for the Permitted Use by Tenant shall not serve to extend the New Bridge Commencement Date.

 
3

 
(c)   As of the New Bridge Commencement Date, all references in the Lease to the 420 Building shall mean the 420 Building together with the New Bridge.
 
3.   Rent .
 
3.1.   Existing Bridge Premises .  Commencing as of the Existing Bridge Commencement Date, and continuing throughout the Term, Tenant shall pay to Landlord Operating Expenses and all other Additional Rent with respect to the Existing Bridge Premises.  Tenant shall have no obligation to pay Basic Annual Rent or a Property Management Fee for the Existing Bridge Premises.
 
3.2.   Corridor Premises . Commencing as of the Corridor Basic Annual Rent Commencement Date, and continuing throughout the Term, Tenant shall pay to Landlord Basic Annual Rent and the Property Management Fee with respect to the Corridor Premises, and the term “Basic Annual Rent” shall include Basic Annual Rent for the Corridor Premises.  Commencing on the Corridor Commencement Date, and continuing throughout the Term, Tenant shall pay to Landlord Operating Expenses and all other Additional Rent (other than the Property Management Fee, which payment obligation commences on the Corridor Basic Annual Rent Commencement Date) with respect to the Corridor Premises.  The initial Basic Annual Rent for the Corridor Premises shall be Nineteen and 50/100 Dollars ($19.50) per square foot of Rentable Area of the Corridor Premises.   The Basic Annual Rent for the Corridor Premises shall be subject to an annual upward adjustment of two and one-half percent (2.5%) of the then-current Basic Annual Rent for the Corridor Premises.  The first such adjustment shall become effective commencing on the first (1 st ) annual anniversary of the Expansion Rent Commencement Date for the Initial 440 Expansion Premises, and subsequent adjustments shall become effective on every successive annual anniversary for so long as this Lease continues in effect.
 
3.3.   New Bridge Premises .  Commencing on the New Bridge Commencement Date, and continuing throughout the Term, Tenant shall pay to Landlord Basic Annual Rent, Operating Expenses, the Property Management Fee and all other Additional Rent with respect to the New Bridge Premises, and the term “Basic Annual Rent” shall include Basic Annual Rent for the New Bridge Premises.  The initial Basic Annual Rent for the New Bridge Premises shall be Zero Dollars ($0) per rentable square foot annually, subject to increase pursuant to Section 4.1 .
 
3.4.   Additional Rent .
 
(a)   Section 6.4(a) of the Lease is hereby deleted in its entirety and replaced with the following: “(a) Tenant’s aggregate pro rata share as determined in accordance with Section 8.1 (“ Tenant’s Pro Rata Share ”), of Operating Expenses as provided in Article 8 for each of the Initial Premises, any Expansion Premises, the Existing Bridge Premises, the Corridor Premises and the New Bridge Premises, (in each case, without duplication).”

4

 
(b)   Effective upon the Term Commencement Date for the Initial 440 Expansion Premises, Section 6.4(b) of the Lease shall no longer apply and shall be of no further force or effect.
 
(c)   Effective upon the Term Commencement Date for the Initial 440 Expansion Premises, the last two (2) sentences of Section 8.1(a) are hereby deleted in their entirety and replaced with the following:
 
“Subject to Real Estate Taxes being abated, deferred, subsidized, fixed, reduced or forgiven as stated above, in no event shall Tenant’s obligation for its allowable share of the same exceed the lower of (i) Tenant’s Pro Rata Share of the actual Real Estate Taxes and (ii) the annual sum (based on a calendar year, provided that, for the last calendar year (or portion thereof) of the Term, in the event the Term ends on a day other than the last day of such calendar year, then such annual sum shall be prorated for such period on the basis of the number of days of the Term in such calendar year) of (A) Five Hundred Thousand Dollars ($500,000) (the “ Initial Premises Real Estate Tax Cap ”) plus (B) Tenant’s Pro Rata Share (with respect to any Premises other than the Initial Premises) of the actual Real Estate Taxes (the “ Real Estate Tax Cap ”); provided , however, that if Tenant enters into a PILOT Agreement pursuant to Article 53 , then Tenant shall be responsible for all payments in lieu of Real Estate Taxes assessed to it pursuant to such PILOT Agreement without regard to the limitations set forth in the immediately preceding sentence.  The Initial Premises Real Estate Tax Cap shall be increased on each anniversary of the Rent Commencement Date to equal the product of (1) the Initial Premises Real Estate Tax Cap immediately before such adjustment times (2) the greater of (aa) the CPI (as defined in Section 18.1 ) as of the date that is two (2) months before the date of such adjustment divided by the CPI as of the date that is fourteen (14) months before the date of such adjustment and (bb) one (1); and”
 
(d)   Effective upon the Term Commencement Date for the Initial 440 Expansion Premises, the first (1 st ) sentence of Section 8.1(b) is hereby deleted in its entirety and replaced with the following:
 
“All other actual costs without duplication (the “ CAM Pool Charges ”) of any kind paid or incurred by Landlord in connection with the operation or maintenance of the Project, including the Common Areas, properly allocable and pro-rated, if applicable, for the Premises, all as depicted in detail in Exhibit M .”

5

 
(e)   Effective upon the Term Commencement Date for the Initial 440 Expansion Premises, Section 8.2 of the Existing Lease is hereby deleted in its entirety and replaced with the following:
 
“8.2           Subject to Section 8.4 , Tenant shall pay to Landlord on the first day of each calendar month of the Term, as Additional Rent, (a) the Property Management Fee (as defined below) and (b) Landlord’s reasonable good faith estimate of Tenant’s Pro Rata Share of Operating Expenses (except Real Estate Taxes, which shall be paid as set forth below), as applicable, for such month.  Subject to Section 8.4 , Tenant shall pay to Landlord, as Additional Rent, Real Estate Taxes in accordance with the following process: (m) Tenant shall, no later than forty-five (45) days prior to the date that Real Estate Taxes are due to the applicable taxing authority, request in writing from Landlord Landlord’s good faith estimate (the “ Tax Estimate ”) of Tenant’s Pro Rata Share of Real Estate Taxes (subject (except in the case of Real Estate Taxes payable pursuant to a PILOT Agreement pursuant to Section 53 of this Lease, in which case Tenant shall be responsible for all payments in lieu of Real Estate Taxes assessed to it pursuant to such PILOT Agreement, without regard to the limitations set forth in this Section or Section 8.1(a) of this Lease) to the Real Estate Tax Cap), (n) Landlord shall, within fifteen (15) days after receipt of such request, provide Tenant with the Tax Estimate, (o) Tenant shall, within fifteen (15) days after receipt of the Tax Estimate, deliver to Landlord a check payable to the appropriate taxing authority in the amount of the Tax Estimate and (p) Landlord shall, no later than the date on which the Real Estate Taxes are due, pay all appropriate Real Estate Taxes to the applicable taxing authority, including by delivering Tenant’s check to the applicable taxing authority.  If Tenant does not timely perform its obligations pursuant to this Section, Landlord may (but shall not be required to) pay to the taxing authority any portion of the Tax Estimate not received from Tenant (but in no event shall Landlord make such payment prior to the date that is seven (7) days before such Real Estate Taxes are due; provided that, prior to such date, Tenant may cure any failure to timely deliver payment of the Tax Estimate to Landlord by delivering such payment to Landlord), in which case Tenant shall, in addition to all other remedies available to Landlord pursuant to this Lease, be liable to Landlord for and immediately pay to Landlord (as Additional Rent) the Tax Estimate, plus any additional taxes, fees or interest imposed by the taxing authority on the portion of Real Estate Taxes that equals the Tax Estimate, which taxes, fees or interest are due to the late payment of Tenant’s Tax Estimate, and Landlord shall not be liable to Tenant

6

in the event Tenant is unable to receive any credit or other subsidy in connection with such Real Estate Taxes.  For the avoidance of doubt, (y) notwithstanding that Real Estate Taxes are paid in a manner different from all other Operating Expenses, the provisions of this Lease relating to Operating Expenses, including, without limitation, Sections 8.2(ii) and 8.3 , shall apply to Real Estate Taxes as if Real Estate Taxes had been paid through Landlord, unless explicitly stated otherwise herein and (z) Tenant’s payment of Real Estate Taxes in accordance with this Section shall be included in any calculation in determining whether Tenant has satisfied its obligations under the Lease to pay its Pro Rata Share of Operating Expenses relating to Real Estate Taxes.

(i)   The “ Property Management Fee ” shall equal 1.80% of the Basic Annual Rent (as the same may be increased pursuant to Section 6.1 ).

(ii)   On or before the date that is ninety (90) days after the conclusion of each calendar year (or such longer period as may be reasonably required by Landlord), Landlord shall furnish to Tenant a statement showing in reasonable detail the actual Operating Expenses and Tenant’s Pro Rata Share of Operating Expenses for the previous calendar year. Any additional sum due from Tenant to Landlord shall be due and payable within thirty (30) days of receipt of Landlord’s statement of Tenant’s Pro Rata Share of Operating Expenses.  If Tenant does not receive a statement showing in reasonable detail the actual Operating Expenses and Tenant’s Pro Rata Share of Operating Expenses for a given calendar year within two (2) years after the end of such calendar year, Landlord shall be deemed to have waived payment of such Operating Expenses for such calendar year, provided, however , such period does not apply to supplemental tax bills, which Landlord shall not be deemed to waive payment of, unless after such two (2) year period Landlord fails to submit such supplemental tax bill to Tenant within thirty (30) days of Landlord’s receipt thereof.  If the amounts paid by Tenant pursuant to this Section 8.2 exceed Tenant’s Pro Rata Share of Operating Expenses for the previous calendar year, then Landlord shall credit the difference against the Rent next due and owing from Tenant; provided that, if the Lease term has expired, Landlord shall accompany said statement with payment for the amount of such difference.

7

Any amount due under this Section 8.2 with respect to (A) the Property Management Fee or Operating Expenses (other than Real Estate Taxes) for any period that is less than a full month shall be pro-rated (based on a thirty (30)-day month) for such fractional month and (B) Real Estate Taxes for any period that is less than a full tax period shall be pro-rated for such fractional tax period.”
 
(f)    Notwithstanding Section 8.1(a)(ii)(B) of the Lease (as set forth in Section 3.4(c) of this First Amendment), for the calendar year 2015 only, and only for purposes of calculating the Real Estate Tax Cap, the Real Estate Tax Cap shall be calculated in part as if the Initial 440 Expansion Premises contained twelve thousand seven hundred two and one-half (12,702.5) square feet of Rentable Area.  Tenant shall remain responsible for all other Real Estate Taxes as set forth in Section 8.1(a) of the Lease (as modified by Section 3.4(c) of this First Amendment).
 
3.5.   Cam Pools and Service Allocation Matrix .  Effective upon the Term Commencement Date for the Initial 440 Expansion Premises, Exhibit M of the Existing Lease is hereby deleted in its entirety and replaced with Exhibit M attached hereto.
 
4.   Tenant Improvements .
 
4.1.   New Bridge Improvements .
 
(a)   Tenant shall cause the New Bridge Improvements to be constructed pursuant to the New Bridge Work Letter at Tenant’s sole cost and expense; provided that, subject to the terms and conditions of this First Amendment, Landlord shall reimburse Tenant for certain costs of the New Bridge Improvements in an amount not to exceed (i) One Hundred Fifty Thousand Dollars ($150,000) (the “ Base New Bridge Allowance ”) plus (ii) One Million Dollars ($1,000,000) (the “ Additional New Bridge Allowance ”).  The Base New Bridge Allowance, together with the Additional New Bridge Allowance shall be referred to herein as the “ New Bridge Allowance .”  The New Bridge Allowance may be applied to the costs of (m) construction, (n) commissioning of mechanical, electrical and plumbing systems by a licensed commissioning agent hired by Tenant, (o) space planning, architect, engineering and other related services performed by third parties unaffiliated with Tenant, (p) building permits and other taxes, fees, charges and levies by Governmental Authorities for permits or for inspections of the New Bridge Improvements, (q) costs and expenses for labor, material, equipment and fixtures, (r) Tenant’s third-party project manager (provided such costs in (r) shall not exceed Forty Thousand Dollars ($40,000)) and (s) insurance in connection with the construction of the New Bridge Improvements.  In no event shall the New Bridge Allowance be used for (w) the cost of construction or other work, in either case that is not authorized by the Approved Plans (as defined in the New Bridge Work Letter) or otherwise approved in writing by Landlord, (x) payments to Tenant or any affiliates of Tenant, (y) the purchase of any furniture, personal property or other non-building system equipment or (z) costs that are recoverable by Tenant from a third party (e.g., insurers, warrantors, or tortfeasors).  Landlord shall (at Tenant’s sole cost and expense) reasonably cooperate with Tenant in good faith to permit Tenant to perform the New

8

 
Bridge Improvements from and after the First Amendment Date, including providing Tenant with access to portions of the Buildings outside of the Premises as reasonably necessary for the completion of the New Bridge Improvements.
 
(b)   Landlord shall not be obligated to disburse or expend any portion of the (i) New Bridge Allowance until the New Bridge Improvements are Substantially Complete (as defined below in this Section) or (ii) Additional New Bridge Allowance until Landlord shall have received from Tenant a letter in the form attached as Exhibit G hereto executed by an authorized officer of Tenant.  In no event shall any unused New Bridge Allowance entitle Tenant to a credit against Rent payable under the Lease.  With respect to the New Bridge Improvements, the term “ Substantial Completion ” and “ Substantially Complete ” means that Tenant has (A) completed all of the New Bridge Improvements identified in the Approved Plans (as defined in the New Bridge Work Letter) in substantial accordance with such Approved Plans, as evidenced by a Certificate of Substantial Completion in the form of the American Institute of Architects document G704, executed by the project architect and the general contractor, subject in each case only to Tenant’s failure to complete (i) minor and insubstantial details of construction (the “ New Bridge Punchlist Items ”) and (ii) items that cannot or should not be completed during the time of year that Tenant performs the appropriate portion of the New Bridge Improvements (for example, the commissioning and testing of air conditioning and cooling systems during the winter months, the commissioning and testing of heating systems during the summer months, or the installation of landscaping during the winter months) the “ New Bridge Seasonal Items ”); (B) received a temporary or permanent certificate of occupancy for the New Bridge Premises from the applicable Governmental Authority(ies); (C) furnished to Landlord a commissioning report (except with respect to New Bridge Seasonal Items) prepared by a licensed commissioning agent hired by Tenant and approved by Landlord for all new or affected mechanical, electrical and plumbing systems.  For purposes of clarity, any disbursement of the New Bridge Allowance is subject to the requirements of the New Bridge Work Letter.  Disagreements regarding Substantial Completion relating to the New Bridge Improvements shall be resolved by the Neutral Architect in accordance with Section 4.2(h) of the Lease.
 
(c)   Notwithstanding anything to the contrary, Landlord shall retain ten percent (10%) of the New Bridge Allowance (the “ New Bridge Retainage ”) until such time as the New Bridge Improvements are Finally Complete (as defined in the New Bridge Work Letter).  Upon Final Completion (as defined in the New Bridge Work Letter) of the New Bridge Improvements in accordance with the provisions of the New Bridge Work Letter, Landlord shall release the New Bridge Retainage to Tenant in accordance with Section 6.3 of the New Bridge Work Letter.
 
(d)   Basic Annual Rent for the New Bridge Premises shall be increased by an amount equal to the product of (i) seven and one-half percent (7.5%) and (ii) the amount of the Additional New Bridge Allowance requested by Tenant and actually disbursed by Landlord to Tenant; provided , however, that the figure in clause (i) above shall be increased by 0.014% per day for each day of delay beyond the initial Additional New Bridge Allowance Deadline (i.e., January 31, 2016) as a result of Force Majeure or Unknown Condition Delay (as defined below).  The amount by which Basic Annual Rent for the New Bridge Premises shall be increased (if at all) shall be determined as of the date that Landlord disburses the portion of the Additional New

9

 
Bridge Allowance applicable to Substantial Completion (as defined in Section 4.1(b) ) of the New Bridge Improvements ( provided that, any such increase in Basic Annual Rent shall be effective as of the New Bridge Commencement Date) and, if such determination does not reflect use by Tenant of all of the Additional New Bridge Allowance, shall be determined again as of the Additional New Bridge Allowance Deadline (as defined below), with Tenant paying (on the next succeeding day that Basic Annual Rent is due under the Lease (the “ Additional New Bridge Allowance True-Up Date ”)) any underpayment of the further adjusted Basic Annual Rent for the New Bridge Premises for the period beginning on the New Bridge Commencement Date and ending on the Additional New Bridge Allowance True-Up Date.  If Basic Annual Rent for the New Bridge Premises has been increased pursuant to this Section, then Basic Annual Rent for the New Bridge Premises shall be subject to an annual upward adjustment of two and one-half percent (2.5%) of the then-current Basic Annual Rent for the New Bridge Premises.  The first such adjustment shall become effective commencing on that certain annual anniversary of the Rent Commencement Date first occurring after the New Bridge Commencement Date, and subsequent adjustments shall become effective on every successive annual anniversary for so long as this Lease continues in effect.
 
(e)   Notwithstanding anything to the contrary in this First Amendment, if the (i) New Bridge Improvements are not Substantially Completed (as defined in Section 4.1(b) ) by January 31, 2016 (as such date may be extended on a day-for-day basis as the result of any Force Majeure delay and any Unknown Condition Delay (in each case, subject to the Extension Cap, as defined below) and any Landlord Delay, the “ Additional New Bridge Allowance Deadline ”), Landlord’s obligation to fund the Additional New Bridge Allowance shall automatically expire, (ii) New Bridge Improvements are not Substantially Completed (as defined in Section 4.1(b) ) by July 31, 2016 (as such date may be extended on a day-for-day basis as the result of any Force Majeure delay and any Unknown Condition Delay (in each case, subject to the Extension Cap, as defined below) and any Landlord Delay, the “ New Bridge Deadline ”), Landlord’s obligation to fund the Base New Bridge Allowance shall automatically expire and (iii) New Bridge Improvements are not Substantially Completed (as defined in Section 4.1(b) ) by the New Bridge Deadline, then Landlord shall have the option (but not the obligation) to (A) require Tenant (at Tenant’s sole cost and expense) to remove any New Bridge Improvements and restore the 420 Building and the 440 Building to their respective conditions that existed prior to commencement of the New Bridge Improvements, (B) remove any New Bridge Improvements and restore the 420 Building and the 440 Building to their respective conditions that existed prior to commencement of the New Bridge Improvements or (C) take over construction of the New Bridge or any portion thereof.  In the event Landlord chooses the option described in clause (B) or (C) above, Tenant shall pay Landlord (as Additional Rent) within ten (10) days after demand therefor, the sum of (1) any and all costs and expenses actually and reasonably incurred by Landlord to perform such work plus (2) the product of (aa) the amount described in Subsection 4.1(e)(1) and (bb) ten percent (10%).   Tenant acknowledges and agrees that such work may be noisy and disruptive and may prevent Tenant from accessing and/or using some or all of the Premises within the 420 Building and the 440 Building; provided , however, that Landlord shall diligently endeavor to perform such work in such a manner so as to cause as little noise, disruption or inaccessibility as is reasonably possible.  In furtherance of the foregoing, in no event shall performance of any such work (X) cause Rent to abate under the Lease, (Y) give rise

10

 
to any claim by Tenant for damages or (Z) constitute a forcible or unlawful entry, a detainer or an eviction of Tenant.  Further, if Landlord chooses the option described in clause (C) above, then (xx) Tenant shall promptly deliver to Landlord any and all plans, specifications and construction documents prepared by or for Tenant, (yy) Tenant shall assign and convey to Landlord, without further consideration, all of Tenant’s rights and interest in any and all such plans and specifications to complete the New Bridge Improvements and (zz) the “New Bridge Commencement Date” shall be the day that Landlord tenders possession of the New Bridge Premises to Tenant.
 
(f)   For purposes of this Section 4.1 only, “ Landlord Delay ” means any delay in Tenant’s prosecution of the New Bridge Improvements caused by any of the following, to the extent that such circumstance actually delays Substantial Completion of the New Bridge Improvements beyond the Additional New Bridge Allowance Deadline or New Bridge Deadline, as applicable (and as determined (in case of a dispute between the parties) by the Neutral Architect, whose determination shall be final and binding upon the parties): (i) Landlord’s requests for changes in New Bridge Improvements contrary to Landlord’s rights to do so under the New Bridge Work Letter; and (ii) Landlord’s delay in responding to any inquiries or requests from Tenant for approvals from Landlord relating to the New Bridge Improvements beyond the time periods set forth under this First Amendment and in the New Bridge Work Letter.  For purposes of this Section 4.1 only, an “ Unknown Condition Delay ” shall mean a delay in Tenant’s prosecution of the New Bridge Improvements caused by conditions at the Project site that are unknown physical conditions of an unusual nature that differ materially from those ordinarily found to exist and generally recognized as inherent in construction activities of the character provided for pursuant to this First Amendment (“ Unknown Conditions ”), to the extent that such Unknown Conditions actually delay Substantial Completion of the New Bridge Improvements beyond the Additional New Bridge Allowance Deadline or New Bridge Deadline, as applicable (and as determined (in case of a dispute between the parties) by the Neutral Architect, whose determination shall be final and binding upon the parties); provided , however, that in no event shall the presence of mold or asbestos discovered at the Project in connection with the New Bridge Improvements be deemed to be an Unknown Condition that gives rise to an Unknown Condition Delay; provided , further, that notwithstanding anything in the Lease to the contrary, any removal and abatement of asbestos discovered or uncovered as a result of the New Bridge Improvements shall be Tenant’s sole responsibility as set forth in Section 6 .  In the event any mold is discovered as a result of the New Bridge Improvements, unless such mold was introduced by Tenant, Landlord, at its cost and expense, shall be responsible for such removal and abatement.  For purposes of this Section 4.1 , in no event will the Additional New Bridge Allowance Deadline or the New Bridge Deadline be extended by more than eight (8) months in the aggregate as a result of any Force Majeure and any Unknown Condition Delay (the “ Extension Cap ”).
 
(g)   Tenant shall be responsible to pay Landlord, as Additional Rent, the cost of Tenant’s consumption of power, water, and other utility services used in connection with Tenant’s performance of the New Bridge Improvements.  Landlord shall make available without charge to Tenant upon Tenant’s reasonable request a reasonable amount of “parking,” “staging” and “lay-down” areas in reasonable proximity to the New Bridge Improvements to facilitate the

11

 
New Bridge Improvements.  Tenant shall: (i) maintain such area in a neat, organized, and safe manner; and (ii) comply with Landlord’s reasonable requirements regarding security, safety, additional insurance, access controls, appearance, and scheduling of deliveries.
 
(h)   Tenant shall be solely responsible for the cost to repair any and all damage caused to the Buildings (including such Buildings’ systems) by Tenant, Tenant’s contractors or subcontractors, or any of their respective employees, agents or representatives arising out of the prosecution of the New Bridge Improvements.
 
(i)   In no event shall Tenant be obligated to use any portion of the New Bridge Allowance; provided , however, unless Landlord elects otherwise in accordance with Section 4.1(e), Tenant shall cause the New Bridge Improvements to be constructed in accordance with this Amendment and the New Bridge Work Letter, and upon Final Completion thereof, shall provide to Landlord the documentation and comply with the obligations described in the definition of “Final Completion” set forth in Section 3 of the New Bridge Work Letter, regardless of whether Tenant uses any portion of the New Bridge Allowance and in the same fashion as if Tenant needed to satisfy such conditions and provide such documentation in order to receive the New Bridge Allowance from Landlord.
 
4.2.   Corridor Improvements .    Landlord shall make available to Tenant a tenant improvement allowance of up to Twenty-Five Thousand Dollars ($25,000) (the “ Corridor Allowance ”) in order to fund improvements (the “ Corridor Improvements ”) to the Corridor Premises consistent with the Permitted Use.  The Corridor Improvements shall include demising the Corridor Premises such that the Corridor Premises functions as a fire rated egress pathway from the south stairwell on the first (1 st ) floor of the 440 Building to the southwest exterior door of the 440 Building.   The Corridor Improvements shall be performed by Tenant and shall be subject to the applicable terms of the Lease and the Work Letter as if the Corridor Improvements were (a) a Phase and (b) Expansion Premises Tenant Improvements.   The Corridor Allowance shall be in addition to the Expansion TI Allowance, but shall be deemed to be a part of the Expansion TI Allowance and shall be subject to the terms and conditions of the Lease and the Work Letter applicable to the Expansion TI Allowance (including the Disbursement Conditions); provided , however, that (y) Tenant’s use of the Corridor Allowance shall not increase Basic Annual Rent as provided in Section 6.1(a) of the Lease and (z) the Corridor Allowance may be applied by Tenant only toward permitted costs and expenses (as set forth in Section 5.5 of the Lease, except that Section 5.5(g) shall not be applicable to the Corridor Allowance) relating to the Corridor Improvements.  For purposes of clarity, but subject to Section 4.4 , Tenant shall be solely responsible for the cost of the Corridor Improvements to the extent such cost is in excess of the Corridor Allowance.  Landlord shall reasonably cooperate with Tenant in good faith to permit Tenant to perform the Corridor Improvements, including providing Tenant with access to portions of the Buildings outside of the Premises as necessary for the completion of the Corridor Improvements.
 
4.3.   Existing Bridge Improvements .  In connection with the Expansion Premises Tenant Improvements for the Initial 440 Expansion Premises and the Corridor Improvements, Tenant may construct improvements (the “ Existing Bridge Improvements ”) to the Existing

12

 
Bridge Premises consistent with the Permitted Use.  The Existing Bridge Improvements shall be performed by Tenant and shall be subject to the applicable terms of the Lease and the Work Letter as if the Existing Bridge Improvements were Expansion Premises Tenant Improvements.  Subject to Section 4.4 , Tenant shall be solely responsible for the entire cost of the Existing Bridge Improvements.
 
4.4.   Use of Allowances .  Notwithstanding anything to the contrary in the Lease, the Expansion TI Allowance for the Initial 440 Expansion Premises and the Corridor Allowance may be used by Tenant for the Expansion Premises Tenant Improvements for the Initial 440 Expansion Premises, the Corridor Improvements or the Existing Bridge Improvements, or any combination thereof.
 
5.   Curtainwall Punchlist .  The remaining Punchlist Items in connection with the work set forth in Section 1(f) of Exhibit N of the September Letter is attached hereto as Exhibit I (the “ Curtainwall Punchlist ”).  Landlord shall diligently endeavor to cause its contractor to complete the Curtainwall Punchlist by July 15, 2015, subject to extension as a result of Force Majeure and Tenant Delay.  Landlord shall use reasonable efforts to perform or cause to be performed the Curtainwall Punchlist in a manner so as to cause as little interference with Tenant as is reasonably possible.
 
6.   Condition of Premises .  Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the condition of the Existing Bridge Premises, the Corridor Premises or the New Bridge Premises (including the condition of the Buildings or the Project as it relates to the constructability of or suitability for the New Bridge Improvements) or with respect to the suitability of the Existing Bridge Premises, the Corridor Premises or the New Bridge Premises for the conduct of Tenant’s business .  Tenant acknowledges that (a)(i) it is fully familiar with the condition of the Existing Bridge Premises and the Corridor Premises, (ii) it is generally familiar with the condition of the Buildings and the Project as it relates to the constructability of or suitability for the New Bridge Improvements and (iii) as of the New Bridge Commencement Date, will be fully familiar with the condition of the New Bridge Premises and, notwithstanding anything in the Lease to the contrary, agrees (A) that it took the Existing Bridge Premises in its condition “as is” as of the Existing Bridge Commencement Date, (B) to take the New Bridge Premises in its condition “as is” as of the first day of the New Bridge Commencement Date and (C) that it took the Corridor Premises in its condition “as is” as of the Corridor Commencement Date, (b) Landlord shall have no obligation to alter, repair or otherwise prepare any portion of the Existing Bridge Premises, the Corridor Premises or the New Bridge Premises for Tenant’s occupancy or to pay for any improvements to the Existing Bridge Premises, the Corridor Premises or the New Bridge Premises , except as may be expressly provided in this First Amendment or set forth in the Lease and (c) Tenant accepts the condition of the Buildings and the Project (as it relates to the constructability of or suitability for the New Bridge Improvements) in their condition “as is” as of the First Amendment Date.   Tenant’s taking of possession of the Existing Bridge Premises, the Corridor Premises or the New Bridge Premises, as applicable, shall, except as otherwise agreed to in writing by Landlord and Tenant, conclusively establish that the Existing Bridge Premises, the Corridor Premises or the New Bridge Premises, as applicable, were at such time in good, sanitary and satisfactory

13

 
condition and repair.  Tenant, at its sole cost and expense, shall remediate or remove any asbestos that is discovered or uncovered as a result of Tenant’s construction of the New Bridge Improvements in accordance with, and to the extent required by, Applicable Laws .  Tenant assumes responsibility for the condition of the Buildings and the Project as each relates to the constructability of and suitability for the New Bridge Improvements (and, for the sake of clarity, Landlord has no obligation to alter, repair or otherwise prepare any portion of the Building or the Project for the sole purpose of making it suitable for the New Bridge Improvements); provided , however, in no event shall Tenant be responsible (except through Operating Expenses if permitted under the Lease) for any condition of the Building or the Project that would have existed regardless of the construction of the New Bridge Improvements and for which Tenant is not otherwise responsible under any other provision of the Lease; provided , further, that Tenant shall be responsible to remedy any non-compliance with Applicable Laws, to the extent such non-compliance would not have existed but for the construction of the New Bridge Improvements.
 
7.   Early Access to Existing Bridge Premises and Corridor Premises .  Tenant acknowledges that it has had access to the Existing Bridge Premises and the Corridor Premises from and after October 15, 2014 in order to begin construction of certain improvements within the Existing Bridge Premises and the Corridor Improvements.  For purposes of clarity, in addition to any other Tenant Delay, the term “Tenant Delay,” as used in the Lease shall include any delay in Landlord’s prosecution of Landlord’s Work for the Initial 440 Expansion Premises or the Existing Bridge Landlord Work caused by Tenant’s exercise of its early access rights set forth in this paragraph, to the extent that such circumstance actually delays Substantial Completion of Landlord’s Work for the Initial 440 Expansion Premises or the Existing Bridge Landlord Work, as applicable, beyond the date when Substantial Completion would have otherwise occurred (as determined by the Neutral Architect if Landlord and Tenant disagree and whose determination shall be final and binding upon the parties).   Tenant shall furnish to Landlord evidence satisfactory to Landlord that insurance coverages required of Tenant under the provisions of Article 22 of the Lease are in effect with respect to the Existing Bridge Premises and the Corridor Premises, and such entry shall be subject to all the terms and conditions of the Lease, other than the payment of Basic Annual Rent and Tenant’s Pro Rata Share of Operating Expenses (in both cases, with respect to the Existing Bridge Premises and the Corridor Premises only).
 
8.   Canopy .  Notwithstanding anything in the Lease to the contrary, Landlord shall not be required to construct the Canopy and any and all prior obligations to construct the Canopy (whether set forth in the September Letter, Exhibit N to the Lease or otherwise) shall be null and void and of no further force or effect.
 
9.   Rentable Area and Pro Rata Shares .
 
9.1.   Notwithstanding anything in the Existing Lease to the contrary, the Rentable Area (expressed in rentable square feet) and Tenant’s Pro Rata Shares shall be as set forth below:

14

 
 
Definition or Provision
 	 
Means the Following

Rentable Area of Buildings (prior to the Term Commencement Date for the Initial 440 Expansion Premises/Existing Bridge Commencement Date/Corridor Commencement Date)
 	 
71,084 for 410 Building
58,145 for 420 Building
8,939 for Connector Building
72,517 for the 430 Building
47,355 for 440 Building

Rentable Area of Buildings (as of the Term Commencement Date for the Initial 440 Expansion Premises/Existing Bridge Commencement Date/Corridor Commencement Date)
 	 
71,798 for 410 Building
58,145 for 420 Building
8,939 for Connector Building
72,517 for the 430 Building
47,355 for 440 Building

Rentable Area of Buildings (as of the New Bridge Commencement Date)
 	 
71,798 for 410 Building
58,859 for 420 Building*
8,939 for Connector Building
72,517 for the 430 Building
47,355 for 440 Building

Rentable Area of Existing Project (prior to Existing Bridge Commencement Date)
 	 
258,040

Rentable Area of Existing Project (as of Existing Bridge Commencement Date)
 	 
258,754

Rentable Area of Existing Project (as of New Bridge Commencement Date)
 	 
259,468*

Tenant’s Pro Rata Share of Buildings (prior to the Term Commencement Date for the Initial 440 Expansion Premises/Existing Bridge Commencement Date/Corridor Commencement Date)
 	 
100% of 410 Building
100% of 420 Building
100% of Connector Building
0% of 430 Building
0% of 440 Building

Tenant’s Pro Rata Share of Buildings (as of the Term Commencement Date for the Initial 440 Expansion Premises/Existing Bridge Commencement Date/Corridor Commencement Date)
 	 
100% of 410 Building
100% of 420 Building
100% of Connector Building
0% of 430 Building
54.60% of 440 Building**

 
15

 
Definition or Provision
 	 
Means the Following

Tenant’s Pro Rata Share of Buildings (as of the New Bridge Commencement Date)
 	 
100% of 410 Building
100% of 420 Building
100% of Connector Building
0% of 430 Building
54.60% of 440 Building**

Tenant’s Pro Rata Share of the Project (prior to the Term Commencement Date for the Initial 440 Expansion Premises/Existing Bridge Commencement Date/Corridor Commencement Date)
 	 
53.55%

Tenant’s Pro Rata Share of the Project (as of the Term Commencement Date for the Initial 440 Expansion Premises/Existing Bridge Commencement Date/Corridor Commencement Date)
 	 
63.67%

Tenant’s Pro Rata Share of the Project (as of the New Bridge Commencement Date)
 	 
63.77%*

* Subject to adjustment based upon the Rentable Area of the New Bridge Premises as of the New Bridge Commencement Date.
 
** Notwithstanding the foregoing, to the extent that Tenant is the only tenant leasing space in the 440 Building, Tenant’s Pro Rata Share of the 440 Building (for purposes of calculating Operating Expenses) shall be deemed to be 100%.
 
9.2.   For purposes of clarity, since Tenant’s Pro Rata Share for the 410 Building is 100%, as of the Existing Bridge Commencement Date, Tenant’s Pro Rata Share for the Existing Bridge shall also be 100%.
 
9.3.   For purposes of clarity, since Tenant’s Pro Rata Share for the 420 Building is 100%, as of the New Bridge Commencement Date, Tenant’s Pro Rata Share for the New Bridge shall also be 100%.
 
9.4.   To the extent Tenant is the only tenant leasing space in the 440 Building and no other party (including Landlord) is performing improvements in the 440 Building in preparation for a new tenant, Tenant shall be responsible for the cost of all utilities supplied to the 440 Building.  To the extent any such costs fall outside of Operating Expenses, Tenant shall pay such amount to Landlord as Additional Rent upon Landlord’s demand.
 
10.   Surrender Premises .
 
10.1.   If, as of the Expansion Option Termination Date, Tenant has not exercised its Expansion Option with respect to the entire first (1 st ) floor of the 440 Building, then, Landlord

16

 
shall have the option (but not the obligation) (the “ Surrender Option ”) to require Tenant to surrender the Corridor Premises to Landlord by providing Tenant with ninety (90) days prior written notice (the “ Surrender Notice ”).  In the event Landlord provides the Surrender Notice, Tenant shall surrender the Corridor Premises to Landlord prior to 11:59 p.m. Eastern Time on the day (the “ Corridor Premises Expiration Date ”) that is ninety (90) days after Landlord’s delivery of the Surrender Notice in the condition required by the Lease for, and in accordance with the terms of the Lease with respect to, surrendering Premises, including Section 19.2 of the Lease (collectively, the “ Surrender Requirements ”).  The Term of the Lease with respect to the Corridor Premises only shall expire on the Corridor Premises Expiration Date.  Commencing on the later of (q) the Corridor Premises Expiration Date and (r) the day (the “ Surrender Effective Date ”) that Tenant actually surrenders the Corridor Premises to Landlord in accordance with the Surrender Requirements, (y) the Lease with respect to the Corridor Premises only shall terminate and neither Landlord nor Tenant shall have any further obligations or liabilities to the other under the Lease with respect to the Corridor Premises, except for (i) such obligations or liabilities that expressly survive the expiration or termination of the Lease and (ii) Landlord’s rights to any unpaid balance of Tenant and (z) the term “Premises,” as defined in the Lease, shall no longer include the Corridor Premises.
 
10.2.   In addition, in the event Landlord exercises the Surrender Option, Tenant shall be responsible for paying the reasonable out-of-pocket costs and expenses actually incurred by Landlord to (a) design and construct any additional ingress or egress pathways in, to or from the 440 Building that are required by any Applicable Law and related to Tenant’s occupancy of the Initial 440 Expansion Premises, (b) procure and install either (in Landlord’s sole discretion) a separate electric meter or an electric submeter to measure the electricity supplied to the first (1 st ) floor of the 440 Building and (c) demolish any improvements installed in the Corridor Premises by or on behalf of Tenant (including the Corridor Improvements) and restore the Corridor Premises to substantially the same condition it was in prior to installation of any improvements installed in the Corridor Premises by or on behalf of Tenant (including the Corridor Improvements), and in each case shall pay Landlord for such reasonable out-of-pocket costs and expenses actually incurred by Landlord upon Landlord’s demand.
 
11.   Sales Tax Exemption .  Landlord and Tenant acknowledge that Tenant has provided to Landlord a Certificate (the “ 440 Exemption Certificate ”) issued to Tenant by the Westchester County IDA with respect to the second (2 nd ) floor of the 440 Building.  Landlord will cooperate (at Tenant’s sole cost and expense) with Tenant so as to ensure compliance with the requirements of the IDA Documentation regarding any use of the 440 Exemption Certificate, including but not limited to any required reporting of purchases.  Within sixty (60) days after final completion (as reasonably determined by Landlord) of Landlord’s Work for the Initial 440 Expansion Premises, Landlord, in consultation with Tenant, shall reconcile and reach agreement on the aggregate amount of sales and use tax exemption actually achieved as a direct result of any use of the 440 Exemption Certificate and within thirty (30) days thereafter, Landlord shall deliver a check, payable to Tenant, in such agreed upon amount.  In the event Landlord and Tenant are unable to timely reach agreement, the dispute shall be determined by arbitration under Article 50 of the Existing Lease.

17

 
12.   Early Termination Option .   Section 41.1(c) of the Lease is hereby deleted in its entirety and replaced with the following:
 
“(c)           On the last business day before the Early Termination Date, Tenant shall pay Landlord an amount equal to the unamortized portion (as of the Early Termination Date) of the sum of, (i) all amounts paid as commissions to any brokers in connection with this Lease (and any other lease transaction between Landlord and Tenant after the Effective Date of this Lease) and (ii) the Base TI Allowance, any Expansion TI Allowance (excluding the 440-02 MEP Allowance and the Corridor Allowance) and any Additional New Bridge Allowance.  For purposes of this Section 41.1(c) , amortization of any amounts which are to be amortized shall be determined utilizing an interest rate of nine percent (9%) per annum based on the remaining principal balance which would be reducing over the Term utilizing equal monthly payments of interest and principal; and”
 
13.   Insurance .  For purposes of Tenant’s insurance obligations under Article 22 of the Existing Lease, the Existing Bridge Premises, the Corridor Premises and the New Bridge Premises shall each be deemed to be a Phase.   Further, Tenant shall maintain the insurance required of Tenant pursuant to Section 22.1 of the Lease as if the New Bridge Improvements were Tenant Improvements.
 
14.   Expansion Premises .  For purposes of Sections 9.2 and 18.5 of the Lease and Articles 13 and 44 of the Lease, the term “Expansion Premises” shall be deemed to include the Existing Bridge Premises (from and after the Existing Bridge Commencement Date), the Corridor Premises (from and after the Corridor Commencement Date) and the New Bridge Premises (from and after the New Bridge Commencement Date).
 
15.   Tenant Improvements .  For purposes of Section 18.8 of the Lease, the phrase “Tenant Improvements made pursuant to the Work Letter” shall be deemed to include the New Bridge Improvements and for purposes of Sections 5.6 , 5.9 , 21.1 , 24.3 , 42.1 , 44.1 , 48.4 and 53(a)(iv) of the Lease, the term “Tenant Improvements” shall be deemed to include the New Bridge Improvements.
 
16.   No Default .
 
16.1.   Tenant represents, warrants and covenants that, to the best of Tenant’s actual knowledge (without investigation or inquiry), Landlord and Tenant are not in default of any of their respective obligations under the Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder.  For purposes herein, Tenant’s knowledge shall mean the actual knowledge (without investigation or inquiry) of David Lawrence or Susan Veres.  Notwithstanding the foregoing, neither David Lawrence nor Susan Veres shall have any personal liability with respect to any

18

 
matters set forth in this First Amendment or the Lease, including any of Tenant’s representations and/or warranties herein or in the Lease.
 
16.2.   Landlord represents, warrants and covenants that, to the best of Landlord’s actual knowledge (without investigation or inquiry), Landlord and Tenant are not in default of any of their respective obligations under the Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder.  For purposes herein, Landlord’s knowledge shall mean the actual knowledge (without investigation or inquiry) of Laura Woznitski or Thomas Brennan.  Notwithstanding the foregoing, neither Laura Woznitski nor Thomas Brennan shall have any personal liability with respect to any matters set forth in this First Amendment or the Lease, including any of Landlord’s representations and/or warranties herein or in the Lease.
 
17.   Notices .  Tenant confirms that, notwithstanding anything in the Lease to the contrary, notices delivered to Tenant pursuant to the Lease should be sent to:
 
Acorda Therapeutics, Inc.
420 Saw Mill River Road
Ardsley, New York  10502
Attention: President and CEO
Attention: General Counsel;

with a copy to:
 
Acorda Therapeutics, Inc.
420 Saw Mill River Road
Ardsley, New York  10502
Attention: Chief of Business Operations.
 
18.   Effect of First Amendment .  Except as modified by this First Amendment, the Existing Lease and all the covenants, agreements, terms, provisions and conditions thereof shall remain in full force and effect and are hereby ratified and affirmed.  In the event of any conflict between the terms contained in this First Amendment and the Existing Lease, the terms herein contained shall supersede and control the obligations and liabilities of the parties.  From and after the date hereof, the term “ Lease ” as used in the Lease shall mean the Existing Lease, as modified by this First Amendment.
 
19.   Successors and Assigns .   Each of the covenants, conditions and agreements contained in this First Amendment shall inure to the benefit of and shall apply to and be binding upon the parties hereto and their respective heirs, legatees, devisees, executors, administrators and permitted successors and assigns.  Nothing in this section shall in any way alter the provisions of the Lease restricting assignment or subletting.
 
20.   Miscellaneous .  This First Amendment becomes effective only upon execution and delivery hereof by Landlord and Tenant. The captions of the paragraphs and subparagraphs in this First Amendment are inserted and included solely for convenience and shall not be

19

 
considered or given any effect in construing the provisions hereof.  All exhibits hereto are incorporated herein by reference.  Submission of this instrument for examination or signature by Landlord or Tenant does not constitute a reservation of or option for a lease, and shall not be effective as a lease, lease amendment or otherwise until execution by and delivery to both Landlord and Tenant.
 
21.   Authority .  Tenant guarantees, warrants and represents that the individual or individuals signing this First Amendment on behalf of Tenant have the power, authority and legal capacity to sign this First Amendment on behalf of and to bind Tenant.  Landlord guarantees, warrants and represents that the individual or individuals signing this First Amendment on behalf of Landlord have the power, authority and legal capacity to sign this First Amendment on behalf of and to bind Landlord.
 
22.   Counterparts; Facsimile and PDF Signatures .  This First Amendment may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document.  A facsimile or portable document format (PDF) signature on this First Amendment shall be equivalent to, and have the same force and effect as, an original signature.
 
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 
20

IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment as of the date and year first above written.
 
LANDLORD :
 
BMR-ARDSLEY PARK LLC,                                                                                                                
a Delaware limited liability company

By:            /s/Kevin M. Simonsen                                                                                      
Name:       Kevin M. Simonsen                                                                            
Title:          Sr. VP, Real Estate Legal                                                                            

TENANT :
 
ACORDA THERAPEUTICS, INC.,
a Delaware corporation

 
By:            /s/ Ron Cohen                                                                 
Name:       Ron Cohen                                                       
Title:         President and CEO

 

 

EXHIBIT A
 
EXISTING BRIDGE PREMISES

 

 

EXHIBIT B
 
CORRIDOR PREMISES

 

 

EXHIBIT C
 
EXISTING BRIDGE LANDLORD WORK
 
Landlord shall perform the following work with respect to the Existing Bridge:
 
1.  	Repair any missing or damaged caulk joints, glazed units and associated metal coping in the existing curtainwall of the Existing Bridge.	

 

 

EXHIBIT D
 
CORRIDOR LANDLORD WORK
 
Landlord shall perform the following work to the 440 Building:
 
1.   	Modifications to the existing stairwell from the second (2 nd ) floor of the 440 Building to the first (1 st ) floor of the 440 Building such that the lighting and fire protection and life safety systems within the stairwell comply (as of the Corridor Commencement Date) with the applicable building code.	

 

 

EXHIBIT E
 
ACKNOWLEDGEMENT OF NEW BRIDGE COMMENCEMENT DATE
 
THIS ACKNOWLEDGEMENT OF NEW BRIDGE COMMENCEMENT DATE AND TERM EXPIRATION DATE is entered into as of [_______], 20[__], with reference to that certain First Amendment to Lease (the “ First Amendment ”) dated as of [______], 2014, by ACORDA THERAPEUTICS, INC., a Delaware corporation (“ Tenant ”), in favor of BMR-ARDSLEY PARK LLC, a Delaware limited liability company (“ Landlord ”).  All capitalized terms used herein without definition shall have the meanings ascribed to them in the First Amendment.

Tenant hereby confirms the following:

1.   Tenant accepted possession of the New Bridge Premises for the installation of personal or other property on [_______], 20[__], and for use in accordance with the Permitted Use on [_______], 20[__].
 
2.   The New Bridge Improvements are Substantially Complete (as defined in Section 4.1(b) of the First Amendment).
 
3.   In accordance with the provisions of Section 2.3(b) of the First Amendment, the New Bridge Commencement Date is [_______], 20[__].
 
4.   The obligation to pay Rent is presently in effect and all Rent obligations on the part of Tenant under the Lease with respect to the New Bridge Premises commenced to accrue on [_______], 20[__], with Basic Annual Rent with respect to the New Bridge Premises payable on the dates and amounts set forth in the chart below:

Dates
 	 
Approximate Square Feet of Rentable Area
 	 
Base Rent per Square Foot of Rentable Area
 	 
Monthly Base Rent
 	 
Annual Base Rent

[__]/[__]/[__]-[__]/[__]/[__]
 	 
[  ]
 	 
$[_______] [monthly][OR][annually]
 	 
[  ]
 	 
[  ]

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

E-1

IN WITNESS WHEREOF, Tenant has executed this Acknowledgment of with respect to the New Bridge Commencement Date as of the date first written above.

TENANT:
ACORDA THERAPEUTICS, INC.,
a Delaware corporation
 
By:            
Name:            
Title:            

 
E-3

EXHIBIT F
 
NEW BRIDGE WORK LETTER
 
This New Bridge Work Letter (this “ New Bridge Work Letter ”) is made and entered into as of the 21 st day of May, 2015, by and between BMR-ARDSLEY PARK LLC, a Delaware limited liability company (“ Landlord ”), and ACORDA THERAPEUTICS, INC., a Delaware corporation (“ Tenant ”), and is attached to and made a part of that certain First Amendment to Lease dated as of May 21, 2015 (the “ First Amendment ”), by and between Landlord and Tenant for the Premises located at 410, 420, 440 and the Connector Building on Saw Mill River Road, Ardsley, New York .  All capitalized terms used but not otherwise defined herein shall have the meanings given them in the First Amendment.  Any reference herein to “Substantial Completion” or “Substantially Complete” shall have the meaning given to them in Section 4.1(b) of the First Amendment.
 
1.   General Requirements .
 
1.1.   Authorized Representatives .
 
(a)   Landlord designates, as Landlord’s authorized representative (“ Landlord’s Authorized Representative ”), (i) Thomas Brennan as the person authorized to initial plans, drawings, approvals and to sign change orders pursuant to this New Bridge Work Letter and (ii) an officer of Landlord as the person authorized to sign any amendments to this New Bridge Work Letter or the Lease.  Tenant shall not be obligated to respond to or act upon any such item until such item has been initialed or signed (as applicable) by the appropriate Landlord’s Authorized Representative.  Landlord may change either Landlord’s Authorized Representative upon one (1) business day’s prior written notice to Tenant.
 
(b)   Tenant designates, as (“ Tenant’s Authorized Representative ”), (i) Susan Veres as the person authorized to initial and sign all plans, drawings, change orders and approvals pursuant to this New Bridge Work Letter and (ii) an officer of Tenant as the person authorized to sign any amendments to this New Bridge Work Letter or the Lease.  Landlord shall not be obligated to respond to or act upon any such item until such item has been initialed or signed (as applicable) by Tenant’s Authorized Representative.  Tenant may change Tenant’s Authorized Representative upon one (1) business day’s prior written notice to Landlord.
 
1.2.   Schedule .  The schedule for design and development of the New Bridge Improvements, including the time periods for preparation and review of construction documents, approvals and performance, shall be in accordance with a schedule to be prepared by Tenant (the “ Schedule ”).  Tenant shall prepare the Schedule so that it is a reasonable schedule for the completion of the New Bridge Improvements.  As soon as the Schedule is completed, Tenant shall deliver the same to Landlord for Landlord’s approval, which approval shall not be unreasonably withheld, conditioned or delayed.  Such Schedule shall be approved or disapproved by Landlord within ten (10) business days after delivery to Landlord.  If Landlord disapproves the Schedule, then Landlord shall notify Tenant in writing of its objections to such Schedule, and the parties shall confer and negotiate in good faith to reach agreement on the Schedule.  Landlord

F-1

 
shall have five (5) business days after receipt of any revised schedule to notify Tenant whether Landlord approves or objects to the revised schedule and of the manner, in any, in which the revised schedule is unacceptable.  Landlord’s failure to respond within the applicable time period set forth in this Section 1.2 shall be deemed approval by Landlord.  The Schedule shall be subject to adjustment as mutually agreed upon in writing by the parties, or as provided in this New Bridge Work Letter.
 
1.3.   Tenant’s Architects, Contractors and Consultants .  The architect, engineering consultants, design team, general contractor and subcontractors responsible for the construction of the New Bridge Improvements shall be selected by Tenant and approved by Landlord, which approval Landlord shall not unreasonably withhold, condition or delay.  Landlord may refuse to use any architects, consultants, design team, contractors, subcontractors or material suppliers that Landlord reasonably believes could cause labor disharmony; provided , however, that Landlord shall not refuse to use any contractors or subcontractors solely because their union or non-union affiliations; provided , further, that Tenant shall be responsible for promptly installing (in no event later than five (5) business days after receiving a written request with respect thereto from Landlord) any “dual-gate” system that may need to be installed at the Project in order to separate union and non-union work forces.  Landlord shall have five (5) business days after receipt of any notice requesting Landlord’s approval of any architect, engineer, consultant, design team, general contractor or subcontractor to notify Tenant whether Landlord approves or objects to the proposed person or entity.  Landlord’s failure to respond within such time period shall be deemed approval by Landlord.  All Tenant contracts related to the New Bridge Improvements shall provide that Tenant may assign such contracts and any warranties with respect to the New Bridge Improvements to Landlord at any time.
 
2.   New Bridge Improvements .  All New Bridge Improvements shall be performed by Tenant’s contractor, at Tenant’s sole cost and expense (subject to Landlord’s obligations with respect to any portion of the Base New Bridge Allowance and, if properly requested by Tenant pursuant to the terms of the Lease, the Additional New Bridge Allowance) and in accordance with the Approved Plans (as defined below), the Lease and this New Bridge Work Letter.  If Tenant fails to pay, or is late in paying, any sum due to Landlord under this New Bridge Work Letter, then Landlord shall have all of the rights and remedies set forth in the Lease for nonpayment of Rent (including the right to interest and the right to assess a late charge), and for purposes of any litigation instituted with regard to such amounts the same shall be considered Rent.  All material and equipment furnished by Tenant or its contractors as the New Bridge Improvements shall be new or “like new;” the New Bridge Improvements shall be performed in a first-class, workmanlike manner; and the quality of the New Bridge Improvements shall be of a nature and character not less than Landlord’s general standards for the Project.  Tenant shall take, and shall require its contractors to take, commercially reasonable steps to protect the Premises during the performance of any New Bridge Improvements, including covering or temporarily removing any window coverings so as to guard against dust, debris or damage.  The New Bridge Improvements shall not be considered Alterations.
 
2.1.   Work Plans .  Tenant has prepared and Landlord has approved initial construction plans covering the New Bridge Improvements prepared in conformity with the applicable

F-2

 
provisions of this New Bridge Work Letter (the “ Approved Initial Construction Plans ”).  The Approved Initial Construction Plans are attached as Schedule 1 to this New Bridge Work Letter.
 
2.2.   Construction Plans .  Tenant shall prepare final plans and specifications for the New Bridge Improvements that (a) are consistent with and are logical evolutions of the Approved Initial Construction Plans and (b) incorporate any other Tenant-requested (and Landlord-approved) Changes (as defined below).  As soon as such final plans and specifications (“ Construction Plans ”) are completed, Tenant shall deliver the same to Landlord for Landlord’s approval, which approval shall not be unreasonably withheld, conditioned or delayed.  Such Construction Plans shall be approved or disapproved by Landlord within ten (10) business days after delivery to Landlord.  Landlord’s failure to respond within such ten (10) business day period shall be deemed approval by Landlord.  If the Construction Plans are disapproved by Landlord, then Landlord shall notify Tenant in writing of its objections to such Construction Plans.  Tenant shall then resubmit the revised Construction Plans to Landlord for approval, except the turn-around approval period afforded to Landlord with respect to any revisions shall be seven (7) business days.  If Landlord and Tenant cannot agree on the revised Construction Plans and Tenant’s correction of same after Landlord resubmits to Tenant further revisions to the revised Construction Plans, then the Neutral Architect, in accordance with Section 4.2(h) of the Lease (whose determination shall be final and binding upon the parties) shall decide whether to accept in their entirety either Tenant’s most recent version of the Construction Plans or Landlord’s further revisions to Tenant’s most recent version of the Construction Plans.  Promptly after the Construction Plans are approved by Landlord and Tenant (or by the Neutral Architect, if necessary), two (2) copies of such Construction Plans shall be initialed and dated by Landlord and Tenant, and Tenant shall promptly submit such Construction Plans to all appropriate Governmental Authorities for approval.  The Construction Plans so approved, and all change orders specifically permitted by this New Bridge Work Letter, are referred to herein as the “ Approved Plans .”
 
2.3.   Changes to the New Bridge Improvements .  Any changes to the Approved Plans (each, a “ Change ”) shall be requested and instituted in accordance with the provisions of this Section 2.3 and shall be subject to the written approval of the non-requesting party in accordance with this New Bridge Work Letter.
 
(a)   Change Request .  Either Landlord or Tenant may request Changes after Landlord approves the Approved Plans by notifying the other party thereof in writing in substantially the same form as the AIA standard change order form (a “ Change Request ”), which Change Request shall detail the nature and extent of any requested Changes, including (a) the Change, (b) the party required to perform the Change and (c) any modification of the Approved Plans and the Schedule, as applicable, necessitated by the Change.  If the nature of a Change requires revisions to the Approved Plans, then the requesting party shall be solely responsible for the cost and expense of such revisions and any increases in the cost of the New Bridge Improvements as a result of such Change.  Change Requests shall be signed by the requesting party’s Authorized Representative.
 
(b)   Approval of Changes .  All Change Requests shall be subject to the other party’s prior written approval, which approval shall not be unreasonably withheld, conditioned or

F-3

 
delayed.  The non-requesting party shall have five (5) business days after receipt of a Change Request to notify the requesting party in writing of the non-requesting party’s decision either to approve or object to the Change Request.  The non-requesting party’s failure to respond within such five (5) business day period shall be deemed approval by the non-requesting party.
 
2.4.   Approvals .  It shall not be unreasonable for Landlord to withhold any consent or approval related to the New Bridge Improvements if, in Landlord’s reasonable determination, any such plans, Change or other request could reasonably be expected to adversely impact any of Landlord’s Building Systems and Structures.
 
2.5.   Preparation of Estimates .  Tenant shall, before proceeding with any Change, using its best efforts, prepare as soon as is reasonably practicable (but in no event more than five (5) business days after delivering a Change Request to Landlord or receipt of a Change Request) an estimate of the increased costs or savings that would result from such Change, as well as an estimate on such Change’s effects on the Schedule.  Landlord shall have five (5) business days after receipt of such information from Tenant to (a) in the case of a Tenant-initiated Change Request, approve or reject such Change Request in writing, or (b) in the case of a Landlord-initiated Change Request, notify Tenant in writing of Landlord’s decision either to proceed with or abandon the Landlord-initiated Change Request.
 
2.6.   Quality Control Program; Coordination .  Tenant shall provide Landlord with information regarding the following (together, the “ QCP ”):  (a) Tenant’s general contractor’s quality control program and (b) evidence of subsequent monitoring and action plans.   The QCP shall be subject to Landlord’s reasonable review and approval and shall specifically address the New Bridge Improvements.  Tenant shall use commercially reasonable efforts to ensure that the QCP is regularly implemented on a scheduled basis and shall provide Landlord with reasonable prior notice and access to attend all inspections and meetings between Tenant and its general contractor.  At the conclusion of the New Bridge Improvements, Tenant shall deliver the quality control log to Landlord, which shall include all records of quality control meetings and testing and of inspections held in the field, including inspections relating to concrete, steel roofing, piping pressure testing and system commissioning.
 
3.   Completion of New Bridge Improvements .  Tenant, at its sole cost and expense (except for any obligation of Landlord to provide any Base New Bridge Allowance and, if properly requested by Tenant, the Additional New Bridge Allowance, in each case pursuant to the terms of the Lease), shall perform and complete the New Bridge Improvements in all respects (a) in substantial conformance with the Approved Plans, (b) otherwise in compliance with provisions of the Lease and this New Bridge Work Letter and (c) in accordance with Applicable Laws, the requirements of Tenant’s insurance carriers and the board of fire underwriters having jurisdiction over the Premises.  The New Bridge Improvements shall be deemed “ Finally Complete ” (or “ Final Completion ” shall be deemed to occur) at such time as Tenant shall furnish to Landlord (t) evidence reasonably satisfactory to Landlord that (i) all New Bridge Improvements have been completed and paid for in full (which shall be evidenced by the architect’s certificate of completion and the general contractor’s and each subcontractor’s and material supplier’s final unconditional waivers and releases of liens, each in a form acceptable to Landlord and complying with Applicable Laws and a statutory notice of substantial completion from the

F-4

 
general contractor), or in the event of a dispute between Tenant and its contractors, or any of its subcontractors, regarding payment, the amount in dispute has been fully bonded or otherwise discharged, (ii) any and all liens related to the New Bridge Improvements have either been discharged of record (by payment, bond, order of a court of competent jurisdiction or otherwise) or waived by the party filing such lien and (iii) no security interests relating to the New Bridge Improvements are outstanding, (u) all certifications and approvals with respect to the New Bridge Improvements that may be required from any Governmental Authority and any board of fire underwriters or similar body for the use and occupancy of the Premises (including a certificate of occupancy for the New Bridge Premises for the Permitted Use), (v) certificates of insurance required by the Lease to be purchased and maintained by Tenant, (w) an affidavit from Tenant’s architect certifying that all work performed in, on or about the New Bridge Premises is in substantial accordance with the Approved Plans, (x) complete “as built” drawing print sets, project specifications and shop drawings and electronic CADD files on disc (showing the New Bridge Improvements as an overlay on the 420 Building and 440 Building “as built” plans ( provided that Landlord provides the 420 Building and 440 Building “as-built” plans to Tenant) of all contract documents for work performed by their architect and engineers in relation to the New Bridge Improvements, (y) a commissioning report prepared by a licensed commissioning agent hired by Tenant and approved by Landlord for all new or affected mechanical, electrical and plumbing systems (which report Landlord may hire (at Landlord’s sole cost and expense) a licensed commissioning agent to peer review, and whose reasonable recommendations Tenant’s commissioning agent shall perform and incorporate into a revised report) and (z) such other “close out” materials as Landlord reasonably requests prior to or simultaneously with the approval of the Approved Plans, or, with respect to any New Bridge Improvements that are the subject of a Change Order, the approval of such Change Order, consistent with Landlord’s own requirements for its contractors, such as copies of manufacturers’ warranties, operation and maintenance manuals and the like.  Disagreements regarding Final Completion shall be resolved by the Neutral Architect in accordance with Section 4.2(h) of the Lease.
 
4.   [ Intentionally omitted .]
 
5.   Liability .  Tenant assumes sole responsibility and liability for any and all injuries or the death of any persons, including Tenant’s contractors and subcontractors and their respective employees, agents and invitees, and for any and all damages to property caused by, resulting from or arising out of any act or omission on the part of Tenant, Tenant’s contractors or subcontractors, or their respective employees, agents and invitees in the prosecution of the New Bridge Improvements.  Tenant agrees to indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to Landlord) and hold the Landlord Parties harmless from and against all Claims due to, because of or arising out of any and all such injuries, death or damage, whether real or alleged, and Tenant and Tenant’s contractors and subcontractors shall assume and defend at their sole cost and expense all such Claims; provided , however , that nothing contained in this New Bridge Work Letter shall be deemed to indemnify or otherwise hold Landlord harmless from or against liability caused by Landlord’s negligence or willful misconduct.  Any deficiency in design or construction of the New Bridge Improvements shall be solely the responsibility of Tenant, notwithstanding the fact that Landlord may have approved of the same in writing.

F-5

 
6.   New Bridge Allowance .
 
6.1.   Application of New Bridge Allowance .  Landlord shall contribute, in the following order, the Base New Bridge Allowance and, if properly requested by Tenant pursuant to the terms of the Lease, the Additional New Bridge Allowance toward the costs and expenses incurred in connection with the performance of the New Bridge Improvements, in accordance with Article 4 of the First Amendment.  If the entire New Bridge Allowance is not applied toward or reserved for the costs of the New Bridge Improvements, then Tenant shall not be entitled to a credit of such unused portion of the New Bridge Allowance.  Tenant may use the Base New Bridge Allowance and, if properly requested by Tenant pursuant to the terms of the Lease, the Additional New Bridge Allowance for the reimbursement to Tenant of construction and other costs in accordance with the terms and provisions of the Lease and this New Bridge Work Letter.
 
6.2.   Approval of Budget for the New Bridge Improvements .  Notwithstanding anything to the contrary set forth elsewhere in this New Bridge Work Letter or the Lease, Landlord shall not have any obligation to expend any portion of the New Bridge Allowance until Landlord and Tenant shall have approved in writing the budget for the New Bridge Improvements (the “ Approved Budget ”).  In addition, Landlord shall not have any obligation to expend any portion of the New Bridge Allowance until Tenant has Substantially Completed the New Bridge Improvements.  Prior to (a) Landlord’s approval of the Approved Budget and (b) Tenant’s completion of the New Bridge Improvements in accordance with the Approved Plans, Tenant shall pay all of the costs and expenses incurred in connection with the New Bridge Improvements as they become due.  Landlord shall not be obligated to reimburse Tenant for costs or expenses relating to the New Bridge Improvements that exceed the amount of the New Bridge Allowance.  Landlord shall not unreasonably withhold, condition or delay its approval of any budget for New Bridge Improvements that is proposed by Tenant.  Landlord shall notify Tenant in writing within (10) business days after receipt of any budget (complete with all supporting documentation for each budget line item) for the New Bridge Improvements whether Landlord approves or objects to such budget and of the manner, if any, in which the budget is unacceptable.  Tenant shall then resubmit the revised budget to Landlord for approval, such approval not to be unreasonably withheld, conditioned or delayed.  Landlord’s approval of or objection to any revised budget and Tenant’s correction of the same shall be in accordance with this Section (except that Landlord shall have five (5) business days after receipt of the revised budget to notify Tenant whether Landlord approves or objects to the revised budget and of the manner, if any, in which the revised budget is unacceptable) until Landlord has approved the budget in writing or been deemed to have approved it.  The iteration of the budget that is approved or deemed approved by Landlord without objection shall be referred to herein as the “Approved Budget.”  Landlord’s failure to respond within any applicable time period set forth in this Section 6.2 shall be deemed approval by Landlord.  Disagreements regarding the approval of the Approved Budget shall be resolved by the Neutral Architect in accordance with Section 4.2(h) of the Lease.
 
6.3.   Fund Requests .  Upon submission by Tenant to Landlord of (a) (i) with respect to any request upon Substantial Completion, all items required by Section 4.1(b) of the First Amendment to show Substantial Completion of the New Bridge Improvements or (ii) with

F-6

 
respect to any request upon Final Completion, all items required by Section 3 to show Final Completion of the New Bridge Improvements, (b) a statement (a “ Fund Request ”) setting forth the total amount of the New Bridge Allowance requested, (c) a summary of the New Bridge Improvements performed using one or more AIA standard form Application for Payment (G 702), each executed by the general contractor and by the architect, (d) invoices from the general contractor, the architect, and any subcontractors, material suppliers and other parties requesting payment with respect to the amount of the New Bridge Allowance then being requested and (e) unconditional lien releases from the general contractor and each subcontractor and material supplier with respect to previous payments made by either Landlord or Tenant for the New Bridge Improvements each in a form reasonably acceptable to Landlord and complying with Applicable Laws (for purposes of clarity, Tenant shall provide such unconditional lien releases for the full amount requested by Tenant), then Landlord shall, within thirty (30) days following receipt by Landlord of a Fund Request and the accompanying materials required by this Section, pay to Tenant (for reimbursement of costs and expenses for the New Bridge Improvements in accordance with the Lease and this New Bridge Work Letter) the amount of the New Bridge Improvement costs set forth in such Fund Request; provided , however, that Landlord shall not be obligated to make any payments under this Section in excess of the New Bridge Allowance.
 
6.4.   Accrual Information .  In addition to the other requirements of this Section 6 , Tenant shall, no more often than once every calendar quarter during construction of the New Bridge Improvements, provide Landlord with a written summary of all work performed by Tenant or its agents, employees or contractors for which a Fund Request has not yet been issued to Landlord, including the following:  the amount that Tenant will seek from Landlord related to such work and the dates on which such work was performed.  Such information shall be provided to Landlord within ten (10) business days after Landlord’s request therefor.  Such information will be provided to Landlord for informational purposes only and will in no event limit the amounts for which Tenant can request reimbursement pursuant to the terms of the First Amendment and this Work Letter.
 
7.   Miscellaneous .
 
7.1.   Incorporation of Lease Provisions .  Without limiting the applicability of any other provision of the Lease that is not inconsistent with this New Bridge Work Letter, Articles 27 , 37 and 38 and Sections 43.1 , 43.3 , 43.4 , 43.5 , 43.6 , 43.7 , 43.9 , 43.10 , 43.12 , 43.13 and 43.15 of the Lease are incorporated into this New Bridge Work Letter by reference, and shall apply to this New Bridge Work Letter in the same way that they apply to the Lease.
 
7.2.   General .  This New Bridge Work Letter shall apply to the New Bridge Improvements only and shall not apply to improvements performed in any premises (other than the New Bridge Premises) added to the Premises at any time or from time to time, whether by any options under the Lease or otherwise; or to any portion of the Premises or any additions to the Premises in the event of a renewal or extension of the original Term, whether by any options under the Lease or otherwise, unless the Lease or any amendment or supplement to the Lease expressly provides that such additional premises are to be delivered to Tenant in the same condition as the New Bridge Premises.

F-7

 
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 
F-8

IN WITNESS WHEREOF, Landlord and Tenant have executed this New Bridge Work Letter to be effective on the date first above written.
 
LANDLORD :
BMR-ARDSLEY PARK LLC,
a Delaware limited liability company
 
By:            /s/Kevin M. Simonsen                                                                 
Name:       Kevin M. Simonsen                                                       
Title:         Sr. VP, Real Estate Legal                                                       
 
TENANT :
ACORDA THERAPEUTICS, INC.,
a Delaware corporation
 
By:            /s/Ron Cohen                                                                            
Name:       Ron Cohen                                                                 
Title:         President and CEO                                                                 

 
F-9

 
SCHEDULE 1 TO NEW BRIDGE WORK LETTER
 
APPROVED INITIAL CONSTRUCTION PLANS

 
F-10

 

 
F-11

EXHIBIT G
 
FORM OF ADDITIONAL NEW BRIDGE ALLOWANCE ACCEPTANCE LETTER
 
[TENANT LETTERHEAD]

BMR-Ardsley Park LLC
17190 Bernardo Center Drive
San Diego, California  92128
Attn:  Vice President, Real Estate Legal
 
[Date]
 
Re:            Additional New Bridge Allowance

To Whom It May Concern:

This letter concerns that certain First Amendment to Lease dated as of [_______], 2015 (the “ First Amendment ”), between BMR-Ardsley Park LLC (“ Landlord ”) and Acorda Therapeutics, Inc. (“ Tenant ”).  Capitalized terms not otherwise defined herein shall have the meanings given them in the First Amendment.

Tenant hereby notifies Landlord that it wishes to exercise its right to utilize the Additional New Bridge Allowance pursuant to Article 4 of the First Amendment.

If you have any questions, please do not hesitate to call [_______] at ([___]) [___]-[____].
Sincerely,
 
[Name]
[Title of Authorized Signatory]
 
cc:        Greg Lubushkin
Karen Sztraicher
John Bonanno
Kevin Simonsen

 
G-1

EXHIBIT M
 
CAM POOLS AND SERVICE ALLOCATION MATRIX
 
[See attached]

 
M-1

 

 

 

 

 

 

 

 

 

EXHIBIT 10.2

June 8, 2015
 
Enrique Carrazana, M.D.
214 Almeria Avenue
Coral Gables, FL 33134

Dear Enrique:

We are delighted to present this letter agreement, setting out the terms of your continued employment with Acorda Therapeutics, Inc. (the "Company") as Chief Medical Officer. If these terms are acceptable, please sign and date the copy of this letter provided herewith and return it to me at your first convenience. If you accept the terms offered herein, this Agreement shall be deemed to be effective as of June 8, 2015 (the "Effective Date").

1.  	Employment.	

You will be employed by the Company as Chief Medical Officer of the Company.

2.  	Base Salary.	

In consideration for your services under this Agreement, you shall be paid an annual base salary of $470,000.00 (your annual base salary in effect as of the date of this agreement), to be paid in accordance with the Company's standard payroll practices. Your base salary shall be reviewed annually by the President and Chief Executive Officer and the compensation committee of the Board of Directors.

3.  	Annual Bonus.	

You shall be eligible to receive an annual bonus as part of any bonus program implemented by the Board of Directors in an amount determined based on your performance.

4.  	Benefits; Perquisites; Reimbursement of Expenses.	

In addition to those payments set forth above, you shall be entitled to the following benefits and payments:

(a)   Employee Benefit Plans Generally . You shall be entitled to participate in all employee benefit plans which the Company provides or may establish from time to time for the benefit of its senior executives.

(b)   Vacation . You shall be entitled to paid vacation in accordance with the Company's vacation policy for senior managers as that policy may be amended from time to time.

(c)   Perquisites and Reimbursement of Expenses . You shall be entitled to all perquisites offered to senior executives of the Company. In addition, you shall be entitled to reimbursement for all ordinary and reasonable out-of­-pocket business expenses which are incurred by you in furtherance of the Company's business, in accordance with the policies adopted from time to time by the Company.

1

(d)   Insurance. You shall be covered by a Directors and Officers Liability Insurance policy that generally covers the directors and officers of the Company, provided by the Company at its expense, for so long as the Company has such a policy in place.

5.  	Stock Options, Stock Appreciation Rights and Restricted Stock Awards .	

You shall be eligible to receive annual performance-based stock option grants to purchase shares of the Company's common stock (“Options”), stock appreciation rights awards (“SARs”), and/or restricted stock awards of the Company's common stock (“Stock Awards”). The number of annual Options, SARs, and/or Stock Awards granted shall be determined based on the achievement of individual performance objectives as recommended by the compensation committee and approved by the Board of Directors and the Company's achievement of its goals and objectives. All such Options, SARs, and/or Stock Awards shall be granted pursuant to and in accordance with the terms of the Acorda Therapeutics, Inc. 2006 Employee Incentive Plan as amended (the “2006 Plan”), and/or any additional or replacement plan adopted by the Board (the "Plan(s)") except as such terms may be specifically modified herein. Unless otherwise provided for in any Option, SARs or Stock Awards agreement, all Options, SARs and Stock Awards granted to you shall vest in 16 equal quarterly installments, beginning with the first day of the quarter next following the date the Option, SAR or Stock Award is granted.

6.  	Termination.	

(a)   Termination of Your Employment by the Company Without Cause or Voluntary Termination by You With Good Reason . If the Company terminates your employment without Cause or if you terminate your employment with Good Reason other than pursuant to subsection (c) of this Section 6, the following shall apply:

(i)           The Company shall continue to pay to you your base salary for a period ending on the earlier of the date that is twelve (12) months after you terminate or the date on which you obtain other, comparable employment (the "Severance Period"). Such salary continuation payments will be paid at the time of the Company's standard payroll during the Severance Period, except as provided in the next sentence. To the extent that the sum of your salary continuation payments that would otherwise be paid in the first six months following your termination exceed the lesser of (A) two times your annual rate of pay (determined under Treas. Reg. § 1.409A-1(b)(9)(iii) and (B) two times the compensation limit under section 401 (a)(17) of the Internal Revenue Code (the "Code") for the year of your termination, such excess shall not be paid within the first six months of your termination and, instead, will be paid in the seventh month after your termination of employment.

(ii)           The Company shall also pay you a bonus equal to the target bonus for which you would have been eligible for the year of termination pursuant to the Company's then effective cash bonus plan, multiplied by a fraction, the numerator of which shall be the number of days in the calendar year elapsed as of the termination date and the denominator of which shall be 365. Such payment shall be made in the month next following the month of termination of your employment.

(iii)           If you or your eligible spouse and dependents timely elect COBRA Coverage, the Company shall pay the monthly premiums for such coverage during the Severance Period; provided that, if you elect coverage under a subsequent employer's group health insurance plan during the Severance Period, payment of such premiums shall cease (but only to the extent applicable law would not preclude payment of such premiums solely to you and other executives).

 
2

(iv)           The Options and SARs granted to you hereunder or under any other agreement that have vested as of the termination date shall remain exercisable for 90 days following such date, provided that no Options or SAR will be exercisable after the earlier of the latest date upon which the award could have expired by its original terms under any circumstances (as determined under Section 409A of the Code) or the 10th anniversary of the original date of grant. All unvested Options, SARs and Stock Awards will be cancelled on the date of termination.

(v)           The Company shall pay you for all salary and any other amounts earned but not paid prior to termination, including vacation and sick leave days that have accrued through the date of termination and have not been used. Payment under this subsection (a)(v) shall be made at the time of the Company's standard payroll for the pay period that includes the date of termination of your employment.

(vi)           The Company shall pay you for all reimbursable business expenses that you incur through the date of termination upon presentation of acceptable supporting documentation. Payment under this subsection (a)(vi) shall be made within 10 days following your presentation of appropriate supporting documentation but no later than December 31 of the year next following the year of termination of your employment.

(b)   Termination of Your Employment by the Company With Cause or by You Without Good Reason. The Company may terminate your employment with Cause or you may resign without Good Reason at any time. In such case, you shall be paid all amounts due for services rendered under this Agreement up until the termination date at the time of the Company’s standard payroll for the pay period that includes the date of termination of your employment. Thereafter, no further payments shall be made to you under this Agreement. All Options granted to you hereunder or under any other agreement that are fully vested as of the date of your termination shall remain exercisable for ninety (90) days from the termination date. If you dispute the grounds for your termination, your vested Options will remain exercisable until ninety (90) days after the date the dispute is resolved. Notwithstanding the preceding, no Option will be exercisable after the earlier of the latest date upon which the award could have expired by its original terms under any circumstances (as determined under section 409A of the Code) or the 10 th anniversary of the original date of grant.  All unvested Options, SARs and Stock Awards shall be forfeited.

(c)   Termination of Your Employment by the Company Without Cause or Voluntary Termination by You With Good Reason Following a Change in Control. If the Company terminates your employment without Cause or if you terminate your employment with Good Reason within the first 18 months after a Change in Control, the following shall apply:

(i)           The Company shall pay to you an amount equal to twenty-four (24) months of your base salary (the "CIC Severance Period") in a lump sum in the month next following the month of termination of your employment, except as described in this paragraph. You shall be under no obligation to secure alternative employment during the CIC Severance Period, and payment of your base salary shall be made without regard to any subsequent employment you may obtain. To the extent that salary continuation payments under Section 6(a)(i) would be delayed until the seventh month after termination of employment if Section 6(a)(i) applied to your termination of employment, the payment under this Section 6(c)(i) shall be delayed until the seventh month after termination of employment.

(ii)           The Company shall also pay you a bonus equal to two (2) times the target bonus for which you would have been eligible for the year of termination pursuant to the Company's then-effective cash bonus plan. Such payment shall be made in the month next following the month of termination of your employment.

3

(iii)           If you or your eligible spouse and dependents timely elect COBRA Coverage, the Company shall pay the monthly premiums for such coverage during the CIC Severance Period; provided that, if you elect coverage under a subsequent employer's group health insurance plan during the CIC Severance Period, payment of such premiums shall cease (but only to the extent applicable law would not preclude payment of such premiums solely to you and other executives).

(iv)             To the extent that your Options, SARs and Restricted or other Stock Awards have not fully vested at the time of the termination of your employment, all of the unvested Options, SARs and Restricted or other Stock Awards granted to you hereunder or under any other agreement shall become immediately and fully vested (and, with respect to Restricted Stock Awards, have the restrictions removed) as of the termination date, and all vested Options shall remain exercisable for 18 months following such date, provided that no Options or SAR will be exercisable after the earlier of the latest date upon which the award could have expired by its original terms under any circumstances (as determined under section 409A of the Code) or the 10 th   anniversary of the original date of grant.

(v)           The Company shall pay you for all salary and any other amounts earned but not paid prior to termination, including vacation and sick leave days that have accrued through the date of termination and have not been used. Payment under this subsection (c)(v) shall be made at the time of the Company's standard payroll for the pay period that includes the date of termination of your employment.

(vi)             The Company shall pay you for all reimbursable business expenses that you incur through the date of termination upon presentation of appropriate supporting documentation. Payment under this subsection (c)(vi) shall be made within 10 days following your presentation of acceptable supporting documentation but no later than December 31 of the year next following the year of termination of your' employment.

(d)   Cause. As used herein, “Cause” means that you have:

(i)               committed gross negligence in connection with your duties as set forth herein or otherwise with respect to the business and affairs of the Company,;
 
(ii)               committed fraud in connection with your duties as set forth herein or otherwise with respect to the business and affairs of the Company;
 
(iii)               engaged in “willful misconduct” with respect to the business and affairs of the Company. For purposes of this Agreement, “willful misconduct” means misconduct committed with actual knowledge that your actions violate directions and instructions of the CEO, which directions and instructions are legal and consistent with the Agreement;
 
(iv)               materially breached your duties under this Agreement or failed to materially comply with the Company’s policies and practices; or
 
(v)               committed an act of moral turpitude, theft, dishonesty or insubordination.

4

“Cause” shall be found only by a majority of the full Board.
 
(e)   Good Reason. As used herein, “Good Reason” means:

(i)               a material diminution in your base salary;

(ii)               a material diminution in your authority, duties or responsibilities;

(iii)               a material diminution in the authority, duties or responsibilities of the supervisor to whom you report;

(iv)               a material diminution in the budget over which you retain authority

(v)               a material change in the geographic location at which you must perform the services; and

(vi)               any other action or inaction that constitutes a material breach by the Company of this Agreement.

Termination for Good Reason may occur only if (A) you give the CEO notice within 90 days of the initial existence of the condition on which Good Reason is based, (B) the Company does not cure the condition within 30 days of receiving such notice, and (C) you terminate within two years following the initial existence of the condition.

(f)   Change in Control . As used herein, "Change of Control" shall be deemed to have occurred if:
 
(i)           there is a consolidation or merger of the Company in which the Company is not the continuing or surviving corporation; or there is any other merger or consolidation if, after such merger or consolidation shareholders of the Company immediately prior to such merger or consolidation hold less than 50% of the voting stock of the surviving entity;

(ii)           there is a sale or transfer of all or substantially all of the assets of the Company in one or a series of transactions or there is a complete liquidation or dissolution of the Company; or

(iii)           any individual or entity or group acting in concert and affiliates thereof, acquires, directly or indirectly, more than 50% of the outstanding shares of voting stock of the Company; provided that this subsection (iii) shall not apply to an underwritten public offering of the Company's securities.

(g)   Compliance with Section 409A.   This Agreement shall be interpreted to ensure that the payments contemplated hereby to be made by the Company to you are exempt from , or comply with, Section 409A of the Code. However, it is your obligation to pay all required taxes (including any taxes under Section 409A) on any payments provided under this Agreement. Any payment under this Agreement that is subject to Section 409A and is contingent upon termination of your employment shall be payable only if such termination qualifies as a "separation from service" within the meaning of Section 409A, and regulations promulgated thereunder. Each such payment shall be considered to be a separate payment for purposes of Section 409A.

5

7.  	Confidentiality/Noncompetition.	

As a condition of this Agreement, you agree to execute and be bound by the terms of the Company's form of Confidentiality, Invention Assignment and Non-Competition Agreement(s).

8.  	Term .	

The term of this Agreement shall continue for a period of one year following the Effective Date, unless earlier terminated as provided herein, and shall be automatically renewed for successive one year terms unless the Company or you provide written notice of its or your determination not to renew this Agreement at least 60 days prior to the expiration of the then current term.

9.  	Miscellaneous Provisions.	

(a)   Notices. All notices and other communications hereunder between you and the Company shall be in writing, shall be addressed to the receiving party's address of record (or to such other address as a party may designate by notice hereunder), and shall be either (i) delivered by hand, (ii) made by telecopy, (iii) sent by overnight courier, or (iv) sent by certified mail, return receipt requested, postage prepaid.

(b)   Modifications and Amendments . The terms and provisions of this Agreement may be modified or amended only by written agreement executed by the parties hereto.

(c)   Waivers and Consents . The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

(d)   Assignment . This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributes, devisees and legatees. This Agreement may not be assigned or pledged by you. In the event of the merger or consolidation of the Company (whether or not the Company is the surviving or resulting corporation), the transfer of all or substantially all the assets of the Company, or the voluntary or involuntary dissolution of the Company, the surviving or resulting corporation or the transferee or transferees of the Company's assets shall be bound by this and the Company shall take all actions necessary to ensure that such corporation, transferee or transferees assume and are bound by its provisions.

(e)   Severability .  The parties intend this Agreement to be enforced as written.  However, if any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a duly authorized court of proper jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

(f)   Choice of Law .  This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the law of the State of New York, without giving effect to the conflict of law principles thereof.

6

(g)   Entire Agreement .  This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings of the parties hereto, oral or written, with respect to the subject matter hereof, including without limitation your existing Change in Control Agreement (as defined below) which shall be deemed terminated in all respects as of the Effective Date. Notwithstanding the preceding sentence, the provisions of any Restricted Stock Agreements and all Option, SAR and Stock Award Agreements (“Awards”) granted pursuant to the 2006 Plan or other Plans, entered into between you and the Company on or after the Effective Date hereof, shall constitute additional agreements between the Company and you, and the provisions of Sections 6(a)(iv), 6(b) and 6(c)(iv) of this Agreement shall constitute terms of such Awards, notwithstanding anything to the contrary in Section 9 of the Plan.  As used herein, “Change in Control Agreement” refers to that certain letter agreement effective as of October 19, 2011 between you and the Company.

(h)   Arbitration . Any dispute or controversy between you and the Company, arising out of or relating to this Agreement or the breach of this Agreement, shall be settled by arbitration administered by the American Arbitration Association ("AAA") in accordance with its Employment Disputes Arbitration Rules then in effect, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Any arbitration shall be held before a single arbitrator who shall be selected by the mutual agreement of you and the Company, unless the parties are unable to agree to an arbitrator, in which case, the arbitrator will be selected under the procedures of the AAA. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could order or grant, including, without limitation, the issuance of an injunction. However, either party may, without inconsistency with this arbitration provision, apply to any court having jurisdiction over such dispute or controversy and seek interim provisional, injunctive or other equitable relief until the arbitration award is rendered or the controversy is otherwise resolved. Except as necessary in court proceedings to enforce this arbitration provision or an award rendered hereunder, to obtain interim relief, as required by law, or the party's immediate family and legal and financial advisors, neither a party nor an arbitrator may disclose the existence, content or results of any arbitration hereunder without the prior written consent of you and the Company. The Company shall pay all costs and fees associated with such arbitration, including all arbitration fees, the arbitrator's fees, attorneys’ fees and all costs.

7

If the terms of this Agreement are acceptable to you please sign where indicated below. It is understood and acknowledged that a fax signature will be considered to be valid as an original.

Very truly yours,

Acorda Therapeutics, Inc.

By:            /s/ Ron Cohen

Its:           President & CEO

6/9/15
Agreed to and accepted:

/s/ Enrique Carrazana
Enrique Carrazana

Date:  June 8 th , 2015

8

    EXHIBIT 10.3

 
 
June 15, 2015

Dear Enrique:
 
Acorda has added an additional $35K toward your relocation assistance; this includes extending the lease for the year at the Windsor at The Gramercy (2 Canfield Avenue, White Plains, NY10601), effective September 1, 2015 through August 31, 2016. During this time the Company is responsible for your monthly rent ($2,530.00) including the unit, parking space and full use of the community amenities), as well as your Con Edison and Cable/Internet expenses (not included). You may also use your relocation allowance toward travel or any item that is involved under the relocation benefit. Should you voluntarily terminate your employment with the Company, you agree to reimburse the Company for the above expenses on a pro-rated basis. Please sign and date below in acknowledgement of the extension and terms. Do not hesitate to contact me with any questions.

Best regards,

Denise J. Duca
Executive Vice President - Human Resources

Signature      /s/ Enrique Carrazana                                                               Date: 6/29/2015

EXHIBIT 10.4

 
June 8, 2015
 
Lauren Sabella
120 Mohican Hill Road
Fairfield, CT  06825

Dear Lauren:

We are delighted to present this letter agreement, setting out the terms of your continued employment with Acorda Therapeutics, Inc. (the "Company") as Chief Commercial Officer. If these terms are acceptable, please sign and date the copy of this letter provided herewith and return it to me at your first convenience. If you accept the terms offered herein, this Agreement shall be deemed to be effective as of June 8, 2015 (the "Effective Date").

1.  	Employment.	

You will be employed by the Company as Chief Commercial Officer of the Company.

2.  	Base Salary.	

In consideration for your services under this Agreement, you shall be paid an annual base salary of $415,000.00 (your annual base salary in effect as of the date of this agreement), to be paid in accordance with the Company's standard payroll practices. Your base salary shall be reviewed annually by the President and Chief Executive Officer and the compensation committee of the Board of Directors.

3.  	Annual Bonus.	

You shall be eligible to receive an annual bonus as part of any bonus program implemented by the Board of Directors in an amount determined based on your performance.

4.  	Benefits; Perquisites; Reimbursement of Expenses.	

In addition to those payments set forth above, you shall be entitled to the following benefits and payments:

(a)   Employee Benefit Plans Generally . You shall be entitled to participate in all employee benefit plans which the Company provides or may establish from time to time for the benefit of its senior executives.

(b)   Vacation . You shall be entitled to paid vacation in accordance with the Company's vacation policy for senior managers as that policy may be amended from time to time.

(c)   Perquisites and Reimbursement of Expenses . You shall be entitled to all perquisites offered to senior executives of the Company. In addition, you shall be entitled to reimbursement for all ordinary and reasonable out-of­-pocket business expenses which are incurred by you in furtherance of the Company's business, in accordance with the policies adopted from time to time by the Company.

1

 
(d)   Insurance. You shall be covered by a Directors and Officers Liability Insurance policy that generally covers the directors and officers of the Company, provided by the Company at its expense, for so long as the Company has such a policy in place.

5.  	Stock Options, Stock Appreciation Rights and Restricted Stock Awards .	

You shall be eligible to receive annual performance-based stock option grants to purchase shares of the Company's common stock (“Options”), stock appreciation rights awards (“SARs”), and/or restricted stock awards of the Company's common stock (“Stock Awards”). The number of annual Options, SARs, and/or Stock Awards granted shall be determined based on the achievement of individual performance objectives as recommended by the compensation committee and approved by the Board of Directors and the Company's achievement of its goals and objectives. All such Options, SARs, and/or Stock Awards shall be granted pursuant to and in accordance with the terms of the Acorda Therapeutics, Inc. 2006 Employee Incentive Plan as amended (the “2006 Plan”), and/or any additional or replacement plan adopted by the Board (the "Plan(s)") except as such terms may be specifically modified herein. Unless otherwise provided for in any Option, SARs or Stock Awards agreement, all Options, SARs and Stock Awards granted to you shall vest in 16 equal quarterly installments, beginning with the first day of the quarter next following the date the Option, SAR or Stock Award is granted.

6.  	Termination.	

(a)   Termination of Your Employment by the Company Without Cause or Voluntary Termination by You With Good Reason . If the Company terminates your employment without Cause or if you terminate your employment with Good Reason other than pursuant to subsection (c) of this Section 6, the following shall apply:

(i)           The Company shall continue to pay to you your base salary for a period ending on the earlier of the date that is twelve (12) months after you terminate or the date on which you obtain other, comparable employment (the "Severance Period"). Such salary continuation payments will be paid at the time of the Company's standard payroll during the Severance Period, except as provided in the next sentence. To the extent that the sum of your salary continuation payments that would otherwise be paid in the first six months following your termination exceed the lesser of (A) two times your annual rate of pay (determined under Treas. Reg. § 1.409A-1(b)(9)(iii) and (B) two times the compensation limit under section 401 (a)(17) of the Internal Revenue Code (the "Code") for the year of your termination, such excess shall not be paid within the first six months of your termination and, instead, will be paid in the seventh month after your termination of employment.

(ii)           The Company shall also pay you a bonus equal to the target bonus for which you would have been eligible for the year of termination pursuant to the Company's then effective cash bonus plan, multiplied by a fraction, the numerator of which shall be the number of days in the calendar year elapsed as of the termination date and the denominator of which shall be 365. Such payment shall be made in the month next following the month of termination of your employment.

(iii)           If you or your eligible spouse and dependents timely elect COBRA Coverage, the Company shall pay the monthly premiums for such coverage during the Severance Period; provided that, if you elect coverage under a subsequent employer's group health insurance plan during the Severance Period, payment of such premiums shall cease (but only to the extent applicable law would not preclude payment of such premiums solely to you and other executives).

2

(iv)           The Options and SARs granted to you hereunder or under any other agreement that have vested as of the termination date shall remain exercisable for 90 days following such date, provided that no Options or SAR will be exercisable after the earlier of the latest date upon which the award could have expired by its original terms under any circumstances (as determined under Section 409A of the Code) or the 10th anniversary of the original date of grant. All unvested Options, SARs and Stock Awards will be cancelled on the date of termination.

(v)           The Company shall pay you for all salary and any other amounts earned but not paid prior to termination, including vacation and sick leave days that have accrued through the date of termination and have not been used. Payment under this subsection (a)(v) shall be made at the time of the Company's standard payroll for the pay period that includes the date of termination of your employment.

(vi)           The Company shall pay you for all reimbursable business expenses that you incur through the date of termination upon presentation of acceptable supporting documentation. Payment under this subsection (a)(vi) shall be made within 10 days following your presentation of appropriate supporting documentation but no later than December 31 of the year next following the year of termination of your employment.

(b)   Termination of Your Employment by the Company With Cause or by You Without Good Reason. The Company may terminate your employment with Cause or you may resign without Good Reason at any time. In such case, you shall be paid all amounts due for services rendered under this Agreement up until the termination date at the time of the Company’s standard payroll for the pay period that includes the date of termination of your employment. Thereafter, no further payments shall be made to you under this Agreement. All Options granted to you hereunder or under any other agreement that are fully vested as of the date of your termination shall remain exercisable for ninety (90) days from the termination date. If you dispute the grounds for your termination, your vested Options will remain exercisable until ninety (90) days after the date the dispute is resolved. Notwithstanding the preceding, no Option will be exercisable after the earlier of the latest date upon which the award could have expired by its original terms under any circumstances (as determined under section 409A of the Code) or the 10 th anniversary of the original date of grant.  All unvested Options, SARs and Stock Awards shall be forfeited.

(c)   Termination of Your Employment by the Company Without Cause or Voluntary Termination by You With Good Reason Following a Change in Control. If the Company terminates your employment without Cause or if you terminate your employment with Good Reason within the first 18 months after a Change in Control, the following shall apply:

(i)           The Company shall pay to you an amount equal to twenty-four (24) months of your base salary (the "CIC Severance Period") in a lump sum in the month next following the month of termination of your employment, except as described in this paragraph. You shall be under no obligation to secure alternative employment during the CIC Severance Period, and payment of your base salary shall be made without regard to any subsequent employment you may obtain. To the extent that salary continuation payments under Section 6(a)(i) would be delayed until the seventh month after termination of employment if Section 6(a)(i) applied to your termination of employment, the payment under this Section 6(c)(i) shall be delayed until the seventh month after termination of employment.

(ii)           The Company shall also pay you a bonus equal to two (2) times the target bonus for which you would have been eligible for the year of termination pursuant to the Company's then-effective cash bonus plan. Such payment shall be made in the month next following the month of termination of your employment.

3

(iii)           If you or your eligible spouse and dependents timely elect COBRA Coverage, the Company shall pay the monthly premiums for such coverage during the CIC Severance Period; provided that, if you elect coverage under a subsequent employer's group health insurance plan during the CIC Severance Period, payment of such premiums shall cease (but only to the extent applicable law would not preclude payment of such premiums solely to you and other executives).

(iv)             To the extent that your Options, SARs and Restricted or other Stock Awards have not fully vested at the time of the termination of your employment, all of the unvested Options, SARs and Restricted or other Stock Awards granted to you hereunder or under any other agreement shall become immediately and fully vested (and, with respect to Restricted Stock Awards, have the restrictions removed) as of the termination date, and all vested Options shall remain exercisable for 18 months following such date, provided that no Options or SAR will be exercisable after the earlier of the latest date upon which the award could have expired by its original terms under any circumstances (as determined under section 409A of the Code) or the 10 th   anniversary of the original date of grant.

(v)           The Company shall pay you for all salary and any other amounts earned but not paid prior to termination, including vacation and sick leave days that have accrued through the date of termination and have not been used. Payment under this subsection (c)(v) shall be made at the time of the Company's standard payroll for the pay period that includes the date of termination of your employment.

(vi)             The Company shall pay you for all reimbursable business expenses that you incur through the date of termination upon presentation of appropriate supporting documentation. Payment under this subsection (c)(vi) shall be made within 10 days following your presentation of acceptable supporting documentation but no later than December 31 of the year next following the year of termination of your' employment.

(d)   Cause. As used herein, “Cause” means that you have:

(i)               committed gross negligence in connection with your duties as set forth herein or otherwise with respect to the business and affairs of the Company,;
 
(ii)               committed fraud in connection with your duties as set forth herein or otherwise with respect to the business and affairs of the Company;
 
(iii)               engaged in “willful misconduct” with respect to the business and affairs of the Company. For purposes of this Agreement, “willful misconduct” means misconduct committed with actual knowledge that your actions violate directions and instructions of the CEO, which directions and instructions are legal and consistent with the Agreement;
 
(iv)               materially breached your duties under this Agreement or failed to materially comply with the Company’s policies and practices; or
 
(v)               committed an act of moral turpitude, theft, dishonesty or insubordination.

4

“Cause” shall be found only by a majority of the full Board.
 
(e)   Good Reason. As used herein, “Good Reason” means:

(i)               a material diminution in your base salary;

(ii)               a material diminution in your authority, duties or responsibilities;

(iii)               a material diminution in the authority, duties or responsibilities of the supervisor to whom you report;

(iv)               a material diminution in the budget over which you retain authority

(v)               a material change in the geographic location at which you must perform the services; and

(vi)               any other action or inaction that constitutes a material breach by the Company of this Agreement.

Termination for Good Reason may occur only if (A) you give the CEO notice within 90 days of the initial existence of the condition on which Good Reason is based, (B) the Company does not cure the condition within 30 days of receiving such notice, and (C) you terminate within two years following the initial existence of the condition.

(f)   Change in Control . As used herein, "Change of Control" shall be deemed to have occurred if:
 
(i)           there is a consolidation or merger of the Company in which the Company is not the continuing or surviving corporation; or there is any other merger or consolidation if, after such merger or consolidation shareholders of the Company immediately prior to such merger or consolidation hold less than 50% of the voting stock of the surviving entity;

(ii)           there is a sale or transfer of all or substantially all of the assets of the Company in one or a series of transactions or there is a complete liquidation or dissolution of the Company; or

(iii)           any individual or entity or group acting in concert and affiliates thereof, acquires, directly or indirectly, more than 50% of the outstanding shares of voting stock of the Company; provided that this subsection (iii) shall not apply to an underwritten public offering of the Company's securities.

(g)   Compliance with Section 409A.   This Agreement shall be interpreted to ensure that the payments contemplated hereby to be made by the Company to you are exempt from , or comply with, Section 409A of the Code. However, it is your obligation to pay all required taxes (including any taxes under Section 409A) on any payments provided under this Agreement. Any payment under this Agreement that is subject to Section 409A and is contingent upon termination of your employment shall be payable only if such termination qualifies as a "separation from service" within the meaning of Section 409A, and regulations promulgated thereunder. Each such payment shall be considered to be a separate payment for purposes of Section 409A.

5

 
7.  	Confidentiality/Noncompetition.	

As a condition of this Agreement, you agree to execute and be bound by the terms of the Company's form of Confidentiality, Invention Assignment and Non-Competition Agreement(s).

8.  	Term .	

The term of this Agreement shall continue for a period of one year following the Effective Date, unless earlier terminated as provided herein, and shall be automatically renewed for successive one year terms unless the Company or you provide written notice of its or your determination not to renew this Agreement at least 60 days prior to the expiration of the then current term.

9.  	Miscellaneous Provisions.	

(a)   Notices. All notices and other communications hereunder between you and the Company shall be in writing, shall be addressed to the receiving party's address of record (or to such other address as a party may designate by notice hereunder), and shall be either (i) delivered by hand, (ii) made by telecopy, (iii) sent by overnight courier, or (iv) sent by certified mail, return receipt requested, postage prepaid.

(b)   Modifications and Amendments . The terms and provisions of this Agreement may be modified or amended only by written agreement executed by the parties hereto.

(c)   Waivers and Consents . The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

(d)   Assignment . This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributes, devisees and legatees. This Agreement may not be assigned or pledged by you. In the event of the merger or consolidation of the Company (whether or not the Company is the surviving or resulting corporation), the transfer of all or substantially all the assets of the Company, or the voluntary or involuntary dissolution of the Company, the surviving or resulting corporation or the transferee or transferees of the Company's assets shall be bound by this and the Company shall take all actions necessary to ensure that such corporation, transferee or transferees assume and are bound by its provisions.

(e)   Severability .  The parties intend this Agreement to be enforced as written.  However, if any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a duly authorized court of proper jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

(f)   Choice of Law .  This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the law of the State of New York, without giving effect to the conflict of law principles thereof.

6

(g)   Entire Agreement .  This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings of the parties hereto, oral or written, with respect to the subject matter hereof, including without limitation your existing Change in Control Agreement (as defined below) which shall be deemed terminated in all respects as of the Effective Date. Notwithstanding the preceding sentence, the provisions of any Restricted Stock Agreements and all Option, SAR and Stock Award Agreements (“Awards”) granted pursuant to the 2006 Plan or other Plans, entered into between you and the Company on or after the Effective Date hereof, shall constitute additional agreements between the Company and you, and the provisions of Sections 6(a)(iv), 6(b) and 6(c)(iv) of this Agreement shall constitute terms of such Awards, notwithstanding anything to the contrary in Section 9 of the Plan.  As used herein, “Change in Control Agreement” refers to that certain letter agreement effective as of November 7, 2011 between you and the Company.

(h)   Arbitration . Any dispute or controversy between you and the Company, arising out of or relating to this Agreement or the breach of this Agreement, shall be settled by arbitration administered by the American Arbitration Association ("AAA") in accordance with its Employment Disputes Arbitration Rules then in effect, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Any arbitration shall be held before a single arbitrator who shall be selected by the mutual agreement of you and the Company, unless the parties are unable to agree to an arbitrator, in which case, the arbitrator will be selected under the procedures of the AAA. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could order or grant, including, without limitation, the issuance of an injunction. However, either party may, without inconsistency with this arbitration provision, apply to any court having jurisdiction over such dispute or controversy and seek interim provisional, injunctive or other equitable relief until the arbitration award is rendered or the controversy is otherwise resolved. Except as necessary in court proceedings to enforce this arbitration provision or an award rendered hereunder, to obtain interim relief, as required by law, or the party's immediate family and legal and financial advisors, neither a party nor an arbitrator may disclose the existence, content or results of any arbitration hereunder without the prior written consent of you and the Company. The Company shall pay all costs and fees associated with such arbitration, including all arbitration fees, the arbitrator's fees, attorneys’ fees and all costs.

7

If the terms of this Agreement are acceptable to you please sign where indicated below. It is understood and acknowledged that a fax signature will be considered to be valid as an original.

Very truly yours,

Acorda Therapeutics, Inc.

By:            /s/ Ron Cohen

Its:           President & CEO

6/9/15
Agreed to and accepted:

/s/ Lauren Sabella
Lauren Sabella

Date:  6/8/15

8

EXHIBIT 10.5

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement"), made as of this 27th day of December 2010, is entered into by Corregidor Therapeutics, Inc., a Delaware corporation with its principal place of business at 384 Powder Mill Road, Concord, Massachusetts 01742 (the " Company "), and Rick Batycky, residing at 19 Bernard Street, Newton, Massachusetts 02461 (the "Executive").

In consideration of the mutual covenants and promises contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties to this Agreement, the parties agree as follows:

1.          Employment/Duties .  During the Employment Period (as defined below), the Executive shall serve as Chief Scientific Officer of the Company and shall have all the duties, responsibilities and authority commensurate with such position and such additional duties as may be determined by the Company's Chief Executive Officer. The Executive shall be based at the Company's principal place of business in the greater Boston, Massachusetts metropolitan area, or such place or places in the continental United States as the Company's Board of Directors (" Board of Directors" ) shall determine.  The Executive shall report to, and be subject to the general supervision of, the Company's Chief Executive Officer.

The Executive agrees to devote substantially all of his business time, attention and energies to the business and interests of the Company during the Employment Period; provided , however , that the Executive may be permitted to engage in other activities, including membership on boards of directors of other businesses or non-for-profit organizations, so long as such activities do not materially interfere with the performance of the Executive's duties under this Agreement and have been disclosed to and approved in advance by the Chief Executive Officer. The Executive agrees to abide by the rules, regulations, personnel practices and policies of the Company, as adopted and amended from time to time by the Company, provided , that such rules, regulations, practices and policies are not inconsistent with the terms and conditions of this Agreement and have been disclosed to the Executive.

2.          Effective Date/Period of Employment . This Agreement will become effective on the date of the initial closing of the Company's first preferred equity investment transaction (the " Effective Date "), which is expected to be on or soon following the date of this Agreement, and shall continue until terminated in accordance with the provisions of Section 4 (the " Employment Period" ), subject to Section 9.14.

3.          Compensation and Benefits .

3.1          Base Salary . During the Employment Period, the Company shall pay the Executive a base salary of $300,000.00 calculated on an annual basis (" Base Salary" ), paid in periodic installments in accordance with the Company's customary payroll practices. The Base Salary shall be reviewed no less frequently than annually, beginning at the end of calendar year 2011. In addition, the Base Salary shall be increased by $20,000.00 immediately upon a Value

 

Creation Event. A " Value Creation Event " means the first to occur of: (a) an Acquisition (as defined in the Stock Restriction Agreements (as defined below) in which the amount of cash consideration and the fair market value of any securities received by the Company and/or its stockholders is equal to or greater than $60,000,000.00 (which, for clarity, shall not include consideration contingent upon events or performance occurring after the closing of such Acquisition, unless and until such contingent consideration is received by the Company and/or its stockholders); or (b) the Company receiving at least $15,000,000.00 of revenues and/or equity financing in addition to the aggregate of $20,000,000.00 of gross proceeds from the financings contemplated by the Series A Preferred Stock Purchase Agreement by and among the Company and certain investors dated on or about the date of this Agreement (the " Series A Purchase Agreement "), which may include amounts received: (i) as fees, payments or other revenues from companies, foundations, governmental agencies and other sources, whether as a result of intellectual property licenses, collaboration agreements, grants or other bases; and (ii) gross proceeds from equity financings, provided that a maximum of $7,500,000.00 of gross proceeds from the Purchasers (as defined in the Series A Purchase Agreement) shall count towards the $15,000,000.00 threshold.

3.2             Bonus .

(a)              Annual Bonus Opportunity .  During the Employment Period, the Executive may be eligible to receive an annual bonus no later than sixty (60) days after the end of each calendar year, as determined by the Board of Directors (or its Compensation Committee) in its discretion, which bonus, if awarded, may be payable by cash or award under the Company's then-current stock incentive plan, as determined by the Board of Directors (or its Compensation Committee) in its discretion.

(b)              Special Bonus Opportunity . Upon the occurrence of a Value Creation Event, the Executive shall be paid a special bonus in an amount equal to $20,000.00 multiplied by the number of years elapsed from the Effective Date until such occurrence (including fractional periods), which special bonus shall be in addition to and determined separately from any awarded bonuses as a result of the annual bonus opportunity described in Section 3.2(a).

3.3             Equity Compensation . The Company and the Executive are party to a certain Amended and Restated Stock Restriction Agreement dated as of December 27, 2010 and a Stock Restriction Agreement dated as of December 27, 2010 (collectively, the " Stock Restriction Agreements ").

3.4             Benefits.   During the Employment Period, the Executive shall be entitled to participate in all benefit programs that the Company makes available to its employees, if any, to the extent that Executive's position, tenure, health and other qualifications make the Executive eligible to participate.  The Executive shall be entitled to take paid vacation consistent with the company's employee benefits policy in addition to customary business holidays approved by the Board of Directors for the Company's employees generally.  The Executive shall notify the Chief Executive Officer when the Executive intends to take vacation.

3.5             Reimbursement of Expenses .

2

(a)             The Company shall reimburse the Executive for all reasonable travel, entertainment and other expenses incurred or paid by the Executive in connection with, or related to, the performance of the Executive's duties, responsibilities or services on behalf of the Company under this Agreement, in accordance with policies and procedures, and subject to reasonable limitations, adopted by the Company from time to time.

(b)             The Company shall reimburse the Executive for up to Thirty Thousand Dollars ($30,000.00) of income tax payable by the Executive as a result of the grant of shares of the Company's common stock evidenced by the Stock Restriction Agreement dated as of December__, 2010, and payable as a result of the reimbursement provided pursuant to this Section 3.5(b), no later than March 31, 2011.

3.6             Withholding.   All salary, bonus and other compensation payable to the Executive during the Employment Period shall be subject to applicable required deductions for state and federal withholding tax, social security and all other employment taxes and payroll deductions.

4.             Termination of Employment Period.   The employment of the Executive by the Company pursuant to this Agreement shall terminate upon the occurrence of any of the following:

4.1            By the Company for Cause .  At the election of the Company, for Cause (as defined below), provided that prior to a termination of the Executive's employment pursuant to subsection (iii), below, the Executive shall have thirty (30) days to cure in all material respects such Cause event(s) following the Executive's receipt of written notice by the Company, which notice shall specifically identify the Cause upon which the termination is based and after the Executive has been given such notice.  For the purposes of this Section 4.1, " Cause " means (i) the Executive's conviction of, or guilty plea to, a felony, (ii) the Executive's commission of a fraudulent, illegal or materially dishonest act in connection with the Executive's employment by the Company, as reasonably determined by the Board of Directors acting in good faith, or (iii) the Executive's willful and repeated failure or refusal to attempt to perform the Executive's duties to the Company or material breach of this Agreement or any other agreement between the Company and the Executive.  The Executive shall be considered to have been discharged for "Cause" if (based on a final, unappealable judicial determination) the Executive has resigned from the Company without Good Reason (as defined in Section 4.3) to avoid a termination for Cause based on an event that occurred prior to such resignation (but not an event about which the Board of Directors had actual knowledge for more than ninety (90) days prior to such resignation).

4.2             Death or Disability .  Upon the death or Disability (as defined below) of the Executive.  For purposes of this Section 4.2, " Disability " means (i) the Executive has been incapacitated by mental or physical injury or illness so as to be prevented thereby from engaging in the performance of the Executive's  duties to the Company and (ii) such incapacity has continued for a period of ninety (90) days.

4.3             By the Executive for Good Reason .  At the election of the Executive, for   Good Reason (as defined below), provided that the Company shall have thirty (30) days to cure

3

 
in all material respects such Good Reason event(s) following the Company's receipt of the Executive's written notice of such Good Reason event(s). For the purposes of this Section 4.3, " Good Reason " for termination shall mean (i) a reduction in the Executive's Base Salary (other than in connection with a reduction in salary with respect to all other senior executives of the Company), (ii) any material diminution or other adverse change in the Executive's authority, responsibilities or duties without the prior written consent of the Executive, (iii) a material breach by the Company of this Agreement or any other material agreement between the Company and the Executive, or (iv) the relocation, without the written consent of the Executive, of the place of business at which the Executive principally performs Executive's duties hereunder to a location that is greater than 35 miles from place of business at which the Executive principally performs Executive's duties hereunder immediately prior to such relocation. Notwithstanding the foregoing, (A) the Executive will be deemed to have given consent to the condition(s) described in this Section 4.3 if the Executive does not provide written notice to the Company of such Good Reason event(s) within ninety (90) days from first occurrence of such Good Reason event(s) and (B) to the extent the Company has not cured such Good Reason event(s) during the 30-day cure period, the Executive must terminate the Executive's employment for Good Reason no later than one hundred and eighty (180) days following the occurrence of such Good Reason event(s) by providing the Company thirty (30) days prior written notice of termination, which may run concurrently with the Company's cure period.

4.4             By the Company Not For Cause or By the Executive Not For Good Reason .  At the election of the Company for reasons other than Cause, or the election of the Executive for reasons other than Good Reason, upon not less than thirty (30) days' prior written notice of termination.

5.            Effect of Termination.

5.1             Payments Upon Termination.

(a)            In the event the Executive's employment is terminated pursuant to Section 4.1, or by the Executive pursuant to Section 4.4, the Company shall pay to the Executive the " Accrued Benefits, " which shall mean: (i) any earned but unpaid Base Salary pursuant to Section 3.1 through the last day of the Executive's actual employment by the Company; (ii) any unreimbursed expenses incurred through the last day of the Executive's actual employment by the Company and reimbursable under Section 3.5; and (iii) all other payments, benefits or fringe benefits to which the Executive shall be entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant or this Agreement; but, for clarity, shall have no obligation to pay any bonus pursuant to Section 3.2.

(b)            In the event the Executive's employment is terminated pursuant to Sections 4.2, 4.3 or by the Company pursuant to Section 4.4, then the Company shall continue to pay to the Executive: (i) the Accrued Benefits; (ii) any annual bonus with respect to the calendar year ending on or preceding the date of termination, which has been determined by the Board of Directors (or its Compensation Committee) prior to the date of termination pursuant to Section 3.2 but is unpaid, which shall be payable at the time such bonuses would have been paid if the Executive was still employed with the Company and in accordance with Section 3.2(a); (iii) any

4

special bonus to which the Executive is entitled pursuant to Section 3.2(b) as a result of a Value Creation Event occurring prior to, or within two (2) months after, such termination; (iv) Base Salary pursuant to Section 3.I as in effect on the date of termination during the Severance Period (as defined below), provided however that, if the adjustment required by Section 3.1 as a result of a Value Creation Event has not yet been effected upon such termination, such adjustment shall be made for purposes of determining pay to the Executive pursuant to this Section 5.l(b)(iv) as though a Value Creation Event occurred prior to such termination; and (v) reimbursement for COBRA continuation medical benefits for the Executive (and the Executive's eligible dependents) during the Severance Period. Such payments of continued salary and any COBRA-continuation premium reimbursement shall begin on the sixtieth (60th ) day after the date of termination and shall include any amounts due prior to such date.  For the avoidance of doubt, unless otherwise elected by the Board of Directors, in its sole discretion and to the extent permitted under Section 409A of the Code, to make payments sooner, any payments made pursuant to this Section 5.l(b) shall be subject to the Company's standard payroll schedule during the Severance Period.  For the purposes of this Section 5.1(b), " Severance Period " means the period beginning on the date of termination and continuing afterward for nine (9) months, if such termination occurs within two (2) months prior to, or at any time following, an Acquisition (as defined in the Stock Restriction Agreements), or otherwise six (6) months.

(c)           The payments to be made or benefits to be provided to the Executive under Sections 5: (i) shall be contingent upon the execution (and non-revocation) within sixty (60) days following termination of employment by the Executive of a general release of the Company, its affiliates, stockholders, directors, officers, employees and agents from all claims (other than claims for the payments to be made and benefits to be provided), together with an agreement to not make any disparaging comments, statements or communications about the Company, its affiliates, stockholders, directors, officers, employees or agents, or its management or business practices for three (3) years following termination ofthe Executive's employment, all in a form reasonably provided by the Company; (ii) shall be contingent upon the Executive's compliance with all continuing obligations under the Company's Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement (the " Proprietary Rights Agreement"); and (iii) shall constitute the sole remedy of the Executive in the event of a termination of the Executive's employment in the circumstances set forth in Section 5.l(b).

5.2             Section 409A.

(a)             Notwithstanding anything to the contrary in this Agreement, no severance pay or benefits to be paid or provided to the Executive, if any, pursuant to this Agreement that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Code Section 409A, and the final regulations and any guidance promulgated thereunder (collectively, the " Deferred Payments ") will be paid or otherwise provided until the Executive has a "separation from service" within the meaning of Code Section 409 A.

(b)            Notwithstanding anything to the contrary in this Agreement, if the Executive is a "specified employee" within the meaning of Code Section 409A at the time of the Executive's termination (other than due to death), then the Deferred Payments that are payable within the first six months following the Executive's separation from service, will become

5

payable on the first payroll date that occurs on or after the date six months and one day following the date of the Executive's separation from service.  Notwithstanding anything herein to the contrary, if the Executive dies following the Employee's separation from service, but prior to the six-month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of the Executive's death.  Each payment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(c)           Any amount paid under this Agreement that satisfies the requirements of the "short-term deferral" rule set forth in Section 1.409A-l(b)(4) of the Treasury Regulations will not constitute Deferred Payments.

(d)           This Agreement is intended to be exempt from the requirements of Code Section 409A so that none of the payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to be so exempt.  The Company and the Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to the Executive under Section 409A.

6.            Restrictive Covenants .  During the Executive's employment with the Company, the Executive will be exposed to, and provided with, valuable confidential and/or trade secret information concerning the Company and its present and future business plans and operations. As a result, in order to protect the Company's legitimate business interests, the Executive shall, as a condition of commencing employment, execute and deliver to the Company the Company's Proprietary Rights Agreement, a copy of which is attached to this Agreement as Exhibit A . For clarity, the obligations and covenants of the Executive pursuant to the Proprietary Rights Agreement constitute material responsibilities of the Executive to the Company pursuant to this Agreement.

7.            Other Agreements . The Executive represents that the Executive's performance of all the terms of this Agreement and the performance of the Executive's duties as an employee of the Company do not and will not breach any agreement with any prior employer or other party to which the Executive is a party (including without limitation any nondisclosure or non­ competition agreement), or violate or contravene any judgment, administrative order or other legal prohibition specifically naming the Executive. The Executive agrees that if the Executive, during the Employment Period, becomes subject to any such agreement or prohibition, the Executive shall immediately notify the Company.  The Company acknowledges that it is aware that the Executive may be subject to certain confidentiality and non-disparagement covenants with respect to the Executive's prior employers.

8.            Indemnification . The Company shall indemnify and hold harmless the Executive against any liability asserted against or incurred by the Executive in the Executive's capacity as a director, officer and/or employee of the Company or an affiliate of the Company or as fiduciary of any Company employee benefit plan to the fullest extent permitted by law. Notwithstanding the foregoing, the Executive shall have no right to indemnification on account of:  (a) acts or

6

omissions of the Executive finally adjudged to be intentional misconduct, gross negligence, fraud or a violation of law; or (b) any transaction with respect to which it is finally adjudged that the Executive personally received a benefit in money, property or services to which the Executive was not legally entitled.  In addition, the Company shall include the Executive within the coverage of any directors and officers liability insurance policy to the full extent that any other director or other executive  officer of the Company,  as applicable, is so covered. The indemnification and insurance provisions of this paragraph shall survive the Executive's termination of employment with the Company and while potential liability exists.

9.            Miscellaneous .

9.1             Notices.   Any notices delivered under this Agreement shall be deemed duly delivered four (4) business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent for next-business day delivery via a reputable nationwide overnight courier service, in each case to the address of the recipient set forth in the introductory paragraph of this Agreement.  Either party may change the address to which notices are to be delivered by giving notice of such change to the other party in the manner set forth in this Section 9.1.

9.2             Pronou ns.   Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa.

9.3            Entire Agreement . This Agreement, together with the Stock Restriction Agreements and the Proprietary Rights Agreement, constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement.

9.4             Amendment .  This Agreement may be amended or modified only by a written instrument executed by both the Company and the Executive.

9.5             Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts (without reference to the conflicts of laws provisions of the Commonwealth of Massachusetts).

9.6            Resolution of Disputes.   Any dispute, difference or controversy arising under this Agreement, the Stock Restriction Agreement or the Proprietary Rights Agreement shall be settled by arbitration.  Any arbitration pursuant to this Section shall be held before a single neutral arbitrator selected from the roles of the American Arbitration Association pursuant to the Commercial Arbitration Rules.  The arbitrator (a) shall not have the power or authority to add to, alter, amend or modify the terms of this Agreement, (b) shall have no power to award punitive or exemplary  damages; and (c) shall interpret and construe this Agreement in accordance with, and shall be bound by the laws of the Commonwealth of Massachusetts. Except as otherwise set forth herein, each party shall bear its own expenses for counsel and other out-of-pocket costs in connection with any resolution of a dispute, difference or controversy. Any arbitration shall take place in Boston, Massachusetts or at such other location as the parties may agree upon, according to the American Arbitration Association's Commercial Arbitration

7

Rules now in force and hereafter adopted. The arbitrator shall make any award in accordance with and based upon all the provisions of this Agreement and judgment upon any award rendered by the arbitrator shall be entered in any court having jurisdiction thereof. The fees and disbursements of such arbitrator shall be borne equally by the parties, with each party bearing its own expenses for counsel and other out-of-pocket costs. The arbitrator is specifically authorized to award costs and attorney's fees to the party substantially prevailing in the arbitration and shall do so in any case in which the arbitrator believes the arbitration was not commenced in good faith.

9.7            Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation with which, or into which, the Company may be merged or which may succeed to the Company's assets or business, provided, however , that the obligations of the Executive are personal and shall not be assigned by the Executive.  The Company may only assign this Agreement to any successor to all or substantially all of the business and/or assets of the Company, provided that the Company shall use reasonable efforts to secure such successor's agreement to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, " Company " shall mean the Company and any successor to its business and/or assets, which assumes and agrees to perform the duties and obligations of the Company under this Agreement by operation of law or otherwise.

9.8             Waivers.   No delay or omission by the Company or the Executive in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company or the Executive on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.

9.9            No Mitigation; No Offset . In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, nor shall the amount of any payment hereunder be reduced by any compensation earned by the Executive as a result of employment by a subsequent employer.

9.10            Captions .  The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

9.11            Severability .  In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

9.12            Termination of Consulting Agreement .  As a founding shareholder of the Company, the Executive and the Company entered into a certain Consulting Agreement on or about December 31, 2009 (the " Consulting Agreement" ). Upon the Effective Date of this Agreement, the Consulting Agreement shall be terminated and of no further force or effect.

8

9.13            Execution; Counterparts .  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. This Agreement may be executed and delivered by facsimile, email/pdf format or other electronic means and each party may fully rely upon such execution and delivery.

9.14            Survival . The provisions of Sections 5, 6, 7, 8 and 9 shall survive the termination of this Agreement.

9

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set forth above.

CORREGIDOR THERAPEUTICS, INC.

/s/ Glenn Batchelder
By: Glenn Batchelder
Its: President and Chief Executive Officer

EXECUTIVE

/s/ Rick Batycky
Name: Rick Batycky

10

EXHIBIT 10.6

CONFIDENTIAL

FIRST AMENDMENT TO EXECUTIVE EMPOYMENT AGREEMENT

THIS FIRST AMENDMENT (the "Amendment'') to the Executive Employment Agreement  dated as of December  27, 2010 (the "Batycky Employment Agreement") entered into between Civitas Therapeutics, Inc. (f/k/a Corregidor Therapeutics, Inc.), a Delaware corporation (the "Company") and Rick Batycky (the "Executive"), is entered into by the Company and the Executive as of June 27, 2013.  Capitalized terms not defined in this Amendment shall have the meanings ascribed to them in the Batycky Employment Agreement.

In consideration of the mutual covenants and promises  contained  in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which  are hereby acknowledged by the parties to this Agreement, the parties agree as follows:

1.          Changes to Payments Upon Termination .  The last sentence of Section 5.1 (b) of the Batycky Employment Agreement is hereby amended and restated in its entirety as follows:

For the purposes of this Section 5.1 (b), ''Severance period" means the period beginning on the date of termination and continuing afterward for twelve (12) months.

2.            Additional Provisions.

2.1              Re-Affirmation of Certain Obligations Concerning Inventions, Non-
Disclosure, Non-Competition and Non-Solicitation .  The Executive acknowledges and confirms that he remains subject to the obligations and covenants set forth in the Invention, Non­ Disclosure, Non-Competition and Non-Solicitation Agreement (the "Proprietary Rights Agreement") entered into between the Executive and the Company dated as of December 27, 2010.  For clarity, all references in the Batycky Employment Agreement to the ''Proprietary Rights Agreement" shall include the Proprietary Rights Agreement (as defined  in this Section 2.1) and any other agreement between the Executive and the Company with similar subject matter, and the obligations and covenants of the Executive pursuant to the Proprietary Rights Agreement constitute material  responsibilities of the Executive to the Company pursuant to the Batycky Employment Agreement as amended by this Amendment.

2.2              Entire Agreement and Modification .  The Batycky Employment Agreement, together with this Amendment, constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, with respect to the subject matter of the Batycky Employment Agreement and this Amendment.

2.3              Counterparts .  This Amendment may be executed in counterparts, each of which shall be deemed an original but all of which  together shall constitute  one and the same instrument.

2.4              Captions . The captions of the sections of this Amendment are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Amendment.

 

2.5              Severability .  In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set forth above.

CIVITAS THERAPEUTICS, INC.

By:        /s/ Glenn Batchelder
Glenn Batchelder
President and Chief Executive Officer

EXECUTIVE

/s/ Rick Batycky
Rick Batycky

2

EXHIBIT 10.7

 	EXECUTION VERSION
CONFIDENTIAL	

SECOND AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT	

THIS SECOND AMENDMENT (the "Amendment") to the Executive Employment Agreement dated as of December 27, 2010, as amended June 27, 2013 (the "Employment Agreement") entered into between Civitas Therapeutics, Inc. (f/k/a Corregidor Therapeutics, Inc.), a Delaware corporation (the "Company") and Rick Batycky (the "Executive"), is entered into by the Company and the Executive as of June 30, 2014 (the "Amendment Date"). Capitalized terms not defined in this Amendment shall have the meanings ascribed to them in the Employment Agreement.

In consideration of the mutual covenants and promises contained in this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties to this Amendment, and pursuant to Section 9.4 of the Employment Agreement, the parties agree as follows:

1.        Amendment to Section 5.1(b) of the Employment Agreement .  The first sentence of Section 5.1 (b) of the Employment Agreement is hereby amended by removing the word "and" where it appears immediately after the";" that appears at the end of clause (iv) and immediately preceding clause (v), and by adding a new clause (vi) immediately after the end of such clause (v) as follows:

 	"; and (vi) an amount determined by multiplying the Executive's target annual bonus amount for the year in which the Executive's employment is terminated, by a fraction, the numerator of which is the number of days in such year that the Executive was employed by the Company and the denominator of which is 365,
which amount shall be paid to the Executive in a lump sum on the sixtieth (60t h)
day after the date of such termination."	
 
2.            Additional Provisions.

2.1.             Re-Affirmation of Certain Obligations Concerning Inventions, Non-  Disclosure Non-Competition and Non-Solicitation .  The Executive acknowledges and confirms that he remains subject to the obligations and covenants set forth in the Invention, Non­ Disclosure, Non-Competition and Non-Solicitation Agreement (the "Proprietary Rights Agreement") entered into between the Executive and the Company dated as of December 27, 2010.  For clarity, all references in the Employment Agreement to the "Proprietary Rights Agreement" shall include the Proprietary Rights Agreement (as defined in this Section 2.1) and any other agreement between the Executive and the Company with similar subject matter, and the obligations and covenants of the Executive pursuant to the Proprietary Rights Agreement constitute material responsibilities of the Executive to the Company pursuant to the Employment Agreement as amended by this Amendment.

2.2.             Entire Agreement and Modification .  The Employment Agreement, together with this Amendment, constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, with respect to the

 

 

subject matter of the Employment Agreement and this Amendment.  Except as specifically modified by this Amendment, the Employment Agreement shall continue in accordance with its terms.

2.3.             Counterparts .  This Amendment may be executed in counterparts,  each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

2.4.             Captions .  The captions of the sections of this Amendment are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Amendment.

2.5.              Severability .  In case any provision of this Amendment shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
Amendment Date.

CIVITAS THERAPEUTICS, INC.

/s/ Mark Iwicki
By: Mark Iwicki
Its: President and Chief Executive Officer

EXECUTIVE

/s/ Rick Batycky
Name: Rick Batycky

2

EXHIBIT 10.8

 
December 5, 2014

Richard P. Batycky
Acorda Therapeutics Chelsea
190 Everett Avenue
Chelsea, MA  02150

Dear Rick:

I am pleased to confirm our offer of employment to you as Chief Technology Officer and Site Head of Acorda Therapeutics, Inc. (“Acorda” or the “Company”) reporting to me.  Your employment terms, if accepted, are effective as of the close of Acorda Therapeutics, Inc.’s acquisition of Civitas Therapeutics, Inc. (“Civitas”) on October 22, 2014 (which I refer to in this letter as the “closing date”).  For clarity, although in this new role you are continuing to have responsibilities relating to Civitas as the Company’s wholly-owned subsidiary, with effect from the closing date your employment with Civitas terminated and you became a Company employee.

The terms of the offer are as follows:

1.  	The salary is $375,000 per annum, payable semi-monthly on the 15 th and the last business day of the month.  The semi-monthly rate is $15,625.00.	

2.  	Your start date was the closing date .	

3.  	You will be eligible to participate in Acorda’s benefit plans.	

4.  	You will also be eligible to participate in the Company’s 401(k) plan and Flexible Spending Accounts as of the closing date.	

5.  	For the remainder of 2014 commencing from the closing date, you will be eligible for 34 days of paid time off (PTO), plus all Company holidays, including 2 floating holidays.  Should you not use all of your remaining PTO for 2014, you will be eligible to roll-over up to 15 days of unused PTO into 2015.	
 
For 2015, you will be eligible for an additional 19 days of PTO, all Company-paid holidays, including the week the Company is closed between Christmas and New Year’s, and 2 floating holidays.

6.  	You have received a base grant of 100,000 options of Acorda common stock, vesting over four years.  In accordance with the Company’s standard option grant procedures, the first 25% of your options will vest at the end of your first 12 months of employment, and the remaining 75% will vest on a quarterly basis over the remaining three years.  These awards were granted in two tranches and the grant dates were the dates we received Board approval for each tranche (October 22, 2014 in regards to the first tranche of 26,750 options and October 29, 2014 in	

 

regards to the second tranche of 73,250 options).  The strike price for each tranche was determined based on the market price of the stock at the close of business on the dates of grant.

7.  	In addition, you were granted 25,000 shares of restricted stock of Acorda common stock, vesting annually over a four-year period as follows:  1/4 of the grant will vest on October 22, 2015, 1/4 on October 22, 2016, 1/4 on October 22, 2017, and 1/4 on October 22, 2018.  Restricted shares are subject to the additional terms and conditions of the Acorda Restricted Share Certificate approved by the Board.	

8. 	In addition to a year-end performance review, you will be eligible to participate in the Company’s Merit Increase Program, Annual Cash Bonus Program and Acorda Equity Program with a potential to receive a merit increase and a cash bonus, and a pro-rated equity grant.   Effective on the closing date, your Annual Cash Bonus Program target is 50% of base salary and is based on the Company’s performance against the Corporate Goals and individual/team performance against goals established for that bonus year.  Bonus targets include a possible range of zero and can exceed 100% for an individual/team goal or in aggregate.  Eighty percent of your target is attributed to Company performance and twenty percent is attributed to individual/team performance.  The Annual Cash Bonus Program and the Acorda Equity Program are subject to approval by the Board of Directors. From January through October, 2014, your bonus will be calculated on your Civitas target, and for the remaining amount of the year on your new Acorda target.	

9.  	The Company is also offering you a retention incentive.  The term of your retention period will be deemed to have begun on November 7, 2014, the date of approval, and end three (3) years later, unless terminated before that.  You will receive 22,000  shares of restricted stock of Company common stock, vesting annually over a three-year period as follows:  20% of the grant will vest on November 7, 2015, 30% on November 7, 2016, and 50% on November 7, 2017.  Restricted shares are subject to the additional terms and conditions of the Company restricted stock agreement approved by the Board, which would be issued to you upon grant of the restricted shares. If, before the end of your retention period, the Company terminates your employment for any reason, or if you resign from the Company, you will not receive any further vesting of restricted stock after that point.	

10.  	This letter is not intended, nor should it be considered, as an employment contract for a definite or indefinite period and you are an employee at will.  This letter constitutes the understanding between us with respect to your employment with the Company with effect from the closing date, and replaces and supersedes any previous understandings or arrangements between us regarding your employment with the Company.  However, for clarity, this letter does not in any way replace or supersede your Employment Agreement entered into with Civitas originally dated December 27, 2010, as amended by that certain First Amendment to Executive Employment Agreement, dated June 27, 2013 and as further amended by that certain Second Amendment to Executive Employment Agreement dated June 30,	

2

2014 (collectively, your “Employment Agreement”), which remains in full force and effect following the closing date and as of the date hereof.  Except as expressly provided in this letter, the Employment Agreement is not amended in any manner, and for clarity the Company (on its behalf and on behalf of Civitas) acknowledge that your acceptance of employment with the Company due to the Company’s acquisition of Civitas does not constitute a waiver in any respect of your rights under your Employment Agreement.  Going forward, should your employment with the Company end, that event will be treated as an end to your Civitas employment for purposes of determining your rights under your Employment Agreement, and the Company will cause Civitas to comply with its obligations to you under your Employment Agreement.

Rick, I am delighted to deliver this letter to you.

If you are in agreement with the terms outlined above, please sign and date one copy of this letter and return it to me at your earliest convenience.

Should you have any questions regarding any of the above or any other matter, please contact me.

Sincerely,

/s/ Ron Cohen

Ron Cohen
President & CEO

CC:           Denise J. Duca, Senior Vice President – Human Resources

Accepted:

/s/ Rick Batycky                                                                               December 5, 2014
Signature                                                                                        Date

3

EXHIBIT 10.10
 
FORMS OF EQUITY AWARD DOCUMENTSFOR AWARDS UNDER THE
ACORDA THERAPEUTICS, INC. 2015 OMNIBUS INCENTIVE COMPENSATION PLAN

 
1.      Non-Statutory Stock Option Certificate
 
2.      Incentive Stock Option Certificate
 
3.      Restricted Stock Agreement
 
4.      Non-Statutory Stock Option Certificate (directors)

 

 
Option Number:	 	[__]	Shares	

ACORDA THERAPEUTICS, INC.

2015 Omnibus Incentive Compensation Plan
Non-Statutory Stock Option Certificate

 Acorda Therapeutics, Inc. (the “ Company ”), a Delaware corporation, hereby grants to the person named below an option to purchase shares of Common Stock, par value $0.001 per share, of the Company (the “ Option ”) under and subject to the Company’s 2015 Omnibus Incentive Compensation Plan (the “Plan”) exercisable on the following terms and conditions and those additional Terms and Conditions set forth on the reverse side of or attached to this Certificate:

 
Name of Optionee:	 

Address:	 

Social Security No:	 

Number of Shares:	 

Option Price:	 
$	
 
Date of Grant:	 

Vesting Start Date:	 

 The Option is not an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

Please refer to the table below for the details of the Exercisability Schedule as well as your E-Trade account under the Stock Plan tab. Total vesting shall not exceed [__] shares.

Exercisability Schedule

Annual Shares	Vest Schedule Ending On Annual Vest Date	Annual Vest Dates	

 	 	 	

 	 	 	

 	 	 	

 
Expiration Date:

 By online acceptance of this Option via the E-Trade website, the Optionee acknowledges that he or she has reviewed and agrees to be bound by the terms and conditions hereof.

 

ACORDA THERAPEUTICS, INC. 2015 OMNIBUS INCENTIVE COMPENSATION PLAN

Non-Statutory Stock Option Terms and Conditions

 1.       Plan Incorporated by Reference .  This Option is issued pursuant to the terms of the Plan and may be amended as provided in the Plan.  Capitalized terms used and not otherwise defined in these Terms and Conditions or the Non-Statutory Stock Option Certificate to which these Terms and Conditions are attached (the “ Certificate ”) have the meanings given to them in the Plan.  The Certificate and these Terms and Conditions do not set forth all of the terms and conditions of the Plan, which are incorporated herein by reference.  The Committee administers the Plan and its determinations regarding the operation of the Plan are final and binding.  The Optionee acknowledges receipt of a copy of the Plan, and additional copies of the Plan may be obtained upon written request without charge from the Company. In the event of a conflict between the Plan, on the one hand, and the Certificate and these Terms and Conditions, on the other, the terms of the Plan shall control.

 2.       Option Price .  The price to be paid for each share of Common Stock issued upon exercise of the whole or any part of this Option is the Option Price set forth on the face of the Certificate.

 3.       Exercisability Schedule .  This Option may be exercised at any time and from time to time for the number of shares and in accordance with the exercisability schedule set forth on the face of the Certificate (or to the extent the Option otherwise vests as provided herein), but only for the purchase of whole shares.  This Option may not be exercised as to any shares after the Expiration Date.

        4.       Method of Exercise .  To exercise this Option, the Optionee shall deliver written notice of exercise to the Company in a form specified by the Company stating the number of shares with respect to which the Option is being exercised accompanied by payment of the Option Price for such shares in cash, by certified check or in such other form that is approved at the time by the Committee.  Promptly following such notice, the Company will deliver to the Optionee a certificate representing the number of shares with respect to which the Option is being exercised.

 5.       Non-Statutory Stock Option.   The Option is a Non-Statutory Stock Option.
 
 6.       Rights as a Stockholder or Employee .  The Optionee shall not have any rights in respect of shares as to which the Option shall not have been exercised and payment made as provided above.  The Optionee shall not have any rights to continued employment by the Company or any Subsidiary by virtue of the grant of this Option.

 7.       Option Not Transferable .  This Option is not transferable by the Optionee otherwise than by will or the laws of descent and distribution, and is exercisable, during the Optionee’s lifetime, only by Optionee.  Any attempted assignment, transfer, pledge, hypothecation or other disposition other than in accordance with the terms set forth herein and in the Plan shall be void and of no effect.

 8.       Compliance with Securities Laws .  It shall be a condition to the Optionee’s right to purchase shares of Common Stock hereunder that the Company may, in its discretion, require (a) that the shares of Common Stock reserved for issue upon the exercise of this Option shall have been duly listed, upon official notice of issuance, upon any national securities exchange or automated quotation system on which the Company’s Common Stock may then be listed or quoted, (b) that either (i) a registration statement under the Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in the opinion of counsel for the Company, the proposed purchase shall be exempt from registration under that Act and the Optionee shall have made such undertakings and agreements with the Company as the Company may reasonably require, and (c) that such other steps, if any, as counsel for the Company shall consider necessary to comply with any law applicable to the issue of such shares by the Company shall have been taken by the Company or the Optionee, or both.  The certificates representing the shares purchased under this Option may contain such legends as counsel for the Company shall consider necessary to comply with any applicable law.

 9.       Payment of Taxes .  The Optionee shall pay to the Company, or make provision satisfactory to the Company for payment of, any taxes required by law to be withheld with respect to the exercise of this Option.  The Committee may, in its discretion, require any other Federal or state taxes imposed on the sale of the shares to be paid by the Optionee.  If and only if the Committee provides authorization in its discretion, such tax obligations may be paid in whole or in part in shares of Common Stock, including shares retained from the exercise of this Option, valued at their Fair Market Value on the date of delivery.  The Company and its Subsidiaries may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Optionee.

 10.            Termination, Retirement, and Disability .  If an Optionee ceases to be an employee of the Company or one of its Subsidiaries, then the Option shall be forfeited except that, to the extent vested at the time of such termination of employment, the Option shall be exercisable as described in the following provisions:

 (i)      if termination is voluntary or involuntary without Cause, the Optionee may exercise the Option within three (3) months after termination (but not after the expiration date of the Option) to the extent of the number of shares subject to the Option which are vested as of the date of termination;

 (ii)      if termination is for Cause, the Option shall be cancelled as of the date of termination and will no longer be exercisable;

 (iii)      if termination is by reason of Retirement, the Option may be exercised within three (3) years after termination (but not after the expiration date of the Option) to the extent of the number of shares subject to the Option which are vested as of the date of termination;

 (iv)      if termination is by reason of Disability, the Option may be exercised within one (1) year after termination (but not after the expiration date of the Option) to the extent of the number of shares subject to the Option which are vested as of the date of termination; and

 (v)      If termination is by reason of death, the Option may be exercised by the Optionee’s estate, or by any person who acquires the right to exercise the Option by reason of the Optionee’s death, within one (1) year after death (but not after the expiration date of the Option) to the extent of the number of shares subject to the Option which are vested as of the date of termination (subject to the accelerated vesting provisions of Section 11, if applicable).

 (vi)                 For these purposes:

“ Cause ” means (i) willful misconduct; (ii) willful or gross neglect; (iii) failure to materially perform one’s job duties; (iv) insubordination; (v) willful failure to materially comply with the Company’s policies and practices; (vi) acts of moral turpitude, theft or dishonesty; (vii) a felony conviction, or (viii) acts that are (or could be expected to be) damaging or detrimental to the Company.  Notwithstanding the foregoing, if the Optionee is a party to an employment or similar agreement with the Company (or any Subsidiary of the Company) and such agreement contains a definition of “Cause” or similar term, such definition shall constitute the definition of “Cause” under this Agreement.

“ Disability ” means incapacity of an Optionee as a result of demonstrable illness (including mental illness), injury, or disease that prevents the Optionee from engaging in any occupation or performing any work for remuneration or profit for which the Optionee is reasonably qualified (or may reasonably become qualified) by reason of education, work, or experience.  However, the term “Disability” shall not include any illness, injury, or disease that resulted from or consists of incapacity resulting from illegal drug use; was contracted, suffered, or incurred while the Optionee was engaged in criminal conduct; or was intentionally self-inflicted total and permanent disability as defined in Section 22(e)(3) of the Code.

“ Retirement ” means an Optionee’s voluntary termination of employment with the Company or one of its Subsidiaries after having attained both the age of 65 and five (5) or more years of service with the Company or one of its Subsidiaries.

 11.            Vesting Upon Death .  In the event of the termination of the Optionee’s employment due to death while this Option is outstanding, this Option shall become fully vested, notwithstanding the vesting schedule in the Certificate, provided that:

 (i)      the Optionee had at least one full year of service with the Company and had not been on probation during the 24-month period preceding death;

 (ii)      the Optionee had not been on disability leave for longer than two consecutive years at the time of death; and

 (iii)      the Optionee’s death was not due to suicide or did not result from any illness, injury, or disease that resulted from illegal drug use; was not incurred while the Optionee was engaged in criminal conduct; and was not intentionally self-inflicted.

 12.            Change in Control .  In the event a Change in Control occurs, the Option shall be treated as specified in the Plan.

 13.            Board Determinations .  In the event that any question or controversy shall arise with respect to the nature, scope or extent of any one or more rights conferred by the Certificate or these Terms and Conditions, the determination by the Board (or the Committee established by the Board to administer the Plan) of the rights of the Optionee shall be conclusive, final and binding upon Optionee and upon any other person who shall assert any right pursuant to the Certificate or these Terms and Conditions.

14.             Entire Understanding .  The Certificate, these Terms and Conditions, and the Plan constitute the entire understanding between the Optionee and the Company regarding the Option, except that any terms and conditions in any written employment or similar agreement with the Company or one of its Subsidiaries regarding the vesting or exercise of Option shall be deemed incorporated by reference.  Any prior agreements, commitments, or negotiations concerning the Option ( other than terms and conditions in a written employment or similar agreement with the Company or one of its Subsidiaries regarding the vesting or exercise of the Option) are superseded.

 

Option Number:	 	[__]	Shares	

ACORDA THERAPEUTICS, INC.

2015 Omnibus Incentive Compensation Plan
Incentive Stock Option Certificate

 Acorda Therapeutics, Inc. (the “ Company ”), a Delaware corporation, hereby grants to the person named below an option to purchase shares of Common Stock, par value $0.001 per share, of the Company (the “ Option ”) under and subject to the Company’s 2015 Omnibus Incentive Compensation Plan (the “Plan”) exercisable on the following terms and conditions and those additional Terms and Conditions set forth on the reverse side of or attached to this Certificate:

 
Name of Optionee:	 

Address:	 

Social Security No:	 

Number of Shares:	 

Option Price:	 
$	
 
Date of Grant:	 

Vesting Start Date:	 

 The Option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) to the extent that the aggregate fair market value (determined at the Date of Grant) of the shares of Common Stock with respect to which the Option first becomes exercisable hereunder does not, when added to the aggregate value (determined as of the applicable date of grant) of the Common Stock with respect to which any other incentive options granted to Optionee prior to the Date of Grant first become exercisable during the same calendar year, exceed one hundred thousand dollars ($100,000) in the aggregate; provided, however, that to the extent that all or any portion of the Option does not otherwise qualify as an incentive stock option under Code Section 422, the Option shall be treated as a non-statutory stock option and not as an incentive stock option.

Please refer to the table below for the details of the Exercisability Schedule as well as your E-Trade account under the Stock Plan tab. Total vesting shall not exceed [__] shares.

Exercisability Schedule

Annual Shares	Vest Schedule Ending On Annual Vest Date	Annual Vest Dates	

 	 	 	

 	 	 	

 	 	 	

Expiration Date:

Other Special Provisions:

 Although this Option is intended to be treated as an Incentive Stock Option under Section 422 of the Code to the extent described above, the Company does not and cannot guaranty or warranty that the Option will be so treated.  Certain acts of the Optionee such as disposing of the Stock issued pursuant to this Option prior to the expiration of the holding periods required under Code Section 422 will prevent this Option from being treated as an Incentive Stock Option.

 By online acceptance of this Option via the E-Trade website, the Optionee acknowledges that he or she has reviewed and agrees to be bound by the terms and conditions hereof.

 

ACORDA THERAPEUTICS, INC. 2015 OMNIBUS INCENTIVE COMPENSATION PLAN

Incentive Stock Option Terms and Conditions

 1.       Plan Incorporated by Reference .  This Option is issued pursuant to the terms of the Plan and may be amended as provided in the Plan.  Capitalized terms used and not otherwise defined in these Terms and Conditions or the Incentive Stock Option Certificate to which these Terms and Conditions are attached (the “ Certificate ”) have the meanings given to them in the Plan.  The Certificate and these Terms and Conditions do not set forth all of the terms and conditions of the Plan, which are incorporated herein by reference.  The Committee administers the Plan and its determinations regarding the operation of the Plan are final and binding.  The Optionee acknowledges receipt of a copy of the Plan, and additional copies of the Plan may be obtained upon written request without charge from the Company. In the event of a conflict between the Plan, on the one hand, and the Certificate and these Terms and Conditions, on the other, the terms of the Plan shall control.

 2.       Option Price .  The price to be paid for each share of Common Stock issued upon exercise of the whole or any part of this Option is the Option Price set forth on the face of the Certificate.

 3.       Exercisability Schedule .  This Option may be exercised at any time and from time to time for the number of shares and in accordance with the exercisability schedule set forth on the face of the Certificate (or to the extent the Option otherwise vests as provided herein), but only for the purchase of whole shares.  This Option may not be exercised as to any shares after the Expiration Date.

           4.       Method of Exercise .  To exercise this Option, the Optionee shall deliver written notice of exercise to the Company in a form specified by the Company stating the number of shares with respect to which the Option is being exercised accompanied by payment of the Option Price for such shares in cash, by certified check or in such other form that is approved at the time by the Committee.  Promptly following such notice, the Company will deliver to the Optionee a certificate representing the number of shares with respect to which the Option is being exercised.

 5.      Treatment as Incentive Stock Option.  Although the Option is intended to be an incentive stock option, the Company does not warrant that the Option will be treated as an incentive stock option for tax purposes.  To the extent that the Option fails for any reason to satisfy the requirements applicable to incentive stock options, the Option shall be a non-statutory stock option.  The Option will not be treated as an incentive stock option for income tax purposes if the Optionee sells or otherwise disposes of shares issued upon exercise before the later of: (i) the first anniversary of the date the shares are delivered to the Optionee, or (ii) the second anniversary of the date of grant set forth in the Certificate.  Any earlier sale or disposition of shares will be a “disqualifying disposition.”  The Optionee must notify the Company of any disqualifying disposition within 30 days after it occurs.  Any portion of the Option that is exercised more than three (3) months after the Optionee ceases to be an employee of the Company for any reason other than disability or death (to the extent the Option has not expired) will be treated as a non-statutory stock option.  In case of termination due to disability, the three-month period will be extended to 12 months.  If the Optionee dies before exercising the Option, it may be treated as an incentive stock option only to the extent that the Option would have been treated as an incentive stock option if the Optionee had exercised it on the date of death.

 6.       Rights as a Stockholder or Employee .  The Optionee shall not have any rights in respect of shares as to which the Option shall not have been exercised and payment made as provided above.  The Optionee shall not have any rights to continued employment by the Company or any Subsidiary by virtue of the grant of this Option.

 7.       Option Not Transferable .  This Option is not transferable by the Optionee otherwise than by will or the laws of descent and distribution, and is exercisable, during the Optionee’s lifetime, only by Optionee.  Any attempted assignment, transfer, pledge, hypothecation or other disposition other than in accordance with the terms set forth herein and in the Plan shall be void and of no effect.

 8.       Compliance with Securities Laws .  It shall be a condition to the Optionee’s right to purchase shares of Common Stock hereunder that the Company may, in its discretion, require (a) that the shares of Common Stock reserved for issue upon the exercise of this Option shall have been duly listed, upon official notice of issuance, upon any national securities exchange or automated quotation system on which the Company’s Common Stock may then be listed or quoted, (b) that either (i) a registration statement under the Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in the opinion of counsel for the Company, the proposed purchase shall be exempt from registration under that Act and the Optionee shall have made such undertakings and agreements with the Company as the Company may reasonably require, and (c) that such other steps, if any, as counsel for the Company shall consider necessary to comply with any law applicable to the issue of such shares by the Company shall have been taken by the Company or the Optionee, or both.  The certificates representing the shares purchased under this Option may contain such legends as counsel for the Company shall consider necessary to comply with any applicable law.

 9.       Payment of Taxes .  The Optionee shall pay to the Company, or make provision satisfactory to the Company for payment of, any taxes required by law to be withheld with respect to the exercise of this Option.  The Committee may, in its discretion, require any other Federal or state taxes imposed on the sale of the shares to be paid by the Optionee.  If and only if the Committee provides authorization in its discretion, such tax obligations may be paid in whole or in part in shares of Common Stock, including shares retained from the exercise of this Option, valued at their Fair Market Value on the date of delivery.  The Company and its Subsidiaries may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Optionee.

 10.           Termination, Retirement, and Disability.  If an Optionee ceases to be an employee of the Company or one of its Subsidiaries, then the Option shall be forfeited except that, to the extent vested at the time of such termination of employment, the Option shall be exercisable as described in the following provisions:

 (i)      if termination is voluntary or involuntary without Cause, the Optionee may exercise the Option within three (3) months after termination (but not after the expiration date of the Option) to the extent of the number of shares subject to the Option which are vested as of the date of termination;

 (ii)      if termination is for Cause, the Option shall be cancelled as of the date of termination and will no longer be exercisable;

 (iii)      f termination is by reason of Retirement, the Option may be exercised within three (3) years after termination (but not after the expiration date of the Option) to the extent of the number of shares subject to the Option which are vested as of the date of termination;

 (iv)      if termination is by reason of Disability, the Option may be exercised within one (1) year after termination (but not after the expiration date of the Option) to the extent of the number of shares subject to the Option which are vested as of the date of termination; and

 (v)      If termination is by reason of death, the Option may be exercised by the Optionee’s estate, or by any person who acquires the right to exercise the Option by reason of the Optionee’s death, within one (1) year after death (but not after the expiration date of the Option) to the extent of the number of shares subject to the Option which are vested as of the date of termination (subject to the accelerated vesting provisions of Section 11, if applicable).

 (vi)                 For these purposes:

“ Cause ” means (i) willful misconduct; (ii) willful or gross neglect; (iii) failure to materially perform one’s job duties; (iv) insubordination; (v) willful failure to materially comply with the Company’s policies and practices; (vi) acts of moral turpitude, theft or dishonesty; (vii) a felony conviction, or (viii) acts that are (or could be expected to be) damaging or detrimental to the Company.  Notwithstanding the foregoing, if the Optionee is a party to an employment or similar agreement with the Company (or any Subsidiary of the Company) and such agreement contains a definition of “Cause” or similar term, such definition shall constitute the definition of “Cause” under this Agreement.

“ Disability ” means incapacity of an Optionee as a result of demonstrable illness (including mental illness), injury, or disease that prevents the Optionee from engaging in any occupation or performing any work for remuneration or profit for which the Optionee is reasonably qualified (or may reasonably become qualified) by reason of education, work, or experience.  However, the term “Disability” shall not include any illness, injury, or disease that resulted from or consists of incapacity resulting from illegal drug use; was contracted, suffered, or incurred while the Optionee was engaged in criminal conduct; or was intentionally self-inflicted total and permanent disability as defined in Section 22(e)(3) of the Code.

“ Retirement ” means an Optionee’s voluntary termination of employment with the Company or one of its Subsidiaries after having attained both the age of 65 and five (5) or more years of service with the Company or one of its Subsidiaries.

 11.            Vesting Upon Death .  In the event of the termination of the Optionee’s employment due to death while this Option is outstanding, this Option shall become fully vested, notwithstanding the vesting schedule in the Certificate, provided that:

 (i)      the Optionee had at least one full year of service with the Company and had not been on probation during the 24-month period preceding death;

 (ii)      the Optionee had not been on disability leave for longer than two consecutive years at the time of death; and

 (iii)      the Optionee’s death was not due to suicide or did not result from any illness, injury, or disease that resulted from illegal drug use; was not incurred while the Optionee was engaged in criminal conduct; and was not intentionally self-inflicted.

 12.            Change in Control .  In the event a Change in Control occurs, the Option shall be treated as specified in the Plan.

 13.            Board Determinations .  In the event that any question or controversy shall arise with respect to the nature, scope or extent of any one or more rights conferred by the Certificate or these Terms and Conditions, the determination by the Board (or the Committee established by the Board to administer the Plan) of the rights of the Optionee shall be conclusive, final and binding upon Optionee and upon any other person who shall assert any right pursuant to the Certificate or these Terms and Conditions.

14.             Entire Understanding .  The Certificate, these Terms and Conditions, and the Plan constitute the entire understanding between the Optionee and the Company regarding the Option, except that any terms and conditions in any written employment or similar agreement with the Company or one of its Subsidiaries regarding the vesting or exercise of Option shall be deemed incorporated by reference.  Any prior agreements, commitments, or negotiations concerning the Option ( other than terms and conditions in a written employment or similar agreement with the Company or one of its Subsidiaries regarding the vesting or exercise of the Option) are superseded.

 

Restricted Stock Number:
 
RESTRICTED STOCK AGREEMENT

This Agreement is entered into as of the [OPTION_DATE] by and between ACORDA THERAPEUTICS, INC., a Delaware corporation (“ Company ”), and [NAME] (“Employee”) at [ADDRESS].

WITNESSSETH:

 NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, in accordance with the Acorda Therapeutics, Inc. 2015 Omnibus Incentive Compensation Plan (the “ Plan ”) the parties hereto hereby agree as follows (all capitalized terms herein not otherwise defined shall have the meanings set forth in the Plan):

 1.                  Grant .  Simultaneously herewith, the Company has made a restricted stock award to Employee and has issued %%TOTAL_SHARES_GRANTED,’999,999,999’%-% shares of the Company’s common stock, $.001 par value per share (such common stock hereinafter being referred to as the “Common Stock” and such shares hereinafter being referred to as the “ Restricted Stock ”), registered in the name of Employee, subject to the terms of the Plan and the restrictions and provisions of this Agreement.
 
2.                  Treatment During Restricted Period . 

 a.   Certificates .  Each certificate representing shares of Restricted Stock, if issued, shall be registered in the name of the Employee and held, together with a stock power endorsed in blank, by the Company, subject to the provisions hereof.  Each such certificate of Restricted Stock shall bear a legend reflecting the limitation of transferability, the risk of forfeiture and other restrictions under this Agreement and applicable securities law restrictions.

 b.   Restrictions Applicable Prior to Vesting .  Shares of Restricted Stock shall be subject to the following restrictions until they vest:

   i)              Nontransferability.  Except as otherwise required by law, Restricted Stock which has not vested may not be sold, assigned, exchanged, transferred, pledged, hypothecated or otherwise disposed of, except to the Company as provided herein.

  ii)              Voting.  Employee hereby appoints the Company’s General Counsel or any successor appointed by the Company (the “ Trustee ”) to act as Employee’s proxy, and grants the Trustee the power to vote the unvested shares of Restricted Stock at any annual or special meeting of stockholders of the Company, or any adjournment or adjournments thereof at which the shares would be entitled to vote.  The Trustee will vote such shares in connection with any matter on a pro rata basis in accordance with all other shares voted with respect to such matter.  This proxy is coupled with an interest and is irrevocable.

 iii)              Dividends and Distributions.  Any cash dividends or other distributions in respect of the shares of Restricted Stock, including, but not limited to, shares received as a result of a stock dividend, stock split, combination of shares or otherwise, shall be retained by the Company and either delivered together with the applicable shares in accordance with Section 2(f) hereof or forfeited together with the applicable shares in accordance with Section 2(c) hereof.  In no event shall any dividend or distribution be paid later than 2-1/2 months after the calendar year in which such dividend or distribution is no longer subject to a substantial risk of forfeiture.

  iv)              Other Restrictions.  The Board may impose such other restrictions on the Restricted Stock as it may deem advisable, including, without limitation, stop-transfer orders and other restrictions set forth in the terms of this Agreement or as the Board may reasonably deem advisable.

 

 c.   Forfeiture .  If Employee’s employment terminates before all of the shares of Restricted Stock are vested in accordance in Section 2(d), any of the shares of Restricted Stock that are unvested or otherwise subject to restrictions shall be forfeited to the Company on the effective date of the termination of Employee’s employment.
 
 d.   Vesting; Termination of the Restricted Period.   The shares of Restricted Stock shall no longer be subject to the forfeiture provisions of Section 2(c) ( i.e ., the shares shall vest) in accordance with the following schedule, to the extent that Employee remains continuously employed by the Company or one of its Subsidiaries:

four equal amounts every year for four years in the amount of %%TOTAL_SHARES_GRANTED,’999,999,999’%-% shares per year, with the vest dates of December 1, [___], December 1, [___], December 1, [___], and December 1, [___], subject to the terms and conditions set forth in this Agreement and in the plan.

 e.   Vesting Upon Death.   In the event of the termination of the Employee’s employment due to death while the Restricted Stock award is outstanding, such award shall immediately become fully vested, notwithstanding the vesting schedule in this Agreement, provided that:

 (i)           the Employee had at least one full year of service with the Company and had not been on probation during the 24-month period preceding death;

 (ii)           the Employee had not been on disability leave for longer than two consecutive years at the time of death; and

 (iii)           the Employee’s death was not due to suicide or did not result from any illness, injury, or disease that resulted from illegal drug use; was not incurred while the Employee was engaged in criminal conduct; and was not intentionally self-inflicted.

 f.   Delivery following Vesting .  Promptly after they become vested, the Company shall deliver to Employee (or Employee’s legal representative) the shares of vested Restricted Stock; provided, however, that the Company need not deliver such shares to Employee until Employee has paid or caused to be paid all taxes required to be withheld pursuant to Section 3 hereof.

 3.                  Withholding .  The Company may withhold any taxes resulting from this Agreement that the Company determines it is required to withhold under the laws and regulations of any governmental authority, whether federal, state or local and whether domestic or foreign.  Subject to applicable legal requirements, Employee may elect to satisfy such withholding requirements either by (i) delivery to the Company of a certified check prior to the delivery of shares of Restricted Stock which are vested pursuant to Section 2, or (ii) another method of payment, but only if agreed to at the time by the Company

 4.                  Notice .  All notices, requests, demands, waivers and communications required or permitted to be given hereunder shall be in writing and shall be delivered in person or mailed, certified or registered mail with postage prepaid, or sent by facsimile, as follows:

 If to the Company, to:

 Acorda Therapeutics, Inc.
 420 Saw Mill River Road
 Ardsley, NY  10502
 Facsimile: (914) 347-4560
 Attention:  Chief Financial Officer

 	If to Employee, to his or her last known mailing address specified in the Company’s employee records.	

or to such other address as either party hereto shall specify by notice in writing to the other party in accordance with this Section.  All such notices, requests, demands, waivers and communications shall be deemed to have been received on the date when given unless mailed, in which case on the third business day after the mailing.

 5.                  No Employment Rights .  The Employee shall not have any rights to continued employment by the Company or any Subsidiary by virtue of the grant of the Restricted Stock.

 

 6.                  Award Subject to Plan.   Employee acknowledges receipt of a copy of the Plan.  The Restricted Stock grant has been made pursuant to the Plan and is in all respects subject to the terms and conditions thereof.  In the event of any conflict between this Agreement and the Plan, the terms of the Plan shall control

 7.                  Board Determinations .  In the event that any question or controversy shall arise with respect to the nature, scope or extent of any one or more rights conferred by this Agreement, the determination by the Board (or the Committee established by the Board to administer the Plan) of the rights of the Employee shall be conclusive, final and binding upon Employee and upon any other person who shall assert any right pursuant to this Agreement.

 8.                  Change in Control .  In the event a Change in Control occurs, the shares of Restricted Stock shall be treated as specified in the Plan.

 9.                  Assignment .  The Company may assign its rights hereunder.  Employee may not assign any of his rights hereunder.  Neither party may assign any of their obligations hereunder.

 10.                Entire Understanding .  This Agreement and the Plan constitute the entire understanding between the Employee and the Company regarding the Restricted Stock, except that any terms and conditions in any written employment or similar agreement with the Company or one of its Subsidiaries regarding the vesting of the Restricted Stock shall be deemed incorporated by reference.  Any prior agreements, commitments, or negotiations concerning the Restricted Stock (other than terms and conditions in a written employment or similar agreement with the Company or one of its Subsidiaries regarding the vesting of the Restricted Stock) are superseded.

 11.                Online Acceptance.   By online acceptance of this Restricted Stock Award via the E-Trade website, the Employee acknowledges that he or she has reviewed and agrees to be bound by the terms and conditions hereof.

 

Option No.	 	[__]	Shares	

ACORDA THERAPEUTICS, INC.

2015 Omnibus Incentive Compensation Plan
Non-Statutory Stock Option Certificate

 Acorda Therapeutics, Inc. (the “ Company ”), a Delaware corporation, hereby grants to the person named below an option to purchase shares of Common Stock, par value $0.001 per share, of the Company (the “ Option ”) under and subject to the Company’s 2015 Omnibus Incentive Compensation Plan (the “ Plan ”) exercisable on the following terms and conditions and those additional Terms and Conditions set forth on the reverse side of or attached to this Certificate:

 
Name of Optionee:	 

Address:	 

Social Security No:	 

Number of Shares:	 

Option Price:	 
$	
 
Date of Grant:	 

Vesting Start Date:	 

Exercisability Schedule

The option shall vest to the extent of 25% of the Number of Shares specified above every three (3) months for one (1) year, starting from the Vesting Start Date specified above, with the last vest to be on [__], subject to the terms and conditions set forth in this Certificate and in the Plan.

Expiration Date:

Other Special Provisions:

 The Option is not an Incentive Stock Option under s ection 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 By online acceptance of this Option via the E-Trade website, the Optionee acknowledges that he or she has reviewed and agrees to be bound by the terms and conditions hereof.

ACORDA THERAPEUTICS, INC.

Dated:           _________                                           By:          
 	Name: Ron Cohen	
 	Title:   President & CEO	

ACCEPTED:

______________________________                                                              Dated: _______________

 

ACORDA THERAPEUTICS, INC. 2015 OMNIBUS INCENTIVE COMPENSATION PLAN

Non-Statutory Stock Option Terms and Conditions

 1.       Plan Incorporated by Reference .  This Option is issued pursuant to the terms of the Plan and may be amended as provided in the Plan.  Capitalized terms used and not otherwise defined in these Terms and Conditions or the Non-Statutory Stock Option Certificate to which these terms and conditions are attached (the “ Certificate ”) have the meanings given to them in the Plan.  The Certificate and these Terms and Conditions do not set forth all of the terms and conditions of the Plan, which are incorporated herein by reference.  The Committee administers the Plan and its determinations regarding the operation of the Plan are final and binding.  The Optionee acknowledges receipt of a copy of the Plan, and additional copies of the Plan may be obtained upon written request without charge from the Company. In the event of a conflict between the Plan, on the one hand, and the Certificate and these Terms and Conditions, on the other, the terms of the Plan shall control.

 2.       Option Price .  The price to be paid for each share of Common Stock issued upon exercise of the whole or any part of this Option is the Option Price set forth on the face of the Certificate.

 3.       Exercisability Schedule .  This Option may be exercised at any time and from time to time for the number of shares and in accordance with the exercisability schedule set forth on the face of the Certificate (or to the extent the Option otherwise vests as provided herein), but only for the purchase of whole shares.  This Option may not be exercised as to any shares after the Expiration Date.

           4.       Method of Exercise .  To exercise this Option, the Optionee shall deliver written notice of exercise to the Company in a form specified by the Company stating the number of shares with respect to which the Option is being exercised accompanied by payment of the Option Price for such shares in cash, by certified check or in such other form that is approved at the time by the Committee  Promptly following such notice, the Company will deliver to the Optionee a certificate representing the number of shares with respect to which the Option is being exercised.

 5.       Non-Statutory Stock Option.   The Option is a Non-Statutory Stock Option.

 6.       Rights as a Stockholder or Director .  The Optionee shall not have any rights in respect of shares as to which the Option shall not have been exercised and payment made as provided above.  The Optionee shall not have any rights to continued service on the Board (or otherwise) by virtue of the grant of this Option.
 
 7.       Option Not Transferable .  This Option is not transferable by the Optionee otherwise than by will or the laws of descent and distribution, and is exercisable, during the Optionee’s lifetime, only by Optionee.  Any attempted assignment, transfer, pledge, hypothecation or other disposition other than in accordance with the terms set forth herein and in the Plan shall be void and of no effect.

 8.       Compliance with Securities Laws .  It shall be a condition to the Optionee’s right to purchase shares of Common Stock hereunder that the Company may, in its discretion, require (a) that the shares of Common Stock reserved for issue upon the exercise of this Option shall have been duly listed, upon official notice of issuance, upon any national securities exchange or automated quotation system on which the Company’s Common Stock may then be listed or quoted, (b) that either (i) a registration statement under the Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in the opinion of counsel for the Company, the proposed purchase shall be exempt from registration under that Act and the Optionee shall have made such undertakings and agreements with the Company as the Company may reasonably require, and (c) that such other steps, if any, as counsel for the Company shall consider necessary to comply with any law applicable to the issue of such shares by the Company shall have been taken by the Company or the Optionee, or both.  The certificates representing the shares purchased under this Option may contain such legends as counsel for the Company shall consider necessary to comply with any applicable law.

 9.       Payment of Taxes .  The Optionee shall pay to the Company, or make provision satisfactory to the Company for payment of, any taxes required by law to be withheld with respect to the exercise of this Option.  The Committee may, in its discretion, require any other Federal or state taxes imposed on the sale of the shares to be paid by the Optionee.  If and only if the Committee provides authorization in its discretion, such tax obligations may be paid in whole or in part in shares of Common Stock, including shares retained from the exercise of this Option, valued at their Fair Market Value on the date of delivery.  The Company and its Subsidiaries may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Optionee.

 10.          Termination .  Except as otherwise provided by the Committee at the time the Option is granted or any amendment is made thereto, upon an outside director’s termination of membership on Acorda’s Board, the Option shall be forfeited except that, to the extent vested at the time of such termination, the Option shall remain exercisable for twelve (12) months, or such other period as the Board may determine in its discretion, to the extent consistent with Section 409A of the Code.

 

 11.          Vesting Upon Death .  In the event of the termination of the Optionee’s membership on the Company’s Board of Directors due to death while this Option is outstanding, this Option shall become fully vested, notwithstanding the vesting schedule in the Certificate, provided that:

 (i)      the Optionee had at least one full year of service with the Company and had not been on probation during the 24-month period preceding death;

 (ii)      the Optionee had not been on disability leave for longer than two consecutive years at the time of death; and

 (iii)      the Optionee’s death was not due to suicide or did not result from any illness, injury, or disease that resulted from illegal drug use; was not incurred while the Optionee was engaged in criminal conduct; and was not intentionally self-inflicted.

 12.          Change in Control .  In the event a Change in Control occurs, the Option shall be treated as specified in the Plan.

 13.          Board Determinations .  In the event that any question or controversy shall arise with respect to the nature, scope or extent of any one or more rights conferred by the Certificate or these Terms and Conditions, the determination by the Board (or the Committee established by the Board to administer the Plan) of the rights of the Optionee shall be conclusive, final and binding upon Optionee and upon any other person who shall assert any right pursuant to the Certificate or these Terms and Conditions.

14.           Entire Understanding .  The Certificate, these Terms and Conditions, and the Plan constitute the entire understanding between the Optionee and the Company regarding the Option, except that any terms and conditions of the Company’s written director compensation policy applicable to the Option shall be deemed incorporated by reference.  Any prior agreements, commitments, or negotiations concerning the Option ( other than the Company’s written director compensation policy) are superseded.

 

 

EXHIBIT 31.1
 
CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER PURSUANT TO
RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Ron Cohen, certify that:
 
1.	I have reviewed this quarterly report on Form 10-Q of Acorda Therapeutics, Inc.;	
 
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
 
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
 
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	
 
 	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 
 	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 
 	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 
 	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	
 
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	
 
 	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 
 	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
 
Date: August 7, 2015
 
/s/ Ron Cohen	 	
Ron Cohen
Chief Executive Officer
(Principal Executive Officer)

EXHIBIT 31.2
 
CERTIFICATION BY THE CHIEF FINANCIAL OFFICER PURSUANT TO
RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
I, Michael Rogers, certify that:
 
1.	I have reviewed this quarterly report on Form 10-Q of Acorda Therapeutics, Inc.;	
 
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
 
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
 
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	
 
 	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 
 	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 
 	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 
 	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	
 
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	
 
 	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 
 	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
 
Date: August 7, 2015
 
/s/ Michael Rogers	 	
Michael Rogers
Chief Financial Officer
(Principal Financial Officer)	 	

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Acorda Therapeutics, Inc. (the “Company”) for the fiscal quarter ended June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ron Cohen, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
 	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and	
 
 	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	
 
/s/ RON COHEN
 RON COHEN
 Chief Executive Officer
 (Principal Executive Officer)
 August 7, 2015

[A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Acorda Therapeutics, Inc. and will be retained by Acorda Therapeutics, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.]

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Acorda Therapeutics, Inc. (the “Company”) for the fiscal quarter ended June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Rogers, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
 	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and	
 
 	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	

/s/ MICHAEL ROGERS
 MICHAEL ROGERS
 Chief Financial Officer
 (Principal Financial Officer)
 August 7, 2015

[A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Acorda Therapeutics, Inc. and will be retained by Acorda Therapeutics, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.]