Exhibit 10.11

Manufacturing Services Agreement

May 29, 2009

[****]Information has been excluded from the exhibit because it is both (i) not
material and (ii) would be

competitively harmful if publicly disclosed.

 

 

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Table of Contents

 

 

 

ARTICLE 1

1

 

 

INTERPRETATION

1

 

 

1.1

DEFINITIONS

1

1.2

CURRENCY

5

1.3

SECTIONS AND HEADINGS

5

1.4

SINGULAR TERMS

5

1.5

SCHEDULES

5

 

 

 

ARTICLE 2

6

 

 

PATHEON'S MANUFACTURING SERVICES

6

 

 

2.1

MANUFACTURING SERVICES

6

 

 

 

ARTICLE 3

7

 

 

CLIENTS OBLIGATIONS

7

 

 

3.1

PAYMENT

7

3.2

ACTIVE MATERIALS

7

 

 

 

ARTICLE 4

8

 

 

CONVERSION FEES AND COMPONENT COSTS

8

 

 

4.1

FIRST YEAR PRICING

8

4.2

PRICE ADJUSTMENTS - SUBSEQUENT YEARS' PRICING

8

4.3

PRICE ADJUSTMENTS - CURRENT YEAR PRICING

9

4.4

ADJUSTMENTS DUE TO TECHNICAL CHANGES

9

 

 

 

ARTICLE 5

10

 

 

ORDERS, SHIPMENT, INVOICING, PAYMENT

10

 

 

5.1

ORDERS AND FORECASTS

10

5.2

RELIANCE BY PATHEON

10

5.3

MINIMUM ORDERS

11

5.4

SHJPMENTS

11

5.5

INVOICES AND PAYMENTS

11

 

 

 

ARTICLE 6

12

 

 

PRODUCT CLAIMS AND RECALLS

12

 

 

6.1

PRODUCT CLAIMS

12

6.2

PRODUCT RECALLS AND RETURNS

12

6.3

PATHEON'S RESPONSIBILITYFOR DEFECTIVE AND RECALLED PRODUCTS

13

6.4

DISPOSITION OF DEFECTIVE OR RECALLED PRODUCTS

14

6.5

HEALTHCARE PROVIDER OR PATIENT QUESTIONS AND COMPLAINTS

14

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6.6

SOLE REMEDY

14

 

 

 

ARTICLE 7

14

 

 

COOPERATION

14

 

 

7.1

QUARTERLY REVIEW

14

7.2

GOVERNMENTAL AGENCIES

14

7.3

RECORDS AND ACCOUNTING BY PATHEON

15

7.4

INSPECTION

15

7.5

ACCESS

15

7.6

NOTIFICATION OF REGULATORY INSPECTIONS

15

7.7

REPORTS

15

7.8

FDA FILINGS

15

 

 

 

ARTICLE 8

16

 

 

TERM AND TERMINATION

16

 

 

8.1

INITIAL TERM

16

8.2

TERMINATION

17

8.3

PRODUCT DISCONTINUATION

17

8.4

OBLIGATIONS ON TERMINATION

17

 

 

 

ARTICLE 9

18

 

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

18

 

 

9.1

AUTHORITY

18

9.2

CLIENT WARRANTIES

18

9.3

PATHEON WARRANTIES

19

9.4

DEBARRED PERSONS

20

9.5

PERMITS

20

9.6

No WARRANTY

20

 

 

 

ARTICLE 10

20

 

 

REMEDIES AND INDEMNITIES

20

 

 

10.1

CONSEQUENTIAL DAMAGES

20

10.2

LIMITATION OF LIABILITY

20

10.3

PATHEON

21

10.4

CLIENT

21

10.5

REASONABLE ALLOCATION OF RISK

21

 

 

 

ARTICLE 11

21

 

 

CONFIDENTIALITY

21

 

 

11.1

CONFIDENTIALITY

21

 

 

 

ARTICLE 12

22

 

 

DISPUTE RESOLUTION

22

 

 

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12.1

COMMERCIAL DISPUTES

22

12.2

TECHNICAL DISPUTE RESOLUTION

22

 

 

 

ARTICLE 13

22

 

 

MISCELLANEOUS

22

 

 

13.1

INVENTIONS

22

13.2

INTELLECTUAL PROPERTY

23

13.3

INSURANCE

23

13.4

INDEPENDENT CONTRACTORS

23

13.5

No WAIVER

23

13.6

ASSIGNMENT

24

13.7

FORCE MAJEURE

24

13.8

NOTICES

24

13.9

SEVERABILITY

25

13.10

ENTIRE AGREEMENT

25

13.11

OTHER TERMS

26

13.12

No THIRD-PARTY BENEFIT OR RIGHT

26

13.13

EXECUTION IN COUNTERPARTS

26

13.14

USE OF CLIENT NAME

26

13.15

GOVERNING LAW

26

 

 

 

 

 

 

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MANUFACTURING SERVICES AGREEMENT

THIS MANUFACTURING SERVICES AGREEMENT (the "Agreement'') is made as of May 29,
2009 (the "Effective Date")

 

 

BETWEEN:

 

 

 

 

PATHEON INC.,

 

 

 

a corporation existing under the laws of Canada

 

 

 

("Patheon"),

 

 

 

-and-

 

 

 

IROKO PHARMACEUTICALS, LLC,

 

 

 

a limited liability company existing under the laws of Delaware

 

 

 

("Client")

 

THIS AGREEMENT WITNESSES THAT in consideration of the rights conferred and the
obligations assumed herein, and for other good and valuable consideration (the
receipt and sufficiency of which are acknowledged by each party), and intending
to be legally bound the parties agree as follows:

ARTICLE 1

INTERPRETATION

1.1        Definitions.

The following terms will, unless the context otherwise requires, have the
respective meanings set out below and grammatical  variations of  these terms
will have corresponding meanings:

"Active Materials”, “Active Pharmaceutical Ingredients” or “API" means the
materials listed  on Schedule D;

“Affiliate" means;

(a)        a business entity which owns, directly or indirectly, a controlling
interest in a party to this Agreement, by stock ownership or otherwise; or

(b)        a business entity which ls controlled by a party to this Agreement,
either directly or indirectly, by stock ownership or otherwise; or

(c)        a business entity, the controlling interest of which is directly or
indirectly common to the majority ownership of a party to this Agreement;

For this definition, “control" means the ownership  of  shares carrying  at
least a  majority  of the   votes for the election of the directors of a
corporation.

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"Annual Report" means the annual report to the FDA prepared by Client regarding
the Product as described In Title 21 of the United States Code of Federal
Regulations, Section 314.81(b)(2);

"Annual Product Review Report" means the annual product review report prepared
by Patheon as described in Title 21 of the United States Code of Federal
Regulations, Section 211.180(e);

“Annual Volume" means the minimum volume of Product to be manufactured in any
Year of this Agreement as set forth in Schedule B;

"Applicable Laws" means the jurisdiction where the Manufacturing Site is located
(Canada) as well as the United States of America.

“Authority" means any governmental or regulatory authority, department, body or
agency or any court, tribunal, bureau, commission or other similar body, whether
federal, state, provincial, county or municipal;

"Batch" means one formulation of [****] prepared according to the manufacturing
instructions and one set of bottles filled from that formulation into
approximately 1,000 bottles;

"Bill Back Items" means the reasonable expenses for all third-party supplier
fees for the purchase of columns, standards, tooling, PAPR or PPE suits (where
applicable), RFID tags and supporting equipment, and other project specific
items necessary for Patheon to perform the Manufacturing Services, and which are
not Included as Components;

"Business Day" means a day other than a Saturday, Sunday or a day that is a
 statutory holiday in the Province of Ontario, Canada. A list of Canadian
holidays is attached hereto as Schedule I;

“cGMPs” means current good manufacturing practices as described in:

(a)         Division 2 of Part C of the Food and Drug Regulations (Canada);

(b)         Parts 210 and 211 of Title 21 of the United States' Code of Federal
Regulations;

together with the latest Health Canada, FDA guidance documents pertaining to
manufacturing and quality control practice, au as updated, amended and revised
from time to time;

“Client Intellectual Property" means Intellectual Property generated or derived
by Client before entering into this Agreement, or by Patheon while performing
any Manufacturing Services or otherwise generated or derived by Patheon In its
business which Intellectual Property is specific to, or dependent upon, Client's
Active Material or Product;

"Components” means, collectively, all Active Materials, packaging components,
raw materials, and ingredients (including labels, product inserts and other
labelling for the Products), required to manufacture the Products In accordance
with the Specifications;

"Confidentiality Agreement" means the agreement about the non-disclosure of
confidential information between Patheon and Client dated December 9, 2008;

"Deficiency Notice” has the meaning specified in Section 6.1(a);

"Equipment” will have the meaning ascribed to it in the Capital Equipment
Agreement related to this MSA and attached hereto as Schedule H;

“FDA” means the United States Food and Drug Administration;

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"Firm Orders" has the meaning specified in Section 5.1(c);

"First Firm Order" has the meaning specified in Section 5.1(b);

"Forecast” has the meaning specified in Section 5.1 (a);

"Health Canada" means the section of the Canadian Government known as Health
Canada and includes, among other departments, the Therapeutic Products
Directorate and the Health Products and Food Branch Inspectorate:

“Initial Set Exchange Rate" means one Canadian dollar equals 0.82216 United
States Dollars as of the Effective Date of the Agreement being the initial
exchange rate to convert one unit of Patheon facility local currency to one unit
of the billing currency, calculated as the average interbank exchange rate for
conversion of one unit of Patheon facility  local currency to one unit of the
billing currency during  the 90  day period immediately preceding the Effective
Date as published by OANDA.com "The Currency Site” under the heading "FxHistory:
historical currency exchange rates" at www.OANDA.com/convert/fxhistory;

"Intellectual Property” includes, without limitation, rights in patents, patent
applications, formulae, trade­ marks, trade-mark applications, trade-names,
inventions, copyrights, industrial designs, trade secrets, and know how;

“Invention” means information about any Innovation, improvement, development,
discovery, computer program, device, trade secret, method,  know-how, process,
technique  or the like, whether or not written or otherwise fixed in any form or
medium, regardless of the media on which it is contained and whether or not
patentable or copyrightable;

“inventory”  means all inventories of Components and work-in-process produced or
held by Patheon for the manufacture of the Product;

"Laws" means all laws, statutes, ordinances, regulations, rules, by-laws,
judgments, decrees or orders of any Authority;

"Manufacturing Services" means the manufacturing, quality control, quality
assurance, stability testing, packaging, and related services, set forth in this
Agreement, required to manufacture Product from Active Materials and Components;

"Manufacturing Site" means the facility owned and operated by Patheon that is
located at 111 Consumers Drive, Whitby, ON L1N 525;

“Materials" means all Components, Bill Back Items, and other materials used to
manufacture the Product;

"Minimum Run Quantity” means the minimum number of batches of a Product to be
produced during the same cycle of manufacturing as set forth in Schedule B;

"Patheon Intellectual Property”  means Intellectual Property generated or
derived by Patheon before performing any Manufacturing Services, Intellectual
Property developed by Patheon while performing the Manufacturing Services, or
otherwise generated or derived by Patheon in its business which Intellectual
Property is not specific to, or dependent upon, Client's Active Material or
Product including, without limitation, Inventions and Intellectual Property
which may apply to manufacturing processes or the formulation or development of
drug products, drug product dosage forms or drug delivery systems unrelated to
the specific requirements of the Product(s);

3

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“Price" means the price measured in US Dollars to be charged by Patheon for
performing the Manufacturing Services, and includes the cost of Components,
certain cost items as set forth in Schedule  B, and annual stability testing
costs as set forth In Schedule C;

“Product" means the product listed on Schedule A;

“Quality Agreement" means the agreement between the parties setting out the
quality assurance standards for the Manufacturing Services to be performed by
Patheon for Client;

"Regulatory Authority" means the FDA, Health Canada and any other foreign
regulatory agencies competent to grant manufacturing, marketing and packaging
approvals for pharmaceutical products including the Products In the Territory;

"Reset Date”  means, with reference to any particular Year, the date on which
Patheon Is to provide Client with updated pricing for the Product for the next
Year; which date may be not less than one month prior to the beginning of that
Year;

"RFID”  means Radio Frequency Identification Devices which (at present or in the
future) may be affixed to Products or Materials to assist in inventory control,
tracking, and identification;

"Set Exchange Rate" means the exchange rate to convert one unit of Patheon
facility local currency to  one unit of the billing currency for each Year,
calculated as the average interbank exchange rate for conversion of one unit of
Patheon facility local currency to one unit of the billing currency during the
three month period immediately preceding the Reset Date by one month as
published by OANDA.com "The Currency Site under the heading "FxHistory:
historical currency exchange rates" at www.OANDA.com/convert/fxhistory;

"Specifications" means the file, for each Product, which is given by Client to
Patheon in accordance with the procedures listed in  Schedule A and which
contains documents relating to each Product, Including, without limitation:

(a)         specifications for Active Materials and Components;

(b)         manufacturing specifications, directions, and processes;

(c)         storage requirements;

(d)         all environmental, health and safety Information for the Product
including material safety data sheets; and

(e)         the finished Product specifications, packaging specifications and
Product shipping requirements;

all as updated, amended and revised from time to time by Client In accordance
with the terms of this Agreement;

"Technical Dispute" has the meaning specified in Section 12.2;

"Territory" means in the geographic area of the United States of America;

"Third Party Rights” means the Intellectual Property of any third party;

"Year" means in the first year  of this Agreement  the  period  from the
Effective Date up to and including December 31 of the immediately following
calendar year. Thereafter, Year means a calendar year.

4

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1.2        Currency.

Unless otherwise indicated, all monetary amounts are expressed In this Agreement
in the lawful currency of the United States of America.

1.3        Sections and Headings.

The division of this Agreement into Articles, Sections, Subsections, and
Schedules and the insertion of headings are for convenience of reference only
and will not affect the interpretation of this Agreement. Unless otherwise
indicated, any reference in this Agreement to a Section or Schedule refers to
the specified Section or Schedule to this Agreement. In this Agreement, the
terms "this Agreement", “hereof, "herein", “hereunder'' and similar expressions
refer to this Agreement and not to any particular part, Section or Schedule of
this Agreement.

1.4        Singular Terms.

Except as otherwise expressly stated or unless the context otherwise requires,
all references to the singular will include the plural and vice versa.

1.5        Schedules.

The following Schedules are attached to, incorporated in, and form part of this
Agreement:

Schedule A

Product List and Specifications

Schedule B

Minimum Run Quantity, Annual Volume, and Price

Schedule C

Annual Stability Testing & Technical Transfer Work

Schedule D

Active Materials

Schedule E

Technical Dispute Resolution

Schedule F

(Form of) Shipping Logistics Protocol

Schedule G

Example of Price Adjustment due to Currency Fluctuation

Schedule H

Capital Equipment Agreement

Schedule I

Canadian Holidays

 

5

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ARTICLE 2

PATHEON'S MANUFACTURING SERVICES

2.1          Manufacturing Services.

Client hereby appoints Patheon, and Patheon hereby accepts the appointment by
Client, to perform the Manufacturing Services for the Territory for the Prices
set forth ln Schedules B and C.  Schedule B sets forth a 11st of cost items that
are included in the Price for Products; all cost items that are not included in
this list are excluded from the Price and are subject to additional fees to be
paid by the Client. Patheon may change the Manufacturing Site for the Products
only with the prior written consent of Client. this consent not to be
unreasonably withheld. If Client has not directed Manufacturing Services to
commence within 12 months of the date of execution of this Agreement. Patheon
may amend the fees set out in Schedules B and C. Patheon will be the sole
manufacturer of Products offered for sale by Client in the Territory. In
performing the Manufacturing Services, Patheon and Client agree that:

(a)         Conversjon of Active Materials and Components. Patheon will convert
Active Materials and Components into Products.

(b)         Quality Control and Quality Assurance. Patheon will perform the
quality control and quality assurance testing specified in the Quality
Agreement.  Batch review and release to Client will be the responsibility of
Patheon's quality assurance group. Patheon will perform its batch review and
release responsibilities in accordance with Patheon's standard operating
procedures. Each time Patheon ships Products to Client,  it will give Client a
certificate of analysis and certificate of compliance including a statement that
the Batch has been manufactured and tested in accordance with Specifications and
cGMPs. Client will have sole responsibility for the release of Products to the
market. The form and style of Batch documents, including, but not limited to,
Batch production records, lot packaging records, equipment set up control,
operating parameters, and data printouts, raw material data, and laboratory
notebooks are the exclusive property of Patheon. Specific Product  related 
information contained in those Batch documents is Client  property.

(c)          Components. Patheon will purchase and test all Components at
Patheon's expense and as required by the Specifications.

(d)         Stability Testing. Patheon will conduct stability testing on the
Products in accordance with the protocols set out In the Specifications for the
fees and during the time periods set out in Schedule C. Patheon will not make
any changes to these testing protocols without prior written approval from
Client. If a confirmed stability test failure occurs, Patheon will notify Client
within one Business Day, after which Patheon and Client will jointly determine
the proceedings and methods to be undertaken to investigate the cause of the
failure,  including which party will bear the cost of the investigation. Patheon
will not be liable for these costs unless It has failed to perform the
Manufacturing Services in accordance with the Specifications, cGMPs, and
Applicable Laws. Patheon will give Client all stability test data and results at
Client's request.

(e)         Packaging. Patheon will package the Products as set out in the
specifications. Client will be responsible for the cost of artwork development.
Patheon will determine and Imprint the batch numbers and expiration dates for
each Product shipped. The Batch numbers and expiration dates will be affixed on
the Products and on the shipping carton of each Product as outlined in the
Specifications and as required by cGMPs. Client may, in its sole discretion,
make changes to labels, product inserts, and other packaging for the Products.
Those changes will be submitted by Client to all applicable governmental
agencies and other third parties responsible for the approval of the  Products.
Client will be responsible for the cost of labelling 

6

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obsolescence when changes occur, as contemplated ln Section 4.4. Patheon's name
will not appear on the label or anywhere else on the Products unless:
(i) required by any Laws; or (ii) Patheon consents in writing to the use of its
name.

(f)          Active Materials and Client Supplied Components Importing. The
parties agree that Patheon shall purchase sufficient amounts of Active Materials
from Client. Client shall ensure that the Active Material is  available for
purchase and delivered to Patheon at least [****] before the scheduled
production date. If the Active Materials are not received [****] before the
scheduled production date, Patheon may delay the shipment of Product by the same
number of days as the delay in receipt of the Active Materials. But ff Patheon
is unable to manufacture Product to meet this new shipment date due to prior
third party production commitments, Patheon may delay the shipment until a later
date as agreed to by the parties. All shipments of Active Material from Client
will be accompanied by certificate(s) of analysis from the Active Material
manufacturer, confirming the identity and purity of the Active Materials and its
compliance with the Active Material specifications.

(g)         Bill Back Items. Bill Back Items will be charged to Client at
Patheon's cost plus a [****] handling fee. Unless Identified to and accepted by
Client, all other expenses, including services related to the Manufacturing
Services, shall be billed to Client at Patheon's cost without any markup.

(h)         Validation Activities. Patheon may assist in the development and
approval of the validation protocols for analytical methods and manufacturing
procedures  (including packaging procedures) for the Products. The fees
associated with Patheon's assistance in providing validation development
assistance are set out in Schedule C.

(i)          Product Rejection for Finished Product Specification Fajlure.
 Internal process specifications will be defined and mutually agreed upon. If
Patheon manufactures Product in accordance with the agreed upon process
specifications and a batch or portion of batch of Product does not meet a
Finished Product Specification, Client will pay Patheon the applicable fee per
unit for the non­conforming Product.

(G)        Technical Transfer Activities. Patheon will conduct technical
transfer activities on the Product in accordance with the specifications and
fees set out in Schedule C.

ARTICLE 3

CLIENT'S OBLIGATIONS

3.1        Payment.

In consideration for Patheon performing the Manufacturing Services,  Client will
pay Patheon the Prices specified in  Schedules B and C. These Prices may be
subject to adjustment under other parts of this Agreement.  Client will also pay
Patheon for any Bill Back Items.

3.2        Active Materials.

Client will deliver the Active Materials to Patheon (in accordance with Section
2.1(f)) sufficient for Patheon to manufacture the desired quantities of Product
on the requested delivery date.  All materials purchased will be shipped
prepaid. The parties agree that title to the Active Materials will transfer to
Patheon upon Patheon's purchase of the Active Materials from Client. Any Active
Materials received by Patheon will be used by Patheon solely to perform the
Manufacturing Services.

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ARTICLE 4

CONVERSION FEES AND COMPONENT COSTS

4.1        First Year Pricing

The tiered Price and annual stability Price for the Products for the first Year
are listed in Schedules B and  C and are subject to the adjustments set forth in
Sections 4.2 and 4.3.

4.2        Price Adjustments -  Subsequent Years' Pricing.

After the first Year of the Agreement, Patheon may adjust the Price effective
January 1sL of each Year as follows:

(a)         Manufacturing Costs. Patheon may adjust the Price for inflation,
based upon the preliminary number for any change in the Producer Price Index
pcu325412325412 for Pharmaceutical Preparation Manufacturing (“PPl”) published
by the United States Department of Labor, Bureau of Labor Statistics in August
of the preceding Year compared to the final number for the same month of the
Year prior to that, unless the parties otherwise agree in writing. On or about
November 1st of each Year, Patheon will give Client a statement setting forth
the calculation for the inflation adjustment to be applied in calculating the
Price for the next Year.

(b)         Component Costs. If Patheon incurs an increase or decrease in
Component costs during the Year, it may adjust the Price for the next Year to
pass through the change in the Component costs. On or about November 1st of each
Year, Patheon will give Client information about the change in Component costs
which will be applied to the calculation of the Price for the next Year to
reasonably demonstrate that the Price adjustment is justified. But Patheon will
not be required to give information to Client that Is subject to obligations of
confidentiality between Patheon and its suppliers.

(c)          Pricing Basis. Client acknowledges that the Price in any Year is
quoted based upon the Minimum Run Quantity and the price tiers specified in
Schedule B. The Price is subject to change if the specified Minimum Run Quantity
changes or If the minimum Annual Volume in the lowest tier is not ordered in a
Year. For greater certainty, If Patheon and Client agree that the Minimum Run
Quantity will be reduced or the minimum Annual Volume in the lowest tier will
not be ordered in a Year whether as a result of a decrease in estimated
annual  volume  or  otherwise  and, as a result  of  the  reduction,
Patheon  demonstrates  to Client that  its  costs to perform the Manufacturing
Services and to acquire the Materials  for  the  Product will increase  on  a
per unit basis (including the amount of the increase),  then Patheon may
increase the Price by an amount sufficient to absorb the  documented increased
costs. On or about November 1 of each Year, Patheon will give Client a statement
setting forth the information to be applied in calculating those cost increases
for the next Year. But Patheon will not be required to give information to
Client that is subject to obligations of confidentiality between Patheon and
its suppliers.

(d)         Adjustments Due to Currency Fluctuations. Patheon will adjust the
Price for all Product that Is manufactured outside the United States or Puerto
Rico to reflect currency fluctuations. The adjustment will be calculated after
all other annual Price adjustments under this Section 4.2 have been made. The
adjustment will proportionately reflect the increase or decrease, If any, in the
Set Exchange Rate compared to the Set Exchange Rate established for the prior
Year or the Initial Set Exchange Rate, as the case may be. An example of the
calculation of the price adjustment Is set forth in Schedule G. 

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For all Price adjustments under this Section 4.2, Patheon will deliver to Client
on or about November 1st of each Year a revised Schedule B to be effective for
the next Year.

4.3        Price Adjustments -   Current Year Pricing.

During any Year of this Agreement, the Prices will be adjusted as follows:

Extraordinary Changes jn Component Costs. If, at any time, market conditions
result in Patheon's cost of Components being materially different than normal
forecasted changes, then Patheon or Client will be entitled to an adjustment to
the Price for any affected Product to compensate It for the change in Component
costs. Changes materially greater than normal forecasted increases will have
occurred if: (i) the cost of a Component changes by [****] of the cost for that
Component upon which the most recent fee quote was based; or (II) the aggregate
cost for all Components required to manufacture a Product changes by [****] of
the total Component costs for the Product upon which the most recent fee quote
was based. If Component costs have been previously adjusted to reflect an
increase in the cost of one or more Components, the adjustments set out in (I)
and (ii) above will operate based on the last cost adjustment for the
Components.

For a Price adjustment under this Section 4.3, Patheon will deliver to Client a
revised Schedule B and budgetary pricing information, adjusted Component costs
or other documents reasonably sufficient to demonstrate that a Price adjustment
is justified. Patheon will have no obligation to deliver any supporting
documents that are subject to obligations of confidentiality between Patheon and
its suppliers. The revised Price will be effective for any Product delivered on
or after the first day of the month following Client's receipt of the revised
Schedule B.

4.4        Adjustments Due to Technical Changes.

Amendments to the Specifications or the Quality Agreement requested by Client
will only be implemented following a technical and cost review by Patheon and
are subject to Client and Patheon reaching agreement on Price changes required
because of the amendment. Amendments to the Specifications, the Quality
Agreement or the Manufacturing Site requested by Patheon will only be
implemented following the written approval of Client, the approval not to be
unreasonably withheld. If Client accepts a proposed Price change, the proposed
change in the Specifications will be implemented, and the Price change will
become effective, only for those orders of Products that are manufactured under
the revised Specifications. In addition, Client agrees to purchase, at Patheon's
cost (including all costs incurred by Patheon for the purchase and handling of
the Inventory), all Inventory used under the “old" Specifications and purchased
or maintained by Patheon in order to fill Firm Orders or under Section 5.2, if
the Inventory can no longer be used under the revised Specifications. Open
purchase orders for Components no longer required under any revised
Specifications that were placed by Patheon with suppliers in order to fill Firm
Orders or under Section 5.2 will be cancelled where possible, and If the orders
may not be cancelled without penalty, will be assigned to and satisfied by   
Client.

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ARTICLE 5

ORDERS, SHIPMENT, INVOICING, PAYMENT

5.1        Orders and Forecasts.

(a)         Rolling 18 Month Forecast. When this Agreement is executed, Client
will give Patheon a non-binding 1B month Forecast of the volume of Product that
Client expects to order in the first 18 months of commercial manufacture of the
Product (the "Forecast”). This Forecast will then be updated by Client on or
before the 101h day of each month on a rolling forward basis. Client will update
the Forecast forthwith if it determines that the volumes estimated in the most
recent Forecast have changed by more than 20%. The most recent 1B month Forecast
will prevail. Patheon acknowledges and agrees that it will make every effort to
ensure that it has adequate capacity to fulfill Client's requirements under the
Forecast.

(b)         Firm Orders for Initial Manufacturing Month. At least three months
before the start  of  commercial manufacture of the Product, Client will update
the rolling forecast for the first three months of manufacture of the Product
(the "Initial Manufacturing  Period”).  The first month of this updated forecast
("Initial Manufacturing Month") will constitute a final written order in the
form of a purchase order or otherwise ("First Firm Order") by Client to purchase
and, when accepted by Patheon, for Patheon to manufacture the quantity of the
Product.  [****].

(c)          Firm Orders Thereafter. After the Initial Manufacturing  Month, on
a rolling basis during the term of this Agreement, and on or before the 10th day
of each month, Client will issue an updated 1B month forecast and the first
three months of that updated forecast will constitute a firm written order in
the form of a purchase order or otherwise ("Firm Order") by Client to purchase
and, when accepted by Patheon, for Patheon to manufacture and deliver the agreed
quantity of the Products on a date not less than three months from the first day
of the month Immediately following the date that the Firm Order is submitted.
Finn Orders submitted to Patheon will specify Client's Manufacturing Services
purchase order number, quantities by Product type, monthly delivery schedule,
and any other elements necessary to ensure the timely manufacture and shipment
of the Products.   The quantities of Products ordered in those written orders
will be firm and binding on Client and may not be reduced by Client.

(d)         Three Year Forecast. On or before the 10th day of June of each Year,
Client will give Patheon a written non-binding three year forecast, broken down
by quarters for the second and third years of the forecast, of the volume of
each Product Client then anticipates will be required to be manufactured and
delivered to Client during the three year period.

5.2        Reliance by Patheon.

(a)         Client understands and acknowledges that Patheon will rely on the
Firm Orders and rolling forecasts submitted under Sections 5.1(a), (b), and (c)
in ordering the Components required to meet the Firm Orders. In addition, Client
understands that to ensure an orderly supply of the Components, Patheon may want
to purchase the Components in sufficient volumes to meet the production
requirements for Products during part or all of the forecasted periods referred
to in Section 5.1(a) or to meet the production requirements of any longer period
agreed to by Patheon and Client. Accordingly, Client authorizes Patheon to
purchase Components to satisfy the Manufacturing Services requirements for
Products for the first six months contemplated in the most recent forecast given
by Client under Section 5.1(a). Patheon may make other purchases of Components
to meet Manufacturing Services requirements for longer periods If agreed to in
writing by the parties. The Client will give Patheon written authorization to
order Components for any launch quantities of Product requested by Client which
will be considered a Finn Order when accepted by Patheon. If Components ordered
by Patheon under Firm Orders or this Section 5.2 are not included in finished
Products manufactured for Client within six (6) months after the forecasted
month for which the purchases have been made (or for a longer period as the
parties may agree) or if the Components have expired during the period, then
Client will pay to Patheon its costs therefor (including all costs incurred by
Patheon for the purchase and handling of the Components). But if these
Components are used in Products subsequently manufactured for Client or in third
party products manufactured by Patheon, Client will receive credit for any costs
of those Components previously paid to Patheon by Client.

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(b)         If Client fails to take possession or arrange for the destruction of
Components within 12 months of purchase or, in the case of finished Product,
within three months of manufacture, Client will pay Patheon [****], per month
thereafter for storing the Components or finished Product. Storage fees for
Components or Product which contain controlled substances or require
refrigeration will be charged at [****]. Storage fees are subject to a one
pallet minimum charge per month. Patheon may ship finished Product held by It
longer than 3 months to the Client at Client's expense on 14 days written notice
to the Client.

5.3        Minimum Orders.

Client may only order Manufacturing Services for Batches of Products in
multiples of the Minimum Run Quantities as set out in Schedule B.

5.4        Shipments.

Shipments of Products will be made DOU (INCOTERMS 2000) lroko Pharmaceuticals,
LLC. Location shall be designated on the Purchase Order. Title shall remain with
Patheon until the Product reaches the destination point identified by Client,
however, risk of loss or damage to Product will only remain with Patheon until
Patheon loads the Product onto the carrier's vehicle for shipment at the
shipping point at which time risk of loss or damage will transfer to Client.
Patheon will, in accordance with Client's instructions and as agent for Client
(i) arrange for shipping to be paid by Client and (II) at Client's risk and
expense, obtain any export license or other official authorization necessary to
export the Product. Client will arrange for insurance and will select the
freight carrier used by Patheon to ship Product and may monitor Patheon's
shipping and freight practices as they pertain to this agreement. Product will
be transported in accordance with the Specifications.

5.5        Invoices and Payments

Invoices will be sent by fax or email to the fax number or email address given
by Client to Patheon in writing from time to time. Invoices will be sent when
the Product Is shipped by Patheon to the Client. Patheon will also submit to
Client, with each shipment of Products, a duplicate copy of the Invoice covering
the shipment. Patheon will also give Client an invoice covering any Inventory or
Components which are to be purchased by Client under Section 5.2 of this
Agreement. Each invoice will, to the extent applicable, identify Client's
Manufacturing Services purchase order number, Product numbers, names and
quantities, unit price, freight charges, and the total amount to be paid by
Client. Client will pay all invoices [****].  [****].

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ARTICLE 6

PRODUCT CLAIMS AND RECALLS

6.1        Product Claims.

(a)         Product Claims. Client has the right to reject any portion of any
shipment of Products that deviates from the Specifications, cGMPs, or Applicable
Laws without invalidating  any remainder of the shipment. Client will inspect
the Products manufactured by Patheon upon receipt and will give Patheon written
notice (a “Deficiency Notice”) of all claims for Products that deviate from the
Specifications, cGMPs, or Applicable Laws within 30 days after Client's receipt
thereof (or, in the case of any defects not reasonably susceptible to discovery
upon receipt of the Product, within 30 days after discovery by Client, but
not  after the expiration  date of the Product). Should Client fail to give
Patheon the Deficiency Notice within the applicable 30 day period, then the
delivery  will be deemed to have been accepted by  Client  on the 30" day after
delivery or discovery, as applicable. Except as set out in Section 6.3, Patheon
will have no liability for any deviations for which it has not received notice
within the applicable 30 day period.

(b)         Determination of Deficiency. Upon receipt of a Deficiency Notice,
Patheon will have ten days to advise Client by notice in writing that it
disagrees with the contents of the Deficiency Notice. If Client and Patheon fall
to agree within ten days after Patheon's notice to Client as to whether any
Products Identified in the Deficiency Notice deviate from the Specifications,
cGMPs, or Applicable Laws, then the parties will mutually select an independent
laboratory to evaluate If the Products deviate from the Specifications, cGMPs,
or Applicable Laws. This evaluation will be binding on the parties. If the
evaluation certifies that any Products deviate from the Specifications, cGMPs,
or Applicable Laws, Client may reject those Products in the manner contemplated
in this Section 6.1 and Patheon will be responsible for the cost of the
evaluation.  If the evaluation does not so certify for any of the Products, then
Client   will be deemed  to  have
accepted  delivery  of  the  Products  on  the  40th  day    after  delivery
(or, in the case of any defects  not
reasonably  susceptible  to  discovery  upon receipt  of  the  Product,  on
the  40th  day   after  discovery  thereof by  Client, but  not  after
the  expiration date of the Product) and Client will be responsible for the cost
of the evaluation.

6.2        Product Recalls and Returns.

(a)         Records and Notice. Patheon and Client will each maintain records
necessary to permit a Recall of any Products delivered to Client or customers of
Client. Each party will promptly notify the other by telephone (to be confirmed
in writing) of any information which might affect the marketability, safety or
effectiveness of the Products or which might result in the Recall or seizure of
the Products. Upon receiving this notice or upon this discovery, each party will
stop making any further shipments of any Products in its possession or control
until a decision has been made whether a Recall or some other corrective action
is necessary. The decision to initiate a Recall or to take some other corrective
action, if any, will be made and implemented by Client. "Recall" will mean any
action (I) by Client to recover title to or possession of quantities of the
Products sold or shipped to third parties (including, without limitation, the
voluntary withdrawal of Products from the market); or (ii) by any regulatory
authorities to detain or destroy any of the Products. Recall will also 

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include any action by either Party to refrain from selling or shipping
quantities of the Products to third parties which would have been subject to a
Recall if  sold or shipped.

(b)         Recalls. If (I) any governmental or regulatory authority Issues a
directive,  order or, following  the issuance of a  safety warning or  alert
about  a Product, a  written request that any  Product be Recalled, (ii) a court
of competent jurisdiction orders a Recall, or  (Ill) Client  determines that any
Product should be Recalled or that a "Dear Doctor" letter Is required relating
the restrictions on the use of any Product, Patheon will co-operate as
reasonably required by Client, having regard to all applicable laws and
regulations.

(c)         Product Returns. Client will have the responsibility for handling
customer returns of the Products. Patheon will give Client any assistance that
Client may reasonably  require to handle the returns.

6.3        Patheon's Responsibility for Defective and Recalled Products.

(a)         Defective Product. If Client rejects Products under Section 6.1 and
the deviation is determined to have arisen from Patheon's failure to provide the
Manufacturing Services in accordance with the Specifications, cGMPs, and
Applicable Laws, Patheon will credit Client's account for Patheon's invoice
price for the defective Products. If Client previously paid for the defective
Products, Patheon will promptly, at Client's election, either: (i) refund the
invoice price for the defective Products; (ii) offset the amount paid against
other amounts due to Patheon hereunder; or (Iii) replace the Products with
conforming Products without Client being liable for payment therefore under
Section 3.1. contingent upon Patheon being able to obtain from Client of all
Active Materials required for the manufacture of the replacement Products.

(b)         Recalled Product. If a Recall or return results from, or arises out
of, a failure by Patheon to perform the Manufacturing Services in accordance
with the Specifications, cGMPs, and Applicable Laws, Patheon will be responsible
for the documented out-of-pocket expenses of the Recall or return and will use
its commercially reasonable efforts to replace the Recalled or returned Products
with new Products, contingent upon Patheon being able to obtain from Client of
all Active Materials required for the manufacture of the replacement Products.
If Patheon is unable to replace the Recalled or returned Products (except where
this inability results from a failure to receive the required Active Materials),
then Client may request Patheon to reimburse Client for the price that Client
paid to Patheon for Manufacturing Services for the affected Products. In all
other circumstances, Recalls, returns, or other corrective actions will be made
at Client’s cost and expense.

(c)         Except as set forth in Sections 6.3(a) and (b) above, Patheon will
not be able to Client nor have any responsibility to Client for any deficiencies
in, or other liabilities associated with, any Product manufactured by it,
(collectively, "Product Claims"). For greater certainty, Patheon will have no
obligation for any Product Claims to the extent the Product Claim (i) is caused
by deficiencies in the Specifications, the safety, efficacy, or marketability of
the Products or any distribution thereof, (ii) results from a defect in a
Component that is not reasonably discoverable by Patheon using the test methods
set forth in the Specifications, (ill) results from a defect in the Components
supplied by Client that Is not reasonably discoverable by Patheon using the test
methods set forth in the Specifications, (Iv) is caused by actions of third
parties occurring after the Product is shipped by Patheon under Section 5.4, (v)
is due to packaging design or labelling defects or omissions for which Patheon
has no responsibility, (vi) is due to any unascertainable reason despite Patheon
having performed the Manufacturing Services in accordance with the
Specifications, cGMP's, and Applicable Laws, or (vii) Is due to any other breach
by Client of Its obligations under this Agreement.

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6.4        Disposition of Defective or Recalled Products.

Client will not dispose of any damaged, defective, returned, or Recalled
Products for which it intends to assert a claim against Patheon without
Patheon's prior written authorization to do so.  Alternatively, Patheon may
instruct Client to return the Products to Patheon as Patheon's own expense.
Patheon will bear the cost of disposition for any damaged, defective, returned
or Recalled Products for which it bears responsibility under Section 6.3. In all
other circumstances, Client will bear the cost of disposition, including all
applicable fees for Manufacturing Services, for any damaged, defective,
returned, or Recalled Products.

6.5        Healthcare Provider or Patient Questions and Complaints.

Client will have the sole responsibility for responding to questions and
complaints from its customers. Questions or complaints received by Patheon from
Client's customers, healthcare providers or patients will be promptly referred
to Client. Patheon will co-operate as reasonably required to allow Client to
determine the cause of and resolve any questions and complaints. This assistance
will include follow-up investigations, including testing. In addition, Patheon
will give Client all mutually agreed upon information that will enable Client to
respond property to questions or complaints about the Products as set forth in
the Quality Agreement. Unless It Is determined that the cause of the complaint
resulted from a failure by Patheon to perform the Manufacturing Services in
accordance with the Specifications, cGMPs, and Applicable Laws, all costs
incurred under this Section 6.5 will be borne by   Client.

6.6        Sole Remedy.

Except for the indemnity set forth in Section 10.3 and subject to the
limitations set forth in Sections 10.1 and 10.2, the remedies described in this
Article 6 will be Client's sole remedy for any failure by Patheon to provide the
Manufacturing Services in accordance with the Specifications, cGMPs, and
Applicable Laws.

ARTICLE 7

CO-OPERATION

7.1        Quarterly Review.

Each party will forthwith upon execution of this Agreement appoint one of its
employees to be a relationship manager responsible for liaison between the
parties. The relationship managers will meet not less than quarterly to review
the current status of the business relationship and manage any Issues that have
arisen.

7.2        Governmental Agencies.

Subject to Section 7.8, each party may communicate with any governmental agency,
including but not limited to governmental agencies responsible for granting
regulatory approval for the Products, regarding the Products if, in the opinion
of that party's counsel, the communication is necessary to comply with the terms
of this Agreement or the requirements of any law, governmental order or
regulation. Unless, in the reasonable opinion of its counsel, there Is a legal
prohibition against doing so, a party will permit the other party to accompany
and take part in any communications with the agency, and to receive copies of
all communications from the agency.

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7.3        Records and Accounting by Patheon.

Patheon will keep records of the manufacture, testing, and shipping of the
Products, and retain samples of the Products as are necessary to comply with
manufacturing regulatory requirements  applicable to Patheon, as well as to
assist with resolving Product complaints and other  similar investigations.
Copies of the records and samples will be retained for a period of one year
following the  date of  Product expiry, or longer if required by raw, at which
time Client will  be contacted  concerning  the delivery and destruction of the
documents and/or samples of Products. Client is responsible for retaining
samples of the Products necessary to comply with the legal/regulatory
requirements applicable to  Client.

7.4        Inspection.

Client may inspect Patheon reports and records relating to this
Agreement  during  normal business hours and with not less than five days
advance notice, but a Patheon representative must be present during the
inspection.

7.5        Access.

Once the products listed in Schedule A of the MSA are approved, Patheon will
give Client reasonable access at mutually agreeable times to the areas of the
Manufacturing Site in which the Products are manufactured, stored, handled, or
shipped to permit Client to verify that the Manufacturing Services are being
performed in accordance with the Specifications, cGMPs, and Applicable Laws.
But, with the exception of “for-cause”  audits, Client will be limited each Year
to one cGMP-type audit, lasting no more than two days, and involving no more
than two auditors. [****]

7.6        Notification of Regulatory Inspections.

Patheon will notify Client’s Head of Quality within one Business Day of any
inspections by any governmental agency specifically involving the
Products.  Patheon will also notify Client's Head of Quality of receipt of any
form 483's or warning letters or any other significant regulatory action which
Patheon's quality assurance group determines could impact the regulatory status
of the Products.

7.7        Reports.

Patheon will supply on an annual basis all Product data in its control,
including release test results, complaint test results, and all investigations
(in manufacturing, testing, and storage), that Client reasonably requires in
order to complete any filing under any applicable regulatory regime, including
any Annual Report that Client Is required to file with the FDA. At the Client's
request, Patheon will provide a copy of the Annual Product Review Report to the
Client at no additional cost. Any additional report requested by Client beyond
the scope of cGMPs and customary FDA requirements will be subject to an
additional fee to be agreed upon between Patheon and the Client.

7.8        FDA Filings.

(a)         Regulatory Authority. Client will have the sole responsibility for
filing all documents with all Regulatory Authorities and taking any other
actions that may be required for the receipt and/or maintenance of Regulatory
Authority approval for the commercial manufacture of the Products. Patheon will
assist Client, to the extent consistent with Patheon’s obligations under this
Agreement, to obtain Regulatory Authority approval for the commercial
manufacture of an Products as quickly as reasonably possible.

(b)         Verification of Data. At least 14 days prior to filing any documents
with any Regulatory Authority, unless otherwise agreed to by Patheon and Client,
that incorporate data generated by Patheon, Client will give Patheon a copy of
the documents incorporating this data to give Patheon the opportunity to verify
the accuracy and regulatory validity of those documents as they relate to
Patheon generated data.  Client and Patheon agree that for the initial CBE-30
filing expedited preparation and review are 

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required and as such every effort will be made by both parties to carry out
those activities within a mutually acceptable compressed timeline.

(c)         Verification of CMC. At least 14 days prior to filing with any
Regulatory Authority, unless otherwise agreed to by Patheon and Client, any
documentation which is or is equivalent to the FDA's Chemistry and
Manufacturing  Controls ("CMC”) related to any Marketing Authorization, such as
a  New Drug Application or Abbreviated New Drug Application, Client will give
Patheon a  copy  of  the CMC as well as all supporting documents which have been
relied upon to prepare the  CMC.  This disclosure   will permit Patheon to
verify that the CMC accurately describes the work that Patheon has performed and
the manufacturing processes that Patheon will perform under this Agreement.
Client will give Patheon copies of all FDA filings at the time of submission
which contain CMC information regarding the Product. Client and Patheon agree
that for the initial CBE-30 filing, expedited preparation and review are
required and as such, every effort will be made by both parties to carry out
those activities within a mutually acceptable compressed timeline.

(d)         Deficiencies. If, in Patheon's sole discretion, acting reasonably,
Patheon determines that any of the information given by Client under clauses (b)
and (c) above is inaccurate or deficient in any manner whatsoever (the
“Deficiencies”), Patheon will notify Client in writing of the Deficiencies. The
parties will work together to have the Deficiencies resolved prior to any
pre-approval inspection.

(e)         Client Responsibility. For clarity, the parties agree that in
reviewing the documents referred to in clause (b} above, Patheon's role will be
limited to verifying the accuracy of the description of the work undertaken or
to be undertaken by Patheon. Subject to the foregoing, Patheon will not assume
any responsibility for the accuracy of any application for receipt of an
approval by a Regulatory Authority. The Client is solely responsibility for the
preparation and filing of the application for approval by the Regulatory
Authorities and any relevant costs will be borne by the Client.

(f)          inspection by Regulatory Authorities. If Client does not give
Patheon the documents requested under clause (b) above within the time specified
and if Patheon reasonably believes that Patheon’s standing with a Regulatory
Authority may be Jeopardized, Patheon may, in its sole discretion, delay or
postpone any inspection by the Regulatory Authority until Patheon has reviewed
the requested documents and is satisfied with their  contents.

ARTICLE  8

TERM AND TERMINATION

8.1        Initial Term.

This Agreement will become effective as of the Effective Date and will continue
until December 31, 2012 (the “Initial Term"), unless terminated earlier by one
of the parties in accordance herewith. This Agreement will automatically
continue after the Initial Term for successive terms of two years each unless
either party gives at least 12 months written notice to the other party of its
intention to terminate this Agreement.

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8.2        Termination

(a)         Either party at Its sole option may terminate this Agreement upon
written notice where the other party has failed to remedy a material breach of
any of Its representations, warranties, or other obligations under this
Agreement within 60 days following receipt of a written notice (the "Remediation
Period”) of the breach that expressly states that it is a notice under this
Section B.2(a) (a “Breach Notice"). The aggrieved party's right to terminate
this Agreement under this Section 8.2(a) may only be exercised for a period of
60 days following the expiry of the Remediation Period (where the breach has not
been remedied) and if the termination right Is not exercised during this period
then the aggrieved party will be deemed to have waived the breach of the
representation, warranty, or obligation described in the Breach Notice.

(b)         Either party at its sole option may immediately terminate this
Agreement upon written notice,  but without prior advance notice, to the other
party if: (i) the other party ls declared insolvent  or bankrupt  by a court of
competent Jurisdiction; (ii) a voluntary petition of bankruptcy Is filed in any
court of competent jurisdiction by the other party; or (iii) this Agreement is
assigned by the other party for the benefit of creditors.

(c)         Client may terminate this Agreement as to any  Product upon 30 days'
prior written notice if  any Authority takes any action, or raises any
objection, that prevents Client from importing, exporting, purchasing, or
selling the Product. But if this occurs, Client will still fulfill all  of  Its
obligations  under  Section 8.4 below and under any Capital Equipment Agreement
regarding this   Product.

(d)         Either party may terminate this Agreement upon six months' prior
written notice if the other party assigns under Section 13.6 any of its rights
under this Agreement to an assignee that, in the opinion of the non-assigning
party acting reasonably, Is: (i) not a credit worthy substitute for the
assigning party; or (ii)  a  competitor of the non-assigning party; or (iii) an
entity with whom non-assigning party has had prior unsatisfactory business
relations.

(e)         Client may terminate this Agreement without cause at any time after
twelve months from the Effective Date of this Agreement, upon twelve months'
prior written notice to  Patheon. Notwithstanding the termination provisions
above, Client agrees that if Patheon receives notice of termination by Client
pursuant to section 8.2(e) above prior to December 31, 2012 (other than in
connection with the expiration of the Initial Term and non-renewal of this
Agreement), then the rebate outlined in Schedule C, Part 9, shall not be
applicable. In the event the rebate in Schedule C has already been paid out by
Patheon if termination pursuant to 8.2(e) occurs, Client agrees that this rebate
will be refunded to Patheon within thirty (30) days of the notice of
termination.

8.3        Product Discontinuation.

Client will give at least six months' advance notice if it intends to no longer
order Manufacturing Services for a Product due to this Product’s discontinuance
in the market.

8.4        Obligations on Termination.

If this Agreement is completed, expires, or is terminated in whole or in part
other than breach by Patheon of the warranty provided in Section 9.3(a), then:

(a)         Client will take delivery of and pay for all undelivered Products
that are manufactured and/or packaged under a Firm Order, at the price in effect
at the time the Firm Order was placed;

(b)         Client  will purchase,  at  Patheon's  cost  (including  all  costs
incurred  by Patheon  for the purchase and handling of the inventory), the
inventory applicable to the Products which was purchased, produced or maintained
by Patheon in contemplation of filling Firm Orders or in accordance with Section
5.2 prior to notice of termination being given;

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(c)         Client will satisfy the purchase price payable under Patheon's
orders with suppliers of Components, if the orders were made by Patheon in
reliance on Firm Orders  or  in  accordance with Section 5.2;

(d)         Client acknowledges that no competitor of Patheon will be pennltted
access to the Manufacturing Site.

(e)         Client will make commercially reasonable efforts, at Its own
expense, to remove from Patheon site(s), within 30 Business Days, all of
Client's Components, inventory and Materials (whether current or obsolete),
supplies, undelivered Product, chattels, equipment or other moveable property
owned by Client, related to the Agreement and located at a Patheon site or that
is otherwise under Patheon's care and control (“Client Property'"). If Client
fails to remove the Client Property within five Business Days following the
completion, termination, or expiration of the Agreement Client will pay Patheon
$100.00 per pallet, per month, one pallet minimum ($200 per pallet, per month,
one pallet minimum, for any of the Client Property that contains controlled
substances or requires refrigeration} thereafter for storing the Client Property
and will assume any third party storage charges invoiced to Patheon regarding
the Client Property. Patheon will invoice Client for the storage charges as set
forth in Section 5.5 of this Agreement.

(f)          Any termination or expiration of this Agreement  will not affect
any outstanding  obligations or payments due hereunder prior to the termination
or expiration, nor will it prejudice any other remedies that the parties may
have under this Agreement [or any related Capital Equipment Agreement).  For
greater certainty, termination of this Agreement for  any reason will not affect
the obligations and responsibilities of the parties under Articles 10 and 11 and
Sections 5.4, 5.5, 8.4, 13.1, 13.2, 13.3, and 13.15, all of which survive
any   termination.

ARTICLE 9

REPRESENTATIONS, WARRANTIES  AND COVENANTS

9.1        Authority.

Each party covenants, represents, and warrants that it has the full right and
authority to enter into this Agreement and that it is not aware of any
impediment that would inhibit its ability to perform its obligations hereunder.

9.2        Client Warranties.

Client covenants, represents; and warrants that:

(a)         Non-Infringement.

(i)          the Specifications for each of the Products are its or its
Affiliate's property and that Client may lawfully disclose the Specifications to
Patheon;

(ii)         any Client Intellectual Property, used by Patheon in performing the
Manufacturing Services according to the Specifications (A) is Client's or its
Afflllate's unencumbered property, (B) may be lawfully used as directed by
Client, and (C) does not infringe and will not infringe any Third Party Rights;

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(iii)        the performance of the Manufacturing Services by Patheon for any
Product under this Agreement or the use or other disposition of any Product by
Patheon as may be required to perform its obligations under this Agreement does
not and will not infringe any Third Party Rights;

(iv)        to the best of Its knowledge, there are no actions or other legal
proceedings concerning the infringement of Third Party Rights related to any of
the Specifications, or the sale, use or other disposition of any Product made in
accordance with the Specifications.

(b)         Quality and Compliance.

(i)          the Specifications for all Products conform to all applicable cGMPs
and Applicable Laws;

(ii)         the Products, if labelled and manufactured in accordance with the
Specifications and in compliance with applicable cGMPs and Applicable Laws (i)
may be lawfully sold and distributed in every jurisdiction in which Client
markets the Products. (ii) will be fit for the purpose intended, and (iii) will
be safe for human consumption;

(iii)        on the date of shipment, the API will have been manufactured in
accordance with cGMP and will conform to the specifications for the API that
Client has given to Patheon and that the API will be adequately contained,
packaged, and labelled and will conform to the affirmations of fact on the
container, as certified by the API manufacturer.

9.3        Patheon Warranties.

Patheon covenants, represents, and warrants that:

(a)         it will perform the Manufacturing Services in accordance with the
Specifications, cGMPs, the Quality Agreement and Applicable Laws;

(b)         any Patheon Intellectual Property used by Patheon to perform the
Manufacturing Services (i) is Patheon's or its Affiliates’ unencumbered
property,(ii) may be lawfully used by Patheon, and (iii) does not infringe and
will not infringe any Third Party Rights;

(c)         Patheon is a corporation duly incorporated, validly
existing  and  ln good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power to execute and deliver this
Agreement and to perform its obligations hereunder.  The execution and delivery
by Patheon of this Agreement and its performance of Its obligations hereunder
have been duly and validly authorized.  This Agreement constitutes a legal,
valid and binding obligation on Patheon, enforceable in accordance with Its
terms, subject to applicable bankruptcy, insolvency, reorganization, and other
laws of general application limiting the enforcement of creditor's rights.

(d)         As of the Effective Date hereof, Patheon holds, and shall continue
during the term to hold, all licenses and permits necessary for Patheon to
perform the Manufacturing Services as contemplated herein.

(e)         As of the Effective Date hereof and during the term of this
Agreement the Manufacturing Services, Manufacturing Site, Materials and all
equipment utilized, in performing its obligations under this Agreement shall be
In full compliance and In accordance with Specifications, cGMP and all
Applicable Laws in which it is contemplated to be performed and/or provided.

19

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(f)          Patheon is not aware of any safety, efficacy, or regulatory Issues
relating to its manufacturing processes other than the information that has
previously been made available to the Client, that would preclude Patheon from
manufacturing the Product in compliance with Applicable Laws.

9.4        Debarred Persons.

Patheon covenants that it will not in the performance of its obligations under
this Agreement use the services of any person debarred or suspended under 21
U.S.C. §335(a) or (b). Patheon represents that it does not currently have, and
covenants that It will not hire, as an officer or an employee any person who has
been convicted of a felony under the laws of the United States for conduct
relating to the regulation of any drug product under the Federal Food, Drug, and
Cosmetic Act (United States).

9.5        Permits.

Client will be solely responsible for obtaining or maintaining, on a timely
basis, any permits or other regulatory approvals for the Products or the
Specifications, including, without limitation, all marketing and post-marketing
approvals.

Patheon will maintain at all relevant times all governmental permits, licenses,
approval, and authorities required to enable it to lawfully and properly perform
the Manufacturing Services.

9.6        No Warranty.

NEITHER PARTY MAKES ANY WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, BY
FACT OR LAW, OTHER THAN THOSE EXPRESSLY SET  FORTH  IN  THIS  AGREEMENT. PATHEON
MAKES NO WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE  OR WARRANTY  OF
MERCHANTABILITY FOR THE PRODUCTS.

ARTICLE 10

REMEDIES AND INDEMNITIES

10.1      Consequential Damages.

Under no circumstances whatsoever will either party be liable to the other in
contract, tort, negligence, breach of statutory duty, or otherwise for (i) any
(direct or indirect) loss of profits, of production, of anticipated savings, of
business, or goodwill or (ii) for any other liability, damage, costs, or expense
of any kind incurred by the other party of an indirect or consequential nature,
regardless of any notice of the possibility of these damages.

10.2      Limitation of Liability.

Maximum Liability.  Excluding the indemnity provided by Client in Section 10.4
dealing with any claim of infringement or partial infringement of a Third
Party's Rights, each Party's maximum liability to the other under this
Agreement  for any reason whatsoever, including  any liability  arising under
Article  6 or 10.3  or (other than infringement of a Third Party's Rights)
hereof or resulting from any and all breaches of its representations,
warranties, or any other obligations under this Agreement [****].

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10.3      Patheon.

Patheon agrees to defend, indemnify, and hold Client, its officers, employees,
and agents  harmless against any and all losses, damages, costs, claims,
demands, judgments and liability to, from  and in favor of third parties (other
than Affiliates) resulting from, or relating to any claim of personal injury or
property damage to the extent that the injury or damage is the result of
Patheon’s breach of this
Agreement  or  a  failure  by  Patheon  to  perform  the  Manufacturing  Services   in  accordance 
with   the Specifications, cGMPs, and Applicable Laws except to the extent that
the losses, damages, costs, claims, demands, judgments, and liability are due to
the negligence  or wrongful act(s) of Client.    its officers, employees,
agents, or Affiliates.

If a claim occurs, Client will: (a) promptly notify Patheon of the claim; (b)
use commercially reasonable efforts to mitigate the effects of the claim; (c)
reasonably cooperate with Patheon  in  the defense of the claim; and (d) permit
Patheon to control the defense and settlement of the claim, all at Patheon's
cost and expense.

10.4      Client

Client agrees to defend, indemnify, and hold Patheon, its officers, employees,
and agents  harmless against any and all losses, damages, costs, claims,
demands, judgments  and liability  to, from and in favor of third parties (other
than Affiliates) resulting from, or  relating to  any claim of
infringement  or  alleged infringement  of any Third Party Rights ln  the
Products, or any portion  thereof, or any claim   of personal injury or
property  damage to the extent that the injury or damage is  the  result of a
breach of this Agreement by Client, including, without limitation, any
representation or warranty contained herein, except to the extent that the
losses, damages, costs, claims, demands, judgments, and liability are due to the
negligence or wrongful act(s) of Patheon, Its officers, employees, or agents.

If a claim occurs, Patheon will: (a) promptly notify Client of the claim; (b)
use commercially reasonable efforts to mitigate the effects of the claim: (c)
reasonably cooperate with Client in the defense of the claim; and (d) permit
Client to control the defense and settlement of the claim, all at Client's cost
and expense.

10.5      Reasonable Allocation of Risk.

This Agreement (including, without limitation, this Article 10) is reasonable
and creates a reasonable allocation of risk for the relative profits the parties
each expect to derive from the Products. Patheon assumes only a limited degree
of risk arising from the manufacture, distribution, and use of the Products
because Client has developed and holds the marketing approval for the Products,
Client requires Patheon to manufacture and label the Products strictly in
accordance with the Specifications, and Client, not Patheon, is best positioned
to inform and advise potential users about the circumstances and manner of use
of the Products.

ARTICLE 11

CONFIDENTIALITY

11.1      Confidentiality.

The Confidentiality Agreement will apply to all confidential information
disclosed by the parties under this Agreement If the Confidentially Agreement
expires or Is terminated prior to the expiration or termination of this
Agreement, the terms of the Confidentially Agreement will continue to govern the
parties' obligations of confidentiality for any confidential or proprietary
information disclosed by the parties 

21

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hereunder, for the term of this Agreement, as though the Confidentiality
Agreement remained in full force and effect.

ARTICLE 12

DISPUTE RESOLUTION

12.1       Commercial Disputes.

If any dispute arises out of this Agreement (other than a dispute under Section
6.1(b) or a Technical Dispute, as defined herein), the parties will first try to
resolve it amicably. In that regard, any party may send a notice of dispute to
the other, and each party will appoint, within ten Business Days from receipt of
the notice of dispute, a single representative having full power and authority
to solve the dispute. The representatives will meet as necessary in order to
resolve the dispute. If the representatives fail to resolve the matter within
one month, from their appointment, or If a party falls to appoint a
representative within the ten Business Day period set forth above, the dispute
will immediately be referred to the Chief Executive Officer (or another officer
as he/she may designate) of each party who will meet and discuss as necessary to
try to resolve the dispute amicably.  Should the parties fall to reach a
resolution under this Section 12.1, the dispute will be referred to a court of
competent jurisdiction in accordance with Section 13.15.

12.2       Technical Dispute Resolution.

If a dispute arises (other than disputes under Sections 6.1(b) or 12.1) between
the parties that is exclusively related to technical aspects of the
manufacturing, packaging, labelling, quality control testing, handling, storage,
or other activities under this Agreement (a Technical Dispute"), the parties
will make all reasonable efforts to resolve the dispute by amicable
negotiations.  In that regard, senior representatives of each party will, as
soon as practicable, and in any event no later than ten Business Days after a
written request from either party to the other, meet in good faith to resolve
any Technical Dispute. If, despite this meeting, the parties are unable to
resolve a Technical Dispute within a reasonable time, and in any event within 30
Business Days of the written request, the Technical Dispute will, at the request
of either party, be referred for determination to an expert in accordance with
Schedule E.  If  the parties cannot agree that a dispute is a Technical Dispute,
Section 12.1 will prevail.  For greater certainty, the parties agree that the
release of the Products for sale or distribution under the applicable marketing
approval for the Products will not by Itself indicate compliance by Patheon with
Its obligations for the Manufacturing Services and further that nothing in this
Agreement (including Schedule E) will remove or limit the authority of the
relevant qualified person {as specified by the Quality Agreement) to determine
whether the Products are to be released for sale or distribution.

ARTICLE 13

MISCELLANEOUS

13.1      Inventions.

(a)         For the term of this Agreement, Client hereby grants to Patheon a
non-exclusive, paid-up, royalty-free, non-transferable license of Client's
Intellectual Property which Patheon must use exclusively for the purpose of
performing the Manufacturing Services.

22

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(b)         All Intellectual Property generated or derived by Patheon while
performing the Manufacturing Services, to the extent it is specific to the
development, manufacture, use, and sale of Client's Product that is the subject
of the Manufacturing Services, will be the exclusive property of Client.

(c)         All Patheon Intellectual Property will be the exclusive property of
Patheon.  Patheon hereby grants to Client a perpetual, irrevocable,
non-exclusive, paid up, royalty-free, transferable license to use the Patheon
Intellectual Property used by Patheon to perform the Manufacturing Services
to enable Client to manufacture the Product(s).

(d)         Each party will be solely responsible for the costs of filing,
prosecution, and maintenance of patents and patent applications on its own
Inventions.

(e)         Either party will give the other party written notice, as promptly
as practicable, of all Inventions which can reasonably be deemed to constitute
Improvements or other modifications of the Products or processes or technology
owned or otherwise controlled by the party.

13.2      Intellectual Property.

Subject to Section 13.1, au Client Intellectual Property will be owned by Client
and all Patheon Intellectual Property will be owned by Patheon. Neither party
has, nor will it acquire, any interest in any of the other party's Intellectual
Property unless otherwise expressly agreed to in writing. Neither party will use
any Intellectual Property of the other party, except as specifically authorized
by the other party or as required for the performance of Its obligations under
this Agreement.

13.3      Insurance.

Each party will maintain commercial general liability Insurance, including
blanket contractual  liability Insurance covering the obligations of that party
under this Agreement through the term of this Agreement and for a period of
three years thereafter.  [****] If requested each party will give the other a
certificate of Insurance evidencing the above and showing the name of the
issuing company, the policy number, the effective date, the expiration date, and
the limits of Lability. The insurance certificate will further provide for a
minimum of 30 days' written notice to the Insured of a cancellation of, or
material change in, the insurance.  If a party Is unable to maintain the
insurance policies required under this Agreement through no fault of its own,
then the party will forthwith notify the other party in writing and the parties
will in good faith negotiate appropriate amendments to the insurance provision
of this Agreement in order to provide adequate assurances.

13.4      Independent Contractors.

The parties are independent contractors and this Agreement will not be construed
to create between Patheon and Client any other relationship such as, by way of
example only, that of employer­ employee, principal agent, joint-venturer,
co-partners, or any similar relationship, the existence of which is expressly
denied by the parties.

13.5      No Waiver.

Either party's failure to require the other party to comply with any provision
of this Agreement will not be deemed a waiver of the provision or any other
provision of this Agreement, with the exception of Sections 6.1 and 8.2.

23

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13.6      Assignment.

Patheon may not assign this Agreement or any of Its rights or obligations
hereunder without the written consent of Client, this consent not to be
unreasonably withheld; provided, however, that Patheon may arrange for
subcontractors to perform specific testing services arising under this Agreement
without the prior consent of Client.

Subject to Section 8.2(d), Client may assign this Agreement or any of its rights
or obligations hereunder without approval from Patheon. But Client will give
Patheon prior written notice of any assignment and any assignee will covenant in
writing with Patheon to be bound by the terms of this Agreement. Any partial
assignment will be subject to Patheon's cost review of the assigned Products and
Patheon may terminate this Agreement or any assigned part thereof, on 12 months'
prior written notice to Client and the assignee if good faith discussions do not
lead to agreement on amended Manufacturing Service fees within a reasonable
time.

Despite the foregoing provisions of this Section 13.6, either party may, upon
notice to the other party assign this Agreement to any of Its Affiliates or to a
successor to or purchaser of all or substantially all of its business, but the
assignee must execute an agreement with the non-assigning party whereby it
agrees to be bound hereunder.

13.7      Force Majeure.

Neither party will be liable for the failure to perform its obligations under
this Agreement If the failure Is caused by an event beyond that party's
reasonable control, including, but not limited to, strikes or other labor
disturbances, lockouts, riots, quarantines, communicable disease outbreaks,
wars, acts of terrorism, fires, floods, storms, interruption of or delay in
transportation, defective equipment, lack of or inability to obtain fuel, power
or components, or compliance with any order or regulation of any government
entity acting within color of right (a Force Majeure Event).   A party claiming
a right  to excused performance under this Section 13.7 will Immediately notify
the  other  party in  writing  of the extent of its inability to perform, which
notice will specify the event beyond its reasonable control that prevents the
performance. Neither party will be entitled to rely on a Force Majeure Event to
relieve it from  an obligation to pay money (including any interest for delayed
payment} which  would  otherwise be due and payable under this Agreement.

13.8      Notices.

Any notice, approval, instruction or other written communication required or
permitted hereunder will be sufficient if made or given to the other party by
personal delivery, by telecopy, facsimile communication, or confirmed receipt
electronic mail or by sending the same by first class mall, postage prepaid to
the respective addresses, telecopy or facsimile numbers or electronic mall
addresses set forth below:

If to Client:

[****]

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If  to Patheon:

[****]

or to any other addresses, telecopy or facsimile numbers or electronic mail
addresses given to the other party in accordance with the terms of this Section
13.8. Notices or written communications made or given by personal delivery,
telecopy, facsimile, or electronic mail will be deemed to have been sufficiently
made or given when sent (receipt acknowledged), or if mailed, five days after
being deposited in the United States or Canada mail, postage prepaid or upon
receipt, whichever Is sooner.

Invoices should be sent to Client at this address:

[****]

13.9      Severability.

If any provision of this Agreement is determined by a court of competent
jurisdiction to be invalid, Illegal, or unenforceable in any respect, that
determination will not Impair or affect the validity, legality, or
enforceability of the remaining provisions hereof, because each provision Is
separate, severable, and distinct.

13.10    Entire Agreement.

This Agreement, together with the Quality Agreement and the Confidentiality
Agreement, constitutes the full, complete, final and integrated agreement
between the parties relating to the subject matter hereof and supersedes all
previous written or oral negotiations, commitments, agreements, transactions, or
understandings concerning the subject matter hereof. Any modification,
amendment, or supplement  to  this Agreement must be in writing  and signed by
authorized representatives of both parties.            in case of conflict, the
prevailing order of documents will be this Agreement, the Quality Agreement, and
the Confidentiality Agreement.

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13.11    Other Terms.

No terms, provisions or conditions of any purchase order or other business form
or written authorization used by Client or Patheon will have any effect on the
rights, duties, or obligations of  the parties under or otherwise modify this
Agreement, regardless of any failure of Client or Patheon to object  to the
terms, provisions. or conditions unless the document specifically refers to this
Agreement and Is s1gr1ed by both parties.

13.12    No Third  Party Benefit or Right.

For greater certainty, nothing in this Agreement will confer or be construed as
conferring on any third-party benefit or the right to enforce any express or
implied term of this Agreement

13.13    Execution in Counterparts.

This Agreement may be executed in two or more counterparts, by original or
facsimile signature, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

13.14    Use of Client Name.

Patheon will not make any use of Client's name, trademarks or logo or any
variations  thereof,  alone or with any other word or words, without the
prior  written consent of Client, which consent  will not  be unreasonably
withheld. Client agrees however, that Patheon may include Client's name and logo
in customer lists or related marketing and promotional material for the purpose
of Identifying users of Patheon's Manufacturing Services.

13.15    Governing Law.

This Agreement will be construed and enforced in accordance with the laws of the
State of Delaware subject to the exclusive jurisdiction of the courts thereof.
The UN Convention on Contracts for the international Sale of Goods will not
apply to this Agreement.

IN WITNESS WHEREOF, the duly authorized representatives of the parties have
executed this Agreement as of the date first written abov:e.

 

 

 

 

PATHEON INC.

 

By:

 

 

 

 

 

 

IROKO PHARMACEUTICALS, LLC

 

By:

 

 

 

 

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SCHEDULE A

PRODUCT LIST AND SPECIFICATIONS

Product List

lndocin (indomethacin) - 237 ml Oral Suspension 25 mg per 5 ml, NDC
42211-101-11, Amber Glass Bottle in a Carton

Specifications

Prior to the start of commercial manufacturing of Product under this Agreement,
Client will give Patheon the originally executed copies of the FDA approved
Specifications. If the Specifications received are subsequently amended, then
Client will give Patheon the revised and originally executed copies of the
revised Specifications. Upon acceptance of the revised Specifications (which
acceptance shall not be unreasonable withheld), Patheon will give Client a
signed and dated receipt indicating Patheon's acceptance of the revised
Specifications.

 

 

 

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SCHEDULE B

MINIMUM RUN QUANTITY, ANNUAL VOLUME, AND PRICE

Pricing

Patheon is providing full service pricing for lndocin® Oral Suspension, per 237
ml (label claim) amber  glass bottle in a carton, encompassing the following
activities;

Supply of all raw materials and packaging components, including the API, 
indomethacin

Manufacturing and packaging of the suspension

All QC testing requirements for raw materials, packaging components and
finished product

Pricing for the Product Is provided in 3 tiers {see chart below) such that the
price for manufacturing decreases as volume demanded increases. In the event
that volumes in a single year do not reach 20,000 cartons, Patheon reserves the
right to adjust and provide new reasonable, pricing to Client.

All pricing includes cost of all raw materials and packaging components,
including the API, indomethacin, to be furnished by Client. An API cost of
[****] per Kg Is assumed in this proposal.

Indocin® (indomethacin) - 237 mL Oral Suspension 25 mg per 5 ml, NOC
42211-101-11, Amber Glass Bottle in a Carton

[****]

Pricing Example

In the event that Patheon manufactures [****].

 

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Manufacturing Assumptions

1.          The manufacturing process at Patheon will follow the process
information provided by Client and Patheon's best estimates.

2.          The API, indomethacin, has been evaluated by Patheon as a Toxicity
Category 2 compound and can be handled safely using existing equipment and
facility at the Manufacturing Site.

3.          Patheon will order excipients from vendors provided and/or approved
by Client.

4.          Manufacturing involves multiple mixing stages ln tanks and vessels,
and suspension will be re­ circulated in the final mixing tank through a
homogenizing mill. Patheon will maintain the existing manufacturing process and
batch size as part of the CBE-30 fifing strategy.

5.          Manufacturing equipment will be provided by lroko al no cost to
Patheon.

6.          The existing batch size will be maintained at [****].

7.           [****] processing campaigns are proposed in the Pricing Table.

8.          Patheon assumes the current cleaning procedure is adequate and full
cleaning occurs after each campaign.

9.          A manufacturing yield of [****] is assumed, as per agreement with
lroko.

 

Packaging Assumptions

1.          The packaging equipment train will consist of the following
equipment: [****]

2.          The target fill and packaging configuration are as follows:  [****]

3.          [****]

4.          [****]

5.          [****]

 

Testing Assumptions

1.          Testing for raw materials, packaging components and finished product
are based on the specifications supplied by Client and Patheon's best estimates.
Testing Is based on standard USP/NF.

2.          Testing labor may be subject to change after the final agreement on
testing specifications and requirements.

 

 

 

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Schedule C

Fees and Technical Overview

Annual Stability Testing/Technical Transfer Work

Patheon and Client will agree in writing on any stability testing to be
performed by Patheon on the Products. This agreement will specify the commercial
and Product stability protocols applicable to the stability testing and the fees
payable by Client for this testing.

[****][7 pages redacted].

 

 

 

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SCHEDULE D

ACTIVE MATERIALS

 

 

Active Materials

Supplier

indomethacin

lroko Pharmaceuticals, LLC

 

 

 

 

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SCHEDULE E

TECHNICAL DISPUTE RESOLUTION

Technical Disputes which cannot be resolved by negotiation as provided in
Section 12.2 will be resolved in the following manner:

1.          Appointment of Expert. Within ten Business Days after a party
requests under Section 12.2 that an expert be appointed to resolve a Technical
Dispute, the parties will jointly appoint a  mutually  acceptable expert with
experience and expertise in the subject matter of the dispute. If the parties
are unable to so agree within the ten Business Day period, or in the event of
disclosure of a conflict by  an expert under Paragraph 2 hereof which results in
the parties not  confirming the appointment of the  expert, then an expert
(willing to act in that capacity hereunder) will be appointed by an experienced
arbitrator on the roster of ADR Chambers who will be a retired Judge of the
Ontario Superior Court of Justice or on the roster of the American Arbitration
Association.

2.          Conflicts of Interest.  Any person appointed  as an expert  will
be  entitled to act and continue  to act as an expert even If at the time of his
appointment or at any time before he gives his determination, he has or may have
some interest or duty which conflicts or may conflict with his appointment If
before accepting the appointment (or as soon as practicable after he becomes
aware of the conflict or potential conflict) he fully discloses the interest
or    duty and the parties will, after the disclosure, have confirmed  his

appointment.

3.          Not Arbitrator.  No expert will be deemed to be an arbitrator and
the provisions of the Arbitration Act (Ontario) or of any other applicable
statute (foreign or domestic) and the law relating to arbitration will not
apply  to the expert  or the expert's  determination  or the  procedure  by
which the expert  reaches  his determination under this Schedule E.

4.          Procedure. Where an expert is appointed:

Timing. The expert will be so appointed on condition that (i) he promptly fixes
a reasonable time and place for receiving representations, submissions or
information from the parties and that he issues the authorizations to the
parties and any relevant third party for the proper conduct of his determination
and any hearing and (ii) he renders his decision (with full reasons) within 15
Business Days (or another other date as the parties and the expert may agree)
after receipt of all information requested by him under Paragraph 4(b) hereof.

Disclosure of Evidence. The parties undertake one to the other to give to any
expert all the evidence and information within their respective possession or
control as the expert may reasonably consider necessary for determining the
matter before him which they will disclose promptly and in any event within five
Business Days of a written request from the relevant expert to do so.

Advisors. Each party may appoint any counsel, consultants and advisors as it
feels appropriate to assist the expert in his determination and so as to present
their respective cases so that at all times the parties will co-operate and seek
to narrow and limit the Issues to be determined.

Appointment of New Expert. If within the time specified in Paragraph 4(a) above
the expert will not have rendered a decision in accordance with his appointment,
a new expert may (at the request of either party)  be appointed and the
appointment of the existing expert will thereupon cease for the purposes of
determining the matter at issue between the parties save this if the existing
expert renders his decision 

 

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with full reasons prior to the appointment of the new expert, then this decision
will have effect and the proposed appointment of the new expert will be
withdrawn.

Final and Binding. The determination of the expert will, except for fraud or
manifest error, be final and binding upon the parties.

Costs. Each party will bear its own costs for any matter referred to an expert
hereunder and, Jn the absence of express provision in the Agreement to the
contrary, the costs and expenses of the expert will be shared equally by the
parties.

For greater certainty, the release of the Products for sale or distribution
under the applicable marketing approval for the Products will not by Itself
indicate compliance by Patheon with Its obligations for the Manufacturing
Services and further that nothing in this Agreement (including this Schedule E)
will remove or limit the authority of the relevant qualified person (as
specified by the Quality Agreement) to determine whether the Products are to be
released for sale or distribution.

 

 

 

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SCHEDULE F

[FORM OF] SHIPPING LOGISTICS PROTOCOL

Shipping will be carried out under the following terms and conditions:

Shipping terms will be DOU (INCOTERMS 2000), lroko Pharmaceuticals, LLC.
Location shall be designated on the Purchase Order.

Exports of Products from Canada to the United States

1.          Shipping terms will be DDU (INCOTERMS 2000), lroko Pharmaceuticals,
LLC. Location should be designated on the Purchase Order.

2.          Client, as the importer of record into the United States. will
advise Patheon prior to export of the Products from Canada of Client's
designated customs broker and freight forwarder to enable Patheon to complete
all applicable shipping documentation.

3.          Client will be responsible for all shipping    costs and shall
assume all risk of loss and damage at the point that the Product is loaded onto
the carrier for shipping.

 

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[****][2 pages redacted]

 

 

 

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SCHEDULE G

EXAMPLE OF PRICE ADJUSTMENT DUE TO CURRENCY FLUCTUATION

Section 4.2(d)

[****]

 

 

 

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SCHEDULE H

CAPITAL EXPENDITURE AND EQUIPMENT AGREEMENT

THIS CAPITAL EXPENDITURE AND EQUIPMENT AGREEMENT (the "Agreement”) made as of
the 29th day of May 2009 (the "Effective Date") between:

IROKO  PHARMACEUTICALS, LLC,

a limited liability corporation existing under the laws of the State
of Delaware, (hereinafter referred to as "lroko"),

OF THE FIRST PART,

-and-

PATHEON INC.,

a  corporation existing under the laws of Canada, (hereinafter referred to as
"Patheon"),

OF THE SECOND PART.

WHEREAS lroko and Patheon have entered into a Manufacturing Services Agreement
(the "MSA") dated May 29, 2009, whereby Patheon agrees to provide Manufacturing
Services with respect to lroko's products (the "Services");

AND WHEREAS in order for Patheon to perform the Services,  certain  capital
expenditures will be necessary in respect of capital equipment required to be
acquired and installed at Patheon's facility located at 111 Consumers Drive,
Whitby, Ontario (the  "Facility"}  and  certain modifications will be required
to be made to the Facility;

AND WHEREAS the purpose of this Agreement is to set out the parties' agreement
with respect to such capita[ expenditures.

NOW, THEREFORE, In consideration of the rights  conferred  and  the  obligations
assumed herein, and Intending to be legally bound, the parties hereby agree
as   follows:

1.          Definitions

"Affiliate" shall mean any person, joint venture, partnership, corporation,
trust, unincorporated organization or other entity which, directly or
indirectly, controls, is controlled by, or Is under common control with another
party.

 

--------------------------------------------------------------------------------

 

 

"Transferred Equipment means the Items listed on Schedule A.

2.          Equipment

(a)         lroko shall, at Its expense, arrange to deliver the Transferred
Equipment to the Facility including, without limitation, all costs and expenses
associated with transportation, insurance and customs clearance (if applicable).

(b)         In consideration of the mutual covenants contained in this
Agreement, lroko herebytransfers and conveys all of its title and interest in
and to the Transferred Equipment to Patheon in the United States, prior to
transfer to the Whitby, Ontario site.

(c)         lroko represents and warrants that, to the best of its knowledge:

(i)          the Transferred Equipment is free and clear of all  encumbrances;

(ii)         prior to the transfer and conveyance of the Transferred Equipment
to Patheon, lroko was the sole legal and beneficial owner of the Transferred
Equipment and such sale, transfer and conveyance does not contravene any
agreement to which lroko is a party;

(iii)         the delivery to and Installation at the Facility of the
Transferred Equipment does not contravene any agreement to which lroko is a
party;

(iv)        upon the delivery of the Transferred Equipment at the Facility, the
Transferred Equipment shall be deemed to be  in good working order; and

(v)         there are no pending or outstanding claims  or liabilities,
Including, without limitation, safety-related claims in respect of the
Transferred Equipment.

(d)         If it is determined by Patheon in its reasonable discretion and
confined by lroko that, upon delivery of the Transferred Equipment, the
Transferred Equipment Is not in good working order or has been damaged during
transit, lroko agrees that It shall be responsible for any reasonable costs
incurred by Patheon to repair the Transferred Equipment or bring the Transferred
Equipment up to the standard of good working order.

(e)         lroko shall be responsible for all reasonable, actual direct costs
and expenses associated with Installing, and performing the installation
qualification/operational qualification and the process qualification of the
Transferred Equipment at the Facility. lroko shall also be responsible for all
reasonable costs and expenses associated with performing the process
qualification of the Transferred Equipment at the Facility.

3.          Use of the Transferred Equipment

Patheon may use the Transferred Equipment for the manufacture of products for
third parties but only upon terms and payments of fees to be negotiated by the
parties on a case by case basis and provided that such use does not interfere
with the services provided to lroko.

 

--------------------------------------------------------------------------------

 

 

4.          Reimbursement  for  the Transferred Equipment

[****]

5.          Risk of Loss of Equipment

Risk of loss to the Transferred Equipment shall transfer to Patheon upon
delivery to  Patheon at  the Facility. Patheon shall use
commercially  reasonable efforts to preserve, protect and maintain the
Transferred Equipment in good working order. Patheon shall be responsible for
the routine maintenance of the Transferred Equipment at its sole cost and
expense. In the event there is any damage, destruction or loss to the
Transferred Equipment after delivery thereof to the Facility or  should any
major repairs or replacements subsequently be required for
the  Transferred  Equipment. Patheon shall, at its sole cost and expense,
promptly repair, replace and restore the condition thereof to the condition of
such equipment before such event or to such better condition  as  may be
required by applicable law or in the ordinary course of  business.

6.          Effect of Termination of MSA

Upon the expiration or termination of the MSA by lroko, other than a breach by
Patheon of Its obligations herein and In the MSA, then the repayments
contemplated in Section 3 shall cease as of the termination date by lroko and
Patheon shall have no further obligations In respect thereof; provided, however,
that (1) in the event lroko or Its Affiliates enter into an agreement with
Patheon prior to or within twelve (12) months of the termination date of the MSA
for Patheon's manufacture and supply of a new product that uses the Transferred
Equipment or (II) In the event Patheon enters into an agreement with a third
party prior to or within twelve (12) months of the termination date of the MSA
to the termination date of the MSA to manufacture a product that utilizes the
Transferred Equipment and/or the lroko Capital Improvements, Patheon shall
continue to be obligated to make repayments for any remaining amount due to
lroko for the Transferred Equipment under Section 3 on terms to be agreed upon
by Patheon and lroko based on the portion of Ancillary Equipment and/or lroko
Capital Improvements used for such new or third party product.  Title to the
Transferred Equipment shall revert back to lroko in the event of   failure by
Patheon to meet the   required payment  terms.

 

--------------------------------------------------------------------------------

 

 

7.          General

(a)         AU monetary amounts are expressed in the lawful currency of the
United States of America.

(b)         This Agreement shall be construed and enforced in accordance with
the laws of the laws of the State of Delaware (without regard to principles of
conflicts of law).

(c)         This Agreement and the MSA contain the entire understanding of the
parties with respect to the subject matter herein and supersedes all previous
agreements (oral and written), negotiations and discussions.

(d)         The parties may modify or amend the provisions hereof only by an
instrument in writing duly executed by both of the parties.

(e)         Neither party may assign or otherwise transfer Its rights or
obligations  hereunder  without the prior written consent of the other party,
not to be unreasonably withheld except to Affiliates or in connection with the
transfer or sale of all or substantially all of the transferor's  business.

(f)          This Agreement may be signed by facsimile or in two counterparts,
each of which when executed and delivered or transmitted, shall be considered an
original and both of which together shall constitute one and the same
Instrument.

IN WITNESS WHEREOF the duly authorized representatives of the parties have
executed this Agreement.

 

 

 

 

 

IROKO PHARMACEUTICALS, LLC

 

PATHEON INC.

 

 

 

 

 

 

Per:

 

 

Per:

 

 

 

 

 

 

 

Name:

 

Name:

 

 

 

Title:

 

Title:

 

 

 

 

 

 

 

 

 

Date:

 

Date:

 

 

 

 

--------------------------------------------------------------------------------

 

 

Schedule I

lroko Transferred Equipment

[****]

 

 

 

--------------------------------------------------------------------------------

 

 

SCHEDULE J

SCHEDULE OF CANADIAN STATUTORY HOLIDAYS

 

 

New Year's Day

Thursday, January 1

 

 

Family Day

Monday, February 16

 

 

Good Friday

Friday, April 10

 

 

Victoria Day

Monday, May 16

 

 

Canada Day

Wednesday, July 1

 

 

Civic Holiday

Monday, August 3

 

 

Labour Day

Monday, September 7

 

 

Thanksgiving Day

Monday, October 12

 

 

Christmas Eve

Thursday, December 24 (half day)

 

 

Christmas Day

Friday, December 25

 

 

Boxing Day

Monday, December 28

Float #1

Tuesday, December 29

 

 

Float#2

Wednesday, December 30

 

 

Float#3

Thursday, December31

 

 

New Years Day

Friday, January 1

 

 

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AMENDMENT NO. 3 TO MANUFACTURING SERVICES AGREEMENT

THIS AMENDMENT (the "Amendment") to the Manufacturing  Services Agreement is
entered into as of June 2, 2011 by and among Patheon Inc., a Canadian
corporation ("Patheon"), having its principal office at 2100 Syntex Court,
Mississauga, Ontario, Canada, L5N 7K9, and lroko Pharmaceuticals LLC ("lroko"),
having a principal office at One Crescent Drive, Suite 400, Philadelphia,
PA  19112,  USA.

WHEREAS Patheon and lroko entered into a Manufacturing Services Agreement dated
May 29, 2009 and amended as of June 29, 2010 and August 5, 2010 (the
"Agreement");  and

WHEREAS  the parties hereto wish to further amend the Agreement in order to
provide  for the qualification of a new source of lndomethacin USP from [****];

NOW, THEREFORE, in consideration of the mutual covenants herein  contained  and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree that the Agreement is amended as follows:

1.    A new Schedule C-3 is added to the Agreement as attached hereto.

Except as set forth herein, all other terms and conditions of the Agreement
shall remain in full force and effect for the term thereof. In the event of any
conflict between this Amendment and the Agreement, the terms of this Amendment
shall control. Upon execution, the Agreement and this Amendment shall be deemed
to constitute the entire Agreement.

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
duly authorized representatives on the dates set forth below.

 

 

PATHEON INC

IROKO PHARMACEUTICALS, LLC

 

 

 

--------------------------------------------------------------------------------

 

 

SCHEDULE C-3

QUALIFICATION OF NEW [****] INDOMETHACIN API SOURCE

Project

This change of scope describes development activities to be performed for lroko
Pharmaceuticals, LLC ("Client") by Patheon Inc. ("Patheon") under the terms and
conditions of Technology Transfer Agreement IRO-FW01-0900-0109-R2 by and between
Patheon and the Client which is hereby revised to include this change of scope
in its entirety.

Due to the fact that there is only a limited remaining supply of indomethacin
USP (the active pharmaceutical ingredient in lndocin Oral Suspension), from the
current supplier (Merck), lroko has sourced a replacement. The existing supplies
of Merck API expire in Nov 2012. lroko has selected material manufactured by
[****] as a suitable replacement.

Patheon will purchase sufficient quantities of 3 distinct batches of [****] API
for use in (1) the qualification of all methods necessary to test and release
the API and (2) to manufacture 3 batches of lndocin Oral Suspension
(qualification batches) for a stability study. The data generated from the
stability study will be used in support of the FDA filing for this new API
source.  An API cost [****] per kg is assumed in this proposal.

Current commercial manufacturing and packaging processes are assumed however the
revised unit pricing (see tables below) will apply due to the increased API cost
(as compared to current assumed Merck API costs). Unit pricing includes
manufacturing, packaging and release testing. There will be an up-charge for
validation testing (above and beyond routine commercial release testing) during
the manufacturing of these qualification batches.

 

--------------------------------------------------------------------------------

 

 

lndocin® 237 ml Oral Suspension 25 mg/5 ml -  Amber Glass Bottle in a Carton

 

 

 

 

Volume

Tier 1

Tier2

Tier3

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

 

 

lndocin® 50 ml Oral Suspension 25 mg/5 ml -  Amber Glass Bottle in a Carton

 

 

Volume

Tier 1

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

 

 

 

--------------------------------------------------------------------------------

 

 

Pricing

[****]

 

1.          [***]

2.          [****]

3.          [****]

4.          Stability- Validation Batches

[****]

 

--------------------------------------------------------------------------------

 

 

1.          Standard Assumptions

1.         [****]

2.         [****]

3.         [****]

4.         [****]

5.         [****]

 

--------------------------------------------------------------------------------